Net Worth Update: 2024 Year-End Review

Welcome to the end of the year and another net worth update. 2024 has been a banner year for both professional and financial growth.

On the business side, we saw revenues increase by an incredible 35%. More and more of you reach out for unbiased financial advice each year, and my wife and I absolutely love our little work-from-home practice.

Financially, the stock market was on fire again and our global stock portfolio will finish up somewhere in the neighbourhood of 25% this year.

One of my pet peeves is reading net worth or dividend income reports with no mention of how much money was contributed. It’s an important part of the equation.

So, in the name of full transparency, our increased business revenue allowed us to pay ourselves more to help meet our personal spending and savings goals, and still shovel a bunch of money into our corporate investments. 

Also, when the capital gains inclusion rate changed for corporations, we triggered a capital gain of $68,000 inside our corporation (selling all of our VEQT shares and then immediately buying them back – and before you ask, there is no superficial gain rule so this is perfectly fine in CRAs eyes).

This created a $34,000 tax-free surplus inside of our Capital Dividend Account – which allowed us to personally withdraw a “capital dividend” of $17,000 each, tax-free.

I recognize that might sound like complete gibberish to many of you, but basically the extra $34,000 helped us contribute the following to our accounts this year:

• TFSAs – $48,000 ($24k each as part of our TFSA snowball strategy)
• RESP – $7,500 (including an extra $2,500 catch-up contribution to fully max out a year of missing CESG for our oldest daughter)
• Corporate – $55,000 in new contributions

When the market is up 25% and you make new contributions of $110,500 across various accounts, well that’s a pretty good recipe for net worth growth.

What’s in store for 2025? As I’ve written previously, we have six financial goals for the new year:

1. Contribute $28,000 each to our TFSAs
2. Contribute $5,000 to our kids’ RESP in January and rebalance the portfolio for their age 16 and 13 years.
3. Take three trips (Cancun in February, Italy in April, and England/Scotland/possibly Finland in the summer).
4. Earn enough business revenue to meet our personal income needs (same as 2024) and contribute $80,000 to our corporate investments.
5. Pay for bi-weekly cleaning, summer lawn care, and winter snow removal to allow more time for work, leisure, and family.
6. Reach the $2M net worth milestone (a stretch goal that is only possible with another strong year of market returns).

With that out of the way, here’s how our net worth looks at the end of 2024:

I’ve had a big hairy audacious goal of reaching the $2M net worth mark by the end of 2025. After a stellar 2024, that milestone is now within striking distance if markets perform reasonably well next year. 

Indeed, we only need a net worth increase of 10.5% to reach a net worth of $2M. Savings contributions and regular mortgage payments will do most of the heavy lifting, but we’ll need a bit of stock market growth to put us over the top. Fingers crossed!

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 (trip bookings, car and house insurance premiums, etc.) 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 for guilt-free spending money.

Our RRSPs, TFSAs, and my LIRA are held at the zero-commission trading platform Wealthsimple Trade. Our corporate investment account is held (for now) at Questrade. I plan on moving this to Wealthsimple in the new year.

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

I think it’s important to acknowledge our tremendous privilege. We work from home – a dream house we had built last year – in a profitable and thriving business that we love. I get a great deal of satisfaction from the work I do with my clients.

We have the money, health, and flexibility to travel several times a year to visit our favourite places (and discover new ones).

I really do believe we’ve cracked the code to living the good life, and I don’t take that for granted for one second.

I also want readers to understand why our net worth has increased so quickly. It’s not just from strong market returns (although that has certainly helped) but the growth is also driven by substantial savings contributions.

Those contributions would not be possible if our income hadn’t increased significantly over the past few years since quitting my day job and working on our business full-time.

We’re not saving 50% of our income and living the Mustachian life either. Our savings rate is more like 15-20%. Indeed, we’re trying to strike the appropriate balance between enjoying life now and saving for the future.

I say all of this to acknowledge that the secret sauce to our net worth growth is simply this: we’re making a lot more money, we continue to save a reasonable percentage of that income, and we invest aggressively in global equities that have grown by about 77% over the last five years.

In closing, 2024 was a great year and we’re hoping for more of the same in 2025.

How did your year shape up? Let me know in the comments below.