Welcome to my net worth update for October 2022! These numbers represent my wife and I’s net worth as of October 1st. Please check out our previous net worth update if you haven’t already!
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Maxing our TFSAs!
Last month we accomplished something that we’ve been working towards for what feels like a long time: we maxed our TFSAs!
I’m surprised we both ended up maxing them in the same month. It just took us contributing $1,800 to each of our TFSAs and we are finally able to say we’ve reached their $81,500 contribution limits!
However, since the market has been doing rather poorly, we’re both down in our TFSAs compared to where we were earlier in the year:
- My TFSA: $76,000
- Wife’s TFSA: $83,700
Readers may remember this was my main goal for 2022, as documented in my 2022 New Year’s Resolutions. The best thing about achieving this goal is that it’ll be so much easier to keep them maxed each and every year. It also means I can start contributing more to my RRSP :).
Savings & Expenses
Last month was one of those fantastic three-paycheque months for me, so my income was much higher than usual. On top of that, it was a relatively low-spending month overall. Altogether, we managed to save $9,300—woohoo!
Our only major abnormal expenses were $1,300 spent on health: eye appointments, new glasses, dental checkups, and other similar expenses we had been putting off. However, this expense is a bit misleading since much of it has been refunded or will be refunded shortly by our health insurance.
We also spent a good amount on clothes this month, at $470, and over $200 on a digital subscription my wife plans to leverage in her work.
Observant readers will also notice our property insurance increased from $99 to $116. I inquired, and the justification I received for this is that the cost of rebuilding our home has increased.
As you may expect, I shopped around for a lower rate, but the next best I could find was with Square One Insurance for $105 for what looked like worse coverage. So I stuck with my current insurance policy.
Investments & Dividends
Despite saving $9,300, we contributed much less than this to our investment accounts. Our contributions were as follows:
- $1,800 to my TFSA
- $1,800 to my wife’s TFSA
- $657 to my RRSP
- $250 to my wife’s RRSP
- $10,000 to our Smith Maneuver account (Interactive Brokers)
Excluding that $10k we borrowed, we contributed $4,600 to our investment accounts. Not a bad month!
We also earned some significant dividends last month: $466 compared to $238 during the same month last year. That’s an increase of 96% and a great sign of things to come for our November net worth update.
Based on this increase, I predict we’ll report over $600 in dividends in our next net worth update. And if we continue on this path, in 2023 we should have multiple months where we earn $1,000 or more in dividends—I can’t wait!
Net Worth Change
The only bad news in this month’s net worth update is that the stock market was absolutely brutal. Overall, when including our leveraged portfolio, we lost $16,700. And things don’t look like they’ll recover anytime soon.
These stock market declines were only marginally offset by a steep decline in the Canadian dollar, which pushed up the relative value of our U.S. and other holdings. But unfortunately, this will make it more expensive to buy foreign stocks (through our ETFs) until the USD weakens again.
However, thanks to our high savings rate this month, our net worth fared a bit better, only declining by $5,400 to $662,500. It’s not great, but I’ll take it!
In reviewing our accounts, we ended the month with the following:
- $234,300 in wholly-owned ETF investments
- $84,000 in ETF investments financed with debt (VEQT)
- $50,600 in HELOC debt
- $24,900 in personal line of credit debt
- $15,400 in margin debt
- $21,800 in cash savings
Overall, our leveraged investment strategy isn’t doing too hot. We’re down over $6,900, with the bulk of the losses coming from the investments I made last summer with my personal line of credit and margin loan.
With the way things are going, I expect our losses to increase into the end of 2022. However, I find comfort in keeping a long-term view and remembering that stock market returns will usually exceed the cost of our debt (after tax) on a long enough time scale. I guess we’ll wait and see!
Thanks for Reading
I recently wrote a few articles that you may be interested in. This includes my post on the best REIT ETF in Canada and my how-to article on the getting cash back from your realtor! Consider giving those a read if you think they’ll help you on your financial journey!
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