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Monday, July 25, 2016

June 2016 – Net Worth

Posted by Tim Stobbs on July 4, 2016

The following is an update of Tim’s plan to retire early in 2018.  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 $550,000 (or higher).

Investments

Accounts

RRSP $49,800
LIRA $14,900
TFSA $73,710
Pension $140,240
Wife’s RRSP $78,870
Wife’s TFSA $59,060
Wife’s Taxable $37,980
High Interest Savings Account $1860

Investment Net Worth $456,420 (increase of $1630 over last month)

Home Equity

Estimate $375,000

Spending

Last Month $6267

About $4500 of that was property tax and house insurance.

Trailing Last 12 Month Average $2445 (or $29,350 for the last 12 months)

Results

PF Score: 28.3 {Target 31}

Net Worth ~$831,420

Commentary:

Well given the gloom of the Brexit, I really expected this update to be worse, but the markets have mostly recovered from the shock and we managed a slight increase overall.

Spending was high for the month, but historically that is ALWAYS the case for June as it is the double doom of property taxes and our house insurance are due at the same time. Yet overall the trailing 12 months is staying in our target range of $30,000 or less.

Any questions?

June 2016 investment net worth

(click to make bigger)

March 2015 to May 2016 – Net Worth

Posted by Tim Stobbs on June 24, 2016

The following is an update of Tim’s plan to retire early.  Please note we are mortgage free and because I have forgot to do this for a while I’m jumping through all these months in a condensed version of my usual update.

Our ultimate goal between investments and the home equity is a net worth of around $1 million.  The investment part of that target is ~$550,000.

Investments, Spending

March 2015: Investment Net Worth $362,440; Monthly Spending $2429

April 2015: Investment Net Worth $365,070; Monthly Spending $928

May 2015: Investment Net Worth $377,210; Monthly Spending $2418

June 2015: Investment Net Worth $375,750; Monthly Spending $5024

July 2015: Investment Net Worth $380,060; Monthly Spending $2599

August 2015: Investment Net Worth $374,800; Monthly Spending $1201

September 2015: Investment Net Worth $365,540; Monthly Spending $2534

October 2015: Investment Net Worth $381,830; Monthly Spending $2589

November 2015: I honestly forgot to write down the numbers; Monthly Spending $2185

December 2015: Investment Net Worth $384,230; Monthly Spending $3886

January 2016:  Investment Net Worth $401,640; Monthly Spending $2169

February 2016: Investment Net Worth $406,480; Monthly Spending $2020

March 2016: Investment Net Worth $426,310; Monthly Spending $940

April 2016: Investment Net Worth $433,400; Monthly Spending $2278

May 2016: Investment Net Worth $454,790; Monthly Spending $2060

Home Equity

Estimate $375,000

Results

May 2016 Net Worth ~$829,790

Commentary:

Did your eyes hurt reading all those numbers? Mine did just preparing them, but after putting this off for FAR too long.

Just a few broad comments, you likely noticed the big jump in investments from Dec 2015 to Jan 2016, well that was because I was being lazy about helping my wife open up a taxable investment account.  So the cash just hung out in our chequing account for the last six months of 2015, which isn’t included in these updates.  The other notable jump was Feb to March 2016 which was just a combination of stock market surge, and tax refund.

Any questions?

investment net worth May 2016

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The Last $100K

Posted by Tim Stobbs on June 8, 2016

So while I know I owe you all a net worth update with all the details I will provide the following little tidbit of net worth news: we just broke $450K in investments at the end of May.  This number may seem a bit odd to be excited over, but I should provide some context to help you understand it.

First off my floor number for leaving work is to have investments of at least $550,000 (plus the already paid off house), so now I’m officially are on saving the last $100,000 to reach my goal.  Being this close to the end of my goal is interesting as I can now actually make a fairly realistic guess of when I will hit that floor value (late 2017 if you must know).  I do intend to actually keep saving (and working) past that number a bit to add some cushion in for a few items like some renovation savings and a pool of cash to use to pay our expenses in the event the stock market falls right after I leave my job.  So rather than fixing the dollar value when I will leave work I’m leaning instead to merely fixing a date in my head in early 2018 and worry less about the exact number of investments when I leave my day job as long as it is past my floor amount.

The second reason that $450,000 in investments is important is that is actually enough money that I am now financially independent on our basics expenses. So when I talk about basic expenses I mean merely bills paid, food on table and nothing else.  No fun money, no vacation, no luxuries, no wine or beer (gasp and sob)! Obviously I have little to no interest in actually leaving paid employment at this particular level, but it does add to the comfort of knowing that if things went really bad suddenly and I was laid off we would be fine for an indefinite period of time.

Of course, some of you may be doing the math on that $550k value above and think I’m bloody well off my rocker for considering leaving work with only that much saved, but I should point out a few important facts:

  • Our plan is based on a spending up to a max of 4.5% of our principle each year (not the usual 4%).  I’ve investigate the risks of pulling out slightly more money I am comfortable accepting them.
  • My wife fully intends to keep working at her daycare, which provides about $6000/year income to the house for the next five years.
  • I fully intend to earn some money myself by working part time at a fun job earning on average $6000/year for the next five years (after an initial 6 month detox period of no work right after I quit).
  • We will be getting an increase in our child tax benefits which will finish funding our boys RESP accounts for us.
  • We are comfortable downsizing in the medium term (5 to 10 years out) and shifting up to $75,000 from the house equity to investments in the event our investments do worse than planned.

Overall I’m happy with plan and the potential risks.  I’m working out the exact details in a spreadsheet model the is broken down by the month from now until 2023. I’ve also setup myself a list of homework assignments to complete before I leave work to determine any issues I have misjudged like reviewing our spending data from the last four years, checking out extended health insurance options, planning my potential weekly schedule ( answering that question of what do I want to do all day) and more.  I’ll provide a post on that in the future.

So I expect there will be questions on all this, so please leave them in the comments I will attempt to address the in a series of posts coming up.