July 2009 Net Worth Update (+1.75%): Big Home Expenses
Welcome to the Million Dollar Journey July 2009 Net Worth Update – The Home Expenses Edition
Houses are expensive! With summer in full force, I have been diving into the “honey do list.” Thus far, we have installed a fence and organized the garage. Other items on the list include creating a front garden for curb appeal, building a shed, and developing the basement. They probably won’t all be done this year, but I’m hoping to take advantage of the home renovation tax credit as much as possible. With the work done so far, and mid year property taxes due, our savings have taken a hit.
With regards to our portfolios, they have been performing well thus far in the year. I’m actually surprised that we haven’t seen a larger correction, but I’ll take it! If we do get another correction, I will be waiting to buy more equities.
Assets: $452,500.00 (+1.04%)
- Cash: $4,500 (+0.00%)
- Savings: $10,000.00 (-9.09%)
- Registered/Retirement Investment Account: $67,000 (+3.08%)
- Pension: $22,500 (+0.67%)
- Non-Registered Investment Account: $17,000.00 (+6.25%)
- Smith Manoeuvre Investment Account: $48,500 (+5.43%)
- Principal Residence: $275,000 (+0.00%) (purchase price)
- Vehicles: $8,000 (2 vehicles) (0.00%)
Liabilities: $89,900.00 (-1.75%)
- Tax Liability: $3,000 (-0.00%)
- Principal Residence Mortgage (readvanceable): $33,900 (-4.51%)
- HELOC balance: $53,000 (+0.00%)
Total Net Worth: ~$362,600.00 (+1.75%)
- Started 2008 with Net Worth: $309,950.00
- Year to Date Gain/Loss: +16.99%
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 all held with PC Financial. 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. The value of the principal residence remains valued at the purchase price despite significant appreciation in the real estate market that we’re in.
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Hey DAvid, you are right, I should be adjusting my home value. I think it’s a combination of laziness and leaning on the side of caution. However, in the new year, I think I will do some valuation adjustments.
I don’t see why you don’t adjust your home value at some reasonable interval. Here in BC, we get an annual market appraisal as part of the taxation process, so annually in January is a reasonable interval here. My concern with your current practice is it does not accurately reflect your net worth. If values were to drop below your purchase price, it would be folly to be still claiming you home is worth it’s purchase price, so why not include increases?
Additionally, you don’t value your portfolio at the book value, so to make the value of you home comparable, shouldn’t it, too be adjusted?
Probably silly questions as I’m not a regular here but…
1. How does the percentage interest work behind some of your numbers? For instance “Savings: $10,000.00 (-9.09%)” if I understand this correctly, you’re losing money on your savings? I assumed this is your PC Financial Savings account but that doesn’t make sense.
2. why value your home at the original purchase price instead of market value, or the value used to obtain your HELOC?
Hey Bob, feel free to ask away.
1. The savings had a negative b/c I withdrew from the account to pay for expenses.
2. I’d prefer to keep the home value as purchase price as I’d rather not deal with a fluctuating market value. My home is approximately worth 20% more than purchase, but the market around here has been very aggressive and who knows when there will be another correction.
I am curious as to why you have 17K in non registered investments?
Isnt the SM strategy to pay down your mortgage with the investments and reborrow the same amount?
Brendan, I have sold off most of my non-reg investments, but remain to hold onto a few. With the large correction last year, I just couldn’t sell the stocks at such a low price. Come to think though, now may be a good time to unload some of them.
Father of Five: The HRTC just needs royal assent. It’s a rubber stamp. There’s no way it would get cancelled, regardless of an election.
FT: With building a fence, organizing a garage (I think any shelving is valid), landscaping, shed, etc, you might be well on your way to maxing out the HRTC. If not, you can buy commodity stuff (lumber/drywall, electrical) for the basement and just store it there until you’re ready next year, in order to capture the 15% discount.
Yes, I still plan to hold mine for the foreseeable future. My SM portfolio needs some diversification from financials and TCK helps. It’s almost tripled in price from where I bought it and I do believe that they will reinstate a reasonable dividend (around 4.5%) perhaps late 2010 or in 2011.
The only negative is that it represents the biggest percentage position in one equity in all of our investment holdings (RRSP’s, RESP’s, TFSA’s, SM portfolio) because it has risen so quickly.
FT, could you please explain your pension amount? is it CPP how do you know the actual amount?
Also, any chance you could share your income statement sheet / monthly budget with us?
Frugal W, as mentioned before, the pension is my wife’s pension plan. That’s a good idea about the income statement/budget, I will look into it.
cf, unfortunately, I did sell the remainder of my TCK.B shares (100 shares). Do you still hold yours?
That means you still hold Teck, right? Must be one of your best performers in spite of suspending the dividend.
Tember, I sold the property to my tenants as we had a prior agreement to do so.
Kumar, no big changes to my SM portfolio since the last update. I’m still waiting for a pullback! :)