Net Worth Update – 2013
Following the example of a number of personal finance bloggers, I’d like to start tracking and updating our net worth on a regular basis. Tracking it monthly doesn’t quite make sense to me (translation – way too much work), so an annual checkup should work just fine.
The value of our house is based on the most recent assessment notice issued by BC govt – some people might disagree with this method of valuing a property, but in our case this will provide most consistent figures (unless I start putting up our home for sale every year just to see what is the real market value of it – and it is too much work as well).
I’m only including major items in our net worth calculations – no need to start including absolutely everything like value of our car (non-existent!), and my vast collection of unfinished sock puppets. No Picasso painting for us, and I’m not about to go through my wife’s jewelery box to make the calculations perfect. After all, I’m not trying to pad the numbers and impress anybody – it’s only meant to show our progression towards our goals.
Investment and cash accounts: $190,853.21
Cash and saving accounts: $23,707.68 (includes emergency fund, chequing account, and various saving accounts – new car, annual property taxes, etc.)
RRSP accounts: $2,675.58
Non-registered investment account: $108,005.95
Mr. Financial Underdog TFSA account : $28,719.00
Mrs. Financial Underdog TFSA account: $27,745.00
Other assets: $275,000
Principal residence: $275,000
Principle residence mortgage: $207,171.39 (as of Dec. 31, 2013)
Total Net Worth (Assets – Liabilities): $258,681.82
– If we sell all of investments and empty out bank accounts, technically we can almost pay off our mortgage and be completely 100% debt-free. But since investment returns are much higher than our mortgage rate, I think it would be counterproductive. But still kinda cool.
– A good chunk of our assets is tied up in our principal residence (sounds way fancier than “our home”, eh?). For the most part, these are fantasy money as there’s no easy way to get them out and invest. Tapping into home equity for the purpose of investing is technically possible by using Smith Maneuver (story courtesy of Million Dollar Journey which is a kick ass resource for anybody interested in personal finance), but at the moment I’m only exploring it as an option down the road.
– We don’t use RRSP accounts although have plenty of room available. I’m not worried about it as contribution room keeps growing, and we can always put some money into RRSPs later on.
– Our net worth is lower than I was hoping it to be (no surprise there). The formula I use is borrowed from Thomas J. Stanley’s book “Millionaire Next Door” :
I think this means we have some catching up to do! I will make another Net Worth Update some time next January to show the progress.
According to this article, just 85 people—the richest of the world’s rich—hold as much wealth as the poorest 3.5 billion. That’s half the world’s population. Amazing.