Welcome to the first Kapitalust Net Worth Update. I probably should have been doing this right from the beginning in July 2013 when I started this blog. But I haven’t. However, like the old Chinese proverb goes “the best time to plant an oak tree was 20 years ago; the second best time is now.” This monthly update will keep me accountable to both me and you – it’ll show the progress that is being made from a typically average married Canadian couple on their way to financial freedom and independence. Without further adieu, the net worth revelation.
The way I display assets and liabilities are bound to change in the future. I am going to start off a little bit more vaguely and perhaps increase details as time goes on. I don’t know, that’s what I feel comfortable with in regards to sharing financial details with complete
weirdos strangers online. I’m walking the tight rope between accountability to my vision and plan for all of you and my personal need for privacy. What’s that? Get on with it! Fine, fine, you Peeping-Tom-looky-loos, here it goes.
- Fixed Income: $60,378
- Equities: $5,263
- Pension: $17,427
- Car: $4,825
- Rent: $1,200
- Credit Card: $2,820
Net Worth: $83,873
Now, regular readers know by now how much I love making graphs. You know this is my favourite part of this post: providing visual aids for the numerically challenged. I kid, I kid! Sort of.
Well, that’s a lonely little blue dot, isn’t it? It’ll be joined by many friends – in an upward trajectory – with time.
Now, some quick notes and explanations to the net worth figures.
This is a combination of all cash and cash equivalent assets we hold. Yes, it is quite high. Two reasons. First, we weren’t prepared to invest heavily as A) we didn’t have a clear investment strategy planned out and B) I had been in extreme student loan repayment mode for the last 2 years and 3 months (no, I have yet to write the post on finishing off paying back $52,000 in student loans). Second, we simultaneously were not sure when we would think of buying a home, so it was thought prudent just to have cash equivalents ready in case we wanted to. We will probably continue holding a high portion of assets in liquid cash equivalents, for our peace of mind.
Since we have finally developed a clear investment strategy and investment policy statement, we are ready to start funnelling money into investments. August 2014 was the first month where we have started diverting money towards investments. I’ll tease you guys and not reveal what we hold in our portfolio until another day.
Where Does the Cash Come From?
We don’t subscribe to lifestyle inflation. We are frugal in many areas. We are also lavish in our spending in others. We ruthlessly prioritize our spending and identify waste. We live quite a simple, yet fulfilling life. This way, we end up pocketing most of our earnings. Our earnings currently only come from our salaries.
The pension amount is the total amount of contributions we have put into our defined benefit pension plans. It is very difficult to come to an accurate value of the commuted value of a defined benefit pension without the assistance of an actuary. I have a rough idea of the commuted values of each, but since it is not fully accurate I will not bother with posting those values.
We value our one car by using VMR Canada and using the wholesale, not retail, value of the car.
With the student loan gone (yes, I will write that post soon) our only liabilities are our monthly rent and rotating credit card charges.
Well, now are all you snoopers happy? Are you satisfied having nosed around in someone else’s private business? I bet you are quite pleased with yourself…
All jokes aside, I have to essentially give all of the credit for this positive net worth value to my wife: she is the one who finished college with no student loans and she is the one who has been building her assets up for the last 4 years. Meanwhile, in that span of time, I went to grad school, looked for employment for almost a year, and then spent 2 years paying back all my student loan debt.
So the financial superstar in this relationship is all my wife. With the student loans finally gone, and with my nerdy level of interest in investments, I plan to start adding value to the financial aspect of our relationship.
Have a great long weekend everyone! We are off for vacation so apologies in advance if I don’t reply to comments as quickly as I usually do!
Like what you’re reading? Than maybe it’s time you join the legion of other Kapitalusts so you don’t miss out on a beat! No spam. No ham. No nonsense. It’s super easy to unsubscribe if it ain’t for you! So why not give it a try?