Creating Your Future Net Worth Statement

Having and updating your very own personal net worth statement is one of the most beneficial ways of viewing your current financial status and can be a deciding factor in decisions such as buying a house, car or taking time off work.

While I believe that it is crucial to create a monthly update of your personal net worth, I also think it is equally important  to make your future net worth statement as well.

Here is how it works. After you calculated your current net worth (hopefully it is positive!) Try to think out of the box and create a net worth statement sometime in the future. I usually create one a year from my current statement. Try to come up with realistic numbers of where you are expecting to be financially. The benefits of creating a future net worth statement are numerous and are as follows:

  1. A future net worth statement is highly motivational as it is almost in the same line as goal setting. The more realistic the goals are, the better the chance of you reaching them and accelerate your motivation!
  2. This statement can give you a much more clear picture of where you can expect to be down your road in life and can help you plan more precisely major buying decisions.
  3. Creating a future net worth statement is a great way to teach self control as you strive to achieve your own expectations. A future net worth statement set a year from now is a little easier to meet compared to budgets as you do not feel as “hand-cuffed” on a weekly basis. (Budgeting is still a great way to achieve your goals. Consider a future net worth statement a beginners tutorial in budgeting!)

There are many other advantages that can be branched off from the above mentioned 3 points but the main benefits are there. I am currently in the process of making my own future net worth statement and will be positing it by the end of the month.


Life Expectancy and Our Retirement

A big issue that is gaining a great deal of attention is the life expectancy of an average human being and how it has been slowly increasing in today’s age. With modern health practices, medicine and the latest in technological developments, the average adult life leading towards the ripe old age of 100 is becoming quite possible.

While this is great news, it can be quite worrisome when you throw retirement into the mix. 65 is the age most people aim to retire and many more are planning to retire at 60 and earlier. I for one am aiming to retire somewhere in my early 50’s and hopefully even leave the workforce much sooner if I can get a viable business up and running whatever it may be. One thing I am cautious about is the possibility of living 40+ years without an income from a job. It seems that us future retirees will have to be more strategic in the coming years!

If you, like me, are interested in receiving a calculated estimate on how long you will be alive, I would suggest you visit the Living to 100 life expectancy calculator. The questionnaire takes roughly 10 minutes to complete and it is free.

As our life expectancy continues to increase, I do not want to spend more of my time in the workforce then I have to. I value my time and I am looking forward to becoming financially independent while still being relatively young. I believe that sound investing at an early age is a great way to be prepared for life after work as well as being content with what you already have. Also, take advantage of employee matching to your retirement fund while you are employed as this is free money. Free money is always a good thing! If you consider your self in being far from financially savvy, I would suggest an investment in index funds. Index funds are a low cost alternative in investing and almost always out preform mutual funds. A great article from Financial Self Starter on index funds and can be found here.

While it is a smart idea to prepare living for the long haul and have as much saved as possible to enjoy your life, try not to stress too much about it. Besides, stress decreases our lifespan!

Remaining Debt

After I paid off the remaining balance on my car loan a few weeks ago, I enjoyed the luxury of a greatly reduced debt load and am highly motivated and focused on paying the remaining balance on my line of credit from a major bank and my MasterCard.

I created a chart below detailing the remaining debt that I have to pay off. Luckily, I only have two forms of debt remaining with one of them being a really low balance. I am aiming to be completely debt free in the next 3 months if possible.



As you can see, I owe just a little over $2,000 and I will be using the following method in eliminating the remaining debt:

  • Entirely pay off the remaining balance on my MasterCard and put about $100 towards the balance on my line of credit.
  • Once the credit card debt is eliminated, I will put all free money used to pay off the MasterCard on a monthly basis onto my line of credit.
  • Stop adding money to my high interest savings account (usually around $150/monthy) and add this amount to repaying my line of credit
  • All money remaining from my bi-weekly budget will go to debt repayment. This varies all the time depending on what part of the month I am as I tend to  pay more in expenses early in the month and barely any during the second half.

Once I receive some extra money from my budget or by any other means, I usually transfer the funds from my chequing account to my line of credit on-line. This eliminates any hassle of travelling to pay off debt and tackles the problem as quickly as possible.

If all goes according to plan, I should be debt free by the end of November! Excited is something that barely describes what I am feeling.  It is extremely hard to mimic the feeling you receive of being debt free. I know it has been a long road for me and I must say I am enjoying the journey but am much looking forward to the benefits of reduced stress financially by seeing a big fat 0 on my debt column.

However, with my wedding less than 14 months away and the pursuit of home ownership hopefully not in the too distant future, staying out of debt will be tough. Having a mortgage is debt I am willing to take on but  my fiance and I are trying extremely hard to pay for the wedding in cash rather than credit. Getting into debt for one night (even though its a great one!) is not something we are willing to do.

For the time being, I am going to focus on what I can control, and that is eliminating the last remnants of my debt.