May 172018
 

It’s natural to be upset about losing one’s job. But sometimes being laid off is not so bad. When my company unexpectedly downsized in February I became unemployed for the first time in 10 years. Actually I was still working part time, so technically I was just under-employed. I didn’t have any other jobs lined up at the time. But instead of feeling worried or sad I was happy. That’s partly because I have the resources to last me years before having to work full time again. But I also had a pretty good feeling that this change in my career was for the better. That’s why I was optimistic in my earlier post about losing my job.

I received a big payout worth more than 3 months of my salary. But I managed to find permanent full time work before 3 months. So from a financial point of view I didn’t lose any money. In fact, my income situation has actually improved because my new job pays more than my old job. Hurray! I can become financially independent a little sooner now. 🙂 Furthermore the job I’m currently at is more fun and rewarding than my old job. I also had fun working temporary at Amazon for awhile. But what I enjoyed the most about this whole situation is taking some time off to relax and experience a small taste of early retirement. 😀

And to add icing on the cake I recently received a letter in the mail from Great West Life, an insurance company, asking what I want to do with my previous job’s matching RRSP fund. I’ve been paying into this retirement program for the last 7 years. I couldn’t access it or use the money in any way while I was employed. Since I couldn’t touch the money, I didn’t think it was worth including in my net worth statements. But now that I’m no longer working there, they have to give me my money, lol. It’s a typical 4% employer matching plan so the sum is not that much compared to the 25% or more I typically save and invest personally, but it’s another benefit to look forward to.

 

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Random Useless Fact:

You know your country is in trouble when the national currency is worth less than the paper it’s printed on.

 

May 072018
 

Farmland prices still on the rise

A new report from Farm Credit Canada indicates that local land values around my farmland have grown by 2% last year. So in this fiscal update I will be increasing the value of my farmland by 2%. This will add $9,000 to my net worth. Cool beans! 😀

Farmland across the rest of the country actually performed much better. The national price rose 8.4% last year, which is higher than the 7.9% growth in 2016.

Overall, my wealth has grown by $15,900 for the month of April, mostly thanks to higher farmland prices in Saskatchewan. So far this year my net worth is up $44,800 because from January to April I’ve had a string of good luck with my finances. But the rest of the year could be different. The popular saying, “Sell in May and go away,” could very well be true this year.

Liquid’s Financial Update

*Total Income: = $5,900

  • Old Amazon job = $300
  • New full time job = $1,200
  • Ongoing part time job = $500
  • Sold cryptocurrencies = $1800
  • Freelance = $500
  • Dividends = $1000
  • Interest = $600
*Total Spending: = $3,300
  • Food = $500
  • Housing = $1100
  • Utilities = $100
  • Miscellaneous = $700
  • Additional Debt Interest = $900

*Net Worth: (ΔMoM)

  • Assets: = $1,186,600 total (+12,500)
  • Cash = $7,700 (+1100)
  • Canadian stocks = $170,200 (+1900)
  • U.S. stocks = $113,800 (-500)
  • U.K. stocks = $22,000 (+600)
  • Retirement = $89,100 (-200)
  • Mortgage Funds = $32,500 (+300)
  • P2P Lending = $31,300 (+300)
  • Home = $275,000
  • Farms = $445,000 (+9000)
  • Debts: = $445,200 total (-3,400)
  • Mortgage = $179,000 (-400)
  • Farm Loans = $183,900 (-400)
  • Margin Loans = $52,000 (-1100)
  • TD Line of Credit = $4,000 (-100)
  • CIBC Line of Credit = $10,500 (-1500)
  • HELOC = $14,800 (+100)

*Total Net Worth = $741,400 (+$15,900 / +2.2%)
All numbers above are in $CDN. 

 

I’m in the middle of switching banks to renew my mortgage. I’m currently paying over 3% for my mortgage. I think I can get it down to below 2.75%. This would allow me to save thousands of dollars over time. Fingers crossed. 🙂

 

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Random Useless Fact:

I feel like I’m the only one who haven’t seen Infinity War yet.

 

May 012018
 

The Tax Free Advantage

Tax free investment vehicles have been around the world for decades. The United States has the Roth IRA. The United Kingdom has the Individual Savings Account (ISA.) The Canadian version is called the Tax Free Savings Account (TFSA) and it’s relatively new – only 9 years old. Tax free accounts give investors a way to save money using their after tax income. And any investment growth inside the account is not taxed, subject to certain restrictions.

Last year Canadians held on average $17,300 inside their TFSAs. That’s not much, but the good news is most people who read this blog have way more saved. I recently conducted a poll asking readers to share their TFSA balances. It seems that 4 out of 5 voters have over $20,000 stuffed away in a tax free account. And surprisingly 8.5% of readers say they have over $100,000. Hey, not too shabby! 🙂 Full results below.

According to a BMO report, people in B.C. contribute the most to their TFSAs – about 28% more than the national average. Yay. My people! 😀

A tax free vehicle is very powerful because it can save us hundreds of thousands of dollar in taxes over time. For example, I currently have about $100,000 in my TFSA. Let’s assume I don’t contribute anymore money and leave it alone to grow at 7% a year. 30 years later my account should be worth $711,000.

However, if I were to invest the same $100,000 in a taxable account, then instead of earning an annual 7% average rate of return, I will probably only make 5% after tax. My account in 30 years would only be worth $411,000. That’s $300,000 less than the previous example. Maybe that amount will only be worth half as much 30 years from now due to inflation. But it’s still a lot of money to pass up. We are lucky in this country to have this financial vehicle to help us save. Everyone should use it if they can. 🙂

If anyone’s curious, here is what I currently hold in my tax free savings accounts. I have some winners and some losers, But mostly winners. 😉

You can also visit my portfolio page for real time numbers.

 

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Random Useless Fact:

Apr 252018
 

My experience working under Jeff Bezos, indirectly.

As many of you know I held a full time job for a month after my layoff in February. This company is the online retailer, Amazon. 🙂 I was a warehouse associate at an Amazon Fulfillment Center. It was a lot of fun! And I’ll never forget the lessons I learned there.

But I quit after a month because I wanted to spend more time pursuing other job opportunities. Besides, I was feeling a lot of pressure because my company’s CEO is literally the wealthiest man on the planet, and I didn’t want to risk disappointing him. Amazon founder Jeff Bezos is currently worth about $115,000,000,000 – give or take a few billion dollars! 😮 Wow that’s a big number. And for a brief moment of my humble existence I was granted the privilege of working indirectly with him. 😀

Although I didn’t work directly under him, he was only 7 management levels above me. So if I had kept working and be promoted just 7 times I would have easily taken his job as CEO. 😉

What Jeff Bezos taught me about business

During my short tenure with Amazon it was clear that Jeff’s influential principles and management style trickled all the way down the corporate ladder to the employees working on the ground floor.

I believe Amazon’s Prime 😎 reason for success is Jeff’s unique management style. He operates the leanest company I have ever seen. Any workplace inefficiency or redundancy, no matter how insignificant, will be eliminated as soon as it is found. From the workers picking and packing to the automated labeling machines and conveyor belts, everything in the warehouse operates like clockwork. 🙂 The impressive logistics system has to manage over 100 workers, moving and sorting 50,000+ items every day.

Consistency is important. All the managers at Amazon have to mimic the same disciplined style of leadership as set by Jeff. This is apparent across all levels of the company. That’s not to say Amazon is all work and no play. They have a well stocked break room, as well as a leisure area with video games, table tennis, and comic books. Amazon’s workplace policies are firm, but fair.

Continue reading »

Apr 122018
 

The ancient philosopher Seneca once said that, “luck is when opportunity meets preparation.” In other words, the more prepared we are the more chances we’ll have to take advantage of opportunities when they come our way. I believe this is true in many ways. But luck is probably a little more complicated than that.

I’ve recently come across a formula created by author Darren Hardy which breaks down luck into all its individual components. According to Hardy, anyone can become more lucky by focusing on this formula. 🙂

The Formula for Getting Lucky

Preparation + Attitude + Opportunity + Action = Getting Lucky

  • Preparation is all about personal growth – improving our skills, knowledge, expertise, and relationships – so we have the tools to take advantage of opportunities when they arise.
  • Having the right attitude or mindset is also important. Hardy says that, we can’t see what we don’t look for, and we can’t look for what we don’t believe in. Billionaire Richard Branson once said, “we are all lucky. If you live in a free society, you are lucky. Luck surrounds us every day; we are constantly having lucky things happen to us. I have not been any more lucky or unlucky than anyone else. The difference is when luck came my way, I took advantage of it.
  • Opportunity is the only part of the formula that we cannot control. Opportunity is when something positive happens that we didn’t plan for. The good news is that fortune comes to us everyday in many different ways, as Richard Branson said.
  • The last part of the getting lucky equation is taking action, or doing something about the situation that is presented to us. This is what separates self made millionaires from the average middle class citizen.

I can vouch for Hardy’s formula because I have seen it work for me. 🙂 I have been very lucky when it comes to my finances. Here are some moments from past blog posts where I expressed my acknowledgement and appreciation for my luck.

I always had a feeling that I was luckier than most people when it came to personal finance and wealth building. But I couldn’t figure out the cause before. Seeing the breakdown of Hardy’s luck formula really makes it clear. I was engineering my own luck all this time but just wasn’t aware of it until now, lol. I think one thing I can do to improve my luck even more is to focus on improving my preparation. 😀 We are surrounded by luck everyday if we look for it. I hope something lucky happened to you recently. 😉

 

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Random Useless Fact

There’s something not quite right with this family tree.