To One Million.... Are We There Yet?

Since I peeked into the future using no appreciation of the real estate, for fun, and for fun only, I thought I would use the CMHC forecast of nationally 6.90% expected price increases for real estate and see what happens.

Again, this is for fun and for fun only.

Using our current Net Worth and Current Asset Value, and using the 6.90% expectation we get the following:

1. Our current assets are valued at $2,229,891. This can be seen here. 6.90% appreciation for 2007 would be $153,862.47 growth. Add this to our current asset value and we get $2,383,753.40.
2. Thus, our current Net Worth of $504,905.30 now becomes $658,767.77 for 2007.
3. But wait! Remember this post? It was figured that we would earn 4.75% by mortgage pay down right? At the end of that post it was determined that we would have $528,911.76, so we need to add this in too. So add $153,862.47 to $528,911.76 and we actually get a true 2007 Net Worth of $682,774.23.

So lets keep going, assuming the 6.90% figure stays constant through 2008 and we reduce our mortgage liabilities by 4.75% again:

1. Our current assets would be valued at $2,383,753.40 in 2008 and at 6.90% growth again it would grow $164,478.98. So by December 31st 2008 our assets would be $2,548,232.30.
2. Thus our Net Worth one year from now of $658,767.77 from 2007 now becomes $823,246.75 in December 31st 2008.
3. But wait! Remember this post? It was figured that we would earn 4.75% by mortgage pay down right & lets use that 4.75% again. So our Net Worth of $658,767.77 times 4.75% is $31,291.47... add that to $823,246.75 for a true Net Worth in December 31st 2008 of $854,538.21.

Lets keep going.... this should be our final one - for 2009:

1. Our current assets are valued at $2,383,753.40 in Dec 2008. 6.90% appreciation for 2009 would be $175,828.02 growth. Add this to our current asset value and we get $2,724,060.30.
2. Thus, the Net Worth of $823,246.75 now becomes $999,074.77 for Dec 31 2009.
3. But wait! Remember this post? It was figured that we would earn 4.75% by mortgage pay down right, so lets use that 4.75% again. Our Net Worth of $823,240.75 times 4.75% is $39,104.22..... add that to $999,074.77 and we get $1,038,178.90 Net Worth.

So our Net Worth in December 31st 2009 should be $1,038,178.90 using the CMHC forecast. But this is just for fun. This is unlikely to happen as we are in the late stages of this real estate cycle and surely the market will downturn, meaning we will have to wait much longer than 2009 to reach our goal. But we are prepared for that as these are all long-term holds.