Ok, on to the numbers!<\/p>\n

How Do We Stand<\/h2>\n

As noted in our recent post with our updated FIRE goals\/numbers, we are aiming to get to the ~$1.3M mark as our FatFIRE goal.\u00a0 In Q1 2021 were we sitting at $1,093,404 without the mortgage so about $200,000 to go.\u00a0 Let see if we’ve dipped back or have inched closer towards our goal.<\/p>\n

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We do still have the mortgage in place on our home while renting out the paid off townhouse.\u00a0 We are hoping that by the time we sell the townhouse the proceeds will meet\/exceed the remaining balance on the mortgage so we can swipe that out completely and not have to dip into our investments to pay off the remainder on the mortgage.<\/p>\n

We reached out to our realtor since trying to sell the townhouse last September and the market has gone up by 10% since then which puts us in positive profit range for the townhouse (he suggested a current list price of $328,000 should sell today vs his suggestion of $299,000 last September vs our original purchase price of $315,000).\u00a0 Woohoo, only took 6 years to break even… sad!\u00a0 We will reassess as we get closer to October when the 1 year rental term is up.\u00a0 If we are all in agreement, we will likely continue with a month-to-month rental agreement until Spring 2022 and try to sell then as that tends to be the best time to sell in our neck of the woods.\u00a0 Our tenants are not stellar by any means but they pay rent on time which ultimately is what really matters.<\/p>\n

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With bonds and cash doing nearly nothing, it’s no surprise that the stock portion of the overall portfolio continues to creep up.\u00a0 That’s fine with me as long as we also have 5 years of cash on hand. And as mentioned above in the recap, we did shift some of our Target Date Funds in our 401k to solely the equity portion (US stock index fund and an International stock index fund) which wiped out some of our bond holdings.<\/p>\n

Right now I am focusing on having 5 years worth of cash on hand.\u00a0 Currently we have around $121,000 in cash which is actually pretty perfect.\u00a0 Why?\u00a0 If we assume $40,000 spend per year and $17,000 in CCB during the first 5 years that’s a net difference of $23,000.\u00a0 Over 5 years that’s $115,000 of cash needed (23,000*5).\u00a0 We prefer this much more cautious and conservative approach vs something like the yield shield as we want to keep our non-cash investments in the overall market.<\/p>\n

Once we FIRE, any taxable income\/dividends we receive from our taxable account we plan to withdraw, rather than drip right back into the non-registered account, to shuffle over to our TFSA instead for some tax sheltering.\u00a0 I’ve been thinking about withdrawals for wayyyy too long and am due to write a post on our withdrawal strategy in the near future.<\/p>\n

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As I continue to work and earn in CAD and as the USD\/CAD exchange rates has shifted from it’s high of ~1.4 to it’s current 1.25 , we’re sitting at a 70\/30 USD\/CAD split.\u00a0 With the USD\/CAD exchange rate sitting at 1.25\u00a0our liquid portfolio fully converted into CAD is $1,332,952.<\/p>\n

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Withdrawal Rates<\/h2>\n

Let’s see what this means when it comes time to withdraw.\u00a0 I like looking at a few different scenarios as we can cut down our spending if need-be in hard times (market tanks).\u00a0 I also like looking at what our withdrawal rate looks like with Canada Child Benefit (CCB) factored in since it is such a juicy benefit that we will be receiving for the first ~15 years. As previously mentioned, we do NOT rely on any<\/strong> external support in our FIRE figures (CCB, CPP\/SS, OAS, GIS) and view them as icing on the cake or to account for any future unexpected medical expenses we may encounter in old age.<\/p>\n

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It’s pretty awesome to see that the only scenario where we are currently over the “4% rule” is if we spend $50k\/year and not have the USD\/CAD conversion in place and also assume $0 in CCB. It is highly unlikely we will spend $50,000 and have the USD\/CAD sit right at $0 and somehow see CCB dramatically altered\/removed in the near future.<\/p>\n