Welcome to the Million Dollar Journey February 2010 Net Worth Update.
There was a small market correction in late January/early February but the market is still as resilient as ever bouncing back above the 50 day moving average. As a result, my portfolio numbers remained status quo.
The biggest financial move this month was that I finally opened a TFSA for myself. Late last year, I opened a TFSA for my wife but never got around to opening one under my name. However, I put some extra cash that I had and opened a new trading account. Now all I need is to sit down and determine what to invest in as my accounts are in 100% cash. Ideally, I’d like to purchase income producing REITs, but they seem a bit frothy at the moment. Hopefully we’ll get both accounts maximized by the end of the year.
As some of you know, I plan to pay off the mortgage by the end of 2010,or at least close to it. If you take a peek at the numbers below, you’ll notice that my savings amount is greater than my mortgage balance. The question you’re probably asking is why not take the savings and pay it all off? The reason is I’d like to ride the low interest environment a bit longer as my current mortgage rate is P – 0.75%. Our scheduled bi-weekly payments, which are topped up, should bring the balance down to almost zero on its own by the end of the year. After I file my taxes and sort out taxes owning (calculated behind the scenes), I will use the savings to max out the TFSA’s.
On to the numbers:
Assets: $ 503,050 (+0.99%)
- Cash: $4,500 (+0.00%)
- Savings: $31,500.00 (+6.78%)
- Registered/Retirement Investment Accounts (RRSP): $76,300.00 (+0.00%)
- Tax Free Savings Accounts (TFSA): $8,000 (+60.00%)
- Defined Benefit Pension: $28,300.00 (+0.54%)
- Non-Registered Investment Accounts: $15,200.00 (+0.00%)
- Smith Manoeuvre Investment Account: $54,000.00 (+0.56%)
- Principal Residence: $283,250 (+0.00%) (purchase price adjusted for inflation)
- Vehicles: $2,000 (2 vehicles) (-20.00%)
Liabilities: $78,800.00 (-1.87%)
- Tax Liability: $3,000 (-0.00%)
- Principal Residence Mortgage (readvanceable): $22,100.00 (-6.75%)
- HELOC balance: $53,700 (+0.19%)
Total Net Worth: ~$424,250.00(+1.54%)
- Started 2010 with Net Worth: $399,600.00
- Year to Date Gain/Loss: +6.17%
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 my wife’s defined benefit pension. I basically take the semi annual statement and add the contribution amounts on a monthly basis.