Welcome to the traditional monthly net worth update - The June 2008 edition. I keep writing these updates to give myself a little heads up on how the finances are doing and it seems that most readers find them enjoyable also.

Lets start off with our income and expenses. Even with our reduced income due to maternity, we have gratefully found that our savings is still on the rise. This is due to reduced spending in combination with increased alternative income. I do expect some larger expenses coming up as we’ve barely scratched the surface decorating the new house. Window coverings anyone?

How about those markets? Just last month, I was touting that the TSX was making all time highs, but we seem to be in a correction zone as of late. If you take a peek at the numbers below, you will notice that my RRSP’s have made quite the gain which seems to go against the current market direction. This is due to a micro cap play going crazy on rumors which has benefited my portfolio nicely. On the flip side, my Smith Manoeuvre portfolio, which is financials heavy, didn’t fare as well.

Here are the numbers:

Assets: $ 598,676 (+5.41%)

• Cash: $4,500 (+0.00%)
• Savings: $31,000 (+15.67%)
• Registered/Retirement Investment Account: $58,200 (+5.43%)
• Pension: $ 22,350 (+0.00%)
• Non-Registered Investment Account: $19,400 (+1.04%)
• Smith Manoeuvre Investment Account: $49,726 (+95.77%)
• Investment Property: $ 124,500 (+0.00%)
• Principle Residence: $275,000 (+0.00%) (purchase price)
• Vehicles: $14,000 (2 vehicles) (-6.67%)

Liabilities: $288,193 (+9.24%)

• Investment Property Mortgage: $93,300 (-0.21%)
• Principle Residence Mortgage (readvanceable): $136,514 (-0.43%)
• HELOC balance: $50,379 (+99.76%)
• Other Liabilities: $8,000 (-0.00%)

Total Net Worth: ~$ 310,483 (+2.09%)

Started 2008 with Net Worth: $279,300

Year to Date Gain/Loss: +11.16%

Another month, another modest gain. One big thing that pops out about this net worth update is that it’s the first month that my Smith Manoeuvre portfolio balance is worth less than the HELOC owing. If it wasn’t for the fact that I’m investing for the very long term, I would probably be very nervous right now. However, as I have a lot of cash in the trading account, I’m waiting for my strong dividend payers to get even cheaper so that I can buy more.

Interested in seeing how my net worth has progressed up to this point? Check out my history of net worth updates.

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Time again for the monthly Smith Manoeuvre Portfolio update, June 2008 edition.

For those of you just joining us, The Smith Manoeuvre is a Canadian wealth strategy that utilizes a home equity loan to invest in income producing assets. The result is a tax deductible loan and portfolio that increases as you pay down your mortgage.

The markets are currently in correction mode which means it may be a good time to add to my positions. All the financial yields are up.  It seems that some economists are predicting a global market crash, however, don’t let that phase you.  If the markets do correct, see it as a good time to jump in!

Onto the business at hand, the portfolio. In terms of trading, the Bank of Nova Scotia position was doubled in addition to a small new position in the fundamental index ETF for U.S small-mid caps. Along with that, we initiated small new positions in BMO and a mutual fund management company that I was eyeing last month, AGF Management.

Total Portfolio Cost Base: $20,042.46

Total Dividends / Year: $796.75

Portfolio Dividend Yield: 3.98%

As you can see, the portfolio is still heavily weighted in financials, but it’s starting to get diversified into utilities like TRP and FTS, along with a small position in the U.S small-mid cap index. I’m looking into more ways to diversify the portfolio, and still meet the CRA tax rules for a leveraged investment loan. One goal of the portfolio is to have a larger growth portion. Any ideas?

Stay tuned, the June net worth update will be posted later today.

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Some great articles by The Money Writers this week:

The Digerati Life has written another great article that explains the ups and downs of the stock market in “A Stock Market Reality Check: What Investment Risk Actually Looks Like.” It shows that historically, down periods are followed by much higher markets.

My Dollar Plan lists 11 Fun & Frugal Summertime Activities.

Lazy Man and Money asks “Are Your Resources Swallowed Up By Parkinson’s Law?” I truly believe in Parkinson’s Law as I am most productive when there is a tight deadline.

The Sun’s Financial Diary reviews a U.S based discount brokerage in his article “TradeKing Review: A Discount Broker with Loads of Features.”

Brip Blap shows us how to be a location independent family, part 1.

Money Smart Life has written about a popular topic these days.. how to save on gasoline! For some great tips check out his article “Save Money on Gas - Small, Easy Gas Saving Tips Take a Big Bite Out of High Gas Prices.”

Generation X Finance gives us A Reminder to Keep Your Beneficiaries Up-to-Date.

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