Net Worth – April 2011

Well this month I hit an interesting milestone.  I managed to max out our lump sum prepayment option on our mortgage for the 12 months.  Which in practical terms means we put on almost $23,000 in lump sum payments in the last 12 months in addition to our regular payments.  No wonder the mortgage balance is dropping like a stone.


House $349,000
RRSP $28,100
LIRA $11,600
TFSA $11,200
Pension $35,000
Wife’s RRSP $20,200
Wife’s Investment Account $12,800
Wife’s TFSA $8,800
My Investment Account $6,600
High Interest Savings Account $5,600

Mortgage $68,000

Net Worth $420,900 (+$19,300 or +4.8%) [+ 9.8% YTD ]
Investment Net Worth $139,900 (+$1700 or +1.2%) [+ 10.2% YTD]
Mortgage is down by $15,500 or 40% of my goal for 2011.

So with the housing market finally kicking back into gear I was able to get a few similar listings to finally update my house value this month.  I had been avoiding the update for a while since I really didn’t have more than a listing or perhaps two that were similar so it was tough to get an estimated market value.

My investment net worth was very stable over the time frame, while I did make minor contributions to it over the last two months, the markets also decreased a bit which offset most of the increase.  Oh, well that happens when you have a a fair amount of equity exposure.

I did notice one interesting fact while I was calculating our combined TFSA balance, which now stands at $20,000.  Not too bad given we only put in $10,000 so far…so a 100% gain in just a few years looks impressive as hell until you realize it was mainly just dumb luck that those stocks have done well and the stocks had fairly high yields when we bought them (AQN.TO, EIT.UN.TO, REI.UN.TO).

Any questions?

Getting Past ‘I Can’t’

Perhaps the most frustrating words I hear when talking to people seems to be the words “I can’t.” The nature of the rest of their sentence will vary, but the idea is often the same.  Some common themes include: I would like to save more, but I can’t.  I would like to retire early, but I can’t.  I would like a new job, but I can’t get a new one right now.  Then following those sentences people usually have some reason for why they can’t do something.

Now the following isn’t to say everyone does this, but in my experience to date 95% of the reasons that go with the phrase “I can’t” are utter bullshit.  Yes, that is right.  I’m calling bullshit on just about every time you or I have ever used the phrase “I can’t”.

The more correct phrases that might work better than ‘I can’t’ are:

  • I don’t feel like it.
  • I’m lazy.
  • I really do enjoy complaining rather than making my life better.
  • I’m really just a self absorbed prick that can’t see past the end of my nose to realize that problem is really my fault.

By now, I’m sure you can come up with you own equally fun real reason why you can’t do something (feel free to suggest more reasons in the comments).  So with that out of the way, why do we keep saying that to each other?  I’ll take a guess at this one.  You don’t want to accept the fact that changing your life for the better means ‘work.’  Nothing worth doing in life is easy, sorry to break it to you, but saving more, retiring early or getting a new job/career isn’t going to be done with a 10 easy step list.  A list might help you get the ball rolling, but keeping it moving is going to take some effort and you will likely have a few patches where to keep going will be hard.

So regardless if you want to lose weight, save more, retire early…or just about anything else might I present the five steps of getting past “I can’t.”

  1. Stop Making Excuses.  This should be obvious by now…you can’t move ahead if you keep running yourself in a loop of excuses.  Stop making them and realize that most of them are bullshit.
  2. Know Your Motivation.  Change requires a strong motivation to keep going over the long haul.  Decide how badly you want something and how much more important this goal is than everything else.  What will you give up to reach your goal?  Is retiring early worth more to you than your cable package or perhaps moving to a smaller house?
  3. Know Your Limits. The other 5% of your reasons for not doing something is likely a limit for you.  Good limits should strike you as insane and that you would never do it even with a gun at your head.  For example, I will not stop contributing to my kid’s RESP’s so I can retire early.  It isn’t happening, so that is a limit on my plan I really can’t get around.
  4. Make a Plan.  Getting from now to then looks easy, until you realize the number of steps involved.  You need a plan to get to any longer term goal.  For example, to write my book I spend several months with the rule I needed to write one page a day.  Yes, that cut into watching movies, or other social events, but in the end I did finish my book.
  5. Change the Plan.  Your first plan will likely have flaws in it.  Accept that and change as you move along.  I rarely see anything go flawlessly in life, so make a plan and then make some reasonable adjustments as you go.  For example, while writing the book I realized some nights it was nearly impossible to get a page done as I was booked sold from 7:30 am until 10:o0 pm, so I decided to allow myself to double up on pages the day before to ensure the progress kept going.

Ok, now it is your turn…how do you get past “I can’t” to achieve a goal?


A Budget Is Not The Answer

This is a guest post by Dave, who is also looking to retire no later than 45, but unlike Tim has no kids and doesn’t want any.  Dave is from Ontario and is working towards his CGA certification.

To some people, there is a reverence paid to budgets that I don’t really think is overly deserved.  I was talking to my sister on the weekend, and she thought that a budget will solve all her problems.  She said that all she needed to do was have a good budget and she would be in good shape.  I politely disagreed around the importance of having a budget and explained to her that it wouldn’t necessarily help her financially because she doesn’t really have anything to budget for and doesn’t really have an end goal she is shooting for.

I explained to her that I didn’t really use a budget per se, I just pay all my bills put money into savings and spend the rest how I want.  My “wants” are generally a lot less than most people, which may be the reason this system works for me.  I also find that I don’t do well with the structure that a strict budget would impose on my spending.

The difference between me (I think) and most people who have no interest in their personal finances is that I have goals that I am hoping to achieve, which provides some direction and incentive for my personal finances.  I have short-term goals, such as saving up enough money to feed my golfing habit for the summer, mid-range goals for things such as a vacation, and longer-term goals of paying off my mortgage.

Without these set goals, I would probably spend a lot more money than I already do on things I don’t need and I would lose all incentive for maintaining my financial plan.  I think that this is the main problem that people without a financial plan have – without some kind of defined future goal, there is no reason to follow the carefully crafted budget that was designed to make them financially stable.  Once the budget is abandoned, all sorts of things happen, mainly by the end of the month there is less money in the bank than bills in the mailbox – creating a situation that requires (usually) debt.

In the end, I explained to my sister that she should think about what she wanted financially – does she want a car?  A nice apartment?  A down payment for a house, or some other financial goal.  Having a light at the end of the tunnel would allow her to maintain focus on her spending plan, which I see as a major stumbling block with most people’s budgeting aspirations.

Do you have short-range, mid-range or long-range financial plans?  How do you maintain your focus on the plan you have set up?