2015 Year End Review

Asphalted road .Forward to the New Year 2015

We are just a few days away from a New Year, and one sleep away before we fly to the Middle East for a 15-day trip to explore 3 countries there.  2015 has been a huge transitional year for us.  Here are some of the major events for our family:

January – our daughter moved out to live on her own and with her boyfriend at Olympic Village.  It was nice to be able to help her set up the condo and visit her as an adult.  Our family house of over 23 years was put on the market, and within 7 days, it was sold for a very good price with competing offers.

February – We were very busy getting rid of our stuff and preparing for our big move.  Our initial arrangement with my brother-in-law to rent their recently purchased condo fell through, but we were very fortunate to find a brand new townhouse across from Metrotown to rent for a reasonable price.  Our son got his work visa approved, and soon we saw him off to London, England, to start a new career in investment banking with a major bank.  We moved into the new townhouse on Feb 25, allowing a 5-day overlap before we hand over the keys to the new owners of our house.

March – 4 days after we moved out of our house and started to live in the townhouse, we flew to London to attend our son’s MBA convocation at Oxford University, and to visit his new home in a leased flat in central London.  Afterwards, we took a train to visit Belgium and Luxembourg for a few days before flying to Dublin to visit Ireland and Northern Ireland with a rental car for 2 weeks.

April – We settled down at our new townhouse and explored our new neighborhood.  I cycle 5 minutes to work, and my wife skytrain to work downtown.  We tried out some new restaurants nearby, and were happy to discover how convenient it is to live so close to all the amenities.  We hardly ever use the car to do chores.  We tried out the strata unit’s exercise gym, and jogged to Central Park for exercise whenever we had the time, in addition to playing badminton 3 times a week, which are the only times we drive our car.

May – My mother-in-law became ill and passed away quite suddenly. It was very sad for the whole family.  There were many family matters to attend to, including arranging for the funeral.  It reminded us of the frailty of life.

June – The weather got much better and days much longer.  Since I have so much more free time with zero home or yard maintenance, I signed up for several hiking Meetup groups and participated in many hikes on the weekend.  We also flew to Whitehorse, Yukon with a credit card 2-for-1 flight promotion, and traveled on the “Golden Circle” route with hiking in Kluane National Park and sightseeing in Skagway, Alaska for 6 days.

July – We started to ride our bikes every weekend to explore different neighborhoods around Greater Vancouver, just like what we had done 4 or 5 years ago.  We have a Greater Vancouver bicycle route map that we highlight each and every path we rode.  We also continued to sign up for more hikes via the Meetup groups, and we have met many interesting people through these activities.  Our sister’s partner treated us on a sailing excursion with his friend’s sailboat and had a wonderful bonding time.

August – We trained hard in July and August to prepare for the annual BC 55+ Games (a 24-sport event to encourage BC seniors to stay active in participation and in competition).  This year was my 3rd year participating in the sport of badminton (2nd year for my wife), and we both did very well, earning 2 medals each in our age category events.

September – We took a 3-week trip to the Italian Dolomites and the Greek Islands with another couple from Brampton, Ontario, that we met on previous trips.  It was a great trip with lots of fantastic hiking, sailing, activities, culture, food, and companionship.  Visiting world wonders of Santorini and Meteora were part of the highlights.

October – The weather was still very nice in Vancouver when we came back from our trip, so we filled our time with many more outdoor activities. I found time to sign up for more Meetup groups of different interests, such as Travel Hacking and Blogging.  We also entered a Masters level badminton tournament at the Vancouver Racquets Club where the best of the BC players play.

November – I decided to start a blog .  We brainstormed for a nice and appropriate domain name to buy.  Once I bought the domain name, along with a hosting plan, I was able to quickly get the site up and running within an hour.  It was fun to learn a new skill and put my creative hat on to create something from scratch.  I attended a Travelers Century Club meeting in Vancouver to hear great stories on exotic places of travel and enrolled in some weekly exercises for the core.

December – Between learning more features and tools with WordPress, playing badminton, and meeting new friends that arrived in Vancouver in their camper truck that we met in Yukon in June, and who are in the midst of traveling the world for the past 8 years, Christmas came quickly.  We had several get-together dinners with friends and families.  Our son did not come home for Christmas, but with technology like Skype, distance does not matter to our family bonds.  With the recent terrorist threats around the world, cheap air tickets were everywhere to be had. We bought return air tickets to Paris for $670 each for next May, and we were able to complete our detailed trip itinerary and booked all the hotels within a few evenings.  We tried to fit a trekking trip to Ladakh, India for next September with my sister-in-law and her partner, but the timing did not work, and we decided to visit Madagascar, Mauritius and Reunion instead.  We have now 2 trips 85% planned for 2016, plus the one that we are leaving tomorrow afternoon to United Arab Emirates (UAE), Oman, and Qatar!

We’ve had a busy and hectic 2015, and we are looking forward to potentially more positive changes next year!

Happy New Year!

2015-2016 change represents the new year 2016 three-dimensional rendering

 

Decluttering & Becoming Minimalist

When we decided to sell our 3,600 square-foot house and downsize to a 1,300 square-foot townhouse, we knew that we had to get rid of a lot of stuff that we have collected over the past 22 years.  We already got rid of all the toys that we have bought over the years when the kids outgrew them.  And we regularly donate our gently used clothing and household items to the Big Brothers and Developmental Disability Association.  But we still had lots of memorabilia, old camping equipment, obsolete electronic equipment, seldom used kitchen applianceP1070627s, and old photo albums.

Once we listed our house for sale, we had no choice but to sort all of our furniture and personal stuff into 4 categories: keep, sell, recycle, and garbage.

Soon, we are answering calls and emails from potential buyers from Craigslist, and driving endless runs to the neighborhood Value Village and to the city dump.  Lucky for us, we made about $3,900 from selling the piano that our kids learned to play music, large furniture such as our king-sized bed and teak wood bedroom set, numerous book shelves, stuff stored above our garage ceiling and basement, and much more.  We felt good donating many useful household items to Value Village.  The memorabilia was the most difficult stuff to let go, but we learned from a friend to take photos of these items such that they will remain in our memory but will not take up space in our new home.

After the whole exercise was done, we felt much “lighter” and not weighed down from all of our stuff.  We have read about being minimalist, and we actually took steps to declutter our lives for better lifestyle.

Here’s an interesting blog article about 21 Surprising Statistics That Reveal How Much Stuff We Actually Own.  We found it hard to believe that “Americans spend $1.2 trillion annually on non-essential goods”, in other words, on items they do not need!

We are so glad that we have undertaken the effort to simplify our lives and not be consumed by “consumerism”.

 

 

Rent vs Own – Our experiences after 10 months

In our previous post, we discussed our decision to rent instead of buying after downsizing our family home of over 22 years.  As we head towards the New Year, we did a quick summary of how we have fared financially after living in a rental townhouse for about 10 months.P1070553

We figured that the we are saving about $1,400 per month in living expenses in our rental home as compared to living in our previous owned home.  This can be broken down as follows:

  • property tax, water & sewer utility $420
  • heating and electricity $100
  • home insurance $180
  • vehicle depreciation & fuel of less driving $50
  • house maintenance & amortized appliance costs $500
  • lawn and landscape maintenance $75
  • parking at work $75

From the proceeds of our house sale, we calculated that we just need to achieve a 1.4%  after tax return (at our marginal tax rate) to pay for our net rent expense.  At this time, this net rental expense is far less than the dividend incomes we are earning from our investments.

We cannot determine if the overall rent vs own strategy will work in our favour in the long term yet.  The capital gain of Vancouver real estate versus the capital gain of our investments will require a longer time horizon to determine which is a better investment strategy.

So far, we are happy with our chosen investment vehicle, and are enjoying the lifestyle of urban and maintenance-free living.

P.S.  There are many opinions on this topic out there.  Here’s one we read this morning …. http://onemoredime.com/2015/11/18/real-estate-versus-stock-market/.  He does a good job comparing the two.

 

 

 

 

 

Housing Decisions

One of the big decisions when contemplating retirement is deciding where to live after retirement.  There are many options: 1) stay in the present home, 2) downsize and buy a smaller house/townhouse/condo, or 3) rent a house/townhouse/condo. With 2 of the 3 options above, one can also choose to move to a different city, or to a different area within the same city.

There is an article in today’s Vancouver Sun that talks about the rising demand for high-end seniors housing among Chinese-Canadians and Chinese-Americans, which is breaking the stereotype that Asian seniors want to live with their children. Traditionally, “multiple generations living under the same roof is supposed to be ultimate symbol of the Confucianist ideal of filial piety”, but nowadays, they prefer to live, eat, and shop close to one another instead.  Those who stay together in one house is doing it because of cost and shared resources.  Development companies are now building more upscale senior homes and marketing them as lifestyle experiences.

Our family have never considered to live together under one roof. Our son, like us when we graduated from university, wanted to experience living in a different city (he is actually experiencing living in a different country).  Our daughter also wanted freedom away from her parents.  For us, we like the idea of renting a strata home so that we don’t have maintenance issues.  We also calculated that it is more cost effective to rent than to own based on the high real estate prices of Vancouver.  There are lot less taxes, utilities and expenses with renting, and we feel that we can do better investing in financial assets than sitting on a large equity on a house. Renting also allow us the flexibility to try living in another area of Vancouver, or store our belongings to travel for a year or two.  So, renting turned out to be our decision for now.

P1220163

 

 

Long Term Thinking

My wife asked me last night whether I was worried about our retirement plans after the big downturn in the stock market for the past couple of weeks.  The TSX just dropped 5% over the past 5 days and our investment portfolio is hurting.  I reminded her that market volatility is nothing new – just think back to 2008-2009 when the market was down more than 40% at one time.  We must think of the long term.

The following chart is one of my favorite running stats on the stock market:SPX Time Frames

On any given trading day, there is a 54% chance that the market will go up, and 46% will go down.  Over a period of 1 year, the probability is 74%/26%.  Over 10 years, it goes to 94%/6%.

I think the stats for Canada is even more impressive.  I think the probability of negative returns over 10 years is zero.

So, there is nothing to worry about.  Just keep enjoying our Next Chapter journeys.

 

Top World Wonders

100 WondersMany people have asked us how we know and decide on where to go on our trips. Similar to my interests in countries, geographical features (such as mountains, rivers, lakes, waterfalls, caves …), and man-made structures (tallest building, longest bridge …) , I have always been interested in learning more about these world wonders. There are the original Seven Wonders of the World, and in 2007, the New7Wonders of the World Foundation (established by Canadian-Swiss Bernard Weber) announced the New 7 Wonders of the World. I was fascinated by these places, even as they announced the top 77 candidates, and the 21 finalists.  Later, I discovered many websites and blogs dedicated to give their opinions of the top world wonders, such as Hillman Wonders,  MinubeLonely Planet, Wanderlust, CNNLIFE,  and much more if you google “100 places to visit“.

It is impossible to get a consensus of the top 100 wonders of the world (and this list will continually change every few years as new natural wonders are discovered and new man-made structures are built).  An example of new wonders being added is shown on the Smithsonian’s Sept 2015 article “The 21st Century Life List: 25 Great New Places to See” which includes 5 places on yet completed.

So, we have used a combination of lists to develop a list of places we wish to visit.  Our “top world wonders” visited is now listed on a separate page by area, and we list further “wonders” that we would like to visit in our next chapter journeys.

 

 

The Start of our Downsizing

P1070642A major impetus for retirement considerations for most people is adult children moving away from the family home. Ours came exactly one year ago when it so happened that both of our children announced that they will be relocating elsewhere.

Our son, upon graduation from Oxford University’s MBA program, got a permanent job posting at an investment bank where he interned during the summer.  He was very excited about the new opportunities living across the pond. He got his work visa approved, and in no time, we are seeing him off to London, England at the airport.

Our daughter got fed up with the increasing long commute to VGH where she worked, and decided it was time to move out and rent a condo to share with her boyfriend.  With their good paying jobs and references, they had no problem getting a nice condo to rent in the heart of Olympic Village.  And in no time, we were helping her move her stuff out of our family house where we lived over 23 years.

With the knowledge that there will be only the two of us living in our large 3,600 square-foot, 3-level house, we contemplated about selling our house, moving to a condo, and changing our lifestyle.  We saw a “For Sale” sign in one of our neighborhood houses, and was surprised that it sold in less than a week.  We took the name and phone number of the listing real estate agent, and after the first interview where we talked about the pros and cons of downsizing and the crazy high prices of Vancouver real estate, we set in motion our decision to downsize.  And this is one of few reasons that the “Next Chapter Journeys” got started.

 

At 60, It is Time to Take “Carpe Diem” Seriously

An article published by Fred Vettese (Chief Actuary of Mornell Shepell) on the National Post yesterday talked about the high probability of a healthy 60-year old man suffering a critical illness or die before they turn 70.  As per the table below, the probability of this happening to a man between 50-60 years old is only 18%, but for a 60-70 year old, it climbs to 36%.  For 70-80 years old, it is 56%, and for 80-90 years old, it becomes 82%.

Risk of Illness or DeathThe critical illness may be life-threatening cancers, heart disease, stroke, kidney failure, Alzheimer’s disease, Parkinson’s disease or loss of independent existence.  So, even though that a healthy 60-year old man is expected to live to about 85, the disability-free life expectancy (DFLE) is a lot lower.  And supposedly, the number of unhealthy years is increasing, mostly due to the poor North American life style decisions that we are making.

This article should make us think about eating better, exercising regularly, and minimizing stress.  Furthermore, we should re-evaluate our retirement plans on the basis of our disability-free life expectancy rather than our total life expectancy.  If we think our DFLE is low, then perhaps retiring earlier and spending our money in our 60’s while we have our health should be a priority.  The article’s conclusion: “The words carp diem apply at any age, but never more so than when we turn 60.” is a good one.