December Networth

by Mr. Cheap

Since my move last month, things have been a little bit more expensive. In addition to the extra $170 / month in rent, I’ve been having to pay for applications to schools (~$90 / school) and to order transcripts ($8 each, at least two needed for each school).

Rent – $670
VOIP – $20
internet – $45
variable – $735
total – $1,470

My passive income rose slightly to $313.37, which is about 21% of my current expenses (way down from a high of 26%). Luckily I got the first payment from my passive real estate investment ($500) and payment from a contract I did a while ago ($500), so combined with my income from the condo I’m about even. This is good considering that I’m not working

My stocks were WAY down, until the rally last Tuesday pulled them back up which also helped my networth. It currently stands at:

Mortgage: $92,104.80
E-Trade: $24,790.36
Cash: $6,173.57
Condo: $143,500.00
Building: $12,553.50

Networth: $94,912.63

I took a bit of a risk and bought a bit of Washington Mutual ($2500 worth) mid month on margin. It promptly dropped significantly and has rebounded a bit, but killer dividend yield or not I’m worried I’m red lining in the investments a bit too much (and am probably not going to do any more buying until income starts coming in again or I’ve at least been accepted somewhere).

Like everyone, I expect the holidays to be a bit more expensive then a typical month. I haven’t had to touch my line-of-credit (which is ready and waiting with $20K once I’ve used up my cash) and I’m currently hoping / expecting my cash reserves to last until I start my PhD program (in May or Sept). The University of Alberta and the University of Waterloo are looking like the two strongest contenders right now…

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{ 12 comments… read them below or add one }

1 telly

Cheap, you really should start using the LOC for your mortgage payments and condo fees, etc. (deductible stuff). Based on your monthly expenses, the cash you have should last until you’re in a program and maybe earning a little from the PhD.

2 Mr. Cheap

Telly: The point was made (correctly by Mike I believe) that since I’m not going to be making much income from 2008 onwards, there isn’t much point generating deductions (LOC interest credit would have just been for the last couple of months of 2007, not really worth it).

I’m pretty sure I won’t be paying taxes while I’d doing my PhD (I’ll be a low-income earner for those years)

3 telly

Ah right…yes. Good call Mike.

4 FourPillars


Mr. C – is your margin loan included in the mortgage entry?


5 Mr. Cheap

Its funny, I actually use my net value for the E*Trade account (so the margin loan is already accounted for in it). Works fine for networth, but it’d throw off my asset : debt ratio if I was trying to calculate that properly.

To be fair, I’m using a net value for my passive investment property too (the “Building” entry, we have a VTB mortgage on it that I ignore, I just consider its worth about what I paid for it – 12.5K).

6 Kim

Have you looked at rents in Alberta? Pretty hefty. I think Waterloo will be a cheaper solution for you.

7 Leora

I did my undergrad at UW and loved my time in Waterloo, but if you’re planning on going into academia, I think that you should start talking to professors in your field before you make any decisions. A PhD from UW (or most Canadian universities, for that matter) may not be good enough to get you a tenure-track position, even (or especially) at those universities. Of course that depends on the area, and I think you’re in CS/some type of Engineering, so there are probably more academic jobs out there.

But the grad school you attend and the supervisor you have are really important, and I would really suggest that you go talk to profs at U of T and York before you go any further. Best of luck!

8 Mr. Cheap

Kim & Leora: Thanks for the comments! I definitely want to get into the best school I can, and have the best “fit” with a prof possible, and will even pay a higher rent if necessary :-).

I think Waterloo is awful as a town, but the school is great. Interesting comment that PhD’s from Canadian universities aren’t competitive… From the CS profs I’ve met, a large number of them got their degrees from Canadian universities, so it SEEMS to be ok in CS right now…

Did you get a PhD from an US school Leora? In what field?

9 telly

You definitely won’t be enjoying much of the multi-cultural dishes you enjoy if you opt for Waterloo. :(

10 Mr. Cheap

telly: Very true :-( Maybe I should add “Able to cook dishes from a wide range of cuisines” to my “Looking for a good woman” post… ;-)

11 FinBear

That WM position you bought has to be down over 20%. Luckily you didn’t invest much into it. To be honest I would sell if I were you. Maybe try to watch it daily and see if you can catch a bump but this thing will trend downwards much more. The balance sheet is just way too overloaded with toxic debt.

12 Mr. Cheap

FinBear: Yes, WM is certainly taking a beating. The dividend cut bothers me more then the current price.

I hate selling when things are the darkest (the contrarian in me rebels against it), but I suspect you may be right.

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