April 2019 – 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 $112,750
LIRA $18,420
TFSA $96,040
Pension $129,480
Wife’s RRSP $97,830
Wife’s TFSA $87,760
Wife’s Taxable $44,670
High Interest Savings Account $33,580

Investment Net Worth $620,530 ($9640 increase 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: $869
  • Child Tax: $340
  • Interest $32
  • Tim Brewery Job: $67
  • Total Income: $1308

Spending

Last Month $2432

Well I was hoping for a lower spending month but that didn’t happen.  Why? Well our bill came due to attend the outdoor NHL game this fall in Regina $512 for four tickets (which was a bucket list item so we don’t mind the cost at all). And my wife owed money for income tax $320 (actually her CPP contribution).

Results

Net Worth ~$1,015,530

This Month Investment Gains & Income/Spending Ratio = (9690+1308)/2432 = 4.52 (Target 1.02 or higher)

May 2018 to April 2019 Invest Gain & Income/Spending Ratio = (10480+15386)/36761 =0.70 (Target 1.02 or higher)

Commentary:

Well as I previously noted I got the new library job but I haven’t been paid yet, but I did work a shift at the brewery so that gave us a bit extra cash in April which again went towards me buying my own brewery equipment.  As an aside I realized why I partly love the new library job…my earliest shift doesn’t start until 9am which means I should never had to set an alarm to get up for it (I usually get up between 7am and 8am and very rarely sleep until 8:30am).

The other big change to this month was that just over $50,000 was shifted out of my pension into my RRSP.  I previously discussed why this was happening here but in short it was I decided to move my unlocked portion of my pension that  over to my RRSP to give us additional flexibility on accessing the money.  And of course the markets had a nice upsurge which helped push up our net worth to a new all time high.  And our year ratio has improved to 0.70 which while not meeting target is moving in the right direction.

The new book continues to move along but slower than I wanted.  The overall manuscript is now over 54,000 words (~216 pages) and the  first draft is done.  The editing has been moving very slowly this month as the interview and starting my new job sucked up some of time and more of my attention for the month.  But now that I’m setting into a new routine I should start making more progress in May.

Any questions?

(click to make bigger)

Early Retirement and Taxes

Well dear Canadians, please tell me you have finished your income tax submission and submitted them (and if you owe paid up)? If not just a reminder that they are due tomorrow on April 30, 2019.

I fully admit I ended up procrastinating on doing my income tax this year as I really don’t like the pain of having to gather and calculate everything for two home based businesses and investments.  It typically ends up taking me like four or five hours to do all of it.  But I eventually got it completed and it went partly as expected and partly had a few surprises for me.

First off I more or less expected that all the money I paid in withholding tax on my RRSP withdrawal last year ended up be refunded.  This occurred since my taxable income was under the basic deduction therefore I pay zero income tax on the withdrawal (at least eventually…as you can’t get around the withholding tax when you initially take the money out).  Also, as per normal, my wife actually didn’t pay income tax but she did owe money for her Canada Pension Plan (CPP) contribution (~$300) on her business income  (I didn’t owe any CPP as I actually had a loss in my business for 2018).  Thus we did achieve one objective I had from my early retirement plan to keep our income tax bill as low as possible (in 2018 it was actually zero).

Newer readers might be a bit confused on how it is possible to have taxable income of around $19K but actually spend about $35K per year so let me explain.  Any withdrawals from our TFSA accounts are tax free thus don’t increase our taxable income.  Also any dividends my wife receives in her taxable account also end up being not added to our taxable income as the tax credit gets is greater than the taxes owing on that income.  So that ends adding $10K a year to our income but it doesn’t show up as taxable income.  Then finally we used some savings and last year’s tax refund to bridge the rest of the spending.

Then of course as I previously had touched on our Child Tax Benefit is going to go up considerably as of mid 2019 since our taxable income in 2018 was so low.  In the end it ends up being close to $933 per month starting in July, which should give our investments some time to grow for the next couple of years while we qualify for that benefit.  An important note about this additional income it is a tax free benefit.

Finally, there were a few surprises for me while filing our taxes.  First up was the fact we would qualify for a GST Credit benefit as I haven’t gotten that credit in likely close to two decades as I earned too much to qualify for it.  So that will give us a quarterly payment of just over two hundred dollars which will be a nice bonus.  The second surprise was the Working Income Tax benefit, which I basically forgot even existed since I was never closed to qualifying for it until now.  It is benefit meant to encourage low income people to work and you need a family income of at least $3000 and it should give us a few hundred dollars of extra income per quarter.

While I’m still waiting for my assessment to be completed and sent back I am projected to get around $2600 of a refund back.  So overall it is a bit higher than I expected but not huge amount like last year when I was using up as much RRSP contribution room as possible prior to leaving work in 2017.

So how did you taxes go this year?  Did you learn anything new?

The Library Gig – First Impressions

Well yesterday was my first shift at the new library job and wow I was impressed.

It started off nicely with a staff meeting so I could ‘meet‘ most of my co-workers all at once rather than introducing myself to everyone for the next month.  The odd thing is this is my local branch so I actually know most of the staff by sight as I have been going there for years.  Now I’m just matching names to faces more than anything and I already know they are all nice people. On the flip side all the staff basically recognized me on first sight.  The location also means I can drive to work in five minutes or even walk to it if the weather is nice.

I was given my first two weeks of shifts already but I noted that I might have a few conflicts later on in May with some existing commitments.  But I just mentioned the key dates to my boss and there was no problem with accommodating them.  Which makes things so much easier when you work for a organization that will be flexible with you.

The only downside to this job is there is some evening and weekend work but I knew that going in and I’m okay with that (after all when your week consists nothing but weekend time you don’t get so upset about working the odd Sunday afternoon).  In addition,  there is some extra pay for working past 5pm and weekends.  Also the hours are only about 18 a week so I really don’t work all that often (about three days a week).

The other funny thing that happened was after the initial staff meeting my boss had to go cover the service desk for a while so he just handed me a cart of books and said to shelve them.  No explanation on how or where to do anything.   Which given my experience getting books from this location and my time working at the school library I basically could do 80% of the work with no training or questions.  I now know why I was hired as I can be up to speed in just a week or two which is great for the library.

Then finally the other thing that really struck me was the absolute honestly of my boss telling me to feel free to apply to other jobs in the library system and not to feel obligated to finishing my current term.  I nearly feel out of my chair at that comment.  The organization is unionized so even being on a temporary contract means my application would be considered first prior to any external applications which I didn’t consider until I was told.  I haven’t really even thought about that yet, but it is good to know that I have that option if I find I really enjoy doing this job.

So overall I’m looking forward to this job and seeing if I want to continue working there more later on.  The work is easy to do and honestly my first shift just flew past.  It really is a fun job for me.

[Note: The image at the start of this post is NOT my library…I just wanted to use it since I would LOVE to work in a location like that.]

A blog about early retirement and happiness