Dec 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 $54,860
LIRA $16,430
TFSA $88,990
Pension $170,100
Wife’s RRSP $88,290
Wife’s TFSA $78,180
Wife’s Taxable $37,330
High Interest Savings Account $38,330

Investment Net Worth $574,170 (-$22,050 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: $2219
  • Child Tax: $340
  • Interest $29
  • Tim Brewery Income: $96
  • Total Income: $2684

Spending

Last Month $5123

Of course this includes the rest of the Christmas shopping, another $660 in dental work and $1569 for my wife’s Rider season tickets.  Even for us that was a lot of spending.

Results

Net Worth ~$969,170

This Month Investment Gains & Income/Spending Ratio = (-22050+2684)/5123 = -3.78 (Target 1.02 or higher)

Jan 2018 to Dec 2018 Invest Gain & Income/Spending Ratio = (-47285+18081)/35435 =-0.82 (Target 1.02 or higher)

Commentary:

Ugh, that was ugly.  Thank goodness 2018 is over.  Our total investment loss for the year is at 8.11% which is high but not high enough to trigger our backup plans and yes I’m starting to wonder if I wasn’t a bit crazy for leaving work in late 2017.

You might have noticed some big shifts in some of the account values but not all of that was from the markets.  I took out $7,000 from my RRSP from the bonds portion for living expense in 2019.  We also took out the cash that accumulated in both my TFSA and my wife’s TFSA accounts.

Oddly enough, while all of this made me nervous I still managed to enjoy my holidays and focus on spending time with family and friends.  Sometimes you just have to ignore the ugly stuff to remember what in life is important (hint it isn’t the money).  The reality is I still don’t have to run out and go back to full time right away.  We still have a lot of money invested and we aren’t going to go broke anytime soon.

The good news is 2019 should start to turn things around.  Why?  Well first off the markets as I write this have already improved from that dip at the end of 2018.  Also we expect a substantial increase to our Child Tax Benefit starting in July which should improve our non-investment cash flow for the year.  I’m also going to make an effort to make some more income this year from writing and side jobs (which I was planning to do even before the markets went to hell but it is just more important to do it now).

Any questions?

(click to make bigger)

10 thoughts on “Dec 2018 – Net Worth”

  1. Call me crazy but the markets dropping has really shifted me into a good high gear. I am ON BOARD to hustle more income, spend far less and scrounge like a bag lady because I can see my investments in the red and that sends panic through my veins…

    I guess I’m looking at the good side of this — a nice shock to my money self ..

  2. Hi Tim, all of my investment accounts are still in red, but as you said the start of January is already better so let’s be hopeful that this won’t last long. I’m sure 2019 will be better for you and your family, and with ~1M net worth I don’t think you need to panic yet (and I’m sure those are one time spending items, your expenses will go down for sure).

    Happy New Year!

  3. @Sherry – Actually a healthy way to look at the problem…get more motivated to seek out other income.

    @misuchiru – Thanks! I think things will get better I’ll just have to wait and see what happens. By the way, the dental costs were not all just cleanings. It also included checkups, xrays, and four fillings between all of us…we just happen to get most of the work done at once.

  4. Tim, I only see high interest savings account in a non-registered account? Do you not have another non-registered account? If I ever retire I will not touch my RRSP or LIRA until I hit 71 and when the government forces me to. My objective is to focus on dividend income only without touching the principal. You pay a lot less tax on dividends. RRSP withdrawals are considered income. But at your current spend rate per year the tax may already be pretty low. Of course, one can always take out dividends and interest from a TFSA tax free.

  5. @GV – My wife has a taxable account (aka: non-registered)…see the line above the high interest savings account. We were waiting until the New Year to pull money from that account as we want to shift some of that over to the TFSA. For me, the RSP withdrawal will end up being non-taxable since I will be below the basic deduction….I just have to wait for the refund when I file my taxes this spring.

  6. @tim given your income level that makes sense. It will be interesting to see your net worth over the years… if all goes well with your investments you should remain at the same level or have it grow with your wife’s income, your consulting/writing income, and your investment growth. If all goes well with your book sales, speaking engagements, consulting, etc you can start making enough to not have to eat into your principal.

    The last few weeks have been an incredible growth period for the markets. So hopefully your net worth is up again… my portfolio is up 8.5% in just two weeks. Of course, that is only making up for declines from September to October… all on paper.

  7. Hi Tim,

    Just curious since you brought up dental and you still have children at home in your retirement, do you pay for health insurance? Or do you intend to as you age? Or do you figure you will just pay for things like prescriptions etc as you go along?

    My funds are all in the negative too, I hope it doesn’t last too long! I’m trying to see it as an opportunity to buy!

  8. @Connie – We don’t have dental or health insurance at this time. We are just paying for costs as they come up. We looked into both and decided the cost wasn’t worth it for us. Of course we will look at that again as we get older and the boys leave home.

  9. Hi Tim

    It is so refreshing to see what I consider reality in your numbers, I had to accelerate my early retirement as the toxic nature of my work place started to accelerate; I left work in August 2018. This left me closer to the edge of my safety margin and the market correction sure did not help.
    I have been tracking spend month to month and unanticipated things can hit hard. $2500.00 in Vet bills since October. There goes some cushion and potential “fun money”.

    The de-accumulation phase is much tougher then I could have imagined; often irrational worries and lots of scenario spreadsheets, 3%, 4% , 5% return scenarios. I am Ok with going back to work and may choose to for fun money if the right thing comes up, but I really dread “having” to go back to work.

    Fred Vettesse, Retirement Income for Life is an interesting read and perspective, he makes contrarian points. Can get it at your library and Costco had it on for $14.

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