Last updated on January 1st, 2021 at 05:23 pm
Hello everyone! Thanks for checking out my net worth update for October 2020. These numbers represent our net worth as of October 1st, 2020. I do my best to round to the nearest $100 to keep everything easy on the eyes.
This month we came into an unexpected windfall. It was a three paycheque month for my wife, and on top of that, she earned a decent bonus for all of her hard work this year. As a result, our income for the month was much higher than normal. This bonus income helped increase our net worth by $12,000! This net worth increase is even better than in our September net worth update where I also reported an abnormally high earning month.
As you can see, our net worth increase was almost totally from saving our income. The net worth increase we earned from our regular pension contribution and mortgage payment only contributed $2,000 to our net worth increase. Our investments dragged down our net worth somewhat – we lost $600 after dividends on our investments.
Liquid Net Worth
Here’s a peek at how our liquid net worth has grown since starting this blog back in June. By “liquid net worth” I mean the cash in our savings accounts and our investments in our brokerage accounts.
We’ve been on a pretty good streak of increasing our net worth significantly each month. These past two months were quite exceptional. In an average month, I expect our liquid net worth to increase around $2,800. This number is based on some calculations I did at the beginning of the year. But, as we’ve experienced, this varies depending on our expenses and if it was a 3 paycheque month. If any annual expenses come due (like insurance or property tax) I expect our net worth increase to be less.
A Peek at our Portfolio
Another thing I’d like to discuss this week is our portfolios. I don’t think I’ve shared everything about our investment accounts just yet. For those of you that don’t know, my wife and I have our registered accounts with Questrade. We don’t have any non-registered accounts. I have a TFSA (1) and an RRSP, while she just has a TFSA (2). Here’s a look at the investments we hold in these accounts:
As you can see, we invest in low-cost, diversified ETFs. Earlier this year I used some spare USD to buy VTI in my RRSP to allow me to avoid foreign withholding taxes on this investment. My wife enjoys monthly dividends, so she picked out two ETFs that pay them: XDG and XDIV. These are both low-cost ETFs from iShares that focus on quality companies with good dividend track records.
At the moment we don’t own any bonds, REITS, or other asset classes. I do plan on buying bonds in the future, but I’ll probably wait until our investment accounts have grown large enough that we can no longer rebalance by simply purchasing more each month. I’m not sure what my target will be for bonds in my portfolio. If anything, I think I’ll have some floating target depending on how comfortable I feel investing in the market. Perhaps between 0 and 15%.
One thing I’ve been thinking about a lot lately is how much Canadian equity I should be holding. And to be honest, I didn’t even know how much of our portfolio was invested in Canadian companies. I decided to plug everything into an Excel sheet and find out. Here’s what I found:
Now, 29% isn’t as bad as I expected. I must have had much more allocated to Canada a few months ago before I started more aggressively buying VEE and VIU. I also had advised my wife to buy a little less of VCN and XDIV, and focus more on XAW and XDG. I’m not sure what the ideal amount of Canadian equity to own is. My feeling is that 29% might be a bit too much – especially if I consider all of the other ways I’m invested in Canada (my job, my home …).
Thanks for Reading!
I hope you enjoyed my net worth update for October 2020! What do you guys and gals think: is 29% too much, or not enough Canadian equities? Should I be investing in bonds yet? Or is it too early? I’d like to hear your thoughts on my portfolio and overall how you think we’re doing so far in our progress towards FI!
If you’d like to read more, check out some of my other articles. Find out the best way to save money on Amazon Canada and my tips for saving up a down payment in a high cost of living area. Finally, consider signing up for my newsletter or following me on social media if you’d like to be notified when I post new articles.