Sometimes I think when I get to a million UK pounds I’ll move somewhere cheap for at least a few years and try living off the dividends (£1,000,000 = just under CAN$1,700,000).

Conventional ‘retirement’ theory would say I’d need quite a bit more, especially as I’d hopefully still be relatively young (although in reality I probably will never stop earning an income, also as such. I tried it once and I was bored and distracted – a good lesson).

I’ve probably missed it but do you have a plan for your $1million? Or is it more of a tangible goal than an end?

Great question. I basically buy dividend stocks when their valuations are appealing to me, not based on how big my HELOC is. When my mortgage is paid off, I may stop using my HELOC altogether unless I need a large amount of capital that I dont’ have in cash.

I have been reading your items on the SM and found them to be immensely informative. I have one question on your use of the tactic. Based on your net worth statement, it looks like you have leveraged your home somewhat modestly. Can I ask why you aren’t closer to the 70% range?

I would disagree. I would divide by the previous month’s total.

Basic example: last month it was $25k. This month it is $50k. My networth has obviously doubled. Running the math it is:

($50k – $25k) / $25k x 100% = 100%. I have seen a 100% increase in my networth.

If we did it the way you suggest it would show only 50%. This would be what last month’s networth is compared to this month with the baseline being this month. We want the baseline to be last month.

For the monthly change it’s (current month’s total – previous month’s total) / current month total x 100%

or in other words (current month’s total minus previous month’s totals) divided by current month’s total multiplied by 100%

To get the year to date change its:

(current month’s total – January 1st total) / divided by current month’s total x 100%

=(N14/M14)*100-100

Which is basically December 1 net worth divided by November 1 net worth, then you times that number by one hundred (which will hopefully give you a number like 101.6) and then I subtract 100 to get me to a percentage.

There may be an easier way, but that works.

Jack, your not the first to tell me that. :) The truth is, I will be opening up a trading TFSA to purchase equities, but I haven’t seen any great valuations or deals of recent months. The argument is that our savings would be shielded from tax, but with our interest accounts paying a very low interest, it doesnt’ make a huge difference. I’m going to try to fund the accounts before the end of the year, most likely with Questrade TFSA.

Cannon, congrats to you on your progress while having fun in the process. I think that reaching the $500k milestone will be a big one. As to whether or not we’ll have the mortgage paid off by that time, I have a feeling that they will fairly close time wise.

Congratulations on the good work. It’s nice to see that the liabilities are coming down quickly – that usually is a steady progress downwards whereas the assets tend to fluctuate a bit.

Just a couple of weeks ago I decided to put together our own networth statement (found a nice little spreadsheet online that is compatible with Excel from Microsoft – it is titled “Net worth calculator”).

Well, I was pleasantly surprised. In spite of the rough 12 month period we survived, and our investments still not being back to where they were in 2007, we’ve seen a networth gain of almost 70% since the beginning of the year. It’s quite mindboggling to see that dramatic of an increase but when I compare to where we were 2 years ago one can see quite a rollercoaster ride.

Our liabilities have decreased 10% while our assets have increased about 30% since the beginning of the year.

I did factor in an increase to our home’s value since the beginning of the year of about 5% (based on some home improvements we had done and the fact that a house very much like ours sold very recently). At the beginning of the year, I pegged our house value as the same as mid 2007.

I also decided to include something which most people would not – Aeroplan points/Airmiles. Since I travel several times per year internationally on business, I have accumulated a lot of points. I decided to conservatively value them based on what I could get in terms of gasoline gift cards. That is a commonly valued and reasonable measurement in my opinion.

What I haven’t included in my networth is our expected prorated tax refunds for 2009.

I didn’t expect that we would achieve our significant milestone of networth until 2011 – and that was BEFORE the meltdown of late 2008 and early 2009. To have achieved it before the end of 2009 is quite satisfying.

I’d say the item I’m most pleased with is that we have eliminated over $200k on our mortgage balance in the last 3 years yet we still have had vacations each and every year (and sometimes more than 1).

I ‘celebrated’ by taking my wife out for dinner to our favourite Thai restaurant. She had no idea of where we stood on this score – I handed her a statement during dinner and she was probably more surprised than I was.

Are you planning anything to celebrate when you reach the $1M mark? What about the $500k milestone? Do you think you will retire your mortgage before or after you reach $500k?

Do you think you will go with one of the high interest savings accounts or the Questrade Tax Free Trading Account?