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 – $1,024,190 (+16%)
|2018||2019||Change ($)||Change (%)|
|Cash||$ 4,473||$ 5,715||$ 1,242||28%|
|Cars||$ 53,000||$ 48,000||$ (5,000)||-9%|
|RRSP’s||$ 230,161||$ 284,163||$ 54,002||23%|
|RESP’s||$ 47,145||$ 61,311||$ 14,166||30%|
|Investment||$ 175,000||$ 175,000||$ –||0%|
|House||$ 375,000||$ 450,000||$ 75,000||20%|
|TOTAL||$ 884,779||$ 1,024,189||$ 139,410||16%|
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 – $299,532 (-24%)
|2018||2019||Change ($)||Change (%)|
|Credit Cards||$ 6,944||$ 8,881||$ 1,937||28%|
|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!