Welcome to the recurring monthly net worth updateThe December 2008 edition.

Well it looks like this will be the final net worth update for 2008! With the huge market correction in the 2nd half of 2008, it’s almost a relief that 2008 is over. However, who knows what 2009 will bring as some economists predict that this bear market will last throughout 2009.

With regards to spending, December wasn’t a great month due to purchasing numerous Christmas gifts along with hosting social gatherings. However, higher than expected income covered the extra spending which helped maintain our savings rate.

With regards to our savings, you may notice a large jump in the numbers below. No, we didn’t save $10k this month. Some of the savings increase was due to selling a few loser stock positions for a capital loss and transferring the cash to my savings account. Thus the large drop in non-registered assets. Truth be told, I should have sold off these positions long ago to pay down the mortgage before I began my leveraged investment strategy. Better late than never right?

Even after 3 straight months of portfolio beatings, they are still hemorrhaging profusely. It’s either sit tight, or sell at a large loss. Personally, I can’t bear the thought of selling strong companies like RY or MFC at a loss, so I’m going to hold, keep collecting the dividends and hope for the best.

Here are the assets/liabilities result for the month of December:

Assets: $575,470 (-0.39%)

  • Cash: $4,500 (+0.00%)
  • Savings: $45,420 (+26.17%)
  • Registered/Retirement Investment Account: $37,700 (-8.27%)
  • Pension: $22,350 (+0.00%)
  • Non-Registered Investment Account: $12,500 (-31.69%)
  • Smith Manoeuvre Investment Account: $40,500 (-3.57%)
  • Investment Property: $ 124,500 (+0.00%)
  • Principal Residence: $275,000 (+0.00%) (purchase price)
  • Vehicles: $13,000 (2 vehicles) (-7.14%)

Liabilities: $265,520 (-0.33%)

  • Investment Property Mortgage: $92,100 (-0.22%)
  • Principal Residence Mortgage (readvanceable): $121,900 (-0.65%)
  • HELOC balance: $51,520 (+0.23%)

Total Net Worth: ~$309,950 (-0.45%)

Started 2008 with Net Worth: $279,300

Year to Date Gain/Loss: +10.97%

So there you have it, I’ve achieved a 11% net worth gain for 2008. It’s not quite the 25% net worth growth that I was going for, but who could have predicted the historic market correction of 2008? Needless to say, my portfolios took a major beating this year which may take years to recover. On the bright side though, our savings made up for the difference which we hope can continue in the future.

For those of you wondering about the relatively large cash savings, I plan on making a significant dent in my non tax deductible mortgage in the new year.

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 all held with PC Financial. We 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.

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 despite significant appreciation in the real estate market that we’re in. The rental property value was appraised in 2006. I’m considering raising the reported values of the homes at the rate of inflation starting January 2009.

Happy New Year! Thanks for following my journey this year and I hope to see you around in 2009!


  1. moneygardener on December 31, 2008 at 10:09 am

    11% is better than a kick in the pants in these markets. Good progress in 2008 FT.

    I am going to post my 2008 calendar net worth growth figure soon on the moneygardener even though I only measure net worth bimonthly on the 15th of the month.

    Happy New Year!

  2. David V on December 31, 2008 at 10:09 am

    I always appreciate your honesty in letting other people see your financial status. I’m a bit worried about doing my net worth year end, as I don’t own a house to help level off my net worth.

  3. Rob G on December 31, 2008 at 10:14 am

    Always inspiring!

  4. DAvid on December 31, 2008 at 11:44 am

    Making an 11% gain this year is extraordinary — congratulations! We met some goals this year as well — we are now debt free, and increasing our savings.

    The investment in RRSP was completed on September 30; I can still hear the screams of my portfolio as it leaped from the cliff! At least I get a tax reduction.

    Here’s hopes that 2009 will be the year we convert the low cost stocks to a profitable portfolio!

    Happy New Year!

  5. Mark on December 31, 2008 at 6:12 pm

    Seriously, an 11% net worth gain for 2008?


    I look at the market correction/contraction this year as an excellent buying opportunity for stocks and contributions to RRSPs. Sure, the RRSP account has taken a MAJOR hit…(I’m 80% equities) but the markets always return in time.

    Further, given the low purchase price of some solid CDN Equity Funds and CDN Index Funds, these vehicles are ripe for the picking!!

    Combine RRSP contributions in 2009 with paying-down the mortgage, I too look forward to some net worth gains.

    That said, I would like to learn more about the Smith Manoeuvre.
    How it works, what the benefits are vs. other debt-load strategies.

    Happy New Year!

  6. Dividend Growth Investor on December 31, 2008 at 6:18 pm

    If you really like the strong canadian companies then you should definitely start deploying your available cash to solid dividend payers on a monthly schedule (dollar cost averaging). With interest rates dropping, investing in the stock market for yield is gaining an appeal.

  7. Joe on December 31, 2008 at 7:49 pm

    Do you include the salaries you owned in the year to calculate your 2008 net worth gain of 11%



  8. 17th Avenue Money Talks on December 31, 2008 at 9:03 pm

    A drop of -31.69% for your Non-Registered Investment Account in December?

    Ouch! Some lesson must have been learned, I guess.

    But, overall, it’s been a solid year for you.

  9. FrugalTrader on December 31, 2008 at 10:38 pm

    Thanks for the feedback guys. To answer the questions:

    Joe, net worth is Assets – liabilities. My salary is used to pay expenses with the remaining used for savings (assets). Therefore, salary is implicitly included in the net worth statement.

    17th Ave, in the post, I explained the drop in non-reg portfolio is due to selling stock for a capital loss and transferring the cash into my savings account.

  10. paul s on January 1, 2009 at 10:52 am


    Great job!

    Personally I wouldn’t keep any savings or cash around. It should be deployed reducing debt and related monthly debt service, otherwise there is a significant opportunity cost. If you have an unexpected need for cash, use your HELOC.

    Just MO

  11. Joe on January 1, 2009 at 4:20 pm

    Thanks for reply.

    I was wondering what the return for your investment in 2008 is, excluding your family salary income

    Have a prosperous new year


  12. Kathryn on January 1, 2009 at 6:29 pm

    We also track our Net Worth on the first of every month and keep track of it on google spreadsheets.

    I’m feeling torn as to whether we should include the kids RESPs as a part of our Net Worth as the money is being held for them, rather than for us.

    What do others of you do?

  13. Colin on January 1, 2009 at 9:09 pm


    I include my kids RESP values in my net worth calculation. It is really a savings for a future expense that you are putting money towards now. I believe the only reason “it is in the childs name” is to properly account for the government grant. I believe it should be part of your net worth statement.

    The only question im my mind is if you include the annual grants in your net worth. The grants are taken back if your child does not pursue post-secondary education. So one might argue that you should not include this portion in your net wrth because it is not really yours (until your child attends post-secondary school). To be conservative I do not inculde the grants. All I include are the contrubitions my wife and I have made.

  14. Spudman on January 2, 2009 at 3:38 pm

    You mentioned using cash for the mortgage in 2009, why are you not using the HELOC or this cash to be buying more of your non reg (Smith Man) account assets since many are beaten down below your cost. I know the markets are still very unpredicable, but in 10 years time from now won’t this be a great dollar cost averaging time that some may not see again in the future?
    and the dividends at the current prices of many banks are awesome.
    Cheers, love your posts


  15. FrugalTrader on January 2, 2009 at 3:49 pm

    Kathryn, we do not include the RESP in our net worth. Technically, we could include it, but we feel that it’s money allocated to our child.

    Spudman, the cash will be used to pay down the mortgage further which can then be reborrowed from our HELOC and finally reinvested in my SM portfolio. Check out this post for a better explanation:

  16. Mark on January 3, 2009 at 6:53 pm

    To Paul S. and others,

    I notice a great deal of comments in various posts refer to a home equity line of credit.

    How often do you guys “dip” into this to fund your investments?
    How much do you invest/year? Thousands? Tens of thousands?

    Is it not more advantageous to contribute moderately to investments but instead, pay-off all mortgage or other debts first?

    Since I’m in my mid-30s, I guess I’m looking to understand why reducing all mortage debt and contributions to RRSPs are not the first priority for some of you.

    I am very interested to hear your/all perspectives.

    Thanks and good luck with your investments in 2009!

  17. james on March 1, 2009 at 9:02 am

    I believe you should use current market values (or approximation of them) of your principal residence and investment property. Considering the values of residential properties in North America is currently declining, using purchase price of your property holdings would tend to inflate your net worth, especially since property is a significant part of your assets.


    • FrugalTrader on March 1, 2009 at 9:45 am

      james, while you are correct in that real estate values in North America are declining, our local economy is doing the opposite. Even if we had a fairly significant correction from current markets prices, my purchase price would still be conservative.

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.