If you read my personal financial goals review at the beginning of the month, you won’t be surprised to read this net worth statement update. While I post a net worth increase, this is all related to the value of my company shares and house. In fact, if I put aside my assets and only look at my debts, things aren’t that pretty.
You may say that I “cheat” with my net worth because I assign a value to something that is very hard to evaluate. You may also say that I would never be able to sell my blogs after what happened at the beginning of the year with Google. The value of my shares is now at $131,521. This means that the total value of the company is at $263,042 (I own 50% of the shares).
We have a specific way to evaluate our company shares which I won’t disclose. However, what I can say is that we make roughly $50,000 of after tax profit annually. Therefore, if you use the current valuation at 263K, it is 5.2 times the profit. It’s a relatively high multiplier when you look at many private company models. On the other hand, I don’t find it overly optimistic either since both our gross income and after tax profit have been increasing year after year. We are more solid and diversified than we used to back in 2009. Someone who would buy it at 5.2 times the net profit would get a business where he only needs to work 10 hours a week because the net profit includes dividend that are paid to us. So the new owner could keep the dividend or use them to pay someone else to do the job. This is why I think it’s a pretty good value, what do you think?
I decided to bump up the value of the house as well since I just posted a 5,6K personal loan for the pool. I know that adding a pool will only give me 20%-25% of its value on the house. But I also based my appraisal on recent sales on my street. When I look at the current market, I could probably sell my house for 360k-370k. I would rather be conservative and use a 2%-3% increase per year. The timing of increasing the value to compensate for the pool loan was more strategic to convince my mind I wasn’t crazy to pay for the pool ;-). Mind you, I’ve been in that pool every single day for the past three weeks! My kids love it too and it will be used all summer long for the next ten years. It was definitely worth it.
As I mentioned in my financial goal review, the costs related to the pool along with my car getting a weekly membership at the garage exploded my budget. In July, I’ll have to cash out a part of my shares to pay for my car repairs that are currently sitting on my credit card bill. It sucks but I have no other choice as it really blew my budget. I expected to put 1,5K a year on my car whereas I paid 5K (this includes both cars) since January.
My emergency fund is my line of credit and my second emergency fund is my employer stocks. This is the first time I have had to use both to compensate for a bad situation. This is definitely the time to stop spending. The good news is that my “regular” budget is under control. I just have a hard time with “unexpected” expenses. I just hope that summer time will be more gentle with me and that I could start saving money to pay off more debts!
CHECKING ACCOUNT $1,000 $1,000 0.0%
$3,898 $4,872 25.0%
RRSP ACCOUNT $28,628 $28,254 -1.3%
PENSION PLAN $20,218 $26,131 29.2%
HOME $345,640 $351,640 1.7%
COMPANY SHARES $98,000 $131,521 34.2%
MAZDA TRIBUTE $16,058 $15,624 -2.7%
MAZDA RX-8 $4,000 $3,600 -10.0%
TOTAL $517,442 $562,642 8.7%
CREDIT CARD $6,672 $10,064 50.8%
LINE OF CREDIT $19,900 $19,859 -0.2%
HELOC $263,433 $264,754 0.5%
CAR LOAN $16,058 $15,624 -2.7%
Personal Loan $9,999 $9,791 -2.1%
Pool Loan $- $5,637 N/A
TOTAL $316,062 $325,729 3.1%
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