Welcome back to The Fake Cheap, your 4th favorite (at least, I hope) personal finance blog and my first post of 2017.
What is Net Worth? It is simply your assets minus your liabilities, find our more here.
It is that time once again, my semi annual net worth update, I’m going to try to update my NW each January and July.
First, lets reflect back and have a look at my Jan 2016 net worth, which was $115,000. This is the most recent figure I have provided, although I have still been calculating my NW every two months on my own.
If you are new to recording your net worth, just one net worth statement isn’t super helpful. It will show you where you are at presently, but for tracking your own, I suggest calculating it quarterly, since this will help keep you motivated by seeing an increase (hopefully) over each quarter. If you find that too tedious, you calculate it semi-annually instead. Or if you really enjoy crunching the numbers, you can also add it up hourly! I kid, I kid.
Back my own story: January 2017: net worth $142,000 .
Change from Jan 2016: + 23% or + $27,000 Amazing! Pretty darn good, if I were to toot my own horn, and of course I did this while only making small “sacrifices” to my lifestyle, I am The Fake Cheap, remember.
Note that this number is much more than just investment returns (which I estimate at about 8% for us for the year, as per my annual statements that have started to trickle in). this includes the amount of debt we paid off, the money we put into RRSPs and TFSAs, and other things like our tax refund (which largely went to pay off debt), increase in home value (as per our tax assessment). Find out more here if you want to know more about how to calculate your net worth. There isn’t one right way to calculate your net worth, but there sure are some wrong ways!
Questions you may have (I’ve left these questions from a previous posting, they aren’t directly related to the above post, but you may find them interesting):
You are off by 2K from your quick calculation from your actual amount, what could cause this?
I would say much of this would be accounted for by 2 main factors: cash we happened to have on hand at the time I calculated my net worth and the remainder would be due to increases in investments. Even though the Canadian markets are down, other areas are not, also dividends are still being paid by my investments, and mutual fund disbursements also normally occur at calendar year end. I bought more investments/mutual funds this year, that generally means more disbursement at year end.
Why are you paying off debt and withdrawing from your line of credit at the same time, that don’t make no sense?!
Good question, but work on your grammar. I could have just as easily made minimum only payments to my low interest rate credit card, and invested the rest for likely a better return. However, I went the route I did because I will still have this debt at the end of the low rate offer (over a year from now) and yes, there could be more of these offers before this one expires, but there is no guarantee of this. So yes, I would agree I could likely be doing even better with my money, but I’m The Fake Cheap, remember?
Please leave a comment, a question or a cookie below. And if you found this post at least half interesting, a like would be nice. Likewise if you found it a huge waste of your time, I want to know about that too.
Stay tuned, another super fun post is coming in just a few days! Shocking!!!