August 2010 Net Worth Update / Debt Update
Although we still want to be debt free by July 2013 we are also going to focus on our net worth. Currently our net worth is $675,244 and our balance in our All In One Account is -$179,900. This represents the debt on our residence. We will not be including the mortgage on our rental property in our debt, but it is included in our net worth.
I still believe most people will be better off by paying off all of their debt before investing, but with our overall goals there are a couple of things that we cannot overlook. Currently I work full time and have my own business part time. When we are debt free I will leave my full time employment and work on my business full time. Unless we are very fortunate my income will drop as I expand my business.
We intend to contribute to my RRSP while my income is high and I am heavily taxed. When my income drops it will present us with an opportunity to withdraw from funds from my RRSP if required. It is off in the future, but if I incorporate my business and do not take any income from it I should be able to withdraw a certain amount from my RRSP tax free. Although this will take some more research and planning I will be pursuing it when I leave my full time employment.
The other opportunity is buying back pensionable time for my spouse. I will be evaluating this in the next couple of months to determine if it is the best course of action for us.
