Welcome to the Million Dollar Journey January 2017 Net Worth Update – 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: 35
- Day Job: Employed as a Real Estate Agent Full Time.
- Family Income: $150,000 (Personal full-time job); $TBD (Income from consulting company); and, $100,000 (spouse full time job).
- Goals: Mortgage paid off by 36 (done!), million dollar net worth by 40.
- Notes: Almost all of net worth is in the real estate market (principal residence). Starting to invest in the markets now.
Even more changes in the last 6 months. I have parted ways with some of my savings to purchase a stake in a consulting firm. The idea has been on my mind for a while so I took everyone’s advice and ditched the Porsche (with a slight loss) and took that money to buy in.
So far in just 2 months it has proved money well spent and is going to allow me to increase my annual earnings substantially. I’m on track to re-coup my investment inside of the first 4 months and forge ahead from there. I decided to do this as a way to help protect myself and my income from the looming correction in the real estate market. I was also drawn to the benefits of being able to operate as a corporation. So I have seen a dip since the last update but I am still in a now in a good position to make the most from 2017 and massively to my net worth through investments.
Personal income is up substantially with this insane housing market (Yes I know the correction is coming). I sold my rental property recently when the mortgage renewed and took that money along with some savings and paid our house off completely!! We are super excited. Never thought I would get there on the timeline I set for myself. Goal #1 complete. Right after I had the opportunity to purchase a property to flip. With the market continuing to rise, the flip turned out a lot better than I had
originally planned which netted my corporation a hefty profit. Furthermore, I have also taken on holding a second mortgage which pays 12%/year for a one year term as well as setup and discharge costs. This investment is secured against the property.
Goals for 2017 – With a rise in my wife’s earnings due her crazy work ethic as well as with having our home paid off I’m super excited for what the year should bring. We are currently able to live off my wife’s wages completely and as such we are hoping to save as much of my wages as possible. We have some projects around the house that we have put off while we pushed to get the house paid for and they now need addressing. That being said nothing will be paid with credit.
In regards to investments 2017 looks as follows.
TFSA – Both to be maxed in contributions
RRSP- Waiting to see how the taxes look this year but I will be finally contributing again.
That really is my focus this year. Finish up around the house and save like crazy.
I welcome everyone’s comments and feedback.
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 (6&8), 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:
- Cash: $2,500 (-37.5%)
- Registered/Retirement Investment Accounts (RRSP): $8,300(+12.2%)
- TFSA: $22,000 (+15.2%)
- Business Account : (0)
- SAVINGS ACCOUNT : (0)
Rental Property 1: SOLD FOR $290,000 FLIP PROPERTY 1: $432,000 SALE PENDING Collector Car: $45,000
- Holding Second Mortgage @ 12%: $60,000
- Consulting Business: $60,000
- Principal Residence:$600,000 appraised 2016 (+9.00% )
- Principal Residence Mortgage : $0 Paid in Full
Rental Property 1 Mortgage: $129,541 Rental Property Line Of Credit: $20,000 Principle Residence Line Of Credit:$480,000
- MasterCard: $4,500 (+125%)
- Wife’s Car: $35,000
Total Net Worth: ~ $713,300(+4.74%)