Welcome to the Million Dollar Journey December 2012 Net Worth Update – The Year End Summary. For those of you new to Million Dollar Journey, a monthly net worth update is typically posted near the end of the month (or beginning of the next) to track the progress of my journey to one million in net worth, hopefully by the time I’m 35 years old (end of 2014).  If you would like to follow my journey, you can get my updates sent directly to your email or you can sign up for the Money Tips Newsletter..

Before I start on the update, I’d like to tie up some loose ends with regards to the 6 year anniversary giveaway.  As promised, the first 20 eligible comments will automatically receive a e-copy of A Beginners Guide to Saving and Investing, with another 30 copies given away randomly.  I will be emailing the winners within the next couple of days.

In addition to the books, I committed to donating $1 for every incremental facebook “like” to Make a Wish foundation which resulted in a $100 donation made yesterday. Finally, what you’ve all been waiting for, the winners of the grand prize ($500 value) where 6 lucky readers will receive a subscription to the highest rated investment newsletters in Canada – The Successful Investor (among others).  Big congratulations to the following winners:

  1. @My Own Advisor
  2. Jason S
  3. Erik
  4. Melissa
  5. karen (comment 181)
  6. Goldberg

Now that we have that business out of the way, lets move onto the final net worth update for the year.  There’s no better way to start than to talk a little bit about the market.  It appears that the Canadian and US markets are diverging a little bit with the TSX taking charge.   The TSX gained 1.07% (via XIU.TO) for the month with the SP500 losing about 1.02% (via XSP.TO), both including dividends.  For 2012, the TSX returned about 5.4% and the SP500 about 12% (both including dividends) which is  a relatively strong year overall.

Despite the negative month for the SP500, my RRSP, which has large US exposure is fortunately still up for the month.  The biggest surprise was with my leveraged dividend portfolio.  The Canadian dividend stocks within that portfolio returned a little over 3% beating the TSX by over 2% for the month.  I made a couple of purchases this month, but I believe that the gains are due to one of my larger positions making 52 week highs.  Overall, the dividend portfolio grew about 11.5% in 2012 which handily beat the TSX (including dividends).

If you take a look at the numbers below, our overall net worth for 2012 grew by about 18% ending the year with about $690k.  With positive market action this year, a portion of these gains came with portfolio growth, however, most of the gain is due to increased income which has lead to increased savings.  As mentioned in previous updates, I funnel extra cash flow into my non-registered account which is reflected below.

Going back to December 2011’s net worth update, I wrote:

This year was also exceptionally busy!  With my full time work picking up, having our second child, working on new web projects while running Million Dollar Journey and Canadian Money Forum, I was stretched pretty thin this year.  Oftentimes writing articles during the week until after midnight (like this post).  I’m hoping that 2012 brings some sanity back to my schedule.

While 2011 was busy, 2012 was likely just as busy or busier.  While still running and growing my sites, the consulting side of the business  really picked up this year, which has driven higher income.  We maintain a relatively low key lifestyle (we may occasionally splurge on some travel), while carrying no bad debt, so incremental income is likely saved or invested (how we save money).

With the goal to reach $1 million in net worth by the age of 35 means I have until the end of 2014 (about 2 years).  With $690k on the books is it possible to gain over $300k in 24 months?  At this point, I’ll need a little over 20% in net worth gains in each of the next two years – the pressure is on!  While it is possible, I would need to be extremely aggressive and likely work even more than I do now (not ideal).  In the New Year, there will likely be some additions to the net worth update as we have assets that are not yet accounted for which should help take some of the pressure off.  Stayed tuned for the January 2013 update to find out more.

For those of you who track your net worth how did you do in 2012?

On a finishing note – Here’s to a Happy, Healthy and Prosperous New Year!

On to the numbers:

Assets: $784,800 (+1.58%)

  • Cash: $4,500 (+0.00%)
  • Savings: $20,000 (+0.00%)
  • Registered/Retirement Investment Accounts (RRSP): $134,000(+1.36%)
  • Tax Free Savings Accounts (TFSA):  $40,800 (-0.24%)
  • Defined Benefit Pension: $41,000 (+0.74%)
  • Non-Registered Investment Accounts: $136,000 (+5.43%)
  • Smith Manoeuvre Investment Account: $108,000 (+3.05%)
  • Principal Residence: $300,500 (+0.00%) (purchase price adjusted for inflation annually)

Liabilities$94,100 (+0.21%)

Total Net Worth: ~$690,400 (+1.75%)

  • Started 2012 with Net Worth: $585,228
  • Year to Date Gain/Loss: +17.97%

In my last update, readers suggested to chart my net worth progress over time.  Below are the net worth values since Dec 2006 with data points taken semi annually.

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 – ie. our credit card bill). 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 has proven 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.

Where Does the Savings Come From?

We don’t live a lavish lifestyle (how we save money) and do not carry any bad debt.  The only debt we have is an investment loan (which pays for itself), so we end up pocketing a majority of our earnings.  Our earnings come from salaries, private business income (via dividends to shareholders), and eligible dividends from publicly traded companies.

Real Estate

Our real estate holdings consist of a primary residence and REITs 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.  The commuted value of the pensions are not included in the statements as they are difficult to estimate.

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.


  1. Jason S on December 31, 2012 at 11:19 am

    Yay, I won something! :) Thanks a lot MDJ and Happy New Year!

  2. My Own Advisor on December 31, 2012 at 12:19 pm


    Thanks for the great giveaway. :)

    HNY to MDJ and all the best in 2013!


  3. Jason B on December 31, 2012 at 12:25 pm

    Hi, I just discovered your website a couple of days ago and wanted to say thanks for all the helpful tips! Have a great new year!

  4. canucktuary on December 31, 2012 at 1:05 pm

    Congrats FT,
    I finished 2012 up 25.6%, but doubt I’ll be able to repeat this level of savings in 2013 as we are expecting our first baby this spring!

    My goal for 2013 will be a more reasonable 17-18% growth.

    Have a happy new year and good luck with your 2014 goal.

  5. Ian on December 31, 2012 at 1:17 pm

    I didn’t go as aggressive as I’d like this year, as I was saving for my first home and a wedding in 2013! With those expenditures out of the way, hopefully 2013 will be a fruitful investing year!

  6. SST on December 31, 2012 at 2:09 pm

    Investable Assets: +9%

    Gold: +8.75%
    Silver: +6.8%
    Farm Land: +10.5%
    Oil Stocks: +8.7%

  7. SST on December 31, 2012 at 2:35 pm

    FT’s 2012 breakdown:

    Investable Assets: $337,980 to $443,300 = +31%

    Liabilities: $81,700 to $94,100 = +15.1%

    “…however, most of the gain is due to increased income…”

    Showing that markets do not make millionaires, it’s the millionaires-in-waiting who do it themselves.

    Would be interesting to extrapolate out your income increases to see the gain of your net worth from rise of price only, without injection of new capital.

    • FrugalTrader on January 1, 2013 at 2:50 pm

      @SST, it’s interesting and I’m coming to the same conclusions as well. For regular people, the markets are for growing savings which will result in greater wealth over time, but the key component is savings.

  8. Canadian Dividend Blogger on December 31, 2012 at 3:13 pm

    Well done – I have seen similar results from my Canadian dividend stock portfolio (10-12% this year). Savings really do drive networth for most people, but I think you will be better positioned to manage your capital, when you do get to $1M in networth, by doing so from the beginning. Once markets close today, I’ll begin calculating the totals for 2012 and they’ll be up on my site within a week.

  9. Tien on December 31, 2012 at 5:46 pm

    Congrats. Great progress!

  10. SST on December 31, 2012 at 7:15 pm

    Talk about counting chickens…

    I’ll add another 1% gain to the year (now 10%) due to today’s gold, silver, and oil action.

    Thanks fiscal cliff! :)

  11. carwel on December 31, 2012 at 7:25 pm

    I always enjoy the net worth updates. Congratulations.

  12. Yuki on December 31, 2012 at 8:23 pm

    I started reading this blog around October and have had fun reading the monthly updates! I started investing in November and with the recent bounce I’m up about 10%! Have a Happy New Year!

  13. Eugene on January 1, 2013 at 5:29 am

    Congrats! I like reading your blog and updates

  14. Bill on January 1, 2013 at 12:25 pm

    My suggestion would be to have less money in cash and savings, you get pretty much 0 gains from those.

    Also, posting an $800 gain after four years of TFSA is pretty low.

    And I no longer see the date and time for your posts or the comments posted. How do I get them back?

    • FrugalTrader on January 1, 2013 at 2:48 pm

      @Bill, as SST has mentioned, I typically invest the amount that i’m comfortable with and only buy when opportunities arise rather than buying for the sake of buying. Yes, you are right, the TFSAs have been relatively ignored, but will be changing that since the balances are growing. I did an upgrade to the blog software which removed the dates, working at getting them back.

  15. Jared Kitcher on January 1, 2013 at 1:10 pm

    Great work on the year… Is there a post about what dividend stocks you purchases?

    I also miss the date and time that showed up on posts and comments..

  16. SST on January 1, 2013 at 1:15 pm

    @Bill: re: cash — I disagree (as does FT).

    1. the $4,500 account is to negate fees, so he is saving money in that aspect. It might not add to his bottom line but it does not detract either. His return is non-monetary in the form of growing the bank-client relationship.

    2. FT’s cash allocation is ~5% if his investable assets. This is a very acceptable amount, as even a basic portfolio model would probably use 10% cash.

    As well, as FT states, cash is for when/if “something comes up”.
    Another way of looking at it is the return on cash is in the form of cost of opportunity. If FT came across a once-in-a-lifetime investment, he could act on it without hesitation. If he didn’t have the cash, he would be looking at a minimum of three days wait to sell any securities (ignoring the fact he has access to LOC).
    Opportunity can be lost.

    Cash is definitely a good thing to have.

  17. Diane on January 1, 2013 at 1:58 pm

    Congrats on your progress! You have inspired me to begin my journey too. Thanks for all the tips. Happy 2013!

  18. FrugalTrader on January 1, 2013 at 4:05 pm

    @canucktuary, congrats on the progress and the new addition to the family! Was most of the growth through savings?

  19. Jane Savers @ The Money Puzzle on January 1, 2013 at 8:22 pm

    One of my goals for 2013 is to figure out my net worth. You count the purchase price of your home and not the possible current value. I was considering using a fluctuating price based on comparable listings in my area.

    Could you please expand on why you are using this figure. Is it because you plan to stay in the home for years to come?

  20. On Demand on January 2, 2013 at 3:50 pm

    Hi FT,

    Nice return of your leveraged dividend portfolio!! “the gains are due to one of my larger positions making 52 week highs” Is it Husky Energy that you are talking about?

  21. FrugalTrader on January 2, 2013 at 6:06 pm

    @Jane, basically i’m being conservative in my numbers. I’m also conservative with the pension numbers.

    @On Demand, wow you are good! HSE is one of them, BNS is another, and CP.

  22. Al on January 3, 2013 at 12:22 pm

    Unrestricted/non-registered assets portfolio return: +9.6%; Restricted/registered pension assets portfolio return: +14.7%. The return figures exclude savings/new capital.

    Decent returns but held too much cash in the trading accounts; overall benefited from heavy international exposure and foreign currency as well as oil stocks (I own HSE also) and a few good picks that offset some bad ones.

  23. Freedom 40 on January 3, 2013 at 2:10 pm

    Up approx 14% for the year. Closing balance approx $550k. Easily met my $500k @ age 35 goal. Still on track for $1M at 40.

    2013 will bring a decision to either purchase a larger house, or some sort of income producing asset (rental or other). I will make my TFSA contribution soon, and that’s it for the markets.

  24. canucktuary on January 3, 2013 at 7:44 pm

    @FT – I haven’t split out savings vs investment income, but I imagine that the majority of the increase was from savings. I was on a work assignment to Calgary this fall and was able to rent out our condo for four months. That definitely helped us meet our 25% goal for the end of the year.

  25. Danielle on January 4, 2013 at 1:28 am

    @Freedom 40: well done! What types of investments do you currently have and what is your strategy?

  26. Freedom 40 on January 4, 2013 at 10:49 am

    @Danielle: The split is as follows:
    – $120k in NREG/TFSA savings (mostly individual stock portfolio within a TD Waterhouse account). Mostly all purchased in 2008/2009. Yeilding $10k in dividends (REI, CM, BCE, HSE, PBH, HIO, PWT, GE, MO, BAM/BNA prefs, SENTRY fund……..etc.).
    – $155k in registered savings (Company DC Pension, RRSP’s……..mostly all segregated funds).
    – $275k in equity in my home ($125k mortgage and a very conservative house valuation of $400k).

    My current strategy will be to potentially make a real estate move. I hope to use my sweat equity to re-furbush a larger fixer-upper (if my wife will let me!). If not, I may consider a rental (although I’ve been there, done that….so it has to be the right property). I will not purchase any other “solid” divided yielding stocks unless there is a significant market correction.

  27. nobleea on January 4, 2013 at 12:07 pm

    We were up 34% for the year. Entirely due to savings. Like Freedom 40, we have the identical goal of 500K NW by 35 and 1mil by 40 (I’m one year younger) and we’ll have no problem meeting those targets.

    I’ve got NW projections going out for the next couple of years, and it looks like growth of 25% per year is possible. Primary mortgage will be paid off in late 2014.

    I do have a question on how one might calculate YOY growth. I am calculating it as (Current Year-Previous Year)/Previous Year. This will give a higher value than if you divided by Current Year.

  28. Al on January 4, 2013 at 1:22 pm

    @ nobleea yes you are correct, percentage growth is (ending value – starting value)/(starting value) x 100; for annual percentage growth for 2012, starting and ending values will correspond to those at Dec 31 2011 and Dec 21 2012 respectively. This will not give you investment return, just percentage growth in your assets including savings.

  29. JD Glenn on January 5, 2013 at 4:48 pm

    You numbers seem a tiny bit off – maybe your Investment LOC needs a slight bump?

    I’ve followed your blog for some time and it seems to me most of your success has come from some pretty amazing savings and your real estate. You certainly have an interest in markets and it will be great to see how that grows as your wealth accumulates.

    One of my goals this year is to learn fundamental analysis. I believe you do some evaluation of your positions but I would be very keen on reading more about your process.

  30. Alamin on January 6, 2013 at 7:20 pm

    One of my resolutions this year is to pay much closer attention to your newsletter! After years of going it alone I decided to go with a highly respected Canadian independent financial advisory firm. 3 years later they have delivered a miserable 1% in total returns over that period. It just goes to show that even taking the safe approach doesn’t necessarily mean you are getting the best.

  31. SST on January 6, 2013 at 8:17 pm

    Hope it wasn’t to Investors Group you gave your money.

    Comparatively, FT may be laying the foundations for a career change should he decide!

  32. Moti on January 27, 2013 at 7:11 pm

    I just found your blog and am hooked. I consider myself a frugal person and save as much as i can every month. I will be reading and following closely :)

    we are looking for someone to help us understand our finances and our options I wonder if you guys know someone or offer this yourself?
    purely an opinion, no strings attached :)


    • FrugalTrader on January 27, 2013 at 7:25 pm

      @Moti, thanks for the kind feedback. Sure, send over your questions. As well, there’s an experienced group at Canadian Money Forum who are very helpful.

  33. Michael Kohn on January 27, 2013 at 7:22 pm

    Thank you for keep sharing your data. I’m always looking for an update..You’ve made excellent result,last year I was not so good as you

  34. Moti on January 27, 2013 at 8:11 pm


    Thanks, i really appreciate the help and time you give to us “newbies” starting out. shall i just share here or email you somewhere? I am open about my numbers no issues sharing net worths,etc.(its not much anyway hahaha)

  35. sgxfish on January 31, 2013 at 1:02 pm

    new blogger here.

    do you include your primary property in net worth? What about unrealized gain/loss investment.

  36. Wow on February 15, 2013 at 8:25 pm

    What do you do for fun and joy? Seems that it’s non-stop work, work, work. My weakness is that I splurge on entertainment and fun with what I have left over every month.

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