Back by popular demand, the 36 year old millionaire retiree, QCash, is back with an update. In the original interview with QCash in 2007, he explained about how he became financially free by accumulating a $1.5M net worth by the age of 36. It’s been about 8 years since that interview, which has resulted in a lot of growth in his portfolio. See below for the numbers.
You can read QCash’s other articles on MDJ here.
First, thanks to FT for allowing me to provide you all with an update. When he asked me to do an update, I looked at my last post and realized that six years had flown by in a blink.
Second, I thought it would be prudent to give you an update on my portfolio and do a second post in a couple of weeks to let you know what I have been up to.
Third, my thinking on a few things has evolved over the past few years given that my kids are older, my wife’s tolerance for risk is growing and I remain committed to receiving an investment income that addresses all our needs with the hope of putting as much as possible on “auto-pilot”.
Those of you who have followed early on remember that I am not averse to using my margin account to buy stocks or mutual funds when opportunities present themselves but over the last few years, I have been more inclined to try to reduce the margin account.
Net Worth Statement
So, as of March 31st, here is an outline of my assets (using round numbers).
- Cash on hand: $98,000
- Non-registered: 1,460,000
- RRSP/RIFS: $430,000
- TFSAs: $88,000
- RESP: $152,000
- Trust accounts: $90,000
- Principal residence: $450,000
- Margin account: 318,000
Net Worth: $2,450,000
1) Why so much cash?
My wife and I have been planning a major kitchen renovation for the past couple of years. I keep holding on to cash with the idea that the original budget was for $50,000. I am also aware that my wife’s van (a 2004 Dodge Caravan) is on it’s last legs. I would like her next car to be four wheel drive to deal with our winters. The kitchen renovation is probably going to happen this summer or next, once we can decide what we want (or more specifically, what she want s :-)
2) You used to list your property at the purchase price, did you buy a new place?
No, this is the house we are going to “be carried feet first out of”, according to my wife, but I have recognized that listing a house we purchased for $250K 15 years ago is not prudent. Instead, I have been accruing our renovations to the property as increasing the assets. The house is still worth more according to the bank (we had it assessed at $684K about 4 years ago).
Instead, I have torn down my garage and replaced it with a stand alone building ($125K), we did some major repairs to the septic and cistern systems ($25K) and completely gutted and replaced a bathroom ($25K) as well as some incidental work around. My feeling is that any project that costs us more than $5000 and is “capital” in nature should be accrued to the value of the house.
Yes, RRIFs. A few years ago, it occurred to us that my wife was not earning any more RRSP room but her account was growing in leaps and bounds. Since this income will be significant when we are older, we have decided to start reducing the amount of the RRSP by converting it to a RRIF. The income is attributable to her, but we also structured the non-registered account so that the margin interest is attributable to her. Thus, the interest we pay is covered by the RRIF payment and the net effect on her net income is nil.
In the next update, I will try to let you know what I have been doing with my “retirement”.
I know there may be more questions, and I will address any in the comments.If you would like to read more articles like this, you can sign up for my free newsletter service below (we will not spam you).