Welcome to the very first net worth update of 2009!

The most notable update this past month was that I took a portion of our savings ($20k) and put a lump sum payment on our mortgage.  I’m hoping to do this again later in the year to meet one of my financial goals.  However, the priority is to maximize my RRSP and TFSA before paying down the mortgage any further as my mortgage rate is currently very low (2.15%).  Why not take advantage of cheap money while it’s offered?

My portfolio’s recovered a bit (for now) which helped in the net worth increase this month.  However, the bulk of the net worth gain is again due to savings (here are some ways to save money).

I mentioned last year that I may adjust my home value with inflation.  For now, however, I’m going to keep it at my purchase price.  Although comps in the area would bring the house value well above my purchase price, I’m not sure if the local housing market will be negatively affected by the weakened global economy.  Personally, I’d rather under value my personal residence than adjust monthly based on volatile market conditions.

Here are the assets/liabilities results for the month of January 2009 (compared to December 2008):

Assets: $563,950.00 (-2.00%)

  • Cash: $4,500 (+0.00%)
  • Savings: $31,900.00 (-29.77%)
  • Registered/Retirement Investment Account: $39,700.00 (+5.31%)
  • Pension: $22,350 (+0.00%)
  • Non-Registered Investment Account: $13,000.00 (+4.00%)
  • Smith Manoeuvre Investment Account: $41,000 (+1.23%)
  • Investment Property: $ 124,500 (+0.00%)
  • Principal Residence: $275,000 (+0.00%) (purchase price)
  • Vehicles: $12,000 (2 vehicles) (-7.63%)

Liabilities: $244,900.00 (-7.77%)

  • Investment Property Mortgage: $92,000 (-0.11%)
  • Principal Residence Mortgage (readvanceable): $101,200 (-16.98%)
  • HELOC balance: $51,700 (+0.35%)

Total Net Worth: ~$319,050.00 (+2.94%)

Started 2008 with Net Worth: $309,950.00

Year to Date Gain/Loss: +2.94%

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.


  1. Four Pillars on February 2, 2009 at 10:24 am

    It looks like your leveraged investing account is making a comeback! :)

    Tax question for FT or anyone – if you borrow money for investment purposes then you can deduct the interest from your income.

    My question is – when you fill out your tax form what do you use for the total interest amount?

    1) Add up the interest accrued during that year?
    2) Use the interest paid? In my case the monthly payment periods don’t seem to match calender months.
    3) Do what you want – but keep it consistent each year?

  2. FrugalTrader on February 2, 2009 at 10:41 am

    FP, that’s a question that I will take up with my accountant. To me though, it would make sense to claim the interest that you paid during the year.

    Any tax pros out there?

  3. Chuck on February 2, 2009 at 12:02 pm

    My bank charges interest on the LOC on the last business day of the month for my business and personal LOCs.

    My mortgage company calculates interest on my SM account on the 24th of each month. I’ve just been using the interest paid for tax purposes, because its easily verified against the statements, and the timing difference from calculating it isn’t worth the effort

    On a side note, TD decided that they weren’t making enough money on their LOC business with me so they’re increasing the rate on my LOC by 0.5%, despite my credit score not changing. My branch manager overrode it this weekend, after a long drawn out discussion.

    I miss the old Canada Trust, TDs slowly getting worse and worse in the customer service category. I now have to walk in there with spreadsheets showing them just how much money they gross off of me and my business.

  4. nobleea on February 2, 2009 at 12:41 pm

    i’ve always wondered when the best time to put money against your mortgage is. is it when rates are high? or when they’re low? i’ve kind of been thinking when rates are low is better. why? since they’re at historical lows right now. eventually you will have to get another mortgage when your term is up and it will likely be at a higher rate. they base your payments on the rate at signing. so might it be better to try and minimize your principal when rates are low?

  5. DBennett on February 2, 2009 at 12:47 pm

    I think you should include the value of both your properties. Your posted net worth is not really an accurate representation of your actual net worth. Realistically, if you valued your property at the value the city assessed your house, it is quite conservative. Especially considering the recent boom in real estate in St. John’s.

  6. Dividend Growth Investor on February 2, 2009 at 1:48 pm

    I am amazed that your dividend portfolio is up for january despite the fact that most major indexes fell.

  7. Victor on February 2, 2009 at 1:54 pm

    Just curious how you scored such a low mortgage rate. You’re well below even the variable rate right now…

  8. Adam on February 2, 2009 at 2:09 pm

    +1 to the low mortgage rate question. I would love to have a rate that low!

  9. FrugalTrader on February 2, 2009 at 2:11 pm

    Nobleea, that’s an interesting question that may warrant a second look. Personally, it almost pains me to pay down the mortgage when my interest is in the 2% range.

    DBennett, you make a good point! Perhaps I’m more conservative than what most people think! :)

    DGI, it’s luck. :)

    Victor, I locked in my mortgage in late 2007, but closed in 2008. At the time, discounted variable rates were the norm. I happened to get a 3 year open @ P – 0.85%.

  10. DAvid on February 2, 2009 at 4:10 pm

    nobleea asks: “i’ve always wondered when the best time to put money against your mortgage is. is it when rates are high? or when they’re low?”

    Generally the advice is to preferentially pay down your mortgage any time the tax advantaged reduction exceeds the return you might get in the market. Thus if mortgage rates were at about 5%, and you are in the 40% tax bracket, you would have to earn about 8.3% in the market to beat simply paying down the mortgage. (You have to earn about $1660 to pay each $1000 of interest).

    The advantage of holding your mortgage for the longer term is you pay down later portions with cheaper inflation devalued dollars.


  11. Carlos on February 2, 2009 at 8:13 pm

    Despite saving $4K in January my net worth is down for the month. You are very fortunate indeed.

  12. TheFatLossAuthority on February 2, 2009 at 9:23 pm

    30k sitting around in savings?? Outside an RRSP or a TFSA? Is that a misprint? You must be saving up for a substantial purchase, no?

  13. FrugalTrader on February 2, 2009 at 9:46 pm

    FatLossAuthority – I will be maxing out my RRSP contribution room come March along with soon opening up 2 TFSA’s with a discount brokerage.

  14. TheFatLossAuthority on February 3, 2009 at 10:26 am

    ahh… I see, that makes more sense. Thanks for the clarification and congrats on the positive net worth update!

  15. Lakedweller on February 3, 2009 at 4:51 pm

    I saw your blog referenced on Rob Carrick’s personal finaince slide show of “Ten ways to make the most of your money”. Good work! On the Net worth too.

  16. Stock Investing Guru on February 4, 2009 at 1:33 am

    I’m working on thinking about what will generate my passive income. Most likely real estate and stocks/bonds, but maybe buying a business that needs little management.

  17. Jack on February 5, 2009 at 12:28 am

    I’m wondering about your pension amount. I’ve noticed that this number hasn’t changed much, if at all, since the inception of your blog. Is this a defined benefit or defined contribution plan? If it’s a defined contribution, I’m wondering how you have it invested? My defined contribution plan allows me to invest in certain mutual funds which rise and fall with the market. I’m curious why you don’t adjust this amount to its market value?

    A good pension plan can be a great way to have money for retirement and can be an important part of increasing your net worth – especially if it comes with some free money!

  18. FrugalTrader on February 5, 2009 at 8:15 am

    Hey Jack! If you dig back a little into the net worth updates, you’ll notice that I stopped adjusting the pension amount early in 2008. The pension is my wife’s and she is currently on maternity leave.

  19. Julie on February 7, 2009 at 11:47 pm

    Hi FrugalTrader,
    I really enjoy your newsletter even though some items are not relevant to Australia.
    I would like to include your very useful %increase or %decrease in my own net work balance sheet but I am having difficulty getting the formula right in Excel.
    Would you be kind enough to help?

    • FrugalTrader on February 8, 2009 at 8:30 am

      Hey Julie,

      This is the way I calculate my % increase/decrease:
      (Current Networth/last months networth)-1
      (current assets/last months assets) -1

      Basically the current number/previous number -1
      Hope this helps!

  20. Bill on February 8, 2009 at 1:39 pm

    Julie –

    Let’s say that Current Net Worth is in J50 and last month’s net worth is in H50. In another cell, type:

    After entering the formula in the new cell, format it as a percentage with one or two decimal places.


  21. Tejinder on March 12, 2009 at 8:12 pm

    Hi million dollar journey,
    My daughter’s RRSP limit was 1562, she purchase from vancity, but later I come to know that she made only 2000 dollars income. Well her RRSP won’t go waste. As per calculation by put or without putting RRSP she is getting refund of $ 241.00. Well she did mistake or there is still some solution to correct it.

  22. FrugalTrader on March 13, 2009 at 9:29 am

    Tejinder, how is she getting a tax refund on her contribution if she only made $2k in annual income?

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