Pengrowth Cuts Distributions

As you may have noticed, I like annoucing when one of my companies increases its dividend payments. Well, sometimes the reverse occurs, and I decided that I should note as well.

Pengrowth Energy Trust has just annouced that distributions will be reduced by 25% to $0.17 per month, starting in Januray 2009.

The distribution cut is hardly surprising, but I am somewhat surprised that the cut is so mild. After all, the price of a barrel of oil has fallen from over $140 last July to about $40 right now.

Digging a little more explains this fact, though. Pengrowth uses forward price swaps and option contracts on about 50% of their oil production for 2009 (at $86) and 2010 (at $93). The trust also does this for natural gas, although to a lesser extent.

I own a very small position of Pengrowth in my DRiP portfolio (it is one of my newest positions). A nice feature of the reinvestment plan is that both the reinvested dividends and the additional purchases get a 5% discount. So not only do I get to add money without have to pay a commission, I get a discount on purchases. I plan on slowly increasing my position in the company in 2009, a few $100 at a time.

Fortis Increases Dividend

Another of the companies that I own in my DRiP portfolio, Fortis, has just annouced a small 4% dividend increase. On top of that, the company has added a 2% discount on shares purchased by the reinvested dividends.

Although this may look like an insignificant increase, it's still means that I'm getting a raise of 6% (since I reinvest those dividends). Who can say with confidence that they'll get that much of a raise at work this year, without having to do any more work, or even asking for it?

Enbridge Dividend Increase

Enbridge, one of the companies that I own in my DRiP portfolio, has just annouced that they are raising the dividend by 12%. Quarterly payments are increasing from $0.33 to $0.37, starting with their next payment in March 2009.

Isn't that nice? I'm getting paid more, without having to do anything. Even better, that increased dividend will continue buying even more shares of the company. That's the magic of dividend reinvestment and dividend growth.

Net Worth Update

As of December 1st, my net worth is $69 761 (down 1.6% from $70 885). If I exclude house-related assets and liabilities, my net worth is $45 557 (down 2.8% from $46 852). Things were still quite crazy on the financial markets at the beginning of the month, but they seem to be slowly stabilizing (meaning they're not dropping as fast as they did). I wouldn't be surprised, however, if the recession was to drag on for quite a while. But it is nototiously hard to predict these things, so I'm not going to worry about it and I'll stick to my plan.

Assets ($135 692, up 0.3% from $135 276)

• Bank Accounts $3 632 (up 10% from $3 291)
• Emergency Funds $3 354 (up 0.4% from $3 340)
• RRSP Accounts $32 889 (up 1.1% from $32 527)
• Non-Registered Investments $9 668 (slightly up from $9 660)
• Home $86 100 (stable)

Liabilities ($65 932, up 2.4% from $64 391)

• Credit Cards $3 992 (up 73% from $2 306)
• Mortgage $55 350 (down 0.2% from $55 469)
• Heat Pump Loan $6 545 (down 0.7% from $6 597)
• Line of Credit $0 (stable)

As planned, my credit card debt has risen due to some important car repairs. These were financed under a no-interest, 12-month payment plan. There was a slight delay for the replacement of our windows, so they haven't been billed on our line of credit yet. Due to that delay, we were able to negociate an arrangement under which they will be paid in two installments -- one in December and the other next May. So the replacement of those windows will have a lower impact on my monthly situation. By the time the second installment is to be paid, the first one will be long gone from our line of credit. We may even be able to pay for the second one without using the line of credit.

Another Contest at WhereDoesAllMyMoneyGo

There is another nice contest at WhereDoesMyMoneyGo.com -- a GPS.

Telus Dividend Increase

I'm getting a pay raise!

Telus has just announced that they are increasing their dividend from $0.45 to $0.475 per quarter. That's only a 5.5% increase, but considering the current state of the markets, it's nothing to sneeze at.

I own Telus through the Dividend ReInvestment Plan, so I can purchase more shares of the company without paying any fee. Furthermore, the increased dividends are used to automatically buy more shares of the company.

Free Book from WhereDoesAllMyMoneyGo.com

Preet Banerjee ia holding a contest on his blog, where the price is a free copy of The Snowball: Warren Buffett and The Business of Life, the new biography of the best-known investor of our time.

You only have to leave a comment here.

Share Purchase: GE

I just purchased some more shares of General Electric (GE) in my RRSP, at slightly above$18 per share. I had established a first position in the company this summer at $29, so I am essentially averaging (and doubling) down.

My beliefs are that the company still has good prospects in the next decades. It's been through recessions before and survived. It pays a nice dividend (over 6% right now), so I can afford to wait until the share price recovers.

Net Worth Update

As of November 1st, my net worth is $70 885 (down 3.6% from $73 501). If I exclude house-related assets and liabilities, my net worth is $46 852 (down 6.4% from $49 639). Since the beginning of the financial crisis, I am down almost $5 000, or about 6.25%. There are signs, however, that the worst of it may be over. The depressed prices could still linger for months, which to me is good news. After all, I am years from retirement and will be a net acquirer of stocks, so low prices are what I am looking for.

Assets ($135 276, down 2.6% from $138 843)

• Bank Accounts $3 291 (down 33% from $4 945)
• Emergency Funds 3 340 (up 23% from $2 720)
• RRSP Accounts $32 527 (down 7.7% from $35 253)
• Non-Registered Investments $9 660 (down 1.6% from $9 818)
• Home $86 100 (stable)

Liabilities ($64 391, down 1.5% from $65 341)

• Credit Cards $2 306 (down 25% from $3 097)
• Mortgage $55 469 (down 0.2% from $55 588)
• Heat Pump Loan $6 597 (down 0.7% from $6 650)
• Line of Credit $0 (stable)

Credit card debt has gone down a lot, but the trend will reverse in November since I am having big car repairs done, which will be on a 12-month no interest financing. There was quite a bit of movement between my bank accounts, as I moved some money to fund my new TFSA account at ING to take advantage of their promotion. I also put more money than usual into my non-registered investment (through my DRiPs) to take advantage of the currently depressed market prices. My plan is to keep doing that as long as the prices remain good. Now is not the time to increase my cash position.

Preparing for the TFSA, Part 2

A few weeks ago, I wrote how I was preparing for the arrival of the TFSA by unwinding the GIC ladder I am using for my emergency fund.

It seems the timing was good for that, since lat week ING Direct announced that they were offering the TFSA early. You could open the account now, and it would be automatically converted into a TFSA on January 1st. As a bonus, they would pay out a bonus equal to their regular interest rate on any money deposited in it, to compensate for taxes.

So I've moved money to take advantage of the offer, and will keep moving more as my GIC ladder unwinds.

Election Day

Today, we Canadians get to vote on our next government. If you are a Canadian, I hope you took the time to listen to what each party is proposing, as well as the counter-arguments from their opponents.

Don't let yourselves be dazzled by short-term promises. Voting is very much like investing -- you have to sort through all kind of chaff to try and understand what each party is really in favour of.

I won't tell you who to vote for, nor will I say who am I voting for.

But I will tell you to vote. It is not only a right, it is a duty and a privilege.

Keep Putting Money Into the Market

Yes, that is what I'm doing right now. I keep putting more money into the market, by slowly buying more shares of good companies using dividend reinvestment and share purchase plans (DRiPs). I also keep adding money to my RRSP accounts, and purchasing share in there too.

Am I crazy?

I don't believe I am. Down markets represent opportunities to invest when the prices are low. You just have to select companies that will endure. Does anyone think that The Bank of Nova Scotis (for example) will go out of business? So why not buy when its shares are cheap?

Remember the rule: buy low, sell high.

Net Worth Update

As of October 1st, my net worth is $73 501 (down 2.8% from $75 601). If I exclude house-related assets and liabilities, my net worth is $49 639 (down 4.4% from $51 908). All of this is because the stock markets tanked in September, as reflected by my registered and non-registered invesments. This may seem like bad news, but it really is not. I am sticking to my investment plan. This is a good time to buy quality companies currently on sale.
I also did the initial downpayment for the replacement of some of our house's windows. This came out of my regular cash flow. The rest will be due upon delivery of the windows, and that will come out of the line of credit.

Assets ($138 843, down 2.7% from $142 741)

• Bank Accounts $4 945 (down 8% from $5 380)
• Emergency Funds $2 720 (stable)
• RRSP Accounts $35 253 (down 6.7% from $37 800)
• Non-Registered Investments $9 818 (down 6.3% from $10 482)
• Home $86 100 (stable)

Liabilities ($65 341, down 2.7% from $67 140)

• Credit Cards $3 097 (down 25% from $4 108)
• Student Loan $0 (down 100% from $375) -- Paid!
• Mortgage $55 588 (down 0.2% from $55 706)
• Heat Pump Loan $6 650 (down 0.7% from $6 701)
• Line of Credit $0 (stable)

Credit card debt went down with the payment of the car repairs and water heater. I also called to get my student loan fully paid, using bonus points from my credit card. That means that aside from my credit cards, I no longer have any personal loans -- everything is house-related. Woo-hoo! :o)

Blood in the Streets!

Yes, it certainly looks like there is blood in the streets. Yesterday the markets tanked. Is this the end of the world? Of course not.

Me, I freed up some cash in my RRSP by selling half of my Pepsi shares (I had a fairly large position) and I'm waiting to see what solid company will be most appealing. I believe we may not have reached the bottom yet, so I'm watching and analyzing companies.

I expect tomorrow's net worth update to show a drop in my assets, due to my investment accounts. That's ok, I'm in for the long term. At the end of the month, my net worth is not the most important thing. Cash flow is more important, because it means that I can continue to pay my debts, buy grocery, and add money to my investments.

Life is beautiful. :o)

Preparing for the TFSA - My GIC Ladder

In January, Canadians will be able to take advantage of a new investment venue, the TFSA (Tax Free Savings Account). Using a TFSA, we will be able to shelter up to $5000 a year, to grow without being subject to Canadian and provincial taxes. Unused contributions will be available in following years, and any money taken out of a TFSA will also be added back to the next year's contribution limit.

Personally, one of the things I plan on using the TFSA for will be my emergency fund. That way, I will no longer pay taxes on the interests received from that money.

Up to now, my emergency fund has been composed of a high-interest savings account, as well as a 1-year GIC ladder, with one step every month. If you are not familiar with the term, a GIC ladder is a number of GICs, each with the same length, but each made a certain lenght of time after the previous so that the all the GICs together cover the length of the ladder.

For example, my 1-year GIC ladder is composed of 12 GICs, each with a 1-year term. One is started in January, a second one in February, March, and so on. Whenever one of the GICs come to its term, the money is reinvested in another 1year GIC.

A ladder is useful to average out the interest rates available on GICs, and also guarantees that some money will flow out every months, should there be an emergency. If a big emergency requires money than 1 month's money, it is always possible to cash out of a GIC before its term, although doing so reduces the interest that will be paid on that money.

As January 2009 approaches, I have decided to stop reinvesting the money coming out of my ladder, so that I can put a bigger chunk of money into my TFSA right at the beginning of the year. Once the money is in the TFSA, I'll start a new GIC ladder in the TFSA.

Customer Service at Costco

Last weekend, I did some shopping at Costco. There was a $3 rebate using a coupon, and I was taking two of the items. I had previously asked whether I needed two coupons, and been told no, that that the cashier would simply scan the coupon twice.

While making my way to the exit, I noticed that the coupon had been applied only once. Turning back, I went to see the cashier, who redirected me to a customer service desk to get my rebate. I got my $3 back without any problem.

The amazing thing, however, happened yesterday. I got a phone call at home from Costco. They had noticed that I hadn't received the rebate twice, and were calling me to make sure I would receive it. I thanked the representative, and explained that I had noticed and gotten my money back before leaving the store.

What amazes me is that they have a process in place to make sure that each customer gets the rebates. Wow, talk about going the extra mile for the customer!

Net Worth Update

As of September 1st, my net worth is $75 601 (up 1.7% from $74 315). If I exclude house-related assets and liabilities, my net worth is $51 908 (up 2.2% from $50 791. A very good month, considering that we replaced the water heater this month, and that this expense was paid from my own cash flow (through my credit card) without any new financing. I had to pay for some unexpected urgent car repairs (not the ones I am planning to get done, those are still to come), but that too came from current cash flow (no financing).

Assets ($142 741, down 2.2% from $145 874)

• Bank Accounts $5 380 (up 5.2% from $5 114)
• Emergency Funds $2 720 (down 3.2% from $2 810)
• RRSP Accounts $37 800 (up 4.6% from $36 140)
• Non-Registered Investments $10 482 (up 6.7% from $9 825)
• Home $86 100 (stable)
• Arbitrage $0 (down 100% from $5 000)

Liabilities ($67 140, down 6.2% from $71 539)

• Credit Cards $4 108 (up 3.4% from $3 974)
• Student Loan $375 (down 41% from $635)
• Mortgage $55 706 (down 0.2% from $55 824)
• Heat Pump Loan $6 701 (down 0.7% from $6 751)
• Arbitrage $0 (down 100% from $4 131)

Both my assets and liabilities went down significantly this month, because of the end of my arbitrage experiment. A slight increase in credit card debt because of the car repairs and replacement of the water heater (I'm still paying down my credit cards completely every month, so no interest is paid on that debt). Kept adding money to my non-refistered investments, taking advantage of the down markets.

Received the Electrician Bill

Last week, when we replaced the water heater, I had to call in an electrician to replace the cabling and connect it.

Well, I received the bill on Monday, and the $185 bill was pretty much in the range I expected ($150-$200).

So the total cost for replacing the water heater was $1 085. That may seem fairly expensive, but you have to remember that it will be good for a minimum of 12 years, which means $90 per year. If it lasts 1.5 times the duration of the warranty, that cost goes down to $60 per year.

By comparison, the cheaper water heater would have cost about $300 less while being good for a minimum of 6 years. That's $130 per year on the warranty's time, and $87 per year if it lasted 1.5 times the warranty.

I believe it's one of those times were buying high-quality was worthwhile. Would you agree or disagreee?

Conclusion of the Credit Card Arbitrage Experiment

In September last year, I started an experiment in credit card arbitrage. Yesterday I received my last statement for the credit card I used to run the experiment.

In early August, as soon as the GIC came to an end, I used the money to pay back the credit card. I didn't wait for them to send me that last statement, because I was worried that they would begin accruing interest as soon as the interest-free period ended.

So here I am, with the credit card paid back in full. I got $160 in interest from the experiment, and invested about 2-3 hours total. Not bad.

Only thing that will be left to do is cancel the credit card I used for the experiment.

Would I do this again? Probably not. As I mentioned before, credit card arbitrage can have an impact on your credit score. Not a big impact, but I think that running this repeatedly could have a cumulative effect, and I'm not willing to run this risk since my mortgage is due to be renewed next year.

To really make it worth my while, I would need to raise the amount borrowed over $10-20K. Which is too risky for me. Still, that was a good learning experience.

Replaced the Water Heater

Last weekend, we had a bad surprise as we found out that the water heater was leaking. It looked like it had been leaking for a couple of days, for a fairly large area of the unfinished part of the basement's floor was wet. Fortunately, the leak wasn't lagre or there would have been damage. As it is, I only had to clean up and throw away a couple of cardboard boxes.

But we had to replace the water heater. So we went shopping. We decided to go with a top-quality water heater from GE, because of the better insulation (which means better energy concumption) and longer warranty (12 years). The difference in price between top-quality and entry-level quality for a 60-gallon water heater is only about $200-300. Installation fees are the same. They last twice as long, minimum, so the difference in price was worth it, on our opinion.

On top of that, we used the seller's installation service. It was similar in price to another quote we got on the service, and by taking it we automatically extended the warranty to lifetime.

One bad surprise I got was that we had to replace the cabling for the water heater, because the old electrical cabling was not adequate (no ground). That meant calling an electrician, which proved to be tough for a short-notice call. I had to make quite a few calls to get that done on the same day.

Cost of the water heater (including installation): $900.
Cost of the electrician: unknown (they will send me a bill by mail). I estimate this will be about $150-200.

The water heater was paid using my credit card. If necessary, I will draw from the home line of credit to pay this when my credit card statement comes in next month, but I will try to avoid doing this if possible.

Net Worth Update

As of August 1st, my net worth is $74 315 (up 3.1% from $72 069). If I exclude house-related assets and liabilities, my net worth is $50 791 (up 4.3% from $48 713). This is another good month, although to be honest a good part of the increase was due to the fact that this was a month with three pay-days. The car repairs are still to come, as are the home renovations. Those expenses will probably show up only in September's update.

Assets ($145 874, up 1.6% from $143 608)

• Bank Accounts $5 114 (up 2.5% from $4 989)
• Emergency Funds $2 810 (up 8% from $2 600)
• RRSP Accounts $36 140 (down slightly from $36 149)
• Non-Registered Investments $9 825 (up 15% from $8 553)
• Home $86 100 (stable)
• Arbitrage $5 000 (stable)

Liabilities ($71 539, stable)

• Credit Cards $3 974 (up 14% from $3 474)
• Student Loan $635 (down 29% from $894)
• Mortgage $55 824 (down 0.2% from $55 941)
• Heat Pump Loan $6 751 (down 0.7% from $6 803)
• Arbitrage $4 131 (down 2.1% from $4 219)

Increase in credit card debt completely balanced other debt payments this month, which resulted in stable liabilities. However, since I don't carry any interest-bearing balance, this will go down next month. My cash reserve was again higher, in advance of the expenses for the car repairs and home renovations. On the other hand, my RRSPs were stable despite adding money to them, but my non-registered investments performed well, so that's a wash!

Net Worth Update

As of July 1st, my net worth is $72 069 (up 3.9% from $69 366). If I exclude house-related assets and liabilities, my net worth is $48 713 (up 5.5% from $46 155). Another good month in the Frog's pond! But there are some clouds coming, for more car repairs are on the way, as well as some house renovations. Princess and I set up a line of credit to do this, so I am adding a line in the liabilities section, even though we haven't tapped it yet.

Assets ($143 608, up 1% from $142 117)

• Bank Accounts $4989 (up 80% from $2 762)
• Emergency Funds $2 600 (down 3.7% from $2 700)
• RRSP Accounts $36 149 (down 0.2% from $36 214)
• Non-Registered Investments $8 553 (up 2.9% from $8 309)
• Home $86 100 (stable)
• Arbitrage $5 000 (stable)

Liabilities ($71 539, down 1.7% from $72 751)

• Credit Cards $3 474 (down 17.4% from $4 204)
• Student Loan $894 (down 22% from $1 152)
• Mortgage $55 941 (down 0.2% from $56 036)
• Heat Pump Loan $6 803( down 0.7% from $6 853)
• Arbitrage $4 219 (down 2.1% from $4 310)

My cash reserve were much higher this month, as I prepare for the coming expenses for the summer (car repairs and house renovations). The emergency fund was slightly lower because of the turnover in one of my GICs. Credit card debt (mostly 0% financing) keeps going down fast, but I expect them to go up before the end of summer.

My RRSP accounts went down in value, even though I kept adding more money in. As I have said before, this is not a problem as I am in for the long term. The recent changes that I made (the purchases of shares in Pepsi and General Electric) were partially responsible for this, due to the comissions paid for the purchases, and the fact that the shares of those companies went lower after my purchases. Am I worried by this? Of course not! I knew I wouldn't be able to pick the bottom, and in 10 years the difference will be meaningless. I even received the first dividend payment from my Pepsi shares (not included in the above numbers). If the shares keep going lower, I will buy more of those (or other similar companies) as more money gets added to my RRSP accounts.

RRSP Purchase - General Electric

I just made a purchase of some shares of General Electric (GE) in my RRSP. Here are some of my reasons for buying GE.

The shares are currently selling at a multi-year low -- that last time its shares were that cheap was 5 years ago! As a results, it sports a dividend yield of 4%, it's highest in recent history. Better yet, the company is bringing in plenty of cash to pay for those dividends, and will keep increasing that dividend in the future (although the next increase may be modest).

This spring's surprise miss send the price of its shares into a tailspin. Many consider GE to be a proxy for the US stock market. People are talking of recession, which scares investors. That is usually the time to go looking for bargains. As Warren Buffet says, "Be greedy when others are fearful."

The company has a good position in green products. They are very much present in the alternative energy businesses, such as wind and nuclear power. Electronics, financial services, infrastructure. You name it, they are everywhere.

Many analysts complain that this company is too complex and too big to be easily analyzed. Me, I simply look at the results -- they make money for their (share)owners, and they keep increasing how much money they make. Maybe the company will restructure, sell parts of the business, or spin off some of it. As a shareowner, any of these will probably be positive. If nothing happens, I will keep collecting that 4% dividend. And the market will recover.

The position I initiated is modest -- I don't know if the price is the lowest it will go. If it goes down some more, I may decide to increase my stake in the company.

Net Worth Update

As of June 1st, my net worth is $69 366 (up 8.5% from $63 938). If I exclude house-related assets and liabilities, my net worth is $46 155 (up 4.5% from $44 187). Our insurer revised the value of our house this month, which caused a big jump in our global net worth. On the other hand, we also had a municipal tax payment to do, so our liquidities went down.

Assets ($142 117, up 3.1% from $137 779)

• Bank Accounts $2 762 (down 23% from $3 614)
• Emergency Funds $2 700 (stable)
• RRSP Accounts $36 214 (up 4% from $34 815)
• Non-Registered Investments $8 309 (up 7.3% from $7 742)
• Home $86 100 (up 4% from $82 800)
• Arbitrage $5 000 (stable)

Liabilities ($72 751, down 1.5% from $73 840)

• Credit Cards $4 204 (down 12.4% from $4 799)
• Student Loan $1 152 (down 18% from $1 408)
• Mortgage $56 036 (down 0.2% from $56 145)
• Heat Pump Loan $6 853 (down 0.7% from $6 904)
• Arbitrage $4 310 (down 2.1% from $4 402)

Both my registered and unregistered investments performed well this month, which explains the increase in net worth even when excluding the house. Credit card debt alsodecreased significantly, as the car repairs from last month were paid off. Overall, a very good month!

Readjusting my RRSP

This week, I made some changes to the content of my self-directed RRSP. I had given this some thought for the last couple of months, and I finally took the first step towards this.

You see, until now the stocks that I held there were mostly of Canadian companies. But in the last two years I have been expanding my DRiP portfolio considerably, most of which is also in Canadian companies. So I was quite overweight in Canada. And with the favourable treatment of Canadian dividends, versus the unfavourable treatment of foreign dividends, made it more efficient to hold foreign companies in my RRSP.

So I sold three relatively small positions. Two of those were in companies that I have been holding for some time, but that have not performed as expected, Killam Properties (Toronto: KMP) and Northgate Minerals (Toronto: NGX). The third position was a short-term trade done on Gildan Activewear (Toronto: GIL) when their stock nosedived a few weeks ago on disappointing results. It had recovered enough to show a small profit for me.

The proceeds of those sales were invested in a fairly large position in Pepsi Co (NYSE: PEP). I have been watching Pepsi for over a year now, and was interested in starting a DRiP with the company. However, the funds I have available for dripping are limited, and I already have many other companies that are currently attractive.

Since Pepsi has moved down quite a bit from its high in January, this looked like a good time to buy into it. My plan is to hold these shares for a long time -- this is a retirement account, after all.

House Value

The value of our house is moving up again this month, since our insurance gets renewed in May and the insurance company updated the cost of rebuilding at the same time.

As I mentioned in last month Net Worth Update, I now use an average of house value provided by our the municipal tax bill and the rebuilding cost stated on our insurance contract to calculate the value of our house. This month, that will increase by $5 500. I only report my part of the house (60%) on this blog, but that will still generate a hefty $3 300 increase in my net worth.

Personally, that doesn't make me feel any richer, but that increase in value does mean something. What we pay for the house hasn't really changed much. Some portions of it have come down, some others up, but overall the increase has been about 2%, in pace with inflation.

Would we be able to say the same if we were renting? I kind of doubt it, for one important reason. When you rent, you have very little control on the increases. Although a large part of the ownership costs leave you limited control (mortage, insurance, utilities), you have more wiggle room. If you feel that heating costs are too high, you can improve insulation. If your mortage costs are too high, you can renegociate or move your mortage. Same thing with insurance.

Net Worth Update

I have changed the way I calculate the value of our house. Previously, I was simply using the municipal evaluation, which only changes every 3 years and do not really reflects the real value of the house. From now on, I will be using the average of the municipal evaluation and of the rebuilding cost established by my insurer (which is revised at least every year). That way, the estimated value should be closer to its real value. Changing the way I calculate the value of our house increased my net worth by about $9 000, which is taken into account in the following comparison (as noted by the "revised" numbers for last month).

As of May 1st, my net worth is $63 938 (up 4.4% from a revised $61 255). If I exclude house-related assets and liabilities, my net worth is $44 187 (up 6% from $41 655).

Assets ($137 779, up 1.8% from a revised $135 357)

• Bank Accounts $3 614 (up 5% from $3 437)
• Emergency Funds $2 700 (up 10% from $2 454)
• RRSP Accounts $34 815 (up 1.9% from $34 162)
• Non-Registered Investments $7 742 (up 4.2% from $7 428)
• Home $82 800 (stable using revised value)
• Arbitrage $5 000 (stable)

Liabilities ($73 840, down 0.4% from $74 102)

• Credit Cards $4 799 (up 4.9% from $4 573)
• Student Loan $1 408 (down 15% from $1 663)
• Mortgage $56 145 (down 0.2% from $56 253)
• Heat Pump Loan $6 904 (down 0.7% from $6 953)
• Arbitrage $4 402 (down 2.1% from $4 497)

I continued to build up liquidities, increasing both my emergency fund and the my regular bank account. Credit cards increased a little bit, as I had to repair the air conditioning in my car. I decided against using a 12-month financing for this, since my car is getting older and I don't want to have any debt on it when I replace it. Hopefully it will still last 2-3 more years.

Net Worth Update

As of April 1st, my net worth is $54 049 (up 2.9% from $52 535). The expected downdraft for March materialized, but it didn't impact me too much. I am expecting the turbulence to continue for the rest of the year, and am planning my investments accordingly. For me, that means that I will be able to buy good companies at discount prices. A lot of this will be done using my DRiP portfolio, but some purchases will also be made in my registered accounts as money get deposited there. My tax reports are mostly done (waiting for one piece of information for Princess), and I will be getting a reasonable tax return.

If I exclude house-related assets and liabilities, my net worth is $41 655 (up 4.1% from $40 000).

Assets ($128 151, up 0.6% from $127 360)

• Bank Accounts $3 437 (up 47% from $2 336)
• Emergency Funds $2 454 (stable)
• RRSP Accounts $34 162 (up 1.4% from $33 694)
• Non-Registered Investments $7 428 (down 0.7% from $7 484)
• Home $75 600 (stable)
• Arbitrage $5 000 (stable)

Liabilities ($74 102, down 1% from $74 825)

• Credit Cards $4 573 (down 4.7% from $4 800)
• Student Loan $1 663 (down 13% from $1 916)
• Mortgage $56 253 (down 0.2% from $56 360)
• Heat Pump Loan $6 953 (down 0.7% from $7 005)
• Arbitrage $4 497 (down 2.1% from $4 593)

I made progress rebuilding my liquidities. I also purchased a new computer to replace my old one (most of the hardware was from 2001), which died last month. I was lucky enough that it revived long enough that I could transfer all my data without having to use a backup.

Net Worth Update

As of March 1st, my net worth was $52 535 (up 1.8% from $51 609). The markets completed its recovery of the January downdraft, although there are signs they we may be in for another downdraft in March.

If I exclude house-related assets and liabilities, my net worth is $40 000 (up 1.2% from $39 530).

Assets ($127 360, up 0.3% from $127 028)

• Bank Accounts $2 336 (down 30% from $3 331)
• Emergency Funds $2 454 (down 27% from $3 376)
• RRSP Accounts $33 694 (up 2.7% from $32 815)
• Non-Registered Investments $7 484 (up 19% from $6 293)
• Home $75 600 (stable)
• Arbitrage $5 000 (stable)

Liabilities ($74 825, down 0.8% from $75 419)

• Credit Cards $4 800 (down 2.1% from $4 904)
• Student Loan $1 916 (down 11.6% from $2 167)
• Mortgage $56 360 (down 0.2% from $56 467)
• Heat Pump Loan $7 005 (down 0.7% from $7 054)
• Arbitrage $4 593 (down 2.1% from $4 692)

I wanted to take advantage of the recent downdraft to boost my DRiP portfolio, so I deployed quite a bit of cash from my bank accounts and emergency fund. I may have slightly overextended myself, since I now have little liquidity left beyond the essential. Just as I did this, I got hit with some larger-than-expected car maintenance and repair costs. And my personal computer died last week.

So, for next month, I expect to see my non-house-related liabilities increase, since the unexpected expenses went on the credit cards. I will also need to rebuild some of my cash reserve. But I can still sleep at night, since I still have a fairly reasonable emergency fund.

Net Worth Update

As of February 1st, my net worth was $51 609 (up 1.45% from $50 868). With the markets acting the way they did in January, it is nice to see that my net worth increase, even if it was by a small amount.

If I exclude house-related assets and liabilities, my net worth is $39 530 (up a paltry 0.1% from $39 486). The reason for this is that my net worth update was from debt reduction instead of an increase in assets, and most of my debt is related to the house.

Assets ($127 028, down 0.2% from $127 227)

• Bank Accounts $3 331 (down 37% from $5 312)
• Emergency Funds $3 376 (up 22% from $2 761)
• RRSP Accounts $32 815 (up 0.3% from $32 706)
• Non-Registered Investments $6 293 (up 22% from $5 172)
• Home $75 600 (stable)
• Arbitrage $5 000 (stable)

Liabilities ($75 419, down 1.2% from $76 358)

• Credit Cards $4 904 (down 4.6% from $5 138)
• Student Loan $2 167 (down 10.4% from $2 416)
• Mortgage $56 467 (down 0.2% from $56 574)
• Heat Pump Loan $7 054 (down 0.7% from $7 102)
• Arbitrage $4 692 (down 2.1% from $4 792)

Recents month have shown that the stock market is having a large impact on my net worth. This is not surprising, considering that my RRSP and non-registered investing are increasing in value and that they are largely based on stocks. This is something that I can live with, since I am in for the long run.

I am also looking at boosting my emergency fund, mostly to prepare for the home renovations we plan on doing this summer. Although we will try to get a home line of credit, having more cash at hand will counterbalance the increased potential debt.

Hydro Rant

This week, I received my monthly statement from Hydro Quebec. They changed the format of the statement, and with the new format there is less information than was previously.

Notably absent from the new statement are two pieces of information that I consider important, and a third one that I consider less critical yet valuable for a lot of customers.

The missing items are:

1. For customer like me who has the bi-energy counters, they no longer list consumption separately for the low-temperature and normal-temprature readings. To me this is an important information, as I like to keep track of how much electricity we used when temperatures were cold, and to see if we should be more careful.
2. The rates for each kWh is no longer on the statement. This is always important to have the current rates on a statement, because the calculation are somtimes tricky (dayly rate, usage rate, low- vs normal-temprature rate). They will now provide this information only once a year.
3. The total paid for electricity during the previous year, for each statement (which are every two months). Although this is not a critical information for me (since I track this anyway in a spreadsheet), it gives an at-a-glance summary of how much it costs for a year. I'm sure that for a lot of customers this is quite useful.

What is really annoying with this, is that it gives the impression that they don't want customers to know how much they are using. Furthermore, the statement came with their usual newsletter which said that the new statement contained all the information that the old one had!

I consider this situation unacceptable. I am currently preparing a complaint that I will send to Hydro Quebec, as well as the "Régie de l'énergie" (which regulate energy rates in Quebec) and "Office de protection du consommateur" (which protects customers from shady pratices).

Have you paid attention to your statements lately?

DRiPs - Selling Shares

This is the fifth installment of my series on DRiP investing.

Selling shares from a DRiP

Although having a DRiP in a company means that you are in the the long run, there will come a time when you may want to sell shares. This may be because you want to diversify your investments, or simply because you need the money.

A bit like setting up the DRiP, selling shares from it is often more complicated than doing it from your broker's account.

Some DRiPs will allow you to sell shares directly, for a reasonable fee (about $10 + a few cents per share). You simply have to inform the transfer agent who admisters the DRiP (usually in writing) that you want to sell a certain number of shares, and they will do so. Note, however, that you won't be able to time your sale precisely. They will probably be sold at the next reinvestment date.

For DRiPs that do not offer this option, you will have to get a share certificate for the shares you want to sell, and sell them through your broker. Your usual broker fees for selling shares will apply, and a few brokers will also charge you a fee when you deposit the share certificate into your account.

All of this takes time, so you have to know ahead of time that you want to do this. The advantage of this is that it eliminates the urge to try to "play the market" by buying and selling often. The disadvantage is that it takes longer to get to your money.

But you should only invest money that you don't need in the short term, so if you invest wisely, this won't be a problem.

To read the beginning of my DRiPs series:

1. DRiPs - What are they?
2. DRiPs - Registering Shares to Your Name
3. DRiPs - Enrollment and Purchases
4. DRiPs - Paperwork and Taxes

Goals for 2008

Like many other bloggers, I've decided to set down some goals for 2008. Not only goals, but also measurable objectives to go with each.

Goal 1 - Lose some weight: It's been creeping up slowly in the last couple of years, and it's time for me to address this problem. I tried setting up a regular exercise schedule in the fall, but got sick and failed to pick it up again afterwards. I currently weight 210 pounds, and my objective is to lose 15 pounds, so that I weight no more than 195 by the end of the year. More important, I want to maintain that weight loss. This is the most important goal to me.

Goal 2 - Increase my passive income: In 2007, my DRiP portfolio generated $130 in dividends, which were reinvested. My current holdings would produce about $300 if I add nothing to them. My objective is to increase that to $450, by making additional regular purchases to my DRiPs.

Goal 3 - Increase my net worth: My objective is to increase it by $20 000, like I did in 2007. That won't be easy, since we have some important renovations to make to the house in 2008 (we will begin replacing the windows).

Goal 4 - Blog more often: Since starting my blog last June, there were periods when I haven't written anything. This year, I'd like to do better. My objective is to write at least 1 article every week. Exceptions will be made for when I'm away on vacation for a week or more, since I usually don't touch a computer at those times.

Year-End Net Worth Update

As of January 1st, my net worth was $50 868 (up 9.7% from $46 360). This more than made up for the decrease of the last two months, but was more a matter of timing than anything else. One of the reasons is that the first pay of the year was made two days in advance because of the Holidays, which resulted in the deposit being made on December 31st. Even without that, however, my net worth would have increased by about $2 500.

If I exclude house-related assets and liabilities, my net worth is $39 486 (up 6% from $37 231).

Assets ($127 227, up 2.3% from $124 334)

• Bank Accounts $5 312 (up 47% from $3 622)
• Emergency Funds $2 761 (up 8% from $2 556)
• RRSP Accounts $32 706 (up 4.5% from $31 306)
• Non-Registered Investments $5 172 (down 7.2% from $5 632)
• Home $75 600 (stable)
• Arbitrage $5 000 (stable)

Liabilities ($76 358, down 2.1% from $77 975)

• Credit Cards $5 138 (down 19% from $6 362)
• Student Loan $2 416 (down 9.4% from $2 665)
• Mortgage $56 574 (down 0.2% from $56 680)
• Heat Pump Loan $7 102 (down 0.7% from $7 151)
• Arbitrage $4 792 (down 2.1% from $4 895)

Looking back a year, the number are impressive. My net worth went from $30 775 to $50 868, wich is an increase of $20 000! Although that is to be tempered by the timing issue (which is coumpounded by the fact that last year we contracted the loan for the heat pump), this is still very nice to see. I don't expect next year's increase to be quiate as large, but I believe it will be somewhere between $10 000 to $15 000.

Happy New Year!