Jan 2017 – Net Worth

The following is an update of Tim’s plan to retire early.  Please note we are mortgage free.

Our ultimate goal between investments and the home equity is a net worth of around $1 million.  The investment part of that target is $582,000.

Investments

Accounts

RRSP $56,320
LIRA $15,930
TFSA $81,800
Pension $153,140
Wife’s RRSP $83,370
Wife’s TFSA $76,940
Wife’s Taxable $52,080
High Interest Savings Account $17,890

Investment Net Worth $537,470 (increase of $10,990 over last month)

Home Equity

Estimate $395,000

Spending

Last Month $2886

Well this month included a few extras as we celebrated my older son’s birthday with going out for supper on the day of and held a party for him the following weekend (~$500).

Trailing Last 12 Month Average $2553 (or $30,642 for the last 12 months)

Results

PF Score: 30.4 {Target 31}

Net Worth ~$932,470

Commentary:

Well that stock market rally has really held pushed up our investment net worth in the last few months.  Honestly I’m almost making more in the market that I am taking home from my job.  It’s a fun feeling even if it is only a temporary thing.

Now to some investment updates.  I topped off my RRSP with a bit of money to increase my tax refund.  I’m trying to keep my available contribution room as close to zero as I can manage. And then we topped off our new TFSA contribution room for 2017.  Then we decided to sell off some of  my wife’s taxable account to fund our cash savings.   There was also some extra cash in some of our accounts we shifted out to our savings.

And finally our kids’ RESP balance reached $71,720 which isn’t included in the above summary (since it has nothing to do with funding our retirement plans).  Now add it in to our net worth, did you notice what happens? Yep, we hit that mythical seventh digit otherwise know as being a millionaire.  I’ll have another post on that later on in February.

Any questions?

Jan 2017 Invest Net Worth

(click to make bigger)

7 thoughts on “Jan 2017 – Net Worth”

  1. Hi Tim,
    I follow your blog with interest and really appreciate some of your insight on common questions.
    I have always struggled with the definition of millionaire status. In my opinion, this should be based on liquid assets as you cannot spend your house. Especially in today’s ridiculous housing markets, there are effectively “millionaires” around every corner that don’t have a penny in investments.
    Just wondering your thoughts on this.
    Thanks
    Dan

  2. With the draining of the investment account you’ll trigger capital gains. If the money goes into your TFSA you must claim the gains, if she claims the gains its an illegal contribution. Spouses can’t contribute to a TFSA, typically the work around is joint accounts. I doubt anyone will care at CRA.

    The bigger issue is making sure the taxes work out well. Capital gains this year will effect your CCB cheques next year. After you retire your income drops and the clawbacks fall too. With your prodigious savings rates you could probably fully fund them by the end of March, drop RRSP contributions for 2 months and then resume RRSP.

  3. Tim,

    You’re now FI. You’re now a millionnaire! Thats awesome , and that’s the goals me and several other want to reach for Early retirement. And you’re there

    But you’re still working. I hope you won’t have the ”Just one more year” syndrome.

    It would make me sadly believe there is never enough money to feel safe and willing to make the big jump

  4. http://www.taxtips.ca/filing/spousereturn.htm

    I was thinking about my earlier response. The taxtip links explains the attribution rules and why its important to track the money between spouses. Any money gifted from her to your TFSA then becomes your money forever (unless gifted into her TFSA). You can’t gift money to invest, that’s not a legal strategy for income splitting.

    I think that you made a mistake taking money from the lower Net Worth spouse to fund the higher tax bracket spouse. Taxes aren’t shared in Canada, there’s rules about who pays what and at what %.

  5. @Dan – I will cover that in more detail in a post next week, but I also thought of that issue.

    @Domino – Actually I’m mainly working to put aside some cash for a few items that we plan to do in the future. In short I want a cash cushion prior to leaving my job.

    @Jay – Sorry, I re-read what I wrote and could see the confusion. My TFSA contribution came directly from our chequing account, not from my wife’s account. Yes selling some of her account will trigger capital gains, but not much since that account is only been open for a short while. Longer term it would best to move as much as that money into her TFSA as possible even if it trigger small amounts of capital gains along the way.

  6. Good job Tim!

    For you’re PF score, shouldn’t you not consider your home equity, unless you plan on having a reverse mortgage or downsizing the home?

    Markets have been great, but maybe a small correction might come up just in time for tax season. Get the most out of reinvesting the refund.

  7. @ Matt – Actually one of our backup plans does include downsizing, so I left it in. Also if you click on the ‘PF Score’ in the post it links to another post where I explain how I added in home equity to get the overall target of 31. So in or out, it doesn’t much matter as you can adjust your target to match and you are willing to downsize.

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