Establishing a "FUN" fund

[HardWorker]

MaxwellMcGee posteda while back about us helping him decide against a higher end car, it worked from the sounds of it, and now I kind of find myself in the same situation.

I love offroading as a sport, almost obsessively actually. March of this year I sold the Jeep that I owned and built up for the last 6 years. Reasons were because I wasn't using it enough, I needed the time and money to put towards my small business, and renovating the house a little. Fast forward a few months, where now I see quite a few Jeeps from the US for sale that are pretty much 20%-30% off because of the economy. Of course now I have the buyer's itch big time. I pretty much spent the weekend researching them, playing with the numbers, and even asking the fiancee if she would like a trip down to a southern state.

I know the deals are good and very tempting, but I know its not a good time. I still don't have time, and the money can be used for something better. Total cost is going to be around $20,000, which I have and is doing nothing but earning very little interest. So this is where you come in. I was thinking to curb my almost child-like desire to spend that money on a toy, I'd setup a small "FUN" investment. I'm thinking 50-$100 a week into a TD efund? The amount is obviously not big enough to justify buying ETFs. Or should I wait a bit, and buy ETFs in $1000 increments?

The goal of this fund is to allow me to withdraw the money in 2 years time, when I'm married, wedding and home renos are paid for. This will be like a reward type of deal. I know 2 years is very short horizon for stocks, but I'm not really looking to make big returns, I just want to have access to the money and not lose any of it. Or did I just answer my own question and I should buy some money market funds in small increments? And oh I don't see my tax situation changing that drastically in 2 years time, so I don't see any benefit to depositing into RRSPs and withdrawing at a lower rate.

Thanks in advance

[BRIAN5000]

What about that new fig-ama-gigeee TSRP, TPSP what ever its called.

Having segmented accounts for different goals is valid depending on how you think or behave.

For myself beng a cheap shrew it would help with spending a bit more money on fun things but I tend to whack it all in the same pile to get the most bang for my buck.

I did finally buy my big screen plasma TV, its just ok.

You could put your fun account on paper only.

[HardWorker]

What about that new fig-ama-gigeee TSRP, TPSP what ever its called.

You mean the new Tax Free Savings Account (TFSA)?

You could put your fun account on paper only.

What? Why? And how?

I thought about this fun account idea all day today. I know its a psychology thing. It doesn't really make a whole lot of sense exposing that money to any risk, And I know myself if "an amazing" deal comes along, I'll go out and buy it anyways. But somehow, having a "fun" account that grows, while I do the responsible thing and take care of other things will work for me

[BRIAN5000]

What? Why? And how?

Well you have an account with x amount of money in it and you just say that some of it is your fun account and the rest is your general savings or whatever. think it was Scotia Bank that used to do this for you. You had the appearance of separate accounts for different savings goals but it was just one account behind the scene. They did the paper work for you.

[HardWorker]

Gotcha, its even more virtual on my psyche than I thought.

No one believes the TSX / S&P 500 will rebound in 2 years? Am I too optimistic?

[BRIAN5000]

God I don't know. You know the general rules of thumb, and they are different depending on your risk tolerance. If your going to put it in the market you should have X time frame, for me its 5 years or longer.

You can take a chance, and hope your right, what happens if your wrong?

It seems a lot of people, (younger?), on FWF have all equity portfolios with no cash, bonds, Gic's.

Silly me ( I'm usually backwards and in this case I was) when I was younger I only had fixed income. Now, not including real estate, I'm about 50/50. It's possible once this latest test is over I may move to 60 FI / 40 EQ.

I keep hearing you have to enjoy the journey!

Being frugal hinders this a bit. We were at a family dinner and the three ladies that I and my two brothers are with were having a good laugh at how we research something and don't buy something (opps but) till we're sure.

[MaxwellMcGee]

Being frugal hinders this a bit. We were at a family dinner and the three ladies that I and my two brothers are with were having a good laugh at how we research something and don't but it till we're sure.

There may be a reason that rappers rarely craft verses based on their frugal approach to spending and investment.

[BRIAN5000]

Ok I even got a laugh out of that.

can't splel, or add very wlel but still doing ok.

[HardWorker]

It seems a lot of people, (younger?), on FWF have all equity portfolios with no cash, bonds, Gic's.

Yeah I guess that includes me. 100% equity, although some what tamer with index funds and no individual stocks. My time horizon is very long, and I sleep easy at night. My fixed income fund is my mortgage. Its been very well, and I'm pretty happy. I have cash (rainy day and sleep easy at night), but it only earns enough for 2 cups of coffee a week. I guess not losing money is winning these days.

If I bet on the TSX and S&P waking up again and lose? Well if its just a bit, then its still a win as I beat temptation, if its major, then I'll really hate myself as I beg friends to let me borrow their toys.

[flywaysuzy]

We're lucky enough to go 'off roading' out our back door. Our son has his fun with his inexpensive quad and old tercel and his bike. We geezers are foot propelled and get the dog moving as a bonus. You can have a lot of fun while spending much less than 20k.

[wallpaper]

Hardworker,

Take this opinion with a grain of salt, but you sold the jeep you worked hard on and you rationalized that choice in your mind. It must have been very difficult to make that decision, but obviously you felt there was merit to it.

People have a way of thinking that 'sales' are saving them money - but thats only if youre in the market for a particular item. Youre no longer in the market (in fact you painfully got out of the market!!) for a new jeep and now you may be tempted to spend the money you convinced yourself to save.

If you can, put yourself back in the frame of mind in which you formed reasons to give up your jeep in the first place. If things have changed, ie you have more time, then maybe its worth pursuing. If things havent changed, then use your time horizon to think about where you want to be in two years. Maybe this money is better off accumulating towards a different kind of goal.

[BRIAN5000]

There are Fun accounts and FUN accounts $20,000 qualifies in the FUN account catagorey. Anyway you can get this done cheaper ? How much did you get for your old jeep? Was it enough to get you one year ahead on your RRSP contribution instead of one year behind or are you already ahead?

[HardWorker]

flywaysuzy, I hike, and mountain bike as well. But the offroading I'm talking about is a whole different animal all together. Some get it and love it, some don't.

Wallpaper, your suggestion is logical, my desire isn't, and I guess hence this posting asking for some help

Brian, I'm not sure what being ahead or behind in RRSPs is? 13% of every paycheque (gross) goes into RRSPs. I have some room to use up, but I'm not planning on it. 45% of my gross paycheque goes towards my mortgage (accelerated). The remaining 42% + OT pays taxes, and living expenses. My rental income is my savings/fun money. If I stay with current employer, I also have a pension plan, and thats why I don't want to max out my RRSPs every year.

And to answer your question, my last Jeep was sold for $6,000. It was a fair price for its state. The new Jeep is much bigger and heavier duty. If my last Jeep was a Miata, then the new Jeep is a Corvette. The Jeep will run me $15,000 and its accessories will be another $5,000. Spreading it over a year or so won't hurt much. But geez the stock market is on sale right now too. I'm actually a bit confused on what to do now. Invest or buy the toy?

[BRIAN5000]

Most people contribute to their RRSP in January for the previous year. In January of this year you should have made your 2008 RRSP contribution not your 2007 one. It looks like yoru doing monthly hopefully its for 08.

[HardWorker]

Oh I see.

I do weekly actually, since I get paid weekly. And I never deposit in Jan/Feb for the previous year. Its all set on auto pilot for the most part. Lets see how well DCA works out at the end.

[flywaysuzy]

I normally make my contributions in January for the current year, but make pension contributions all year as well.
HW, if that's your old jeep in your photo, you would definately like to go up the hill with my youngest. Mud is where it's at for him. He had to get it pulled out of a gravel pit with a 4wd tractor last spring. At least if they take their quads, they can usually winch/pull or heave the stuck ones out on their own. I get what you mean about the motor size, I'm happy in the miata, while the offspring pines for a corvette. He'll have to finish high school and find a job first, I guess!

[HardWorker]

HW, if that's your old jeep in your photo, you would definately like to go up the hill with my youngest. Mud is where it's at for him. He had to get it pulled out of a gravel pit with a 4wd tractor last spring. At least if they take their quads, they can usually winch/pull or heave the stuck ones out on their own. I get what you mean about the motor size, I'm happy in the miata, while the offspring pines for a corvette. He'll have to finish high school and find a job first, I guess!

Its awesome your son is into an outdoors hobby. There are so many negative things kids can get into, and so many video games to glue them to the TV. Hes gonna brake lots of parts offroading (LOTS). The skills he'll learn now will serve him well, and save him thousands down the road.

My avatar picture is of my last Jeep. I think it was in North Bay for some charity run, possibly in '04. When I was comparing the Miata and Corvette, I was speaking metaphorically, not literally. Although I know of a few guys who buy Corvette engines for their Jeeps.

So anyways, this thread on FWF didn't do the trick. I found an awesome deal on my next addiction. It took about a week, but I got a fairly great deal. I'm a good negotiator, but apparently slow All in all, I ended up spending 15K and not the planned 20. Yes the money could've been invested more logically. But enjoying life while alive and well is the ultimate investment.

Late Sunday evening I took my fiance to the shop to show her what I was going to buy. The child like smile on her face sealed the deal. I'm very grateful she enjoys my hobby without being clingy. We've actually decided to incorporate the new Jeep into our wedding (resort owners permitting), and we might even take our honey moon in Moab Utah, which is heaven for mountain biker and offroaders.

[flywaysuzy]

HW-Glad you got your dream fun toy. I got the 4-banger vs 8 cyl. analogy, it just so happens that we do have an old miata and my son still drools over every corvette he spots. My answer: Go start up the red truck, it's got the 454, the dual exhaust plus you can fit 75 bales of hay in the back! He mostly fails to find the humor in my vehicle related comments. He just spent $250 on carbon handlebars for his bike, would I have done that? Heck no, but am I secretly lusting after a carbon fiber paddle? Maybe I am...

You could change your picture to your new jeep when you get it muddy!

[BRIAN5000]

I'm a good negotiator, but apparently slow All in all, I ended up spending 15K and not the planned 20. Yes the money could've been invested more logically. But enjoying life while alive and well is the ultimate investment.

and way more fun, post some pictures

[HardWorker]

and way more fun, post some pictures

Ask and you shall receive. Heres the new toy, about 90% complete. I'll have to finish it up over the winter, it'll be ready early next spring.








Suzy, can I borrow your big block? Please, pretty please. I'll tell you where my fiance got a good deal on a Carlisle carbon fibre for her kayak

And oh this toy isn't for mud, heres a couple of quick clips of the kinda thing its built for.

http://www.youtube.com/watch?v=681kM6Xi ... re=related

http://www.youtube.com/watch?v=iugHYPCm ... re=related

[flywaysuzy]

With that cage and those tires, I guess you're not bound for the nearest mud hole! I've never seen such technical rubber. Obviously, not much in the way of rock climbing around these parts...will look up the utubes next time I'm in town-no wireless out here either! Do you have to tow out to the outback or are you putting lights on it?

HW, you're welcome to borrow the 454-so long as it's back in the truck before next year's hay crop needs to be hauled in!

I remain optimistic that a used carbon fiber paddle could cross my path at some point (garage sale, gear swap?), in the meantime, since the paddling is limited right now, will be content with basic fg.

[HardWorker]

It'll have to be towed, not road legal by any stretch of the imagination, but shes all insured I'll add lights, a heater core, etc etc, to finish it up.

The towing part is a pain, I have a little SUV that won't do the job, so I need a bigger truck, which I'll probably rent. But heck if you let me borrow your truck, I'll give you professional driving services for free, help out around the far, and I'll bring the truck back with a full tank of gas