2019-04 Networth

2018

Apr_2019

M/M $

M/M %

YTD

Assets

Corporate Acct

3,847,322

4,167,663

104,869

2.6%

7.8%

RRSP

717,438

732,868

5,168

0.7%

2.2%

TFSA

113,366

141,757

4,752

3.5%

25.0%

Personal Acct

310,466

293,640

-2,390

-0.8%

1.2%

Commodities

44,776

44,776

0

0.0%

0.0%

Personal Residence

3,030,000

2,607,000

0

0%

0%

Property- Other

852,450

800,350

0

0%

0%

Property- Office

448,000

473,000

0

0%

0%

Total

9,363,818

9,261,054

112,399

1.2%

3.9%

Liabilities

0

0

0

0

0

Totals

9,363,818

9,261,054

112,399

1.2%

3.9%

It is networth time of the month again. I have kept track for as long as I can recall. I kept track even when I have no idea what to do with the numbers.

I think the way I manage finances is similar to keeping one’s house clean. I put everything in its place so that I can find things easily.

Why bother keeping track of your networth? Honestly, why not? I mainly do this nowadays to make sure that I review each account’s transactions. If I did not have this spreadsheet and the habit of reviewing, I’d likely lose track of an account.

I have set up notifications on most of my accounts to alert when there is access or spending on my credit cards. But regularly reviewing each account reminds me to take a closer look once a month.

In terms of our networth, the only account that went down was our personal spending account. This was likely from an expense since all the funds are in a Tangerine high interest savings account.

I am proof positive that one can increase their networth by savings alone. My husband and I reviewed our investment acumen lately and the results were not pretty. But we continue to earn consistently, keep modest expenses and avoid doing too much silly stuff with the investments. Many years we simply did nothing.

There is plenty to be said for doing the simplest of things. It works. You might have nothing to tell anyone that would impress them. But with the kind of money most physicians need to work diligently for, it makes sense to keep it simple.

Our Personal Account consists of cash in a high interest savings account. Currently I get 2.75% thanks to Tangerine. However I have been thinking about putting a portion into VDY ETF which is the Vanguard Canada FTSE Canadian High Dividend Yield Index ETF .

My thinking is that we rarely need such a large infusion of cash in our daily lives. Our retirement portfolio is made up of our CCPC account and our RRSPs. This portfolio is planned for 60/40 to 70/30 asset allocation. We will get there someday..

My personal account is really for spending. I don’t care if there is limited growth. But I figure the Canadian dividends would have preferential tax treatment. I recognize that VDY is mainly made up of banks (about 66% financials) and oil & gas (about 22%).

But the thought of trying to choose individual stocks to buy and hold is NOT what I want to be doing at this stage in my life. I do not care enough to even bother. I will gladly pay the 0.22% MER to keep me away from looking at individual companies. I do not even read the newspaper most days.

I plan to spent the dividends each year. The passive income would likely be higher than the high interest savings account. That would be an additional bonus. Anyhow that is on my mind and I will mull over this for a while before I pull the trigger. We have invested for decades and have never opened a personal taxable investment account.

We have always invested via the Corporation accounts or else I just held large amounts of cash. I have always had serious “cash drag”. Like I said, we pretty much deviated from “optimal” investing but simple habits have allowed us to keep our finances on track.

That has always been my issue with folks who do not seem to be able to save enough. Rather than deal with the biggest issue which is the fact they have meager savings after decades of full time work. They would rather talk about investing. I keep thinking, investments are NOT the problem here.

Furthermore, I firmly believe that the equities market are not less risky the longer one holds an investment. I see it as a percentage game. If one can live on 2% of their liquid wealth, then one can invest as much or as little in the stock market. And I would stay with low cost broad market index funds since picking individual stocks is ever riskier. I am NOT Warren Buffett.

Or one has pension-like income which can cover all their living costs. Few physicians have that. Also many physicians have such high expenses. I often tell my husband that his sister who is a doctor could never retire. No one could generate enough passive income to cover her lifestyle.

It is the regular dull accounting that I partake in that likely keeps our family finances on track. Nowadays the excel sheets do all the heavy lifting.

But there is a great truth that one should track what one cares about.

Enjoy the long weekend!

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Published by Dr. MB

I enjoy the know-nothing, do-nothing approach to investing.

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2 Comments

  1. Hi Dr. MB,

    Like you, I track my net worth monthly, I think it’s worthwhile to keep track of one’s assets and ensure things are increasing every month/year.

    I realize you are attempting to keep things as simple as possible for yourself and for your family (which I commend!), however, with your net worth, things will inevitably get “complicated” due to the magic of compounding. It’s a nice “problem” to have, but nevertheless, it is something to think about. This is what I’ve come to realize as well with my own situation.

    I’m sure you’ve done this already, but I just plugged in your current net worth of $9.2mil into an investment growth calculator, assumed NO additional savings/contributions, and plugged in a very doable conservative 5% rate of return per year. Your net worth in 25 years will be >$31mil. In 30 years, it will be >$39mil. It will be a massive estate.

    Estate planning is definitely a topic I’ve neglected to learn much about (since it’s not fun!), but I’ve come to realize this is a topic which is unavoidable and becomes more important as one’s net worth grows.

    I am hoping some other blogger smarter than me will cover this topic so that I can ride their coattails! 🙂

    Hope you are enjoying the long weekend with your family!

    1. Hey DN!

      In 30 years I may be too old to give a crap. That is if I am lucky to still be around then.

      I doubt my RE will appreciate at 5%. Plus my husband has been thinking of working part time in a couple of years. Finally!!!

      I will meet with my accountant again this summer. I will certainly let you know if there are any interesting strategies recommended to us.

      And yeah it’s a gorgeous weekend out here. And so relaxing!!!

      Have a great one DN!!!

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