Q1 2017 update – incremental gains

We have had an incremental increase in our net worth (+$30,000) resulting from a lift in the value of one of our future income properties. Without further ado:

March 2017

  1. We marked up the value of our second presale unit given the increasing heat in the Vancouver condominium market.
  2. Ms. Frugaler had additional room in her RRSP (tax free savings account), and we contributed $40,000 (see decrease in cash).
  3. We used some cash to pay for Ms. Frugaler’s RRSP investment.
  4. Timing, nothing else. We don’t carry credit card balances, outside the MBNA zero % credit cards.

You may recall in my last post I suggested our net worth would reach ~ $2.1 million this year. With $31k in Q1, if we annualized we would be close to that goal; however, I have great news – I think we will beat that goal.

Additionally positive, while I had suggested in prior posts that we might have lost value on our single family home, it turns out I was off. Current appraisals are coming in at ~ what we paid for the land, if not $50k higher. Given that, if we can assume that in design / building we are adding value to the property, it may be that next year when it completes we will be up a couple hundred thousand dollars – excited to see…

Why do I think that? It turns out we may get a much more favorable construction loan than previously anticipated to build our house; thus, while I thought we would need to fund ~ $1 million ourselves, that is looking closer to $500k, which would leave us $500k to invest this year; as such, we ought to expect to generate additional investment income this year. Once I know more what we are intending to invest in, I can share what I think the returns are going to be for the Frugaler family.

At this point, I am continuing to feel blessed and starting to actually consider whether I should give up the ‘rat race’ and pursue life passions / reduced hours. In Q2, I will be running some analysis with my wife to determine what minimum salary I can afford in order to not have to ‘work’ as I do today. As with many financially independent people, retirement would not be “don’t work”; instead, it would be work at something I am passionate about and enjoy. It is to be determined what that would be.

Until Q2,

Mr. Frugaler

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