Male. Late-twenties. Resides in Metro Vancouver, Canada. Full time graphic designer making about $25/hr. I currently have over $500,000 of debt but I plan to become financially independent when I’m 35 years old by investing and beating market returns. In the last six years that I’ve lived on my own I’ve paid off $15,000 of student loans, quadrupled my home equity, built up a $200,000 stock portfolio, and acquired nearly $400,000 worth of additional investments such as farmland, mortgages, and precious metals, by simply using my own personal savings, plus bank loans. I’ve shared my income tax statements from previous years to demonstrate that even an average salary can be used to generate great wealth with the proper planning and leverage. I’m Liquid Independence, and welcome to my freedom 35 blog!
I don’t earn a high income like some other finance bloggers do. My situation is more down to earth. I dropped out of university to pursue an arts diploma at a local college. I currently spend about $3,000 per month living by myself. And I do not have an emergency fund. On paper I’m just a typical millennial with an average job. However it’s the way I manage my money that sets me apart from many others in similar fiscal situations, and why my net worth is over $300,000 today.
Whenever I invest in something new I usually explain my decision process on this blog’s front page, and demonstrate step-by-step exactly how I did it with documentation. This keeps me accountable since I can’t make up random numbers. It also gives other people a chance to try out my strategies, if they so choose, at their own risk and discretion of course. My financial decisions are known to be highly controversial. But even if most people disagree with me I hope to at least show them a different way to look at the world of personal finance.
I believe it’s perfectly okay to stay in debt, to enjoy a relatively high standard of living, to spend money now, and still achieve early retirement without ever working too hard. I believe in finding a fulfilling career that is enjoyable, but may not come with a high salary. Smart investment decisions will ultimately lead to long term prosperity.
I grew up in a typical middle class household. When I was going through college my generous parents contributed $10,000 towards my tuition. I’ve received no other financial aid from them since then. After graduating at age 21 I began my humble career in 2008 with a $35,000 starting salary. Still living with my folks at the time I was easily able to save $13,000 within one year and purchased a $230,000 apartment, and moved in right away.
As soon as I was living on my own I began to discover the powerful nature of what money is. I realized that in today’s world money represents power, potential, security, influence, hope, and of course freedom. I vowed to make saving and investing my top priorities so I can retire early, and have unlimited free time. Time is the real wealth that everyone wants. When I go to work I’m trading my time for someone else’ money. And when I spend that money, such as at a restaurant, I’m essentially buying back my time because I don’t have to cook and clean. I realized that being financially independent means I would have all the time and freedom in the world, without ever having to work again. That was my Eureka moment. That’s when I decided to embark on a financial journey to freedom 35.
About My Investments:
In 2009 the apartment I bought was my first major investment. My research showed home prices would continue to increase despite the headlines in the media about a real estate bubble. I didn’t want to miss out on any gains. A couple years later my apartment’s value had indeed risen by $40,000 above my purchase price. Boom! I made over 300% return on my $13,000 real estate investment in just two years!
In 2010 and 2011 I invested heavily into the Canadian and U.S. stock markets, even borrowing money to buy high quality companies like banks, energy companies, and technology giants such as Apple, Google, and Amazon. My 2 to 1 leverage proved to be fruitful as I was able to double the performance of the stock markets during the bounce back years from the great recession.
In 2012 I ventured into more exotic investments like farmland because I believed it was a greatly undervalued asset class. I blogged about spending $20,000 of my own money to purchase a $150,000 farm, and secured a long term loan for the remaining balance. Farmland values in Saskatchewan increased on average by 19% in 2012, and 28% in 2013, which means I have already made over 200% return on my initial $20,000 investment thanks to the amazing power of leverage!
In 2013 I purchased another piece of farmland, and continued to invest in the financial markets in Canada and the U.S. My leveraged U.S. margin account outperformed the S&P 500 index yet again and returned a whopping 75% in 2013. I share all the holdings in my U.S. account under the “Portfolio” menu near the top of the site.
In 2014 I started to invest in mortgage securities, which I think are great options for many investors, particularly those who are focused on income. I also bought individual bonds as a way to diversify my portfolio. My plan for this year is to continue investing in stocks, fixed income, and other opportunities whenever they present themselves
I have built up over $800,000 of financial assets over the last six years. My savings rate is about $18,000 per year. So most of my investments purchased so far were heavily dependent on bank loans. I don’t save up and wait to invest. I invest first, then wait. It takes money to make money, so using leverage has allowed me in the last several years to make 100% annual return or more on my capital. Finding lucrative investment opportunities and using other people’s money to do the work is how I’m currently growing my net worth by over $100,000 per year.
I don’t have a secret formula to get rich. But here are some guidelines I follow: Purchase undervalued assets. Invest using leverage if the cost is affordable. Stay in the game. Build up a strong asset column. And think outside the box. One must be willing to seize opportunities when other are reluctant to act. We don’t get rich by paying down debt. More often than not investing should take priority over paying down low interest debt.
These are my life long goals
-Become financially free
-Donate at least a million dollars to charity
-Become part of the 1% wealthiest people in the country
-Start a company and create jobs for my community
-Qualify and become an accredited investor
-Fly into space