Net Worth Update July 2012 (+1.47%) – Market Bounce?
Welcome to the Million Dollar Journey July 2012 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 (or beginning of the next) to track the progress of my journey to one million in net worth, hopefully by the time I’m 35 years old (end of 2014). If you would like to follow my journey, you can get my updates sent directly to your email or you can sign up for the Money Tips Newsletter..
Last month, the TSX appeared to have formed a small base which has continued in July. The first half of July investors saw a steep drop, but the last few trading days of the month are showing a bit of bullish momentum – particularly in energy. The SP500 has almost completely recovered from the May to June decline and looks destined to retest 2012 highs. Over the past while, I’ve been doing a little bit of work with portfolio tax allocation, buying US dividend stocks, and foreign ETFs in my self directed RRSP. This is while keeping my Canadian exposure in non-registered accounts.
Besides the market gains, there was a little bit of movement in between assets this past month. We had a large amount of cash just sitting in a savings account, so we decided to move the bulk of it into a non-registered portfolio for now. I’m still coming up with a plan on what to do with it. What do you think? Right now I have:
- RRSP: Foreign ETFs and US dividend stocks.
- TFSA: Mostly cash, ideally Canadian REITs but they are pricey right now.
- Leveraged Non-Reg Smith Manouevre Portfolio: Canadian dividend stocks.
- Non-Registered: ??
On to the numbers:
Assets: $724,000 (+1.34%)
- Cash: $4,500 (+0.00%)
- Savings: $20,000 (-77.01%)
- Registered/Retirement Investment Accounts (RRSP): $126,000(+2.11%)
- Tax Free Savings Accounts (TFSA): $40,000 (+0.25%)
- Defined Benefit Pension: $39,500 (+1.02%)
- Non-Registered Investment Accounts: $102,500 (+220.31%)
- Smith Manoeuvre Investment Account: $91,000 (+3.41%)
- Principal Residence: $300,500 (+0.00%) (purchase price adjusted for inflation annually)
Liabilities: $83,300 (+0.36%)
- Principal Residence Mortgage (readvanceable): $0 (0.00%) (Paid off in 2010!)
- Investment LOC balance: $83,300 (+0.36%)
Total Net Worth: ~$640,700 (+1.47%)
- Started 2012 with Net Worth: $585,228
- Year to Date Gain/Loss: +9.48%
In my last update, readers suggested to chart my net worth progress over time. Below are the net worth values since Dec 2006 with data points taken semi annually.
- December 2006: $198,500
- June 2007: $254,695
- December 2007: $279,300
- June 2008: $310,483
- December 2008: $309,950 (rough second half)
- June 2009: $355,850
- December 2009: $399,600
- June 2010: $456,910
- December 2010: $505,800
- June 2011: $558,713
- December 2011: $585,228
- June 2012: $631,400
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 – ie. our credit card bill). 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 has proven 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 and REITs 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. The commuted value of the pensions are not included in the statements as they are difficult to estimate.
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.