It’s the end of month financial checkup! Lets see, where do we start?

On the income front, my wife finally started getting her maternity benefits along with the monthly UCCB payments. Even though the benefits are much less than her regular paycheck, they help take some of the pressure off.

On the expense side of things, we didn’t make any major purchases but made many.. many smaller purchases for the baby. So much so that I am now on a first name basis with the Walmart greeter. … sometimes you want to go where everybody knows your name …

Onto the markets, what is going on with the Canadian market? All time high? Wasn’t it just a couple months ago when we were all predicting doom and gloom with pending recession along with sub prime this and that? Has that all gone away? Seems that investors are confident in the Canadian market place, and it shows with the amount of money pouring into stocks like RIM and Oil & Gas Companies.

One more thing, you may notice a large drop in the mortgage balance. After all the talk in the Manulife One thread, it motivated me to take some of my savings ($15k) and dump it onto my mortgage debt. I don’t know why, but having a lot of cash around gives me a sense of security. Sometimes, however, the “feeling” of security isn’t the most efficient way to use the money.

Enough rambling, here are the numbers:

Assets: $574,450 (-1.13%)

  • Cash: $4,500 (+0.00%)
  • Savings: $26,800 (-27.57%)
  • Registered/Retirement Investment Account: $55,200 (+5.14%)
  • Pension: $ 22,350 (+0.00%)
  • Non-Registered Investment Account: $19,200 (+4.92%)
  • Smith Manoeuvre Investment Account: $25,400 (+0.40%)
  • Investment Property: $ 124,500 (+0.00%)
  • Principle Residence: $275,000 (+0.00%) (purchase price)
  • Vehicles: $15,000 (2 vehicles) (-0.00%)

Liabilities: $263,820 (-5.62%)

  • Investment Property Mortgage: $93,500 (-0.21%)
  • Principle Residence Mortgage (readvanceable): $137,100 (-10.22%)
  • HELOC balance: $25,220 (+0.40%)
  • Other Liabilities: $8,000 (-0.00%)

Total Net Worth: ~$ 304,130 (+3.12%)

Started 2008 with Net Worth: $279,300

Year to Date Gain/Loss: +8.89%

Interested in seeing how my net worth has progressed up to this point? Check out my history of net worth updates.


  1. Cannon_fodder on May 29, 2008 at 8:49 am


    Is it the case that your HELOC and SM Portfolio are completely linked so that there is no portion of your HELOC which is being used for anything other than the SM?

    I know that the SM portfolio is only slightly ahead of the HELOC (and perhaps with commissions thrown in it is a wash) but one also has to keep this in mind – where would I be with a traditional mortgage? Once you submit that form to the CRA and start applying that extra money the momentum will start accelerating your progress.

  2. Telly on May 29, 2008 at 9:31 am

    Wow…huge move! Great job, especially with the Mrs. being on mat leave.

    I like your move to pay off more of the mortgage rather than keeping so much cash but I’m also a gal that keeps very little cash on hand and uses a LOC as an emergency fund! ;)

  3. moneygardener on May 29, 2008 at 9:47 am

    Good move with the $15K, and good progress for the month! You just keep chugging along…

  4. FrugalTrader on May 29, 2008 at 10:00 am

    Thanks guys! Most of the increase was due to the markets moving in the right direction.

    Telly, since you use your LOC as an emergency fund, say you needed to replace your car. I guess you would use the LOC then pay it back as fast as possible?

  5. Dividend Growth Investor on May 29, 2008 at 11:13 am


    I just realized that you have 10% of your assets in fixed income/cash. I hope that your mortgage interest is not too high compared to your savings rate.
    I think that for people in their late 20s early 30s it’s typically best to have as little cash equivalents ( money market, cd’s, deposits, savings) as possible. But that’s just my 2 cents!
    Btw Good job this month!

  6. Blitzkrieg on May 29, 2008 at 12:00 pm

    Nice gains overall for the year so far.

  7. DAvid on May 29, 2008 at 12:12 pm

    Frugal Trader said “After all the talk in the Manulife One thread, it motivated me to take some of my savings ($15k) and dump it onto my mortgage debt.”

    Good to see you put your money where your ‘blog’ is! If you hold it in relatively liquid investments, it is still available as an emergency fund.


    • FrugalTrader on May 29, 2008 at 1:22 pm

      LOL, very true DAvid. It’s a psychological thing where, to me, it feels better to increase assets than to decrease liabilities.

      DGI, yes you are right, I may have too much cash on hand. Who thought that would be a complaint? To answer your mortgage question, I have a great rate of prime (4.75%) – 0.85%. So relatively, the rate is low.

  8. Cannon_fodder on May 29, 2008 at 5:38 pm


    Is it the case that your HELOC is strictly being used for borrowing to invest?

    One thing that may happen (especially if the HELOC interest rate is higher than the investment portfolio’s growth rate – not hard to do with low growth, high yield dividend stocks) is that when the mortgage balance is 0, the portfolio could be smaller than the HELOC.

    One has to keep in mind that without implementing the SM, it is likely that the overall networth would be worse since your mortgage balance at that point in the future would be higher than the difference between the HELOC and the portfolio’s value.

  9. FrugalTrader on May 29, 2008 at 6:59 pm

    Hey CF, yes, the calc shows that in 7 yrs, the mtg will be paid off with the heloc balance greater than the portfolio with conservative growth assumptions.

    Also, the heloc is for investing only. You may have noticed that my portfolio balance is smaller then the total investment account. The reason being is that there is still some cash in the investment account waiting for the right opportunity to be deployed.

  10. DAvid on May 29, 2008 at 9:38 pm

    Frugal Trader said: “LOL, very true DAvid. It’s a psychological thing where, to me, it feels better to increase assets than to decrease liabilities.”

    Yes, but your executor will place assets against liablilties and consume the assets anyway!!!!!!


  11. Patrick on May 30, 2008 at 1:57 am

    Have you noticed that your net worth is essentially equal to the value of your home? In other words, a 1% move in your home’s value translates into a 1% move in your net worth. (Or, if you’re a Garth Turner-style pessimist, a 50% decrease in real estate prices would wipe out half your net worth.) For my own personal taste, the Toronto real estate market is not somewhere I want to be exposed right now.

    • FrugalTrader on May 30, 2008 at 11:41 am

      Patrick, no, didn’t notice that until you mentioned it! Even if housing prices go down, there is a fairly large buffer between what I declare on my net worth statement, and the actual worth of my home. BTW, i’m in Newfoundland. :)

  12. DAvid on May 30, 2008 at 12:36 pm

    Since the value of the home is the largest portion of the net worth statement, Patrick’s comment makes sense, the increases in the other investments will make themselves apparent as they grow in proportion.

    Also since the economy usually moves largely in parallel over short periods of time, a similar rate of increase across most sectors would be expected on a month to month basis.


  13. Chris on May 30, 2008 at 8:23 pm

    Nice job MDJ,
    You are walking the walk while teaching so many how to do it as well. This is one of the better finance blogs on the web and the RSS subscriber increases clearly show that (I am sure traffic increases are even better).

    Keep up the good work – I know how time consuming and rewarding writing a blog can be.

  14. paulette on June 1, 2008 at 2:36 am

    Congratulations to you!

  15. The Financial Blogger on June 1, 2008 at 6:48 pm

    Quick question:
    why don’t you use your savings to pay off your “other liabilities” and then re-borrow the money from your rental property in order to put it down on your new house? interest becomes tax deductible and it doesn’t cost a penny ;-D

    • FrugalTrader on June 1, 2008 at 7:20 pm

      FB, money borrowed that is used for non investment purposes is not tax deductible, even if I refinanced the rental property to do so.

  16. The Financial Blogger on June 2, 2008 at 8:18 am

    It all depends on how you present it ;-) I’m sure there are some renovations to be done on your rental property… oops that’s my accountant friend talking right beside me ;-) lol!

    Seriously, If you want to make it “better”, you could cash in a part of your non leveraged investment and do the same thing. And everything would be 100% right ;-)

  17. Derek on June 22, 2008 at 10:10 am

    Nice job.

    I was wondering why so large a jump in the valuation of your realestate holdings from ’07?


  18. FrugalTrader on June 22, 2008 at 10:29 am

    Hey Derek, valuations haven’t changed, we sold our old house and built a new one. The principle residence value is our purchase price.

  19. DAvid on June 23, 2008 at 12:40 pm

    Also, the value of housing in the St. John’s area has increased about 16% in the past year.

    It’s good to see such confidence in the economy. Danny must be a popular guy in financial and business circles.


  20. FrugalTrader on June 23, 2008 at 12:52 pm

    DAvid, that’s another great point. Even though my house is fairly new, it has increased significantly in value. However, I don’t think i’ll be adding onto the value of the principle residence until the new year.

    Yes, the (oil) economy here is booming. It’s VERY difficult to find a starter home at a reasonable price these days.

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