Saturday, May 2, 2009

net worth coast to coast & my ratios

Canadian Dream; Free at 45's net worth moved up 11% from his last update. The stock market rally, some savings, and a SK real estate revival are the reasons for the uptick.

Frog of Finance's net worth move up moved up 10% bringing him to par with his highest net worth ever. Real estate value increases, stock market gains, and debt repayment had all to do with the nice gain.

Million Dollar Journey's net worth moved up 4% thanks to the market's gains. That is a 6.7% year to date increase for the Maritime Super Blogger.

My Findependance Day saw his net worth jump by 10% as well. The market gains and an increase in his savings drove the healthy gain.

I update my net worth and associated ratios bi-monthly on or around the 15th of the month. My next update is two weeks from now on May 15. Here are the ratios that I like to track in my bi-monthly reports:

Debt/Asset Ratio
This is a ratio that shows me what kind of fundamental financial condition condition we are in. It would be great for one to have a million dollars in assets but if one also had a million dollars in liabilities I would not be as impressed. The aim is to use debt as a tool to grow our assets. For example our recent use of leverage in our non-registered investment portfolio is intended to provide fuel to grow the asset value of the portfolio as the market picks back up. The benefit of receiving dividends earlier is also a perk of this strategy. Our last Debt/Asset ratio was 0.56 (meaning we had $1.00 in assets for every $0.56 in debt)

House Value/Total Assets
I want our net worth to be made up of a diversified set of assets. I find it interesting to see what percentage of our total assets is the value of our primary residence. For now, the lower the better as I am aiming to diversify more into the ownership of dividend paying corporations in various sectors. Currently our House Value/Total Assets is about 70% (meaning that 70% of our total asset value is the value of our humble abode).


mfd said...

Hey MG,

Thanks for the mention. Ya its definitely nice to see things on the up trend. I can't wait until this whole wedding business is over so that my fiance and I can see some real growth in our savings. You know what they say...savings is the key to wealth not investments....or something like that.

Million Dollar Journey said...

Maritime Super Blogger - that has a nice ring to it! :) Thanks for the mention!

Canadian Dream said...

Wow, that's a lot of double digit increases for everyone.

Thanks for the link,

Frog of Finance said...

Those two ratios give a good overall picture. I think I may add them to my monthly net worth update.

For May 1st, that would be 0.46 for debt/assets and 63% for house value/total assets.

Thanks for the mention!

MG (moneygardener) said...

mfd, I hear you.

FT, I want royalties.

CD, Keep it up.

FoF, I like them. Any ideas from anyone for additional interesting ratios let me know.