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For my stock portfolio I have a created a excel sheet and can
determine my tax owing amount and net amount very easily in seconds based on current stock prices. If tax rates change I can change the rate by changing one cell in the sheet. Presently my portfolio holds a tax liability of 17% which I consider very relevant in considering my NW.

There really is no right or wrong it just depends on how accurate one wants to be. I only consider my net portfolio and my house for NW. I ignore cars, boats, other toys etc, even some other RE which is significant. One piece would if sold generate a tax loss.

One of the other posters suggest the trend was the most important …… fair enough.
If you are planning on taking out all the money in the short term to say, pay a departure tax, buy a retirement house/land or something than your calculation seems valid. But if one wants to calculate how much money they will have for a long retirement, I don't see the point of trying to predict what the after tax value of OPs corporate investments when OP plans to gradually dividend them out during retirement. OAS, corp tax rates, corp tax rules, insurance rules, swap rules, personal tax rates etc etc no way to predict what they will be over the next 20+ years.

I guess it would be reasonable to multiply TFSA/personal non-reg amounts by 20-30% or so if one wants to be more accurate when calculating asset allocation but beyond that I don't see the point.
 

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Discussion Starter · #22 ·
When you say consulting for automation, I assume you are doing high level consulting, rather than actual programming? To kick out on your own after 12 yrs experience is impressive. I have 17yrs experience now in a very narrow field (also O&G). I'm at the point I could probably go alone and be taken seriously.
I do both high level consulting and programming. The main client I work with has a group of about 10 guys which lean on me as being a specialist. Don't get me wrong I'm not indispensable, half the reason I've been able to ride this is the relationships I've made. Funny enough as I typed in how many years I worked before going off on my own I thought to myself "That was stupid" but in the end the consultant I worked for provided no value to me as an employee. I was doing everything from business development to programming to project management to invoicing. It all worked in my favor.
 

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I've got a similar financial target for early retirement goal as OP, thanks for sharing. Interesting to see your comments of working another 2 years to go from 4 to 5 mil. Out of curiosity, it that more about the absolute number (ie required for retirement income) or psychologically realizing that you can increase your net worth 25% in just two years?
 

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Discussion Starter · #24 ·
Interesting to see your comments of working another 2 years to go from 4 to 5 mil. Out of curiosity, it that more about the absolute number (ie required for retirement income) or psychologically realizing that you can increase your net worth 25% in just two years?
Between those options I would say its more about the number vs the amount the net worth could increase in two years, 5mil would make me feel very comfortable to retire young. Psychologically my bigger issue is negative perception I would potentially feel from others for quitting work so young not that two years makes much of a difference. I'd like to think that I'll continue to do some sort of work if I retire that young.
 

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Discussion Starter · #25 ·
Oct 1st 2018 Quarterly Update.
Not much has changed in life, Net Worth is up about $82K from last quarter. I worked a fixed price job that went significantly over budget so I had to eat some time. Next couple quarters should be pretty busy.

Assets:
House - $611K
Vehicles - $53K
NRSP - $288K
RRSPs - $573K
TFSAs - $122K
RESPs - $101K
Cash - $13K
Business - $1046K

Total Assets - $2,796,000

Liabilities:
Credit Cards - $11K (credit cards are payed off every month)

Net Worth: $2,796,000
 

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Discussion Starter · #26 · (Edited)
Jan 1st 2019 Quarterly Update.
It was a busy few months for me at work which helped negate the horrible market conditions. I've added in an additional asset that until now had never really considered part of my Net Worth. This is a whole life policy that I have been paying on for 19 years. The last payment is due next month. While I know now that this is not a great investment it actually wasn't as bad 20 years ago as one would be today and it is insurance. That being said it is now has a cash value of $32400 (It's a $600K policy and I've paid $34K in premiums for it).

Assets:
House - $589.3K
Vehicles - $55.6K
NRSP - $253.3K
RRSPs - $553K
TFSAs - $107.2K
RESPs - $92.5K
Whole Life Cash Value - $32.4
Cash - $34.2K
Business - $1063.9K

Total Assets - $2,781,300

Liabilities:
Credit Cards - $18.4K (credit cards are payed off every month)

Net Worth: $2,763,000
 

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Discussion Starter · #27 ·
Mar 1st 2019 Quarterly Update
Still busy at work and I expect to be busy through at least the rest of the year. With how well the market has been doing I've been eager to post another update as I crossed another major threshold. I was wrong about one more payment to the whole life policy apparently I have now fully paid it out so that saved me a couple thousand dollars. We are planning to do a few things around the house like replacing the shingles, gutters, and some other small updates. There is a chance that we will look at moving in the next few years but would be looking for a house that is in a nice location that is in need of a gut. We have a specific one in mind that someone is looking to downsize from.

Assets:
House - $583.8K
Vehicles - $49.5K
NRSP - $286K
RRSPs - $595.6K
TFSAs - $131.3K
RESPs - $110.8K
Whole Life Cash Value - $38.4
Cash - $20.8K
Business - $1261.2K

Total Assets - $3,077,500

Liabilities:
Credit Cards - $8.2K (credit cards are payed off every month)

Net Worth: $3,069,300
 

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It all depends on your financial planning. If you have good money to support your finances, mortgage, bills, etc then its a good luck! I will be 40 after 2 years still standing with $60k annual income and paying of liabilities (credit, mortgage and auto loan repayment). My personal experience say never invest on a single place always split your money in different options and keep checking performance of your micro investments.
 

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Discussion Starter · #29 ·
July 1st 2019 Quarterly Update
Still busy at work and I expect to be busy through at least the rest of the year. We did some work around the house, replaced the shingles, gutters, and some other small updates, might still do the exterior doors. Spent some significant money on the 20th Wedding Anniversary that I hadn't really though about on previous update. Definitely been spending more lately then I'm used to but times are good so why not.

Assets:
House - $597.9K
Vehicles - $47.7K
NRSP - $286.9K
RRSPs - $606.6K
TFSAs - $133.7K
RESPs - $112.7K
Whole Life Cash Value - $38.4
Cash - $17.3K
Business - $1374.2K

Total Assets - $3,215,300

Liabilities:
Credit Cards - $25.1K (credit cards are payed off every month)

Net Worth: $3,190,200
 

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Between those options I would say its more about the number vs the amount the net worth could increase in two years, 5mil would make me feel very comfortable to retire young. Psychologically my bigger issue is negative perception I would potentially feel from others for quitting work so young not that two years makes much of a difference. I'd like to think that I'll continue to do some sort of work if I retire that young.
Maybe another way to think of this, instead of retiring young, is to tone down the pace of work. Perhaps allow the workload to reduce to the point where it occupies less of your life. Then you will have more time for family and life, but still would do some work and continue to bring income.

There is a danger in truly retiring when you're young. If you break off from the work world entirely (and let your connections and skills go stale) it would be harder to start up again later. Also, as you mentioned, there's the negative perception from other people.

I'm a bit younger than you and have already started reducing my pace of work. My plan is to continue working for another 40 years, but not at "full steam". I'm being very picky about what work I accept and how many hours of work I sign up for. So far, this feels like a nice way to balance the need to earn income, with the desire to have lots of time available.
 

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I'm a bit younger than you and have already started reducing my pace of work. My plan is to continue working for another 40 years, but not at "full steam". I'm being very picky about what work I accept and how many hours of work I sign up for. So far, this feels like a nice way to balance the need to earn income, with the desire to have lots of time available.
Good luck with that James. In my experience as one, management always knows the good producers and loads them up with extra challenges. It is very tough for the producer to not fall for this challenge. I hope you are the exception!
 

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^+1. Could not agree more.

Our finances increased very substantially between age 40 and age 50. And even more so between age 50 and age 59 when I retired early. Why? Because I used my initiative, worked smart, accepted challenge. Pay for performance bonus' and stock option benefit between ages 50 and 59 paved the way for a very secure early retirement. This would not have been possible if I had kept on doing what I was doing in my early 40's. In fact my job would have disappeared as many have in the IT industry. You can go from hero to zero as the clock ticks over to the new fiscal year. In a similar fashion, you may be judged by your performance on the last project AND judged in relation to the performance of others on the project. There is always someone with skill and ambition behind you.

When in comes to promotions, salary increases, downsizing, employers look at high performers, poor performers, and they look at those who are coasting. It is not only about today, it is also about the value that an employer believes that you will provide in the future, ie your willingness to grow, to learn, to accept challenges and responsibility.

Don't fall into the trap of coasting. You could find yourself coasting into a downsize. It does not take long in the IT industry to fall behind or to viewed as someone who has fallen behind the curve. You need to constantly look ahead, re-invent yourself, update and sharpen your skills. If you are coasting at 45 or 50, chances are there is someone age 25-35 who is just as sharp as you, just as skilled, works for less money, and has ambition. You will be replaced. Employers watch for this.
 

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My point ian is that if you're financially already in a great spot, you can afford to dial down the work. Forebiz is talking about getting to $5 M. Surely he will have "enough" at some number of $ millions.

Yes of course someone who isn't pushing ahead at full steam won't get the best opportunities and best pay. That part is obvious.

What I'm suggesting is assessing whether you have enough, and then being willing at that point to ease off the work. Obviously this will come along with less pay and less opportunities, being replaced by others, etc. What does it matter? If he's at $5 M (or whatever will be enough) then any small amount of additional income will be enough for the rest of his life.
 

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I was never able to coast. Not in my nature so it is difficult for me to understand it. For me it was as much about not getting bored, wanting a change in the for of a new challenge.
 

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Why are you calling it coasting? You're using that word a lot and I don't understand what you mean by it.

There are so many waking hours in a week, let's say 100 hours. You need to eat, go to the bathroom, probably read a book once in a while, and you might even pursue some hobbies and pleasures. It comes down to a question of what % of those 100 hours a week you can work.

There's a finite amount of time. Needs also vary between individuals as there may be children, health concerns, or who knows what else going on.

I've tried working 60 hours in a week, 40 hours, and less. The work itself can be extremely engaging, challenging, and interesting no matter how many hours are spent working.

When you say 'coasting' it sounds like you mean a kind of disengagement with work where you take it easy and don't work hard. Consider for example 10 hours of work a week. That can be extremely hard, challenging work... it's not coasting just because it's lower than 60.

The OP, at $5 million, could do something like working 10-20 hours a week of the interesting and challenging work he likes. He will have more than enough money to live a great life, will continue to be intellectually challenged, and will probably keep seeing his net worth increase.
 

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Discussion Starter · #36 ·
Oct 1st 2019 Quarterly Update
Work is all going to plan for the year. I have work scheduled for the first 6 months of next year and an estimate for another project that sounds promising. I have booked our annual winter vacation but flights were crazy expensive this year, I suspect it was due to reduced schedules with the 737 Max issues. I may look at evaluating spending a little closer, seems we are experiencing some lifestyle creep that I'd like to get under control.

Assets:
House - $574.4K
Vehicles - $48.7K
NRSP - $295.3K
RRSPs - $612.9K
TFSAs - $136.6K
RESPs - $115.3K
Whole Life Cash Value - $38.4
Cash - $20.7K
Business - $1437.6K

Total Assets - $3,279,900

Liabilities:
Credit Cards - $18.9K (credit cards are payed off every month)

Net Worth: $3,261,000
 

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Discussion Starter · #37 ·
Hey Guys,

At times I already see the writing on the wall for the work I'm doing. I watch certain guys in their 20s and am shocked at some of the things they can do. At this point in my career maintaining my work has more to do with experience and relationships then it does skill. At times I can still outproduce the young guys but it's more about working smarter then harder. When my main client is done with me I may no longer have the ambition to pursue more work in this field. Maybe I'll continue to do small jobs locally, maybe I'll flip houses, maybe I'll mow lawns and shovel snow, maybe I'll hop on a tractor and help out some farm family.
 

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Any thoughts around how you'll be using your Whole Life policy? Is it just for estate planning or do you have plans to do something out of the box like leveraging it as collateral for an investment loan or some other business venture?
 

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Discussion Starter · #40 ·
What is your yearly expenses excluding business expenses?
I would estimate that our current expenses are $110-120K a year including RESP/RRSP/TFSA investments. Post investment savings in todays dollars I would estimate in retirement if we maintained current lifestyle we would be $70-80K a year.
 
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