How Do We Stand<\/b><\/h2>\n
As noted in our post with our updated FIRE goals\/numbers<\/a>, we are aiming to get to the ~$1.26M mark as our FatFIRE goal. We were only $6,524 away in Q1 2022 and we\u2019ve now seen the markets sliding down down down in 2022 so now we are nowhere as close. Let see how we compare with our goal.<\/p>\n As of early January 2023, our current liquid portfolio is sitting at:<\/p>\n $1,201,779<\/p>\n Not terribly far away but with giving up our steady paycheque and no longer receiving EI from parental leave it\u2019s unlikely we will get to that $1.26M number, which is ok! We shall see what the stock markets do this year, who knows we may see it get up there at some point in 2023 – here’s hoping!<\/p>\n For those who use the 4% rule, this portfolio size would equate to an annual withdrawal of $48,071.<\/p>\n While we did deplete some of our cash cushion during Q4, the shift of USD to CAD for some of the cash offset our net spending so we are still sitting at ~$118,000 in cash on hand so we are slightly cash heavy. <\/p>\n Note we are not considering any CCB coming in or coaching clients or any other one off income that may come our way that will likely lower the amount of cash we actually need on hand. We like to play it safeeeee.<\/p>\n Starting in 2023, any taxable income\/dividends we receive from our taxable account we plan to withdraw, rather than drip right back into the non-registered accounts. \ufffc<\/p>\n We also will have interest income to report over the next 3 years from our GIC mortgage payoff plan<\/a> (taxed like ordinary income). <\/p>\n We will also withdraw from a mix of our RRSPs\/taxable accounts first up to the federal basic amount which is currently at $15,000\/person for 2023 (accounting for any dividends, earned income, etc).<\/p>\n So the math looks like this for both Nic and I:<\/p>\n Federal Basic Amount \u2013 Income\/Dividends from Taxable Accounts \u2013 GIC\/HISA interest = Amount to Withdraw from RRSP\/Taxable Accounts<\/p>\n So we each will be “earning” the Federal Basic Amount for the year ($15,000 each for 2023) as well as CCB (~$7,500 for 2023). Alberta also recently launched its Alberta Affordability Action Plan<\/a> which will provide us with another $1,200 in tax free income. Then of course there’s the cash cushion on hand too.<\/p>\n Each year we will see what the equation looks like and decide how much to pull from our RRSPs vs taxable accounts to get our total cash to the federal basic amount for both of us each year. Some years we may end up withdrawing more than that which is fine too. But in reality, the capital gains from our taxable account are only taxed on 50% of the earnings so it should be quite easy to withdraw the federal basic amounts + have CCB coming in and living on a very healthy income for the year (for our standards at least).<\/p>\n Stocks\/Bonds\/Cash Allocation:<\/p>\n I actually really like this set up. Slowly the bond and cash percentage will go down and our plan is to glide back to ~90% equites over time.<\/p>\n We\u2019re currently sitting at a 58\/42 USD\/CAD split. With the USD\/CAD exchange rate sitting at 1.36 our liquid portfolio fully converted into CAD is $1,443,902.<\/p>\n Let\u2019s see what this means when it comes time to withdraw.<\/p>\n I like looking at a few different scenarios as we can cut down our spending if need-be in hard times (market tanks \u2013 hello 2022!). I also like looking at what our withdrawal rate looks like with Canada Child Benefit (CCB) factored in since it is such a juicy benefit that we will be receiving for the first ~15 years. We do NOT rely on any external support in our FIRE figures (CCB, CPP\/SS, OAS) and view them as icing on the cake or to account for any future unexpected medical expenses we may encounter in old age.<\/p>\n Even with all the market craziness of 2022, it\u2019s pretty awesome to see that the only scenarios where we are currently over the \u201c4% rule\u201d is if we spend $50k+\/year and not have the USD\/CAD conversion in place and also assume $0 in CCB. Similarly at the $60k\/year mark we are over if we do not include CCB but include the currency conversion. It is highly unlikely we will spend $50,000+ every year and<\/b> have the USD\/CAD sit right at par and<\/b> somehow see CCB dramatically altered\/removed in the near future.<\/p>\n As tallied up in our Q2 life and spending report, we spent ~$39k this year so I\u2019m still loving what we see in this chart despite all the recent market craziness!<\/p>\n Total Assets:<\/p>\n *Our house could sell for ~$500,000 in today\u2019s market but we like to keep this value close to our purchase price as we do not know the true value until we actually sell in the future.<\/p>\n Total Liabilities:<\/p>\n Net Worth:<\/p>\n $1,829,279 \u2013 $246,542 = $1,582,737<\/p>\n Total: $1,582,737<\/b><\/p>\n There we have it! Comparing this to last quarter<\/a>, we were sitting at $1,545,748 so we are up $36,989 or 2.39%. Really not much change for a few quarters in a row now. I am hopeful that we see a rebound in these markets soon, but who knows what the future holds! Comparing this figure to this time last year<\/a>, our net worth was $1,629,862 so we are down $47,1255 or 2.97% in a 12 month period. Our numbers aren’t as scary as many peoples year-over-year figures when looking at December 31 2022 vs December 31 2021 as I had my final bonus payout in 2022 and we also sold our townhouse in 2022 for more than we were estimating which helped cushion the blow to our stock performance.<\/p>\n Since taking time off at work in June 2021<\/a>, our net worth was sitting at 1,524,413 so we\u2019ve seen our net worth grow by $58,324. This is still just wild to me. It will be interesting to track this number over time.<\/p>\n During Q1 2023 we will shift $6,500 into Nic’s TFSA and $2,500 into each of the kiddos RESPs.<\/p>\n Even though I understand the magic of compound interest<\/a>, it continues to amaze me. I\u2019m curious to see what the market does this upcoming quarter.<\/p>\n Those following along know we have a few other items in our portfolio that we like to hide behind the scenes as our true emergency fund such as my Health Savings Account (HSA), my pension from my previous employer, Nic\u2019s small 401k from her former employer, our children\u2019s RESP, and any CCB\/CPP\/SS\/OAS potentially coming our way in the future. So for the sake of this exercise we are not including them.<\/p>\n The key to all of this is to stay flexible. If we see the markets tanking during the early years we have no problem tightening the spending belt and taking some staycations vs longer vacations. We also have no problem picking up some fun part time gig for 15 hours a week to add some extra padding. We are humans, not robots, and are capable of adjusting plans if need be.<\/p>\n Voila! Stay tuned to see how our net worth has changed in 3 months when we check back in on this. Stay weird and wealthy muchachos!<\/p>\n If you liked this article and want more content like this, please support this blog by sharing it. Not only does it help spread the FIRE, but it lets me know what content you find beneficial. Writing is NOT my strong suit and it honestly takes me hours to write each post so the more encouragement the better! Engaging in the comments below keeps me motivated. You can also support this blog by subscribing to receive emails anytime a new post is published. Thank you FImily!<\/p>\n We believe in stacking up life hacks to keep your enjoyment levels to the max without depleting your bank account. Here are some ways to further educate yourself and save thousands of dollars over your lifetime by making some simple adjustments:<\/p>\n Hey everyone! Last post we tackled the life and spending side of things and this week we\u2019re back with a net worth update. How Do …<\/p>\nChanges This Quarter<\/h2>\n
\n
\n
Portfolio Details<\/h2>\n
\n
Withdrawal Rates<\/b><\/h2>\n
![\"\"](\"https:\/\/i0.wp.com\/modernfimily.com\/wp-content\/uploads\/2023\/01\/Screen-Shot-2023-01-08-at-9.18.38-PM.png?resize=300%2C161&ssl=1\")
<\/p>\nPutting It All Together<\/b><\/h2>\n
\n
\n
Support This Blog<\/b><\/h2>\n
\n