Welcome to the recurring monthly net worth update – The December 2008 edition.
Well it looks like this will be the final net worth update for 2008! With the huge market correction in the 2nd half of 2008, it’s almost a relief that 2008 is over. However, who knows what 2009 will bring as some economists predict that this bear market will last throughout 2009.
With regards to spending, December wasn’t a great month due to purchasing numerous Christmas gifts along with hosting social gatherings. However, higher than expected income covered the extra spending which helped maintain our savings rate.
With regards to our savings, you may notice a large jump in the numbers below. No, we didn’t save $10k this month. Some of the savings increase was due to selling a few loser stock positions for a capital loss and transferring the cash to my savings account. Thus the large drop in non-registered assets. Truth be told, I should have sold off these positions long ago to pay down the mortgage before I began my leveraged investment strategy. Better late than never right?
Even after 3 straight months of portfolio beatings, they are still hemorrhaging profusely. It’s either sit tight, or sell at a large loss. Personally, I can’t bear the thought of selling strong companies like RY or MFC at a loss, so I’m going to hold, keep collecting the dividends and hope for the best.
Here are the assets/liabilities result for the month of December:
Assets: $575,470 (-0.39%)
- Cash: $4,500 (+0.00%)
- Savings: $45,420 (+26.17%)
- Registered/Retirement Investment Account: $37,700 (-8.27%)
- Pension: $22,350 (+0.00%)
- Non-Registered Investment Account: $12,500 (-31.69%)
- Smith Manoeuvre Investment Account: $40,500 (-3.57%)
- Investment Property: $ 124,500 (+0.00%)
- Principal Residence: $275,000 (+0.00%) (purchase price)
- Vehicles: $13,000 (2 vehicles) (-7.14%)
Liabilities: $265,520 (-0.33%)
- Investment Property Mortgage: $92,100 (-0.22%)
- Principal Residence Mortgage (readvanceable): $121,900 (-0.65%)
- HELOC balance: $51,520 (+0.23%)
Total Net Worth: ~$309,950 (-0.45%)
Started 2008 with Net Worth: $279,300
Year to Date Gain/Loss: +10.97%
So there you have it, I’ve achieved a 11% net worth gain for 2008. It’s not quite the 25% net worth growth that I was going for, but who could have predicted the historic market correction of 2008? Needless to say, my portfolios took a major beating this year which may take years to recover. On the bright side though, our savings made up for the difference which we hope can continue in the future.
For those of you wondering about the relatively large cash savings, I plan on making a significant dent in my non tax deductible mortgage in the new year.
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 all held with PC Financial. We 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.
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 appraised in 2006. I’m considering raising the reported values of the homes at the rate of inflation starting January 2009.
Happy New Year! Thanks for following my journey this year and I hope to see you around in 2009!If you would like to read more articles like this, you can sign up for free my newsletter service below (we will not spam you).