Net Worth Update_ 2020 Year-End Review

Back in 2012 I decided to start sharing my net worth updates twice a year. I’ve always been transparent with my finances because I think it’s helpful for readers to know where I’m coming from and how I manage my own money. I’m a real person and wrestle with financial decisions just like everyone else. This blog has been a great outlet for me to share my thought process and get valuable feedback from readers.

Somewhere along the way I made a goal to achieve $1M in net worth by the end of 2020. I accept that it’s a vanity metric that doesn’t really mean anything. When people dream of being a millionaire they’re likely thinking about spending $1M rather than having $1M in wealth.

Still, I thought it was a stretch goal worth striving for along the road to financial freedom.

When I shared my mid-year review at the end of June I didn’t think I had much of a chance to reach the $1M mark. Stocks had dropped 34% in March and hadn’t quite recovered those losses by mid-year. What a difference six months can make! My own RRSP surged in value by nearly $30,000 while my TFSA grew by $10,000 (with no new deposits).

Meanwhile, we’ve lived on the cash payout from my pension and so we were able to save and invest inside of our corporation to the tune of $100,000.

All of this meant that our total assets grew to $1.2M while our only liability – our mortgage – dipped below $200k. We made it!

Here’s how our net worth breaks down as 2020 comes to a close:

Net worth update: 2020 year-end review

 202020192018% Change  
Assets
Chequing account$5,000$1,500$1,500
Savings account$65,000$35,000$15,00085.71%
Defined benefit pension$224,054$198,920
Corporate investment account$109,281
RRSP$246,391$208,614$162,93918.11%
LIRA$162,218
TFSA$88,882$49,239$29,37880.51%
RESP$64,428$52,754$38,47222.13%
Principal Residence$459,000$459,000$459,000
Total assets$1,200,200$1,030,161$905,20916.51%
Debt
Mortgage$187,059$201,665$213,678-7.24%
Total debt$187,059$201,665$213,678-7.24%
Net worth$1,013,141$828,496$691,53122.29%

Now let’s answer a few questions about the way I calculate net worth:

Credit Cards, Banking, and Investments

We funnel all of our purchases onto a couple of different rewards credit cards to earn points on our everyday spending.

Our go-to card is the Scotia Momentum Visa Infinite Card, which we use for non-Costco groceries and gas. I’m also using the HSBC World Elite MasterCard, which came with an incredible 100,000 point welcome bonus. Finally, we look for the best credit card sign-up bonuses and time our large annual spending (car and house insurance) around these offers.

Our joint chequing account is held at TD, along with our mortgage and kids’ RESPs. My wife has her own chequing and savings accounts at Tangerine. Our high interest savings account is held at EQ Bank, which pays 1.5% interest.

My RRSP and TFSA are held at the zero-commission trading platform Wealthsimple Trade. My LIRA is held at TD Direct, and the new corporate investment account is held at Questrade. My wife’s investments are held at Wealthsimple. You know all of this from my post about how I invest my own money.

RRSP / LIRA / RESP

The right way to calculate net worth is to use the same formula consistently over time to help track and achieve your financial goals.

My preferred method is to list the current value of my RRSP, LIRA, and RESP plans rather than discounting their future value to account for taxes and distributions.

I consider a net worth statement to be a snapshot of your current financial picture, so when it comes time to draw from my RRSP/LIRA and distribute the RESP to my kids, my net worth will decrease accordingly.

Principal Residence

We bought our home in 2011 for $425,000 and developed our basement a few years later, increasing its value to $450,000. The next year I bumped up the market value by 2% (which is still less than its city-assessed value), but the local real estate market has since flattened – with nothing selling in our price range – and so I’ve left the value at $459,000 for the past three years.

Final thoughts and a look to 2021

It’s an immense privilege to be able to work from home and prosper in the middle of a pandemic when so many people have lost so much. I acknowledge this privilege and I’m incredibly grateful for everything we have.

What’s next after reaching the $1M milestone? They say the first million is the hardest, so why not aim for $2M by the end of 2025 (my age 46 year)?

We had big plans for 2020 after I quit my job. Since I can truly work from anywhere we planned to travel more and put that location-independence theory to the test. That obviously didn’t happen.

We’ll see what 2021 brings, particularly in the last half of the year. I’m forever an optimist so I’m hopeful there’s a return to ‘normal’ somewhere on the horizon. Until then, we’ll focus on our family and make the most of our time at home. We’ll continue to save and grow our business. And we’ll continue to dream of better days ahead.

How did your finances fare in 2020? Did you stay invested through the ups and downs? Let me know in the comments below.

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39 Comments

  1. Azul on December 31, 2020 at 3:29 pm

    Congratulations Robb!!

  2. Freehan S on December 31, 2020 at 4:02 pm

    Congrats. If you were to reflect, are you satisfied? Where there any areas that you think you could have stretched yourself to attain more?

    • Robb Engen on December 31, 2020 at 4:26 pm

      Hi Freehan, thanks! Looking back, I think everything happened exactly as it needed to. I was surprisingly accurate with our goals (doing our epic month-long trip to Ireland/Scotland last year and reaching my $1M milestone this year).

      I want people to realize they don’t need to do everything all at once. I had stretches where I didn’t contribute to my TFSA, but we had other priorities at that time. We caught up, eventually, which is all that matters.

      Finally, I’ll just say that I was apprehensive about quitting my day job to do this full-time, but in hindsight I probably could have pulled the trigger earlier. Oh well, such is life.

      • Freehan on December 31, 2020 at 5:31 pm

        Congrats again and I’m sure you will do very well in your current practice. It’s a service that is needed by many 🙂

  3. Stuart on December 31, 2020 at 4:16 pm

    Congratulations on achieving your goal, Robb!

  4. Gus on December 31, 2020 at 4:17 pm

    Congratularions Robb and Happy new year to you and your family and also thank you for all the time and effort !
    one question in mind are you making any extra payments on your mortgage ? or is it because rates are low you’d rather invest the money then paying off the mortgage earlier.
    Thanks

    • Robb Engen on December 31, 2020 at 4:29 pm

      Hi Gus, thanks so much. I have addressed this in another post but basically before Covid I planned to double-up our payments to accelerate our mortgage pay down. Then rates dropped and our mortgage rate is now just 1.45%. I figure I’m better off leaving that money in our corporation and investing it rather than pulling it out, paying tax, and paying down our low interest rate mortgage. I’ll revisit this if rates rise or when it’s time to renew our term.

  5. DSB on December 31, 2020 at 4:36 pm

    Congrats Robb on reaching this milestone. Must be very gratifying!

  6. Pat on December 31, 2020 at 4:47 pm

    Congratulations Robb on setting a long term goal and meeting it. I agree with you that the first
    million is the hardest. I’ve been doing a biannual net worth statement since 1998 and set a goal of achieving 1 million net worth by my 50th birthday in 2005. I achieved it in my year end 2004 net worth statement.

    The next million took a little bit longer which I achieved at age 56 in 2011..the market crash in 2008/9 had something to do with that! So in your case taking 6 years to amass the second million seems entirely reasonable.

    I retired from full time work in 2012 and then from part time consulting in 2015 at age 60 but my net worth has continued to grow and I reached $3 million in 2017. so another six years. I expect my net worth at the end of this year will be in the $3.5 million range. The magic of being fully invested in the market and not spending more annually than I receive in dividends and other investment income.

    • Robb Engen on January 1, 2021 at 11:57 am

      Hi Pat, thanks for sharing your story – very inspiring! Always good to keep the needle moving forward.

      Happy New Year!

  7. Mark on December 31, 2020 at 4:53 pm

    Keep up the great work Robb. One question I have on your update is what you consider your threshold for something to be considered an asset? E.g. I include the current estimated value of my vehicles in my own tracking… I see you included your chequing account which is relatively low value in the scale of this report, so I assume that either your vehicles are below that threshold, or there is some other reason you exclude them… Thanks agan for putting out great personal finance content and being transparent in your journey.

    • Robb Engen on December 31, 2020 at 5:29 pm

      Hi Mark, many thanks! I’ve just never bothered to include the value of our vehicles in our net worth statement. For one, they’re hard to value, plus they decline in value each year. I guess it would be like including your TV. It’s an asset, sure, but if I sold it I’d likely replace it with another (more expensive) one.

      For the record, we have two Hyundai SUVs – a 2007 Tucson and a 2013 Sante Fe. Hopefully we don’t have to upgrade these vehicles anytime soon.

  8. Barry Knapp on December 31, 2020 at 5:37 pm

    Not at all surprised Robb that you met your goal. Having had the privilege of working alongside you in your previous career I would have bet the house you would achieve this. Congrats to you and Lindsay!!

    • Robb Engen on January 1, 2021 at 11:59 am

      Hi Barry, thanks for the kind words. Your mentorship meant a lot to me.

      Happy New Year to you and your family!

  9. Radha on December 31, 2020 at 6:07 pm

    Wow, amazing, you deserve it, Robb!

    • Robb Engen on January 1, 2021 at 11:59 am

      Thanks so much, Radha – Happy New Year!

  10. Gary Page on December 31, 2020 at 6:29 pm

    Congrats! Milestone financial achievements mean a lot so hope you take some time to reflect and enjoy this moment in time. I have a question for your corporate investment account. Any thoughts to go back to stocks and invest for increasing dividends?

    • Robb Engen on January 1, 2021 at 12:02 pm

      Hi Gary, many thanks! No, I won’t go back to individual stocks – that ship has sailed. I’m after the total returns of global stocks (thru low cost ETFs).

  11. Cindy Jones-Sherk on December 31, 2020 at 7:20 pm

    Thank you for sharing! I find it fascinating that I look to ‘a guy on the internet’ to share their finances and can’t even discuss or share this with my closest family or friends. Again, MUCH THANKS and APPRECIATION. Oh, and a big CONGRATS, so inspiring to follow your journey.
    from a creeper fan 🙂

    • Robb Engen on January 1, 2021 at 12:06 pm

      Hi Cindy, thanks so much for the kind words. I know money can still be a taboo topic in a lot of households and friendship circles, which is why I prefer to be an open book here for readers to get some insight into real life money management.

  12. Tawcan on December 31, 2020 at 9:12 pm

    Congrats Robb on joining the double comma club. Very impressive stuff to accomplish and hit it like you had planned.

    • Robb Engen on January 1, 2021 at 12:07 pm

      Thanks so much, Bob! That’s why I loved goal-centric planning. It’s amazing what you can accomplish when you write down your goals and have something to strive towards.

  13. Joyce on December 31, 2020 at 10:31 pm

    Congrats Robb
    Just curious if you and your wife topped up your TFSA, shouldn’t it be above 100,000
    You had good timing with taking out your commuted value because they
    Changed their formula in April. A 500,000 commuted value is now only 400,000
    I am trying to convince my son in law to read your colum so he could realize paying down a mortgage can be balanced with accumulating other assets.

    • Robb Engen on January 1, 2021 at 12:10 pm

      Hi Joyce, thanks so much. I maxed out my TFSA this year but my wife’s TFSA is on the list of goals for 2021. Can’t do it all, I’m afraid.

      It was good(ish) timing with the commuted value. I didn’t get the full benefit from the interest rate drops in March, but I also avoided the changes that were imposed on December 1st.

      Nothing wrong with paying down the mortgage if that’s his comfort zone, but I agree that a balanced approach is usually best.

      Happy New Year!

  14. Mike W on January 1, 2021 at 5:08 am

    Congratulations Rob,

    Funny we are very close in net stock asset levels. I was under $1 million and I was sure it would take another year to get there.

    I did not have much cash to buy more when the market took a tumble in March. Also my accounts got frozen by the online broker so I could not add more money. It took 50 plus days to fix the snag because I could not get a hold of anyone by phone at the broker’s offices.

    By 2020’s end I was up over $1 m. I invested a few thousands in SaaS companies and in a healthcare company. Those investments and a gold etf push my total over $1 million.

    I anticipate that 2021 will very volatile and unpredictable.

    Thank you for all your great posts in 2020 and I look forwards to reading all your new posts in 2021.

    • Robb Engen on January 1, 2021 at 12:12 pm

      Hi Mike, nice work and congrats on the $1M!

      Thanks for the kind words. The future is always unpredictable, isn’t it? I don’t see that changing in 2021. We’ll see what happens, but we’ll focus on what we can control.

      Happy New Year!

  15. JRR on January 1, 2021 at 5:50 am

    Great achievement, i hope it continues for you. My net worth is now at 2.4 mil at Dec31. I just turned 65 and if you asked me 20 years ago if I would ever be worth this much, I would have said no way. The information you provide is so helpful, everyone needs it and should read it. I wish columns like yours existed in the eighties when I first started my investment journey !! I estimate that I would be worth at least 1 million more :o( Anyway that spilt milk is sour now so onward and upward. Cheers and here’s to a great 2021 :o)

    • MikeW on January 1, 2021 at 8:47 pm

      Hi JRR,

      The time machine if only we had one. When I was 18 I thought retirement was light years away. I know just by working a job it was almost hopeless to save enough to retire.

      I too wish I had someone to let me in on the mechanics and different ways to get to the retirement goals.

      I paid off my mortgages first. My rental property and principal residence. Then I apply all the mortgage payments to retirement. I was able to catch up and surpass.

      At the rate I am going if I can still able to physically do my job, I might be able to get to $3 m by age 65. I am going to be 60 soon.

      Congratulations on blowing pass most Canadian’s retirement plans. Most don’t even come close to a fraction of what you have achieved.

      Sad to see many of former co-workers struggle into retirement.

      Here’s to successful 2021 and health.

  16. TPM on January 1, 2021 at 6:30 am

    The first million is definitely the hardest. Congrats on reaching this. The next one will be here before you know it.

  17. Gary on January 1, 2021 at 8:01 am

    Way to go Robb! It has been fun to follow your journey over these past several years. I plan to follow your path in my next life as it is too late for this time around. . Happy New Year to you and yours .

  18. Gin on January 1, 2021 at 11:54 am

    Congrats on achieving this milestone with best wishes for a Healthy and Happy 2021.
    Thank you for a year of informative and enjoyable blog reading.

  19. John S on January 1, 2021 at 2:29 pm

    Hi Rob;

    Great post as usual. We are a bit older and I do track all assets, including the car. Am a “Quicken-holic” and have been since a loooong time and have a lot of data. This year was the first I can recall our net worth dropped. But that’s the way it should be according to our decumulation plan assembled by a fee only planner about a year ago now. Am 64 and “retired” now, or more accurately, financially independent. We had planned a couple of big trips last year, which didn’t transpire. So we bought some furniture, a new TV for the basement and in November, replaced our 2015 car with a new one. Earlier in the spring we had sold the commuter car; we can survive in our 55+ community with only one. Quicken also tells me we returned 7.95% for the year; not bad considering where we were in March. So we are comfortable with a net worth drop and look forward to spending more of our hard earned savings in the 30+ years to come!

  20. Japan on January 3, 2021 at 8:24 pm

    Congratulations Robb and Happy New Year to you and your family and I hope you reach your new 2M milestone before 2025.

  21. Shashi on January 5, 2021 at 9:54 am

    Congratulations Robb on achieving your goal for 2020.

    As you said, the second half of 2020 was a surprise. We remained invested and continued our monthly contributions.

    Wish you the very best on your next goal.

  22. Ian on January 8, 2021 at 5:41 pm

    The bulk of most peoples portfolio is in an RRSP. From what I understand you shouldn’t touch that until you are at least 60. If you are looking to retire early you need to focus on your portfolio minus your RRSP part, and see how your numbers work out.

  23. Bob Wen on January 14, 2021 at 10:40 am

    Well done Robb and thanks for sharing your numbers. It was also good to hear you on the Build Wealth Canada podcast.

    • Robb Engen on January 14, 2021 at 4:50 pm

      Hi Bob, thanks so much for the kind words! Glad to hear you enjoyed my conversation with Kornel on the Build Wealth Canada podcast.

  24. MJ on January 14, 2021 at 8:53 pm

    Hi Robb, I am so proud of you. I appreciate your openness and willingness to share your life with such transparency while you remain the same humble person that I worked with many years ago.
    Congratulations to you, Lindsay and the kids for such great achievement!!!

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