Aug 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 $58,460
LIRA $16,530
TFSA $86,700
Pension $165,610
Wife’s RRSP $86,600
Wife’s TFSA $76,660
Wife’s Taxable $51,180
High Interest Savings Account $42,280

Investment Net Worth $584,020 (increase of $3,610 over last month)

Home Equity

Estimate $395,000

Spending

Last Month $3155

Well this month was paying the car insurance for around $1000 and then new cell phones for the wife and I for another $220.

As I mentioned last time I’m breaking out the renovations separate from the rest of our spending this year.

Trailing Last 12 Month Renovations $9509

Trailing Last 12 Month Average Everything Else $2889 (or $34,672 for the last 12 months)

Results

PF Score: 28.2 {Target 31}

Net Worth ~$979,020

Commentary:

Well I finally past my investing target of $582,000 and I have to admit I’m a bit disappointed.  Why? Because I honestly thought I would be further along than I am right now.  The markets have been sluggish lately so while I’m past my target for investments I was hoping to have a bit more of a buffer prior to leaving work. So for the last two months most of the gains have been contributions rather than investment gains.  Oh well, that’s the way life goes at times.  Good thing we pre-saved most of the cash for the first year so this doesn’t matter a whole lot.

Any questions?

(click to make bigger)

7 thoughts on “Aug 2017 – Net Worth”

  1. Tim, Congrats on exceeding your goal! You should be proud, excited or, at a minimum, pleased. Your earlier self who set that goal would’ve been more than pleased with no mortgage and almost $600,000. Celebrate that win.

    Also, thanks for sharing your progress for the past ~11 years. I always find peoples money journeys fascinating.
    -Max

  2. Well done!

    I have a question regarding the PF score however. If you include your home equity in the calculation, there should also be included a hypothetical rent in the expenses.

    Alternatively you could not consider your home equity in the networth. Then you get a PF score of 16.8 (=584020/34672).

    Do I get something wrong?

  3. Congrats on passing your goal, Tim. I know the markets have been sluggish lately. At least you don’t have a mortgage anymore, lol. I’m kind of bummed out interest rates went up again today. My variable rate mortgage is now more expensive to maintain than before. Oh well.

    @Mori,

    What is your reason behind why home equity shouldn’t be included in the calculation?

    The PF score gives you an idea of how well you’re doing in terms of getting to financial independence. I think home equity should be fair game so consider, since it represents real value. 🙂

  4. Thanks everyone! I should feel proud, but at some level I’m just not there yet.

    @Mori – It depends on what you are using the the PF score for. If you were renting I would include that in the spending but I adjusted the initial scale of the PF score up to 31 from 25 to include paying off the house (click the PF score text above to read the initial post on it). Besides I always used the PF score as a rough guide rather than fixed metric that I had to exceed. I hope that helps.

  5. Hi Tim,

    I am new to your posts in the last couple weeks and have backtracked through them a bit. Forgive me if I ask something you have answered a million times before. Early retirement was always something I thought would be cool, but never took too serious until actually crunching numbers recently and thinking hmmmm, maybe. Ironically, we seem to be very similar in situations. I am 46, similar net worth and 2 kids. We have never really used any formula, just paid mortgage off early, and saved wherever we could into RRSP, TFSA, pension etc.. Always below our means etc etc, you know the routine. For me I feel a couple things hold me back. I think I may feel more comfortable once my kids are done all schooling (both now early in high school), which will put me closer to 53 or so.. We do have RESP put aside for them, and my goal is for them to come out as close to debt free from school as possible so they can have a clean slate going forward. My question to you which I believe is the case, you intend to live off interest only with minimal draw from principal? Understanding some part time work for a while with both you and your wife. Assuming something happens, and here is no additional income, still in a position to survive off interest? I only ask as that is my hold back. We are very safe in investments and stick mostly with Market Growth GIC’s through the bank which holds us back to a lower interest rate. Company pensions are a little more risky, but not really, moderate risk choices. It is amazing what the difference between a 2 or 3% rate and 5% rate can make. Anyway, best of luck and I will continue to read for some good ideas. Some great reading material.

  6. @Bill B Gone – No I don’t think we could only live on the interest. I would have to consume some principle over the life of my plan (at least until I turn 65). Read the Master Retirement Plan post and hopefully that will explain things.

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