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Saturday, October 25, 2014

April 2014 – Investment Update

Posted by Tim Stobbs on May 1, 2014

The following is an update of Tim’s plan to retire early.  Please note we are mortgage free, and the house equity isn’t part of the retirement plan.

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 use a trailing 12 month average on spending (but excluding vacations) and a trailing 12 month average on investment results.

Investments

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

RRSP $37,900 ($100), [+$0]
LIRA $13,930 ($0), [+$110]
TFSA $44,310 ($5500), [+$990]
Pension $95,220 ($1136), [+$208]
Wife’s RRSP $55,420($0), [+$0]
Wife’s TFSA $39,740 ($2500), [+$1150]
High Interest Savings Account $3530 (+$330),[+$0]

Investment Net Worth $290,050 ($9566), [+$2458 or +0.9%]

(YTD Contribution: $22,996), [YTD Gain: $10,588 or +3.83%]

Average Monthly Gain (12 month rolling) $2131

Spending

Last Month $1765

Another fairly boring spending month, the only odd transaction was the annual life insurance payment of $270.

Trailing Last 12 Month Average $2671

Results

Number of months trailing average spending covered by trailing investment gains: 0.79 {Target 1.0 or higher}

PF Score: 21.5  {Target 32}

Net Worth ~$690,000

Commentary:

Well tax refunds are sure handy, as that let us max out both my TFSA and my wife’s TFSA this month.  This of course is why my YTD contributions are already over $22k.  Which is good since I’ve been dragging my heels on getting that RRSP money moved over and back into the market (right now it is still just in cash).  Not doing anything with the money is going to drag down my investment results if I don’t get my butt in gear.

I’ve also decided to start posting approximate net worth again on these statements, since really with the spending information you can calculate it from the PF score anyway.

And finally I got some really good news yesterday, but the information hasn’t been publicly released.  So I can’t tell you specifics yet, but I promise a post on that next week.  Feel free to speculate in the comments. ;)

Any questions?

(click to make bigger)

April 2014 Net Investment

Comments

13 Responses to “April 2014 – Investment Update”
  1. Liquid says:

    Your company got bought out? :) Glad you’ve brought back the approximate net worth number. It’s like a financial report card. And nice gains in both your TFSAs :)

  2. Amy says:

    I have enjoyed reading your blog since I came across it a couple of months ago.
    Your investment returns listed here look good. Do you have a previous post describing your investment strategy?

  3. Tim Stobbs says:

    @SSS – Nope…I already got that for the year.

    @Liquid – Nope…I work at a crown corp…so even if we were sold off it won’t help me out.

    @Amy – Several posts…which doesn’t give a good overall summary. Mmm, perhaps I should write one up which explains it better. In summary, RRSP are being moved right now, but will end up in index ETF (bond, US, Canada and International). Pension is somewhat conservative (I only have like five choices). Meanwhile TFSA are all individual stocks based on my monthly bills (banks, telecom, power…you get the idea).

    Tim

  4. Amy says:

    Thanks for the summary. I would love to see a dedicated post.

  5. Fritz says:

    I have just now been going through your blog. I am 42 this year and by my calculations i could retire this summer if i wanted. it has been a goal for some time and one that many others cannot figure out.
    would love to converse and crunch some ideas.

  6. Fritz says:

    Interesting to see how close my numbers are to yours.
    Net worth less real estate- 258,855.00
    (if i sell one of my properties then i have closer to $400,000 net worth, is it enough to retire now?

  7. jon_snow says:

    Fritz, without knowing the specifics of your situation, I’d wager to say you probably should have a larger nest egg before thinking of retiring that early… but if you have a large inheritance coming, are an investing genius, or if you can live incredibly cheaply maybe you can do it.

    I’m the same age as you and am retiring later this year and have a portfolio in excess of 7 figures which is generating over 4k in monthly dividends (roughly twice our monthly spending amount). And I’m still nervous about quitting my job this young. :)

  8. fritz says:

    Thanks Jon. you are making twice in just dividends what you are spending and you are nervous about retiring? I guess it comes down to what you want to do-keep working at your job or something else.
    My kids are still young and i have 10-12 left before they move onto their own lives-something i have contemplated is leaving wor for that time and then go back to work for 5-10 years and i still would be ahead. it is tough to choose, i have a kick ass job, i am home every night and after school during the week but i work 12 hours every weekend and holiday and the family is getting tired of that.
    We do live cheaply for years- so we are used to living on less then 3K a month easily.

  9. fritz says:

    Tim- for your net worth of 690,000 are you including your house at 400,00?

  10. Tim Stobbs says:

    @fritz – Yes the $690,000 number includes the house equity. I would personally not retire on $258,000 in investments unless you had one hell of a big real estate portfolio providing a nice steady income. My plan calls for me to save about $750,000 in investments (no house equity) prior to leaving. So hopefully that helps.

  11. fritz says:

    My plan is a bit different. thinking of retiring now (at 42 and return to work (at 55) for 5-10 years. that’s when the kids are gone and both the wife and i can work at the same time. right now I work and my wife is the caregiver at home while i am away. by my calculations i will have used up half of my net worth by that time. it is a scary thing to do but that’s what i want to spend my money on- time with the family.

  12. Jacq says:

    Fritz – if it were me, I’d look at ways that I could earn a little something while you’re downshifting to offset expenses. It goes a long way when your spending is as low as yours sounds like it is. It also helps for getting back into the workforce without a 15 year gap. And helps with the boredom that *can/often* results from having long periods of time off when you’re in your early 40′s (speaking from experience there – most people *need* a challenge at that age – and if it makes a bit of $$ then you’re killing 2 birds). I started downshifting at your age with contract work in order to spend more time with my kids among other things although I had more in savings – but no intent to draw on it at that point. No regrets except for one contract where I worked with a friend who wanted me to be full time/permanent and couldn’t understand why I wouldn’t. It all turned out well though. :-)
    Not sure how much you make, but if you can save $50-$100k a year in taxable accounts, I’d consider doing that for a couple more years and start pursuing a side income at the same time. I’d really be hesitant to suggest that many people try to pull the plug entirely right now at market highs without some kind of safety net of income coming in. Jon would be an exception as his wife works and his portfolio is more than enough for them.
    I really do think there’s too much emphasis on all or nothing in the ER world. I’ve been fortunate to be able to work for awhile every year for the last 6 years (only one of those years being a full year of work). There are options for downshifting out there but it’s hard to see them when you look at it in terms of a binary job/no job perspective.
    Best of luck to you.

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