Welcome to the recurring monthly net worth update – The October 2008 edition.
Before I started writing this update, I was actually quite nervous about the result as my portfolios are deep in the red for the year. This dramatic correction is the largest of my investing career and it comes with mixed feelings. The good is that it gives me an opportunity to deploy some idle cash sitting in my investment accounts to buy low priced stocks. The bad being that my existing positions are taking a severe beating and the losses seem to grow daily.
Even with major losses to the portfolio, the savior this month was a combination of increased household income, and keeping our expenses in check (no TV’s this month). Without this, the loss this month would have been significantly greater.
Here are the assets/liabilities result for the month of October:
Assets: $583,490.00 (-1.60%)
- Cash: $4,500 (+0.00%)
- Savings: $32,740 (+3.94%)
- Registered/Retirement Investment Account: $45,000 (-14.61%)
- Pension: $22,350 (+0.00%)
- Non-Registered Investment Account: $18,500 (+2.78%)
- Smith Manoeuvre Investment Account: $46,900 (-6.94%)
- Investment Property: $ 124,500 (+0.00%)
- Principal Residence: $275,000 (+0.00%) (purchase price)
- Vehicles: $14,000 (2 vehicles) (+0.00%)
Liabilities: $267,100.00 (-3.13%)
- Investment Property Mortgage: $92,500 (-0.22%)
- Principal Residence Mortgage (readvanceable): $123,400 (-0.52%)
- HELOC balance: $51,200 (+0.43%)
Total Net Worth: ~$316,390 (-0.26%)
Started 2008 with Net Worth: $279,300
Year to Date Gain/Loss: +13.28%
For those of you who have been watching my updates every month, you may be wondering where my “other liabilities” went. That personal liability was covered this month and fortunately it was over estimated. The amount owed was covered by cash savings.
Well, it’s official. For the first time since I started reporting my net worth at the end of 2006, I am reporting negative net worth growth for the month. The bear market has got a death grip on my portfolio which resulted in paper losses greater than my savings could cover. If we reach a bottom soon, I’m optimistic about my portfolio growth going forward.
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. 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 all held with PC Financial. We hold a fair bit of cash due to a cash liability coming in the near future along with the fact that we typically have some cash on hand 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.
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 despite significant appreciation in the real estate market that we’re in. The rental property value was it’s appraised value in 2006. I’m considering raising the reported values of the homes at the rate of inflation starting January 2009.