Welcome to the Million Dollar Journey September 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 (late this time) 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.

Not a lot to report this month except that we had quite a gain this month with all the stock broker accounts landing in the green.  With the ever present negatively in the media, I did not expect September to come out so strong.  My biggest gainers are a couple of REITs that were purchased just after the market started to turn around in 2009.  My biggest losers are some of the penny stocks I own.

I have played around with a bit more trading as of late, but there is still a large percentage of cash in my portfolio.  In particular, I traded a covered call option of a technology stock on the Nasdaq, but it got called away because of the strong market.  Although I made a small profit on the trade (10% total), it would have been better if I could simply keep writing covered calls on the same stock and continually collect the premiums.

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).

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

On to the numbers:

Assets: $ 545,550 (+1.53%)

  • Cash: $4,500 (+0.00%)
  • Savings: $39,000.00 (+11.43%)
  • Registered/Retirement Investment Accounts (RRSP): $99,200.00 (+1.22%)
  • Tax Free Savings Accounts (TFSA):  $20,400 (+3.55%)
  • Defined Benefit Pension: $31,200.00 (+1.30%)
  • Non-Registered Investment Accounts: $12,000.00 (+3.45%)
  • Smith Manoeuvre Investment Account: $56,000.00 (+2.75%)
  • Principal Residence: $283,250 (+0.00%) (purchase price adjusted for inflation)

Liabilities$64,900.00 (-2.26%)

  • Principal Residence Mortgage (readvanceable): $10,100.00 (-14.41%)
  • Investment LOC balance: $54,800 (+0.37%)

Total Net Worth: ~$480,650.00(+2.06%)

  • Started 2010 with Net Worth: $399,600.00
  • Year to Date Gain/Loss: +20.28%

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.


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 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.

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. Sampson on October 4, 2010 at 10:33 am

    Congrats! Beat me by 0.02% this month ;)

    Looking at your numbers and you do realize how ridiculous this is. You are up $180k this year. Spectacular.

  2. Jerry on October 4, 2010 at 10:41 am

    You mean $80k, right? (approx 299K to 380K). Still a worthy number to be proud of.

  3. Echo on October 4, 2010 at 10:59 am

    Correct me if I’m wrong but I think the YTD gain is just over $80k, not $180k. Still very impressive…but not ridiculous :)

  4. ldk on October 4, 2010 at 11:36 am

    Congrats….your numbers look fantastic–very impressive YTD gain.

    Q., though…why not throw the cash on the LOC until such time as you need/want it?

  5. Brandon on October 4, 2010 at 11:40 am

    I would be so tempted to pay off my 10k mortgage with some of that savings… Especially considering the savings account is generating 1-2% interest while the mortgage interest is likely higher

    Also, it would be fun to burn those mortgage papers!

  6. Sampson on October 4, 2010 at 12:47 pm

    Oops, thanks for the catch. Now I don’t feel so ashamed I’m not saving as much as FT.

  7. FrugalTrader on October 4, 2010 at 12:50 pm

    @Sampson, baby steps! Maybe I’ll go for $180k next year! :)

    @ldk, I may put some excess cash on the LOC. But as of right now, my investment LOC does not come out of my cash flow at all due to capitalizing the interest. Once i pay down the LOC with cash, I can still only use the LOC to invest with to keep everything kosher.

    @Brandon, I may end up doing just that, however, the issue lies in the fact that it’s almost free money! I have a mortgage for prime – 0.85%. However, you are right in the fact that it’s a higher return than a high interest rate savings account. Hmm… you might see the mortgage disappear within the next couple updates. :)

  8. canucktuary on October 4, 2010 at 3:01 pm

    Good month over here too (+2.13%). We’re on target for our goal of annual 30% growth with 3 months still to go!

  9. Miilionaireby45 on October 4, 2010 at 3:14 pm

    Very well done FT. I am currently on track to meet my goals with regards to increasing my assets but unfortunately it looks like I may fall a little short of meeting my goals with regards to reducing my debt. Overall I have increased my net worth by $40,000 this year. I am going to have to start making a conscious effort to start reducing my debt at a faster level. Most of my debt is tied up in my mortgage.

  10. Sarlock on October 4, 2010 at 6:06 pm

    +3.1% for the month for us… you’re about halfway to $1m! If you can maintain your 20%+/year growth rate, you’ll be able to hit your goal in 4 years.

  11. skube on October 4, 2010 at 6:15 pm

    Can you clarify the 11% gain in savings? Is this from earned income?

  12. Freedom 40 on October 4, 2010 at 6:46 pm

    Nice. 1.72% for us. 9.49% on the year. $420k balance. Looking to achieve $500k by 35 (1.5 years away). Looking to achieve $1 million at age 40. Intrigued by your #’s, as mine are never quite as good. Gives me a benchmark to shoot for!

  13. Jungle on October 4, 2010 at 7:37 pm

    Good job Frugal. I always like your updates, it’s good motivation.

    I was very surprised to be up 5k this month, even after we paid a 1.8k annual insurance bill(s) and devalued the car 1.3k. Sept was good on the markets, so that helped push the numbers up.

    Keep up the good work. I look forward to seeing what you do with your accounts, once the mortgage is paid.

  14. DividendMan on October 4, 2010 at 8:40 pm

    Nice work. Have you ever had a down month?

    I went over 100k! I’m a hundred-thousandaire…. woo.

  15. FrugalTrader on October 4, 2010 at 8:51 pm

    @Sarlock, thanks for running the calcs.

    @ Skube, yes it’s from earned income (including wife salary).

    @Jungle, thanks, we have a property tax bill coming up which is never fun. :)

    @DividendMan, oh I’ve had quite a few in 2008/2009 when the market tanked, however, portfolios have bounced back since.

  16. Chris L. on October 4, 2010 at 9:27 pm

    Does it worry you that over 50% of your net worth is in residential RE? What if values tumble? Do you think RE is really part of net worth? Where would you live otherwise?

    I think if you don’t plan to leave to a cheaper place, RE as net worth should not be included. And then, only the difference between where you live now and where you will live matters in your net worth statement. If it doesn’t or can’t generate income, it’s not an investment.

    “Millionaire next door” book agrees. You gotta live someplace.

  17. FrugalTrader on October 4, 2010 at 9:40 pm

    @Chris, no, it really doesn’t worry me at all. I under value my residential real estate on the NW statement, so even if markets tanked, we’d still be ok. We use the house to leverage the investment loan, so to me, my house is generating income.

  18. DAvid on October 5, 2010 at 1:58 am

    Seems to me that your house becomes net worth the day you move into the nursing home. I’d count it as net worth simply because you can sell it should you truly need to do so.


  19. Commander T on October 5, 2010 at 3:08 am

    I would say that having your call option being exercised early is great news. It means that who ever called you just sacrificed the time value of the option (an option can only be exercised at its strike price, but if an option is exercised earlier then expiry the holder is giving up the possibility of the stock going higher which theoretically should always be a higher probability then the stock falling in value.) In fact with the exception of companies that pay dividends it can be mathematically proven that one should not exercise an option early.

    The way to realize that there is significant upside to being called is that when you write the call you are effectively capping the maximum profit that you could earn on the stock. You have effectively earned the maximum profit on the position, just early (and money today is worth more then the same money tomorrow).

  20. FrugalTrader on October 5, 2010 at 9:40 am

    @DAvid, i’m with you, net worth is assets-liability and really has nothing to do with cash flow.

    @Commander T, good point! Do you trade covered calls? If so, do you have a specific strategy?

  21. Commander T on October 5, 2010 at 11:06 am


    I don’t trade covered calls, however it is only because I do not have a non-registered portfolio. I believe that as writing options is forbidden inside of registered accounts (both RRSP and TFSA).

    I know as much as I do simply because I studied options extensively in University and because a very close friend of mine is a trader for a living.

    That being said, if I were to trade covered calls I would probably look at selling calls with an expiry about a year away with a strike price such that if the option were exercised at expiry, the return on just the stock would be 10 – 15%. I like setting the strike price this way because even if the option is exercised my return on the position will be excellent. In addition you will receive a larger premium for selling an option further into the future, this is really helpful for minimizing the trading commissions and the spread.

  22. Zip on October 5, 2010 at 5:33 pm

    Well done again!
    I find my networth percentage gains dropped dramatically since I started tracking them 15+ years ago. With initial networth growth of 20-30% yearly, I thought I would be a billionaire in no time…lol

    With much diversified investment portfolio now, I would be a happy camper if I can get 10% yearly nowadays. Being risk averse as I age doesn’t help either. :(

    @Commander T: Writing option is allowed in RRSP and covered call is perfectly okay inside the TFSA as well.

  23. Mick on October 5, 2010 at 11:55 pm

    @FrugalTrader => Awesome numbers…soon to be half-lionaire :)

    @Freedom 40 => Like your thinking! “Looking to achieve $1 million at age 40″…but hey when did ya start investing?

  24. Commander T on October 6, 2010 at 12:12 am

    Zip, I know that an RRSP is not able to incur debt and writing a call option creates a liability. I simply assumed that the ITA would not look at the entire transaction as a whole when determining if something was a liability.

    Thanks for the info, as a result I probably will start using covered calls.

  25. Dividend Monk on October 6, 2010 at 12:32 am

    Having a covered call called away is bittersweet.

    If you still like the stock, you could write a put to collect a premium and buy it again at a cheaper price or keep writing puts, and then if you end up owning it again you could write another covered call. I don’t know what kind of account you have it in, though.

    I don’t track my net worth; the markets are fickle. As primarily a dividend investor I track my passive income streams (from dividends and elsewhere. I’m up a bit this month, as I am every month.

  26. Freedom 40 on October 6, 2010 at 1:54 pm

    @ Mick

    Bought my first house at 23 (10 years ago), with very little $ down. Fixer-upper in a popular area. Dabbled in student rental (basement appartment). Sold privately for a good gain. Also started working at a large company at that age….thus the plan sponsored savings begin (stock plan, DCPP, DB). Bought a small cottage at age 28 with my wife. Used exclusively as a summer rental (paid the mortgage, etc). Huge “PITA” factor! Sold shortly before the market turned, and made a $50K profit. This was the begginning of my TD Waterhouse non-reg investing. Bought most of my stuff at highly discounted prices. Earning great yields on most. I’m realistic about the future. No real estate ventures on the horizon, and 2 kids under the age of 3 at home. Combined income of 110’ish. A wife that likes to spend! Slow and steady from now on.

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