June 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 $58,650
LIRA $16,520
TFSA $85,350
Pension $164,210
Wife’s RRSP $86,880
Wife’s TFSA $78,200
Wife’s Taxable $51,270
High Interest Savings Account $34,780

Investment Net Worth $575,860 (decrease of $2020 over last month)

Home Equity

Estimate $395,000

Spending

Last Month $5920

Last month had our property taxes due which are about $3700 and we also bought a new laptop for the house for another $550.

So I was feeling a bit guilty about our spending numbers until the other day when I looked at the data a bit more closely and realized what I was doing.  I’m front loading a lot of our spending now so that my first year of early retirement can be lower.  For example, we have put some extra money into doing electronic upgrades now.  We helped our oldest son buy his first laptop ($400), we upgraded the family laptop ($550) and then later on I still need to buy new phones for my wife and myself.  So yes we have been spending a lot, but at least I know where it has been going.

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 $2573 (or $30,877 for the last 12 months)

Results

PF Score: 31.4 {Target 31}

Net Worth ~$970,860

Commentary:

It was bound to happen at some point as stock and bond markets can’t go up forever, they do come down at some point. So this month is one of those down months and hence the net worth reduction.  Honestly, while I’m a little bit frustrated being so close to my goal, I’m sort of happy this happened now.  I would rather eat a month or two of losses now rather than it happen right after I leave work.  I know I would be more worried about this drop if I had already left my job.

And by an odd quirk of fate we passed the PF Score target this month, but that is more due to me stripping out the house renovations than actually being fully correct.  Yet the trend is nice to see.

Any questions?

(click to make bigger)

I Don’t Want to Think About It

It may come off as bit self serving but I’ve been somewhat avoiding  my own blog lately.  Why?  Because honestly I’m trying not to think too much about how close I am getting to the end of my early retirement goal.

You see my current tactic is to keep busy so that the time flies by and before I realize it another month has past and I’m even closer to the end.  Oddly, this tactic  seems to be working for me.  I’m keeping myself occupied at work, my chores list at home is longer than I would like and don’t even get me started on how long my Netflix queue is right now.

The other reason I’m being cautious here is frankly I can be a wee bit obsessive about early retirement (as if you can’t tell by over 10 years of blog posts).  So when I do start thinking about early retirement in depth I can can so consumed that I almost cease to think about much of anything else for hours.  This of course then get me dreaming of my post work life and then I get a surge of disgust of having to go back to work then next day which then leads me to being distracted at work.  After all, it is hard to do good work when your motivation died and is buried out back.

On the pure math target I’m about 99% of the way there so it really isn’t particularly healthy to start counting down by 0.1% segments.  I suppose I could but it seem sort of silly.  Also I’ve also figured out that I’m not that good at countdowns.  I actually find them more demotivating than motivating for myself.

What I am working on is trying to guess on some of the emotional impacts I may feel going through this process of leaving work later this year and prepare for them.  Yet with that I’ve come to the conclusion isn’t that useful since I don’t know what I don’t know.  I think that this level of change is really beyond the average person’s ability to predict your reaction to, so the only way to really know how it feels like to early retire is to in fact do it.  Hence I’ve been spinning my wheels on some draft posts.

So that is lead me overall to avoiding this blog and of course that means less posts recently.  Yes, it does suck for you dear reader, but on the upside I am building up a nice list of items to talk about in future posts.  You you have a bit of drought now but you likely will have a bit of a flood later on this year.

So how do you deal with being close to the end of a big goal?  Any other tactics that work for you?

Falling Into Ruts

Habits are an interesting beast.  On the one hand, they can be incredibly helpful to allow you to automate things that you know you should do but just never seem to get around to otherwise.  For example, I’m a big fan of setting up automatic savings from bank account into your investment accounts.  That way, you know you are saving what you should each month.

Habits also have a dark side, which often seems to get discussed using the phrase: falling into a rut.  We talk about people that stop trying to climb the corporate ladder and stay in the same job for ten years as being in a rut.  Or sometimes when someone always does the same thing every weeknight (eg: watch TV) or eats the same meals all the time (eg: Sunday roast chicken) we say they are in a rut.

Yet are ruts always bad?  Not entirely.  I do think that some change in our lives is a good thing but I can understand the desire to not rock the boat as well.  It just depends on the context.  For example, if you are working on getting a small business off the ground you might very well appreciate being in a bit of a rut at your day job.  After all, knowing what is expected of you each day can be rather nice when in the evenings and weekends you are constantly pushing yourself out of your comfort zone.

I personally think the real issue is when that is all  of your life is nothing but a set of ruts.  When you get up at the same time, do all the same things in a day and never go outside of your ruts, then you have a problem.  Why?  Because you can never learn anything new when you are in a rut and for me that would be an incredibly boring life.

I like trying new things even if I fail at them.  I might try a new recipe that a friend gave me and have it turn out bad.  But often I at least learn something from it (even if it is not to try that again in the future 😉 ).  Or I might try to watch or read something different from my usual fare and once in a while I discover something wonderful.  But most of all, I like to keep exploring the world even if it is just my own backyard because it keeps me from mistakenly thinking that I know everything.

For example, when you comes to personal finance I know a fair bit after ten years of blogging, but I still skim new blogs just to see what their point of view is.  Often I don’t come back, but a few times I come across someone who challenges my point of view and makes me reconsider my assumptions.  I won’t always agree with them but I do enjoy at least questioning if I should leave my rut on something.

Do you think ruts are a good thing at times? Or do you try to avoid them?

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