Welcome to my net worth posts where I try to prove to myself and you that I wasn’t crazy for leaving work in the fall of 2017 to start my early retirement. A few important notes: we are mortgage free and our goal is have our income/investment gains exceed our spending by 102% on a 12 month rolling average (the extra 2% is a buffer for inflation).
Wife’s RRSP $94,580
Wife’s TFSA $90,790
Wife’s Taxable $45,770
High Interest Savings Account $33,510
Investment Net Worth $619,850 ($2320 increase over last month from investments)
To keep things simple I’m only going to track what income comes into our main ‘house’ chequing account. I won’t be tracking my wife’s or my businesses income as those don’t really matter until the money moves over to the ‘house’ account. Also I won’t track investment gains since that is covered above.
- Wife’s Monthly Payment to House: $550
- Child Tax: $341
- Interest $30
- Tim’s Payment to House:$142
- Kid Cell Phone Payment: $55
- Total Income: $1118
I owed the house a few business expenses that I had paid for in cash previously so I wrote a cheque for that. And our oldest son got his own cell phone this month and he paid us for half of it.
Last Month $1105
Well I wanted to balance things out and we more than did it last month. The above total also includes spending $176 to buy a cell phone for my oldest son and setup his minutes and data for it. Going forward we agreed to pay his base plan for texting but he is responsible to pay for any additional minutes or data costs after his initial top up is used. The monthly spending also includes spending $100 on a new deep fryer after my old one broke.
Net Worth ~$1,014,850
This Month Investment Gains & Income/Spending Ratio = (2320+1118)/1105 = 3.11 (Target 1.02 or higher)
Sept to July Invest Gain & Income/Spending Ratio = (19989+18652)/35814 =1.08 (Target 1.02 or higher)
Just a note on the multiple month ratio I stripped out all income related to my old job from the early months to provide a more realistic picture for retirement.
Well I expected our situation to improve through August but honestly I wasn’t expected that much of an improvement. So overall we exceed our ratio goal of 1.02 with a 1.08 or putting it another way we have investment gains and income of 108% of our spending during the last year. So our net worth went up even without me working in the last year.
What is particularly interesting about the result is our investments only gained 3.24% which is a noticeably lower than my longer term average I modeled my retirement at which is 4.5%. And our spending was a bit higher than I initially had put in the model. I had expected to spend around $32K plus vacation or roughly $33K when we in fact spent $35.8K (I touched on why that occurred during July’s net worth post). So we earned less and spent more and still made our overall target. I’ll discuss the numbers in more detail on a post next month as I have a series planned to discuss my one year of early retirement that I hit next month.
(click to make bigger)