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Discussion Starter · #281 ·
December 2021 Update

Another month in the books, and our investments have taken a sizeable hit. Our networth is down 46K, but our investments are down more than that, so that is still a somewhat positive month over the things we have direct, immediate control over. I lose no sleep whatsoever about market fluctuations. We have about 120K in cash available for further drops in the various investment accounts.

As I mentioned, I am going to be staying at home primarily to look after the kids (7, 5, 3). My old employer did not get back to me with an offer or further discussions after I told them I'd only work part time. I was looking back at Page 1 of this diary and I said our family income was about $240K. I think we'll be somewhere between $250K-300K in 2022 and that's with me working only part time. I also saw this comment from 2014:
I believe both our jobs are secure enough to not worry about a large cash savings. My wife is an award winning teacher. There'd have to be a >20% cut in staff across the Board before she was in jeopardy. My position is secure. I am close to being an international subject matter expert on the product. The product is a 2billion/yr niche of which my company has over 50% of the market. It's one of the crown jewels of the company. Even if the worst happened, a lay off would come with a healthy severance package and my skill set would be sought after.
I was pretty accurate on all those statements. I should have made a comment about winning the LottoMax instead...

Our motorhome is now up on RVezy for rent starting in late Apr, 2022. I didn't expect to see any reservations show up until Feb or March, however, we just received a confirmed reservation of $4K for June/July (3 weeks). I think 10K or more in rental income is doable per year, which would actually be a fantastic investment since our cost base is under 40K AND we get to use it for personal use.

Our solar PV work is in permitting at the moment. We've been told installation is scheduled for late January.

Skiing-wise, there is some fantastic early season snow in the mountains. Did a day trip to Banff Sunshine already, and we'll be doing Kicking Horse for a few days skiing next week. My goal is 10 ski days this season which would be the most I've ever done since having kids.

Assets:

House - $1,130,000
DB Pension (wife) - $309,166
RRSPs - $527,128
Non-Reg - $0
TFSA: $20,445
Corporate Account/Value/Inventory: $120.000
House Maintenance Account: $8,463
Truck - $32,750
Motorhome - $36,975
Cash - $1,268
Miscellaneous assets - $16,000

Total Assets $2,204,195

Liabilities:


Mortgage - $624,269
Credit cards - $6,184 (this is not a balance, but the amount due. We pay off every month, but a true snapshot must include this)
PLOC - $0
HELOC - $55,675

Total Liabilities $686,128

Net Worth: $1,518,067 (-$46K from last update)
 

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Discussion Starter · #282 ·
March 2022 Update

Been a while since I've updated this. Not a huge change, though the books may show some. My wife's DB termination benefit has dropped by over 40K due to rising interest rates. Can't do anything about it and that's the methodology I am using, so take the good with the bad.

Have a few stocks that are not doing so hot right now. If they were up to my ACB, the numbers would be about $75K higher. The HELOC balance is getting pretty high, but that is exclusively a shareholder loan to the company to buy inventory for this year. I expect it will be all paid off by July and then the company shouldn't need anymore loans.

Our motorhome, which I consider to be something of an investment we are also able to use ourselves, has about $9K in rental income booked so far for the season. I think it will be closer to $12K by the time it's all said and done. We have 40 nights booked off for our own use, which is about all we need. Also hoping to keep the mileage to less than 20-25K per year.

They started on our solar PV installation in January and then the weather got cold, icy, snowy, icy, windy, etc. They will be finishing it all off next week, just in time for our super long, super sunny days. Hoping we can build up enough credit to carry us all the way to Feb 2023.

Wife got Covid a month or so ago. She was functional but exhausted. No one else got it in our house and all the kids were not fully vaccinated at the time. We locked her in the basement.

My web stores are doing well. The existing one has sales peaks in May and Sept/Oct. The new one, I expect to have peaks in April-June and then almost nothing the rest of the year. I am going to try exhibiting at a tradeshow. Curious as to whether it's effective or not and whether the sales will make up for the expense. Its March 19/20 in Calgary. If anyone in Calgary wants free tickets to the show, send me a note (Outdoor Adventure Show Mar 19/20).

We are planning on going to Fernie for skiing in a couple weeks. They got 11" of snow yesterday, hopefully it doesn't melt by then. Will also get another day trip to the mountains in early April. I did a weekend in LA a while back to photo and video product for my webstore. Return flights were only $134, so it was hard to say no.

Just filed my income taxes, about $7K refund for me due to almost no income last year but a requirement to make instalment payments based on the previous year. Wife has to pay about $1K but haven't filed that one yet. Consulting is going well, I work about 6hrs a week, which is all I really want. They did offer me a full time job doing something similar but I told them I'm going to stick with P/T work for the next few years.

Kids' RESP is not included in our Net worth. Current balance is $81.5K.

Assets:

House - $1,130,000
DB Pension (wife) - $266,415
RRSPs - $536,790
Non-Reg - $0
TFSA: $15,686
Corporate Account/Value/Inventory: $166,000
House Maintenance Account: $7,509
Truck - $31,700
Motorhome - $36,450
Cash - $638
Miscellaneous assets - $16,000

Total Assets $2,207,188

Liabilities:


Mortgage - $617,288
Credit cards - $5,800 (this is not a balance, but the amount due. We pay off every month, but a true snapshot must include this)
PLOC - $0
HELOC - $98,614

Total Liabilities $721,702

Net Worth: $1,485,486 (-$33K from last update)
 

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Discussion Starter · #283 ·
May 2022 Update

Birthday update. Another complete year around the sun and up the year counter to 44 now. Covid visited our house again with me and our youngest getting taken out for a couple days. I did get one final day of skiing in at Sunshine which made it 8 on the year - my goal was 10 so not too far off.

On our house, we finished up and activated our solar PV system. It's been running for a month now. Production is about 750kwh for the last month, which would be around or just over our actual consumption for that month. I expect we would we be net zero for the months of Apr-Sep. I want to run for a full year to see if there are any months where we do export more than we use as we can switch power providers and get paid 28c/kwh for excess generation. But we'd also get charged that rate for consumption, so it only makes sense in months where we're sure to consume less than we produce. It's a small array, 6.1kW. Most we could fit on the garage roof, which is the best location and angle for solar. Father in law lent us his fancy radon detector. I wasn't expecting much since it's a tight, new build house, but our numbers were 2-3 times the recommended limit (450-500 vs limit of 200 in Canada), consistently. So we booked a radon mitigation installation at a cost of $2500. Essentially just pulls a vacuum under your basement slab and exhausts it outside. Once it was turned on, radon numbers dropped down to ~20. Mortgage keeps on chugging away - I feel like a genius doing an early renewal last Feb at 1.59 fixed for 5 years.

Motorhome - continue to get bookings for it, up to 55 nights booked as rentals. Just took it out of storage from the winter and no surprises. I am going to stick with 12K in rental income per year after booking fees.

Pension - wife's pension continues to drop in termination benefit as rates go up. So that's another hit to the NW. Flip side is that purchasing years of service from maternity leaves is getting cheaper now, so something we might consider as we have 2 years available to purchase.

Investments have not done well as of late. Mainly due to one of my bigger holdings doing poorly. I feel like we're possibly heading in to rough waters here and see stocks dropping in general some more. I started moving to cash a couple months ago and am now about 50% cash. I have 300K in cash across the accounts available and may just wait to see what happens in the fall. I got out similarly in Feb 2020 when most indices broke thru their 200DMA.

Overall, I'd say things have gotten in to a bit of a mess with personal loans to my businesses, house repairs, etc. and will be focusing the rest of this year on getting everything straightened out and back to normal.

RESP is now at 68K though it was as high as 85K within a few weeks ago. Not included in the NW.

Assets:

House - $1,140,000
DB Pension (wife) - $241,320
RRSPs - $491,299
Non-Reg - $0
TFSA: $12,625
Corporate Account/Value/Inventory: $110,000
House Maintenance Account: $6,323
Truck - $31,000
Motorhome - $36,100
Cash - $3,702
Miscellaneous assets - $16,000

Total Assets $2,088,369

Liabilities:


Mortgage - $612,645
Credit cards - $4,050 (this is not a balance, but the amount due. We pay off every month, but a true snapshot must include this)
PLOC - $12,941
HELOC - $76,100

Total Liabilities $705,736

Net Worth: $1,382,633 (-$103K from last update)
 

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You overestimate your networth in my opinion.. First, RRSP is 20-35% less as you need to pay taxes...Maybe even more depending when you take the money out.. Same with the DB pension. House, you don't consider the cost of selling it. On top of that, until you sell it you don't know the real value..... Also truck, motorhome and what miscellaneous assets are your estimations.. most of the time the real value is way less....

"You are richer than you think" doesn't work in reality... Think about 2 theoretical situations... Individual A has $1M in checking account or TFSA and individual B has $1M in RRSP... What is the networth of each individual?
 

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Discussion Starter · #287 ·
Overestimate? Maybe a little bit, but as long as its measured consistently on the way, the growth and change is what matters, not the absolute value. When we get closer to retirement, then the actual amount matters.

Anyone who loses 20-35% to taxes on their RRSP is massively incompetent. I think my average tax rate during earning years was around 24%, so I fail to see how our retirement tax rate would be worse. I suspect most average tax rates on RRSP withdrawals is 15% or under. If she plans on going to retirement, the value of the DB pension is a useless number since we'd be getting the income instead.
The truck and motorhome are conservative estimates. They're both worth about 10K more each and that is an easy estimation. The house value includes selling fees. Based on comparables in the surrounding neighbourhoods, selling right now would be in the 1.3-1.5M range, but that is sure to drop if interest rates continue to rocket.
 

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You overestimate your networth in my opinion.
but as long as its measured consistently on the way, the growth and change is what matters, not the absolute value. When we get closer to retirement, then the actual amount matters.
I've seen the question about whether you should use after tax figures to calculate net worth pop up here and there.
IMO, it really depends on what one's goal is in terms of tracking net worth. I think for most, it's to check to see that one is progressing in the right direction and at what speed. And as mentioned, to compare apples to apples of one's net worth snapshots, the variables should stay consistent. One can try to calculate taxes along the way but theres so much potential variability around how tax rules may evolve and apply to one's retirement income strategy.

Closer to retirement, for me, it's also been less about absolute value but after tax cashflow and correspondingly, then figuring out how to minimize taxes.
 

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If it was me, I would drop the following lines:

House Maintenance Account: $6,323
Truck - $31,000
Motorhome - $36,100
Miscellaneous assets - $16,000
Credit cards - $4,050

I would also track two separate net worth totals. One that includes your house & mortgage and another that doesn't. I also calculate my net worth using pre-tax totals.

I am in the same situation as millhouse: "Closer to retirement, for me, it's also been less about absolute value but after tax cashflow and correspondingly, then figuring out how to minimize taxes."
 

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With RRSPs and a DB pension, my average tax rate since retiring in 2002 has been consistently 13%.

I agree that it is better to have an optimistic plan than no plan. Pre-retirement, I had three plans: pessimistic and average. The optimistic plan was the most accurate, mainly due to the markets. But the three plans allowed us to properly allow for the impacts of major items.
 
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