net worth July, 10

It's time to report my bimonthly net worth. It's been a pretty stagnant two months.

Net worth results for the 2 Months Ended July 15, 2010:

• Debt/Asset ratio stayed at a record low of 0.44
  
• Net Worth rose 0.6% (to a record high)
  
• Total Assets rose 0.7% (to a record high)
  
• Total Liabilities increased by 0.8%
  
• House Value/Total Assets fell to 58.5% (a record low)
  
• Non-Registered Portfolio grew 0.4% (to a record high)

2010 Calendar Year to Date Gain/Loss: +9.4%

It's been a fairly flat to down two months on the stock markets. Personally we have refinanced our mortgage by lumping in our home equity line of credit, legal fees, and a little bit more which caused our liabilities to rise slightly. This mortgage adjustment should enable us to ramp up our asset growth going forward as we have extended our amortization to 35 years. We saved a decent amount of money over the last 60 days and most accounts experienced slight increases in value.

net worth update March '10

It's time to report my bimonthly net worth. I report my net worth on the moneygardener or around the 15th of May, July, September, November, January, and March.

Net worth results for the 2 Months Ended March 15, 2010:

• Debt/Asset ratio dropped to 0.44 from 0.46 (record low)
• Net Worth gained 6.7% (record high)
• Total Assets rose 3.2% (record high)
• Total Liabilities dropped by 0.9%
• House Value/Total Assets fell to 60.6% (record low)
• Non-Registered Portfolio grew 5.7% (record high)

Another strong gain in net worth and we are looking good in all categories. Records were set across the board with the exception of our liabilities where we still above early 2009 levels. We're curbing expenses lately as we deal with less employment income. We are also hoping to continue to save money this year and we're determined to find ways to get it done as we reduce fixed costs and consider more frugal options.

net worth update, jan '10

It's time to report my bimonthly net worth. I report my net worth on the moneygardener or around the 15th of May, July, September, November, January, and March.

Net worth results for the 2 Months Ended January 15, 2010:

• Debt/Asset ratio dropped to 0.46 from 0.47 (record low)
• Net Worth gained 3.0% (record high)
• Total Assets rose 1.8% (record high)
• Total Liabilities rose by 0.4%
• House Value/Total Assets fell to 61.7% (record low)
• Non-Registered Portfolio grew 5.3% (record high)

Our net worth growth keeps chugging along since bottoming out in March of 2009. Savings have still been a bit depressed but I see this picking up in February and March. We are still doing all the right things by living well within our means, saving regularly for investments in our future, and holding and adding to shares of dividend growing corporations.

2009 net worth results

Well, with 2009 becoming a distant memory it's time to look back at how net worth held up here and with our usual suspects.

First off our net worth rose about 33% for 2009 calendar. That sounds much better than it truly is though, as our net worth was actually at a higher level in May of 2008 than it was in March of 2009. A milestone for 2010 would be to see our house value get to the point where it makes up 50% of our total assets. It currently sits at about 62%.

The Maritime Super-Blogger, at Million Dollar Journey posted a 29% increase in net worth over 2009 reaching the $400,000 mark. The 30 year old is 40% of the way to his goal of a $1,000,000 net worth by age 35.

Tim at Canadian Dream increased his net worth by 39% in 2009. During the year he focused on building his market investments. His net worth stands at $304,500.

If any other bloggers have calculated their net worth increase for 2009 please drop me a comment with your results or a link to your blog, and I will post your results with a link in a follow up post to this one.

net worth update, Nov 09

It's time to report my bimonthly net worth. I report my net worth on the moneygardener or around the 15th of May, July, September, November, January, and March.

Net worth results for the 2 Months Ended November 15, 2009:

• Debt/Asset ratio dropped to 0.47 from 0.48 (record low)

This is a measure of our financial health. Total debts divided by total assets. So currently for every $1 of assets that we have, we have $0.47 of debt. Back in May of 2006 our debt/asset ratio was a whopping 0.77. What is your debt/asset ratio?

• Net Worth gained 3.3% (record high)

Net worth is probably the best barometer of one's financial health. The recent financial crisis caused our net worth to drop by about 14% at one point. Since then our net worth has rebounded 37%. How has your net worth fared in 2009?

• Total Assets rose 1.3% (record high)
• Total Liabilities shrunk by 0.9%
• House Value/Total Assets fell to 62.8% (record low)

I like tracking this because it shows us how diversified we are. Our asset base is made up 62.8% by the value of our humble abode.

• Non-Registered Portfolio grew 3.4% (record high)
• Net Worth Calendar Year to Date Gain/Loss: +27%

2009 is shaping up to be a great year for our net worth. The year began amid the credit crisis and our net worth has grown leaps and bounds since then as the market has risen.

net worth update, Sept 09

It's time to report my bimonthly net worth. I report my net worth on the moneygardener or around the 15th of May, July, September, November, January, and March.

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.

vancouverites are richest canadians

An interesting article appeared on today's Globeinvestor.com: Vancouver Ousts Calgary as Canada's Highest Net Worth City

For Canadians as whole household net worth dropped 6.2% in 2008. Our net worth dropped by pretty much that exact percentage during calendar 2008; I guess that makes us average. We live in Brantford, Ontario. In Calgary, Alberta net worths actually dropped on average by 12.3% and in Vancouver wealth dropped by only 3.1%.

Vancouver real estate prices are holding up pretty well making them the richest Canadians with an average net worth of $575,826 per household versus Calgary's $569,926 and Ontario's $354,968. British Columbians are also piling back into the stock market faster than elsewhere while Quebecers and Ontarians are socking money away in safe places.

net worth update, july 2009

It's time to report my bimonthly net worth. I report my net worth on the moneygardener or around the 15th of May, July, September, November, January, and March.

Net worth results for the 2 Months Ended July 14, 2009:

• Debt/Asset ratio dropped to 0.50 from 0.51 (back to $1.00 for every $0.50 of debt - a record low)
• Net Worth gained 1.7% (to a record high)
• Total Assets rose 0.6% (to a record high)
• Total Liabilities shrunk by 0.4%
• House Value/Total Assets fell to 66.0% (a record low)
• Non-Registered Portfolio grew 7.4%
• Net Worth Calendar Year to Date Gain/Loss: +12.5%

Steady as she goes, as our net worth continues to grow to record highs. The S&P 500 index was up about 2.5% during the period and our net worth grew by 1.7%. Our savings rate has slowed lately as we had some lingering planned household expenses. I expect our savings rate to pick up over the next few months and the money will go toward debt reduction unless I see an irresistibly priced stock to add to. It is very encouraging to see our debt/asset ratio back down to meet the record low we achieved back in September of 2008.

net worth history

I believe that net worth is a very important measure of one's financial health. Keeping your net worth statement in mind when making financial decisions will usually lead you to make the correct choice. Most of successful personal finance comes down to trying to grow your net worth. With that being said, I wanted to look at my net worth progression over the past few years.

YEAR ONE May, 2006 to May, 2007

• Net worth grew 108%
• Started the year with $0.77 of debt for every dollar of assets and ended the year with $0.60 of debt
• Started the year with a house value that made up 83% of our total assets and ended the year at 77%
• S&P 500 index was up roughly 18% over the year

YEAR TWO May, 2007 to May, 2008

• Net worth grew 40%
• Started the year with $0.60 of debt for every dollar of assets and ended the year with $0.51 of debt
• Started the year with a house value that made up 77% of our total assets and ended the year at 70%
• S&P 500 index was down roughly 6% over the year

YEAR THREE May, 2008 to May, 2009

• Net worth grew 5%
• Started the year with $0.51 of debt for every dollar of assets and ended the year with $0.51 of debt
• Started the year with a house value making up 70% of our total assets and ended the year at 66%
• S&P 500 index was down roughly 38% over the year

YEAR FOUR PREVIEW The markets are due for a good year, and we are due for a large net worth increase as we fuelled the fire with extra funds during YEAR THREE. After all it can't get much worse than YEAR THREE.

What do you think a strong percentage long term annual compounded net worth growth rate would be?

Consider that a good investment rate of return is considered to be 10%+, but with net worth, debt is being paid off at the same time, and one's home makes up a good percentage of assets in most cases.

net worth update, may 2009

It's time to report my bimonthly net worth. This particular report (May) is what I call my 'fiscal year', as I began tracking net worth in May of 2006.

Net worth results for the 2 Months Ended May 15, 2009:

• Debt/Asset ratio dropped to 0.51 from 0.56
  
• Net Worth jumped up 18.9% (to a record high)
  
• Total Assets rose 5.9% (to a record high)
  
• Total Liabilities shrunk by 4.3%
  
• House Value/Total Assets fell to 66.4% (a record low)
  
• Non-Registered Portfolio grew 20.5%
  

Calendar Year to Date Gain/Loss: +10.6%

2008 Fiscal Year Gain/Loss: +4.6%

This was by far our largest bi-monthly net worth gain ever. It feels good to be up this much after several months of weak net worth changes. The markets were in a deep hole in mid March and have climbed out of that hole to much higher levels today. We have also paid off about $5,700 of debt over the past 60 days.

Fiscal 2008 was extremely weak, as we grew our net worth by only +4.6%. This is completely attributed to the weakness in the stock market. The markets are down by 38% over the period. So against that headwind, I'll consider that not half bad.

We'll continue to do what we can on the savings front and either invest the money or pay down debt, depending on the level of the stock market. I don't claim to know where the market is going but lately I have felt it appropriate to pay down debt instead of investing at these levels.

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).

net worth update, march 2009

I'm releasing net worth results early this bi-monthly period.

Results for the 2 Months Ended March 11, 2009:

• Debt/Asset ratio rose to 0.56 from 0.54
• Net Worth moved down 7.0%
• Total Assets declined 2.5%
• Total Liabilities increased 1.3% (highest since July 2006)
• House Value/Total Assets rose to 70.3%
• Non-Registered Portfolio declined 12.5%
• Calendar Year to Date Gain/Loss: -7.0%

What a crappy two months it has been. This is our second largest two-month net worth decline ever. Once again the markets were the main culprit as the S&P 500 index was down 18% over the same period. Our net worth is now back at January 2008 levels. Our savings levels have also been weak lately as we are going through a planned period of extra spending. Unless something miraculous occurs we will be down in our fiscal year May 2008 to May 2009 on the next update.

This is all to be expected as we are highly leveraged to the stock markets and they have been terrible. We'll take our lumps and keep looking to the long term. Keep your head up...

net worth update, january 2009

Results for the 2 Months Ended January 15, 2009:

• Debt/Asset ratio rose to 0.54 from 0.53
• Net Worth moved up 1.3%
• Total Assets increased 2.6% (record high level)
• Total Liabilities increased 3.8% (highest since Sept. 2006)
• House Value/Total Assets fell to 68.6% from 70.4% (record low level)
• Non-Registered Portfolio rose 16.3%
• Calendar Year to Date Gain/Loss: +0% (first update)

I have to consider this good progress. Assets are at a record high while our debt/asset ratio is still very manageable, as it is at March 2008 levels. What having a debt/asset ratio of 0.54 means is that we have 54 cents of debt for every dollar of assets. Net worth moved up by a small percentage from a very low level. In the next four months we need to pick up our net worth growth or we will have a negative year over year result when I record our fiscal results which wrap up on May 15, 2009; and that would be depressing indeed.

For the two month period the S&P 500 index was down about 3.5%.

january net worth preview

Since May of 2008 our net worth has started to look a little funky. Things were generally only up until the markets really started their hard downward dive in May of 2008.

Lately:
The stock markets seem to be least settling down, which is adding some stability to our net worth value. We are continuing to save a significant portion of our employment income each month, and our home value is flat. These are the probably the three factors that will affect our net worth the most in 2009.

I'll update our net worth next around January 15, 2009.

2008, a net worth disaster

2008 was a very bad year for the personal net worth of the majority of people and households. Declining real estate values coupled with a stock market crash sent net worths reeling, especially in the latter half of 2008. Our net worth actually peaked out in September during 2008.

Even though I typically measure my net worth on the 15th of the month bimonthly, I wanted to see how we made out in calendar 2008. Considering how ugly the year was in every asset class we did not fare half bad.

Net Worth 2008 Calendar Year
January 15, 2008 = $135,456
December 31, 2008 = $145,555
2008 Calender Net Worth Gain/Loss = +7.5%

In a year where my wife was on maternity leave, the S&P 500 index was down a whopping 39%, and my home value was flat, any gain in net worth should be considered a small victory.

Other 2008 results from the blogosphere:
Canadian Dream Free at 45 (+2%)
Million Dollar Journey (+11%)
The Financial Blogger (+17%)
Frugal Bachelor (+23%)

net worth update november, 2008

Results for the 2 Months Ended November 14, 2008:

• Debt/Asset ratio rose to 0.53 from 0.50


• Net Worth moved down 7.9%


• Total Assets decreased 0.7%


• Total Liabilities increased 6.5%


• House Value/Total Assets rose to 70.4% from 69.9%


• Non-Registered Portfolio rose 8.0%
  
• Calendar Year to Date Gain/Loss: +5.1%

I have to admit that I was dreading putting this net worth report/post together. Our net worth has been hammered down almost 8% since the last bi-monthly update in September. The S&P 500 index is down about 28% since the last update, so this comes as little surprise. Basically the last seven months of net worth gains have been wiped out, as we are now back to April, 2008 levels. As readers know I am buying fist fulls of dividend paying stocks down at these levels. Let's just say that I am investing in future net worth reports. I can take the pain now, and it does hurt, with a look to the future.

Leverage - Liabilities are up 6.5% this update due to us utilizing line of credit funds in order to fund our non-registered portfolio at these low stock valuations. Whether these low stock prices continue for the next few months or next few years, or, god forbid, go much lower, I'll still be glad I started investing these funds now because I'll be receiving dividend income from the funds months earlier.

House Value - I have maintained our house value in net worth calculations at the same level since July of 2007. During this time we've made improvements to our home, however I feel that their affect on the value of the house are negligible when you consider the recent weakness in Canadian real estate prices.

net worth declines abound

Declining North American home prices coupled with plunging stock markets mean that personal net worths are declining everywhere from Los Angeles to Halifax. This is a phenomenon that is not only occurring in North America, but in most of the world. Personal finance bloggers are no exception.

Here is how some of the usual suspects fared on their November 1 updates:

American, Clint from Accumulating Money saw his net worth decline by 9.9% since October 1.


Eastern Canadian, FT from Million Dollar Journey had his net worth decline by only 0.3% since last month due to some strength in his savings as well as stable real estate values. FT has had a strong performance in 2008, as he is sitting at a net worth increase of 13.3% year to date.


Western Canadian, Tim at Canadian Dream: Free at 45 saw his net worth decline by 3.6% since his last update in late August. He is still hanging on to a 1.9% increase year to date.

How bad will my November net worth damage be? I report my net worth on or around the 15th of the month, every other month. My next report is scheduled for around November 15. See the blog sidebar for all previous net worth updates, like my last one in September here.

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net worth update september, 2008

Results for the 2 Months Ended September 14, 2008

A 'record' high net worth!

• Debt/Asset ratio fell to 0.50 (we officially have $1 of assets for every $0.50 of debt)
• Net Worth moved up 6.5%
• Total Assets increased 2.6%
• Total Liabilities decreased 1.0%
• House Value/Total Assets fell to 69.9%
• Non-Registered Portfolio rose 13.9%

Calendar Year to Date Gain/Loss: +14.0%

Well, we sprung back nicely from our last report on July 15, which was ugly and revealed our first net worth decline ever. It just so happens that July 15 was actually a 52 week low for the S&P 500 index, so it's easy to see that the market helped us rebound. Having a greater affect than the market though, was the appreciation of the U.S. dollar. The Loonie was dead even with the Greenback on July 15, and it now sits at $0.94 USD. This gave a serious boost to our non-registered portfolio which is about 35% U.S. equities. I am pleased with our year to date percentage change of 14%, during a year of poor stock markets and reduced employment income.

Nevertheless, it feels good to be headed in the right direction again.

net worth update july, 2008

Results for the 2 Months Ended July 15, 2008

Debt/Asset ratio rose to 0.52%
Net Worth moved down 4.9%
Total Assets decreased 2.9%
Total Liabilities decreased 0.9%
House Value/Total Assets rose to 71.7%
Non-Registered Portfolio declined 12.9%

Calendar Year to Date Gain/Loss: +7.1%

Ouch...what a horrible 60 day period. Almost 5% of our net worth was lost since May 15, 2008. This is our first ever net worth decline. Obviously the poor stock market performance has hit our net worth pretty hard. The S&P 500 index is down 16.4% year to date.

what's your net freedom?

For those of us that like to think that we are living below our means, there exists an interesting alternative to net worth in determining your wealth level. Mr.Cheap from Quest for Four Pillars does a great job describing this alternative, in his 'An Alternative to Networth' post.

This metric is mentioned in the book 'The Millionaire Next Door' and is an interesting way of looking at one's wealth level, as it factors in your personal cost of living. In essence this formula compares your assets to your lifestyle costs, quite simply - How Long Could You Go Without Receiving a Paycheque. Simply take your net assets (assets minus liabilities) and divide by your monthly expenses. This will give you the number of months that you or your family could go without regular income. I think I will call it 'Net Freedom'

Whether you would include your home equity in the calculation or not depends on personal choice. If you use your home equity as an asset then don't forget to include an amount in your expenses that you would be paying for rent. Also, if you are a homeowner, when adjusting your expenses think about how they would change if you no longer owned a home. If you would choose not to move when you became paychequeless then the calculation becomes simpler. Obviously there are flaws to all of this as many more changes to your expenses could come to light if you suddenly were without a job (ie benefit loss).

When I perform the calculation for our family, our Net Freedom is about 46 months, or 3.8 years. I like this metric because it not only measures wealth, but it measures wealth against lifestyle costs. This allows those who live below their means to score higher and rightfully so, as their financial situation is truly more flexible and powerful than someone who lives high on the hog and earns just enough to get it done. Certainly it is an interesting, and perhaps eye-opening exercise to calculate this for your personal situation. As always, I'd enjoy hearing reader's thoughts on this.