Welcome to the Million Dollar Journey August 2010 Net Worth Update – RRSP Contribution Edition.

It’s a little past halfway through the year and I finally got my act together and made our RRSP contributions.  I figured since our cash savings was buiding up, we might as well put it to some use.  The bright side is that we’ll get the tax deduction for 2010 tax year, but the other side is that I’ll need to find a place to invest the cash.  In total, we contributed $23,000 in our combined RRSP’s which is pretty close to our contribution limit for the year.

What do you typically do with cash sitting in an investment account?  Do you simply put it in a money market fund?  Or perhaps short term bonds?

I haven’t been doing too much buying lately, with most of the action happening within the RESP acccount.  If you recall, the RESP account is indexed with the TD e-Series set of low cost mutal funds.  As it’s a common theme, it was close to 40% cash, but I managed to transfer some to the various funds during the correction in July.  I’ll be moving more of the cash with every market dip going foward.

In terms of savings, besides the contributions, our cash savings was stronger than usual as we finally collected on some long overdue receivables.

On to the numbers:

Assets: $ 537,350 (+1.02%)

  • Cash: $4,500 (+0.00%)
  • Savings: $35,000.00 (-30.00%)
  • Registered/Retirement Investment Accounts (RRSP): $98,000.00 (+0.26%)
  • Tax Free Savings Accounts (TFSA):  $19,700 (-0.47%)
  • Defined Benefit Pension: $30,800.00 (+1.15%)
  • Non-Registered Investment Accounts: $11,600.00 (-5.69%)
  • Smith Manoeuvre Investment Account: $54,500.00 (-0.91%)
  • Principal Residence: $283,250 (+0.00%) (purchase price adjusted for inflation)

Liabilities$66,400.00 (-2.64%)

  • Principal Residence Mortgage (readvanceable): $11,800.00 (-14.49%)
  • Investment LOC balance: $54,600 (+0.37%)

Total Net Worth: ~$470,950.00(+1.56%)

  • Started 2010 with Net Worth: $399,600.00
  • Year to Date Gain/Loss: +17.86%

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 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.

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 (+inflation) despite significant appreciation in the local real estate market.


The pension amount listed above is the value of both of our defined benefit pension plans.  I basically take the semi annual statement and add the contribution amounts (not including employer matching) on a monthly basis.

Stock Broker Accounts

Another common question is which discount broker do I use?   We actually have accounts with multiple institutions.  I’m hoping to reduce the number of accounts that we hold in the near future.  Here is a review of some of the more popular online stock brokers.

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I’ve followed your blog for quite some time now and like seeing how your NW changes each month (preferably on the + side).

One question: is the NW you post your own or as a couple?

Hey, almost halfway! I hope you’ll continue blogging when you get to 1mil.

Nice work FT, are you on pace to reach your goal by 35? I know there are probably a lot of variables to account for, but are you pleased with your progress so far since you started your MDJ?

The $4,500 min balance seems like an inefficient use of those funds. There are lower min requirements or simply paying for the unlimited fee from the return from the use of the $4,500.

Wow, nice big, fat contribution Frugal! Congrats!

To answer your question – we usually keep our money in cash in our RRSPs when it’s not invested in ETFs or foreign stocks like JNJ or KO.

Although we rarely have more than a few thousand “in there”, awaiting a purchase (not $23,000! :)

You guys are doing great – keep up the monthly reporting.


Long time reader, first question:

I have a fair bit of money in RRSPs and will be making my maximum contribution this year as well, but am wondering what to put the money in for a good ROI for the medium term (3-7 years).

You’ve probably seen their advertising around the web, but I recently got league.ca’s “Blue Book” and I get email communication from them regarding their commercial/residential developments that can be invested in with returns typically a little under 10%.

I’m wondering if you have any experience with such investments and what your opinion is?

It would be interesting to see some form of progress chart. Show your net worth at Day 1 with maybe a straight line or some form of growth driven curve line to your goal of $1m by age 35, and then compare to your results.

Also, another thought – do you project where you hope your net worth will be in short or near terms? We know the overall goal, but what about say, 6, 12, 24 months from now?

Last thought – do you ever write about how faith/ethics is affecting your goal and investments? If you are a Christian or of another religion, how does reaching the $1m goal jive with your faith? And if you are secular, do you have a set of principles guiding your overall objective and investment choices etc? Your blog is getting big, so I might have missed or forgotten articles on these topics if you have already written about them.

I too would be very interested to know what people do with money that is sitting around in their investment accounts. I usually just leave mine in cash until the next time I want to invest in something.

I wish there were high interest savings accounts that you could easily allocate it to, but I guess that would be too easy.

Frugal Trader,

My mistake in not seeing it listed as more then 1 chequing account. I’m just wondering if better options for it. The $35,000 for “something” makes complete sense to me.

Wow! I think by the time 2010 ends, you net worth will have increased $100,000. That’s only one year! I’m trying to catch up, but you’re going to fast lol.

How do you estimate what your 2010 contributions will be under the defined benefit pension plan? The pension adjustment reduces your overall contribution room in 2010.

As usual, great job!

Since i look at graphs and data all day long, and I plot my own NW over time, I too would be interested to see your progression. I’m sure pivotal things like the babies, the wage increases etc have had a big effect on the rate of wealth accumulation. My observation has been that your savings rate has actually been increasing like wildfire.

Lots of people wanting the returns… nothing wrong with idle cash. We’ve all been scared into thinking inflation will kill all our hard earned savings, but keeping money parked as cash for a year or two or three waiting for opportunity is much better than getting that extra 1-3% return if the cash is invested now in a guaranteed return vehicle.

Have to chime in on the “hoarding cash” topic… I’m sitting on close to 200k cash and it is a combination of fear and a lack of investment knowledge that prevents me from doing more with the funds. Although recently, I’m looking at Canadian bank preferred shares as a way to get a good return with what looks like to be not a tremendous amount of risk… must research this more.

On a side note, I crossed the 1m networth mark in April of this year, and as of the end of September, I’ll be over 1.1m. LBYM works.

Another great post.

Is there a reason you do not include your families RESP account in your net worth? Is this standard practice?

Connected with my earlier comment – since it is sunny outside and I am a bored tax accountant sitting in my office inside, I figured I would calculate where you should be right now in terms of net worth assuming a constant savings and growth rate, in order to get you to $1million dollars by age 35.

Problem one is I can’t find your precise age, but noted that you got your degree at age 23 in 2003, and were 27 by mid-December 2006, and another article indicates you will be 35 sometime around mid 2014. You also note you were born in 1979. So I guess you were around 27 1/2 when you started the blog, give or take a few months.

Looks like you started at $198,500 in December 2006. And I assume (per age guessing above) you will reach $1m by the end of September 2014. That works out to a constant annual increase rate of 21%, compounding monthly. And suggests you should be at around $427,000 right now. You reported in at $470,000, so it looks like you are ahead.

In any event you are far ahead of me since I turn 35 next month and my personal net worth starts with a minus sign (especially since I exclude the value of my house since I never plan to sell and I include the mortgage since the bank will most assuredly want their money).

Like I said I was bored. I enjoy your blog.

I usually don’t keep any cash in my RRSP Trading account. I use Tactical Asset Allocation, so the moment I get around $1500 in cash I buy a stock that’s fallen in %age according to my allocation% due to it’s performance or due to me dollar-cost-averaging. I don’t buy the stocks in bulk, so whenever I have extra cash due to dividends or new contribution it goes into buying some stock or bond etf once it reaches that amount.

In the RRSP non-trading account, it just sits in cash in an ING account but that’s mainly because I plan to take it out in the near future for either my LLP or my spouse’s should either of us decide to go back to college to get an MBA or some other degree. If that doesn’t happen or the plans are dropped, then most probably that excess cash will probably either end up being redirected to the RRSP trading account to be tactically re-distributed over time (based on good USD/CAD conversion rate – as all our RRSP trading accounts are in USD in Questrade). I wait for good coversion rates to transfer money from CAD to USD into my RRSP trading account, and usually just keep it in cash till the USDCAD rates are bad (stock market has crashed, and it’s time to load up on good dividend stocks or when the excess cash turns to >$1500 so it’s time to buy).

All our cash in our TFSA accounts are still in cash. Treating them as true emergency accounts so not investing in anything except for keeping them in ING. Once they swell to a point that they are more than what we need in an emergency will open a TFSA trading account with Questrade so that can load up on Canadian Dividend stocks like XDV, CDZ, XRE, and XSB and XRB. (also possibly CBO).

Very impressive numbers even in a down economy. Ive been following your site for some number of months and its cool to see an increase in net worth. I believe once you hit a specific threshold you can easily increase your net worth by investing wisely. Great job!

Just curious about what your strategy is if inflation gets out of control. I can’t imagine having tens of thousands sitting in high interest savings accounts will be a good plan. The obvious thing, I suppose, is to buy some silver and gold. We seem to be at a turning point in history, financially, in my opinion. The US has printed unprecedented amounts of money, plus there are trillions in unfunded liablities, which realistically cannot be paid back. And because Canada is tied economically to the US, couldn’t we easily be on the cusp of unprecedented inflation? If that is the case, then a net worth of $1 million will have absolutely no meaning. Remember, everyone in Zimbabwe were multitrillionaires before the currency collapsed. What do you think?

Wow, this is very impressive, even if you are posting your net worth as a couple. You are definitely zooming along on your way to 1mil by 35.

May I ask what your % that you save per month is of your gross monthly income?

: I read through all the Smith Maneuver articles and I was wondering if it’s possible to do that investment strategy using TD E-Series index funds or an ETF that tracks an index. Or is the tax benefits of dividend investing too advantageous to ignore?


I love following various bloggers net worth updates… I’m 38 and hit 1m in net worth this past April and am now just about at 1.1m. Don’t know what I expected, but my life has remained remarkably unchanged by acheiving millionaire status. I think the magic moment will arrive when my investments are able to generate close to what I make in current salary… then I will retire… age 45 at the very latest…

Living below your means is the best way to get ahead, bar none….

Regarding sitting on a large amount of cash for retirement, Moneysense did an analysis recently on a couple that had alot of cash and were almost paralyzed when it came to spending it. It seems the savings habit gets hard to break once you retire. I am sure they have info on their website about this couple.

I am blown away by your net worth. I am curious, how much of your networth is from forced savings/ increases in salary vs. actual investment profit?

Hey how are ya?, was wondering what happened with you rental property ? did you sell ? why ? im interested in getting a rental property and just was curious what motivated you to sell, what kind of challenges you had and so on, would be a good article to write about or if out there , please send me the link, would be appreciated.


Just want to clarify Frugal .. u mentioned u save roughly 50% of gross income each month. I am jst blown away. are u sure u meant 50% of gross and not net.

i am guessing u are in the highest tax bracket (or maybe a notch down) .. so u are getting upto 40% – 50% of ur gross taxed. ie inhand u get 60% of gross .. of which u save 50%.

so u basically spend just 10% of the gross monthly??? that doesn’t make sense! can u clarify? if this is true .. this is phenomenal!