Welcome to my net worth update for August 2022! These numbers represent my wife and I’s net worth as of August 1st. Please check out our previous net worth update if you haven’t already!
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Investment Loan Update
Last month I contributed another $10,000 to my the Interactive Brokers account I’m using for my Smith Maneuver investments. This contribution, combined with the 1% interest rate increase from the Bank of Canada, pushed my total interest expense to just under $250 for the month.
Now my Tangerine LOC sits at 4.70% while my HELOC is at 5.00%—ouch!
It seems likely we’ll at least see another 0.50% to 0.75% increase this fall. After that, I expect the Bank of Canada (and the U.S. Federal Reserve) to pause and give these rate increases some time to take affect. But, of course, it all depends on where inflation is headed, and that’s anybody’s guess.
If I continue my plan to contribute $10,000 per month until the end of the year, by that time I’ll have about $120,000 in investment loans (mostly my HELOC, but also margin and unsecured line-of-credit). By that time rates will probably increase another 1.50%, which means my loans will be at about 6.50% and costing me around $650 per month.
Dividend Income
On to the good news: It was another great month for dividend income. A couple of our quarterly payers (like VIU, VCN, and VUN) and our monthly dividend ETFs (XDIV, XDG) paid us a total of $781!
Historically, we’ve reported much lower dividends in our September net worth update, but I still hope to see at least $100 in dividends.
Net Worth Change
Last net worth update I reported how it was a largest net worth decrease to date. This month, things recovered in a big way, and we were able to post a $18,900 net worth increase! That means our net worth increased from $645,800 to $664,700.
Most of this increase is from our investments, which mostly recovered from the their $20,000 loss in the previous month.
As usual, our home makes up the majority of our net worth. But our liquid net worth is slowly starting to catch up, totaling $256,000.
Expenses in Depth
Last month was another expensive month for us (I feel like I keep saying this!). In total we spent $10,425 which is even more than we earned.
The main reason for this high spending is that we booked flights to see some of our extended family. Two tickets came in at around $2,300 each. Lucky for our budget, our accomidations will only be charged closer to the travel date.
Despite this, we still managed to contribute $2,200 to our investment accounts (not including our mandatory pension and work RRSP contributions).
Thanks for Reading
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Nice to get a reprieve from the market onslaught, even if only temporary. The downside of net worth tracking is that you do pay attention to the numbers during a down market–even if you know you they’ll rebound and you don’t need to funds for a decade plus! I’ve had to stop myself from checking outside of my monthly excel update.
So true! Not being upset when the market falls takes a fair bit of “zen”. Somehow even with these monthly updates I find myself checking far less than my peers. They regularly check on their porfolio during the day and I pretty much only check once a month.
Thanks for stopping by!
That’s nice to see your net worth hasn’t been negatively impacted too much by the bear market this year. Given the size of your portfolio, a $20K drop appears to be manageable.
Oh man. 6.5% interest rate for an investment loan reminds me of the olden days, like pre-2010, when asset prices weren’t overly inflated lol. I hope we don’t go there again. But another 0.50% increase by year end is likely. I think anything over 0.50% and a lot of people with variable rate mortgages will be forced to renew their terms with higher monthly payments.
I think my portfolio has done well because we have a good amount of Canadian stocks (through our ETFs) and also a bit of a dividend focus, which has performed better than average… but we’ll see if that holds up. Looks like tech is poised for a rebound, IMO.
Definitely think we’ll see 1% to 1.5% in raises by year end. Then predict the so called “pause” will happen. Like you, I’ll be following with great interest!
Glad you ended up contributing to your investments despite the expensive flight tickets. May I ask why each ticket is so expensive? Was it a last minute somewhere far? Our 4 tickets from Montreal to London, UK in Aug (High season) which I booked in July came up to almost the same price ($2280 for all 4 tickets).
Hi Dreamer. I didn’t categorize it 100% correctly, but that amount includes tickets for some family members as well. Hopefully that clarifies things!
Congrats on $781! XDG is one of my personal fav dividend ETFs. I wonder what more investors are reluctant to go global? With diversification being your only free lunch it spreads out nicely.
Thank you Samuel! I’m with you – I definitely think XDG is underrated these days.