June 2013 – Investment Update

The following is an update of Tim’s plan to retire early.  Please note the house is paid off, 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 to date.

Investments

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

RRSP $32,880 ($100), [-$1140]
LIRA $12,260 ($0), [-$430]
TFSA $26,330 ($7710), [-$1600]
Pension $73,180 ($973), [-$1403]
Wife’s RRSP $38,440 ($0), [-$770]
Wife’s Investment Account $110 (-$13,350), [-$110]
Wife’s TFSA $26,880 ($13,400), [+$-570]
My Investment Account $100 (-$6556), [+$6]
High Interest Savings Account $1,210 (-$3200),[$0]

Investment Net Worth $211,390 (-$972 ), [-$5967 or -2.8%]

(YTD Contribution: $20,404), [YTD Gain: $8,285 or 4.5%], YTD Avg Monthly Gain $1380

Spending Averages

Last Month $7235

Trailing Last 12 Months (less mortgage payments) $3386

Results

Number of months spending covered by investment gains: 0.41 {Target 1.0 or higher}

Commentary:

This month’s update almost needs a subtitle like: it can’t get any worse.  It’s interesting how I’ve lost almost $6000 in gains and almost undid the last five months of market increases.  Oddly enough…I’m not even upset.  I’m now used the fact the summer months always suck, so I don’t worry about it.  In fact, I look at the price drop as “Oh, what can I buy?”

You might notice we have mostly closed out our investment accounts and moved the cash over the the TFSA accounts.  We are just waiting to ensure any last payout from the stocks clear the accounts in the next month.  Then they will be fully shut down.

On the spending side, our property taxes were due which drained out the savings account and our house insurance.  Hence the negative contribution rate for the month.  Also some of our holiday spending is starting to show up this month.  I’ll back that out of future updates as that spending isn’t relevant to our retirement plan.

Any questions?

(click for a bigger version)

investment_june_2013

4 thoughts on “June 2013 – Investment Update”

  1. One trick I use is the Vanguard Retirement simulation:

    https://retirementplans.vanguard.com/VGApp/pe/pubeducation/calculators/RetirementNestEggCalc.jsf

    I think the investment gains to spending ratio doesn’t include so many fluctuating factors which the simulation uses.

    For me, I estimate I will want $30 000 spending in retirement (real dollars), and would use an allocation of 50% bonds 50% stocks. I want the probability of my money lasting to be better than 90%. So it means I need an investment net worth of $900 000 (Real dollars). Based on my math I’d be there at age 41 (but I’ll likely buy a house in the next 2-3 years which will slow that down).

  2. I have to do the same when I look at the exchange rates every month. Some months it goes up and others down and I have to just suck up the loss and move on. I think it’s great how you keep positive, it’s the only way to be. Keep up the great work.

  3. When I transferred a lot of money into my index fund account earlier this year, I didn’t feel right doing a lump sum approach. Now, I’m really glad I didn’t as I still had some cash sitting around to take advantage of this price drop.

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