REVscene - Vancouver Automotive Forum

Tapioca · 01-25-2011, 08:27 PM

Bear with me, this is a bit of a read, but I just wanted to see if there's anyone who's been in a similar situation with respect to their finances, careers, and lives. I wasn't sure where to post this since my questions are wider than the scope of business and finance.

The first issue I have is that I don't save a lot of money. I have about 3-4 months of salary in cash, a few grand in RRSP mutual funds, and I dedicate a very nominal amount (100/month) to a high-growth mutual fund TFSA. Unlike most of you, I do not have stock options, but instead, I have a defined benefit pension. As you can imagine, I've seriously reconsidered contributing any more of in my income to RRSPs. Even if I stay at my existing salary (adjusted for inflation of course) for the next 25 years, I will get a livable pension when I retire (provided the country doesn't implode.) The notion of maximizing my RRSP contribution is meaningless to me as I don't have nearly enough savings to do that.

The second factor is that I am fortunate enough to have property in greater Vancouver. It's not much - just a 2 bedroom condo in Burnaby - and I'm currently 4 years into a fixed 5 year mortgage. I have a roommate whose rent pays my property tax, strata fees, and utilities. Even if interest rates rise in a year's time, I should be able to negotiate a fixed rate (if I decide to go there again) that's lower than what I have right now (4.99%.)

The third factor is that I have no debt other than my mortgage. No student loans, no credit card debt (pay it off each month), no car loans, etc.

The fourth factor is my job. I've been with the same organization for about 5 years and it seems I've hit a bit of a plateau in terms of career progression. I was in 3 job competitions last year (interview stage), but was not made an offer for any. The security and benefits are very good, but I'm know I'm capable of much more. I have a side gig (which pays peanuts, but I enjoy quite a lot) and I would almost be interested in pursuing a career in it, but I'm pretty sure that the starting salaries would be atrocious for someone like me (though it does come with some perks.) I have an undergraduate degree in basket-weaving.

The fifth thing to be considered is my life outside work. I have no dependents (no girlfriend, no kids) and I'm fairly healthy. I do however spend more money than I should. I have unnecessary expenses like two (albeit older) cars, clothes, etc. I know that people say that things can change in a hurry, but the rush of women wanting to get married hasn't come upon me yet, so I don't anticipate any changes to my dependent situation over the next 5-8 years. I plan on maintaining a healthy lifestyle too, so my mind and body should be in well enough shape to take on new challenges.

Anyway, where am I going with this? Well, I do have some goals and a bunch of questions:
- Should I solicit the services of a financial planner to make my existing my assets work for me? Or, are they just salesmen trying to make a buck?
- After hearing about stock market riches from friends and colleagues, I want get feet wet and dip into the market. But, is even a couple grand worth playing with? Moreover, what's the learning curve for a newb like me?
- I want to do a graduate degree in the medium term, but I don't know how I can afford it with my mortgage and current modest salary. I'm reluctant to take on any more debt, such as a student loan. I imagine that a degree will cost me about 20K and I will have to forego 2 years worth of salary. Can anyone share any tips?
- It would pain me to move away from the city, but I might have to in order to advance my career. I think I'm capable of making at least 10-15K more per year, but I might have to go to central Canada to do that. However, I do know that once I leave, I may never come back. What would you do?

Bonka · 01-25-2011, 10:35 PM

On the surface, it seems your circumstances allows you to walk away from your current situation pretty easily assuming you can line up a job elsewhere beforehand and you can lease out your home unless you're sure you're going to relocate permanently. This doesn't take into account the intangibles and would depend if the loss of living here can be made up by the additional income you would make elsewhere. Personally I couldn't even fathom relocating elsewhere permanently and as such, would require quite a tempting deal to make me even think about moving away.

While I also share the same thoughts of going back to school later to further my credentials, I would question whether or not the benefits gained (depending on the chosen industry) is enough to sacrifice your existing job not to mention the financial burden during and after your graduate while you get back to where you left off. I consider going back to school a bit of a luxury and if your industry is a bit grey in earning potential even with a graduate degree, I think I would rather relocate instead. In that way, you're already in the industry and you're supplementing work experience as opposed to possibly having to start over.

I'm inept at financial planning and outside of budgeting I do not know how to make my money work for me. Through work I ended up meeting a CFP whom I now have managing my money. While I know quite a few people who know how to play with their own money I have zero interest in this or either learning it so for me, I find there is value in using the services of these people. Frankly, even if I had the knowledge of managing my personal finances I would still use them. Personally I hate looking at money and if it weren't for money running everything these days, I may be better off without it. Nevertheless, the gains I've made far outweigh the expenses associated with using these people.

These are the years that are best for maximizing earning power and trying new things and since you're unattached and young it's worth capitalizing on this before you start to settle down. I unfortunately live a mundane, low-risk, conservative lifestyle so if I were giving advice to you I would go with the "making the best of a bad situation" attitude. If I was normal person however and laid out my cards like you have I would certainly consider job relocation - it provides a change of scenary while giving you the opportunity to evaluate yourself as it sounds like you would have some regret if you stayed put.

Tapioca · 01-25-2011, 11:14 PM

@Bonka

I guess I should elaborate about my potential to relocate. I wouldn't say that I could relocate with the snap of a finger, but if I'm persistent, I'm sure I could at least make a lateral move to central Canada where the opportunities are far greater. The issue for me is that I like Vancouver too much - we have a great climate, people are generally healthier (which in turns motivates me to maintain my health and fitness), food is good, it's laid back, etc. On the other hand, I could put in my time elsewhere (10-15 years), take an early retirement and do consulting. Consulting wouldn't be a bad way to go: get a couple of short-term contracts a month (anywhere from 3-6K) and spend the rest of time pursuing interests like travel.

I suppose there are two things motivating my desire for more credentials - hubris and earning potential. I want another degree on my wall as much as I want to earn more money.

I'm risk averse by nature (which is why I chose the organization I'm working for now), but I can't help but think that I'm missing out. For example, a guy I met recently made a killing in the stock market. He bought Teck when it hit rock bottom ($3/share) and cashed in when the stock hit about $50. Another friend of mine hasn't been so lucky, but even he made 20K over the past year. The market is where the money seems to be, but I just don't know where to start. My limited experience with financial planners (from my bank) has been negative. An FP-wannabe from my bank cold called me last year and asked me to come in for a chat. I agreed and he stated that I should do something with my cash, get rid of my mortgage cash account, etc. I don't like to make decisions without doing my due diligence and I did not heed his advice.

mr_chin · 01-26-2011, 06:47 AM

I would really recommend the stock market if you're not afraid of risks. Avoid the junior miners aka tsx ventures. Those are a gamble.

If you have over 10k of spare cash, invest it in a company that is already in production.

For example, Western Coal Corp approximately 6 months ago is at $4, just almost the end of 2010, they were bought out for $11, and now sits at a little over $12. So do the math if you had $10k in that at $4.

A co-worker told me that in today's economy, especially after the QE2, it would be stupid not the be in the stock market. Even if it's $2k that you have, if you're not in need of it, why not sit it in a stock that will grow 100% - 200% in a year or two?

But a word of advice I would like to give you is, make sure you know what you are buying into for your own safety sake.

Gt-R R34 · 01-27-2011, 10:46 AM

I think the main consideration above all is this :

Do you see yourself continuing with the same company for the next 20-30 years. Your define pension goes out the window (depending on company) if you move on to another company and you start from scratch. You woud lose out on 5-10years. That said, another way to look into it would be, is a new job worth the risk. Is the reward worth it enough.

Strategically, Would the impact of the a graduate program positively effect your earned income down the road to an substantial increase, where your company can afford to have you on a sabatical?

Before the finances comes to play, the idea of your job security/career and where you want to be in 5 - 10 years. Thats the question.

I've worked with a lot of ppl regarding similiar finances, finances can be worked around to play in what your ultimate decision is.

Example: 1 person was in a similiar situation, good job, single but wanted a even greater career and something more self-rewarding. Person X went and did a MBA. He had a condo downtown, but wouldn't be able to afford all the payments if went back to school with no pay, so I gave him a couple of options: 1 was his parents lived out east, rent out his condo and do his MBA out there and live at home, 2: borrow and work a part-time and live very lean for the next 2 years or 3. sell, take the decent size profit from the property and invest it into himself, rent and live comfortable and maitain his lifestyle needed for the 2 years, and re-start but with a higher income.

He choose route 3, he's pretty happy he's done 3rd route, he doesn't live downtown anymore, commutes in from Richmond on the Canada Line but with a 2 bedroom and a very good increase in income.

That said, that isn't necessarily the best route. He choose that route because of his need to maintain lifestyle. So it depends on what you see fit, we only really as you questions, and then you need to answer them. Once you do, we go about setting a plan for you.

suzuka84 · 01-27-2011, 05:58 PM

you have everything on track if you're a person in their late 30s and 40s married with kids. Have you traveled outside North America?

If not, quit/go on a sabbatical (you sound like a govt worker) to South America, Europe or Africa and go bonkers. You have a condo and cars, all the materialistic things are settled. What would you accomplish with a masters degree?

I vote for seeing the world.

You're trying to make quick gains so you don't miss out on the stock market rebounding which will definitely set you up for irrational decision making. You should go on a semi-long (3 month min) trip overseas to experience other places and cultures.

Tapioca · 01-27-2011, 06:37 PM

@ GTR

I didn't want to say it outright since people like me are often the object of scorn, but I guess I have to come clean (for the benefit of suzuka84 as well) - I'm a "fed". My options for career growth are these:
1. Move to Ottawa (even if it's a lateral move) and work my way up eventually peaking at a low 6-figure salary (in today's dollars; no guarantees, of course.) I will likely be able to buy a house, but die slowly inside. It is very hard for someone to transfer back to Vancouver mid-career because the opportunities just aren't available here.
2. Stay in Vancouver, be content with an average salary for years, slowly develop my skills, and hope that the right opportunity comes along.

I can take an unpaid sabbatical for education purposes. My reason for pursuing another degree is that the trend in the public service is toward graduate degrees. Compromises with respect to my current lifestyle will likely be required, but I haven't figured out how much I'm willing to compromise if I decide to pursue another degree.

@suzuka84
Yes, I've traveled outside North America, but I haven't spent longer than a month overseas. I've been to Europe and parts of East Asia. I'd love to travel more, but I realize that it will probably wipe out most of my savings (which I originally intended for emergency purposes or perhaps to finance part of my education.) I do budget for silly trips like Vegas, and stags.

As I mentioned, part of my desire for more education is self-pride. I was class valedictorian in high school. Granted, life is still good and I haven't had to work as hard as some of my peers, but when I hear of peers being more successful than me at this point in time, it irks me a little. I'm a bit of a hypocrite - I have preached the merits of having perspective, but I sometimes lack perspective myself.

On the brighter side, I talked to my bank today about my mortgage and I was pretty excited about some of the numbers that were being thrown around. If nothing changes, I figure I can be mortgage free by about 40 at which point I will have the freedom to do some of what I want. I suppose I just wanted a quicker way to get there.

Thanks to everyone who has contributed to and read this thread. It's given me some more things to think about.

waddy41 · 01-27-2011, 08:50 PM

making money in the stock market is not as easy as it seems
it's a combination of luck, timing, doing your homework

dont listen to aznlangjai, it's very hard to make 100 - 200% on your portfolio unless it's a small amount that you're willing to risk and you picked the right stock

0000000000 · 01-27-2011, 11:14 PM

If you want to get your feet wet in "the market", but are uncertain about what your true tolerance level is.....consider buying Silver bullion.

From my own experience, it's a relatively safe (and lower cost vs Gold) way to begin understanding the fundamentals behind trading commodities, and as I continued buying Silver bullion, I was hedging for the future.

It's a nice conversation piece for guests. If you have a 100oz Johnson/Mathey bar of silver on your coffee table, you will definatley have a story to entertain guests with. Silver coins make great gifts for nieces & nephews too. Historically, Silver and Gold have always been a storage of wealth that can be passed on. So in my case, any spare $$$ that was lying around was quickly converted into physical silver. It stored my true wealth (as precious metals are positivley affected by the increasing inflation) and prevented me from buying stupid shit.

Buying Silver bullion also helped me to better understand the metals market and also understand how money is made and how FIAT currency works in the real world. Point I'm getting at here is that education should be intrinsic. We become learned to become enlightened - not to impress people/organizations. Also that bullion investment is a safe and very educational stepping stone to more volatile forms of investment - if that's your objective.

Something to consider.

goo3 · 01-29-2011, 02:26 AM

You sound like you're hitting your quarter-life crisis.. it happens to many ppl, I think.

BTW, we should really do away with these defined-benefit pensions

Tapioca · 01-29-2011, 10:19 AM

Quote:

Originally Posted by goo3

You sound like you're hitting your quarter-life crisis.. it happens to many ppl, I think.

BTW, we should really do away with these defined-benefit pensions

You betcha. I've always done things a little bit differently (and at a slower pace) than the rest of the Joneses, so eventually I will end up in a place where I'm satisfied.

The public's appetite to slash defined benefit pensions is something I have not yet hedged. What I see happening is that if there is enough political will, the politicians may stop offering defined benefit plans for any new hires after a certain date.

TRDood · 01-29-2011, 01:02 PM

If I recall correctly, you work for the federal government right? but I am not sure what position/grade you are in. By the information given, it sounds like you may be a CR-xx or PE-xx.

What I think you should do is obtain a graduate degree to compete in PM/EC/CO positions. That is, you enjoy government work. However, this also means that you might need to move to Ottawa for quick promotions.

Look into your HR guidelines, I think you can take an extended leave (e.g. 1-5 years, depends) for education, family, outside work, personal reasons and return to work.

Edit: I just read the whole thread and it seems like what your options are. I'd say if you don't have any commitments - move to Ottawa and get the 6 figures. Why? because you get a kick ass pension, because $500k gets you a big house with a swimming pool, because you can move back to Vancouver later.

We share some similarities, I want to get into the federal government (my qualifications matches 100% of job postings, graduating shortly) but also want to live in Vancouver. Chances of that? 1 to ~100. If you want to climb the ladder quick, move to Ottawa. In Vancouver, you basically need to wait for your managers to retire, THEN you can a CHANCE to move up.

Tapioca · 01-30-2011, 12:21 AM

@TRDood

I'm currently a mid-level EC and have been for over 2 years. If I were still in an administrative classification, I definitely would have moved to Ottawa a long time ago. I started an assignment about a half year ago and it looks like I'm going to be extended indefinitely, so I'm willing to stay at my current level for another year or two.

If I were to move to Ottawa, making 6-figures wouldn't be guaranteed, but this would be the typical career progression:

EC-xx --> EC-05, 06
EC-xx --> PM-05, 06

I'll share a story about a former manager of ours. He took an assignment in Ottawa for a year minus a day. He (or someone in HR) lost track of time and he ended up working in that assignment for over a year. When he finalized realized this, he tried to come back, but his position in Vancouver was eliminated and he got stuck in Ottawa for the remainder of his career. This guy was at least a PM-06 and he was SOL. More recently, when my old boss left his job and made a lateral move, our director in Ottawa cut his position too (he was also a PM-06.) This is why I say that if I were to move to Ottawa, it would be until I decide to retire.

TRDood · 01-30-2011, 01:38 AM

EC-04 to EC-06, consider INAC? I know a lot of their analyst are EC-06s. You must be really lucky to get EC positions without a graduate degree. I only know 2 people in Ottawa like only has a BA in Economics.

Just from what I have heard. You will be placed in a priority list if you marry and your spouse is in Vancouver. Haha
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goo3 · 01-30-2011, 04:25 AM

BTW, is it true govt work is slack?

Not saying it's a bad thing.. after a couple rounds of the rat race, making money for doing as little as possible does not sound bad at all....

Tapioca · 01-30-2011, 09:49 AM

@TRDood

I was hired as an SI (an old classification before the merger) so the minimum requirements were different back then. You can still get hired with just a Bachelor degree under the new requirements, but as I said, the trend is towards graduate degrees.

Quote:

BTW, is it true govt work is slack?

Not saying it's a bad thing.. after a couple rounds of the rat race, making money for doing as little as possible does not sound bad at all....

Well, it really depends. If all you aspire to be is a clerk and make 40-something grand a year, then work in the government really is a good deal. The higher profile your work, the more stressful it will be. If you're super ambitious, expect immediate rewards and recognition for your work, etc., then you'll probably get frustrated with the bureaucracy really fast. There are no such things as bonuses, there are no open-bar Christmas parties, there's no free coffee (heck we don't even have a water cooler at our office), etc. On the other hand, you get 3 weeks of vacation to start, you can take time off to take your kids to the doctor, and you can take sabbaticals.

I don't believe in abusing the system like taking sick days just because they're there. If you move beyond pushing paper, some of the jobs are pretty interesting (managing programs, working with regulations, negotiations, etc.) You'll understand how government works and why some things are the way they are.

taylor192 · 01-30-2011, 09:49 PM

Quote:

Originally Posted by Gt-R R34

Do you see yourself continuing with the same company for the next 20-30 years. Your define pension goes out the window (depending on company) if you move on to another company and you start from scratch.

This depends on the employer. The government allows you to roll your pension into an RRSP to keep the benefits you've earned - yet the amount you can roll is far less than the defined benefit would pay in retirement. So you may be doing fine right now with little retirement savings, yet if you change companies this could change substantially.

Almost all of my friends that consider leaving the government cannot pull the trigger cause their benefits are so good.

taylor192 · 01-30-2011, 09:54 PM

Quote:

Originally Posted by Tapioca

The public's appetite to slash defined benefit pensions is something I have not yet hedged. What I see happening is that if there is enough political will, the politicians may stop offering defined benefit plans for any new hires after a certain date.

Watch the US, we tend to follow. Right now many states are battling for pension rollbacks, and have already canceled pensions for new hires.

There was a big pension rally in Hamilton this weekend, and there's lots of private Canadian companies rolling back pensions already.

I would suspect your defined benefit pension will stay intact, yet change when you can take it and how much it will be worth. 2%/yr for 30 years and retiring with 60% of the average of your 5 best years will probably be the first thing cut. The age will be pushed out, or the amount given cut back, or both.

taylor192 · 01-30-2011, 09:58 PM

Quote:

Originally Posted by goo3

BTW, is it true govt work is slack?

Not saying it's a bad thing.. after a couple rounds of the rat race, making money for doing as little as possible does not sound bad at all....

I lived in Ottawa for 10+ years and worked for the government, then for a company selling to the government. I can tell you that it is 80% slackers.

I would go to most offices and the parking lot would be filling up at 8am, and empty at 3pm. If you do the math, that's not even 7 hours worked, then consider lunch and breaks.

Some do work hard, yet unfortunately they tend to leave. The government promotes on seniority, not merit. I would walk too if some douchebag got promoted before me cause he's been there 5 years longer playing solitaire.

taylor192 · 01-30-2011, 10:18 PM

Tapioca, this is how I see it:

If you're in government then Ottawa is where you need to be to seriously move up. Yet you may need to be bilingual too... although training is often provided.

Hiring is essentially frozen in the federal government, so there will be room to move laterally/up as people retire and new people are not hired. Yet for now jobs are not easy to come by, so I could see it being difficult for you to move around currently.

Ottawa is a fantastic city to raise a family, yet not so much fun while you're young (thus why I moved here). If you like Vancouver and want to stay single for a couple years, stay here then eventually move there. Houses are cheaper, salaries higher, food better, lifestyle nearly as active, and the people friendlier in Ottawa. Summers are warmer and longer, yet winters suck ass. There way more educational experiences in Ottawa, thus even better when you start a family.

---

As for your academic aspirations - stop thinking degrees and start thinking certificates. There's tons of certificate programs you can take, and since the government covers costs up to I think $5K, they will be completely paid for. Maybe look at doing a PMI/PMP instead of a MBA for instance.

---

For financial advice this is simple: don't bother. You don't have enough assets to get a good adviser, you'll only get a glorified bank teller. I have > $200K and still don't qualify for great financial advisers.

If you want to learn, sign up for iTrade, try the sample trading where you get to play with fake money to see how it works. yet remember you're essentially gambling at this point so start small.

---

As for career aspirations - I took a career hit moving to Vancouver. I could have had a management position paying $30K more by now. Worse, there's fewer opportunities in my field here, so less chance I'll move up.

Was it worth it? Absolutely. I am happy enough in my career that if I don't move up I won't be disappointed, and I make enough to be more than comfortable. I've traded career aspirations for enjoying the Vancouver lifestyle.

To me it sounds like you're bored. I get bored at work sometimes too, so when I do I usually pick up more hobbies outside of work, in particular hobbies where I get a chance to learn something. This makes me focus more at work to get done faster and out the door to enjoy the rest of the day. Currently I'm learning to skate and play guitar.

Tapioca · 01-30-2011, 11:03 PM

Thanks for the insight, taylor.

I lived in Ottawa briefly when I was a naive and impressionable student. I got the worst of the seasons while I was there - a harsh winter and a humid summer. It is a great place to raise a family and the people are pretty good. If I do end up moving there at some point, at least Montreal is a short drive away.

I have picked up a few hobbies since I started working full-time. This year, my new interest is Toastmasters.

I have never heard of anyone in the government being promoted solely on the basis of seniority. If you want to move up, you have to compete for a job. You will get your 1-2% each year, but that's it.

taylor192 · 01-30-2011, 11:23 PM

Quote:

Originally Posted by Tapioca

Thanks for the insight, taylor.

I lived in Ottawa briefly when I was a naive and impressionable student. I got the worst of the seasons while I was there - a harsh winter and a humid summer. It is a great place to raise a family and the people are pretty good. If I do end up moving there at some point, at least Montreal is a short drive away.

I have picked up a few hobbies since I started working full-time. This year, my new interest is Toastmasters.

I have never heard of anyone in the government being promoted solely on the basis of seniority. If you want to move up, you have to compete for a job. You will get your 1-2% each year, but that's it.

Toastmasters is a great hobby to pick up! My friends that have done it have improved themselves immensely, more confidence in life, not just speaking in public.

Solely on seniority is an exaggeration, yet you do have to "compete" for jobs, yet the competitions are far from fair. You must have seen this by now? people getting promoted who you cannot believe got the job.

Ottawa is a humid city so the summer will always be hot and sticky and the winter have a lot of snow. Most of the time the winter is not that cold (it was +10C in Ottawa this Jan) yet a couple -40C days are guaranteed.

Montreal is fantastic, my family is there so I would visit once a month. That is something that is missing in Vancouver, a close city that is very different to take weekend road trips to Seattle, Victoria and Whistler are just not that much different.

Tapioca · 02-15-2011, 11:04 AM

After some conversations, I think I have a handle on what I need to do: further my education.

I've already invested 5 years of my life in the public service, so I need to do something that will allow me to stay competitive: obtain a Masters in Public Administration. I've been zoning in on the the University of Victoria. They offer an online MPA program that's reasonable in terms of cost (~10K) and that will allow me to continue working full-time. I will definitely have to make some sacrifices and the benefits won't be realized in the short-term, but I think it'll be a wise investment in the long, long-term. I will have to wait a year to apply though since the deadline for this fall just passed.

Thanks to everyone for the advice.

abdulclamwacker · 03-01-2011, 08:15 PM

See the world and don't get married.

LiquidTurbo · 03-01-2011, 09:39 PM

Quote:

Originally Posted by Tapioca

After some conversations, I think I have a handle on what I need to do: further my education.

I've already invested 5 years of my life in the public service, so I need to do something that will allow me to stay competitive: obtain a Masters in Public Administration. I've been zoning in on the the University of Victoria. They offer an online MPA program that's reasonable in terms of cost (~10K) and that will allow me to continue working full-time. I will definitely have to make some sacrifices and the benefits won't be realized in the short-term, but I think it'll be a wise investment in the long, long-term. I will have to wait a year to apply though since the deadline for this fall just passed.

Thanks to everyone for the advice.

Sounds like a very safe option. Ever consider travelling the world?

If you want something risky and blazze, why not travel the world.