December 31, 2008, 6:00 am

End of the Year Net Worth Update

by: The Financial Blogger    Category: Assets and Net Worth
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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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I would change three things about how you measure your net worth:

1) Get the car out of there.
2) Get the house out of there, as well as the mortgage associated with it. But keep the heloc associated with investments.
3) Value the company shares in at more of a market value. You value your stock market shares at market, so if you were able to improve on your company give yourself credit!

Goal Hunter,

Why would you take off the house value and the mortgage? I actually used my house value several times in order to increase my net worth through investment (stock market and my company). Without this “tool” I would not be able to leverage in order to create more wealth.

I’ll increase my company share value next year 😉

What do you think?

You house (value – HELOC) is 47 out of your 48K net worth. The value of your house is appraised at 300,000 (3 with 5 zeros, what are the chances?). This is clearly an estimate within, I’m guessing, maybe a 10-50K margin of error. That affects your net worth by 20%-100% if you leave it in. This means that 48K is almost certainly not even close to your net worth.

More useful to cut that piece out, especially since it isn’t optional and doesn’t generate revenue. List as a liability the portion of the mortgage associated with investments. I just assumed this was part of the HELOC, but if you increased another mortgage then that amount is applicable.

by: The Financial Blogger | December 31st, 2008 (5:30 pm)


I actually used the Dec 22th appraisal report i received from the bank. you know appraisers, they always use even numbers 😉

It is definitely not ideal to have most of my net worth lies in my property value. However, considering my age and the fact that I have a family (much tougher to have 2 kids in an apartment), I think it was the right decision… for now.

I used 17K from my HELOC to finance my investments in the stock market and my company shares.

I am counting to increase my net worth in 2009 via other means than thought my property. I put the car value because I don’t have any debts attached to it and the same model is being sold around 7 to 8 K right now.

If you prefer to include the car then why not your other long-lived assets like the TV and kitchen table? You could estimate the value of those by the value of the insurance of your home’s contents, or by taking the big items and comparing price on Kijiji. Especially if they are funded by the “personal debt”.

By the way, that’s a fantastic interest rate if it’s unsecured.

For my “net worth” as it applies to tracking my wealth I take only the investment activities. So no primary residence, no car, etc.

If I was to value my residence, I would value it as the difference between owning and renting since I absolutely must live somewhere. Basically the PV of what rent would be minus the PV of all the interest payments is what owning my home adds to my wealth. But I don’t go through that and just value the home at zero until I come a lot closer to owning it outright.

I understand your point for the car. However, if I would have paid 23K for my tv, I would be tempted to include it in my net worth 😉

Good point on the house but it seems a lot of calculations 😉 and it would probably increase the value of my property (the fact that I work for a bank makes my interest charges on a mortgage very very low!)

Happy New Year!

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