Million Dollar Journey

Building Wealth through Saving and Investing

Net Worth Update October 2012 (+1.36%)

Welcome to the Million Dollar Journey October 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..

Early fall is historically known to be very volatile for the markets, but this year has been a bit of an exception. September was actually good to investors with October resulting in more of a sideways market.  In October, the S&P500 netted a 2% loss while the TSX just about broke even.  From a chart perspective, the TSX looks like it may go higher which will hopefully lead to the traditional Santa Claus rally.

There was very little activity in my riskier trading account this month, but this may change as some of the more volatile stocks are moving.  All of my non-registered account growth shown below is due to savings.  Where do our savings come from?  First, we don’t live a lavish lifestyle (how we save money) and do not carry any bad debt.  The only debt we have is an investment loan (which pays for itself), so we end up pocketing a majority of our earnings.  Our earnings come from salaries, private business income (via dividends to shareholders), and eligible dividends from publicly traded companies.

On to the numbers:

Assets: $765,400 (+1.22%)

  • Cash: $4,500 (+0.00%)
  • Savings: $20,000 (+0.00%)
  • Registered/Retirement Investment Accounts (RRSP): $132,000(+0.69%)
  • Tax Free Savings Accounts (TFSA):  $41,000 (+1.23%)
  • Defined Benefit Pension: $40,400 (+0.75%)
  • Non-Registered Investment Accounts: $122,000 (+5.17%)
  • Smith Manoeuvre Investment Account: $105,000 (+1.45%)
  • Principal Residence: $300,500 (+0.00%) (purchase price adjusted for inflation annually)

Liabilities$93,900 (+0.21%)

Total Net Worth: ~$671,500 (+1.36%)

  • Started 2012 with Net Worth: $585,228
  • Year to Date Gain/Loss: +14.74%

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.

Some quick notes and explanations to net worth questions I get often:

The Cash

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.

Savings

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.

Real Estate

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.

Pension

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.







5 Comments, Comment or Ping

  1. 1. Liquid

    Nice progress FT. I think I’m up about 1%-2% as well. Are you trying to hit a six figure increase in net worth this year? Because that’s what it’s looking like so far :0)

  2. @Liquid, thanks – I’m trying to increase net worth as much as possible, 6 figures would be a bonus!

  3. 3. Ravi Gupta

    It’s very cool looking at your chart and seeing your progress. Hardly any dips. :)

  4. 4. Subversive

    Looks like it’s going to be tight to make it to $1 million by end of 2014. Have you run the numbers on what kind of return you need in order to get there, and do you think it’s realistic? Do you have any plans to change your strategy to try and make the goal?

    Also, do you have a spreadsheet or template you use to track your net worth over time? If so, would you be willing to share a blank version of it?

  5. @subversive, sorry for the delay, missed this comment. Yes, it will be very tight. I’ll need at least 20% net worth gains every year until the end.

    I use a google spreadsheet to track my net worth on a monthly basis. But you gave me a good idea, i’ll look into creating one to share with readers.

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