Welcome to the Million Dollar Journey Sept 2009 Net Worth Update – The Pension Buy Back Edition.
As I’ve mentioned in passing before, my wife has a defined benefit pension plan that she contributes to through her work with the government. As she was on maternity leave last year, her work recently gave her the opportunity to “buy back” her pension. Buying back her pension allows her to retire “on schedule” instead of delaying it a year due to her leave. Since it’s pretty typical for us to have cash on hand, we decided to pay lump sum instead of pay roll deduction (+interest) which you may notice in the balance sheet below.
The markets continue to march higher which is pushing my portfolio to higher highs. Good in a way, but it may be a false sense of security. Some are predicting a “W” shaped recovery which could mean the testing of March lows. Other economists are saying that this is a “V” shaped recovery with more upward energy left. I don’t know where markets are going, but I do know that I’m not buying many equities at this level as most securities are expensive.
Assets: $$465,900.00 (+1.87%)
- Cash: $4,500 (+0.00%)
- Savings: $13,500.00 (+3.85%)
- Registered/Retirement Investment Account: $72,200.00 (+4.64%)
- Pension: $27,500.00 (+21.41%)
- Non-Registered Investment Account: $17,200.00 (+1.18%)
- Smith Manoeuvre Investment Account: $50,000.00 (+2.67%)
- Principal Residence: $275,000 (+0.00%) (purchase price)
- Vehicles: $6,000 (2 vehicles) (-20.00%)
Liabilities: $86,900.00 (-1.92%)
- Tax Liability: $3,000 (-0.00%)
- Principal Residence Mortgage (readvanceable): $30,700.00 (-5.54%)
- HELOC balance: $53,200 (+0.19%)
Total Net Worth: ~$379,000.00(+2.78%)
- Started 2009 with Net Worth: $309,950.00
- Year to Date Gain/Loss: +22.28%
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 (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.
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. I will most likely be adjusting the value of the home come the new year.