Net Worth Update March 2011 (+1.55%)

Welcome to the Million Dollar Journey March 2011 Net Worth Update. For those of you new to Million Dollar Journey, a monthly net worth update is typically posted near the end of the month (or beginning of the next) to track the progress of my journey to one million in net worth.  If you would like to follow my journey, you can get my updates sent directly to your email.

Last month, a regular reader noticed an inconsistency with my HELOC/Investment loan balance.  The reason for this is that I’ve simply been increasing the account balance to by a few hundred dollars a month (for the capitalized interest) and not using the actual numbers.  The result was that I overstated my debt by a small margin but I’ve corrected it for this update.  If you take a look though, the significant increase is due to a recent transfer of $10k to my Smith Manoeuvre trading account.  The reason for the transfer is that the trading account is running low on cash due to adding new dividend positions to the portfolio.

In addition to adding new positions to my leveraged investment portfolio, I’ve also found some good use of some of the cash sitting in the RRSP account.  The combination of a strong Canadian Dollar with a few large U.S dividend stocks being offered at near 52 week lows is enough to convince me to deploy some of that stagnant capital.

Other than that, there’s not a lot to report other than being grateful for another consistent month of growth.  A combination of portfolio growth along with savings increases are the drivers of net worth growth these days as paying off debt will no longer make a difference (I plan on keeping the investment loan for a while).

On to the numbers:

Assets: $ 605,448.00 (+2.94%)

• Cash: $4,500 (+0.00%)
• Savings: $55,000 (+7.84%)
• Registered/Retirement Investment Accounts (RRSP): $109,400(+1.30%)
• Tax Free Savings Accounts (TFSA):  $26,900 (+1.13%)
• Defined Benefit Pension: $33,600 (+1.20%)
• Non-Registered Investment Accounts: $11,800 (+1.72%)
• Smith Manoeuvre Investment Account: $72,500 (+17.89%)
• Principal Residence: $291,748 (+0.00%) (purchase price adjusted for inflation)

Liabilities: $65,000 (+16.18%)

• Principal Residence Mortgage (readvanceable): $0 (0.00%) (Paid off in 2010!)
• Investment LOC balance: $65,000 (+16.18%)

Total Net Worth: ~$540,448 (+1.55%)

• Started 2011 with Net Worth: $505,800
• Year to Date Gain/Loss: +6.85%

Some quick notes and explanations to net worth questions I get often:

The Cash

The $4,500 cash are held in chequing accounts to meet the minimum balance so that we pay no fees (accounting for regular bill payments – ie. our credit card bill). Yes, we do hold no fee accounts also, but I find value in having an account with a full service bank as the relationship with a banker has proven useful.

Savings

Our savings accounts are held with PC Financial and ING Direct. We usually hold a fair bit of cash in case “something” comes up. The “something” can be anything that requires cash such as an investment opportunity that requires quick cash or maybe an emergency car/home repair.  We also need cash to cover any future tax liabilities.

Real Estate

Our real estate holdings consist of a primary residence and REITs plus a rental property. The value of the principal residence remains valued at the purchase price (+inflation) despite significant appreciation in the local real estate market.

Pension

The pension amount listed above is the value of both of our defined benefit pension plans.  I basically take the semi annual statement and add the contribution amounts (not including employer matching) on a monthly basis.

Stock Broker Accounts

Another common question is which discount broker do I use?   We actually have accounts with multiple institutions.  I’m hoping to reduce the number of accounts that we hold in the near future.  Here is a review of some of the more popular online stock brokers.