Welcome to the Million Dollar Journey August 2016 Net Worth Update – Team MDJ edition. A select group of readers were selected to be part of Team MDJ which was conceived after my million dollar net worth milestone was achieved in June 2014. Karl the Real Estate Agent was selected as a team member and will post net worth updates on a regular basis. Here is more about Karl.
- Name: Karl
- Age: 34
- Day Job: Employed as a Real Estate Agent Full Time.
- Family Income:
$130,000$150,000 (Personal full-time job); $15,600 (rental income before expenses); and, $50,000$100,000 (spouse full time job).
- Goals: Mortgage paid off by 36 (done!), million dollar net worth by 40.
- Notes: Almost all of net worth is in the real estate market (principal residence and rentals).
A lot of changes since my last update. Personal income is up substantially with this insane housing market (Yes I know the correction is coming). I sold my rental property recently when the mortgage renewed and took that money along with some savings and paid our house off completely!! We are super excited. Never thought I would get there on the timeline I set for myself. Goal #1 complete. Right after I had the opportunity to purchase a property to flip. With the market continuing to rise, the flip turned out a lot better than I had originally planned which netted my corporation a hefty profit. Furthermore, I have also taken on holding a second mortgage which pays 12% per annum for a one year term as well as setup and discharge costs. This investment is secured against the property.
Now for something that will most likely fly like a bag of hammers around these parts. Since I was a child I have always been a car fanatic. Fanatic may be an understatement. Obsessed is a more accurate picture. I made the promise to myself that if I pushed to get the house paid off in the time I would reward myself with a car of my dreams. So I did it. I bought myself a low mileage German sports car with the intention of keeping it long term and catching some appreciation on it. Regardless, depreciation is unlikely as long as I don’t drive it all the time.
It has been a very productive year so far. We are almost in the position of living off my wife’s earnings – so the next few years are going to be exciting. Next on the list is maxing out my wife’s TFSA set up through auto withdrawals so we never fall behind again. Then pay her car off for peace of mind. (As luck would have it my wife’s car blew up weeks after I bought my collector car. Go figure lol)
I welcome everyone’s comments and feedback.
My spouse and I currently live in our fourth personal residence since entering the real estate market in 2006. We used to move around town when I was able to find a decent deal to buy. That has all changed now with two kids (6&8), so now my real estate investing is done outside our principle residence. I currently own one rental semi-detached 3 bedroom in my personal name.
In terms of savings, I’m automatically making bi-weekly deposits into my TFSA to max out the year but I still have plenty of room left. However, my wife’s account hasn’t been fully funded over the years. I’m looking forward to learning more about investing in securities and transitioning away from rentals as they are extremely labor intensive investments that take a lot of time away from my family.
The biggest financial challenges that we face are a lack of budgeting and a lot of discretionary spending. Having the majority of our household income being commission based and somewhat seasonal has been a battle since day one.
Net worth numbers:
- Cash: $4,000(+110.53%)
- Registered/Retirement Investment Accounts (RRSP):
- TFSA: $19,100 (+63.67%)
- Business Account : (Closed)
- SAVINGS ACCOUNT : $85,500
Rental Property 1: SOLD FOR $290,000
- FLIP PROPERTY 1: $432,000 SALE PENDING
- Collector Car: $45,000
- Holding Second Mortgage @ 12%: $60,000
- Principal Residence:$600,000 appraised 2016 (+9.00% )
- Principal Residence Mortgage :
$131,747$0 Paid in Full Rental Property 1 Mortgage: $129,541 Rental Property Line Of Credit: $20,000
- Principle Residence Line Of Credit:$480,000
- Capital Gains Owing:$55,000
- MasterCard: $2,000 (-33.33%)
- Wife’s Car: $35,000
Total Net Worth: ~ $681,000(+27.02%)
- Started Jan 2014 with Net Worth: $249,924
You can read my previous updates here.
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