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 forward.
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 $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 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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