Net Worth Update June 2012 (+1.69%) – Growth Chart Edition

Welcome to the Million Dollar Journey June 2012 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, 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..

The first half of 2012 continues to be a rough one for investors, but the bleeding seems to have stopped – for now.  With the TSX (via XIU) dropping 5.5% in May,  June was thankfully relatively flat.  My portfolios still took a hit as they are relatively high in energy, which continues its bear run.

So where did the overall net worth growth come?  A larger than expected tax refund and a large cash dividend out of our corporation.  The large tax refund was not intentional as we normally withdraw enough out of the corporation so that we receive very little or no tax refund at the end of the tax year.  But last year, child care expenses were higher than I expected, which resulted in the refund.

On to the numbers:

Assets: $714,400 (+1.52%)

• Cash: $4,500 (+0.00%)
• Savings: $87,000 (+19.18%)
• Registered/Retirement Investment Accounts (RRSP): $123,400(-1.44%)
• Tax Free Savings Accounts (TFSA):  $39,900 (-0.75%)
• Defined Benefit Pension: $39,100 (+1.03%)
• Non-Registered Investment Accounts: $32,000 (-0.31%)
• Smith Manoeuvre Investment Account: $88,000 (-1.68%)
• Principal Residence: $300,500 (+0.00%) (purchase price adjusted for inflation annually)

Liabilities: $83,000 (+0.24%)

• Principal Residence Mortgage (readvanceable): $0 (0.00%) (Paid off in 2010!)
• Investment LOC balance: $83,000 (+0.24%)

Total Net Worth: ~$631,400 (+1.69%)

• Started 2012 with Net Worth: $585,228
• Year to Date Gain/Loss: +7.89%

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.

• December 2006: $198,500
• June 2007: $254,695
• December 2007: $279,300
• June 2008: $310,483
• December 2008: $309,950 (rough second half)
• June 2009: $355,850
• December 2009: $399,600
• June 2010: $456,910
• December 2010: $505,800
• June 2011: $558,713
• December 2011: $585,228
• June 2012: $631,400

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.

Savings

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 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.

Pension

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.