Welcome to the Million Dollar Journey May 2011 Net Worth Update – Money is Moving Edition. 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. If you would like to follow my journey, you can get my updates sent directly to your email.
Last month, I wrote that I needed to make some annual contributions and some readers commented that I should be a little more proactive and contributing a bit earlier. Of course, they are right. To fix this, I moved around a significant amount of money this past month and started putting some of that cash to work.
To start, we opened an RESP for our second child and deposited $2,500 to capture the maximum matching from the government ($500). Actually, to be more accurate, we changed the individual TD e-series RESP account to a family account. This setup gives us a more convenience during accumulation years more flexibility during withdrawal years.
Next, we deposited another $5k in my wifes TFSA and $5k into my RRSP account. We still have a good bit of contribution room remaining for this year, but we will top it up when we receive our official Notice of Assessments. Besides the tax sheltered accounts, I also transferred some cash into a non-registered trading account.
These transfers were mostly paid by cash savings, and by taking some money out of the business via dividend.
On to the numbers:
Assets: $ 615,848.00 (+1.08%)
- Cash: $4,500 (+0.00%)
- Savings: $45,000 (-23.73%)
- Registered/Retirement Investment Accounts (RRSP): $113,100(+4.05%)
- Tax Free Savings Accounts (TFSA): $32,500 (+20.37%)
- Defined Benefit Pension: $34,400 (+1.19%)
- Non-Registered Investment Accounts: $21,100 (+86.73%)
- Smith Manoeuvre Investment Account: $73,500 (+0.68%)
- Principal Residence: $291,748 (+0.00%) (purchase price adjusted for inflation annually)
Liabilities: $65,368 (+0.25%)
- Principal Residence Mortgage (readvanceable): $0 (0.00%) (Paid off in 2010!)
- Investment LOC balance: $65,368 (+0.25%)
Total Net Worth: ~$550,480 (+1.18%)
- Started 2011 with Net Worth: $505,800
- Year to Date Gain/Loss: +8.83%
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 – 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.
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.