Welcome to the Million Dollar Journey April 2016 Net Worth Update (a little late, sorry!) – Team MDJ edition. A select group of readers were selected to be part of Team MDJ which was conceived after my million dollar net worth milestone was achieved in June 2014. Karl the Real Estate Agent was selected as a team member and will post net worth updates on a regular basis. Here is more about Karl.
- Name: Karl
- Age: 34
- Day Job: Employed as a Real Estate Agent Full Time.
- Family Income:
$130,000$150,000 (Personal full-time job); $15,600 (rental income before
- expenses); and,
$50,000$100,000 (spouse full time job).
- Goals: Mortgage paid off by 36, million dollar net worth by 40.
- Notes: Almost all of net worth is in the real estate market (principal residence and rentals).
It has been another great quarter for me and my wife professionally which has enabled us to advance towards our goals. Since my last update, we managed to put a substantial amount of money towards the house as well as finish some of the renovations our home desperately needed.
My mortgage was due for renewal and I was able to put the large lump sum down from my business account without penalty. We also put a home equity line of credit (HELOC) on it in case there are any good purchases out there in the coming years. The last of the renovations were done prior to my mortgage renewal to maximize the credit limit on the HELOC.
I know some people will be upset but I will be adjusting the value of my property now to $550,000 which is still conservative as my home would most likely sell for $600,000 in this inflated market we are in.
Notable Changes Since the Last Update:
- TFSA down big on low oil
- Continued to double up mortgage payments
- Renegotiated mortgage
- Paid Corp Taxes from Business account
- Still haven’t set up wife’s TFSA
Before the next update, I need to setup my wife’s TFSA and max mine out with the new increase. (STILL HAVEN’T DONE THIS. NEED TO GET GOING.)
My spouse and I currently live in our fourth personal residence since entering the real estate market in 2006. We used to move around town when I was able to find a decent deal to buy. That has all changed now with two kids (4&6), so now my real estate investing is done outside our principle residence. I currently own one rental semi-detached 3 bedroom in my personal name.
In terms of savings, I’m automatically making bi-weekly deposits into my TFSA to max out the year but I still have plenty of room left. However, my wife’s account hasn’t been fully funded over the years. I’m looking forward to learning more about investing in securities and transitioning away from rentals as they are extremely labor intensive investments that take a lot of time away from my family.
The biggest financial challenges that we face are a lack of budgeting and a lot of discretionary spending. Having the majority of our household income being commission based and somewhat seasonal has been a battle since day one.
Net worth numbers:
Assets: $ 799,674 (-10.02%)
- Cash: $1,900 (-56.42%)
- Registered/Retirement Investment Accounts (RRSP):$6,104 (-4.62%)
- TFSA: $11,670 (+6.09%)
- Business Account : (Closed)
- Real Estate Deposits : (Returned)
- Rental Property 1: $230,000 (purchased in 2009 for $167,000 price adjusted for average selling price annually) (+0.00%)
- Principal Residence: $550,000 (purchased in 2012 for $350,000 price adjusted for average selling price annually) (+10.00% )
Liabilities: $263,541 (-31.95%)
- Principal Residence Mortgage: $131,747 (-45.17%)
- Rental Property 1 Mortgage: $129,541(-2.27%)
- Rental Property Line Of Credit: $20,000 $0 (-100%)
- Principle Residence Line Of Credit: $0 (-100%)
- MasterCard: $3,000 (+66.66%)
Total Net Worth: ~$536,133 (+6.90%)
- Started Jan 2014 with Net Worth: $249,924
Some quick notes and explanations to common questions:
Any cash I have in my chequing account is currently used to pay monthly bills and living expenses. All paycheques are deposited into our chequing account and is our primary household account that everything runs through so the cash amount fluctuates.
The large cash amount sitting in my business account is what I have from liquidating my rental and land and will be used to finance the next piece of land I am looking at. If I haven’t found anything by May 2016, I will put it on my principle residence and setup so I can access it as a LOC