2019 Net Worth Update (with some background)

My first ever net worth update to the blog! At the end of 2019, I set out to document my journey to becoming financially independent. In August of 2018, wondering what the hell happened to my 30’s as I quickly approached 40, and wandering through life with no serious focus on finances, my wife and I got on the same page to becoming laser focused on getting out of debt as fast as possible, and then building up a completely unlevered Balance Sheet of assets and investments that will create financial independence and open endless possibilities and choices for us.

I began tracking our net worth in 2013. We had just had our fourth child, I was working crazy hours to continue proving myself at work and getting promotions & increases to my salary. I was starting to make good money, starting to be able to save (despite a very well diversified portfolio of consumer debt – you name it, we had it), and wanted to track net worth each year as our key metric to make sure we were going in the right direction. Our net worth was $152,671. I didn’t compare it to anything or decide if it was good or bad for a couple in their early 30’s, but hey, there was no negative beside it and just needed to make sure it went up from there.

We did a really good job of increasing net worth each year as you can see by the chart below. Never less than 15% YoY increases and a good slow climb. By August 2018 when I had my meltdown over debt load, we had surpassed $1M in assets. Amazing, right?! I fixated on the liabilities though. $636,000. Somebody else owned almost 65% of what we had. I know all the arguments for good debt and using leverage to build net worth and I’ve got no problem with that for anyone who wants to do so. But, it’s not for me anymore. I want to not have a debt in the world. How is it any different than being captive at a job you don’t like because you need the pay? To me, it’s part of Independence. Not owing anybody anything. That’s the baseline for Independence in my opinion.

On to the point of the post I guess…December 2019 net worth. We finished 2019 with a net worth of $724,647! An increase of 49% from 2018 or $236,903. I’m going to play around with these net worth posts and possibly borrow some ideas from some of the other amazing blogs out there, and would welcome any feedback to it.

Assets – $1,024,190 (+16%)

20182019Change ($)Change (%)
Cash $              4,473 $             5,715 $         1,24228%
Cars $            53,000 $           48,000 $      (5,000)-9%
RRSP’s $         230,161 $         284,163 $      54,00223%
RESP’s $            47,145 $           61,311 $      14,16630%
Investment $         175,000 $         175,000 $                  –0%
House $         375,000 $         450,000 $      75,00020%
TOTAL $         884,779 $     1,024,189 $    139,41016%

An overall increase of 16% in 2019. Cars are made up of a car and van and values taken and rounded to the nearest thousand from Auto Trader valuations. Great year for the RRSP and RESP accounts, recovering from a dismal December 2018. The individual Investment listed here is a private company investment that I hold. There’s also a loan against it that while it does accrue interest, does not have a repayment schedule, is tax deductible, and only repaid with distributions received (for which I did receive some this past year). The value is listed at cost and expect it is worth more, but is not liquid and I’d prefer to be conservative. As for the house, real estate in our area has gone gangbusters the last 2-3 years. I’ve always listed a very conservative number, however with the appreciation we’ve had broke down and increased it. This is still a fairly conservative number; there hasn’t been a sale on our street under $500,000 in the past year.

Liabilities – $299,532 (-24%)

20182019Change ($)Change (%)
Credit Cards $              6,944 $             8,881 $         1,93728%
Line of Credit $              9,627 $                      – $      (9,627)-100%
Income Tax $            16,000 $                      – $    (16,000)-100%
Car Loan $            41,343 $           29,528 $    (11,815)-29%
Investment Loan $         165,702 $         118,900 $    (46,802)-28%
Mortgage $         152,538 $         142,223 $    (10,315)-7%
TOTAL $         392,154 $         299,532 $    (92,622)-24%

Perhaps the thing I’m most proud of from the past year is the reduction in our liabilities. As I mentioned in a previous post, I’m utilizing the “Baby Steps” from Dave Ramsey. In Baby Step #2, your focus is on paying off non-mortgage debt – cut your budget, no retirement investing, just focus on paying it off. It’s been a gruelling year, and sometimes challenging when you don’t see the quick payoff, but with focus, side hustles, and diligent spending, we were able to reduce our liabilities under the $300,000 mark, and most importantly, our non-mortgage debt reduced by over $84,000!

We utilize one credit card for all monthly spending. It’s paid off in full each month and I actually find it easier to have there vs. a million transactions hitting our bank account, so it is not part of our “Debt Snowball”.

Last up is that loan for a minivan which we took out before the goal of paying off debt. I’m hoping to have it gone by the end of Q2. Since the investment loan has no set repayment terms and no collateral against it other than the investment, I plan to let that ride and allocate any distributions received to paying it off after the van is paid and instead focus efforts on building our emergency fund and then aggressively saving our income. By freeing up our debt snowball obligations, we should be able to save over 50% of our net income!

Thanks for taking the time to read the post. Any and all feedback is totally welcome. Cheers!

Here goes nothing…

My first ever blog post!  Creating a blog to document my journey to Financial Independence was one of my 2020 goals.  After seeing such great information out there by FI bloggers, I had been pondering it throughout 2019 and finally decided to set the goal to do it.  The purpose?  Mainly to keep myself motivated, accountable, and share my journey in hopes of receiving feedback from others like me and hopefully provide inspiration to others, as other blog posts have done for me.

A little about me…I am a Canadian Dad to 4 great kids, and happily married almost 20 years.  I’ve worked for the same company my entire adult life, and spent years slowly climbing the corporate ladder to become an Executive at the company – a very challenging job, with a great, growing company. 

As long as I can remember, I’ve had the idea that I wanted to be financially independent.  But, until recently just never did anything consciously about it.  I could blame it on being busy raising kids with a very time-consuming job, but being brutally honest, I was just sleep walking through my financial life and not being deliberate about it.

That takes me to August 2018.  I was looking at the prospect of turning 40 years old in the next few months and realizing what a mess I was in.  Reflecting all the way back to my 20’s (which does NOT feel like that long ago!) when I would always tell myself how well off I’d be by 40 with no mortgage and freedom to spend whatever I wanted whenever, the time was quickly coming and I was nowhere close.  Sure, I had grown my net worth to about $445,000 from about $152,000 in December 2013 (the first time I started tracking it), but I looked at my personal Balance Sheet to see total debt of $636,000 (insert an outburst of swear and curse words here). Thinking of how long that would take to pay off, I had a panic attack – literally – and sat all night looking at that number letting it sink in.  For the first time in my life, the debt scared the hell out of me.  I knew a lot of it was what some like to call “good debt” – a rental house mortgage, share loan in my company and personal mortgage made up almost $450K of it, but it was still debt.  I still had to pay it.  How could I ever be financially dependent owing this much money?!

After a couple of days of freaking out, I started searching for podcasts (for whatever reason I love talk radio.  Don’t know why, and doesn’t matter what it is, but love the background noise – my wife used to freak that we’d be listening to MLB radio in February).  I came across the Dave Ramsey Show podcast and remembered the book I bought a couple of years earlier in an airport on a business trip called The Total Money Makeover.  Put two and two together remembering how much I liked the book (although I guess it didn’t sink in for me) and downloaded a few episodes.  I was instantly hooked by his teachings and the simplicity of his plan.  The Borrower is Slave to the Lender.  I’m not very religious but it made so much sense – no debt = financial peace.  You can’t be financially independent if you’re indebted to someone else.  I decided to commit myself to the plan and became extremely deliberate about making a budget and paying off debt (my first mistake – not communicating with my wife and working as a team…I’ll save that for another post sometime!).  Started searching for people on Twitter and following them for inspiration and advice.  Joined a bunch of Facebook groups dedicated to being debt free, etc.  

Fast forward 16 months to the end of 2019 and our debt is under $300,000 and net worth is approaching $650,000. 

I set three goals for 2020:

  • Pay off the remaining consumer debt (currently $29,528, down from $143,560 in 8/2018)
  • Save a $25,000 emergency fund
  • Create a blog to document my journey, create accountability, and provide inspiration to others

With my new blog, I plan to document my net worth quarterly, beginning with a 2019 in review coming soon, and outside of that, plan to share one thing monthly that I have learned, have an opinion on, or want to seek feedback for.

I hope you like the blog and would greatly welcome any feedback, comments, insights, etc.!  Thanks for taking the time to read it and if you’ve found it valuable, please pass it along!

Cheers,

Canuck on FIRE

You can have it all, just not at the same time. — Gail Vaz-Oxlade