Another year just flew by and I am not sure of what happened 😉 I was so busy that I barely noticed months passing by. I actually didn’t put much attention into my net worth evolution over the current year and I am sure this is probably the case for many of you. However, I think that complete a personal balance sheet at the end of each year is a good personal finance exercise.
– Cash account: I don’t know!
I never count my cash account because it is too volatile (like the market!). I don’t keep much in there since all my money is already redirected for specific purposes (the joy of automatic electronic transfer!).
– Car: $6,000
Then again, I don’t put much importance into car value. The only reason I put a value is because I paid the damn thing ;-). On the other side, cars depreciate so fast that it is barely to balance the debt that I paid! Last year, I put a value of $8,000, so I am down 25% on this item L
– Smith Manoeuvre Account: $6836
Man it’s been a rough year for all of us who leveraged! I keep confidence in the strategy and will keep investing my $400 into my Smith Manoeuvre.
– RRSP Account: $9,000
Definitely, I got a real good hit in all my investments! I actually tried to play smart and make a few trade. In the end, I think I will put my upcoming RRSP contribution into ETF’s and wait 😉 If you can’t beat them, join them!
– Stock account: $1,500
I purchase my employer’s company stocks through this account. While I use it once a year to pay off municipal taxes and other household expenses, I still have a steady balance in there.
– Pension plan: $???
This one is though to determine as it is a defined benefit pension plan. So I have no clue what’s in there. I’m waiting to get my employee’s guide to retirement in February to get a better figure.
– House: $300,000
This is not my own opinion as I paid a professional appraisal (not a real estate agent!) to appraise the house. Renovations definitely helped getting a bigger value!
– Company shares: $7,000
This is what I injected in the company back in April. However, I am absolutely certain it worth much. On the other side, it doesn’t have a liquid value so I keep it as is.
Total assets: $330,336
Home Equity Line of Credit (HELOC): $253,000
This amount increased significantly since I used it for my Smith Manoeuvre, investing in my company and doing home renovations. I basically used low interest debt to increase my net worth overtime.
Personal debt: $28,600
This debt is due in 2 years at a rate of 4.80%. I have now to start putting money aside to pay it off 😉
Total Liabilities: $281,600
Net Worth: $48,736
Overall, my net worth increased compared to last year (17%) but I am confident that I will increase it more significantly in 2009. Investments went down and I spent a lot of money investing in my house and my company. While my property helped me getting low rate interest charges, my company will gradually help me creating an alternative source of income and pay some bills in the upcoming year J
I wish everybody a marvelous 2009 with positive returns on your investments 😉
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Have you survived Boxing Day? I didn’t go this year… I’m broke since I finished my home renovations 😉 As we are approaching 2009, it is now time to take a moment to establish my personal and financial goals for 2009. While 2008 was a year of changes, 2009 should become a year of great results from those changes. In 2008, I switched job to become a financial planner, I started a web based company and my wife decided to start her own daycare at home.
Make the top 10 financial planners in Montreal
Now that I have learned the job, I want to get everything in line so I become one of the top financial planners of my company in the city I work. Our financial year started in November 2008 so I already have a great taste of what my year is going to be. We didn’t receive any ranking so far (they usually wait until summer to show us the ranking) but I know I am doing quite well so far by my numbers. As we are working on net growth of our book, anything can happen until the very last day. However, I will work hard to make it happen.
Double income from my web company
We started our web company late in March 2008. Since then, we have been consistently increasing our income. Since it is still a start up, doubling income seems an achievable goal for me. We are actually working on a new design that will be in place within a couple of months. We should add more blogs to our network and possibly buy one of two website (if you ever have a site to sell, drop me an email!). While it is a lot of work, I just love blogging and working on my computer!
Finish my MBA with honor
I should be done by July 2009. In order to finish with honor, I need on A’s (A+, A or A-). So Far, I have 8 A’s and 1 A- so I am still eligible. However, I still need 6 more A’s in order to finish my MBA with mention. This is going to be quite a challenge since I run a lot of project at the same time. On the other side, I think that when you start something thinking you will succeed, you have half the work done!
Get my wife to (finally) stay home
I have been working on my $1,500 project for about a year and a half now. While we found a compromised solution by starting a daycare at home, our real goal is to have her to stay home only with our children. If I succeed with my two first goals, I should be able to make enough money so my wife can stay home without having to change our lifestyle too much.
So that’s it for my financial goals for 2009. What about yours? Do you want to pay off your debts? Increase your net worth? Change job?
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I feel quite lazy this Saturday (we had 3 Christmas party in a row and we are going for a 4th one today!). So I am leaving you with an interesting video about another guy “who told us” that things were turning sour. And don’t forget to submit your stock post at the festival of stocks that will be hosted on Intelligent Speculator next Monday!
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This is going to be a short post since I think that most of you are probably either running in stores to buy all your gifts or preparing food and make sure everything is ready for tonight.
Some people may say that Xmas has become too commercial, that it had lost its magic touch. I say that Xmas will have the meaning you want to give it!
I think it is a time of the year where you have the opportunity to see people you love. It is obvious that you don’t need a specific date to spend quality times with your friends and family. However, in this time of the year, most people agree to get together and make an extra effort to manage their busy schedule 😉
If you still doubt of Xmas magic, I suggest finding a 5 year old children that believe in Santa to tell you about Christmas. My children are already so excited to see Santa Claus! So Ignore Christmas if you want, but don’t ignore people around you 😉
On another note, Intelligent Speculator will be hosting the next Festival of Stock on December 29th. Make sure to participate and read a few good articles on stocks!
I will take a break of a few days (until next Monday 😉 ) since most people will go visit friends and family instead of reading blogs 😉 So posting schedule will be inconsistent for the next two weeks and we will come back on a regular schedule on January 5th. Until then, I wish you a Merry Christmas!
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– For the Better or Worst –
As we approaching Christmas, many couples will get engaged (I don’t know why they decide that time of the year, but it happens more frequently around Xmas 😉 ). They will plan their wedding and ultimately live together in a few months (if they are not already been living together for several years 😉 ). Beyond the religious or emotional aspect of marriage, it has a huge impact of your assets. Depending in which country you are living in, laws defer from what belongs to you and your other half in case of divorce.
So let not go there and keep a happy perspective where everybody that lives together have several children and stay happy for the rest of their life 😉
If you plan on living your life with someone, there are financial strategies to be used in order to financially maximize your union. It becomes even better if you have a different income level.
For example, the person with a higher income (therefore higher marginal tax rate) will be deemed to pay off all the household expenses and contribute to RRSP’s (or spouse RRSP) and the person with a lower income will be deemed to invest money in non-registered investments. Such tax strategies can make you save a lot of money.
Another example could be to have the spouse with the lower income to buy a rental property or a vacation property. If you receive rental income or sell the property and declare a capital gain, you will pay fewer taxes if the asset was held by someone with a low marginal tax rate.
Putting all your money in the same joint bank account can be scary at first thoughts but it is the easiest way to manage your money and benefit from tax advantages. On the other side, communication and trust within the couple must be very strong. Nobody wants to see his bank account ripped to buy a Playstation 3 with 10 games and a Plasma TV… especially if you don’t play videogames and you had other plan for that money like vacation down south!
For the better:
– optimize tax efficiency.
– make money management simple.
– personal finance is 100% divulge to the couple.
– increase saving ability if two people join their effort together.
For the worst:
– you must trust your other half 100%.
– in case of separation, things may be more complicated as all assets are blended.
– in case of death, a will must be written and not contestable as all assets (including bank accounts) will be frozen until the estate is settled.
As you can see in this series, there are no perfect ways to manage finance within your couple. The key remain in trust and communication for any financial steps!
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