Net Worth Update December 2014 ($652,778.50)

By: GenXinvestor

Here is my net worth update December 2014.  I like to track my family’s progress through monthly net worth updates.  To calculate our net worth, I add up all of our household assets and subtract any outstanding liabilities (ie. debt owing).  The result is simply a snapshot of what my family is worth at a particular moment in time and does not give any of the relevant details as to how or why we reached that point.  For that kind of information, please refer to our dividend income and monthly highlights section.

Last summer I mentioned that my family was considering buying our final home.  I crunched the numbers and figured out that it would be at least 30k off the net worth with realtor fees and taxes etc.  Well I was correct the hit to the net worth this month was a direct result of having sold our small townhouse and purchasing a detached home.

We are all pretty excited to move in to the new home before Christmas, however, the home purchase destroyed any chance of meeting our 2014 annual goals.  That said, were it not for the house purchase we would have succeeded in all 3 of our goals that I had set out below.  Oh well, the damage is done and we are re-building our investment portfolios and are creating a new plan to pay off this mortgage!

For those of you who are unfamiliar, my family had 3 major financial goals for 2014.  First, we wanted our net worth to hit the $700,000 mark by the end of the year.  This seemed ambitious but I noticed that our net worth was increasing by about 10k every month so I thought that it was within our reach if we continued to diligently save and invest.  Secondly, we wanted to aggressively pay off our mortgage so that we could have been mortgage-free in 2015 (not gonna happen now!).  Finally, we want to hit the $4,000 mark in dividend income.  We have managed to achieve this by deploying the cash that was building in our investment accounts back in the October correction and through our regular contributions to our dividend reinvestment plans (DRIPs).

Assets: $1,132,778.50 (+45.73%)

Home: $795,000 (0.0%)

We recently purchased our “final” family home where we expect to be for at least the next 30 years.

Cash: $5490.15

As a matter of habit, I rarely keep a lot of cash on hand in a savings account.  The reason being is that at today’s record low interest rates I’d rather put the money toward paying off my mortgage faster or investing it.  That said, I do keep some cash on hand in my investment accounts in case any market opportunities arise.

Non-Registered Investment Accounts: $103,021.88 (-10.55%)

Our non-registered investment accounts include DRIP accounts with Computershare and Canadian Stock Transfer, a discount brokerage account and a work savings plan.  For the most part, in these accounts, I prefer to hold Canadian companies that pay eligible dividends.

TFSA: $8,515.35 (-48.0%)

In the TFSA I like to hold growth assets, such as low-cost ETFs, TD e-series index funds or Canadian dividend paying stocks.  I plan to max out my TFSA in 2015 after having recently withdrawn a large sum to pay for a new vehicle (that does not appear on my net worth statement).  Also, my wife has not yet opened a self-directed TFSA.

Retirement: $187,295.39 (+1.92%)

Our retirement accounts consist of RRSPs, a small locked-in retirement account (LIRA) from a previous employer and a company defined contribution pension plan.  The RRSPs and LIRA hold low-cost TD e-series index funds and other low-cost ETFs, while the company pension plan is invested in a low-cost target date fund.

RESP: $6,457.88 (+2.9%)

In the RESP we hold low-cost TD e-series index funds.  We contribute the annual amount of $2,500 so we can get the 20% match from the government.  Our strategy for contributing is to use the $100 we receive each month from the universal child care tax credit and make up the difference at the beginning of each year.  This ensures that we receive the maximum government contribution of $500.

Other: $27,000 (0.0%)

Under the “other” category, I include an extensive coin and paper money collection.  For years I collected rare gold and silver Canadian coins and Canadian paper money.  The collection has a face value of $10,000 so I conservatively estimate the collection’s worth at around $27,000.  For the purpose of my net worth calculations, I’ve been keeping this number constant versus increasing it over time because (a) coins and paper currency can be difficult to accurately appraise as they are subject to changing market trends and (b) can become illiquid if you can’t find a buyer for them.

Liabilities: $480,000

Mortgage: -$480,000 @ 2.89%

Paying down our mortgage will be a high priority for 2015 and we expect to be mortgage-free in less than 10 years.

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