Wednesday, January 26, 2011

First Net Worth Update

OK, here's the first of my net worth updates. I'm thinking of posting this annually to see how I'm doing.

First, some comments about the information given:

I'm including my home because I plan to use the equity to buy up and to eventually borrow against for investing. The value is somewhat subjective until we sell, but is based on the mortgage approval I recently had done. It is above the assessed value, but not by much and other apartments in the area have sold for about 10,000 more than what I have listed.

I'm excluding the car both as an asset and a liability because I have no intention of selling the car or borrowing against it. Recording the loan without the asset doesn't truly represent my net worth, because if I was unable to make the loan payments a very large portion of the loan would be repaid with the sale of the car. Mostly though, it is because I don't want to have to constantly check the blue book value of the car to see what it is worth in comparison to what is owed.

I'm also not going to include things like Jewellery or savings that are earmarked for future purchases. I have a TFSA to save for Christmas gifts, vacations, etc. It would be misleading to include that in my net worth statement to see how healthy my finances and retirement planning is doing. I do have some investment money in it at the moment though until I can figure out a better place to put it.

Finally, my wife's pension, if she works until 65 is 70% of the average of her 5 highest earning years. I'd just be guessing if I included an accumulated amount in her pension, so I'm excluding it as well. Although, I'm not too worried about her retirement plan due to this. We may decide to supplement it with RRSPs at some point though.

OK, enough chat, let's get to it.


House: $200,000
RRSP Savings Account: $800
RRSP (as of Dec 31, 2010): $1000
TFSA: $200

Total Assets: $202,000


Mortgage: $155,500
Student LOC: $8,100
BC Student Loan: $6,200
Canada Student Loan: $9,600
Scotia BC Student Loan: $500
Scotia Canada Loan: $1000

Total Liabilities: $180,900

Net Worth: $21,100

Even with all the student loans I'm happy with that number. At least its positive. So now I have a yard stick for measuring against. Now its time to work on achieving my goals and hopefully boosting this number up for next year.

If you have any questions about my calculations or think I missed something or just generally have a question, please let me know.

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