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Friday, August 29, 2014

July 2014 – Investment Update

Posted by Tim Stobbs on August 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 $38,220 ($100), [+$20]
LIRA $14,380 ($0), [+$30]
TFSA $45,290 ($0), [-$110]
Pension $100,700 ($1000), [+$600]
Wife’s RRSP $64,470($3000), [+$50]
Wife’s TFSA $41,240 ($0), [+$440]
High Interest Savings Account $950 (-$471),[+$0]

Investment Net Worth $305,250 ($3629), [+$1021 or +0.3%]

(YTD Contribution: $32,961), [YTD Gain: $15,819 or +5.6%]

Average Monthly Gain (12 month rolling) $2471

Spending

Last Month $2641

This month included my $1071 annual house insurance bill.

Trailing Last 12 Month Average $2473

Results

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

PF Score: 23.7  {Target 32}

Net Worth ~$705,250

Commentary:

Just squeaked past the $100,000 mark in my pension, which is a nice little milestone to pass.  Also we finally got off our butts and have arranged to do the paperwork to move our RRSP accounts over to self directed, so I’ll be putting those back in the stock market in ETFs likely in August.

I bought another 100 shares in BCE in my TFSA and my wife is looking at buying some RY in her TFSA account, but she is slightly short of cash.  So she has a limit order out in case it drops that low (somewhat unlikely), but otherwise she should enough cash in another quarter.  Yield based on contributions is around 6.5% for both accounts combined.

Spending was noticeably up, but mainly from our house insurance coming due.  Overall not a bad month.

Again our spending and investment metric for the last 12 months are almost equal, so rather than worry about this I’m going to leave that metric likely until the end of the year.  Then I’m just rolling around ideas to replace it.  Currently I’m thinking of perhaps just having a flat target of like $600,000 for investments and then adjusting it annually for inflation.  Then as I get closer to end I’ll add a secondary target to track the cash flow from the accounts.  I’ve adjusted the scale on my graph to show $600,000 at the top. So we are a little over half way there right now.

Any questions?

(click to make bigger)

July 2014 Investment Net Worth

June 2014 – Investment Update

Posted by Tim Stobbs on June 30, 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 $38,100 ($100), [+$0]
LIRA $14,350 ($0), [+$220]
TFSA $45,400 ($0), [+$150]
Pension $99,090 ($1100), [+$690]
Wife’s RRSP $61,420($3000), [+$0]
Wife’s TFSA $40,790 ($0), [+$730]
High Interest Savings Account $1430 (-$2700),[+$0]

Investment Net Worth $300,600 ($1500), [+$1790 or +0.6%]

(YTD Contribution: $29,332), [YTD Gain: $14,798 or +5.2%]

Average Monthly Gain (12 month rolling) $2767

Spending

Last Month $5047

This month included my $3300 annual property tax bill, plus I bought a wine kit for $180.

Trailing Last 12 Month Average $2491

Results

Number of months trailing average spending covered by trailing investment gains: 1.1 {Target 1.0 or higher}

PF Score: 23.4  {Target 32}

Net Worth ~$700,600

Commentary:

Ya, we passed the $300K milestone for investments! Also I’m so close to crossing the $100K mark for my work pension as well, oh well, that should occur next month.

You might also notice our spending is way up this month.  This is a normal event for us as several large bills come due during the summer (house insurance and property tax).  But overall the trailing 12 month spending is stable, so I’m not worried.

Now onto the somewhat major shift in our results, the fact we were financially independent for the last 12 months.  Yes, my investment gains exceeded our spending and ironically we have likely been in this state for a while as I found an error in my formula that calculated our 12 month rolling investment gains.  I had only picked 11 months instead of 12, so this has likely been the case for like six months or more.  I haven’t back calculated to confirm when this occurred yet.

So does this mean I’m quitting work? NO WAY IN HELL!  Just because the one metric looks good doesn’t mean this is sustainable, it just means we have had a low spending year and a high investment gains.  Which is why I also introduced the PF score to help keep the longer tend in mind.  Regardless it is a good feeling to know we are on the right path.

Any questions?

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Investment Net Worth June 2014

May 2014 – Investment Update

Posted by Tim Stobbs on June 2, 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 $38,000 ($100), [+$0]
LIRA $14,130 ($0), [+$200]
TFSA $45,250 ($0), [+$990]
Pension $97,310 ($1136), [+$954]
Wife’s RRSP $58,420($3000), [+$0]
Wife’s TFSA $40,070 ($0), [+$330]
High Interest Savings Account $4590 (+$600),[+$0]

Investment Net Worth $297,308 ($4836), [+$2418 or +0.8%]

(YTD Contribution: $27,832), [YTD Gain: $13,006 or +4.5%]

Average Monthly Gain (12 month rolling) $2118

Spending

Last Month $1361

A nice low month, which is great since next month I pay my property taxes for the year.

Trailing Last 12 Month Average $2491

Results

Number of months trailing average spending covered by trailing investment gains: 0.85 {Target 1.0 or higher}

PF Score: 23.3  {Target 32}

Net Worth ~$697,000

Commentary:

Ugh, so close to having $300,000 in investments. Oh, well next month we can hopefully hit it.  By the way, if you look at the chart below you might have noticed something, it typically takes me like a year to gain about $50k in net worth, but now I’m up over $40k in just six months.  Partly this is due to some extra contributions, but also we are starting to see the impact of compounding is having as you get a higher net worth.  It’s sort of fun to watch.

On the spending side we also have been really good this year so that is also helping along my metrics in the results section.  I doubt this will last as we do have a few bigger purchases on the horizon with a house reno, new kitchen floors, being planned for later in the year.

Any questions?

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May 2014 Investment Net Worth