Hey Everyone and welcome to the October 2021 net worth update. We are at the $1.59 million mark! September was a flat month and we’re up $2k! It’s to be expected considering our conservative financial strategy this year. Our net worth is still the highest that it’s ever been and we’re on track to hit $1.6 million next month!
The markets have been crazy lately with all the action from the WallStreetBets crowd, the Silver Squeeze and of course the sell off in the bond market over the past few weeks. We’ve also seen over-leveraged hedge funds like Archegos go bust and, of course, the Bitcoin Crash we saw in early May. And yet the market has been going higher and higher – but it seems to be cooling off this summer.
I view all of this as a sign the market is topping, so I’m being extremely cautious. Yet the family net worth continues to rise in a safe, sustainable way. For now, we’re happy to patiently build up cash for another lump sum mortgage payment and to take advantage of any market volatility.
These are definitely strange times, but as these posts show, it’s still possible for the average person or family to build sustainable wealth the old fashioned way. We are doing 3 important things to keep growing our net worth. First, we keep reinvesting our dividends. Second, we keep adding new money and keep investing. Finally, we are paying down debt. This is our recipe for success.
Why Do We Publish Our Net Worth?
If you’re new to this site you’ll find that I like to track my family’s progress to financial freedom through monthly net worth updates. Now my purpose in publishing these reports is not to gloat or brag.
Lots of other bloggers are way better at this stuff than I am. My purpose is simply to see what we can achieve through our own approach to finances. Neither of us have any formal training in business or finance and we haven’t worked in those fields. We’re regular people trying to get ahead like everyone else and hope that these posts might inspire others to get serious about money and take control of their financial future.
Please note: this page contains affiliate links. As an affiliate, this blog receives a commission for each sign up for Tangerine, EQ Bank, Borrowell, Questrade, Silver Gold Bull and Bluehost.
How to Calculate Net Worth
To calculate our net worth, I add up all of our household assets and subtract any outstanding liabilities (ie. debt owing). The result is simply a snapshot of where we stand financially at a particular moment in time and does not give any of the relevant details as to how or why we reached that point. For that kind of information, as well as for our monthly investment income, please refer to our dividend income and monthly highlights section.
Tracking our net worth is important to make sure that we’re headed in the right direction and achieving our long term financial goals. Our net worth fluctuates from month to month but it’s the longer term trend that we’re focused on.
How To Grow Your Net Worth
In a previous post about our financial goals for 2021, I wrote about how our number 1 priority in 2021 is to pay off as much of our mortgage as possible. That’s it, simple right?
A million in net worth is a huge milestone on the road to financial freedom and I’m happy that we achieved it! But it’s high time we slayed the mortgage beast. If you want to know our secret financial tricks to make your first million, check out our post on How We Made A Million Dollars…and how YOU can too!
These net worth reports are all about managing our cash flow from our jobs, our financial assets, and dealing with our debt. It’s important to be aware of our financial situation since we are homeowners with a young family.
One of the tools that we started using recently is Borrowell’s free credit score report. If you’re thinking about buying a home, renewing your mortgage or buying a car, you might want to Get Your Free Credit Score with Borrowell.
October 2021 Net Worth Update
Assets: $1,627,525.95
Well thanks to our approach to regularly invest our money, along with a little help from the stock market, our assets have grown to over $1.6 million!
Home: $846,000 (0%)
A few years ago we purchased our “final” family home where we expect to be for at least the next 30 years. In June of 2016, we received the latest property assessment and the assessed value had increased to $846k!
Rental Properties: SOLD
We sold our out of town rental property due to management issues.
Cash: $5,913.80
As a matter of habit, we rarely keep a lot of cash on hand in a savings account. The reason being is that at today’s record low interest rates we’d rather put the money toward paying off my mortgage faster or invest it. That said, we’re building cash for a big lump sum mortgage payment with EQ Bank’s Savings Plus Account because they offer the best returns for our cash. Check out the review HERE to see why they’re an attractive banking option.
Our day to day banking is one area where we save a ton of money because we use Tangerine as our no-fee banking service. If you’d like to open one, then visit the Tangerine website and remember to use my Orange Key: More25 to get $50 in free bonus cash just for opening up an account!
Taxable Investment Accounts: $40,714.87 (-1.33%)
Our non-registered investment accounts include DRIP accounts with Computershare and Canadian Stock Transfer, a discount brokerage account at Questrade because of their low fees and a work savings plan.
Related: Use My Link to Sign Up For Questrade and Get $50 in Free Trades
For the most part, in these accounts, we prefer to hold Canadian companies that pay eligible dividends. From time to time you may see a decrease when we move some of these assets that are fully taxable into our registered accounts that are not subject to any immediate taxes.
Tax Free Savings Account (TFSA): $35,836.24 (+3.43%)
In the TFSA we like to hold growth assets, such as low-cost ETFs, index funds or dividend paying stocks.
Retirement Accounts (RRSPs, LIRA, Pension): $568,071.02 (-0.82%)
Our retirement accounts consist of RRSPs, a small locked-in retirement account (LIRA) from a previous employer and a company defined contribution pension plan. The RRSPs and LIRA hold low-cost TD e-series index funds and other low-cost ETFs, while the company pension plan is invested in a low-cost target date fund.
Education Savings Plans (RESP): $61,990.02 (-0.90%)
In the RESP we hold low-cost TD e-series index funds. We contribute the annual amount of $2,500 so we can get the 20% match from the government. Our strategy for contributing is to use the money we receive each month from the universal child care tax credit and make up the difference at the beginning of each year. This ensures that we receive the maximum government contribution of $500.
Other Assets: $69,000
Under the “other” assets category, I include precious metals and an extensive coin and paper money collection. Precious metals and rare coins are hard assets that add a level of diversification.
For years I collected rare gold and silver Canadian coins and Canadian paper money. The collection has a face value of $12,000 so I conservatively estimate the collection’s worth at around $30,000.
We’ve also been adding some physical gold and silver as an inflation hedge. We purchase our gold and silver from: Silver Gold Bull – Your Trusted Bullion Dealer because they price match and offer safe secure shipping.
For the purpose of the net worth calculations, I’ve been keeping this number conservative versus quoting its market value over time because (a) coins and paper currency can be difficult to accurately appraise as they are subject to changing market trends and (b) can become illiquid if you can’t find a buyer for them.
Liabilities: -$37,623.96 (-72.50%)
We have 1 big debt to tackle: our home mortgage. Paying this off this a priority so we can get out of debt and live on our terms!
The HELOC is used for investing and is tax deductible.
Mortgage: -$37,623.96 @ 3.34%
Paying down our mortgage will be a high priority for 2021 and we expect to be mortgage-free by mid-2022.
HELOC: $0.00
Sometimes we use the HELOC to boost our investing funds. The interest is tax deductible so we’re fine with carrying a balance.
Thanks for reading our October 2021 Net Worth Update!
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