Net Worth Update May 2013 (+1.61%) – Sell in May and Go Away?

Welcome to the Million Dollar Journey May 2013 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 – soon!).  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.

Lets start off with one of the favorite topics here on MDJ – the stock market!  The TSX was on the decline in March and April, but roared back in May with a gain of 1.9%.  The S&P500 continued its charge at the beginning of the month but pulled back a bit during the last trading week of May. However, it managed to keep the winning streak for a 1.2% gain for the month of May.  The market gains resulted in gains in my portfolios listed below.  However, take note that I have made cash contributions to those accounts as well, so the gains are not completely organic.

As my work place has a defined benefit plan (not vested yet), my RRSP contribution room has been decreased accordingly, but I still made a $2,500 contribution in May.  We also received our defined benefit pension statements that include our contributions (plus interest) which came in a bit higher than expected.  Finally, I ran out of cash in my Smith Manoeuvre investment account, so I moved $5k from my HELOC to the trading account.

Although the markets have been strong up until now, some investors follow the “sell in may and go away” strategy and reduce risk over the summer months then repurchase in the late fall. The reason being is that the markets have historically been weak from May to October. There are some convincing arguments out there, but I’m sticking with the buy and hold strategy.  Do you follow the strategy “sell in may and go away?”

On to the numbers:

Assets: $870,600 (+2.04%)

  • Cash: $4,500 (+0.00%)
  • Savings: $20,000 (+0.00%)
  • Registered/Retirement Investment Accounts (RRSP): $155,200(+2.44%)
  • Tax Free Savings Accounts (TFSA):  $52,500 (+0.96%)
  • Defined Benefit Pension: $45,400 (+7.54%)
  • Non-Registered Investment Accounts: $159,000 (+2.58%)
  • Smith Manoeuvre Investment Account: $124,500 (+5.06%)
  • Principal Residence: $309,500 (+0.00%) (purchase price adjusted for inflation annually)

Liabilities$105,600 (+5.28%)

  • Principal Residence Mortgage (readvanceable): $0 (0.00%) (Paid off in 2010!)
  • Investment LOC balance: $105,600 (+5.28%)

Total Net Worth: ~$765,000 (+1.61%)

  • Started 2013 with Net Worth: $690,400
  • Year to Date Gain/Loss: +10.81%

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.

Updated 2013 –  My wife has recently changed her job position which has resulted in switching from a defined benefit plan to a defined contribution plan.  This amount will be added to the RRSP totals going forward.

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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FT is the founder and editor of Million Dollar Journey (est. 2006). Through various financial strategies outlined on this site, he grew his net worth from $200,000 in 2006 to $1,000,000 by 2014. You can read more about him here.
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Value Indexer
10 years ago

Harry, if you could just let us know the date and amount of those future dips I’m sure a lot of people here would be eager to do as you suggested. Don’t keep the good stuff to yourself!

10 years ago

So Harry,

you are suggesting that FT is doing the right thing by using a buy and hold strategy, but that he should have timed the market and made more money…

something’s not consistent here.

10 years ago

Just to add to my previous point, this strategy would have worked well if one had booked some profits right at the start of June, with the markets falling a bit from the highs and that’s where one could have started to buy the same stocks while keeping some money aside for further dips.

10 years ago

I think you’re doing the right thing by following the buy and hold strategy, although I feel you should book a bit of profit and then aim to buy later on small dips, as this could lead to increased returns.

10 years ago

High savings rate is definitely something to be proud about. Different paths to the same goal. Could be savings, could be earnings, could be investments, defined benefit pension – who cares, a millionaire (young one) is a millionaire.

Good luck!

10 years ago

Great job FT!

Not sure about the bitterness either, seems directed more towards envy of government pension plans more than anything else.

If one were to be honestly critical, it would be that the majority of your monies have come directly from savings – but that is not a knock on you, since you are the ‘Frugal’Trader anyway. Just shows that you can have a million dollars by earning a decent salary, saving a tonne, and taking care of those savings wisely.

It will take a major event for you to get to the million by 35 though. Maybe it can be 1M before turning 36? ;)

Enjoy while it lasts
10 years ago

Sorry, going to rain on the parade a little here…

Quite a bit of your monthly gains come from the Defined Benefit pension. Given that this is Newfoundland, I’m going to assume you’re working in a government job.

I’ll give you credit for your diligent saving approach because your numbers actually illustrate how unsustainable these plans are. Sooner or later, governments will have to cover the shortfalls which in Canada are accumulating into the hundreds of billions of dollars – money that could be used instead for industry investment, infrastructure construction & refurbishment, etc instead of creating a separate tier of moneyed citizens.

It’s pretty easy to make investment plans when one knows that should those investments completely tank, later a magical fund will pay you an indexed monthly wage as long as you’re alive – underwritten by the taxes of many employees who work in private industry and overwhelmingly do not have the option of the government DB plans. As a bonus, the financial performance of that magical fund is completely irrelevant as the government will simply take from others to give to you, in the case of losses.

Maybe a better, but much less catchy, blog title would be “Million Dollar Journey: Building Wealth through Saving and Investing while backstopped by government support”.

My Own Advisor
10 years ago

Ditto – what The Dividend Guy said :)



Silver Goren
10 years ago

As they say, never go away!