It’s been a few month’s since I’ve provided an update on building my net worth. Since my last update, we’ve seen some massive drops due to market impacts of the coronavirus. But we’ve also seen some short term recovery. A few weeks ago I looked at the COVID-19 impacts across the 5 different index portfolio’s that I have, and today I look at the overall growth (or lack thereof) for my investments, savings, and property. It may not be as bleak as it seems though. Let’s dive in.
For readers new to my investments/wealth building updates, my net worth is broken up into 3 main categories. You can see how they have changed overall since November 2019 (my last update):
Let’s take a closer look at the 3 main categories.
TFSA TD e-Series
Almost everyone is feeling the sting from the first few months of the year. With the global pandemic and the possible beginnings of a recession, index funds have been hit hard (as you can see in my overview here). But over the last week or two of the month, we have seen some recovery. Here’s where I was in November 2019, as well as the contributions I made and the dividends that I earned for my TFSA index portfolio containing TD e-Series index funds:
And here’s where I am at the end of April. You can see some big losses in the Canadian stock index and International stock index, while the US index has made a recovery. It’s always good to note that you can see in the long term (since late 2016) even after the markets have been substantially rocked by a global pandemic, my index investments have still profited me a great deal.
RRSP TD e-Series
My RRSP TD e-Series portfolio contains a more aggressive approach to index investing, as I don’t plan to touch these until retirement. Let’s look at the contributions over the last few months:
While my RRSP TD e-Series portfolio contains funds that are all included in my TFSA portfolio, the different allocations and the lack of a bond index fund have a big effect on the returns, especially during a significant crash:
The more aggressive approach means that my portfolio lost 6% of it’s value, compared to my less aggressive TFSA portfolio that only lost 2.2%. A great example of the differences a different level of risk tolerance makes.
TFSA Questrade ETFs
My TFSA Questrade account contains a similar target allocation to my TFSA TD e-Series portfolio. The target is 50% US/International stock index, 25% Canadian stock index, and 25% Canadian bond index. I focus my contributions to my TD e-Series account, so the only contribution I made was a rebalancing trade using dividend earnings:
As you can see below, with being slightly more aggressive than my TFSA TD e-Series portfolio, and containing some different versions of index funds, it lost 3.8% over the past few months:
Since I haven’t held my Questrade portfolio for nearly as long, it is showing in the red as losing 1% since I bought in 2019, but over a longer amount of time, I’ll see that go into the black.
Other Index Funds
Because I have a general interest in index investing, I have smaller amounts of investments in two other index type investments:
I contribute $50 a month to the WealthSimple portfolio, but don’t really add anything to the Tangerine Investment Fund due to it’s higher MER.
The WealthSimple portfolio is quite aggressive, so saw a pretty big hit since last November. I’m still in the positive overall though, even though I just started investing with WealthSimple last year:
My savings account is my emergency fund. I switch between EQ Bank and their high interest savings account, and a Tangerine Savings account. I switch depending on who has the best interest rate. EQ Bank offers a consistently high rate (currently at 2.00%) while Tangerine offers a low constant interest rate, but often offers 3 month promos (which I’m currently on now at 2.75%).
With the uncertainty caused by COVID-19, I’m going to bump up my emergency savings account over the next few months. My goal is to then keep it steady at around $12,000.
The other forms of wealth that I own are my property (a townhouse and a newish car), a ‘for fun’ crypto portfolio (although the fun part is debatable over the last year or so), and a retirement pension provided by my work.
Property value can be a hard thing to quantify. An item is only worth as much as someone is willing to pay for it at the time of the sale. So these are estimates of the value that my property has.
For my home equity, I use the cost of the property, minus the amount remaining on my mortgage. For my car, I use the Canada Black Book to estimate the resale value of my car. I then minus the amount I still owe on it (at 0.00% interest).
I wouldn’t recommend investing in crypto for trying to build long-term wealth. I got really interested in cryptocurrencies in late 2017 and have been riding the wave up and down. While I still have a small amount, I don’t follow it as much, and really plan to ride it for a while longer to see where it goes. You can see over the last few months that my crypto portfolio was actually quite stable.
I haven’t tracked my cryptocurrency portfolio as well my regular investments. As a result, some of these numbers are more of a rough estimate. Overall, my return since I started buying BitCoin and other cryptocurrencies has been almost 2% since 2017.
I would have profited more by just keeping it in an EQ Bank Savings account this whole time.
It’s always nice to know that me pension is growing in the background. I only receive updates to my pension investments once per year, and haven’t received a report since my last update. So it is currently estimated at $71,959.
I imagine the the recent market fluctuations have wreaked havoc upon my pension investments, but only time will tell.
My investments weren’t hit as hard as I thought they would be over the past few months, which is a nice surprise. There is a lot of uncertainty in the global economic future. We could see a long term recession over the next few years. If this is the case, it’s a great time to buy more index funds. At the lower price, and reap the rewards years down the line!
Thanks for reading!