Investment Update – April 2013

The following is an update of Tim’s plan to retire early.  Please note the house is paid for so net worth is no longer tracked.

To track my progress I’ve decided to track both my expenses and my investment gains.  So once the investments gains are consistently beating my expenses I’m financially independent and can stop working.  I think my ideal tracking of this would be one full year of investment and spending data, but I don’t have that yet.  So for now I’ll do a trailing six 12 month average on spending and investments for the calendar year.

Investments

Account (Contribution), [+/- Gain or Loss less contributions]

RRSP $33,210 ($100), [+$320]
LIRA $12,480 ($0), [+90]
TFSA $20,630 (+$2900), [+$470]
Pension $71,760 ($973), [+$517]
Wife’s RRSP $38,800 ($0), [+$230]
Wife’s Investment Account $12,830 (-$600), [-$200]
Wife’s TFSA $13,720 ($0), [-$300]
My Investment Account $6,890 ($-300), [+$30]
High Interest Savings Account $1,900 ($0),[$0]

Investment Net Worth $212,220 ($3073 ), [+1196 or 0.6%]

(YTD Contribution: $17,802), [YTD Gain: $11,717 or 6.4%], YTD Avg Monthly Gain $2929

Spending Averages

Last Month $4183

Trailing Last 12 Months (less mortgage payments) $3041

Results

Number of months spending covered by investment gains: 0.96 {Target 1.0 or higher}

Commentary:

So this month I finally fell below my target of 1.0 for the first time this year.  So lesson learned in the short term a massive gain in investments can seriously mislead you to think you are doing better than you are.  I’m glad I’ve kept my expectations down so far, but I’m happy to see the YTD investment gain stay over 5%.

This month our expense took a hit as we had an unusual bill of just over $2000 owing for federal tax.  Which seems like a lot until I looked into it and realized that just about all of this tax owing came from our home based businesses, which then transfer cash to cover their portion.  So while I’ve booked the full expense of this in this summary about $1450 of that was paid for by the business accounts.  Proving again if I keep using the full expense number generated from Mint I will be over estimating what I actually need for the plan.

On the investment side we drained off some extra cash in the investment accounts and contributing more to the TFSA accounts.  I need to look into cashing out the taxable accounts entirely and moving them to TFSA.  There really isn’t a good reason to keep getting the fees in those small trading accounts when they won’t be used much for the next few years.  The plan is to catch up on all our contribution room in our TFSA and RRSP first, which should take about two years.

Any questions?

3 thoughts on “Investment Update – April 2013”

  1. As for moving your stuff into your TFSA you have realize you positions for tax (deemed disposition) when moving assets into a TFSA.

    In you situation (massive saver) you will be caught up quite quickly without the transfer. So unless you have a loss that you want to offset some other gain or you don’t care about the taxes you might want to hold off.

    Just my 2 cents.

  2. @Adam,

    Good point, there will be tax from the move, but both my wife and I have previous year losses which we have been carrying forward. So the hit will be minor compared to the future tax free growth.

    Thanks,
    Tim

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