youngandthrifty’s October 2012 Net Worth Update: +1.8% $162015

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$162,015 (+1.8%)

One of my goals this year was to aim for a $200K net worth by the end of 2012 though I wasn't sure if it would be possible since I'm in school.  If I include my pension amount, this might work.  I just need to find my password to check how much is in my pension.

I ended up transferring a large (basically soon to be all of it) portion of my margin non-registered account into my RRSP.  The good thing about it is that I don't have to keep track of dividend income, capital gains, etc. for tax purposes when these are in registered accounts.

We decided to succumb and get another Costco membership.  We find it good for meats and they have these delicious organic crackers that are at least 50% more in price anywhere else.  I find that although we probably only go to Costco maybe 4 times a year, having that flexibility is great.  Speaking of Costco, have you all seen the video of Ellen in Costco?  It's hilarious.

Okay, so here’s the breakdown for September 2012:

ASSETS:

CASH: 16,547 (-0.7%)

  • More money Pictures, Images and Photos

  • This month there was negligible growth in this department because I couldn't help myself and bought approximately $2000 worth of shares in BMO.  It's my idea of a shopping spree.
  • Boyfriend and I have a joint account which our mortgage is deducted from, and our own personal accounts.
  • I added up my chequing and savings accounts (High Interest Savings Account). I automatically deduct money from my chequing account and have it siphoned to the HISA account (paying yourself first)
  • I have $3700 saved up for my goal of climbing Mt Kilimanjaro (highest peak in Africa). I'm automatically deducting $100 a month from my bank account into this travel account.
  • Did you hear about the oldest couple (84 years old) that have reached the summit of Mount Kilimanjaro?  They were doing it for Alzheimers research.  Reading that story almost made me cry, it was so sweet.
  • My goal is to save $5000 in my emergency fund by the end of the year <— this might not happen with the recent stock splurge, but we'll see.

STOCKS: $2520 (-71.3%)

  • I finally did it.  I transferred assets in my margin account to my RRSP account to pay for half of the RRSP loan (Home Buyers Plan) I have to myself since my income is lower this year.
  • These are stocks that capture 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

RRSP: $20530 (+46%)

  • This includes the pre-authorized monthly contribution into my TD E-Series account, a GIC in my ING Direct Account and a Questrade RRSP account.
  • I am seriously thinking about maxing out my TFSA instead, if I am not able to max out on both (read my TFSA vs RRSP great debate over here) from now on, as I will expect to have defined benefit pension when I retire.
  • I'm not including my defined benefit pension
  • I owe about $16,000 to myself in my RRSP because I used the Home Buyers Plan for my down payment. I haven't decided whether or not to pay it back this year or have the 1/15 amount included as income. Since I'm in school, my income has decreased substantially so it might be feasible to just let the minimum amount get added as tax for 2012 (remember RRSP's are all about tax deferring!)

TFSA: $25053 (+10.4%)

CAR:

  • I am not counting this in my net worth, because it’s 12 years old.
  • I have started a separate ING bank account for a future car

PRINCIPLE RESIDENCE: $387,500 (0.0%)

  • I know this it does not make any sense to divide the principle residence and mortgage debt by 50%, but since I cannot disclose my boyfriend’s financial information, I will do it this way to simplify things. Some of you may not agree to that, and I understand.
  • Vancouver's housing prices seem to be cracking! Lots of inventory and no one buying. Dun dun dun….

LIABILITIES:

Mortgage Debt: $289,044 (-0.26%)

  • Our basement suite is rented out so this takes the sting out of me going to school and dropping my income.  One of our next projects is to re-do the floors for the tenants.

Credit Cards: $1094

  • With my MBNA World Points World mastercard, I already almost have another $290 worth in points since redeeming the points in February. Gotta love my credit card.
  • I've used my new Amex Aeroplan card twice so far.
  • I pay off my full amount every month (and folks, it’s VERY important you do so otherwise you’re losing out on a 19% return!) but include it in my net worth update so I have an accurate picture of my actual net worth. I sort of think “If I were to sell everything right now, what would my net worth be?” I guess I shouldn’t put it in the liabilities column since i pay it off regularly, BUT in mint.com it’s under the liability column so I’ll do the same.
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Young is a writer and former owner of Young and Thrifty and the main "twitter' behind Young and Thrifty's twitter account. She lives in Vancouver, BC and enjoys long walks on the beach, spending time with her anxious dog, and finding good deals. If you like what you read, consider signing up for email updates.

30 Comments

  1. kc on October 16, 2012 at 2:04 pm

    if your house value drops by 50%, what does this do to your net worth?



  2. Teacher Man on October 16, 2012 at 7:12 pm

    I think 50% is a bit much kc…



  3. Lance @ Money Life and More on October 16, 2012 at 7:39 pm

    Sounds like another good month to me. I’d include your pension in your net worth and long as it is guaranteed to be paid out at some point.



  4. Leigh on October 17, 2012 at 12:41 am

    Wow, you’re up to $25k in your TFSA and $20k in your RRSP? Those are pretty awesome milestones!!! 🙂

    So when you say that you transferred assets to pay for half of your RRSP loan, was it half of the total loan or half of what you owed yourself for this year’s payback?

    Awwww, a shopping spree of BMO? A girl after my own heart 🙂



  5. Liquid on October 17, 2012 at 7:10 am

    Mini heart attack when I saw your stocks balance, then I read the details. BMO is a great company, makes sense to buy them now especially if you already bank with them. I’ve heard property sales are dropping too, but I’m not too worried about it. People still have to live somewhere and it’s not like we have tons of empty houses or apartments. Maybe 5 to 10% drop in price at most, but it won’t affect people’s mortgage payments or anything



  6. Young on October 17, 2012 at 10:48 am

    @kc- Hi KC! Nice to see you here again 🙂 Well, I think a more realistic drop in housing value may be 30% (and that would be considered quite a large drop) over a few years time. The house we bought has risen in value by 30%+ but I have not included this in my nw posts. So if it did drop by 30% I would be at the same net worth.



  7. Young on October 17, 2012 at 10:49 am

    @Lance- Yeah..good idea. and since it’s deducted from my paycheck.



  8. Young on October 17, 2012 at 10:51 am

    @Leigh- Well, technically I won’t be able to finish “paying off” half of my total loan RRSP HBP (didn’t take a loan for the RRSP, just the HBP) until tax time when I enter the numbers in. This year’s payback only amounts to something like $1200 I think, so it’s a bit more than that.



  9. Young on October 17, 2012 at 10:52 am

    @Liquid- Haha. Sorry I almost gave you a heart attack! I like BMO’s dividends.



  10. kc on October 17, 2012 at 5:32 pm

    50-30% doesn’t matter really, the point I am after is that you can’t / shouldn’t use your primary housing in any net worth total. that total is a liability and not an asset. To use property as an asset it should be on investment property that you can get revenue from, or capital gains when sold. Otherwise the property is looked at as speculation values. The house worth is paper only and can’t be valued until sold. The market will determine the true worth, selling into a declining market will give the true value, then factor in all associated costs in selling. Her values given are A: values from property taxes, & B: speculation per comps ?.

    See the problem using a primary residence? Too many outer forces control the values.



  11. Teacher Man on October 17, 2012 at 6:25 pm

    Ah, I see what you are getting at now KC. At the same time, in order to get a proper snapshot of net worth one has to value a house to some level right? Even it is slightly arbitrary. Your point about factoring in selling costs is pretty valid though in my opinion.



  12. My Own Advisor on October 17, 2012 at 8:08 pm

    Well done, I enjoy reading these updates!



  13. kc on October 18, 2012 at 2:49 am

    “in order to get a proper snapshot of net worth one has to value a house to some level right?”

    then one must value it right.
    Mortgage Debt: $289,044 – all assets
    TFSA: $25053 + RRSP: $20530 + STOCKS: $2520 + CASH: 16,547 = $64,650
    Now take outstanding mortgage amount 289,044 and subtract assets 64,650 and that leaves the negative net worth. However this number is actually worse because she is only listing that number as half the mortgage which complicates the situation.
    The proper way to value the house worth is when it isn’t on the balance sheet or it is paid off completely for then it is worth what you sell it for and the monies are an asset and not a liability. true she has close to 100K in “equity” however, without selling at a price that covers the payout to the bank and closing costs, that equity does not factor as assets.
    Wasn’t this the same thing that sunk millions of people in the states when their bubble popped?
    Would you say this is the proper way to snapshot the value?



  14. kc on October 18, 2012 at 3:01 am

    hey young, yep your critical thinker is still here… don’t worry I am only pointing it out to make people think outside the box. Glad to see you are still going strong and that schooling is going good for you. cheers



  15. Teacher Man on October 18, 2012 at 7:41 am

    I see what you’re saying and I agree with the idea of taking into account the costs of converting the house from a theoretical amount of money to what it would actually bring in, in terms of assets before throwing the number on a balance sheet. I guess the question becomes just how big do you this bubble is going to be in B.C.? To me I can’t see it going down much more than 30% from peak and I don’t believe that Young bought at peak. In any case, I paid $95,000 grand for my house, so I’m not too worried about the accounting piece of it!



  16. young on October 19, 2012 at 12:18 am

    @MOA- Thanks Mark! I enjoy reading others’ updates too (dividend updates, nw updates). I think we all have voyeuristic tendencies in all of us lol….



  17. young on October 19, 2012 at 12:18 am

    @kc- Thanks KC 🙂



  18. Pam on October 21, 2012 at 7:48 pm

    I think that is awesome that you plan on climbing Mt Kilimanjaro soon. I have plans on climbing mt Rainier next spring. What time of year will you be going? Also, about what is the cost of the climb (If you dont mind me asking).

    Thanks,
    Pam



  19. greater fool on October 22, 2012 at 7:17 am

    Payments would be affected once the fed govt raises interest rates and people have to start paying their mortgage at higher rates once they reset.
    Happened in the USA.
    Canada ain’t different here despite our attitude of being smarter than “dumb” Americans.



  20. Teacher Man on October 22, 2012 at 4:46 pm

    Obviously this is the case GF, but what proof do you have this will happen? The USA has committed to keeping rates low, and if we raise rates and they don’t our dollar will rise and cripple our export/import ratio. Plus, inflation was only 1.3% last year, so that doesn’t suggest a change either.



  21. kc on October 23, 2012 at 9:09 am

    1.3% is a pipe dream number to some extant… If you shop at ChinaTire London Drugs, Wallymart, ETC, you will notice that prices have seemed to not change much or GO DOWN on average. Watch the fliers and price compare for consumer goods. Deflation is happening (more demand for shrinking buyers/dollars) Credit contracting maybe?

    Now take a serious look at the price of what really matters and you should notice an inflating price IE: taxes (all), services like water, hydro, garbage, buspasses, insurances, GAS, groceries. The stuff that you need to survive goes up daily.

    The Govt. takes the increasing prices, then subtracts the declining prices to get the FRANKEN number called INFLATION…..

    Believe what you want, however, my feeling is we are getting screwed, the game is rigged and we are pawns.

    Don’t kid yourself, the Govt. wants to raise rates.



  22. Teacher Man on October 23, 2012 at 5:25 pm

    I’m not sure what you are talking about man, here is the study, right here, 1.2% at the most recent count.

    Carney came out today with the softest language we’ve heard in months on raising rates. If you you believe so strongly, why not go make a little arbitrage money? It’s been proven time and again no one can predict what rates will do with any validity.



  23. thetamax on October 24, 2012 at 1:03 am

    Hi Young:

    Not to rain on your parade. From the archives it appears that you purchased your house near the end of 2010.

    From your post above, you indicate that your house value has risen by 30%+.

    However, from the published average sales prices in Vancouver, I’d be surprised if at this time you’re up 30%.

    I know it probably doesn’t factor into your day to day decision making. However, be careful of falling into the trap of “feeling good cuz you think your house is worth more”

    Because after carrying costs and transaction fees…you ain’t up 30%



  24. Teacher Man on October 24, 2012 at 7:46 am

    Man, people are really obsessed with your home value eh Young?



  25. young on October 25, 2012 at 11:40 pm

    @TM- Haha yeah. Every time I talk about it the trolls come out!!



  26. Young on October 25, 2012 at 11:46 pm

    @greater fool- I thought you were actually “greater fool”!



  27. Young on October 25, 2012 at 11:46 pm

    @Pam- Cool! I’m not sure what time of year I’ll be going. I anticipate that the entire cost would amount to something like $5K (for safari, airplane ticket, climb etc.)



  28. Young on October 25, 2012 at 11:55 pm

    @thetamax- LOL Okay fine you win!! Are you happy now? I don’t really like to argue- you’re welcome to think what you want to think of course. 🙂



  29. Teacher Man on October 26, 2012 at 7:50 am

    It’s like your a siren for housing-obsessed individuals or something.



  30. Young on November 2, 2012 at 12:16 am

    @TM- lol it’s kind of nice to have you as a moderator/ back up. So that the comments don’t get too out of hand.



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