2009 is coming to an end.  I can’t believe it’s been a year already… I can’t believe we’re heading into 2010!

(Vancouver is going to be a gong show in 2010, by the way with the Olympics.  I just know it.)

Here’s an update on my financial status:

Total Net Worth: $79,300

Here’s the breakdown:

ASSETS:

CASH:

$24,500

I added up:

• BMO banking account that my paycheck is sent to
• the Manulife high interrest savings account that is earning me about 1% (that I have automatically deducted from my BMO banking account) and
• money that is sitting there in my Questrade Trading account waiting for some action
• I’m keeping so much money in cash in case I want to  take some money out for my down payment
• Also a big chunk of that will disappear when I go on my traveling spree to Asia for five weeks (I anticipate about $5500- more on that later)

STOCKS:

$21,800

These are stocks that captures the  “moment in time”, including unrealized gains or losses in my BMO Investorline and Questrade accounts.  I added up USD and CAD stocks as “Canadian” money to be simplistic.

I have recovered mostly from the huge stock market crash, I think I am down about $1000.

RRSP:

$20,000

This includes some emerging market mutual funds (BRIC), the TD E-Series account, and some ETF stocks I have in my BMO Investorline account.

I hope to max out the $25,000 and withdraw for my first home purchase (hopefully soon) with this amount saved.

PENSION:

I am a public sector employee (hurrah for good-lookin’ pensions!) but am not including it in this net worth update because I want to keep it simple, and to be honest, I’m too lazy to calculate how much I have in it.

OTHER:

$8,300 (initial investment was$13,000)

I have some investments that were poor choices (I signed up for them before I became “edumacated”) that are losing money big time.  Some flow through shares, Venture investments that gave out a tax credit, and some more mutual funds.

TFSA:

$5000 Principal protected through an HSBC investment

CAR:

I’m not going to bother counting the car.  It’s 10 years old and I’m planning to drive it to the ground.

LIABILITIES:

CREDIT CARD:

$300

Don’t get your panties up in a knot, I don’t carry a balance (and nor should you), but this was taken a “moment in time” and as you can see from the low amount, it was early in the month.

Goals for 2010

• I hope to buy my first home next year.  Hopefully the housing prices will have decreased and the housing bubble will have burst.  Since November 2008 last year there’s been an increase of 232% in housing sales in Vancouver!  The low interest rates have been driving up the housing prices like crazy.  Considering that you would ideally need 25% down payment, for a $350,000 condo (standard 1 bedroom condo price here) I would need $87,500.  So I’m not really there yet.  That will be my goal. To get there with a little bit of cash cushion beyond the down payment amount.  The Bank of Canada will likely increase the interest rates too next year, possibly in the tune of 2-3% so you variable mortgage people should lock it in!  Because 2-3% is HUGE. It could mean thousands!

• I have gotten into the habit of calculating my net worth every month now (It’s actually kind of fun) to make sure I am going in the + zone, not the -.  I hope to continue this into 2010.

• I am contemplating whether to get a newer car next year.  If I get a newer car, I can start from scratch with my Capital Cost Allowance calculation and tax deduction.  Right now, I am kind of “bottoming out” with regards to how much money my car is worth on tax forms.  On the other hand, I just bought $1000 winter tires last year (thanks….Kal Tire) and want to get some good wear out of them.

• Lastly, I hope to recuperate the losses that I have, mainly from the “adventurous” investments I did with investment advisers before I knew anything about investing.  I have been a bit more aggressive with the stock market lately, so hopefully I will be able to recoup in this way.

What are your personal finance goals for 2010?

If you own equities, are you finding that you have recovered most of your investments?

Related posts:

1. youngandthrifty Net Worth Update: February 2011
2. youngandthrifty Net Worth Update: May 2011
3. youngandthrifty Net Worth Update: March 2010

Now we want to think OUTSIDE the box (aka RRSP).

What should we keep outside of the RRSP or Tax Deferred Shelter?

Well, after you maximize your RRSP’s and TFSA, then you can keep investments in the “spillage”

Basically you want investments that are the least “taxing” to you, to keep outside of an RRSP.

Say HELLS NO if you can help it, to:

• bonds
• GIC’s
• money market funds
• foreign equities/ stocks that have robust dividends
• basically anything that is taxed at 100% your marginal rate to you

Say YES PLEASE, to:

• Canadian stocks with dividends (these are actually given PREFERENTIAL tax treatment- the government is kind to us when we are kind to our Canadian corporations)
• Any stocks (capital gains are given good tax treatment)
• non-dividend foreign stocks (e.g. stocks on the NYSE that don’t give out dividends)
• equity type mutual funds
• risky investments (you definitely don’t want to keep these in an RRSP because once you lose that contribution room, you’re screwed)

It may be nice to receive $100 interest from a GIC that you have maturing.  But if you don’t keep it inside some sort of tax shelter (RRSP or TFSA), then that $100 is really $70 if you are taxed at 30% of your income (marginal rate).

On the other hand, if you have $100 investment gain from a stock, then that is considered a capital gain, and only 50% of that amount is subject to tax.  So $50 would be subject to the 30% tax, so for that $100 you get to see $85 of it, not $70.

I personally was keeping everything and anything in my RRSP intially (except for GIC’s!!) and after I did some researching I realised that I should be more “tax efficient”.  So now I put GIC’s and bond index funds in my RRSP, to shake things up a bit.

What are you keeping in and out of your RRSP/TFSA tax shelters?

Related posts:

1. RRSP holdings: part one
2. RRSP versus TFSA: Head to Head Comparison
3. RRSP’s: aka Registered Retirement Savings Plans: