Welcome to the Million Dollar Journey October 2011 Net Worth Update – Market Bottom 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..

August and September were tough months for the market with the expectation of October being worse.  However, since October started, the Market has bounced back quite aggressively.  If we have already hit bottom, the correction was much more tame that what I had hoped for. As mentioned last month, we have been slowly deploying capital into the markets, but perhaps not as much as I would have liked.  In October, I added to my long term energy positions, added to our RESP indexed portfolio, and made a couple of quick trades in my “fun money” non-registered account.

With cash building up, I’ve been trying to come up with more ways to increase our income.  I’ve been considering building our online business even further, to potentially getting back into the real estate investment game.  I have been in talks with a friend in another province  to potentially get involved with some vacation rental properties, but we’re still in the feasibility study stage.

For those of you who celebrate Halloween, have fun tonight!

On to the numbers:

Assets: $ 655,648 (+2.37%)

  • Cash: $4,500 (+0.00%)
  • Savings: $60,000 (+7.14%)
  • Registered/Retirement Investment Accounts (RRSP): $116,000(+4.50%)
  • Tax Free Savings Accounts (TFSA):  $29,500 (+3.21%)
  • Defined Benefit Pension: $36,400 (+1.11%)
  • Non-Registered Investment Accounts: $30,000 (+1.35%)
  • Smith Manoeuvre Investment Account: $87,500 (+5.29%)
  • Principal Residence: $291,748 (+0.00%) (purchase price adjusted for inflation annually)

Liabilities$81,400 (+0.37%)

Total Net Worth: ~$574,248 (+2.66%)

  • Started 2011 with Net Worth: $505,800
  • Year to Date Gain/Loss: +13.53%

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.

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.

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.


  1. trollmonger on October 31, 2011 at 11:56 am


    I have been tracking my net worth for about a year and half now. I started largely because of following yours.

    One thing I’ve recently included in mine is the taxes due as a result of RRSP withdrawals. Of course I don’t know what my tax rate will be so I assumed it was the same as my current. That may (or may not) be conservative.

    Regardless of the appropriate rate, I know I will have to pay it. And as such, I thought it should be included in my liabilities. To be honest, it was a bit of hit to my net worth and I hesitated to include it because it was somewhat depressing but I couldn’t find a good argument not to include it. Despite it not being due for many years, it know I will have to pay it.

    Is there a reason you don’t include it?

  2. Jordan on October 31, 2011 at 12:12 pm

    Congrats Frugal! Any new additions lately to the dividend portfolio?

  3. FrugalTrader on October 31, 2011 at 12:30 pm

    @Trollmonger, good point. It’s really tough to say how much tax will result from RRSP withdrawals. I imagine that I will start withdrawing during low income years to minimize the tax impact. But very good point.

    @Jordan, I added small positions in COS and CP. Will do a SM update with more details in this quarter. Do you have a div portfolio?

  4. K on October 31, 2011 at 1:06 pm

    Great Job FT

    Nice to see a bit of a rebound starting. The market decline was tough on the portfolios for me, but they are really starting to find some footing now (i think)

    Still struggling as to when to deploy cash reserves….

  5. ITS on October 31, 2011 at 2:40 pm

    Good Job Ft!

    Would you say that most of your net worth additions are due to your monthly savings?

    Also I realized that you don’t have RESPs. Is the 20% govt grant not worth it for you?

  6. FrugalTrader on October 31, 2011 at 3:02 pm

    @ITS – Yes, in volatile markets, most of the growth is definitely from savings. They don’t call me frugal for nothing. :)

    About the RESP’s, you are right, they are starting to get significant (esp with two kids), but I made the decision to leave them out of my net worth. I could just count the contributions as mine as I can withdraw them tax free, but occasionally, the contributions come from relatives – so something doesn’t feel right about that.

  7. Jungle on October 31, 2011 at 4:26 pm

    Good job on the update! What are your plans with the tax deductible loan?

  8. Doctor Stock on October 31, 2011 at 7:05 pm

    Great work! And it is work… people don’t just find themselves financially disciplined. So good work.

    As for the bottom? Time will tell… it may be the Greek bottom, but like Jenga, there’s lots of other PIGS to still be managed and put on top.

  9. My Own Advisor on October 31, 2011 at 9:53 pm

    Simply awesome work! I love these updates. Inspirational FT!

  10. My University Money on October 31, 2011 at 11:25 pm

    With the Greeks going to a referendum on the bailout/austerity plan, the turnaround is by no means guaranteed. I truly believe that we’ll test 2008 lows once more before this all gets sorted out. There is still not enough political will in Europe to make the necessary changes, and the German public is getting less and less cooperative (not that I blame them). Furthermore, with the Americans headed into an election where we will hear all kinds of promises, I don’t think we’ll see the stability for a true market rebound for at least another 18 months.

  11. InsureCan on November 1, 2011 at 1:34 pm

    FT, perhaps it’s an opportune time to do some posts on REITs. I believe they’re an important part of a diverse investment strategy but most folks don’t know about them and there’s not a lot of info about investing in them.

  12. Jordan on November 1, 2011 at 1:37 pm

    @Frugal – I do have a dividend portfolio. These are the stocks I watch:


  13. FrugalTrader on November 1, 2011 at 2:54 pm

    Thanks InsureCan. For those of you interested, here are some REIT posts:

    Owning Rental Property vs Owning REITs

    What are REITs?

    REIT Analysis using FFO

  14. FrugalTrader on November 1, 2011 at 3:07 pm

    @Jungle, I’m going to keep it for now! If I find that I have the luxury of too much excess cash, then I may start paying it down. But as of right now, I’m confortable with the balance.

  15. RJ on November 1, 2011 at 3:46 pm

    I am assuming these are interest earned per year?
    Registered/Retirement Investment Accounts (RRSP): $116,000(+4.50%)
    Savings: $60,000 (+7.14%)

    Which schemes/savings delivers such a high interest rate?

  16. Bazinga on November 2, 2011 at 3:46 am

    I wonder why do people think that the economy is getting better. Are these people blind and not see what is happening in the world? What is happening with all this fake economy that has been kept alive for so long? I would think that people so actively participating in the market trading should know better. And seeing your ‘market has hit the bottom’ makes me smile… Or am I completely crazy?

    It’s good that you manage to increase your capital. May come in handy as long as deflation hits before inflation.

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