The first
decade of the new Millenium was a turning point for us. It felt like things
were falling into place. The sacrifices and hard work over the past twenty years
were paying off. However, the future was on my mind. I had recently turned 50
and was very much aware that I had more years behind me than in front of me. If
we were going to achieve my goal of retiring at 60, we needed a plan. Yes, we
did have our pensions and my work RRSP, but realistically we knew that these
would not cut it. The goal was not to stop working and sit at home. We wanted
to do the things our dads hadn’t had the chance to do, so we would need an income
that would accommodate an enjoyable and active retirement. We were going to
need some help. As I’ve mentioned in past posts, working with a financial
advisor had not gone well for us, so that was out of the question. We decided to
make an appointment with a personal banker at our bank. We met with Jennifer and
shared our goal with her. She said she would be happy to assist us with a plan.
Our next meeting is something I will never forget. She was more excited than we
were! We talked about our current situation, income, current debts, savings,
etc. She asked a lot of questions, but one especially caught me off guard. She
asked if we had plans to renovate our home. I responded that this is something we
would like to do someday but it was certainly not something that would be done
in the immediate future. She disagreed, saying that we should do it now because
we did not want to have to spend our retirement funds on home renovations. This
made sense, but my first thought was I would never be able to retire.
Renovations would be expensive. They would no doubt take all the money we had
hoped to put away for our future. Besides, we were very close to paying off our
mortgage, which to me was integral to affording to retire. Turns out I couldn’t
have been more wrong. Taking into consideration our current income and debt
load, and our ten-year timeframe, Jennifer helped us to build an investment
plan that would accommodate the retirement we wanted. It would mean a regular
healthy contribution that we would have to stick to. But it would also leave
enough in the coffers to increase our mortgage payment, allowing for some
renovations.
Our next
plan of action was to meet with a contractor to discuss the renovations we
would like to make, and a budget. Good luck was on our side again. We contacted
a friend who was a very reputable contractor, knowing full well that we probably
could not afford him. We knew him to be a very honest person and had hoped to
get some guidance. It turned out that he was slowing down his business activity
and now only took on small jobs with a small crew. He would be more than happy to
take on our reno project. Dwight came to the house to meet with us. As we tried
to determine which areas of the house we thought most needed a remodel, he said
for us to dream big and tell him everything we would like to change. The list was
significant, but we could prioritize. He took away the list and came back about
a week later with a quote. The number jumped off the page, hit me square between
the eyes and knocked me to the floor. The renos were going to cost double what
we had paid for the house. I didn’t see how we could do it. We took the quote
to the bank and let Jennifer perform her magic. Twenty-five years earlier, we
purchased our house at a very high mortgage rate of almost fifteen percent. The
rate on the table for the renovation costs was under three percent. My, how
times had changed. We were going to have to commit to a significantly higher
monthly payment than we were accustomed to, but it was do-able. We were about
to take the first step of our ten-year strategy. The plan was coming together.
More next week.
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