Oct 2018 – Net Worth

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).

Investments

Accounts

RRSP $63,050
LIRA $17,080
TFSA $92,690
Pension $169,700
Wife’s RRSP $90,010
Wife’s TFSA $85,560
Wife’s Taxable $41,470
High Interest Savings Account $30,560

Investment Net Worth $590,120 ($24,140 decrease over last month from investments)

Home Equity

Estimate $395,000

Income

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: $340
  • Interest $27
  • Total Income: $917

Spending

Last Month $1864

We had Thanksgiving with some family in AB (~$150) and also bought our anniversary gift ($166).

Results

Net Worth ~$985,120

This Month Investment Gains & Income/Spending Ratio = (-24140+920)/1864 = -12.45 (Target 1.02 or higher)

Nov 2017 to Oct 2018 Invest Gain & Income/Spending Ratio = (-30608+17909)/35001 =-0.36 (Target 1.02 or higher)

Commentary:

Well that folks is how you blow up a retirement plan in a two month span.  I knew this would be bad but ouch that hurt more than I was expecting.  Our investment decrease was equal to just under a year of spending cash in two months.

The other factor that kicks into play here is my ratio is based on a 12 month average so I just stripped out the results of Sept and Oct 2017 which were really good so that made the results look even worse.

But on the plus side the actual decrease this month was only just over 4% overall this month.  It just seems bigger because of the numbers involved. The other good thing is this is just a paper loss we didn’t actually sell anything.

So now what?  Well in the short term, nothing much changes.  I keep working on the sequel to  the Free at 45 book so I can publish it in 2019.  I keep my ear out for interesting opportunities like a local brewery looking for some causal help which I put my name in for.  And hopefully next month gets better.

Any questions?

(click to make bigger)

8 thoughts on “Oct 2018 – Net Worth”

  1. Thanks for sharing Tim. I guess everyone’s in the same boat.

    The holiday season is coming up so maybe we should just forget about the numbers and enjoy the holidays. =)

    I’m interested in your new book and what sort of topics you are including. Maybe you can tell us a bit more about it? Thanks!

  2. Yup, I am down 40k for the month, but staying the course. I know down the road i’ll be up 40k , 50k, 60k some months. The market goes relentlessly up most of the time but corrections + downright crashes are normal. Buckle up, stay calm and rebalance on.

  3. Thank you for providing a reality check to us all. I am retiring in March next year and is also experiencing a decline in my net worth. My hedge is that I have a PT teaching gig that pays about 1/2 of both my wife and my living expenses. The 10 year bull market run is coming to an end, and the best thing to do is to review your asset allocation, (buy risk-free GICs that pays 3.5%), bulk up cash to last for 1 year or more (keep in HISA like EQ bank that pays 2.3%), and then wait …. History had shown that investors who did nothing to their asset holdings in 2009 experienced a 30% drop or more during the meltdown, but were up more than 250% after the market recovered and peak in 2017.

  4. I’d hardly call the last ten years a full on bull market run , especially here in Canada . There was a good run for a couple years from Feb , 2009 then a couple middling years in 2012/2013 . Another good run started in Jan 2016 and ended this past January . Yeah it peaked again in August but since then , this has been a lost year. Staying balanced is the only way to keep from being blown out entirely.

  5. 250% returns for the past ten years based on S&P 500 Total Returns . Not only do you need to stay balanced, but you must also diversify geographically. Investing in Canadian junior mining and weed stocks is definitely not the way to go. Look at CPP, HOPP, OMERS, Ontario Teachers Plan, and etc. They put the money to work globally, and only a small fraction is invested in Canada. Canadian government’s anti-business policies only drive businesses away!

  6. Agreed . The TSX has been an overall underperformer for years compared to other indices , US and international . And when it does well , it is usually driven by one sector . Nortel and tech was the flavour of the decade awhile back and more recently , financials , the big banks . The future for investment in Canada does not look bright either thanks to the Federal govt and some anti project provincial govts as well !

  7. @misuchiru – Actually I have an entire post on the new book coming up so you can read the draft table of contents and give some feedback.

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