We will become Financially Independent in 2024, and in order to do that, we track not only our spending but our Net Worth by sharing our progress with you. Let’s see what May 2023 brings us!
What is Net Worth and why is it important?
Here’s an excerpt from Wikipedia:
For individuals, net worth or wealth refers to an individual’s net economic position, the value of the individual’s assets minus liabilities. Examples of assets that an individual would factor into their net worth include retirement accounts, other investments, home(s), and vehicles. Liabilities include both secured debt (such as a home mortgage) and unsecured debt (such as consumer debt or personal loans). Typically intangible assets such as educational degrees are not factored into net worth, even though such assets positively contribute to one’s overall financial position
Net Worth Calculation Breakdown – May 2023
Assets: $1,731,990
Liabilities: $751,977
- Principal residence (Canada): $751,977
Net Worth: $980,013
Financial Independence Summary
- When comparing MoM:
- Assets: Decreased -0.73%
- Liabilities: Decreased -0.09%
- Net Worth: Decreased -1.22%
- Even with the increase of the investments, the Smith Manoeuvre went down. Here are a few parameters for the investments accounts increase:
- ITOT is up +14%
- QQQ is up +39%
- BMO is down -4% (part of our Smith Manoeuvre account)
- T is down -2% (part of our Smith Manoeuvre account)
Where do we invest to achieve Financial Independence?
Principal Residence
Currently, we are living in Toronto, a rather expensive city! But that high cost of living also means that our house has appreciated over the past few years quite a bit. Our home was purchased in 2016 for $615,000 but was recently valued in 2020 at $860,000 2022 at $1,030,000. [UPDATE] In 2023, due to the state of the economy, we’ve decided to reduce the price of our house to $950,000
Condo overseas
In 2019 we bought a condo in Brazil as an investment property. This price was paid in Reais (Brazil’s currency) but we have converted this to Canadian dollars ($137,500) to keep things simple. The condo is now paid off. [UPDATE] New price (Dec 2022) is $160,000 Canadian dollars.
Pension
Kristine works for the municipal government and we are using the same number every month based on her best five years.
Investments
This is the total of our investments in both of our RRSPs and TFSA’s, our margin accounts, and Gean’s investments overseas. We are 100% invested in equities (dividend and growth stocks) and ETFs.
Smith Manoeuvre
Since renewing our mortgage in 2020, we are using the HELOC (Home Equity Line of Credit) to invest in dividend-paying stocks (100% Canadian stocks).