Net Worth Update November 2010 (+1.49%)

Welcome to the Million Dollar Journey November 2010 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 scroll down below, you’ll see that the net worth is getting close to the $500k mark with about 4 years to go.  If you would like to follow my journey, you can get updates sent directly to your email.

During my last update, I committed to using my cash savings to pay off the mortgage, and I’m happy to announce that we are mortgage free in 2010.  Looking for more details?  Last week, I wrote some background information that included a history of our real estate adventure and the mortgage strategies that we used to pay off the mortgage.  Check out how we became mortgage free in 3 years.

So what does having the mortgage paid off really mean?  For us, we like to focus on cash flow, that is, minimizing expenses while increasing our household income as much as possible.  With the mortgage eliminated, it simply means that one of our largest cash outflows can be diverted elsewhere.  Where?  Initially, we’ll likely save a lump sum for some home renovations (basement development, shed, exterior stone work) but after it’ll likely be used to continue building our passive income dividend portfolio.  As our definition of financial freedom is when passive income sources are enough to meet expenses, although still a good way to go, our goal is closer now with no mortgage payments.

For those of you who track your net worth, how did it turn out for November?

On to the numbers:

Assets: $ 551,700 (-0.20%)

• Cash: $4,500 (+0.00%)
• Savings: $39,000 (-10.34%)
• Registered/Retirement Investment Accounts (RRSP): $101,500(+1.20%)
• Tax Free Savings Accounts (TFSA):  $20,650 (+0.98%)
• Defined Benefit Pension: $32,000 (+1.27%)
• Non-Registered Investment Accounts: $12,800 (+4.92%)
• Smith Manoeuvre Investment Account: $58,000 (+1.75%)
• Principal Residence: $283,250 (+0.00%) (purchase price adjusted for inflation)

Liabilities: $55,200 (-13.21%)

• Principal Residence Mortgage (readvanceable): $0 (-100%)
• Investment LOC balance: $55,200 (+0.36%)

Total Net Worth: ~$496,500 (+1.49%)

• Started 2010 with Net Worth: $399,600
• Year to Date Gain/Loss: +24.25%

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). 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.

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.

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.