May 23, 2012, 6:00 am

May Net Worth Update +0.03%

by: The Financial Blogger    Category: Assets and Net Worth
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Yeah! Another month with a small increase in my net worth combined with a debt reduction! All right… the debt reduction was smaller than expected. But still… I’m heading in the right direction!


The biggest reason why I didn’t see a major debt decrease (my debts went down by all of $354) is because I had my pool installed. As I mentioned in my previous net worth statement, I will have to get a loan to buy a pool this year as I overestimated my tax refund (darn! I should definitely do my own taxes!). This also means that my debt level will increase by $5,500 in June when my pool loan will appear on my balance sheet (yuk!). In the meantime, I had to cover several other expenses while installing the darn pool. Because the pool price doesn’t include the bulldozer and the water in the pool… Long story short, I had to spend a good $700 over the past 2 weeks for my pool (on top of the $5,500 loan coming onboard…).


This sucks, but this is my vacation budget as well (I’m not going anywhere this year). I also have a “plan” to drop my debt quicker as I will cash in a good part of my employer stocks (I’m allowed up to 75% without penalties) to pay off a part of my debts. The longer I can wait, the bigger the amount will be as I’m putting over $600/month in them. I expect to be able to get about $4,000 from my employer stocks. This will almost compensate for my pool loan!


June Net Worth Should See a Big Jump


I’m expecting a big jump on my asset side next update since we’ll be looking at the value of our company shares. As a valuation model, we use 3 times the yearly gross income minus all debts. To calculate our yearly gross income, we consider the average of the past 12 months (so from June 2011 to May 2012). I expect the value to go up to around $125,000 per shareholder (so the total company would be worth $250,000). This would jump my assets by more than 10% in a single month. I don’t think it’s exaggerated to think that my company worth this much since it currently has the possibility of paying me $18,000 per year in dividend (which is currently used to pay off corporate debts). Assuming a capital value of $125,000, the company will eventually pay me a 14% dividend on my investment… not too bad, huh?


One of my Personal Goals is Achieved!


At the beginning of the year, one of my most important goal for me was to open a RESP account (special account to fund my children’s tuition) and invest $200/month in it. Well last week, I opened it! The $200 systematic investment will start in June. By the time that my oldest boy reaches 18, I’ll have gathered 44K in today’s dollar (assuming a 2,25% inflation rate and 5,25% investment return). This will pay 15K per kid on top of the fact that my youngest will start withdrawing 6 years after the first one. So I’ll probably have the time to build a 50K+ nest egg to pay for tuition. Considering that the cost of education is super low in Quebec, this should be more than enough to pay for University.


The $200/month systematic investment will replace my daughter’s private daycare cost in our monthly budget. We pay $360/month for 3 days/week ($30/day) and this ends in June! This means that in July, I’ll be generating an additional $160/month to pay off my debts faster while I will contribute to my children’s future! How cool is that?


I’ll Need Help To Drop Under $300,000 in Debts!


As of June, I’ll have around $21,000 (including the darn pool loan!) over the $300K debt I want to reach by the end of the year. This means that I will have to pay down for $3,500/month worth of debt… ouch! At least, I can count on my employer’s stocks along with a few thousand in dividends from my company. My last resort will be my year-end bonus but I can’t expect much from it this year since I’m starting from scratch. I’ll definitely need to chill by the pool this summer and leave my wallet in the drawer!



CHECKING ACCOUNT$1 000$1 0000,0%
$3 898$4 31910,8%
RRSP ACCOUNT$28 628$28 7630,5%
PENSION PLAN$20 218$20 2180,0%
HOME$345 640$345 6400,0%
COMPANY SHARES$98 000$98 0000,0%
MAZDA TRIBUTE$16 492$16 058-2,6%
MAZDA RX-8$4 400$4 000-9,1%
TOTAL$518 276$517 998-0,1%



CREDIT CARD$6 371$6 6724,7%
LINE OF CREDIT$19 945$19 900-0,2%
HELOC$263 400$263 4330,0%
CAR LOAN$16 492$16 058-2,6%
Personal Loan$10 208$9 999-2,0%
TOTAL$316 416$316 062-0,1%

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So June should have a revaluation of your company but it will also include the pool loan – so it shouldn’t be that big of a jump, right? Or did I miss something.

I paid off $30k+ of debt in about three years, while making relatively little income (my income was a $70k base + $4k bonus). Paying off debt, if it is really a priority, is one of the most fulfilling things I have ever done. Every $100 per month I realized I no longer needed to spend was both a rush of adrenaline and also a deeper sense of feeling grounded.

I have long thought about creating an info product on this…except I have no idea how to market it.

by: The Financial Blogger | May 24th, 2012 (7:46 pm)


the pool is a lot less than the growth of my company value 😉

thats awesome! you may want to check how market his (youvsdebt) it may give you a few tips 🙂

[…] The Financial Blogger provided his May 2012 net worth update. […]

TFB: Nice site. I have been debt-free since 2005…that $30k debt was my entire debt load at the time. Have remained that way ever since, except for one business risk I took which failed horribly. (At least I didn’t bet the farm)