Comments on: Net Worth Update – Oct 2008 http://blog.canadian-dream-free-at-45.com/2008/10/30/net-worth-update-oct-2008/ Wed, 08 Feb 2012 17:31:40 +0000 hourly 1 http://wordpress.org/?v=3.1 By: Canadian Dream http://blog.canadian-dream-free-at-45.com/2008/10/30/net-worth-update-oct-2008/comment-page-1/#comment-13713 Canadian Dream Fri, 31 Oct 2008 12:11:05 +0000 http://blog.canadian-dream-free-at-45.com/?p=550#comment-13713 Icarus, So I have a question for you then. How do you know when things are going up or if it is just another in term spike? Rather than wait for the bottom or try to find when things are recovering I'm keeping to my base plan and keep putting in money at regular times. Obviously I'm usually waiting for a large down day before buying in but that is as close to market timing as I get. I'm not worried about APF.UN cutting again. I understand what they do and where the money is going. I decided a price that was reasonable to me and then invested. I don't worry it is keeps sliding a bit after I buy. Rob G, Mmm, defined benefit pensions are difficult to include in the net worth because they represent a future value of a contract which shifts in value over the years. Perhaps a crude way of doing it is to use your current salary and calculate your yearly payout in the future. Then using a 4% payout find out how much cash you would need as a pool to generate that money (so if you get about $2100/month that would mean a payout pool of $630,000). Then use a present value calculation with a set % such as seven and calculate its current worth. Then include that in your net worth calculation (assuming 20 years that would be about $163,000). It won't be correct, but it should get you in the ball park. Any one else come across a good method to do this? CM, I somewhat agree. There are cases where something was overvalued to begin with that you shouldn't try to buy at it drops (ie: Nortel). Tim Icarus,

So I have a question for you then. How do you know when things are going up or if it is just another in term spike? Rather than wait for the bottom or try to find when things are recovering I’m keeping to my base plan and keep putting in money at regular times. Obviously I’m usually waiting for a large down day before buying in but that is as close to market timing as I get.

I’m not worried about APF.UN cutting again. I understand what they do and where the money is going. I decided a price that was reasonable to me and then invested. I don’t worry it is keeps sliding a bit after I buy.

Rob G,

Mmm, defined benefit pensions are difficult to include in the net worth because they represent a future value of a contract which shifts in value over the years.

Perhaps a crude way of doing it is to use your current salary and calculate your yearly payout in the future. Then using a 4% payout find out how much cash you would need as a pool to generate that money (so if you get about $2100/month that would mean a payout pool of $630,000). Then use a present value calculation with a set % such as seven and calculate its current worth. Then include that in your net worth calculation (assuming 20 years that would be about $163,000). It won’t be correct, but it should get you in the ball park. Any one else come across a good method to do this?

CM,

I somewhat agree. There are cases where something was overvalued to begin with that you shouldn’t try to buy at it drops (ie: Nortel).

Tim

]]> By: Canadian Money http://blog.canadian-dream-free-at-45.com/2008/10/30/net-worth-update-oct-2008/comment-page-1/#comment-13709 Canadian Money Fri, 31 Oct 2008 04:42:05 +0000 http://blog.canadian-dream-free-at-45.com/?p=550#comment-13709 There are many urban myths about the market such as "don't buy a falling knife". Do the math. For example, buy at -40%, market goes to -80%, use typical market recovery times from historical records. Approach it like an engineer. Ask the "falling knife" guys to show you the math. CM There are many urban myths about the market such as “don’t buy a falling knife”. Do the math. For example, buy at -40%, market goes to -80%, use typical market recovery times from historical records. Approach it like an engineer. Ask the “falling knife” guys to show you the math.

CM

]]> By: Rob G http://blog.canadian-dream-free-at-45.com/2008/10/30/net-worth-update-oct-2008/comment-page-1/#comment-13697 Rob G Thu, 30 Oct 2008 22:29:07 +0000 http://blog.canadian-dream-free-at-45.com/?p=550#comment-13697 I noticed you have Pension listed in your net worth assessment. I myself will be collecting a pension at the end of my 20 year contract. It is 40% of my 5 best years. It is then indexed after 5 years. Anyway if I were to take my current pay I'd receive around 2100$ a month gross. Is this the amount I'd put into my net worth calculations? I noticed you have Pension listed in your net worth assessment. I myself will be collecting a pension at the end of my 20 year contract. It is 40% of my 5 best years. It is then indexed after 5 years. Anyway if I were to take my current pay I’d receive around 2100$ a month gross. Is this the amount I’d put into my net worth calculations?

]]> By: icarus http://blog.canadian-dream-free-at-45.com/2008/10/30/net-worth-update-oct-2008/comment-page-1/#comment-13676 icarus Thu, 30 Oct 2008 15:21:18 +0000 http://blog.canadian-dream-free-at-45.com/?p=550#comment-13676 Just two little comments on stuff you said: "I keep buying as things drop." This is usually a big no no in investing circles. Especially the technical ones. You STOP buying when things drop and you restart when they go up! Catching falling knives hurts, lets hope you dont have to learn the hard way. Please dont buy into the "im lowering my avreage" BS too either. "I’m really glad I didn’t pick up any APF.UN until after they cut their distribution by 74%." Again with the buying of citrus stocks... Why would you ever buy into a company who just cut distribution by 74% ??? Whats saying they wont do it again. Maybe wait to buy when they have a little upside ? Anyway, maybe im just too technical in my investment decisions. Best luck with your investments. Just two little comments on stuff you said:

“I keep buying as things drop.”

This is usually a big no no in investing circles. Especially the technical ones. You STOP buying when things drop and you restart when they go up! Catching falling knives hurts, lets hope you dont have to learn the hard way. Please dont buy into the “im lowering my avreage” BS too either.

“I’m really glad I didn’t pick up any APF.UN until after they cut their distribution by 74%.”

Again with the buying of citrus stocks… Why would you ever buy into a company who just cut distribution by 74% ??? Whats saying they wont do it again. Maybe wait to buy when they have a little upside ?

Anyway, maybe im just too technical in my investment decisions.

Best luck with your investments.

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