Retirement Ramblings Part I

Happy Hump Day lovelies!

My dad sent me an e-mail last week - now that he is newly retired, he has a little bit more time on his hands to do the things he never used to be able to do. He told me that he read all of my blog posts and loved everything that I had written so far (aww, thanks daddy) - he then asked if he could write a guest blog post. Of course I immediately said yes - and then we decided that he would do a guest blog post at least once a month. He's got a ton of funny stories to share from his 30+ years working for Environment Canada.

Without further adieu, here is dad's first ever blog post:

Spreadsheets Tell You the Ugly Truth

I love spreadsheets.

Seriously, I’m a spreadsheet guy. Call it what you will: quirkiness; misguided interest; signs of a misspent youth; character flaw; or just plain lame. I love spreadsheets. While others engage in hobbies like sports, gambling, knitting, reading, driving, and movie-going, I play with spreadsheets.
More on this later.

So at the beginning of each year the municipal tax office sends me my property tax assessment. This includes a statement of what they believe to be the retail value of my house as well as the assessed value for tax purposes. They swear (and have done for the 3 decades we have owned houses) that there is no link between property tax and house assessment. They seriously must think we’re idiots. OF COURSE there is a link. Duh!

Anyway, we just got our assessment and I was, well, shocked … in an ecstatic kind of way. I know what we paid for the house … and with some mental arithmetic (not math … just arithmetic) I determined that, if they were right, then our assets had increased by $145,300 in just 8½ years. Wahoo! That’s an impressive average gain of just over $17,000 per year. I imagined myself trying to build up a savings account at that rate. I imagined having a savings account at all.

Now I’m an optimist. Not a goofy Pollyanna kind of optimist, but a results-based optimist. The difference between the two is that a results-based optimist is one who believes that things can and will get better, but he believes that while accepting the stark reality of the world in which he lives. I don’t look at the world through rose-coloured glasses. My career as a science guy has bred into me a healthy respect for data … and data are neither positive nor negative … they are just data. And where there are data, there is a grand use for spreadsheets.

I decided to put my spreadsheet hobby to use and create an elegantly simple construction of a cells and formulae that would calculate for me the reality (the truth) of my newfound assets, after weighing in the not-so-hidden liabilities inevitable when choosing a house over an apartment. We begin with my mortgage payments, averaging about $1200/month since we bought our house … a price that is comparable to the rent of a decent 2/3-bedroom apartment with underground parking. With the monthly mortgage payments swapping out for the rent, I pondered what other costs there have been that were unique to owning my house … costs that would have never arisen had we been renting an apartment. Turns out there were a few, all of which I fired into the spreadsheet.

The first one that came to mind was the water heater which chose to burst on December 22 … yes 3 days before Christmas … which set us back $740 to replace. If we had been in an apartment we would have never seen that cost. Next I thought about the $4,169 that we spent 18 months earlier to replace the furnace when it had given out. And of course that quickly reminded me of the $8,263 and $9,335 that we spent only a year before that to replace the roof and windows, respectively. Now I was on a roll: there was the $5,647 for new appliances since moving in and $1,800 for replacing a couple of those already (they just don’t make stuff like they used to); there was the $12,000 to turn an unfinished basement into fully finished; and of course the $10,000 in other renovations and home improvements along the way (paint, flooring and counter-tops aren’t cheap).



Phew … my profits were vanishing before my eyes. That’s when I started thinking about the routine stuff that an apartment dweller would never see, such as the $4,800 on lawn care that I’ve coughed up in the 8.5 years, not to mention the $33,600 in property taxes that my municipal government dogmatically declares is unconnected to my property value. Then my wife Debbie said, “and don’t forget the extra costs for power, oil and water that we pay compared to those lucky apartment people!” Crap! Even if I guestimated a monthly utility for apartment dwellers to be $150, my total costs for just those 3 “amenities” EXCEEDS theirs by another $25,249. I was quickly becoming a lapsed optimist. That’s when the dark side got hold of me and I started nickel-and-diming my “good fortune” to the point where I estimated that I’ve likely spent $800 in additional gas because of the idling in my driveway each year while I clear the ice and snow from my car windshield … something that underground parking would negate.

The final bit of reality hit when it occurred to me that in order to realize any of these “assets” I would need to sell my house in order to liberate said-equity. MLS listing fees are 6% (sure, you can do better, but experience says that the quickest and best sales come with the benefits of those fees). I intentionally withheld my assessed “retail value” until now: $400,100. The 6% fees on a full-price sale would be $24,006.

If you have taken the trouble to use even an abacus (you don’t need a fancy spreadsheet for this) you already know that my net profit on the house sits not at $145,300 … but rather, at an incredibly depressing $4,931!

Are you kidding me? That’s what I get for the 510 hours of renovations that I have personally put into the house … and the 300 hours of lawn care (35 hrs/year) … and the 120 hours of snow shoveling (15 hrs/year) … and the 52 hrs of windshield snow/ice clearing (30 min/week during the winter months) … and the 442 hrs of additional cleaning that a 4000+ sq.ft. house required over an apartment?

My wicked spreadsheet taunted me with the ridiculous reality that we put 1424 of extra house-only hours into a house that has netted us $4,931, for an effective wage of $3.46/hour. My final salary before retirement was 15x that … and my consulting fees are already coming in at more than 40x that.

I told Deb that my daughter is a genius because she lives in an apartment and that we need to do the same. ASAP!!!!!! (superfluous exclamation marks for effect) She said, “you’ve been playing on your spreadsheets again, haven’t you? Why don’t you take a break from that for a while because the snow’s really coming down and you need to go out and start shoveling?”

Before putting on my boots and gloves I went and deleted Excel from my computer and punched the monitor.



I hate spreadsheets.