Monday, September 28, 2009
Wednesday, September 23, 2009
Thursday, September 17, 2009
For almost a solid 6 months everyone and his dog has expected the stock market rally to falter, and falter hard. Supposed pundits from every echelon of the financial system, including analysts, money managers, reporters, bloggers, and individual investors have all sung the same tune for the better part of 2009. The conventional wisdom was that the rally was weakly based and we should all get ready for another dip. I don't know if it was because people had just seen one of the largest collapses in confidence and the markets ever, and people tend to get cautious after an event like this, or just downright pessimism. We all should have known that whenever this many people agree that they can foresee a drop in the markets, the indices are headed higher.
The rally party pooper who sold in April of 2006 after the rally accelerated has missed a nice 26% charge in the S&P 500 since then.
Saturday, September 12, 2009
Net worth results for the 2 Months Ended September 13, 2009:
- Debt/Asset ratio dropped to 0.48 from 0.50 (record low)
- Net Worth gained a huge 9.3% (record high)
- Total Assets rose 4.2% (record high)
- Total Liabilities shrunk by 1.0%
- House Value/Total Assets fell to 63.4% (record low)
- Non-Registered Portfolio grew 11.4% (record high)
- Net Worth Calendar Year to Date Gain/Loss: +23%
As I type this update I am extremely pleased with our financial progress, as we look forward to March when our second child arrives. Everything is moving in the right direction and the moves are substantial. Our non-registered portfolio grew by a very strong 11.4% over two months and our net worth is up a staggering 23% since January 15. Our house value is now making up only 63% of our total assets, meaning that we are riding the roller coaster of the equity markets to a greater degree. Running against the wind was difficult over the past year, however the wind has been at our back lately. Home improvements are on the horizon and will eat into our potential savings as we move toward another maternity leave period.
Tuesday, September 8, 2009
The only piece of this strategy that continued to bother me was the fact that I was paying an interest rate of prime + 3% on an unsecured line of credit from a major bank. Even though I am able to claim this interest on my taxes, I was still unhappy with this rate. After attempting to negotiate a lower rate with a few banks on an unsecured line of credit, I decided to go instead with a home equity line of credit secured against our home.
I've just completed the process of opening a home equity line of credit with President's Choice Financial (CIBC Bank). The process was fairly easy and I was quite pleased with PC's price of $150 to open this loan. This option compared very favourably to the fees asked for by two other banks. On the eventual occasion that I close out this loan with PC I will be required to pay a $225 closing fee. The rate on this loan is prime + 1%, currently 3.25%.
Overall this dramatically decreases my cost of borrowing and I will make up the total fees of $375 in mere months. Writing off this interest at 3.25% makes this pretty close to free money.