If you needed proof that my net worth increases were mostly due to the luck of the markets, here it is. I got smoked in April, with my investments losing over $2000. Yikes! But additional contributions soften the blow to about $1600, or a little over 2% loss. The start of May isn’t looking good either!
This month I started with the increased mortgage payments on the house, which works out to an extra $500/month for me. I look forward to seeing that mortgage balance fall a bit more quickly. I continued my regular $500/month contribution to my non-registered account, but beyond that I made no more contributions.
I used my excess cash this month to pay my taxes ($1400!). I’ve never owed money come tax time before, but this was due to the rental property income. At the end of last year I asked that I have more money deducted at source from my employer so that I will not owe tax. I realize this is the opposite of what most people do – I am giving the government an interest free loan – but I would rather have my income fixed and know that I do not need to come up with more money next April to pay taxes.
Paying down debt has neutralized most of effect of the investment losses on my net worth, leaving me essentially unchanged on the month.
The coming months will have more big expenses, so I do not anticipate making additional contributions to investments. Hopefully the markets play nice and I see some recovery in my portfolio!
So it has been a really long time since I updated this since I haven’t been around much and haven’t been keeping track, but I am back into my normal routine, so I will update this as of the end of August, and possibly just move to bimonthly or maybe even quarterly updates, as it’s really not that exciting!
Assets:
Condo - $232,000 (purchase price in 2005) (no change)
House - $187,500 (my half of $375,000) (no change)
RRSP - $38,756 (-$214 = -0.55%)
TFSA - $14,695 (-$2,925 = -16.60%)
Non-reg Investments – $21,819 (+$5,372 = +32.66%)
Chequing Account - $6,638 (+$1,068 = +19.17%)
Savings Account - $2,616 (+$686 = +35.54%)
Total Assets = $504,024 (+$3,987= 0.80%)
Most of the changes to the investment/asset section are related to simply moving money around – I withdrew some from the TFSA, but am waiting for next year to put it back in, so for now it sits in the “non-registered” account. The gains are essentially related to the markets recouping some of the losses from April.
Most of the net worth gains are related to debt repayment. I’ve made good progress on paying down the house mortgage – in April we started the increased mortgage payments, but we also ended up making a couple of larger lump-sum contributions.
I’ve also slightly increased my condo mortgage payments starting in August – and extra $100 biweekly. I know some people don’t believe in paying down their rental property mortgage before they’ve cleared their primary residence mortgage, but the interest rate on the condo is significantly higher (more than double) than the house rate…so I feel more comfortable paying that down.
Net worth has continued to increase nicely…if anything, this money diary is a good example of how something as simple as paying down debt/saving excess cash – rather than relying on making huge inestment gains – can really increase net worth. Being successful in the markets is great, but not everybody has the ability or the interest in doing so…but we can ALL pay down debt and live below our means.
Not a lot has happened since the last update, so let’s get to the numbers.
As usual, most net worth gains are due to debt repayment. Increased regular payments, plus a number of lump sum contributions, have resulted in significant progress with regards to principle residence mortgage paydown. No new contributions were made to investments – gains are the result of the market, making up for the losses sustained over the summer
Assets:
Condo - $232,000 (purchase price in 2005) (no change)
House - $187,500 (my half of $375,000) (no change)
RRSP – $39,267 (+$511 = +1.32%)
TFSA - $18,067 (+$3,372 = +22.95%)
Non-reg Investments – $22,754 (+$935 = +4.29%)
Chequing Account - $5,809 (-$829 = -12.49%)
Savings Account - $4,850 (+$2,234 = +85.40%)
Total Assets = $510,247 (+$6,223 = +1.23%)
I am very please with the progress made this year. We paid off the HELOC and automatically started to contribute that same amount of money to our mortgage. This year was heavily focussed on debt repayment, and now that we’ve got a good system in place, we will simply stick with it and chip away at that mortgage debt.
Our spending didn’t change much, but we did manage to cut down our house expenditures significantly (they were originally high due to the “start-up costs” of a new home), and our cable/internet bill has been halved since we cut out cable.
How’d I do on my 2012 goals?
1) Increase my knowledge of investments. I've concentrated on living within my means, reducing debt and saving money, but now I'd like to work on building wealth. I expect wage increases to match inflation but nothing more, so I'm looking to increase through investments. I've done a lot of reading...now need to put things into action
DONE! I’ve learned a lot in the past year, and strengthened my knowledge of how to evaluate the fundamentals of a company. I have also use that knowledge to shuffle my investments (see #4). My journey, however, has shown me that the best way to build wealth has actually been to pay down debt and save.
2) Maximize my TFSA and RRSP (not a lot of room as I have a DB pension which takes up space – unfortunately only partially indexed to inflation), for a total of about $9500.
PARTIAL SUCCESS I contributed to my TFSA and RRSP but it was partially through contributing funds from the non-registered account, not all new money, in order to rejig portfolios.
3) Double mortgage payments once HELOC is paid off.
DONE! (sort of) Our mortgage payments are just under twice the original, plus we make lump sum contributions.
4) Build a portfolio of stocks with dividend reinvestment plans and refine my TFSA/RRSP holdings to build a nice, integrated, well-diversified overall investment portfolio.
DONE! Since my last update I have mainly been focusing on rearranging my portfolio for tax optimization, moving my US and foreign equities into my RRSP, using my TFSA for Canadian equities which I hold for capital appreciation or as shorter term investments (trading), and non-registered account for my long term Canadian DRIPs.
5) Get fiancé to start retirement savings! (wish me luck)
FAIL! He is super focussed on paying down the mortgage (which I am ok with, I would just prefer a more balanced approach). Better luck in 2013
Goals for 2013:
1) Maximize TFSA
2) Maximize RRSP
3) Learn more about conservative options strategies
4) House mortgage below $105,000, condo mortgage below $50,000
Thanks Pennypincher! Yes, I am taking a lot of comfort in the stability of my job right now as my husband's job is precarious and will likely be lost within a year. It's funny, my job has good pay and stability, but nobody wants it, lol.
A little late, but here’s my Q1 update, as of April 1st:
After a nearly 3 year pay freeze I got a nice bump in pay in the second half of last year, which has increased my take-home pay by about $250/month and which will certainly help going forward. The condo is still rented and I am very happy with the arrangement.
I made both RRSP and TFSA contributions in the first quarter, however funds came from already existing non-registered accounts. This is how I plan to make contributions until I have my assest allocation correct, with new money then going to non-registered accounts. Overall my assets grew as a result of a combination of new money invested and stock market gains (which are currently being wiped out, lol).
I made a good dent in the mortgages, with a decent lump sum being applied to the house in March. I appear to be on track for meeting both mortgage goals.
Assets:
Condo - $232,000 (purchase price in 2005) (no change)
House - $187,500 (my half of $375,000) (no change)
RRSP – $47,106 (+$7,839 = +19.96%)
TFSA - $26,449 (+$8,382 = +46.39%)
Non-reg Investments – $15,039 (-$7,715 = -33.91%)
Chequing Account - $7,024 (+$1,215 = +20.92%)
Savings Account - $4,421 (-$429= -8.85%)
Total Assets = $519,539 (+$9,292 = +1.82%)
Goals for 2013:
1) Maximize TFSA – on track
2) Maximize RRSP – on track
3) Learn more about conservative options strategies – started
4) House mortgage below $105,000, condo mortgage below $50,000 – on track
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