Over the weekend I had a few questions about our financial plan. Thanks to Mike at Four Pillars and the SavingDiva for your thoughtful questions and ideas.
I am going to answer as best I can here. First, Mr W and I would like to retire early (me at 55, he at 60). I did not think it would be possible for me to retire at 50 when Mr W retires so I plan to work for an additional 5 years and then retire to spend time with my husband. We would both love to retire sooner, but at the moment that is not possible. Once we are debt free I have some additional income earning ideas, but we don't yet have that freedom.
One of our goals though is to own a vineyard. Our area is really becoming known for growing certain grape varieties, and it appeals to both of us as wine drinkers. We would have a lot to learn, but are no strangers to agriculture and hard work. We also plan to start learning more and more over the next few years. The plan is to co-own the vineyard with my parents, who have more experience growing grapes and making wine. Thus we need less investment. At the financial planner we estimated we would need $570k in addition to selling our house at today's market value of $270k. We ended up being $100k short in cash, but since we will be living there, could increase our mortgage payments.
Mike also expressed his skepticism (as I had too) about including a theoretical inheritance from our parents 30 years down the road, which amounted to about $300k. I thought about this all weekend, and decided that I am still reasonably comfortable about the current projection because we had included the vineyard as a goal. If we felt we would inherit only a third each of what we projected we could decide to: 1) decide we are not in the financial situation to buy a vineyard at all in 10 years, and put more into our RRSPs, 2) buy the vineyard and hope we can sell it for reasonable money because it is land and a business asset, or 3) retire at a later age (combined an extra 15+ years of working). It is a good point though, and next time I do this I will ask for projections with and without inheritance included. I like scenarios anyway, that is how I do any forestry modelling, I never give just one answer.
Thanks again for the comments, always appreciated.
One thing I've learned from doing quite a few projections for my situation is that when trying to predict the future, it's all in the assumptions. The reality is that you can't predict future inheritance amounts any better than your investment returns. All you can do is just use a reasonable assumption and see how it goes!
You seem to have taken this sort of attitude so that will help in your planning.
One other suggestion which I didn't include in my email is that in a few years when your investment accounts get a little bigger that you get into DIY investing in order to save costs. I wouldn't worry about it now (unless you are really keen) but it will save you money in the long run.
Mike