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 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). 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.

Real Estate

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.


  1. Balance Junkie on April 29, 2010 at 10:15 am

    Congratulations on your new position and your savings boost! Two defined benefit pension plans? Lucky you!

  2. Tyrone Matheson on April 29, 2010 at 2:23 pm

    Very curious to know why the multiple brokerage firms? As a former financial planner and now a financial coach I tell my clients that’s it’s all about making life easier, but being smart about it. Are there accounts that would be better managed at a bank where you would pay no fees, unless your brokerage firms are not charging you a yearly admin fee (highly doubt)?

    On an aside, great job on increasing your net worth. I love the fact that you practice what you preach and lay it all out on the line for others to see.

  3. The Reverend on April 29, 2010 at 2:31 pm

    Congratulations on another great month and the new job.

    Your comment about paying yourself a salary to create RRSP room is an interesting one. I’m sure there are a ton of factors to be considered (do you have to pay employer portion of CPP? what are the implications of the reduction in corproate earnings due to paying yourself a salary? are there other mechanisms like an individual pension plan that might be more effective than an RRSP?)

    Might make a good blog post (or series).

  4. FrugalTrader on April 29, 2010 at 2:45 pm

    Thanks for the kind feedback!

    Balance Junkie – The DBP doesn’t actually start the employer matching until 5 years of employment. I haven’t lasted at a job for more than 5 years yet, so we’ll see what happens. :)

    Reverend – Since I have a full time job, my CPP/EI will be paid in full. The salary from the corp which requres CPP payment as well will be an overpayment, thus I’ll get a refund. Effective ways to draw money out of a corporation is worthy of an entire book!

  5. DAvid on April 29, 2010 at 5:34 pm

    Congrats on the new job!


  6. Greg on April 29, 2010 at 7:03 pm

    Why not use the your yearly property tax valuation for your property value? Every year the government sends me one that the city uses to determine how much property tax I’ll have to pay. Their assessments are usually conservative. I assume it’s the same all over Canada.

  7. This is why I opened an ING account on April 29, 2010 at 7:23 pm

    do you like your new job?

  8. Alex on April 29, 2010 at 11:56 pm

    Hi, I am a bit unclear on the pension related posts…

    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.“

    I don’t really understand how you come up with the numbers… If it is a defined benefit pention plan the only “value” it has is the “commuted value” which changes every month due to your age, service and interest rates… Employee/Employer matching has nothing to do with this (almost nothing) – hence the name “defined benefit”.

    “The DBP doesn’t actually start the employer matching until 5 years of employment. I haven’t lasted at a job for more than 5 years yet, so we’ll see what happens. :)“ again I`m not very clear as in DB pension there is no `matching` concept…

    Could you please clarify?

  9. Money Green Life on April 30, 2010 at 1:57 am

    Question – I see bloggers posting their net worth all the time and I get confused each time I see them. I personally calculate my own net worth every month (i don’t post them on my blog), but I don’t account for the value of my depreciating car, or even home mortgage loans. I only consider my immediate debt, such as credit cards and student loans and immediate cash available in savings and checking account, also stocks, but not 401k. Should I reconsider this and account for everything like everyone else to get an accurate sense of my total net worth? Thanks.

  10. Chris on April 30, 2010 at 2:23 am

    What is your TFSA invested in (does anyone remember it posted before)?


  11. FrugalTrader on April 30, 2010 at 9:08 am

    Greg, that’s a good idea, i’ll see what the tax valuation is for next year. I know that this years was pretty close to my valuation.

    Alex, yes, the way that our DBP works is that the employee contributes a fixed amount to the DBP, the employer contributes a fixed amount (after 5 yrs of service). After that, the benefits during retirement are set at a certain percentage of wages as an average of the last 5 years of service.

    There is a “value” to the DBP, which we determine by the statements that we receive. Basically, it’s the amount you would receive in lump sum (if you choose), should we leave the organization. As we only get the statements semi-annually, we simply add our contributions to the plan.

    Chris, my TFSA is mostly cash, some fixed income, and a couple equities that I’m playing with. Ideally, I’d like to put some REITs in the TFSA, but I’m waiting until they become priced more attractively.

  12. Alex on April 30, 2010 at 10:53 am

    FrugalTrader – do you live in Ontario?

  13. FrugalTrader on April 30, 2010 at 10:53 am

    Alex, nope, i’m an east coaster – NL to be exact.

  14. Tyrone Matheson on April 30, 2010 at 1:00 pm

    I would like to advertise on your site, haven’t heard back from you. Please visit my site to contact me (don’t want spam).


  15. Canadian Dream on April 30, 2010 at 2:05 pm

    Cool, new job. How are you liking it so far? DB plan so I’m guessing some level of government or perhaps a Crown corp. Anyways it great to hear you took the leap to something new. Growth is money is good, but growth in yourself is better.


  16. FrugalTrader on April 30, 2010 at 3:37 pm

    Hey Tim! New job has been great so far, learning new things,busy and the people are easy to get along with. I agree, personal growth was a big factor in trying something new.

  17. Aury (Thunderdrake) on May 4, 2010 at 9:19 pm

    Interesting that you’re laying out whole nine yards in your accounting assets. A very fantastic breakdown of your assets and liabilities.

    Nice to see how much you got the real estate paid off as well. Definitely showing some strength in your net worth.

    If I had to shoot for a million dollar goal like that, chances are I’d be balancing my paper assets with typical liabilities. But I ought to study accounting again, if I plan on getting more serious with this sort of thing.

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