Welcome to the Million Dollar Journey February 2011 Net Worth Update. 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. If you would like to follow my journey, you can get my updates sent directly to your email.
We had a respectable +1.56% gain this month bringing us up to about $532k in total net worth. The gains this month is mostly due to the rising markets and, as usual, our savings. With exposure to the oil and gas sector in the leveraged dividend portfolio and RRSP, it’s not surprising that both accounts showed some gains. In addition to energy, the financial sector is reaching all time highs as well, which means my large exposure to the Canadian big banks is starting to pay off.
Something that I do not include in the net worth statement is the RESP account. With the single child (soon to be two), we deposit $2,500 annually to maximize the government matching grant (CESG) of $500. We usually do this in January, but due to some delays (or procrastination), we finally made the deposit last week. Now it’s the issue of allocating the cash. With the markets at a high, I find it psychologically challenging to buy, even though I’m indexing that portfolio.
For those of you who index your portfolio, what do you do with new cash to invest when markets are high? Do you simply rebalance regardless of where the market is?
On to the numbers:
Assets: $ 588,148.00 (+1.45%)
- Cash: $4,500 (+0.00%)
- Savings: $51,000 (+9.68%)
- Registered/Retirement Investment Accounts (RRSP): $108,000(+2.37%)
- Tax Free Savings Accounts (TFSA): $26,600 (+1.14%)
- Defined Benefit Pension: $33,200 (+1.22%)
- Non-Registered Investment Accounts: $11,600 (-8.66%)
- Smith Manoeuvre Investment Account: $61,500 (+3.02%)
- Principal Residence: $291,748 (+0.00%) (purchase price adjusted for inflation)
Liabilities: $55,950 (+0.45%)
- Principal Residence Mortgage (readvanceable): $0 (0.00%) (Paid off in 2010!)
- Investment LOC balance: $55,950 (+0.45%)
Total Net Worth: ~$532,198 (+1.56%)
- Started 2011 with Net Worth: $505,800
- Year to Date Gain/Loss: +5.22%
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 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.
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.