September 2008 Net Worth Update (+0.34%)
Welcome to the recurring monthly net worth update – The September 2008 edition.
Seems that lately having the word “frugal” in my handle is hypocritical. As one of my regular readers puts it, I’ve been “spendy”. This month, it started with the new HD TV along with cables, then of course we had to get a new TV stand, and most recently, a food processor for the little one. Of course each of the items were purchased at a great price, but still a substantial amount of cash. As we typically like to buy for the long term, we’re hoping that the excessive spending will come to an end soon.
Onto the markets, let me start by saying that when the markets run in the downward direction, it’s usually a bad time to sell. As I’ve mentioned before, it’s healthy for the markets to correct before it resumes it’s long term move upwards. Personally, I consider bear markets to be a great opportunity to purchase your favorite companies on sale. Speaking of which, I will have a post about Benjamin Graham stock picking strategies coming up soon.
Enough rambling, here are the numbers for the month of September.
Assets: $592,950 (-0.02%)
- Cash: $4,500 (+0.00%)
- Savings: $31,500 (+12.50%)
- Registered/Retirement Investment Account: $52,700 (-4.70%)
- Pension: $22,350 (+0.00%)
- Non-Registered Investment Account: $18,000 (-2.17%)
- Smith Manoeuvre Investment Account: $50,400 (-1.18%)
- Investment Property: $ 124,500 (+0.00%)
- Principal Residence: $275,000 (+0.00%) (purchase price)
- Vehicles: $14,000 (2 vehicles) (+0.00%)
Liabilities: $275,732 (-0.43%)
- Investment Property Mortgage: $92,700 (-0.22%)
- Principal Residence Mortgage (readvanceable): $124,050 (-0.95%)
- HELOC balance: $50,982 (+0.40%)
- Other Liabilities: $8,000 (-0.00%)
Total Net Worth: ~$317,218 (+0.34%)
Started 2008 with Net Worth: $279,300
Year to Date Gain/Loss: +13.58%
Looking over the numbers, even with the increased spending, we have managed to increase our savings amounts. That, however, is probably our net worth saviour as my portfolios have been taking a beating over the past couple months. With only a few months remaining in 2008, it seems that meeting my net worth goal may be a challenge. Not unless of course, we get the unlikely event of a sudden market turn around from bear to bull market.
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. 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.
Savings
Our savings accounts are all held with PC Financial. We hold a fair bit of cash due to a cash liability coming in the near future along with the fact that we typically have some cash on hand 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.
Real Estate
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 it’s appraised value in 2006. I’m considering raising the reported values of the homes at the rate of inflation starting January 2009.
15 Comments, Comment or Ping
1. The Reverend
Out of curiousity, what is the statement date for your investment portfolio values? Despite the negative numbers, the movement wasn’t too bad, especially considering yesterday’s sharp decline. I haven’t tallied up my performance for the month but I’m expecting it to be closer to -6-8% on my index funds.
Oh, and almost forgot, great job managing to scrape out some savings despite the bigger purchases this month. I tend to justify a flat or negative month when I have these things creep up so its great to see you stay committed. I’ve still got lots to learn.
Sep 30th, 2008 @ 10:05 am
2. Four Pillars
Frugal can mean anything you want.
If you live within your means, save a large percentage of your earnings and make sure you get good prices on items that you will value and use – that to me is “frugal”.
Let’s face it – you guys have a pretty good financial situation, so you can’t compare your spending habits with someone who only makes half as much money (or less) and has a ton of debt.
Sep 30th, 2008 @ 10:14 am
3. FrugalTrader
Reverend, I wrote this post the day before yesterday. I know, it’s convenient as there was a market crash yesterday. If I were to account for yesterday’s crash, then my net worth this month would probably be negative. But then again, we’ll probably get a bounce today.
FP, thanks for the encouragement. I’ll make sure that my wife doesn’t read your comments as she may get the cue to buy more stuff! :)
Sep 30th, 2008 @ 10:18 am
4. Dividend Growth Investor
FT,
Actually I think that presenting the portfolio values as of Friday is consistent with what you have reported in the past. As for the savings – if you could postpone that future liability or decrease the amounts of it, you could take full advantage of the bear market declines. It’s always good to find bargains..
Sep 30th, 2008 @ 10:34 am
5. Gates VP
Hey FT, you gotta spend some of it :)
If you’ve making your saving goals for the years, you get no flack for the rest.
Sep 30th, 2008 @ 12:48 pm
6. Pinyo
@FT – What percentage of your investment is in U.S. market versus Canadian market?
Sep 30th, 2008 @ 1:19 pm
7. FrugalTrader
Hi Pinyo,
Approximately 10% of my portfolio is invested in the U.S. I would say that proportion will increase in the near future.
Sep 30th, 2008 @ 1:39 pm
8. MultifolDream$
FT, Do you have amortization plan for your cars?
I reduce my car’s value monthly by a small amount so that in several years it will cost close to 0
Sep 30th, 2008 @ 10:31 pm
9. FrugalTrader
Hi MultifolDream$, I typically use the Canadian black book to evaluate the values of the cars.
Sep 30th, 2008 @ 10:50 pm
10. Finance_Addict
FT – Your savings were up 12.5% and your cash did not move. Where did you pay your TV etc. from?
Sep 30th, 2008 @ 11:06 pm
11. cannon_fodder
FT,
Has your non-registered portfolio produced any dividends to apply to your SM yet?
I’ve almost completed crafting my portfolio (there is still 1 or 2 stocks I’d like to pick up) and my yield on my original investment is 4.44% without any income trusts.
Sep 30th, 2008 @ 11:46 pm
12. kasm
Wow investments are only down 2-5%. For Sept I’m down 8% :( – mostly in equities unfortunately. A few banks and gold stocks are up for me, but everything else is red.
Oct 1st, 2008 @ 2:51 am
13. FrugalTrader
Hi Cannon, yes, I have had some dividends produced thus far, but I have yet to withdraw them. I may withdraw them on a semi-annual, or annual basis.
Oct 1st, 2008 @ 9:29 am
14. Aspiring Entrepreneur
We have the same financial freedom goal. I’m quite near with my goal of earning my first million but it’s in Philippine Peso. Hopefully, I can also reach the US $1Million mark someday in the future. Check out my blog too ;)
Oct 3rd, 2008 @ 6:31 am
15. Vic
You seem to be doing well in the stockmarket despite the volatility and the general downward trend I look forward to your post on Benjamin Graham, now that Warren Buffett has started buying it could be a sign that the end is nigh !
Oct 4th, 2008 @ 8:45 pm
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