Welcome to the Million Dollar Journey April 2010 Net Worth Update – The New Beginnings Edition
For those of you following my net worth updates, you may have noticed that the bulk of the net worth increase is due to savings. The savings have been higher than normal as of late due to higher household professional and business income.
What does this have to do with “new beginnings?” Well, I managed to conjure up enough courage to leave my technical job for a position that’s more in alignment with who I am. The new position requires both financial and technical skill sets and has been a great experience thus far. Perhaps more relevant to these updates, the new position increases our household income which leads to increased savings. As I’ve written about before, one way to further build your wealth is to bank your raises.
In addition to the increased income, the new position comes with a defined benefit pension plan. Being on a pension plan is new to me as I’m accustomed to contributing to an RRSP. With the DBP, the pension adjustment will severely reduce my RRSP contribution limit. For tax planning purposes, I may top up my professional salary with a salary from my corporation thus giving me RRSP contribution room for the following year.
Lets talk a bit about the numbers below. Again this month, you’ll see a large gain in the TFSA, this is due to a $5,000 contribution. We’re aiming to have both our TFSA’s ($20k worth) maxed out by the end of the year. Other than the significant boost to the TFSA, the other investment accounts have leveled off their gains. As well, I have decided to write the vehicles off the balance sheet.
On to the numbers:
Assets: $ 514,470 (+0.84%)
- Cash: $4,500 (+0.00%)
- Savings: $34,900.00 (-1.69%)
- Registered/Retirement Investment Accounts (RRSP): $77,400.00 (+0.91%)
- Tax Free Savings Accounts (TFSA): $14,970 (+50.00%)
- Defined Benefit Pension: $28,950.00 (+1.76%)
- Non-Registered Investment Accounts: $13,800.00 (-3.50%)
- Smith Manoeuvre Investment Account: $56,700.00 (+1.25%)
- Principal Residence: $283,250 (+0.00%) (purchase price adjusted for inflation)
- Vehicles: $0 (2 vehicles) (-100.00%)
Liabilities: $75,800.00 (-1.94%)
- Tax Liability: $3,000 (-0.00%)
- Principal Residence Mortgage (readvanceable): $18,900.00 (-7.80%)
- HELOC balance: $53,900 (+0.19%)
Total Net Worth: ~$438,670.00(+1.34%)
- Started 2010 with Net Worth: $399,600.00
- Year to Date Gain/Loss: +9.78%
Some quick notes and explanations to net worth questions I get often:
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). 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 can prove useful.
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.
Our real estate holdings consist of a primary residence 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.
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.