You’ve asked for him and now he’s back. QCash, the 37 year old retired millionaire, goes through his history of net worth updates to show us how he progressed to where he is today.
A while back, I promised FT that I would pull out my net worth totals from 2000 (the year I got married) through 2007 and see what happened that allowed my net worth to balloon and let me experiment with hyper early retirement (a la Derek Foster‘s suggestion).
Unfortunately, I cannot find my files from 2000 and 2001. I experienced a computer crash a year ago September and I thought I had recovered everything and could not find the file. Locating the hard copies requires a Herculean effort at tackling the garage loft and I have not been that motivated.
Net Worth Updates from 2002
2002 Net worth – $677,000
2003 Net worth – $787,000
2004 Net worth – $1,075,000
2005 Net worth – $1,468,000
2006 Net worth – $1,722,000
2007 Net worth – $1,782,000
The reason my numbers jump so rapidly is two-fold. One, I always list my real estate at the adjusted cost base on my net worth statement. So, for example, in 2003, I sold three rental properties and netted out 50K. Also, I had always listed my investment in my business at its real cost basis. So while this doesn’t fairly paint an accurate picture and shows large jumps, it is how I kept my accounts.
Also, up until our little girl was born in 2003, my wife continued to work and she always earned more than I did.
In 2004, I sold my business and the proceeds from that sale show up in 2004 and 2005 as the commercial property closed in 2004, while I did not receive all payments until 2005. Although I should probably adjust my net worth statement in 2004 to show the money owing as an account receivable, I was not assured of the cash payment until 2005, so I remained cautious.
Finally, almost all of the growth from 2005 to 2006 was from my investment portfolio. After 2004, we no longer had any debt and I was ploughing everything that was made back into my investment portfolio to gear up for my “retirement” at the end of 2006.
Is this typical? Of course not. However, purchasing real estate at a young age paid off huge for me. Living a pretty frugal lifestyle, while planning for a family and working hard on my business, allowed me to take chances. I was also lucky in finding a buyer for my business who wanted both the building and the operating company, allowing me to structure the deal to my maximum tax benefit.
So what next?
Well, I have to admit that I have suffered from a mild mid-life crisis that was satisfied with the purchase of a 2004 350Z Nissan Roadster. Or as my wife describes it – my birthday, fathers’ day, xmas gifts for the next 60 years. And as I describe it – cheaper than a mistress.
I have also used a HELOC to make the purchases to convert my growth funds to income funds without taking a huge capital gains hit. So far it is working out okay. Although I hate to be in debt to anyone, it is allowing me to build the “income portfolio” I want and melt down my capital gains against the interest charged. It will be a slow, multi-year process, but it has worked so far.
I have also started to get the bug again. I had read somewhere that entrepreneurs should take a year off after a successful business venture, to recharge and make sure you don’t overheat.
I have been exploring opportunities in the green energy field. In Ontario, the govt is offering the Renewable Energy Standard Offer Program (RESOP) for generation of wind, solar or biomass energy. After looking at wind (11.9 cents/kwh) and solar (42 cents/kwh), I am leaning towards establishing a biomass generation system (11.9 cents per kwh).
If FT is so inclined to let me, I will provide a follow up to that plan in the near future.
Stay tuned for more from QCash in the near future!
Photo credit: Willvision Photography