Welcome to the Million Dollar Journey December 2014 Net Worth Update – Team MDJ edition. A select group of readers were selected to be part of Team MDJ which was conceived after the 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: 33
- Day Job: Employed as a Real Estate Agent Full Time.
- Family Income: $130,000 (Personal full-time job); $15,600 (rental income before expenses); and, $50,000 (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 a great quarter for me and my wife professionally which has enabled us to advance towards our goals. In this quarter, we managed to pay off the remaining balance of our last car loan . This means we own 2 vehicles in good shape and paid off in full. Our plan is to keep the cars for another five years.
I also have been putting away lump sums from each cheque with the plan of paying off the principal residence mortgage when the mortgage is due in May 2016. Refinancing my rental property will also contribute to paying of the principal mortgage, but for me mentally it is going to be a giant win regardless. We will continue to double up payments on both our principal and rental mortgage. I can honestly say that being part of this group has given me the push to chase my financial dreams. I’m forever indebted to MDJ for the opportunity
For what it’s worth, the biggest thing I have learned so far is that everyone has different goals and opinions (which at first took me by surprise how vocal people are in the comments section. lol). But if you don’t have an emotional attachment to your goal you won’t pursue it. I received a lot of heat for wanting to pay off my principle mortgage before going gangbusters into saving and investing. But that’s what I want and as soon as I accepted that, it made this a lot easier for me. Everyday I think about how I’m going to feel when I wake up for the first time and my home is completely paid and right now it’s my main financial goal.
Notable Changes Since the Last Update:
- Paid Off Audi ($13,000);
- Increased Savings;
- Doubled up mortgage payments;
- We have a couple development properties tied up pending due diligence; and,
- Still haven’t set up wife TFSA.
Before the next update, I need to setup my wife’s TFSA and max mine out with the new increase.
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: $ 888,776 (+3.85%)
- Cash: $4,359 (-73.74%)
- Registered/Retirement Investment Accounts (RRSP):$6,400 (-1.36%)
- TFSA: $11,000 (-16.85%)
- Business Account : $114,517 (+39.65%)
- Real Estate Deposits : $22,500 (+200.00%)
- Rental Property 1: $230,000 (purchased in 2009 for $167,000 price adjusted for average selling price annually) (+0.00%)
- Principal Residence: $500,000 (purchased in 2012 for $350,000 price adjusted for average selling price annually) (+0.00% )
Liabilities: $387,281 (+2.36%)
- Principal Residence Mortgage: $240,311.15 (-2.77%)
- Rental Property 1 Mortgage: $132,552 (-0.6%)
- Rental Property Line Of Credit: $20,000 (new)
- Principle Residence Line Of Credit: $800 (-82.9%)
- MasterCard: $1,800
Total Net Worth: ~$501,495 (+4.94%)
- 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.