$171 free from Mastercard

The other day I was reading MoneySense magazine (its Canadian), and they had an article on the different types of credit cards available and which is best given your goals in life. I’m not much of a traveler (and if I was, I can get good rates through work), and I don’t have a grocery store nearby that I can redeem points for — so I prefer the Cash Back cards.

Now as a background, I’m not one to pay interest — I pay off my balance on time every month, and to date, have never paid a penny of interest to Mr. Mastercard :) I also put nearly every purchase I make on my credit card — and I mean everything — from a $2 coffee to a $2000 laptop. I do this deliberately, as it is free (to me) and also earns me a bit of cash back every year.

For the last several years, I’ve had the 0.05% cash back Mastercard with no fees, which gave me a nice $100 boost every January — which means I spent nearly $20,000 on it over the past year, or roughly $1600/month.

Lately though, my bank has been promoting a new cashback card, which offers 1.25% cash, but comes with an annual fee of $79. This card also comes with road assist, global travel insurance, and extended warrantee protection. But none of that I really care about — my decision came down to simple math:

If I spend another $20,000 this year, and get 1.25% back = $250 – $75 annual fee = $171 in free money! The difference between my old card, and new card, is about $71… not to mention the extra perks I get for simply having it.

Switching cards was ridiculously simple — I filled out a form online, and a week later the card arrived in my mailbox. I don’t know why I didn’t do this sooner… afterall, I’m literally getting paid to buy things that I was going to buy anyways.

What type of credit card are you using, and what perks do you get?

Career Moves

This past month has been quite interesting for me, as I made an agressive career move that seemed to work out quite well — and I didn’t even quit my job!

A few weeks ago, a direct competitor put up a job posting for my exact job description, which also listed the salary — which was about 20% more than I make. Now, I didn’t actually apply, because that company wasn’t the greatest, and to be honest, the industry I’m in, is not one that I plan to stay in for much longer. I did, however, drop the posting on my boss’ desk, so he was aware what the industry was paying… he seemed a bit surprised, but took it for future reference for my upcoming review.

To make it more interesting, I went on vacation and came back to a few messages on my voicemail from a head hunter, asking me to give them a call back — so I did, turns out, they found me on Linkedin and thought I’d be a good fit for a job. After probing them a bit more, they told me what company it was, and what do you know, it was the same company I saw that posting from.

I debated whether or not to even go through the interview process, as I was largely happy where I was carrer wise, but figured for my own peace of mind, it would be good to know what the job was all about. The first step was the phone screening, which went by really easy, as they sought me out — followed by the in-person interview with the hiring manager. This one was much more detailed, and went over my background, skills, career goals, etc. After about an hour of talking about the job, my background, and experience, he let me know there were a few other candidates he was interviewing too, and would know later in the week.

The next day — they called to let me know they’d have a decision the following Monday. An hour later, they called again, and let me know that they made the decision, and wanted to hire me. Wow, that was easy?

This is where I had to make a decision — I could change companies to do a similar job, but almost a step backwards for me, for more money, or I could stay where I am with seniority and career growth potential, but for lesser money. After a solid weekend of debating the pros/cons of making a move, I ultimately decided to turn down their offer. I’d much rather have career growth than more money (well, for the most part).

But with that said, knowing a competitor would pay me 20% more, I knew I was in a good postion to bring this up to my boss. I “casually” let it slip the other company offered me the job, to which my boss was surprised I even chatted with them, but he’s smart enough to realize I would have been stupid not to. A week later was my review, at which time I brought up the topic again — my boss knew career wise I was nearing the end if salary didn’t get corrected, so he went off to see where I should be salary wise, based off the internal and external data they had. A week after that, he came down, and to what I expected to be a low ball raise, they ended up increasing my pay by 16% (which is quite a fair bit). After all their external research and conversations with HR, they realized I was right.

Not only did I get (nearly) as close as the other offer, but after you include my extra weeks of vacation, perks, etc, I’m farther ahead than if I were to have taken the other job, plus, I have much more career growth opportunities here.

Career wise, it was a pretty tough decision to make to even go talk to the competitor, but it really helped set the benchmark of what I’m worth — I also played it off as that I was sought out, and it wasn’t a decision I made on my own (which is true), but I reiterated that I only spoke to them because I would have been foolish if I hadn’t. It all goes back to that old saying “In Business As in Life, You Don’t Get What You Deserve, You Get What You Negotiate” — Knowing a competitor would pay me more, put me in a pretty strong bargaining position… and if the answer had come back as “too bad so sad”, they knew I would have eventually left.

So now, with my sizeable raise, I figure I’m in a good spot for another year — the only challenge now is to make my job more interesting for myself on a day to day basis. Once that is solved, I should be good!

With that extra $, I’ve decided to go back to investing in the stock market, and putting away more money into my RSP fund — not the most interesting way to spend the money, but probably the wisest.

Two months later, an update!

I’ve been really bad at updating as of late — been busy with work, moving into my place, and life in general. But here’s an update of a few different areas.

Finance

Buying a place costs a lot of money I’ve learned — all the new expenses (strata, property taxes, mortgage payments, etc) add up quickly. I’m still happy I bought this condo, but it changes the budget up by a fair bit. I think I’ve gotten over the hurdle of buying things for this place, and can get back into a monthly budget, based off my new expenses. So far, I’m not spending more than I make — but I am not saving much right now. Need to turn that around!

Weight Loss Challenge

I mentioned in my last post that I’m going to focus more on my health, and lose a bunch of weight. I’ve been working out with my trainer for about 2.5 months now, and am seeing results — so far, I’m down about 25lbs from where I started, so I’m quite happy. I’m still working on cooking more at home, as well as eating better, but getting my ass kicked in a gym once a week is helping. While its $240/month for the trainer, it seems to be working, and I’ve got the weekly accountability I need.

Work

I’ve been in a bit of a rut lately with work, as I’m just burning out. Its been a crazy year so far, and has no signs of slowing down, so I’m in the precarious position of having too much work to do, and having to almost half-ass everything to get it done. That doesn’t really work with my style, as I like doing things really well… not fast and ‘alright’. I have a meeting with my boss later this month to hash it out, and it sounds like the company wants to keep me happy… but we shall see. I’ve been there for several years now, and I keep pondering whether or not its time for a change. I’m in no immediate hurry, but I’ve got my linkedin/resume updated just in case!

 

Thats been my last couple of months in a nutshell — I’ll try to get back to my regular updates, if anyone is still reading!

New Home, New Challenge

Now that I’m all settled in my new place, I’m starting to figure out what else my building has to offer — in particular, the gym. My old place didn’t have one, so I always had to go to the local rec center, but now its down on the 2nd floor, and is pretty well equipped. The catch is, is I have little to no idea what I’m doing.

So I figure now that I have a mortgage payment, and will need to eat at home more often, I should go focus on my health and getting fit.

I’ve been pretty out of shape for as long as I can remember (like 100lbs overweight), so this is a good motivator of change. Since the new year I’ve been debating what to do, and finally bit the bullet and hired a personal trainer last week. At $70/hour, its a good chunk of change knowing that I’ll see him once a week for who knows how long! My goal is to not only learn how to make the most of my time in the gym, but to have that level of accountability that comes along with a trainer yelling at you (heh). I think this has been the missing piece of the puzzle for years, as I’ve always wanted to lose weight and get more active — now that I’m paying for it, and being held accountable, hopefully I’ll see positive results for the long term.

My first session was on Saturday, and a day later I’m feeling it — we started off pretty slow, did the measurements and initial testing, etc, and then spent the entire — entire — hour going through different exercise and equipment. It really highlighted just how out of shape I am, and the amount of work I need to do to reach my fitness goals.

The trainer himself was pretty relaxed — he realized that everyone hates him by the end of it, and kept sharing different motivational slogans (I think thats why people hate him… no one wants to hear it! haha). But, by the end of it, I was much more confident in what I was doing, as well as had some takeaways to do at home.

Only time will tell the results, but we’ll see next week if I lost any weight, and if I can continue the healthy lifestyle. Its a long journey trying to lose about 100lbs, but its better to try and fail than not try at all (though I’m not going to fail)! Wish me luck.

Ambition without Passion

Over the past few months, I’ve slowly come to the realization that I’m reaching a point in my career, that I feel like I hit the brick wall… which is not something I expected so soon (6 years) into the workforce.

I’m now finding that showing up to work each day is getting harder and harder, as the work is just no longer interesting, and my passion for what I do is gone. I’m not sure if its specific to my company — as it is a great company to work for — or just the entire field I’m in. I know I’m good at what I do, but I find I’m losing my passion for what I do, without any sort of clue of what I would like to do.The work itself is just not interesting, and it really is just there is a LOT of work rather than it being challenging.

I’m trying to find a way to get re-inspired, but I think I’ve reached the burnout stage. How do I get past this?

I know I can look to different companies, but I have it pretty good where I am now — the pay, responsibility, and opportunity is there, but I almost feel as if I’m trapped. I could go somewhere else, and make less, or I could stay where I am now and continue to move up. Again, hitting the stage of just not being passionate about what I do.

I know I’m not the only one who has felt this — afterall, I’ve now been with this company for years. The average employee lasts on average 2-3 — I’m nearly double that at this job. How do you know when to jump ship for something different, even though it may be almost a lateral — if not slightly backwards — career move.

Is it better to stay in a job with a good potential, even though I’m beginning to hate it — or make a jump somewhere else, to be mentally stimulated?

New Home Money Pit!

Well, maybe not a ‘money pit’ directly, but since moving in exactly one week ago, I’ve been spending a fair bit on different things. These are above and beyond the closing costs I wrote about last week.

To date, I’ve probably spent $1,000 on small things for my place, minor maintenance things, or building/strata obligations.

In no particular order, these have included: $50 visitor parking pass, $80 braided washing machine hoses (something the home inspector said I should do sooner than later, $15 for maintenance on my sink drain, $40 on new shower head (old one sucked!), $35 on new stove drip trays (old ones were dirty enough it was easier to just replace), $10 for bike locker key, $7/month for extended channels for TV (basic is always missing that one channel I really want)…. etc, the list goes on. All the small things add up quickly!

To top it off, I made the decision before buying that once I do, I’d furnish the place right. Before moving out of my last apartment, I had a fire sale and sold all my bigger items on craigslist. Now, I need to buy a new couch, tv unit, bar stools, headboard, etc. All of this, I figure will set me back another $3-4,000 — but, on the bright side, I expect to keep it for 10+ years.

One thing I discovered early on that has helped a lot, is that with the RSP Home Buyers Plan, you can use the $25,000 you withdrawal for ANYTHING. So $20k went towards the down payment, and the remaining $5k was kept in cash for furniture and other expenses.

The good news of it all, is that in the grand scheme of things, these added expenses are fairly minimal. I’ve heard horror stories of people moving in, and realizing they needed to do tens of thousands of dollars of renovations and repairs!

Lawyer and Closing Costs

With the offer accepted and mortgage in place, the only last thing I had to do to make this purchase was official was talking to the Lawyer. My mortgage broker actually recommended him, and got me a discount, but it was still a very steep conversation.

The lawyer’s roll is to really figure out the nitty gritty details, that can often be a surprise, both for the buyer and the seller. This way, its all handled up front, and all the potential issues are resolved before ever having the need to go to court! As well, at this stage in the purchase, its a whole lot of paper signing acknowledging who I am, agreeing to follow strata rules, agreeing to the mortgage payments, etc.

For $800, he did all the work regarding making the mortgage company happy (making sure the property is actually sellable, is what we say it is, etc), along with flush out all the remaining costs owed by the sellers (such as existing strata payments, property taxes, etc). All in all, my total result came down to the $800 in lawyers fees, $300 in expenses from requesting all the various docs, and $1200 in liabilities that I need to assume in the purchase. The $1200 included the movie in fee ($150), pre-paid property taxes from the seller ($600), pro-rated strata fees for the few days I’m in there before the full month ($50), etc.

So far to date, there hasn’t been any real surprises in terms of cost. Right now, I’m sitting at the Mortgage + $2300 Lawyer fees and liabilities + $450 home inspection. Not bad!

Home Inspector – a $450 Investment

Spare ChangeSo with me in the final days of buying a place, I went through and had a home inspector go through it — to the tune of $450. While his fee was in line with other inspectors in the area, it was still high to begin with.

Now, I was on the fence about even needing one — afterall, its a condo, only 10 years old, and I read all the strata minutes, so I knew pretty much all there was to know about the unit and building. Thats good enough, right? Well, my real estate agent offered a pretty good insight — am I willing to risk buying a unit to save just 0.001% of my purchase price?

With that, I went for it — why not, afterall. I’d rather know, just in case. Even if it came back with nothing, I’d have that peace of mind. There are too many buildings where I live that have to get rain screened or have roofs replaced, because it wasn’t built well to begin with.

The inspection itself went quite well. The inspector was great at explaining everything, telling me why he was checking certain things, what to look for, as well as just ongoing maintenance tips over time. He checked everything from the electrical plugs, appliances, and  fixtures, to the underground parking, building exterior and common areas. As well, he pointed out where the water and electrical shut off valves are (they were hidden), how the dehumidifier system works, along with giving ballpark ranges for replacing the appliances and flooring when the time comes. All of this, he gave to me in a detailed report along with tips for what to do in the future to maintain it.

While there were no red flags — in fact, he gave my building a higher rating than similar buildings in the area — he re-affirmed my purchase decision, and helped me learn more about my future home

While $450 could be spent on other (funner) things… I’m happy I did it. I now know I’m buying a solid condo, in a well kept building.

If you’re buying — are you willing to risk structural, mould or electrical issues to save $450?

Soon to be Home Owner

Rent versus Owning a HomeOver the past month or so, I somehow got it in my mind that its time to buy a home — a condo to be precise. I think I’m finally growing up (ak!)

The main motivator, was that I started this year quite different than last year — this year I no longer had school, had no student loan, and had a fair bit of money saved up. Add on top of that, my landlord wants to renovate my suite (and kick me out to do it), mortgage rates have never been lower, and the condo market has turned to really favor buyers, so everything seemed to line up just right!

If you’ve been reading this blog for some time, you would have noticed I’ve been saving a fair bit of money each month in my RSP. All of this was designed to be used as a down payment, using the First Time Home Buyers program.

After getting pre-approved for a mortgage, I managed to find exactly what I wanted, only a few days later. While this is quick — very quick — I’ve been passively looking for the past 3 years, and really knew in my head what I needed/wanted in a place. These included a newer building, higher floor, up and coming/livable area, 1 bedroom, great building, and a good floorplan.  When I saw it, I jumped on it.

I ended up going realtor shopping, to find the right one — normally I’d try to find a recommendation from a friend, but there was no one who specialized in the area. With no hope there, I hit the pavement and went to a few open houses, both to see the units, as well as to secretly interview the agent. Turns out, I found the right one very quickly, who had a very similar personality, and was also willing to be agressive in the home search.

With the condo I wanted, it was over priced and out of my budget range — but that didn’t stop me and my agent from lowballing them back to a more reasonable price (well, reasonable for me). With the condo already empty, I had the fact I can move in very quickly on my side, along with another condo on the floor, with the same layout, selling for a big price drop only days before. Pairing these 2 facts together, along with a couple of motivated sellers, the owner countered me $5,000 (which is nothing), and I accepted!

While the deals not fully done yet, I am well down the path — I’ve gone through the condo strata minutes, have got all my financing figured out, and am now just waiting for 1 more form before I bring in a home inspector, and give my notice at my landlord.

While its been a lightning fast process, it really has helped that I’ve been passivley looking for years — both to know what I want, but at the same time to prepare myself with reasonable expections, and knowing that I’ll be paying off a mortgage for years and years and years to come.

If everything goes according to plan, I’ll be in  my new home at the end of the month!

Now the tough part — getting out of paying April rent… I know I have to by virtue of my rental agreement, but I’m going to try to negotiate with them to let me out early…. after all, they want to renovate my apartment anyways, and jack up the rent for the next tenant.

The Real Life ROI of Student Loans

I was going through my documents today, and came across a guest post I did on brokeprofessionals.com a year ago — I thought it was interesting enough to share again on here. As of a few months ago, I fully paid off my student loan and am debt free… but here’s a good insight behind that!

Over the past several years, there have a number of studies on the benefits of a post secondary education and how they can increase your lifetime earning potential. While the studies are interesting to read, I thought I’d dive into my own life and look at the difference a degree has made for me in just a couple years, compared to my friends who went straight onto work.

For me, it’s been almost ten years since I graduated high school, and in that time I’ve managed to spend upwards of $30,000 for a Commerce degree. Even today, it’s hard to imagine that in just four-years, while living at home, I could burn through $30k — but, I figured it was an investment that would pay off quickly… and it did. Before even walking across the stage to pick up my degree, I had already landed a solid job that would become the basis of my career. Not only that, most of my graduating class were in the exact same situation! The only downside though, was this piece of paper came with a pretty hefty price tag attached to it that would follow me around for years to come.

In my case, the $30,000 student loan I took out, would (according to my bank) take about eight years to pay back, along with $10,000 in interest, at 3.5% per year, making my payment roughly $4,500 a year. Even with a good paying job, it’s was noticeable chunk of money out of each paycheck – money that could have been spent on something else… like beer! But, just like the countless hours I put into going to school, this money was as an investment.

Doing the math, this investment is already paying off – right now, I’m earning an instant 222% return on it. How do I figure? Well, I compared my income to that of friends who didn’t go to school, and looked at the difference in pay.

For my friends who went straight on to working after high school, they hold the advantage of actual work experience along with no student loan. But, when you look at the type of jobs they have, most of them being retail and restaurants, you realize that their earning potentials are quite different. Averaging out their salary, they make roughly $15,000/year less than what I do. From the other viewpoint, I was making $15,000 morethan them, in spite of the fact I had limited work experience. So even after paying the $4,500/year for my student loan each year, I was still making almost $10,000 more, simply by graduating university – a 222% return.

Now, in all fairness, this calculation discounts the fact that my friends also had a four-year head start in terms of earning income. Even calculating that in, with my degree earning me about 1/3rd more than what they make, it would only take three years to catch up. And at that point, the additional earning potential is realized. But, I consider these four years a sunk-cost in my life, so I took them out of the calculation all together.

By simply showing up every day and applying myself, I had opened the door to a number of career prospects, while also growing a network of industry contacts. Sure, the four-years were challenging, filled with never ending homework, and stressful exams, but they were all part of the investment. Not only that, this return on investment only gets bigger over time – when you factor in my salary growth over the next 40 years, compared to those who didn’t get a university degree, the percentage will typically be much higher, thus widening the gap even further.

But that’s the long term – in the short term, I’ll sit back and pay my student loan each and every month, knowing that I’m enjoying my 222% return on investment.