Jul 132017
 

Lending Loop Update

Earlier this year I blogged about investing $20,000 in a peer-to-peer lending platform called Lending Loop. My goal was to make 8% return overall, net of fees and write-offs. To be frank I was a little apprehensive at first when I learned about the high interest rates.

I wondered if it was really possible to earn 15% or higher rates of return consistently. Being greedy, I decided to give Lending Loop a try. I primarily invested in B and C loans because they are relatively safer, although the returns are lower than loans in higher risk categories.

Here’s what my Lending Loop portfolio looks like after half a year of investing. This screenshot was taken at the end of June.

As we can see I have made about $846 so far. Yay! 🙂 That’s about 4.2% return, or 8.5% annualized return. This is very much in line with my expected 8% return I had initially set as my goal. I have invested in roughly 30 different loans so far on the platform, each loan averaging $700 of principal. Thankfully none of them have missed a payment yet so I’m really pleased about that. 😀

If this trend continues I should be able to earn a double digit return by the end of the year! But this rosy picture assumes there are no defaults on my loans for the next 6 months. 🙂 Anyway, I will update again at the end of the year so we shall see what happens.

Unlike investments in a tax advantaged account, my Lending Loop returns will be taxed at my marginal tax rate, which is about 30%. This means if I earn 8.5% from the P2P investment, I will only end up making roughly 6% return after tax. To me 6% after tax is pretty good and certainly beats many alternative options out there. 🙂 As interest rates are starting to climb slowly in North America, fixed income investments such as Lending Loop should continue to be attractive for investors looking for yield.

 

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Random Useless Fact:

Due to the lower surface gravity of Mars, if you weigh 100 pounds on Earth, you would weigh only 38 pounds on Mars.

Jul 052017
 

In an interesting turn of events the Canadian dollar is showing signs of strength. It gained against the US dollar and the British pound. This is a double edged sword. The good news is my wealth is greater since I have more purchasing power. 🙂 The bad news is my net worth in Canadian dollars went down. 🙁

Since I have investments in foreign currency my assets fell in value. Oh well. I’m not cashing out any time soon so I will continue to hold and see what happens. Energy companies also lost value in June, following lower oil prices. I also purchased a vehicle in cash that cost over $1,000. It was expensive, but it’s important to have a life. 🙂

Liquid’s Financial Update

*Side Incomes:

  • Part-Time = $900
  • Freelance = $800
  • Dividends = $800
  • Interest = $200
*Discretionary Spending:
  • Fun = $1500
  • Debt Interest = $1100

*Net Worth: (ΔMoM)

  • Assets: = $1,113,700 total (-6,300)
  • Cash = $5,300 (+2100)
  • Canadian stocks = $146,400 (-200)
  • U.S. stocks = $91,600 (-4600)
  • U.K. stocks = $20,100 (-1300)
  • RRSP = $82,600 (-2800)
  • Mortgage Funds = $31,000 (+300)
  • Peer-to-Peer Lending = $20,900 (+200)
  • SolarShare Bonds = $9,800
  • Home = $270,000
  • Farms = $436,000
  • Debts: = $486,000 total (-5,500)
  • Mortgage = $182,900 (-500)
  • Farm Loans = $188,800 (-500)
  • Margin Loans = $60,300 (-3200)
  • TD Line of Credit = $13,000  (-600)
  • CIBC Line of Credit = $25,000 (-500)
  • HELOC = $16,000 (-200)

*Total Net Worth = $627,700 (-$800 / -0.13%) 
All numbers above are in $CDN. 

 

This is the worst month I’ve had in over a year, lol. It looks like my fixed income assets performed well at least. Hopefully I can turn things around in July and get back to increasing my net worth.

 

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Random Useless Fact:

Canada produces over 80% of the world’s maple syrup.

Jun 292017
 

According to Chelsea Fagan, founder of the Financial Diet, transportation is one of the biggest unseen costs in people’s lives. Americans on average spend about “9% to 25% of their monthly budget” on transportation. That’s a pretty large portion of one’s take home pay. 😮 The surprising thing is, most people can easily cut their transportation costs down by half, according to Chelsea. In today’s post I’ll write about my new vehicle, and how I plan to save money with it. 🙂

Recent Purchase: Used Scooter

Motor scooters are like motorcycles; they can sit up to 2 people. Here in Vancouver, Canada, all you need to ride one is a helmet and a regular class 5 driver’s license which most people have already.

I started to look into buying a scooter after I drove to a restaurant last month and had trouble finding a parking spot. But I saw a scooter that sat comfortably in a small space between two cars on the road. So then I did some research and calculations, and realized that I wanted to get a scooter for economic reasons.

So earlier this month, after checking out some used scooters on craigslist I ended up buying a 2009 50cc Derbi scooter for $1,400 including tax and registration. It only has about 2,250 KM on it. It’s really enjoyable to ride and easy to control.

Here’s a photo of my new ride in Batman’s favorite color. 🙂

Cost of Owning a Scooter

Like I mentioned, I bought the scooter for $1,400 tax included, which is much more affordable than a car or even a motorcycle. The seller accepted e-transfer and the transaction went smoothly. Now let’s talk about the ongoing costs of operating it. Spoiler: It’s cheap. 🙂

Continue reading »

Jun 222017
 

The Largest Name in Retail Continues to Grow

Amazon.com (AMZN) recently announced it’s taking over the trendy supermarket chain, Whole Foods. At the beginning of this year I wrote an article which included a prediction that this would happen. Maybe Amazon’s CEO Jeff Bezos got the idea from reading my blog. 🙂

Whole Foods sells healthy, organic products. Most items in the stores can be expensive, but  if you want to grab a quick and healthy lunch, you can buy half a pizza for $7 CAD, which isn’t bad. I remember my first time visiting Whole Foods. I didn’t really know what it was so I had no idea what’s in store. 😉 But after going in I quickly understood why the retailer attracts so many yuppies and hipsters like myself. Shopping there is an experience. 😀

This acquisition is a very good deal for both companies. Whole Foods Market Inc has been suffering from declining same-store sales year after year. Whole Foods stock (WFM) peaked in 2013 and has been falling every year since. 🙁 So it needs a larger company to help turn things around. Amazon has already been experimenting with grocery stores since last year with its Amazon Go project. The idea is consumers can walk into a store, buy the food they want, and leave without lining up or checking out. The in-store scanners do everything automatically so people can just walk out of the store and get charged the correct amount. It’s a really neat concept, but the service is only in the U.S. for now. By merging with a grocery chain, Amazon can expand its grocery business, and can also transform unused Whole Foods real estate into Amazon warehouses. 🙂

Whole Foods stock is up about 25% in the last 5 trading days and now sits at $43. Amazon stock is now at $1,002 per share. I like shopping with both retailers, and I look forward to see how they collaborate.

Disclaimer: I own 10 shares of AMZN, and no shares of WFM.

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Random Useless Fact:

 

Jun 152017
 

We’re Living Longer

I don’t know how the term “aging gracefully” can be a compliment. To me it just sounds like a nicer way of saying you’re slowly looking worse. 😛 When the government pension (CPP) was first introduced in the 1960s, the average life expectancy was about 71 years old. The idea was that most workers would retire at around 65 years old, and receive 5 to 10 years of CPP benefits in retirement. And that was the case for awhile. 🙂 But today, the average life expectancy in Canada is over 80 years old which puts more pressure on the CPP investment board to perform well. It’s not unreasonable to assume that my generation of workers (millennials) could have a life expectancy on average of 90 years or older.

According to a Telegraph article, we could witness in our lifetime a world where most babies will have a life expectancy of 100 years or longer! 😀 It’s nice that people are living longer than previous generations. But it’s also kind of sad to think about getting old. Can you imagine having sex when you’re 90? It’ll probably be like trying to shoot pool with a rope. 😕

Young adults are also starting careers later today than in the 60s. So with relatively less money going into the sovereign wealth fund, and more people withdrawing, many economists are worried about the future sustainability of government benefits on the local, provincial, and national level – not just in this country, but all around the world.

If generation Y folks are likely to live to 90 years old, then planning to retire at 65 may not be financially feasible unless a large amount of wealth is saved up first. For those who are planning to retire early like myself, it is even more difficult. Assuming I reach financial freedom by 35, I will have 55 years of living in retirement if I choose to. That sounds great. But the reality is I will most likely be working on and off, or on a part-time capacity throughout my 40s and 50s because there are only so many non-productive activities I can do before I get bored and start working on something economically productive again. 🙂

So instead of planning to live until 80 years old, most healthy people my age should be aiming for 90 as the starting point. And with that it means accumulating more personal savings for retirement. But also keeping in mind that there is no set retirement age anymore, so plan to be flexible with work schedules to accommodate a balanced lifestyle.

 

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Random Useless Fact:

Jun 052017
 

U.S. Unemployment Rate Drops to 4.3%

U.S. job growth slowed in May, which suggests the labor market was losing momentum despite the unemployment rate falling to a 16-year low of 4.3%. The problem with the unemployment number is that it doesn’t account for people who are out of the workforce because they gave up trying to find a job. Finding work usually isn’t very difficult, especially if one has some marketable skills. But finding the right one can often be difficult. In Canada for example, many have chosen to not accept a job that pays minimum wage because they think their time is worth more. Here’s a breakdown of minimum wage across the country.

  • Alberta ‑ Currently, the minimum wage is $12.20 an hour, but it rises to $13.60 this year and $15 Oct. 1, 2018.
  • B.C. – $10.85 now and $11.25 or more later this year.
  • Manitoba – $11, with plans to raise it every year along with the rate of inflation.
  • New Brunswick – $11. Adjusted annually relative to the consumer price index.
  • Newfoundland & Labrador – $10.75 rising to $11 on Oct. 1, 2017.
  • Northwest Territories – $12.50
  • Nova Scotia – $10.85. Adjusted annually April 1 based on the consumer price index.
  • Nunavut – $13. Adjusted annually April 1.
  • Ontario – $11.40.
  • Prince Edward Island – $11.25.
  • Quebec – $10.75, rising to $11.25 per hour May 1.
  • Saskatchewan – $10.72. Adjusted annually Oct. 1 relative to the consumer price index and average hourly wage.
  • Yukon – $11.32. Adjusted annually April 1 based on the consumer price index.

May was an average month. Stock market went up a little. I’m still waiting for the crash that some people have been talking about for years, but hasn’t happened yet.

Liquid’s Financial Update

*Side Incomes:

  • Part-Time = $600
  • Freelance = $700
  • Dividends = $700
  • Interest = $400
*Discretionary Spending:
  • Fun = $300
  • Debt Interest = $1100

*Net Worth: (ΔMoM)

  • Assets: = $1,120,000 total (+7,200)
  • Cash = $3,200 (-1000) 
  • Canadian stocks = $146,600 (-200)
  • U.S. stocks = $96,200 (+900) 
  • U.K. stocks = $21,400 (+700)
  • RRSP = $85,400 (+6500)  ~ purchased 200 units of BMO high yield bond fund (ZHY)
  • Mortgage Funds = $30,700 (+100) 
  • Peer-to-Peer Lending = $20,700 (+200)
  • SolarShare Bonds = $9,800
  • Home = $270,000
  • Farms = $436,000
  • Debts: = $491,500 total (-3,300)
  • Mortgage = $183,400 (-400)
  • Farm Loans = $189,300 (-500)
  • Margin Loans = $63,500 (-1100)
  • TD Line of Credit = $13,600  (-600)
  • CIBC Line of Credit = $25,500 (-500)
  • HELOC = $16,200 (-200)

*Total Net Worth = $628,500 (+$10,500 / +1.75%)
All numbers above are in $CDN. 

 

 

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Random Useless Fact:

Just because something is legal doesn’t mean it’s ethical.