Net Worth Update: 2024 Mid-Year Review

Welcome to another net worth update. I’ve been tracking and reporting my net worth twice a year for the past decade or so. It’s a good way to check on our financial progress and keep us on track with our goals.

We’re at the stage of our journey where forces outside of our control can have a major impact on our net worth. Our overall portfolio surpassed the $1M mark earlier this year, and that means a 10% increase or decrease on our investment returns moves the needle by $100,000.

Let’s be honest, outside of setting up an appropriate asset mix and choosing your investment vehicle(s), your returns are largely out of your control and can vary widely in the short-term.

So, while we try to keep the net worth needle moving forward, I’m careful not to take too much credit for an increase in portfolio value that has more to do with market returns rather than our own contributions.

Speaking of returns, well they have been excellent so far this year. Global stocks, represented by Vanguard’s All Equity ETF (VEQT), are up about 14.3% YTD. As you know, that’s where the bulk of our money is invested.

As for contributions, we’ve started filling up our TFSAs again and have each contributed $17,000 so far (on our way to a goal of contributing $28,000 each by year-end).

We’ve dumped $36,000 into our corporate investing account this year, and plan to contribute about $66,000 by year-end if all goes well. We’re able to do this thanks to consistently strong business income that continues to grow year-over-year (#blessed).

Critics of advice-only planning say people don’t want to pay upfront for advice.

My advice-only peers all tell me I’m not charging enough.

Meanwhile we’ll hit $500k in revenue this year with just $25k of expenses.

It’s possible to make good money and charge a fair price.

— Boomer and Echo (@BoomerandEcho) May 2, 2024

We also re-organized the kids’ RESP account to follow Justin Bender’s RESP strategy for family RESP accounts. The gist of it is that our oldest daughter has her portion of education savings invested in VEQT + VSB, while our youngest daughter has her portion invested in XEQT + XSB.

We now contribute to the RESP annually in January and do our rebalancing then to get to our target asset mix (more conservative as they get closer to post-secondary age).

Finally, we renewed our 1-year mortgage term at the end of April – opting for a 3-year fixed rate term this time around. We also switched lenders from TD to Pine Mortgage. So far, so good.

Now, let’s look at the numbers.

Net worth update: 2024 mid-year review

Total Assets – $2,146,728

• Chequing account – $12,000
• Corporate cash – $50,000
• Corporate investment account – $386,706
• RRSPs – $344,493
• LIRA – $228,678
• TFSAs – $34,499
• RESP – $114,352
• Principal residence – $976,000

Total Liabilities – $491,116

• Mortgage – $491,116

Net worth – $1,655,612

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

Credit Cards, Banking, and Investments

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

Our go-to card is the American Express Cobalt Card, which we use for groceries, dining, and gas. We also look for the best credit card sign-up bonuses and time our large annual spending (car and house insurance) around these offers. One I’m using currently is the American Express Aeroplan Reserve Card.

Our joint chequing account and the kids’ RESPs are held at TD. My wife has her own chequing and savings accounts at Tangerine. 

Our RRSPs, TFSAs, and my LIRA are held at the zero-commission trading platform Wealthsimple Trade. Our corporate investment account is held at Questrade.

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 last year for $976,000, so that’s the price I’m using for our net worth calculation. I typically adjust the purchase price by inflation each year but I’ll likely keep listing it at the purchase price for a few years.

Astute readers will notice that the price of our previous home went from $459,000 to $555,000 from 2021 to 2022. That ended up being the sale price, so you can see that I was pretty conservative with the house value over the years.

Final Thoughts

We’re enjoying a more “normal” year with our finances after a tumultuous couple of years building our new house. Inflation is cooling off, interest rates are starting to fall, and maybe we’ll get that so-called soft-landing after all.

We also have a good plan to fill up our TFSAs over the next five years or so. 

Recent changes to the capital gains inclusion rate will affect our corporate investing account, but it’s still advantageous to shelter excess money inside our corporation and invest for the future. 

We’re taking a flexible approach that will see us having money in lots of different buckets for retirement (RRSP, LIRA, TFSA, corporation). That will help smooth out taxes as we navigate our way to and through retirement.

Finally, we’re looking forward to continue travelling this year as we visit London, Paris, Zurich (Taylor Swift!), Lauterbrunnen, Lake Como, and Venice on what is sure to be an epic trip in July. 

We’re also heading back to our happy place this fall with an eight-day stay in Edinburgh in October.

How’s your 2024 shaping up?