💸My $1.5M FIRE progress update

After 8 years of aggressive investing, I am finally ready to enter the next stage of my FIRE plan, which is to re-focus my cashflow on debt repayment to reduce fixed cost. Here is an overview of my current financial positions as of July 11th (all currency in CAD):

Financial Assets

• DIY stock portfolio (taxable/TFSA/RRSP): $1,027,993

• WS private Equity: $11,872

• Employer RRSP: $54,000

• Smith Maneuver portfolio: $99,486

• Crypto cold wallet: $10,600

  —-

  Total: $1,203,951

Portfolio Debt

• Margin Loans: $52,335

• HELOC Balance: $88,823

  —-

  Total Debt: $141,158

Current Monthly Fixed Cost

• Mortgage: $2,300

• Condo Fee: $670

• Property Tax: $246

• Utilities (insurance/internet/phones/hydro..): ~$300

• Food: $600

• No guilt spending: $200

• Travel budget: $1000

  —-

  Total: $5,316

  Annual burn rate: $63,792

  Emergency funds: I keep multiple personal line of credit opened which can cover 1.5 years of expenses.

Based my financial position, I am satisfied with my equity portfolio size which should compound itself to $1.5M within a few years without additional contribution. However, my burn rate is slightly higher than my $60,000 target (covered by $1.5M end goal using 4% rule). My focus over the next 2-3 years will be mainly paying down the mortgage balance to reduce the monthly payment down to about $1500. This will reduce my burn rate to about $54,192, comfortably below the spending limit after FIRE. My future contribution to the portfolios will be mostly for registered accounts only, with the rest of saving goes into debt repayment.

One important consideration is that the mortgage payments in Canada does not decrease even if you accelerates the payment once the term is locked. My workaround will be to use WealthSimple portfolio line of credit (PLOC) to make a significant repayment in the upcoming renewal in October, and aggressively pay it down over the next 1-2 years. This allows me to lock in the fixed cost reduction, aka reducing mortgage payment to $1,500 per month immediately, while also allowing me to continue reducing fixed cost as I'm paying down the PLOC. The WS PLOC currently offers an lower rate of 3.9% compared to my new 4.21% 5-year fixed mortgage rate.

Overall, I'm feeling pretty good about my progress and should be able achieve FIRE in the next 3 years. Checkout my original post on Blossom for comments and discussions.

DISCLAIMER: SoloFIRE is not a registered financial advisor. This post contains author's personal opinion only and it should NOT be considered financial advice. While we strive for accuracy, we make no representations as to the completeness or suitability of any information on this site. All investments involve risk, including the possible loss of principal. Past performance is not indicative of future results. Always consult with a qualified financial professional before making any significant financial decisions.