Welcome to the Million Dollar Journey November 2011 Net Worth Update – Santa Claus Rally 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 (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..
First, I’d like to apologize for the delay in this post – my writing schedule got a bit thrown off due to the 5 year anniversary giveaway and life in general! Between my full time career, online business, and raising two kids under age four with my wife, the schedule can get a bit hectic.
Regardless of how busy things get, I always make time for my favorite hobby – personal finance and investing. On the tune of investing, the second half of the year was dominated by the bears. This has brought a ridiculous amount of volatility to any portfolio that has held onto stocks. Despite how queasy the swings can make even the most seasoned investor feel, it is important to keep perspective of the long term goals. For me, one financial goal is to build a strong dividend income stream. Having that goal helps me focus on buying strong dividend stocks when their valuations are attractive, which is why I have been adding positions to that account.
With volatility, there are violent market moves in both directions. Since the end of November, the TSX has bounced with a gap up that some traders are calling Santa Claus rally. With the never ending bad news coming from Europe, it is difficult to imagine any sustained rally but there’s always hope for market strength until the end of the year.
What do you think? Do you think we’ve hit a sustainable rally? Or perhaps a short term rally followed by a continuation of the down trend?
On to the numbers:
Assets: $ 661,248.00 (+0.85%)
- Cash: $4,500 (+0.00%)
- Savings: $65,000 (+8.33%)
- Registered/Retirement Investment Accounts (RRSP): $117,900(+1.64%)
- Tax Free Savings Accounts (TFSA): $29,300 (-0.68%)
- Defined Benefit Pension: $36,800 (+1.10%)
- Non-Registered Investment Accounts: $29,700 (-1.00%)
- Smith Manoeuvre Investment Account: $86,300 (-1.37%)
- Principal Residence: $291,748 (+0.00%) (purchase price adjusted for inflation annually)
Liabilities: $81,650 (+0.31%)
- Principal Residence Mortgage (readvanceable): $0 (0.00%) (Paid off in 2010!)
- Investment LOC balance: $81,650 (+0.31%)
Total Net Worth: ~$579,598.00 (+0.93%)
- Started 2011 with Net Worth: $505,800
- Year to Date Gain/Loss: +14.59%
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. 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.