July 24, 2012, 5:00 am

July Net Worth Statement + 0.01%

by: The Financial Blogger    Category: Assets and Net Worth
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Going in the right direction! Yippee!


Vacations are paid. Kids’ day camp and birthday parties too. Car didn’t breakdown this month. Life is good!


I’ve cashed out a part of my employer shares to pay down my debts and am finally seeing thing moving along in the right direction. I started January with a net worth of $203K. I’m now at almost 237K in 2012, I wanted to focus on debt repayment. If you look at my total debts back in January, I was at $317,836. Now I’m at $322,331. If you do a quick math here, you won’t be impressed. However, considering all the bad luck I have endured over the past 6 months (read more about it here), I think I did a pretty good job.


The Stress of Debt


For the very first time in my life, I feel the stress of debt. It’s a weird feeling. I have never been concerned about my level of debt since I started working as I have always able to increase my income significantly (read more about the chronology of my income). Therefore, each time I made an important purchase in my life, I just thought that I needed to boost my year-end bonus to compensate. The worst part is that it has always been working very well.


But I woke up at the end of 2011 telling myself; “do you really want to keep up like this all your life?”. It’s not a matter of being or not being able to make my payments. I’m doing pretty well at it actually and am not worried at all. However, when I look at my situation for the upcoming years, I really would like to drop my debt level drastically before turning 35 (which is in five years). This would give me the ability to enjoy financial independence and would be able to quit my job whenever I want.


I actually love my job. I enjoy every single day. But knowing that I can pull the plug at any moment and never be worried is an awesome feeling. I want to feel that way in the future!


But putting so much emphasis on debt started to stress me. Each time I’m about to spend money, I now think twice. I look at my bank account every couple of days when I used to check it every two months. I’m constantly calculating my debt level and trying to find where I spend money in order to cut back. To be honest, I don’t really like this feeling!


I’m doing this because I don’t want to get stuck in a credit spiral where I don’t see the end of the tunnel. Instead, I’ve created the urge of action right away. But it really bothers me. I’m not sure I want to continue this way, but I want to make sure I go under 300K before I stop my madness. I have 23K to go and I’ll feel relief J. Once past the 300K level, I’ll start to breath again. I guess I have about one year to go in order go under 300K. My year-end bonus (once again!) should be enough to bring me down to this level in January 2013 :-D.


Speaking of which, I’m better off starting to work like there is no tomorrow at work!


Here’s the table:



CHECKING ACCOUNT$1 000$1 0000,0%
$4 872$1 450-70,2%
RRSP ACCOUNT$28 254$28 9482,5%
PENSION PLAN$26 131$26 1310,0%
HOME$351 640$351 6400,0%
COMPANY SHARES$131 521$131 5210,0%
MAZDA TRIBUTE$15 624$15 190-2,8%
MAZDA RX-8$3 600$3 200-11,1%
TOTAL$562 642$559 275-0,6%


CREDIT CARD$10 064$7 985-20,7%
LINE OF CREDIT$19 589$19 8191,2%
HELOC$264 754$264 154-0,2%
CAR LOAN$15 624$15 190-2,8%
Personal Loan$9 791$9 583-2,1%
Pool Loan$5 637$5 600-0,7%
TOTAL$325 459$322 331-1,0%

Net Worth: $236,944

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Are you guaranteed a bonus every year? It seems kind of risky to rely on it because if your company has a bad year they may be smaller than you expect or if, God forbid, you lose your job you definitely won’t be getting one. I believe you’ll be fine but it is just a couple things to keep in mind. You never know what will happen in the future.

by: The Financial Blogger | July 24th, 2012 (6:06 am)

Hey Lance,

My bonus is based on my performance, not my employer. This is good news as they have to pay me no matter what happen during the year. The risk is also related to my performance. If I have a bad year, my bonus will be very small. This is why I have to stop counting on it! The problem is that I have been hitting over 175% of my objectives for the past 4 years ;-). Then again, it’s not the right way to manage a budget thought!

It’s great that you are heading in the right direction. I wonder how much interest you pay in each of the debt lines. Are the interest rates pretty high there? HELOC should be pretty low, but the other lines… Good luck with debt reduction, I’m sure you can get it under 300k soon.

Woot! Keep up the good work!

by: The Financial Blogger | July 24th, 2012 (11:22 am)


I don’t pay much in interest (beside the pool loan at 6.45%). The HELOC and Line of credit are at 1.50% (yeah…I’m quite lucky to work for a bank!). The car loan was at 0% (we all know it’s not 0% but this is what it is!) and the personal loan is at 4.25%. Credit cards are being paid in total each month but I use them for each purchase so I always have a huge balance on them (this is why I always put 1K in my bank account for each report). I hope this help understanding my structure 🙂

Ok, I’ll admit I’m biased since my debt is just over $14K and falling fast, but I totally support paying off debt. The flexibity of not needing a specific monthly income to support those payments makes life so much more enjoyable. Like you said you don’t have to quit work, but having that freedom is nice.


I’ve been reading your site for a while.. glad to hear your paying more attention to your debt.. why not take control of your finances and go after the debt before the year is over? and use the bonus as a bonus to do what ever you want.. be it debt or something else.. just think no debt and your net worth increases by 300k guaranteed!!

Hi Mike – What earnings multiple did you use to calculate your company shares this time?


Great job you guys, especially considering how the market has been pretty flat for the last quarter or so. I wouldn’t be too concerned with your debt. Interest rates aren’t going up any time soon and you guys don’t seem overly leveraged. Your debt to equity ratio is still less than 200% 🙂 But i understand you want to balance your finances to be able to reach financial independence in your mid 30s. I have the same goal.

by: The Financial Blogger | July 25th, 2012 (6:08 am)


I update my company shares once a year. I don’t use earning multiple to value it since our company is pretty “generous” toward is two employees. However, it comes down to a 5,2 multiple.


this is my goal! however, my bonus will definitely help to drop my debt level under 300K. I have also a lot of “static expenses” due to the fact that we have 3 kids! I cut on my clothe budget but I can’t cut on theirs! hahaha!

Been following you for a while Mike, and I think you’ll find that each time I say something about the debt.

By just getting rid of the pool debt which is at a high of 6.5% you’d increase your net worth more than you did this month.

I’d really try on focusing on some of the smaller debts if for no other reason then you don’t have to worry about it. To not have to worry about an account provides me with a lot less stress but that might just be me (although from the tone of your post it sounds like it is you too…now)

by: The Financial Blogger | July 26th, 2012 (11:16 am)


I totally agree with you, this loan will be the first one to be paid off as soon as I have liquidity! I don’t expect to keep it for 10 years!

Hi Mike,

Every 0.01% helps. My net worth typically stays around the same level for a few months, then “jumps” up (really for unknown reasons, it seems).

Why did your employer stock account drop 70%? Did you take a withdrawal to pay off credit cards?

And I have said similar before: if your priority is to pay down debt, then pay down debt. Don’t keep rationalizing expensive purchases by saying, “My income is going up, my blog is getting more traffic, I have a great job, I can always pay it later…” And while I do fully agree with the good mattress and good quality food (which is for health…something money can’t buy back when it’s too late), extravagant purchases MUST be put in their place. Think of it like training a dog. Set the ground rules, and have fun within those boundaries–don’t violate them.