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Net Worth Update September 2014 – Nobleea

Welcome to the Million Dollar Journey September 2014 Net Worth Update – Team MDJ edition. A select group of readers were selected to be part of Team MDJ which was conceived after the million dollar net worth milestone was achieved in June 2014. Nobleea was selected as a team member and will post net worth updates on a regular basis. Here is more about him.

Profile:

  • Name: nobleea
  • Age: 36
  • Net Worth: $681,388
  • Day Job: Engineering supervisor at large oilfield services company, Teacher (wife)
  • Family Income: $145,000 (main job), $30,000 (part time job), $85,000 (wife main job), $10,000 (wife part time job), $14,500 (rental income before expenses)
  • Goals: Pay off primary house mortgage in September 2014, Million dollar family net worth before 40, Retirement from primary job at 50 (for me)
  • Notes: Owns primary house. Owns tear down house across the street currently being rented. (to be torn down for new family home)

I stumbled across MDJ by accident the same year it was created. Such a great wealth of information and an inspiration. I’ve been following regularly since then. I track and trend these networth numbers on a monthly basis, so posting them here isn’t much of a stretch.

We live in Edmonton where incomes are high and housing prices are fairly reasonable. Some may roll their eyes at the high family income and say that a million dollar journey is going to be pretty easy. That is likely true, so some of the goals should reflect that. I have a plan to retire at 50 and pursue other things. This will still involve working, but part time on things I’m really passionate about and with no requirement for a decent income.

My wife will likely continue working until it makes sense to retire with her DB pension. The penalties for early retirement are pretty severe. She is 3 yrs younger than me. We have a 6 month old daughter and plan to have more children. She is currently on EI and will be returning to work in February on a part time basis. Income numbers above are based on last year, when she worked full time. I will be taking parental leave for 5 weeks this year as well. We recently bought a tear down property across the street from our home. We will be tearing it down in the spring and building a larger family home. Once we take possession of the new build, our current home will be sold.

We travel a lot for pleasure but are pretty frugal otherwise (no cable, coupons, pay and talk phones, dine out or take-out a few times a year). I try to keep our cash balances as low as possible and want every spare dollar going towards debt repayment. I would say our living expenses are low relative to our income. We have worked hard to avoid most lifestyle inflation.

Given our low cost of debt, some might question the choice to pay down debt. Some might suggest that we borrow to invest. Over the past several years, I have learned that borrowing to invest is not a great option for me, as I am prone to take unnecessary risks with investment choices when it is not money I’ve earned. Paying debt down is guaranteed return and once the debt is all gone, it releases a lot of cash flow which can be used for investments.

On to the net worth numbers:

Assets: $1,111,911 (+0.00%)

  • Cash: $1,137 (+0.00%)
  • Registered/Retirement Investment Accounts (RRSP): $154,033 (+0.00%)
  • Tax Free Savings Accounts (TFSA): $0 (+0.00%)
  • Defined Benefit Pension: $47,500 (+0.00%)
  • Non-Registered Investment Accounts: $30,166 (+0.00%)
  • Principal Residence: $458,000 (+0.00%)
  • Tear Down Property: $375,000 (+0.00%)
  • Vehicles/Other: $46,075 (+0.00%)

Liabilities: $431,111 (+0.00%)

  • Principal Residence Mortgage: $11,959 (0.00%)
  • Tear Down Mortgage: $300,000 (0.00%)
  • HELOC: $110,992 (0.00%)
  • Car Loan: $4,325 (0.00%)
  • Credit Cards: $3,835 (0.00%)

Total Net Worth: $680,800 (+0.00%)

  • Started 2014 with Net Worth: $566,394
  • Year to Date Gain/Loss: +20.2%

Some quick notes and explanations to common questions:

The Cash

Cash includes bank account balances in two accounts, plus any gift card balances. We try to keep as little money in bank accounts as possible and make mortgage prepayments with it instead. We use cash flow modeling to predict the maximum amount we can put towards debt today without having a negative balance in the future, taking all one time or non-regular bills in to account.

Loans and Credit Cards

The credit cards are paid off in full every month with no interest due. We put all our expenses on credit cards for points and cash back. As this can be a substantial amount some months, I believe it needs to have a line item in your monthly net worth as it is a liability at that snapshot in time. The HELOC is almost completely tax deductible (small smith maneuvre and downpayment on rental). Considering the tax deductibility of interest, our highest net interest rate on liabilities is 2.24%, with a weighted average rate of 1.79%.

Savings

TFSA’s have not been started yet as all spare cash has been going against the mortgage. Transferring the non-registered investments over would affect the tax deductibility of some of the HELOC.

Real Estate

Our primary residence was purchased in 2008 for $355K. We have put in $110K in renovations since then in a complete overhaul. The house value shown here is based on those two numbers and is conservative relative to what similar homes in the area sell for.

Our ‘rental’ is across the street and was purchased last month for the lot, purchase price $375K. It is currently rented (cash flow negative) and will be torn down in April to start construction on our new home. The next 2 years will be a mess with construction draw mortgages, HELOC balances for some construction costs, messy accounting for a rental that was effectively disposed of after 7 months of rent. We have no desire to remain landlords now or in the future. Once we move to the new home and sell our current home, the plan is to pay that one off in 5-10 years.

Pension/Investments

My wife has a DB pension as a teacher. The balance shown is her contributions to date as shown on annual statements. I have a matching RRSP plan through my work. Combined with CPP, we are not worried about retirement income, it’s just a matter of timing. We plan on contributing to my RRSP in order to get the full match but no more, then max out TFSA for investments, and then non-registered investments.

We have pretty substantial unused RRSP contribution room and will likely never use it. Perhaps in the event of a large capital gain, we may contribute some to offset the capital gain taxes. Not listed on the net worth values is our daughter’s RESP, which has a balance of about $1800. We plan on contributing enough every year to get the full CESG grant. The RESP is invested in TD e-series funds in a couch potato portfolio as a family plan.

Vehicles/Other

About half of this amount is vehicles. We have a 2013 and a 2000 model year. I depreciate their value every month in net worth updates to keep it at just above wholesale value. The “Other” refers to fairly extensive photography equipment (part time business), sporting equipment and personal property.

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About the author: This is a guest post. You can read more about the author in the biography above.

{ 43 comments… add one }
  • Greg September 15, 2014, 10:55 am

    Very interesting! With that much income and no kids until very recently, I’m not sure I would agree that your family is frugal other than for personal travel. Home renos and teardown developments are sucking up a lot of capital. And buying a (new I assume) cars on isn’t frugal.

    I wouldn’t include vehicles in the assets, but then I wouldn’t include a principle residence either. Sure, you could sell your vehicles and convert them into cash, but you could also sell all your clothes and home furnishings. I favour including only income producing assets that can be productive toward financial independence.

    Sorry, kind of critical, but there you go- my opinions!

  • SST September 15, 2014, 11:20 am

    Agreed.

    With a ~$250,000+ income, this ‘1%er’ family isn’t pressed too hard to be frugal — “no cable” is hardly a stretch.

    Won’t be attending this one, either.

  • Mitch September 15, 2014, 11:23 am

    I’m with Greg. I also don’t include my house or vehicles in my net worth statement. Income producing assets all the way!

  • Mitch September 15, 2014, 11:27 am

    I should have mentioned that you should have no problem saving and investing over $100,000/year into dividend paying stocks. You should be able to retire in 7 years or less, especially if you consider yourself frugal.

  • Goldberg September 15, 2014, 11:31 am

    The first thing that jump at me is why each of you have a part-time job if you earn 5x the national family household income… are frugal… and have a six months old kid… leave the second jobs, forget the stupid mortgage and be a parent!!! The mortgage will get paid off eventually… but the kid won’t be six months for very long… and why have more kids if your priority is working all the time / focus on personal finance rather than spending time with her???

    re: greg comment: A paid for house is an asset. It produces “income” by not having you pay rent. It is also an asset by the fact that you could sell it and move to a cheaper area to tap the wealth… perhaps FT should have a standard for this… kinda like the FMV of the house, net of mortgage, sales commission, moving expenses, and cheaper alternative you would consider (i.e. moving from Toronto to Halifax… or large 5 bedrooms to a two bedroom townhouse)… but advocating not considering the house at all is wrong…

    his wealth is mainly in his house because he chose to use his savings toward reducing debt… reducing debt should increase net worth, its basic mathematics. If he had put his savings toward his TFSA, the net worth should be similar… its still savings resulting in increase net worth. his rate of return could be different but that’s another story.

  • newvisionhomesales September 15, 2014, 12:04 pm

    Great stats you got there keep it up!

  • Greg September 15, 2014, 12:59 pm

    oops, I meant to say “buying a (new I assume) car on *credit* isn’t frugal”.

    Goldberg, I’ll grant than any paid for house in excess of what you need for shelter is an asset. But rent or buy, you have to live somewhere. So you either rent or have capital tied up in an illiquid asset requires cash to maintain and that you can expect to return zero after inflation in the long run. Though markets vary over time, financially renting and buying are pretty much the same in the long term.

    What about listing cars as assets? Why not clothes and other personal possessions? I’d distinguish between live net worth and dead net worth. Dead net worth is the value of your estate- the cash you could raise if you sold everything. Dead net worth is really only relevant if you are dead. Live net worth is what you have in excess of what you need to live your chosen lifestyle. Putting your house in your net worth statement but not the rest of your personal possessions is a kind of arbitrary.

    At least that’s how I think about it. But I think the point of looking at net worth is to track progress toward financial independence. Live net worth is what matters for financial independence.

  • memekeme September 15, 2014, 1:01 pm

    Wow, do we ever have some critics here!
    I would say that to pay off your mortgage by 36 is a feat, and implies that you have indeed been frugal. It sounds to me like the part-time work is hobby-based for enjoyment, and people can choose to spend their time how they like!
    As for the vehicles, I doubt there are many people in Alberta with your combined salaries driving a 2000 car.
    Kudos to you for earning a large salary and tracking where the money goes, regardless of where YOU choose to spend it. It sounds to me like there are some envious people out there.

  • FrugalTrader FrugalTrader September 15, 2014, 1:51 pm

    I have so many friends who are in the oil and gas field making just as much (or more) than Nobleea, but nowhere close to the wealth that he has built. The fact of the matter is, for most, higher incomes = higher expenses. Nobleea will be a millionaire in no time.

  • So-CoAddict September 15, 2014, 1:52 pm

    I’ve been waiting patiently for the next update, but I have no interest in following the financials of a top 1%-er. Hopefully the next one is a little more ‘average’ so that my family and I can better relate.

    • FrugalTrader FrugalTrader September 15, 2014, 1:55 pm

      The updates will include a wide variety of profiles. Stay tuned!

  • Khai September 15, 2014, 3:02 pm

    I second So-CoAddict.
    The whole article sounds to me more like bragging than a useful blog entry.

  • Greg September 15, 2014, 3:05 pm

    @memekeme- a double income no kids family with $250k income paying off a $355k home in 6 years does not imply frugality. Subtract $70k for taxes and $70k to pay down the mortgage and that leaves more than $100k/year. Not much in other savings, looks like most of it got spent. Big reno projects and tearing down houses to build new ones isn’t frugal. And having two cars isn’t frugal either, even if one isn’t new.

    Sure nobleea is doing better than average financially but I’d attribute it mostly to high income. To retire at 50 will require savings of greater that $100k/year increasing with inflation with a return of 4% after inflation if nobleea expects to spend $100k/year. Unless nobleea is depending on significant income from the other pursuits he is turning to at that age, about the time his kids entering high school and maybe have some post-secondary education in their future.

    No envy from me, I’m much farther down the path that is nobleea’s goal with similar income but had kids much younger. Speaking from experience and knowledge.

  • Banjopete September 15, 2014, 4:15 pm

    Thanks for sharing nobleea, lots of things on the go and maybe not the worries of the “average” household that a few commenters are griping about but some concerns like tax implications of high net worth families that might be of interest to others. Remember kids just because it doesn’t speak to you doesn’t mean it’s irrelevant…

    I’m also an Edmonton resident so it’s interesting to peek in the neighbours windows so to speak. As others have mentioned making that kind of money doesn’t quite make you a 1% here and most do waste the incomes on big trucks, big trailers, quads, snowmobiles, boats, etc. Keeping any portion of your income in this city seems to make you unique so good on you.

    Best of luck with your goals.

  • nobleea September 15, 2014, 5:02 pm

    Thanks for the comments folks, all of them. Interesting that some mention 1%ers, which we’re not ($181K personal income required according to statscan). As has been pointed out before, Alberta has more 1%ers as a whole, with 1 in 50 in Alberta and 1 in 30 in Calgary. I guess that would make them 3%ers.
    For those who don’t think that primary residence should be in a net worth statement, we’ll have to agree to disagree. I’ll stick with common sense on that one.
    In terms of vehicles and other/miscellaneous. I think it’s semantics. An extra 20-40K in those assets isn’t going to make a huge deal in our balance sheet, so I include for the sake of completeness. What matters is that your terms of reference for your measurement (net worth) is consistent throughout your journey.
    Mitch: We have been putting 100K towards the mortgage every year, so yes, once that’s done we’ll be able to put 100K towards investments every year instead.
    I don’t plan on having 100K a year in retirement income. Probably closer to 50-60K from my savings. The wife will still be working til she reaches the magic pension number.
    I am cutting back on the photography to have more family time, but unfortunately, a lot of work is signed/contracted 1-2 yrs in advance, so it’s not a tap that can be quickly turned off. Most of the photo work (editing) happens at night, when the wife and kid are asleep already.

    In terms of our friends and acquaintances here, we’re probably median for income and median (maybe a bit less) for net worth. So I think we have some work to do.

  • Tawcan September 15, 2014, 6:50 pm

    Having high family income will certainly help with the early retirement journey. Looks like both of you have done a very good job to achieve early retirement.

    Photography is a great part time business. That’s what I’m doing as well. :)

  • SST September 15, 2014, 9:42 pm

    re: “A paid for house is an asset. It produces “income” by not having you pay rent.”

    The “rent” is paid in the form of principle and interest versus actually renting and paying actual rent. The family paid at least $465,000 in “rent”, with more on the way; an amount which could last a true renter 25 years.

    re: “It is also an asset by the fact that you could sell it and move to a cheaper area to tap the wealth…”

    If you sell you then lose the utility of the asset.
    To gain access to the capital tied up in that “asset” you need to buy something completely different (i.e. “a cheaper area”). The only other way to access that capital is via a loan — paying to use your own money. The difference is that you need to live somewhere and that costs money. I don’t need to own KO stock, I could own APPL stock…or GICs…or cash…or a percentage of the local pizza joint…

    As well, if this family sold their asset and moved to “a cheaper area” to access the capital, they would also lose a portion of their income, because a cheaper area would not pay as high as Alberta.

    re: “For those who don’t think that primary residence should be in a net worth statement, we’ll have to agree to disagree. I’ll stick with common sense on that one.”

    “Common sense” has nothing to do with it. Take a look at any HNWI analysis and you will NEVER see primary residence listed on the books. Why should the rules change for “poor” folk?

    I get a kick out of almost every North American who has been duped into the whole home ownership = wealth scheme — myself included — but I’m realistic about the whole thing. No room for envy in this realist’s three-car garage.

    I’ll wait for the frugal median-income family MDJ updates…

    (p.s. — for what it’s worth, I have long-standing ties to Alberta/Edmonton and have watched it (d)evolve over the last few decades. For those who have never been there (esp. recently), it’s really hard to explain just how much oil money floods the entire province. Find a frugal way to get yourself there for a visit and it will blow you away — both good and bad.)

  • My Own Advisor September 15, 2014, 10:44 pm

    The reality is, few folks can retire early (before age 50) without a high income or being a successful entrepreneur. The odds are against you if you don’t have one or both.

    Even still, nobleea must still spend his money wisely, and it looks like he is. Well done. As FT wrote, the more you make, the more you are inclined to spend. It’s just natural.

    I absolutely think a house should be in a NW statement. Cars as well, although with my old car, it isn’t worth much.

    “We have been putting 100K towards the mortgage every year” – wow. Awesome.

    I also think $50-$60k per year after tax is a very comfortable retirement. If you have no RRSP contributions and no mortgage, you’ll probably find you can live off 50% of what you make now.

    Keep killing those mortgages nobleea, and max out that RRSP, you’ll be a millionaire in no time.

  • SST September 15, 2014, 11:48 pm

    re: “I absolutely think a house should be in a NW statement. Cars as well, although with my old car, it isn’t worth much.”

    Wrong. But this seems to be a beloved theme on this website.

    Both house and automobile are depreciating consumer durables.

    One must continually expend more and more capital into these “assets” in order to hold any kind of market value; more so a house than a an auto, as a car will never recoup initial outlay.

    Can you take out a line of credit on your car? Why not?

    Example:
    Buy $1,000 of Coke stock in 1919. Inject zero dollars. What’s the market value of the stock today?

    Buy $1,000 house in 1919. Inject zero dollars. What’s the market value of the HOUSE today?

    (Hint: the value is in the land, not the structure. Remember the mantra, “Location, location, location!”)

  • nobleea September 15, 2014, 11:54 pm

    Cool story bro.

  • SST September 16, 2014, 12:27 am

    Any factual proof to verify otherwise?

  • S September 16, 2014, 1:24 am

    A net worth statement should not be confused with a net investable assets statement. A principal residence is included in the former and excluded in the latter. At least that’s how my bank does it.

    The bank’s net worth form also has lines for consumer goods like cars, jewelry, art, furniture (perhaps you own a Biedermeier secretaire) etc.

    I can already hear the Greek chorus on this…

  • Jay September 16, 2014, 3:41 am

    This is a bit too far-fetched with such high incomes and low property values. I think I will be leaving MDJ if such profiles persist.

  • Goldberg September 16, 2014, 3:00 pm

    S is right. And SST is confusing it again. Net worth statement is the sum of what you own minus the sum of what you owe. That’s all. To the person who said sarcastically “you might as well include clothes too.” YES! you should! The market value of my clothes is zero! Or immaterial anyway. So nobleea should have a line in his next update that says clothes value: zero. Debt on clothes: zero. There! But if you have a $5000 suit that you think you could realistically sell for that much in future years, yes, it should be included.

    Cars should also be included and value should be reduced every year as it depreciates.

    What SST refers to is usage cost. I use my car and my house and that brings repair costs… if I went surfing with my RBC shares, it might break and it would cost me money to repair them. That is the cost of usage. Not the cost of owning per se. So you include the cars (as corporations include their delivery truck) and you depreciate its value every year. You also expenses the repairs; not on the net worth statement.

    When Warren Buffet (or other investment guru) says ignore goodwill and reduce inventory value by half, its his own bias. He doesn’t like how GAAP gets the inventory value on the statement so he uses an arbitrary (bias) number to discount it. That doesn’t make it more correct or better. It is simply a conservative bias. But the extreme of being conservative is to value your dividends stocks as zero. After all, they could all go bankrupt tomorrow so why even include your stocks too?!

    I think this site should keep it the same for everyone. What you own minus what you owe. then let everyone, including SST, apply their own personal biases in their head.

  • Banjopete September 16, 2014, 4:01 pm

    Is it too early to say play nice or not at all?

    We’re all here to learn from the experience of others, not to jump on or or be critical of the details or circumstances of someones’ personal life.

    A friendly inquisitive tone goes a long way to getting courteous answers. If something irks you take a pass on the story.

  • SST September 16, 2014, 9:03 pm

    “Net worth statement is the sum of what you own minus the sum of what you owe. That’s all.”

    Yup. And a theoretical number at that — especially when principle residence is factored. There is no way to allocate that capital into actionable money without taking a loan against it (i.e. paying to use your own capital), or selling it and renting. So you might as well count PR as zero.

    I will always take investable assets over simple net worth because it can be actualized. And don’t confuse corporate net worth with personal net worth.

    “A principal residence is included in the [net worth statement]…At least that’s how my bank does it.”

    Ask yourself why a bank would want you to have a greater rather than lesser net worth. Hint: would it be so they can issue you a larger loan? Bigger loan = bigger profit. Banks don’t care what your net worth is unless they are loaning you money.

    “…not to…be critical of the details…”

    You do realize this is a site about money (aka math)?
    Tell the CRA not be critical of the details on your next return, see how that works out for you.

    We all might be richer than we think! Woo hoo!

    Off to adjust my spreadsheet… :)

  • Banjopete September 16, 2014, 10:18 pm

    You’re right SST, what was I thinking, and I appreciate you righting the course. This is math after all and there is only one right opinion in that regard.

  • Andrew September 17, 2014, 7:14 am

    Of course every net worth statement template for the 99% includes their real estate.

    But because this site’s comments are not moderated every net worth post is trolled and degenerates into this same discussion.

    It’s too bad because I was enjoying the idea of reading a diverse set of individual net worth discussions.

    Perhaps adding a category to the statement, “Investable assets” would appease the troll? Or just moderate your blog, FT!

  • Peter@paidtoinvest September 17, 2014, 11:06 am

    Congratulations on your success to date and being featured on this site Nobleea. Well done, with another 35 years until you have to RRIF at 71

  • SST September 17, 2014, 11:07 am

    Or perhaps the updates should adhere to a predetermined template, as Goldberg suggested; a plug-n-play type deal. Done and done. No need to moderate when things are designed correctly from the onset.

    As it stands, these net worth updates are not all that diverse, and all rely very heavily on principle residence (I know at least a dozen millionaires in Vancouver!). Perhaps these updates should also included links to Rempel articles on wealth and “poverty millionaires”.

    But that would just be trolling.

  • j September 17, 2014, 12:01 pm

    Buying KO in 1919 is a flippant remark. It takes effort and time to pick a stock. This is a form of money. Holding KO takes effort and time. GM may have been a good buy along with several stocks that have since gone to zero.

  • nobleea September 17, 2014, 1:10 pm

    Here’s a questions for the readers: At what point does a part time job no longer make sense? I mean, there’s obviously a time consideration, but if that’s not a big commitment and life doesn’t suffer, then why stop?
    What hourly rate would it take for you to work 4 hours extra a week? $60, $100, $150, $200/hr? I consider a part time job to be overtime, so it should pay at least what the overtime rate would be at the primary job (if one could get OT there).

  • LifeInsuranceCanada.com September 17, 2014, 3:44 pm

    The PT job should stop when the hourly rate < your 'premium' for not working and doing other stuff.

    When I was young and single (and had abs) I worked my FT day job, and also put in 25-40 hours/week in a part time job. For me, that stopped when I met my wife. It wasn't worth it to me to be working when I could be at home with my spouse – that was my priority.

    if you're both working P/T, and don't need to spend any more time together, might as well keep making bank. Eventually your time will become valuable enough that the second job isn't worth it though.

  • jolayn September 17, 2014, 4:11 pm

    Interesting post. I enjoyed reading it.

    @nobleea – If I was to take a part time job, my hourly rate there would have to be at least equal to my primary job. I am not eligible for OT at my primary job.

    Question about the family incomes: are these numbers only base salary, or do they include bonuses and/or taxable benefits (such as company-paid RRSP contributions, company vehicle, etc)?

  • nobleea September 17, 2014, 5:16 pm

    jolayn/LIC,
    I’m not eligible for OT at my job either, but I consider my part time work to be OT (work hours over 40/week would be OT, regardless of who the employer is, in my books). I only work 4-5 hours a week and almost exclusively when the wife and child are already asleep, so I don’t feel like I’m missing things and the money helps pay for travel and early retirement.

    jolayn,
    Her income is straight off the T4 for last year, so would include all taxable benefits. Mine is estimated for 2014 and is probably on the low side given bonuses. Bonuses are entirely dependent on the success of the company and my performance and can range from 0-35% of salary.

  • D September 17, 2014, 7:34 pm

    Have to say that the new profile is a bit more like the G&M financial makeovers which appeal to their demographic, and less so for this site. I agree with some others that the information is interesting, as anytime you get a chance to see how other families are spending that can be a trigger to assist you in your own budget allocations.

    Surprised there are still arguments on net worth calculations, as others have correctly pointed out there is a distinction between investment equity and net worth.

    I track both as they allow me to see how I have progressed. But, as we all likely realize it is investment equity that will provide us the means towards an early retirement. You need to pay the bills and without passive income, if not working, then collectors will be calling.

    So, net worth is a good metric, but don’t get into long arguments with others when they are including primary residence or vehicles, even when those are depreciable assets. It is just one metric in looking at financial health.

    A good one is taking a budget and calculating years/months to deplete based on portfolio, the tighter your budget the longer you can go, of course the greater your portfolio this increases the duration.
    Better end here going off on a tangent..

    Enjoyed this site for years btw, thanks! Has been a great motivator.

  • jolayn September 17, 2014, 10:36 pm

    I’m in a very similar position as you. I live in Alberta and I’m employed in the Oil & Gas sector in the field of engineering. My wife also works (currently on mat leave) and we have two kids ages 4 and almost 1. Your net worth is a little higher than mine, but you’re also a little older too :)

    Thanks for clarifying how you calculated your family incomes. The reason I think this is important is not because of the 1% stigma, but because it further highlights the need to have a benchmark/template/standard for future contributors on this site. One person may give their base income, while another will use their T4 total income. One person may include their house as an asset, while another may not. The same can be said for listing vehicles as assets, or estimating taxes on registered savings. Ultimately, these differences may hinder or confuse discourse on future net worth discussions.

  • SST September 17, 2014, 11:07 pm

    re: “At what point does a part time job no longer make sense?”

    I held a part-time position for the last five years; one day a week in a retirement home(!). All proceeds went to the family of a terminally ill friend. Was it worth it? Yes; hang out with old and/or dying people and you will immediately realize the deep value of Life.

    The thing about p/t jobs, etc., is that it’s only money. Time is the most precious commodity we have so you better be getting a ton of money for that extra time. Want more money, move to Alberta*. Want more time…I dunno…start praying?

    My own MDJ is at a much more comfortable pace than some of the others’ on here because I will ALWAYS choose time over money — I work maybe 1,500 hrs/yr — but I’ll definitely make it, even w/o principle residence on the books.

    In the immortal words of one F. Bueller, “Life moves pretty fast. If you don’t stop and look around once in a while, you could miss it.”

    *(I moved out of Alberta because I desired a better quality of life. I quickly realized one not need live in Alberta in order to reap the rewards of oil. You simply have to invest in Alberta and let other people do the work. Then enjoy all your extra time.)

  • The Passive Income Earner September 18, 2014, 2:28 am

    MDJ has been doing the net worth with the home included and Money Sense does it that way too. The vehicles are also included with Money Sense so it only makes sense to follow a standard. It’s money a bank would look at but it’s not money you can rely on for retirement. I think the inclusion should be there as a way to compare since MDJ started it this way. Consistency is important. You investments are like a home too in the true sense as there is a market value and you can sell it. If you ignore the fact that you have to pay rent later or that there is a cost to owning a home. The reality is that you can spin it every way you want and you keep going in circle around this debate … If you think about it, you can’t leverage investments much but you can leverage a home so it’s a really good asset to have.

    I think nobleea is doing good in the savings category. I know many that earn less and drive new BMW and other luxury cars and have no savings. Their lifestyle grows faster than the salary they earn. That’s really what everyone should take from this – life style expenses are kept in check.

    It is true that the higher the income is, the faster you *can* reach goals but only if you rein in your expenses. It’s hard too because the friends and co-workers are usually in the same spending bracket and you have to make choices. No kids also helps … but those are the choices that one needs to make.

    Congrats on getting to where you are.

    I will say and agree with everyone that time is a commodity. At 40 with two kids, time is really at a premium. I used to do a lot of work on my own and now it’s not worth my time … and I have money to pay for it.

  • RN September 18, 2014, 3:47 pm

    Net worth should include your primary residence. Net worth is your total assets – liabilities, it has nothing to do with what money you have access to or how much money you will have to spend in retirement.

    However for a “million dollar journey” I don’t include my primary residence since my million dollar goal is for money that I have access to freely. This isn’t my net worth it’s just a goal. Having a paid for primary residence just means that I will always have a place to live!

  • Derico September 19, 2014, 11:44 am

    Nobleea, one thing you didn’t talk about was your “emergency fund” philosophy. Since you carry no cash reserve, is your Heloc your source of emergency funds? Personally, as a single person with a job in a somewhat uncertain industry (consulting engineering) I made a priority of building up my TFSA with some HISA cash as well as couch potato Funds I can access if necessary. I’m guessing with 2 incomes that’s less of a priority for you, but just curious.

  • nobleea September 19, 2014, 12:19 pm

    Derico,
    Yes, I consider the HELOC to be a source of emergency funds. We both have secure positions and given our level of spending, we’d really only need one average income to sustain ourselves. I really don’t think that would be challenging with the skill sets we have. We can cover most other emergencies from cash flow, things like car repairs, roof leaks, appliance failures, etc.
    In our next house, I plan on starting a monthly savings plan for maintenance, repairs and replacements which can also double as emergency savings.

  • Biff September 28, 2014, 10:25 pm

    Primary Residence in NWS

    Person A – Today
    $100,000 CASH and no debt NW = $100,000

    Person A – Tomorrow
    Buys $100,000 condo cash, no debt NW = 0

    Person A – 2nd Day
    Borrow $100,000 against condo and invests in ETF
    $100,000 Condo, $100,000 MTG, $100,000 stock NW = $100,000

    All smoke and mirrors SST

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