Hey Everyone and welcome to my October 2020 net worth update. September was a bad month for every asset class across the board. So my net worth is essentially flat. Given the way the market’s been lately, I consider that result pretty good.
I’ve put a lot of my disposable cash to work this month instead of paying down debt. Prices for some assets are just too cheap to pass up.
If you’re new to this blog, my investments were getting killed this year due to the economic crisis. But we are doing 3 important things to keep growing our net worth. First, we keep reinvesting our dividends. Second, we keep adding new money and keep investing. Finally, we are paying down debt. This is our recipe for success.
Why Do I Publish My Net Worth?
If you’re new to this site you’ll find that I like to track my family’s progress to financial freedom through monthly net worth updates. Now I want to say that my purpose in publishing these reports is not to gloat or give myself a pat on the back.
Lots of other bloggers are way better at this stuff than I am. My purpose is simply to see what I can achieve through my own imperfect approach to finances. I have no formal training in business or finance and haven’t worked in those fields. I’m just a guy with a day job trying to get ahead like everyone else. My hope is that I may inspire others as I have been inspired to get serious about money and do better financially.
Please note: this page contains affiliate links. As an affiliate, this blog receives a commission for each sign up for Tangerine, EQ Bank, Borrowell, Questrade, Silver Gold Bull and Bluehost.
How to Calculate Net Worth
To calculate our net worth, I add up all of our household assets and subtract any outstanding liabilities (ie. debt owing). The result is simply a snapshot of where we stand financially at a particular moment in time and does not give any of the relevant details as to how or why we reached that point. For that kind of information, as well as for our monthly investment income, please refer to our dividend income and monthly highlights section.
Tracking our net worth is important to make sure that we’re headed in the right direction and achieving our long term financial goals. Our net worth fluctuates from month to month but it’s the longer term trend that we’re focused on.
How To Grow Your Net Worth
In a previous post about our financial goals for 2020, I laid out 3 big goals this year. First, we want to increase our net worth to 1.5 million. This is a bit of a stretch, but I think we can achieve it as long as this pandemic doesn’t last too long.
A million in net worth is a huge milestone on the road to financial freedom and I’m happy that we finally achieved it! I’m even more happy that we managed to stay above that mark. If you want to know our secret financial tricks to make your first million, check out our post on How We Made A Million Dollars…and how YOU can too!
Our second major goal is to increase our passive income to $21k. In 2019, we managed to earn just over $19k. So I feel that if we continue to invest a great deal of our paychecks, then we’ll be really close to earning $21k from our investments. At that point we’ll be really close to our goal of earning $25k a year in passive investment income.
Finally, we still want to aggressively pay off our mortgage so that we can be mortgage-free in 10 years or less. To this end, we plan to pay off at least an extra $30k this year in the form of lump sum payments. To date, we paid an additional $4.8k!
These net worth reports are all about managing our cash flow from our jobs, our financial assets, and dealing with our debt. It’s important to be aware of our financial situation since we are homeowners with a young family.
One of the tools that we started using recently is Borrowell’s free credit score report. If you’re thinking about buying a home, renewing your mortgage or buying a car, you might want to Get Your Free Credit Score with Borrowell.
October 2020 Net Worth Update
Assets: $1,667,451.22 (+0.27%)
Well thanks to our approach to regularly invest our money, along with a little help from the stock market, our assets have grown to over $1.6 million!
Home: $846,000 (0%)
A few years ago we purchased our “final” family home where we expect to be for at least the next 30 years. In June of 2016, we received the latest property assessment and the assessed value had increased to $846k!
Rental Properties: SOLD
We sold our out of town rental property due to management issues.
Cash: $1,114.17
Our day to day banking is one area where we save a ton of money because we use Tangerine as our no-fee banking service. If you’d like to open one, then visit the Tangerine website and remember to use my Orange Key: More25 to get $50 in free bonus cash just for opening up an account!
As a matter of habit, I rarely keep a lot of cash on hand in a savings account. The reason being is that at today’s record low interest rates I’d rather put the money toward paying off my mortgage faster or invest it. That said, I’m still slowly building an emergency fund with EQ Bank’s Savings Plus Account. Check out my review HERE to see why.
Taxable Investment Accounts: $86,728.96 (+7.13%)
Our non-registered investment accounts include DRIP accounts with Computershare and Canadian Stock Transfer, a discount brokerage account at Questrade and a work savings plan.
Related: Use My Link to Sign Up For Questrade and Get $50 in Free Trades
For the most part, in these accounts, I prefer to hold Canadian companies that pay eligible dividends. From time to time you may see a decrease in this account as a result of me moving some of these assets that are fully taxable into our registered accounts that are not subject to any immediate taxes.
Tax Free Savings Account (TFSA): $167,261.53 (-3.10%)
In the TFSA I like to hold growth assets, such as low-cost ETFs, TD e-series index funds or Canadian dividend paying stocks.
Retirement Accounts (RRSPs, LIRA, Pension): $464,198.83 (-0.43%)
Our retirement accounts consist of RRSPs, a small locked-in retirement account (LIRA) from a previous employer and a company defined contribution pension plan. The RRSPs and LIRA hold low-cost TD e-series index funds and other low-cost ETFs, while the company pension plan is invested in a low-cost target date fund.
Education Savings Plans (RESP): $51,087.73 (-0.57%)
In the RESP we hold low-cost TD e-series index funds. We contribute the annual amount of $2,500 so we can get the 20% match from the government. Our strategy for contributing is to use the money we receive each month from the universal child care tax credit and make up the difference at the beginning of each year. This ensures that we receive the maximum government contribution of $500.
Other Assets: $51,060 (+11.97%)
Under the “other” assets category, I include precious metals and an extensive coin and paper money collection. Precious metals and rare coins are hard assets that add a level of diversification.
For years I collected rare gold and silver Canadian coins and Canadian paper money. The collection has a face value of $12,000 so I conservatively estimate the collection’s worth at around $30,000.
I’ve also been adding some physical gold and silver this year. I purchase my gold and silver from: Silver Gold Bull – Your Trusted Bullion Dealer
For the purpose of my net worth calculations, I’ve been keeping this number conservative versus quoting its market value over time because (a) coins and paper currency can be difficult to accurately appraise as they are subject to changing market trends and (b) can become illiquid if you can’t find a buyer for them.
Liabilities: -$321,353.63 (+1.29%)
We have 1 big debt to tackle: our home mortgage. Paying this off this a priority so we can get out of debt and live on our terms!
The HELOC is used for investing and is tax deductible.
Mortgage: -$261,369.53 @ 3.34%
Paying down our mortgage will be a high priority for 2020 and we expect to be mortgage-free in less than 10 years.
HELOC: $-59,984.10 @ 3.35%
I moved $60k over to invest during this crash. Sometimes I use the HELOC to boost my investing funds. The interest is tax deductible so I’m fine with carrying a balance.
Thanks for reading my October 2020 Net Worth Update!
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