My First Net Worth Update: June 2020

Hi there, welcome to my first net worth update! This is technically our (my wife and I’s) net worth update and it’s not really our first – we’ve been privately tracking our net worth diligently for years. This post is a little scary for me as it’s my first time sharing such private information on the internet for the world to see (and judge!). Despite this, hopefully I can break it down for you in a way that gives you a good understanding of “where we’re at” financially at this stage of our life.

This net worth update will be a little different from what you typically see when perusing personal finance blogs. Unlike many personal finance bloggers we happen to be quite young and live in a very high cost of living area. So no, we don’t have multiple rental properties, and no, we don’t earn a thousand dollars a month in dividend income. We’re still at the early stages of our life, but we do hope to attain those personal finance goals and more in the not-too-distant future.

Assets and Liabilities

The status of our finances has changed a lot over the past year because in 2019 we bought our first home. We financed this through our diligent savings, coming up with over $150,000 for our down payment. The result is that we have a huge portion of our net worth tied up in a single asset (scary!). If you would have checked in on our finances last year, you would have seen the majority of our funds stashed away in high interest savings accounts, short term GICs, and only a small portion invested in the markets. Now the picture is quite different, with most of those easily accessible assets ploughed into real estate.

Here’s how the assets side of our financial picture stands today:

Assets Value
Home$850,000
Pension$45,000
Savings$34,500
Investments$31,500
Total$961,000

Now, before you think “Hey, these guys are millionaires!” let me familiarize you with the debt side of our finances:

Liabilities Value
Mortgage$668,500
Total$668,500

Now you can see the effect of that large mortgage coming into play. Although we own a relatively expensive home (which is actually average for our area), the portion that we own outright is quite small – around 20%. The remaining portion can be thought of as essentially owned by our bank.

Our savings includes an emergency fund and some money we had left over after buying our home. That amount used to be larger but we’ve been slowly investing it in the markets (on top of our regular monthly contributions) over the past year. Today our investments total just $31,500. I’ll discuss our investments in more detail later, but for now you just need to know that we’re mostly invested in exchange traded funds.

Another large part of our net worth comes from my pension. Thanks to my generous employer I’m entitled to a hearty pension at retirement. It’s a bit difficult to estimate the true present value of my pension, but I do know the total value of mine and my employer’s contributions. As of today those contributions total $45,000, so I’ll use that as a conservative valuation of my pension assets.

Our Net Worth

To give you a clearer picture, I’ve broken down our net worth into a bunch of contributors. Basically, the cash and investments we have, my pension, the equity portion of our home. The end result is the following:

Contributions to Net Worth
Contributions to Net Worth

As you can see our total net worth, accounting for all assets and liabilities, is approximately $292,000. Now that you know “our number”, please follow along as we hopefully continue to build our wealth well into the future. I’ll be sure to let you know what strategies I like to employ and what “secrets” I’ve found to be useful over the years.

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2 comments

  1. “Hey, they’re doing pretty good on the assets side.. nearly a mil!”

    “And debts?”

    O_O

    *Shudder*

    What’s the interest rate on that mortgage? I’m assuming things are pretty low up there in Canada, too. Tell me it’s sub 4%.

    1. Hey there, thank you for reading :)! Yes, our rate is on the low end. We’re right around 2.5%, which makes our monthly payment not too outrageous!

      Rates up here have gotten even lower these days. I’ve seen 1.99% on a fixed 5-year mortgage. Others report getting well below 2.0% on variable rate mortgages. It has definitely helped buoy the real estate market (for now) despite the pandemic.

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