Jul 062020
 

Growing passive income

Thanks to some recent stock purchases I’m now making about $20K a year in total dividend income. πŸ™‚ I also earn $9K a year from interest through my fixed income portfolio. And my rental property cash flows $700 a year after mortgage payments and other costs. So altogether my forward annual passive income is expected to be $29,700.

My current personal expenses adds up to roughly $30,000 a year. This means I am really close to being financially free. Hurray! πŸ€— Investment income tends to be fairly stable despite volatility in the underlying assets. So unless there’s some kind of black swan event I will probably achieve financial independence within the next couple of months!

I didn’t expect to hit my goal this soon. My initial plan was to be FI in 2022 – when I turn 35 years old. But now it appears financial freedom could be just around the corner! πŸ˜€

This came as a surprise to me. I didn’t expect the stock market would go on sale earlier this year. But it did. 😁 As a result I was able to buy more shares than initially planned, leading to a higher yield on cost.

Since I’m further ahead on my financial journey than planned I have decided to reduce my financial efforts by quitting all freelance work. This means going forward I will be working only 45 hours a week instead of 50 hours a week. This will give me more free time on the weekends. But I will keep both my full-time and part-time jobs for now. 😬

Liquid’s Financial Update June 2020

*Side Incomes: = $4,600

  • Part time job =$800
  • Dividends =$1300
  • Interest = $600
  • Rent = $1,800

*Discretionary Spending: = $1,800

  • Food = $400
  • Miscellaneous = $500
  • Interest expense = $900

*Net Worth: (Ξ”MoM)

  • Total Assets: = $1,540,400 (+$10,200)Β 
  • Cash = $20,800 (-32,500)
  • Canadian stocks = $336,900 (+35,700)
  • U.S. stocks = $153,700 (+3800)
  • U.K. stocks = $19,600 (+700)
  • Retirement = $152,200 (-900)
  • Mortgage Funds = $39,300 (+3100)
  • P2P Lending = $36,900 (+300)
  • Home = $331,000 (assessed land value)
  • Rental Unit = $450,000 (2020 purchase price)
  • Total Debts: = $518,500 (-3,300)
  • Home Mortgage = $181,300 (-500)
  • Rental Property Mortgage = $312,000 (-800)
  • Margin Loans = $25,200 (-2,000)

*Total Net Worth = $1,021,900 (+$13,500 / +1.3%)
All numbers are in $CDN at 0.73/USD

 

It was another positive month for the financial markets as stocks continue to recover. I filed my income tax in June. I have to pay about $2.5K in tax adjustment to the Canada Revenue Agency (CRA) this year because I didn’t use all of my RRSP deduction room. The good news is I don’t have to pay this tax bill until September. πŸ™‚

I’m planning to use all of my saved RRSP deduction for next year’s tax season when I have to offset the huge capital gain I triggered this year from selling the farmland – which unlocked about $250,000 of equity that was just sitting there doing nothing.

2020 has been a wild ride so far. But we are officially half way through. How are your finances doing so far this year?

 

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seapotato
seapotato
07/06/2020 7:50 am

waaa, congrats! do you do detailed tracking of your monthly expenses or is it just an estimate? I’ve seen some pretty crazy spreadsheets but always have been too lazy to enter in all my spending lol

Roadmap2Retire
07/06/2020 8:01 am

Well done Liquid! Thats fantastic progress and great to see your progress over the years and hitting that $1M milestone and getting that much more closer to financial freedom. Keep up the great work and wishing you the best

Love that “inner peace & not my problem” image at the bottom lol….so true.

R2R

Investing Pursuits
07/06/2020 9:04 am

Congrats on being close to financial independence. Well written post.

You still hold Cineplex? If so, what are your thoughts on it? I still have my shares, but regretting not selling when it went above $34 after the proposed sale. I was so close to pulling the trigger on it. With an ACB around $36, I am down a lot on Cineplex.

Vancouver FI
Vancouver FI
07/06/2020 10:05 am

Congratulations, I’ve been following this blog for some time and it’s really inspiring to see your fiscal update posts. Are you still thinking of buying more real estate? I’ve been watching the Vancouver market with hopes of a discount but haven’t seen any yet.

P C
07/07/2020 2:08 pm

Congrats, glad you are on your way to financial independence! Last few times I tried to make a comment… it didn’t go through I think!

Fee
Fee
07/07/2020 8:08 pm

Congrats on reaching the end of one life stage and starting on the next exciting challenge…Family !πŸ˜€

immi
immi
07/09/2020 5:57 am

Hey Liquid, congrats on an incredible achievement. What are your thoughts on your assets on Lending Loop? I have found that around 10% of my holdings are in some sort of arrears due to covid-19. Hope you’re keeping safe!!!

Money Mechanic
07/10/2020 4:09 pm

Well done on the passive income, super exciting.

AlW
AlW
07/11/2020 7:26 am

Ever think you’ll get married have a few kids and the expenses will jump?

GYM
07/11/2020 8:59 pm

Congratulations Liquid, this is a huge accomplishment for being so young. You are under 35, right? You made your goal same year as Frugal Trader did his $60K annual goal!

The CCB provides you with income for children under 6 but if your household income is too high it claws back to $0.

AlW
AlW
07/12/2020 5:17 am

8k/kid seems low to me. It’s the hidden costs, the babysitters, the diapers etc that add up. As GYM mentions don’t count on any money from the government as you’ll likely not get any. But it’s all definitely feasible especially if you get creative!

R from AB
07/23/2020 11:25 am

As a first-time parent, I also was apprehensive about our first new-born. But you know what? You learn as you go.

Sure, I wasn’t the perfect father but they still love you the same. Good luck!

tony
07/12/2020 8:39 am

that’s awesome to see Liquid! I’m always super intrigued in your blog posts since a part of me is planning very carefully to go to BC and another part I want to see how someone like yourself, living in arguably the most expensive part of Canada can STILL live comfortably and retire wealthy… I know there are less expensive parts of BC for sure but I’m just assuming the overall expenses of living there is definitely more than where I am right now in Winnipeg

DreamingOfDividends
07/15/2020 6:27 pm

I’m impressed that you have reached this milestone at a young age. Congrats! I have thought about investing in property, so it’s interesting to read about your perspective.

Steve L.
Steve L.
10/30/2020 12:42 am

Congratulations on FIREing.

I am in a pretty similiar position with a couple of rental properties, mortgage notes, and stocks etc. The stocks I have them spread out into 3 different brokerage accounts in US and Canada.

Do you use any program to keep track of your asset column, networth and balance sheet or do it all by hand?

Would like to organize the various stocks as well to better view the allocations by sector.

Thanks for your advice,

Steve