This is my sixth net worth updates report for the year 2016. For those new to my finance journey, net worth update is a simple report I post every month which tracks the progress of my journey to reach my financial goals.
My ultimate financial goal is to become a self-made millionaire in 10 years by saving and investing in stable dividend paying blue-chip companies.
I am posting all my financial information in this website because I love to inspire and motivate people to start their own journey to reach their financial freedom.
In June 2016, my net worth increased by $3100 or 2.30%, thanks to the positive momentum in the stock markets around the world.
Also, I received three pay cheques from my day job – as you know everybody receive bi-weekly salary gets three pay cheques twice. My next one will be in November 😀 .
But, June was very expensive month for our family. Second property tax bill and our closed-relative (& friend) wedding expenses cost us more than $4000.
I would have posted bigger gain in June if I didn’t have those expenses.
However, big gained in my investment holdings and dividend payments helped me to record a decent increased in my net worth.
Now, let’s look at my net worth in numbers.
Last month, my net worth increased by $3100 or 2.30% from my last update.
Year-to-day gain is $29 600 (27.33%).
Net worth update as of June 30, 2016 ()
Assets:$472 000 ()
- Cash: $500 (no change)
- Home: $270 000 (no change) – Yearly adjustment with inflation
- Canadian Stocks: :$157 600( )
- U.S. Stocks:$37800 ()
- Employer’s Pension Plan: $6100 ()
Liabilities:$334 100 ()
- Mortgage :$186 200 ()
- Student loan: $25 500 ()
- Margin loan:$48400 ()
- Credit card 1:$8300 () (low interest credit card – 0.99% special rate for 10 months – will be expired in September 2016)
- Credit card 2:$9700 () (low interest credit card – 0.99% special rate for 12 months – will be expired in March 2017)
- Credit card 3: $24 200 () (low interest credit card – 0.99% special rate for 10 months – will be expired in November 2016)
- Line of Credit 4: $9700 ()(low interest balance transfer – 2.99% special rate for 12 months – will be expired in May 2017)
- Credit card 5: $3000 () (low interest credit card – 0.99% special rate for 10 months – will be expired in December 2016)
- Credit card 6: $0 (no change) (paid-off)
- Credit card 7:$500 () – (regular expenses)- high interest rate of 19.99%.
- Line of Credit 1 : $10 300() – (low interest credit card – 2.99% special rate for 12 months – will be expired in April 2017)
- HELOC:$8300 () – (low interest of 3.35% – primte + 0.5%)
Net worth :$137 900 () as of June 30, 2016
My net worth up by since my last update.
Note
- all amounts are rounded to the nearest $100;
- all numbers are in CAD; and
- Conversion rate 1.00 USD = 1.30 CAD
I have a huge credit card debts because I take advantage of low balance transfer promotion rate and invest in high quality dividend stocks. Learn, earn, save,invest and leverage your skills are the keys to become wealth.
Thank you so much for being in my finance journey and for your support.
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I have to ask…how do you plan on paying off all those credit card loans in a few months when the promotion period is over? A $5000 or $10,000 payout is one thing but $30k+ is very tough..unless you have access to the cash.
I also borrow to invest in the market (margin loan, RRSP loan and MBNA credit card) but all of these are for high quality divided stocks and I can afford the monthly repayment. The MBNA credit card one is only $5k so my monthly repayment is around $50. Come a year from now the balance I can either pay down on my line of credit or if I’m disciplined I’ll pay it off in cash. Point I’m trying to make is do you have $30k in extra room on a line of credit to pay down the MBNA loans or are you hoping to just refinance or sell proceeds of your stocks? What happens if the stock goes down and it’s now worth less? There comes a point where leaders will no longer lend you anymore credit and you need a plan to pay off that high interest debt which will shoot up to +19%.
I’m not against using margin or credit card loans but I personally wouldn’t do a 1 shot gamble and hoping a stock picks up within a year to pay the loan for such a large amount. I would already have a payment schedule in place where I can afford it through wages.
Thanks
Hello Jason,
Thank you for your comments.
Currently I have access to over $60 000 cash from my margin account. But, the margin interest rate is little higher than the credit cards rates (Margin 4.25% to 6.00%, and credit cards from 0% to 2.99%). I also have access over $10 000 in my HELOC. I could pretty much handle if lenders refuse to give any promotion in the future, but I’m keep getting new promotions every months.
As you said, it is very risky approach. Available cash in my margin accounts will decrease along with stock value. I think I went well over on my comport level. You might have noticed that I stopped investing using debts, instead I am trying to pay-downs debts using the saving from day job and the dividends I receive in my non-registered accounts.
I always try to pick good stocks, so, hopefully they will perform well in down market.
Hope I answered your question.
Best Regards
Thanks for the reply. Well hopefully it all works out for you. Are these loans just with MBNA ?
The reason why I started doing loans is I found that contributing X amount each pay check into my investing accounts wasn’t really yielding much. The amounts were too small to buy a position and my contributions would just sit in cash until I had a enough to make a move. I rather buy now and pay over time. Plus I only buy stocks where there is a dividend of over 4% and I have enough shares to take part in a DRIP (if offered). One stock is up 15% since Feb this year and I fianced it on a RRSP loan. Instead of funnelling my contributions every month into my RRSP all I’m doing is redirecting it to the loan repayment which has a low interest of 2.8%.
Hello Jason,
It was a great move you made. I also bought couple of stocks in Feb 2016, and they all performed well. Even some stocks are up more than 50% in couple of months (MTY, BIP.UN, TRP, etc). I wouldn’t have bought them if I don’t use those loans.
I usually use debts when I see a great bargains, situation like last February. Again, it is not a suitable approach for all investors.
DRIP is a great way to build wealth. But, I don’t use the option. I collect dividends and buy stocks if I find any quality one with low price.
Best Regards,
Hey Finance Journey, I love that you use leverage. Have you considered rental property?
Hi PID,
Thank you for stopping by, I like to own rental property, but don’t like to handle the related issues with tenants. I may own cottages and farmland in the future. Currently I focus on dividend growth stocks.
Best Regards,
Gotta love hot market months. Nice overall increase.
Hi IH,
Thank you for stopping by, weather, real-estates and stock market are too hot in Canada. But you know 😀 .
Cheers,
Congrats Man, smart goal setting and right mindset are the way to build wealth. You are in the right direction, keep it up FJ
Hello Amit,
Thank you for stopping by. You are absolutely correct. Mindset is very important to build wealth.
Cheers,