Tuesday, August 21, 2018

A Brief Update on Aiki Finances

One of our guiding principles when we first took on this particular endeavour was to try to trim down our lifestyle such that it allowed us to spend more time together.  For a family of introverts, we sincerely enjoy one another's company!

The first three years we were able to bask in the ability to spend the entire time together most days.  It didn't mean we were attached to one another, but moreso that if one of us needed to work on a large project, the other was free to keep an eye on Kenny.

While Kenny has grown and doesn't need constant (or really any) supervision, we still want to be sure that he is involved in the goings on in our household and connected to us.

Unfortunately, fiscal realities set in and my part time income(s) certainly weren't enough to keep us afloat.

Donna's skill set is much more employable and as such, she has gone back to work.  First at three days a week, then moving up to four, and for nearly a year now at five.  This is definitely the opposite direction from where we intended that particular needle to move.

Rather than get bogged down in how annoying this has been, I'm going to write only about the positive spin it has put on our finances for now.  If it weren't for that, I don't believe it is something we would want to continue for any longer than required.

It has allowed us to pay off the roof of the cabin when we realized that was a project that couldn't be tackled by one person.

It allowed us to purchase a more reliable vehicle to make the pilgrimage back to southern Ontario to visit family once (or twice?) a year.

It reduced a fair amount of stress from watching the bank balance that once seemed so high in the black, to keep tracking into the red.

We like the bank balance needle moving higher again, but we also are mindful that Kenny is at a great age to start having more adventures together.  Whether here on the homestead, or perhaps showing him a bit more of the world.  We also now believe that providing him with some of his own tangible assets may be a good plan for his future; something that seems increasingly hard to prepare for or predict using traditional means.

Almost two years ago we suffered from reduced access to one of our greatest resources out here on the homestead - one that I've often admitted was the difference between total failure and the successes we've had.

Mummu and Grandpa decided to move from the property adjacent to us back to the city.  It's nice that they are still more than close enough to visit often, but it's nowhere near what it was like when we could walk back and forth between us.

One of their choices in moving to the city was that they no longer wanted to be home owners.  They were happy to rent and have fewer worries about how to maintain a household.  Not to mention no longer having to cut wood and blow out a huge driveway.

An idea floated while they began their search for an appropriate place to move to - for Donna and I to purchase a tidy little home of their choosing, and then turn around and rent it to them for enough to cover the expenses.  This would give everyone the best of the situation.  We still had a mid-sized HELOC [home equity line of credit] on our house in Kitchener, and the local RBC was willing to provide a mortgage for the remainder based on Donna's income and our credit rating.

Together we found a cozy bungalow that seemed to check off all the required boxes.

This situation worked so well for the first year that it began to show us a way to perhaps get Donna home sooner.

With that in mind, we tapped even more of the equity in our Kitchener home to purchase a triplex in Thunder Bay, and placed three very lovely tenants there.  It required more renovations than we expected (isn't that always the case?), but we believe we have done most of the heavy lifting so that it shouldn't require many more inputs going forward.

Mummu and Grandpa have been at their place a bit over a year now, and recently we began looking for something else for them as there were a few things that they would prefer to have differently.  Luckily we found another home in the city that they like even more, and it sports a small suite in the basement which should help to off-set the increased price.

So here we are, about to close on that house, and lining up renters for the house they are now leaving, as well as this new basement suite.

Truth be told, this year we probably will make very little or even nothing from all of these "doors" - as renovations took a bit of a toll on the balance.  We also had windstorms in southern Ontario that damaged the roof in Kitchener, which needed to be repaired to the tune of many thousands of dollars.

We're optimistic that with these large capital expenses finished, rental properties may provide a less time-intensive stream of income for the family budget and may soon free up Donna significantly.

I'll try to add in a bit more writing about how we are managing our time and money going forward, as I think that's an important part of the picture.  Things like financial independence and early retirement have played a large part of our thoughts of late, and so it's only fair to include them on the blog.

Bonus picture of "hawky" - a hawk that has been hanging around the cabin quite a bit the past week, and appears nearly tame!

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