We’re halfway through 2013, so now’s a good time to take a big picture view of our finances to see if we’re on track.  I like to update our net worth and review our financial plan a couple times a year to stay on top of our goals.

The last time I updated our net worth was at the end of 2012.  We had a net worth of $258,301 and aimed to hit $360,000 by the end of 2013.

Net Worth Update

I’m happy to see our net worth has surpassed $300,000 at the midway point this year.  The $40,000+ increase was due in part to increased savings, RRSP contributions and an aggressive mortgage pay down.

Related: Why Do We Save?

Here are the numbers:

Total Assets – $581,976

  • Chequing Account – $1,500
  • Savings Account – $9,000
  • RRSP – $63,305
  • Defined Benefit Pension – $72,500
  • TFSA – $4,388
  • RESP – $6,283
  • Principal Residence – $425,000

Total Liabilities – $281,861

  • Principal Residence Mortgage – $281,861

Net Worth – $300,115

Looking forward

While I’m pleased with the results so far this year, I’ve tempered expectations for reaching $360,000 net worth by year end.  At this pace, $340,000 seems more realistic.

Related: Three Things I Wish I Had Done Differently With My Finances 

For one, I was hit with an unexpected $3,500 bill for property taxes owed.  I pay property taxes through my mortgage provider and they’d been withdrawing around $250 per month for taxes since mid-2011.

Last week I received a letter from the bank saying I was behind in my taxes and that they’d be increasing my monthly payment from $250 to $715 per month!  Instead, I chose to pay a lump sum now and reduce the monthly payments to $325.  Needless to say, that’s a big hit to the wallet.

Second, the markets haven’t been as strong this year as they’ve been since 2009.  My RRSP portfolio is up just 6 percent on the year.  The dividends are still flowing, but only add about $2,500 per year to the total.

Related: Is It Time To Say Goodbye To Dividend Investing?

Final thoughts

To get another $40,000 increase in net worth by the end of the year, we’ll need to get saving.

We’ll continue to pay an extra $1,100 per month towards our mortgage, and top up my RRSP by $1,500 per month.  Add another $500 per month to our savings account, plus my monthly pension contributions, and we’re nearly at our goal.

And, who knows, if the markets start to heat up then we might have an outside shot at reaching that stretch goal of $360,000.

Do you review your finances mid-year to see if you’re on track?

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38 Comments

  1. Fiscally fit on July 1, 2013 at 12:40 am

    I have a quick question about why you are paying down your mortgage so aggressively. I understand paying down a bit extra to build in a margin of error but why so much? Even if you were concerned that your rate would increase in the next year or two, I’m sure you could achieve a rate of return greater than that differential over the same time frame with a simple gic/accumulation annuity. Just curious. Thanks

    • Echo on July 1, 2013 at 8:26 am

      @Fiscally fit – Great question. We decided that we’d like to have our mortgage paid off in 10 years and so we’ve set our payments to do just that.

      We’ve struck a pretty good balance (in my opinion) between investing and paying down debt.

  2. Trombonedadio on July 1, 2013 at 6:22 am

    Congratulations on hitting $300K – there is nothing like a nice juicy round number such as that to measure your progress! So, from the info you’ve given us, you are putting away $3,100 per month on top of your regular mortgage and pension contributions. I am guessing that your single income is actually a pretty hefty one as on top of those numbers you have to cover all your other monthly living expenses. And of course, these are all after-tax dollars. It sounds like your work income puts you somewhere in the top 20% in Canada…… It may be a single income family, but the income is a healthy one!

    • Echo on July 1, 2013 at 8:34 am

      @Trombonedadio – Thanks! We save about 35% of our income, which includes my day job and some freelance writing for The Star. We’ve also incorporated our online business and I stream dividends from the corporation to my wife.

      Starting a side gig has truly been the catalyst to saving more and being able to fast track our financial goals. It has also allowed my wife to stay home full time and look after our kids.

      • MG on July 1, 2013 at 9:19 am

        Hi Echo!
        I recommend that you extricate yourself from having the bank pay your property taxes as soon as possible. I recall that they used to insist on collecting and submitting taxes for those who did not have a conventional mortgage such as 25% down. Since you are paying off so much of your mortgage, your debt to equity ratio is probably fine now. The banks make a lot of money by building up a “pot” for your next tax payment which may actually be 6 months away. And they don’t pay interest on it! Essentially a free source of funds for them. Your tax balance is always much higher than what you owe.

        Cheers,
        MG

        • Echo on July 1, 2013 at 9:32 am

          @MG – Thanks, I think I’ll take your (and NormaK’s) recommendation and switch to paying the city directly.

          I could’ve had the $4k or so sitting in my ING savings account and earning the bonus 2.5% interest until taxes came due.

          Next year!

  3. NormaK on July 1, 2013 at 6:48 am

    Rob: We learned the hard way not to allow the bank to pay property taxes. It won’t stay on top of property taxes and will top them up for you for a fee! Does your city/municipality allow you to directly pay property taxes monthly via auto debit or other means? That way, you’ll always be paying exactly what you owe and there will be no bank fees as long as you have one of those accounts where you maintain the monthly minimum balance. Just an idea. Congratulations on making and sticking to you financial plan!!

    • Echo on July 1, 2013 at 8:37 am

      @NormaK – Thank you for the suggestion. Yes, our city allows us to pay taxes directly. I think I’ll set that up going forward.

      Usually I’d get a letter from the bank stating if our tax account was in a deficit, but that didn’t happen last year and so the payment never changed and we got even further behind. I should have been more diligent.

  4. Jane Savers @ Solving The Money Puzzle on July 1, 2013 at 7:28 am

    I am not on track and have been trying to avoid the update. I ended up having to move to a new blog host yesterday because my current host is closing suddenly. Now I have a charge on my Visa and no way to pay it except reducing my debt payments in July.

    One step forward, two steps back seems to be the theme for finances in 2013.

    Pay off your mortgage as quickly as you can. Debt is debt – why drag it out?

    • Echo on July 1, 2013 at 8:44 am

      @Jane Savers – Oh no! Which hosting company were you with?

      I agree about the debt – I don’t intend to drag it out.

      • Jane Savers @ Solving The Money Puzzle on July 1, 2013 at 8:51 am

        I was with Nuts And Bolts Media until yesterday when they announced their closure.

        They have been under a DDOS attack for days and suffered permanent damage to the hard drives. As soon as they replaced the hard drives the attack started again and they decided to stop business.

        The users of the hosting services have been blocked from their blogs for most of the week.

        I am in the process of switching to GreenGeeks.

  5. My Own Advisor on July 1, 2013 at 7:53 am

    Excellent work!

    Having over $300 k in NW in your 30s is very impressive. Take away that mortgage, in another 10 years, and you’re well on your way to becoming a millionaire (in terms of NW) by age 50.

    Putting $1,500/month into the RRSP is an amazing savings rate. We’re not even half that. Most of our extra money is going on the mortgage, although we do have some other savings goals we are meeting. We’ve got another $10 k in TFSA contribution room to max out, I hope to contribute $8 k to it before end of December in my wife’s account.

    http://www.myownadvisor.ca/2013/05/2013-financial-goals-may-update/

    I’m not sure what our exact net worth would be right now but as long as I keep my head down and continue mortgage lump sum payments, TFSA contributions and regular RRSP contributions, I suspect it is increasing by about $3,000 per month.

    Keep up the great work Robb, you should be proud.

    Mark

    • Echo on July 1, 2013 at 8:48 am

      Thanks Mark! I think we have similar strategies; killing off the mortgage quickly while still saving a good chunk of our income for retirement. I made a conscious decision to go all-in with my RRSP rather than splitting between RRSP and TFSA contributions. I’ll get to the TFSA (eventually).

      I’m about a month shy of my 34th birthday, so this was a nice milestone to hit. One million still seems a loooong way away.

  6. Lynne on July 1, 2013 at 8:38 am

    Nice work you guys! 🙂

  7. JT on July 1, 2013 at 11:08 am

    Very impressive, Echo.

    Paying off your mortgage at a faster clip doesn’t seem like such a bad idea. Too bad you can’t lock in a rate for 30 years like your friendly neighbors to the south! 😉

    I saw that the 5- and 10-year Canadian government bond yields were spiking. I don’t know your mortgage situation, but it looks like those with ARMs could be in for a bit of a sticker shock when rate resets come through.

    • Echo on July 1, 2013 at 12:43 pm

      @JT – Thanks! I’ve noticed the 5-year fixed rates have edged up a few tenths of a point over the last week or two. No doubt fixed rates will be higher when it’s time for us to renew.

      We initially went with a 5-year variable mortgage rate, which was set at prime, minus 80 basis points (2.2%).

      Although fixed rates are trending up, I’ve yet to see any signs that the Bank of Canada will raise its overnight rate anytime soon.

      Perhaps if I were single and childless I’d consider stretching out the amortization on my home loan and focus instead on investing. But that’s not the case 🙂

      • Dunny on August 26, 2013 at 10:41 pm

        Great blog. Yes, that’s what I’ve done. I have a variable rate mortgage and the longest amortization the credit union will give me (it was 40 years, but the renewals are for only 35 years). My reason is partly cash flow safety as I haven’t had a salary for 8 years and I want to travel for at least half the year. If the prime rate goes up, my payments do not increase. When I renew again in 5 years, I will ask for the longest amortization again, to keep the payments as low as possible. I rent out a portion of my home to offset my mortgage payments and other housing costs. Meanwhile, my RRSPs and investment accounts are still growing and I haven’t started to withdraw yet. My net worth is pretty high and I don’t have dependents, so I can afford to take some calculated risks. On the other hand, I have only rental and smallish pension income. I use a spreadsheet to calculate my increase in net worth in various scenarios (e.g. downsize to a condo, pay mortgage off faster) and keeping the house and stretching out the mortgage always wins out by a big margin.

  8. Brian @ Luke1428 on July 1, 2013 at 11:41 am

    I think everyone should review their finances at least twice a year. I’m getting ready to do mine soon. Congrats on the growth in net worth. It’s very motivating to see progress.

    • Echo on July 1, 2013 at 12:48 pm

      @Brian – thanks, I appreciate the comment!

  9. Bet Crooks on July 1, 2013 at 3:00 pm

    Wahoo! What happy reading for Canada Day. Congratulations on your continued success.

    I’m glad you don’t get too hung up on the growth (or lack thereof) of any market investments. They swing around so much that the “noise” can make it a very frustrating item to snapshot.

    The mortgage makes a great simple way to see your success. Looking at how much you have contributed to various savings plans also works.

    Enjoy!

    • Echo on July 1, 2013 at 8:42 pm

      @Bet Crooks – I try and tune out the market noise and just focus on my strategy. In the grand scheme of things, my portfolio is very small and there’s no point moving in and out of investments to try to eke out a few more bucks. I’ll just keep plowing money into dividend stocks and keep building up my portfolio.

  10. Bryan on July 1, 2013 at 4:05 pm

    I am doing a major review of my finances after buying our first house this past week! I saved for it mainly through GICs and living at home to limit my expenses. But now I want to change and maximize the way I save.
    My investment amount is relatively small (ok, tiny) right now, about $3000. I am looking at using only my TFSA to invest as my pension plan severely limits my RRSP room (which I am not complaining about at all!). At the start of next year, I will have over $25000 worth of room in my TFSA, so I can add to it a lot when I get back to saving regularly; house start-up costs are hindering that right now.
    I am trying to decide between the TD e-series funds, dividend stocks, or ETFs (probably through Questrade, unless you recommend something that is better). So I have 2 questions that I hope you can help me with, and possibly other poeple in similar situations:
    1. Which of the 3 methods should I choose with this amount? I am not afraid of “risk” since this is strictly to increase my net worth over a long period of time (I’m 26 now). Or should I choose more than 1?
    2. Where can I get dividend stocks? Like what kind of account/which financial institution is a good place to go for dividend stocks? I don’t know why I can’t find this information.
    Thanks as always for helping out!

    • Echo on July 1, 2013 at 8:56 pm

      @Bryan – Congratulations on becoming a homeowner! You’re right, those extra costs can really add up when you first move in. I’d advise that you put aside a couple hundred bucks a month into a savings account (or chequing) for a year or so until you’re really comfortable with your new expenses.

      Nothing like an unexpected bill (see my property tax surprise) to derail your finances.

      To answer your question(s), it sounds like you’ve already made up your mind and want to buy dividend stocks.

      I’d say Questrade is a good choice for getting started. This tutorial will walk you through the trading platform, where you can buy and sell stocks and ETFs – https://boomerandecho.com/questrade-tutorial-how-to-use-the-trading-platform/

  11. Gary on July 1, 2013 at 4:24 pm

    congratulations robb and mrs. robb!!!! you are well on your way to a great retirement. at your age i think my net worth was minus something. i started my rrsp for the second time at 35; but better late than never. now that i am retired our savings are going in the other direction but thats why we saved in the first place — right! again all the best to you, your mom and all your families — HAPPY CANADA DAY.

    • Echo on July 1, 2013 at 8:58 pm

      @Gary – Thanks very much for your continued support. We really appreciate it!

  12. Steve @ Grocery Alerts on July 1, 2013 at 6:09 pm

    Robb,

    Great work! I have not done an update but it we have recently refinanced so we are waiting to see what to do for our next house. My feeling is to not pay too much down while rates are so low and to take on more risk but whatever works!

    • Echo on July 1, 2013 at 9:01 pm

      @Steve – In this low rate environment it’s so tempting to put more money into investments and less on the mortgage.

      We decided to err on the side of caution, but I can certainly see both sides of the argument.

      Thanks for stopping by.

  13. KC on July 2, 2013 at 12:48 pm

    Congratulations on such an impressive semi-annual report! Definitely an inspiration to me. I do agree with you on paying down as much mortgage as possible while interest rate is low. You do have that nice set of balance there of savings and debt repayment.

  14. Andrew @ She Think's I'm Cheap on July 2, 2013 at 3:08 pm

    Congrats Rob! Tracking net worth is the best way to picture overall performance, more people should be keeping their eye on this. Another $40k in 6 months would be a phenomenal increase, keep at it!

    • Echo on July 3, 2013 at 10:11 pm

      @Andrew – As long as the needle keeps moving forward, I’ll be happy. Thanks for the support!

  15. Janine on July 3, 2013 at 6:16 pm

    Congrats, that’s fantastic! My net worth should hit $30,000 this month, so we’re off by a factor of 10 😉

    • Echo on July 3, 2013 at 10:09 pm

      @Janine – thanks! I probably have a decade on you so don’t feel too bad 🙂

      In fact, you should be proud of that number because most people your age have negative net worth. You’re well on your way!

      • Janine on July 4, 2013 at 9:22 am

        Thank you! Blogs like yours are the things that inspire me to keep pushing myself!

  16. RICARDO on July 3, 2013 at 7:08 pm

    Congrats on the morgage pay down. That gives you after tax dollars straight in to your pocket to pay down much quicker. Agreed that the payment does not decrease but you will see the light much sooner than most. I managed to pay off the house in five years but that was well before the spike in housing prices.
    I have an RRSP, LIRA (locked in RRSP), TFSA and two non-registerd (taxable)investment accounts running off my LOC. I use the TFSA dividends to pay down the LOC. Why? Because the dividends are not sufficient to re-invest when taking in to account the transaction fee (both buying and selling). Don’t worry. the withdrawn funds get re-invested in January of the following year along with the allowed yearly limit. Eventually the dividends will be sufficient to warrant leaving the monies in the account and re-investing them, hopefully next year. The TFSA generated over $1300 in dividends last year. Should be close to $2K this year.
    I pay down the LOC by at least 1K per month. The LOC is at prime plus 0.5% (3.5%) so that is 3.5% of (dividends) in my pocket. A bit less really as I get taxed on the differnce between the dividends less the LOC interest. But still, it is so called “free” money as I am using the LOC to puchase stock. As long as the stocks do not fall too far. I am ahead of the game. The stocks are generating enough dividends to pay the LOC plus some on the principal by themselves. I just top it up to at least 1K per month. Buy and sell in these accounts. The RRSP’s are n more buy and hold althoung I do some selling in them as well. Needless to say I then look for something to re-invest the funds in.
    Max out the RRSP & TFSA every year now. I am approaching retirement so any monies I can spare get put into stocks paying dividends.
    Best Quote. If you purchase a rental property today, in five years will you be looking at how much it cost you or at how how much it is paying you!
    Never lose track of your purchase price but if you are a dividend investor the “rent” counts as well.

    Take care. Invest wisely.

  17. David on July 3, 2013 at 9:36 pm

    Hi Robb. Besides the headline your posting caught my attention because your numbers are similar to my own. I run a net worth update at least once a month and found I am at $436,000. My goal is $500K by the end of 2013. As a result of paying off all of our credit card/LOC/HELOC debt I’ve doubled our monthly mortgage contribution. Was wondering why you don’t top out your TFSA contribution before contributing to RRSP – this is something I’m thinking of doing.

    • Echo on July 3, 2013 at 10:06 pm

      @David – Congrats on your net worth and good luck with your year-end goal.

      I get more benefit from making RRSP contributions at this point. I have quite a bit of unused contribution room from my years in the private sector.

      I’ve been over-contributing for the past two years, and will probably catch up all that unused room in the next 3 years.

      Once I’ve done that, going forward I’ll only have $3k or $4k in annual contribution room because of my pension at work. That’s when I’ll shift back to TFSAs and try to catch up in that savings vehicle.

  18. Hussein on July 9, 2013 at 3:43 am

    Congrats on the significant move up in net worth – that is really something to be proud of. I calculate mine differently, and would be interested to hear why you differ.

    On RRSPs, I remember reading a David Chilton article questioning the way people include RRSPs in their net worth. I agreed with the logic that you can never access the full amount within an RRSP (barring many years of very lean living), so have since included a corresponding liability of 29% of the RRSP value, assuming that as an average tax rate in retirement.

    The same logic applies to the Defined Benefit pension plan. My wife and I recognize we are lucky to both still be tied to DB plans. I have opted not to include either in our calculation of net worth, due to its extreme volatility in calculations (transfer values are very sensitive to interest rates, especially at current low levels), and the fact that it will be taxed whenever I receive. While we could use a similar 29% model to acknowledge future tax liability on it, I prefer to leave it out.

    I’d be interested to hear your thoughts on using your method.

    Thanks again for the inspiring post 🙂

    • Echo on July 9, 2013 at 7:23 am

      @Hussein – Yes, I’ve read the argument about including a tax liability for your retirement accounts. I don’t disagree, however for my purposes I’d prefer to keep things simple and just use the market value.

      I suppose if you wanted to get really technical you’d have to factor real estate fees into your home value. I don’t want to get that technical.

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