"Life's but a walking shadow, a poor player that struts and frets his hour upon the stage and then is heard no more. It is a tale told by an idiot, full of sound and fury, signifying nothing."

Wednesday, February 27, 2008

Musing, Dreaming, Scheming, and Planning

My big move is coming up in about seven months and I keep on imagining potential scenarios and numbers to go with those scenarios. There are just so many 'whatifs' when you're planning a cross-country move with no guarantee of finding a job before you go. Ah, I do so love adventures!

At any rate, I finished my taxes yesterday and am doing some research today and finally, finally am beginning to really understand the retirement plan my financial adviser came up with. It all has to do with the power of an RRSP.

One tidbit of financial advice I'd held onto since starting my career as a civil servant is that RRSPs are not the best savings vehicle for us since we have an amazing pension plan. That changes, though, when you're a civil servant who wants to retire before her 30 years are up.

So, my planner had me take all my money out of my emergency fund and put it into an RRSP. I balked, but ponied up the money. Then, I did my tax return. Where I discovered that my RRSP contribution meant a refund of just about the same amount. Waitaminute. I put money in an RRSP and the government pays me for it? Okay, the catch is that I have to pay taxes at withdrawal but until that day, the government is giving me money for my retirement.

Yes, that's probably a bit oversimplified, but it's not insignificant. The obvious thing to do with my refund is add it to my RRSP for next year. And so on. Until I reach the one million dollar mark my adviser says is realistically within my reach in the timeframe I'm looking at and which I'll be able to combine with my partial pension to have enough to live without working full time.

I'm going back to my move, hold your horses.

So, I finally understand why savvy people move heaven and earth to max out their RRSP contributions every year.

Okay, how can I do that myself?

I've come to the conclusion that housing is the expense I need to drastically reduce for a few years. Sure, I could buy a house cheaply in Manitoba, but when I factor in repairs and whatnot, owning a house is not cheap. I can't wait to own a house again, but I'm beginning to accept that doing so at this stage of my life would be a mistake for more than just financial reasons.

You see, I haven't been 'free' in ten years. I've been encumbered with a household and debt and studies and work and whatnot since the end of my teens. I never had/took the chance to do something cool like travel around the world for a year. Wouldn't it be nice for just a few years to be in a position to 'just go' whenever I want?

So, why not take this move as an opportunity for a fairly radical, but temporary, downsize?

My cats make some potential scenarios tricky and unlikely, but I am exploring all options. One that I really like for its whimsy is to rent a room with kitchen privileges for the winter months and then tent-camp all summer. I'm sure my cats would have a blast. :-)

But the more serious idea I'm entertaining is to move this fall to a room with kitchen privileges so that I can research two purchases in the spring: a small piece of land on which I could later build my dream home and a gently used motorhome (both paid for with cash).

My expenses when 'at home' would be land taxes and propane (or whatever I use to heat and power the RV). I have yet to explore the centre and north western halves of this continent and could do so in my own home with my own cats at my leisure.

I'm learning that I can have everything I want, but not at the same time, and not if I order them incorrectly.


1001 Petals said...

The RV idea sounds really good. I wonder how much insurance and gas would be though.

Might be worth it if you bought one that's a couple yrs old (so it would have already dropped a lot in value) and then sell it after the year, making back most of the money :)

Raven said...

I've seen the calculations done for this sort of scenario and if you have no, or very minimal, payments for your RV, the cost of gas and insurance is still well below what it would cost to live even cheaply in a regular house. I wouldn't spend that much time on the road, either.

I'd definitely be getting an older unit, something that would cost me no more than 10K. It could have a ton of mileage and still be good for the purposes of this exercise provided it's mechanically sound. I considered a trailer at first since they're much cheaper, then I realised that I'd have to get a vehicle strong enough to tow it, so more money.

This idea has been going around my noggin for a long, long time, but it just seems more feasible now for some reason. I'm just not sure about the idea of buying land immediately (what if I end up not liking the area or new by-laws come in and I can't build my dream home later or whatever?). There are soooo many variables, LOL!!!

Louise said...

Thank you so much for the kind comment you left about about your cats on our blog. It really made my day!

Best of luck on your plan to move into an RV. Once you find one, if you need help deciding if it a good deal, I highly recommend the discussion board on escapees.com. They are good, honest folks there.

Raven said...

Louise, thank you for your advice. Google hadn't turned up that site!