“Chains of habit are too light to be felt until they are too heavy to be broken.” -Warren Buffett

2020 Net Worth Update #1

We've decided to forego actual numbers and share about our net worth in percentage terms. We want to share in an effort to open up conversations about money, but for now this is the approach we're most comfortable with.  So, here we go!

We hold the majority of our fixed assets in our home and vehicles.  Following that, we have a large portion in a defined benefit pension which will provide the majority of our income when I retire (likely at 55) for the rest of my life.  We also have a significant amount in Justin's work RRSPs, including an account funded by his employer.  We don't consider any of these amounts as money as we have access to as most would be very difficult to access before retirement and have significant tax implications.

We have slightly more liquid assets in a few smaller accounts (RRSPs, RESPs, and a TFSA).  These are all funds we could access if needed, but we don't plan to as they are intended to be longer term savings for us (and our kids, in the case of the RESP).  I'm slowly moving these all over to Questrade to save on fees as our money grows (if you are interested in setting up a Questrade account use my QPass key for a bonus: 426324641428874).

Assets               Possessions (house, cars, etc) = 59%
                         Other retirement (Pension, Employer matched RRSPs) = 47%
                         Other savings (RESPs, TFSAs) = 3%
Liabilities        Home equity Line of Credit  = -10%
*Due to rounding, total is 99%

Blip in our net worth when we paid off the HELOC
before pool install
As you can see from this, we don't owe a lot on our HELOC in comparison to what we hold in assets.  We will have this paid off in 2021, assuming life remains stable until then.  It was paid off for a second in 2018 before we put in our pool, and we increased it again in 2019 for our solar system - both of which were diligent choices to take advantage of time with our kids when they are small, and government grants for solar install.  We have agreed we aren't planning any big trips or other expenses to increase it again at this stage.  We want to pay it off and save ahead for big expenses moving forward.

We don't have other savings (like car replacement funds, home reno funds, etc) right now. Part of our HELOC is that it's meant to combine emergency funds with other debt and assets and use that money to pay down the principal on the mortgage until we need it.  Between that and our focus on retirement, we will need to rebuild those savings next year when the HELOC is gone.As the kids grow we're adding more to their RESP and our TFSAs (choosing to pay taxes now instead of deferring for later through RRSPs).  Our goal with the kids is to help with school (hopefully cover tuition), not necessarily fully fund, so we're not saving as aggressively as we could.  We also expect to have sufficient cash flow to help in the future with expenses as they come up when they are in school.

How do you feel about your net worth?  It is moving in the right direction?

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