When I first started this blog in 2010, I only had about $300K of financial assets. I thought that was a lot of money back then, but as I learned more about personal finance I realized that it’s actually not that much. The average household net worth in Canada today is $400K. I looked at other people’s balance sheets and was really inspired by bloggers from Planting Our Pennies. They have multiple rental homes, multiple cars, and lots of stock investments 🙂 It’s because of the success of other people that has given me the motivation to work hard.
Today I still do not have a $400K net worth. But I have however broken $700K in assets for the first time ever 😀 I am now in the same boat as many of my online friends and acquaintances like the P.O.Ps. I feel like I fit in more now.
- Part-Time Work = $400
- Dividends = $400
- Eating Out = $100
- Others = $2,000 (closing costs on farm)
*Net Worth: (MoM)
- Assets: = $738,800 total (+156,700)
- Cash = $1200 (-5100)
- Stocks CDN =$76,900 (–800)
- Stocks US = $45,000 (+1600)
- RRSP = $38,700 (+5800)
- Home = $252,000 (same)
- Farms = $325,000 (Farm 1 old value of 152,500, plus Farm 2 purchase price of 172,500)
- Debts: = $534,600 total (+155,500)
- Mortgage = $200,700 (-400)
- Farm Loans = $209,300 (+99,800)
- Margin Loan CDN = $26,100 (Same)
- Margin Loan US = $23,600 (+100)
- TD Line of Credit = $35,900 (+17,000) $9,000 of this account was used for investment purposes.
- CIBC Line of Credit = $15,000 (new)
- HELOC = $18,000 (new)
- RRSP Loan = $6,000 (new)
*Total Net Worth = $204,200 (+0.6%)
All numbers above are in CAD. Conversion rate used: 1.00 USD = 1.05 CAD
Managed to squeeze in a small net worth increase despite some pretty big expenses in November. The legal fees were $1,700 to buy the farm, plus $300 for notarization so I didn’t have to be in Saskatchewan to sign the papers. Most of my debt is used to leverage against financial assets but I still have about $59,900 of consumer debt which I spent on living expenses and luxuries because #YOLO 😉
Cash – I used most of my reserve cash funds to complete the farm purchase. This would be the second farm I bought 🙂
RRSP – I borrowed $6,000 to invest in my retirement account. The borrowing cost is at 4% interest rate, not bad. I haven’t bought anything yet, but I’m looking at Cisco, Coke, Pepsi, Comcast, IBM, and Lockheed Martin 😀
Farms – In my previous Fiscal Update I listed my 1st farm with a value of $152,500, and a 10% deposit on my 2nd farm. From now on they will be combined.
Farm loans – I got a $100,000 loan from the bank to buy my 2nd farm. I’ve combined the value with my existing loan for the 1st farm.
Congrats on crossing the $700k assets level! I’m kind of like you where I thought I was doing well and then I look at where some other people are at and it just motivates me to try and catch them.
Yup, Frugal Trader just reached $800K in assets not long ago. Looks like I’ve still got some catching up to do.
You are crushing it. I commend anyone able to wisely use historically low interest rates to buy appreciating assets for the long term. Delaying gratification and working hard in your first years out of school has always proven to be the winning strategy, great job (see financial samurai, MMM, etc).
Businesses use something called optimal capital structure to decide how much debt to take on at any given time depending on different macro situations. This is the same strategy I try to use myself. It’s how come I’m using leverage today 🙂 It’s a simple concept and I think a lot more people would realize better investment returns if they also used it.
Congrats…could you post a P&L for the farm business in the future
Good idea. I might do one early next year. So far I can say that 2013 has been a loss from a operational point of view 🙁
Nice job! Love the aggressive mentality you’re using to accelerate your pursuit of financial freedom. I think the two farms will prove to be huge assets for you down the road as the debt gets retired and the rental income and appreciation continues to grow.
Looking forward to the future. That farm loan debt is retiring at about $500 a month at the moment 🙂
I don’t think one should ever stop saving! Even Bill Gates fought the tax assessment on his house!
He also saves and reuses plastic bags. Good for him for being so frugal.
$700K in assets is no small feat. Congrats!
Thanks. You and Mr. PoP have been a great source of inspiration with all your diversified assets :0)
Nice update. Nice to see the second farm included in this way instead of the farm deposit. I am curious what the farm loan payment will be combined for the two farms. Are you now cashflow positive in regards to the farms?
Payment will be $1100 a month for the combined farm loans. Which doesn’t give me positive cash flow yet since my bi-annual rent works out to be about $850 a month 🙁 I’m hoping the land’s capital appreciation will make up the difference though 🙂
Wow! That is a big asset column!
Thanks. I now need to diversify and buy more stocks 🙂
The results are because you have dreams, and plan to achieve them. Good on ya my friend at yet another positive month! I will suggest a vacation to you at some point… maybe a camping trip to Saskatchewan on some land you own out there! All I have to say, is please, please keep a close eye on that debt ratio. when things work out there great, but I hope you have a plan should plan B need to be executed. You always, always must have a have a plan B in your pocket – Cheers.
Coincidentally I just came back from a vacation. That’s why I haven’t been replying to comments over the last 2 weeks. Yeah, having a plan B is important in case something unexpected happens. The world is high on easy credit right now and there are signs of possible asset bubbles all around the world. My insurance plan is to sell my farms as soon as they become underwater to protect myself from any further losses. Then my liabilities would be reduced by half 🙂 My net worth would take a hit if that were to ever happen, but we all have to know when to fold at some point.
congrats! i’ve been neglecting my blog as i’ve been busy. hehe
keep on truckin and you’ll see a mil in assets in no time 🙂
Can’t wait to hit the $1 million point. It would sure be another big step towards the ultimate financial independence goal 🙂
Climbing up the asset ladder fast! WHat will your next acquisition be?
Finally, I’m closing in on my condo purchase… hopefully I can rent it out soon after!! Passive income here I come.
Not sure what I’ll be buying next. Maybe I’ll focus on paying back my debt for awhile. Vacancy rates are pretty low in Greater Vancouver. I’m sure you’ll have no problem renting it out. Hope you find a good tenant 🙂
Great work. How old are you again?
Thanks 🙂 26.
Congratulations – you’re really doing it!
Yay \:D/ 20% of the way to becoming a millionaire.
Congratulations on reaching a fiscal milestone. What is it like owning/selling a farm? I have friends in the farming industry and although it intrigues me I don’t think I have the fortitude for it. Best of luck as you continue to build your net worth.
Farm investing isn’t for everyone but I’m lucky to have come across it myself. I like to own tangible assets. Things of intrinsic value that can be touched like real estate, silver, and gold. Land appears to be a logical addition to my basket of financial assets 🙂