Net Worth Update October 2010 (+1.78%)

Welcome to the Million Dollar Journey October 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 a little over 4 years to go.  If you would like to follow my journey, you can get updates sent directly to your email.

With the markets still heading in the upward direction, my portfolios are still gaining month over month.  In particular, my leveraged dividend portfolio has been seeing gains as of late as dividend stocks are the current media darling.  Why?  With interest rates at record lows, many investors are looking for a decent income, so anything with a reasonable yield is targeted.  For example, dividend stocks, bonds, preferred shares are all being bought up, which is why their values are relatively high.   My portfolios still have a high percentage of cash, but I’ve been actively looking and purchasing equities that look undervalued.  I still have some ways to go before I’m fully invested, but moving in the right direction none the less.

In addition to the strong markets, our savings remain strong.  We did not have any significant expenses in September, so in combination with our relatively low expenses, it equates to more cash in the bank (how we save money).

During my last update, a few readers suggested that I take some of the cash I have sitting around doing nothing, and simply pay off the mortgage.  The reason I’ve been holding off is because of my ridiculously low rate (P-0.85%), but as one of my goals for the year is to pay off the mortgage, now is a better time than never right?  I’m committed to paying the remaining balance this month so that I’ll be mortgage free in 2010!

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

On to the numbers:

Assets: $ 552,300 (+1.24%)

  • Cash: $4,500 (+0.00%)
  • Savings: $43,500.00 (+11.52%)
  • Registered/Retirement Investment Accounts (RRSP): $100,300.00 (+1.11%)
  • Tax Free Savings Accounts (TFSA):  $20,450 (+0.25%)
  • Defined Benefit Pension: $31,600.00 (+1.28%)
  • Non-Registered Investment Accounts: $12,200.00 (+1.67%)
  • Smith Manoeuvre Investment Account: $57,000.00 (+1.79%)
  • Principal Residence: $283,250 (+0.00%) (purchase price adjusted for inflation)

Liabilities$64,900.00 (-2.26%)

  • Principal Residence Mortgage (readvanceable): $8,600.00 (-14.85%)
  • Investment LOC balance: $55,000 (+0.36%)

Total Net Worth: ~$489,200.00(+1.78%)

  • Started 2010 with Net Worth: $399,600.00
  • Year to Date Gain/Loss: +22.42%

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.

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FT

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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Jane
10 years ago

I love that you clearly show your net worth itemization in your updates! I like your goal to hit $1M at 35 and will be cheering for you.

nobleea
10 years ago

^ It would be nice to see a graph of net worth vs age (maybe average age for you and the wife) to show how it trends. I suspect it’s slightly exponential, and seeing that might make others feel a little more comfortable that they’ll reach they’re goal, even if it seems like they’re making small progress right now.

Jungle
10 years ago

Hey Frugal, how old approx were you when your net worth was 300K?

nobleea
10 years ago

FT:
making 10-40K a year as a part time photographer is not out of reach, especially if you do a few weddings. however, to make enough to cover my salary as an engineer, including benefits, etc (and future raises as an engineer) is pretty much out of the realm of possibility.
right now, its extra cash for a hobby that i really enjoy and other people benefit from.

nobleea
10 years ago

FT:
Yes, I do weddings, but families and babies are by far the biggest stream. Everyone’s willing to shell out a couple hundred for photos of their children.
http://www.evannoble.com
(There goes the internet anonymity.)

Gary
10 years ago

I don’t consider my house part of my net worth because I will never touch that money even if I sell it. I always will need to live somewhere.

nobleea
10 years ago

Using market value for your house in net worth calcs is fine, as long as you adjust it down when market value goes down. A lot of people like to track it up, but then don’t want to track it down. Who wants their net worth to slide 50K a year when house prices slide even when you’re doing great things otherwise? And if you think house prices won’t slide, they will. It’s already started.

FT, our goals for 2011 are to reach 250K in NW, refinance the mortgage in to a variable closed with a better rate (we’re variable open right now), demo and replace our detached garage, go on a trip to machu picchu and south america, grow my side business (photography) to 20K a year, and start a regular investing plan outside of our rrsps.

Emily
10 years ago

Great job FT! I am starting at -5000, that’s right negative. However my goal is to break even within in next 4 months! Then of course can come the bigger goals. We just bought our first home in March so it will be nice when I start to see the principal start getting hit. Gotta start somewhere right? Your blog is very inspiring!