Sep 192018
 

Freedom 35 Blog’s Growing influence

It’s been a few years since the last post featuring mean comments. I hope this time people will be nicer. 😳

Most of my regular visitors have positive and encouraging discussions in the comment sections on the blog. Thanks guys! 😀 But of course it’s also important to hear opposing views to understand personal finance through different life experiences. I’m not sure if you guys know this, but I’ve been told that my articles can rub some people the wrong way. I know – this was surprising for me to hear too.

Over the last few years this blog has been mentioned on different websites and internet forums, often met with some interesting feedback. I’ve gathered some of those comments today to share with my regular readers so we can look at some fresh perspectives, and perhaps learn something new. 😀

Below are comments written by random people online after they have read my blog posts.

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Sep 102018
 

Billionaire investor Warren Buffett recently celebrated his 88th birthday and told CNBC in an interview that he thinks stocks are still more attractive than bonds or real estate. In fact his company Berkshire Hathaway recently picked up some more shares of Apple Inc (AAPL) making it the largest position in the holding company.

The value of BRK.A shares increased by an astonishing 1,000,000% between December 1964 and December 2015. Meanwhile the S&P 500 market index increased by only 2,300% during that time. This is a testament to the will and dedication by Buffett & his team to create wealth for shareholders. I suppose you can say that if Berkshire has a will, Berkshire Hathaway. 😎

One thing to remember when investing is to keep it simple. You don’t have to be a genius to be good at it. 🙂

When we keep track of something it tends to grow. Building up investment experience is no different. That’s why every investor needs to track their investment decisions. This is going back to basics but it’s crucial to becoming better investors.

Investment Tracking 

This can be done by creating a simple table or spreadsheet like the following, and updating it over time. You can think of this like an investment journal. 🙂 I will demonstrate using the 2 new companies I blogged about purchasing earlier this year.

InvestmentTypeActionReasons for decisionDateExit plan
  • Parkland Fuel Corp (PKI.TO)
StockBuy 100 shares
  • Large network of retailers
  • Stable dividend yield (with growth)
  • Recession resistant
01/02/18Hold into retirement
  • Automotive Properties (APR.UN)
REITBuy 190 units
  • High 7% dividend yield
  • Relatively low payout ratio (60%)
  • Canadians love to buy cars
01/02/18Hold into retirement

 

Here are some additional columns we can add to track our investment decisions even more closely:

  • Timeline horizon (how long we plan to hold something)
  • Current market value of said investment
  • How to measure the success or failure of our decision
  • Any concerns that go against our final decision
  • Does the original reason for buying a stock still apply in the present day
  • What process did we use to evaluate the investment, eg: P/E ratio, Graham formula, or analyst predictions

No matter how good we are at evaluating investments, we’re eventually going to be wrong. Sometimes we may be wrong due to unpreventable reasons. But there are many factors that we can control, such as our own psychology and behavior.

Keeping a detailed investment journal of our decisions is the best way to remind us in the future of the feelings we had at that time to avoid making the same mistakes again. We’ll understand why we made the choices we did, whether or not it was worth it, the process behind our decisions, which strategies worked and which didn’t, and do our best to hopefully replicate past successes. 🙂 Hindsight is 20/20, but only if we remember how we thought and what we did in the past that lead to the current moment.

 

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Random Useless Fact:

What it’s like having a motorcycle.

Sep 042018
 

We are now officially in the longest bull market in history. Hurray! 😀 Generally speaking a bull market begins when the market rises 20% from the end of a bear market. The last low set by the benchmark S&P 500 index in the U.S. was on March 9, 2009. It’s been 3,465 days of fairly steady growth since then, with the stock index climbing by more than 320% over that period. The previous record bull run was set between Oct. 1990 and March 2000 where the S&P 500 gained 418% between those 9.5 years!

Liquid’s Financial Update

*Total Income: = $6,000

  • Full time job = $3000
  • Part time job = $1100
  • Freelance = $500
  • Dividends = $900
  • Interest = $500
*Total Spending: = $3,500
  • Food = $300
  • Housing = $1200
  • Utilities = $100
  • Miscellaneous = $1000
  • Additional Debt Interest = $900

*Net Worth: (ΔMoM)

  • Assets: = $1,238,600 total (+9,700)
  • Cash = $11,200 (-400)
  • Canadian stocks = $177,800 (+4800)
  • U.S. stocks = $126,000 (+4500)
  • U.K. stocks = $21,600 (-300)
  • Retirement = $115,800 (+800)
  • Mortgage Funds = $33,900 (0)
  • P2P Lending = $32,300 (+300)
  • Home = $275,000
  • Farms = $445,000
  • Debts: = $426,400 total (-3,600)
  • Mortgage = $191,600 (-400)
  • Farm Loans = $181,900 (-500)
  • Margin Loans = $49,900 (-200)
  • TD Line of Credit = $0 (-1500)
  • CIBC Line of Credit = $3,000 (-1000)

*Total Net Worth = $812,200 (+$13,300 / +1.7%)
All numbers are in $CDN. 

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Aug 292018
 

According to a recent Northwestern Mutual study, nearly 1 out of 3 Americans have less than $5,000 saved for retirement. The average retirement savings for all Americans is $84,821. That’s a far cry from enough. Experts typically recommend building at least $1 million in savings by retirement. So it doesn’t look good for the average American. And we aren’t doing much better up here. A CIBC poll shows that 32% of Canadians between 45 and 64 have nothing saved for retirement. 😮

The 3 pillars of retirement savings

I recently finished reading a book called The Subtle Art of Not Giving a F*ck by Mark Manson, which explains that we can’t possibly care about everything in our lives because that would be too exhausting. So we have to choose what’s actually worth giving a hoot about. For those who are having trouble saving for retirement the best way to get ahead is to focus on a few things that will make a substantial difference. 😀

Below are 3 important factors that are absolutely the mutt’s nuts to building up a retirement nest egg.

Income

This is the number one tool to accumulating wealth. You can’t have savings if you never have income. Prioritize finding new ways to make additional income. This could be through a side job. Investment income is another method that requires patiences but ultimately has extremely lucrative results. For example this is what consistently investing in dividend growth stocks for 10 years can do in a bull market. 🙂

Another strategy that usually gives a lot of mileage is to constantly apply for new jobs. Every month make it a goal to send your resume to a few different companies, and follow up with any interviews or feedback you get. The worst case is you decline a job offer with a lower salary than what you’re currently earning. But if you are offered a better compensation package then you’ll receive an immediate raise in your career, either by joining the new company, or negotiating a higher salary with your current employer. 😉

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Aug 152018
 

The idea that higher minimum wage helps the working poor is utterly ridiculous. It’s a lie spread by liberal politicians and their supporters so they can take more tax money from individuals.

According to the Calgary Herald, rising minimum wage was the cause of 25,700 jobs disappearing in the city. But things will likely get worse as Alberta’s minimum wage will soon grow to $15 an hour. The Bank of Canada warned that minimum wage hikes could cost the country up to 136,000 jobs by 2019. Ouch. That’s some hard cheese. 🙁

Minimum Wage is a violation of basic human rights

Instead of protecting our life, liberty, and the pursuit of happiness the government actually violates our rights by creating a minimum wage law, which prevents mutually beneficial, voluntary labour contracts between two parties from taking place. It’s absurd that some government official can think they have the right to prevent others from offering their personal services for pay.

You have to be an egotistical control freak to believe that you somehow know the magic amount of what a minimum wage should be. You also have to believe that this one arbitrary number can be fairly applied to millions of agreements and transactions between people living in different cities, with different costs of living. That kind of patronizing thinking is pure buffoonery to me.

What gives them the right to decide how much my service is worth? Apparently these politicians think it doesn’t matter if the work is shoveling snow, teaching calculus, or giving CPR, because everyone’s time and labour is magically of equal value! But anyone who reads this blog regularly is smart enough to realize this is simply not true in the real world.

When I worked at a warehouse earlier this year I was making about $14/hr. My coworkers and I were pleased with our pay. Nobody talked about unionizing because we were all treated fairly. But if minimum wage were to increase then some of us would lose our jobs for sure. Even if we want to come back the law would make it illegal for the company to hire us at $14/hr. It would be very difficult for laid off workers to find a similar job that pays better. Raising the minimum wage displaces workers and increases the incentive to leave the job market altogether to live on social assistance. This is very damaging to the lives of low income workers.

 

How Minimum Wage hurts the poor the most

There is a myth being spread that governments can somehow mandate employers to pay all their minimum wage workers more money. And therefore, an increase in the minimum wage will benefit those workers.

Unfortunately the reality is not that simple. The actual fact is that governments can only give employers the choice of either paying their workers more or employing fewer workers – both scenarios are bad news for low income earners.

  • If the owner employs fewer workers, the least skilled employees are the first to get canned.
  • If workers are paid more, the least productive employees will lose their jobs and be replaced by other people who are more qualified and can provide more value to customers in the marketplace.

If an employee only creates $12/hr of value then it wouldn’t be sustainable for a business to pay him $15/hr for his labour. Either that worker’s productivity/ skills/ efficiency have to improve, or he will be laid off. Companies can also invest in new technology to bypass human workers altogether.

When minimum wage is forced onto employers it's the busines sowners that hurt the most.

Furthermore increasing the minimum wage across the board will create inflation and raise the price of goods and services. The people who are most disadvantaged by rising minimum wage are the working poor because their cost of living will increase disproportionately to everyone else. The dollar is devalued and the affordability gap widens between the rich and poor.

So if the idea is to help low income workers, then increasing the minimum wage is the antithesis of what we need to be doing. If you are making around minimum wage, then logically speaking you should be the most against raising it because you are most at risk of losing your job.

 

Why the Minimum Wage is Racist

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