Happy New Year Everyone and welcome to my January 2020 net worth update. We’re up about $12k or 0.92% from last month! And, the markets have been kind to us again this month!
Overall, things seem to be firing on all cylinders lately which is a big difference from the way they were going earlier this year. We paid off the Line of Credit, paid extra on the mortgage and managed to build some cash savings (in our investment account).
This year, the market fallout from the widening trade war was killing my investments but we are doing 3 important things to keep growing our net worth. First, we keep reinvesting our dividends. Second, we keep adding new money and keep investing. Finally, we are paying down debt. This is our recipe for success.
Why Do I Publish My Net Worth?
If you’re new to this site you’ll find that I like to track my family’s progress to financial freedom through monthly net worth updates. Now I want to say that my purpose in publishing these reports is not to gloat or give myself a pat on the back.
Lots of other bloggers are way better at this stuff than I am. My purpose is simply to see what I can achieve through my own imperfect approach to finances. I have no formal training in business or finance and haven’t worked in those fields. I’m just a guy with a day job trying to get ahead like everyone else. My hope is that I may inspire others as I have been inspired to get serious about money and do better financially.
Please note: this page contains affiliate links. As an affiliate, this blog receives a commission for each sign up for Tangerine, EQ Bank, Borrowell, Questrade and Bluehost.
How to Calculate Net Worth
To calculate our net worth, I add up all of our household assets and subtract any outstanding liabilities (ie. debt owing). The result is simply a snapshot of where we stand financially at a particular moment in time and does not give any of the relevant details as to how or why we reached that point. For that kind of information, as well as for our monthly investment income, please refer to our dividend income and monthly highlights section.
Tracking our net worth is important to make sure that we’re headed in the right direction and achieving our long term financial goals. Our net worth fluctuates from month to month but it’s the longer term trend that we’re focused on.
How To Grow Your Net Worth
In a previous post, I laid out 3 big financial goals for 2019. First, we want to increase our net worth to 1.2 million. I’m happy to say that GOAL achieved as of the August update! In fact, we reached $1.3 Million! So the net worth increased by a whopping $200k or 18.45% from January 2019!
A million in net worth is a huge milestone on the road to financial freedom and I’m happy that we finally achieved it! I’m even more happy that we managed to stay above that mark. If you want to know our secret financial tricks to make your first million, check out our post on How We Made A Million Dollars…and how YOU can too!
Financial success doesn’t always come easy and for us, 2018 was super hard on our finances. From January 2018 to January 2019 our net worth was essentially flat because of the market correction and some expensive home renovations. But now that we’re done the home renos, our focus has shifted back to investing our money and paying down debt. That’s the surefire way to build wealth.
Our second major goal is to increase our passive income to $17k. In 2018, we managed to earn just over $14k. So I feel that if we continue to invest a great deal of our paychecks, then we’ll be really close to earning $17k from our investments. At that point we’ll be over the half way point toward our goal of earning $25k a year in investment income.
Finally, we still want to aggressively pay off our mortgage so that we can be mortgage-free in 10 years or less. To this end, we plan to pay off at least an extra $20k this year in the form of lump sum payments. To date, we paid an additional $23.6k! We beat our goal by $3,600!
These net worth reports are all about managing our cash flow from our jobs, our financial assets, and dealing with our debt. It’s important to be aware of our financial situation since we are homeowners with a young family.
One of the tools that we started using recently is Borrowell’s free credit score report. If you’re thinking about buying a home, renewing your mortgage or buying a car, you might want to Get Your Free Credit Score with Borrowell.
January 2020 Net Worth Update
Assets: $1,581,394.43 (+0.47%)
Well thanks to our approach to regularly invest our money, along with a little help from the stock market, our assets have grown beyond $1.5 million!
Home: $846,000 (0%)
A few years ago we purchased our “final” family home where we expect to be forat least the next 30 years. In June of 2016, we received the latest property assessment and the assessed value had increased to $846k!
Rental Properties: SOLD
We sold our out of town rental property due to management issues.
Cash: $3,425.69
Our day to day banking is one area where we save a ton of money because we use Tangerine as our no-fee banking service. If you’d like to open one, then visit the Tangerine website and remember to use my Orange Key: More25to get $50 in free bonus cash just for opening up an account!
As a matter of habit, I rarely keep a lot of cash on hand in a savings account. The reason being is that at today’s record low interest rates I’d rather put the money toward paying off my mortgage faster or invest it. That said, I’m still slowly building an emergency fund with EQ Bank’s Savings Plus Account. Check out my review HERE to see why.
Taxable Investment Accounts: $47,667.68 (+4.34%)
Our non-registered investment accounts include DRIP accounts with Computershare and Canadian Stock Transfer, a discount brokerage account at Questrade and a work savings plan.
Related: Use My Link to Sign Up For Questrade and Get $50 in Free Trades
For the most part, in these accounts, I prefer to hold Canadian companies that pay eligible dividends. From time to time you may see a decrease in this account as a result of me moving some of these assets that are fully taxable into our registered accounts that are not subject to any immediate taxes.
Tax Free Savings Account (TFSA): $172,332.76 (+0.10%)
In the TFSA I like to hold growth assets, such as low-cost ETFs, TD e-series index funds or Canadian dividend paying stocks.
Retirement Accounts (RRSPs, LIRA, Pension): $441,696.14 (+0.64%)
Our retirement accounts consist of RRSPs, a small locked-in retirement account (LIRA) from a previous employer and a company defined contribution pension plan. The RRSPs and LIRA hold low-cost TD e-series index funds and other low-cost ETFs, while the company pension plan is invested in a low-cost target date fund.
Education Savings Plans (RESP): $42,272.16 (+0.33%)
In the RESP we hold low-cost TD e-series index funds. We contribute the annual amount of $2,500 so we can get the 20% match from the government. Our strategy for contributing is to use the money we receive each month from the universal child care tax credit and make up the difference at the beginning of each year. This ensures that we receive the maximum government contribution of $500.
Other Assets: $28,000
Under the “other” assets category, I include an extensive coin and paper money collection. For years I collected rare gold and silver Canadian coins and Canadian paper money. The collection has a face value of $10,000 so I conservatively estimate the collection’s worth at around $28,000.
For the purpose of my net worth calculations, I’ve been keeping this number constant versus increasing it over time because (a) coins and paper currency can be difficult to accurately appraise as they are subject to changing market trends and (b) can become illiquid if you can’t find a buyer for them.
Liabilities: -$281,115.94 (-1.56%)
We have 1 big debt to tackle: our home mortgage. Paying this off this a priority so we can get out of debt and live on our terms!
Mortgage: -$281,115.94 @ 3.34%
Paying down our mortgage will be a high priority for 2019 and we expect to be mortgage-free in less than 10 years.
HELOC: $0.00 @ 3.35%
Sometimes I use the HELOC to boost my investing funds. The interest is tax deductible so I’m fine with carrying a balance.
Thanks for reading my January 2020 Net Worth Update!
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