Liquid Independence

Liquid is the main editor of the Freedom 35 Blog.

Aug 272015

Comparing Household Incomes from 2006 to 2011

I recently watched a CBC video report that looked at how incomes have changed for different types of households. According to Statistics Canada, during the years between 2006 and 2011, family households saw their incomes increase by 7% on average. :) However, single people have been left behind as their incomes only rose 0.6%. It appears having a stable family with two parents has great financial benefits for everyone involved. These stats measure after-tax income, and is properly adjusted for inflation.

Let’s break down these households even more.


So basically single senior men and two-parent families are doing much better now than nine years ago. 😀 Single senior women and single moms didn’t fair too badly either, with 7% and 5% income gains respectively. On the other hand, single women who don’t have children have seen almost no growth to their net incomes. And single men have actually experienced deteriorating incomes from 2006 to 2011, especially if they also happen to be a single dad. Since financial independence is one of my long term goals I think the lesson for me here is try not to become a single dad, lol.

Of course all these numbers are averages and there is always a range of possibilities for personal finance. It’s interesting how this study demonstrates the closing income gap between single women and men. It also suggests that seniors, for the most part, are doing great on their own. When a new baby comes into a family, many changes are necessary. 😎 But it’s worth it because the family will likely be making more money. I wonder what these numbers look like for other countries.

Random Useless Fact:

“Be more concerned about your character than your reputation. Your character is what you really are, while your reputation is merely what others think of you.”

Aug 242015

How to make money in oil regardless of market conditions

Drilling for oil can be such a boring job. 😝 At least it provides a good income, though. But it’s becoming harder these days to find work in the oilfields. A year ago oil was trading at $90/barrel. Today, WTI has fallen below $40/barrel. Canadian crude is selling for even less, at around $30/barrel. Ouch!


Many oil producers are currently operating at a loss because $40/barrel is below their break-even point. It can take many years for oil prices to turn around. The problem is we don’t know exactly when the recovery will happen. If we did, we would probably all be retired right now. :)


Oil stocks are not doing so hot these days. However, there are other ways to still make money from the oil industry, despite the bleak market conditions. :) One way is to write covered calls. But today I’d like to discuss a different approach.

Since the start of this year, Western Energy Services Corp (WRG), has lost about 23% of its value. It could be worse, considering the price of crude oil has fallen about 27% over the same period. But who knows how much lower WRG shares can fall if the price of oil drops further? Fortunately, this company also issues bonds.

When Stocks Underperform, Look Towards Bonds

So last week I bought $5,000 face value of Western Energy Services bonds, with a 7.875% coupon interest rate, maturing in January 2019. I was able to buy it pretty much at par value, which is nice. :) Even though the company is barely making a profit, it’s still obligated to pay me 7.875% every year. Interest is paid to bond holders before dividends are paid to shareholders. 😁


Related Post: What is a bond?

Thanks to the new bond investment my passive income is now $393.75 a year higher. Woohoo! 💰  The yield to maturity for this high yield bond is about 8% a year. This rate of return is safe :) as long as the company doesn’t file for bankruptcy protection before January, 2019. Here are some benefits of buying the bond of this company rather than its stock.

  • The bond pays 8% annual return. The stock only pays a 6.5% annual dividend.
  • Bonds are inherently less risky than stocks.
  • The stock dividend might get cut if the price of oil remains at these low levels. But the bond interest rate does not change.
  • If the company goes bankrupt the stock holders will lose all their money. But the bond holders can liquidate the company’s assets to recoup some of their losses.

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Aug 222015

This is an important balance that every adult has to make in life. Some people are suited to the…shall we say…Ascetic lifestyle: one where very little money is spent and very little is consumed. This is the message that you see preached on a thousand different frugality blogs. Some people seem to really get into it, making a hobby out of finding new ways to live on beans and rice and never going on vacation.

Then you’ve got people who are devoted to living an enjoyable life now. We’ll call them the YOLOs. They aren’t going to put off their chosen lifestyle for even a minute, and they’re certainly not going to wait for retirement to start letting their hair down a little. Nope, they want life on their own turns immediately. As such, they’re going to have to start making money. These folks tend to become career people, investors, and even con artists. While I don’t advocate the last, I do recommend a healthy dose of this tendency in the life of everyone who wants to experience the good life. But what “the good life” is depends on your own personal definition.

Clearly, most people aren’t going to enjoy living either the Ascetic or the YOLO lifestyle, at least not completely. But if you’re a reader of this blog, you are interested in financial freedom sooner than later. For most people to achieve this, you are going to have to make a way for yourself down the middle path: a combination of the Ascetic and YOLO lifestyles. But how?

Independence is key. Even if you don’t make more money than anybody else, you’ve got to learn to do some things for yourself. This may include educating yourself, cooking your own food, renovating your own home, and the like. Teaching yourself investment is key for the FreedomThirtyFive way of life. To learn, I would recommend CMC Markets, which can include investment education and the brokerage of many easy-to-understand day trading options. Even if you never risk a dime, their educational demo accounts are invaluable for the would-be investor, teaching important skills which cross over to every form of investment you’ll ever make in your life.

Residual or Passive Income is also a vital step in this process. These money making arts earn you money even when you’re not actively working for it. This can be accomplished in a number of ways. As a writer, for instance, I’ve got articles all over the web. Some sites pay money according to how widely clicked the articles are, meaning that money can come for weeks, months, and years after the article is written. Many industries have techniques built into them which allow residual income like this. Another common method is Real Estate. By owning properties in addition to your own home, you can be getting rent from tenants who can be paying your mortgage for you. Many landlords receive money over and above what they pay for mortgage and upkeep combined, earning a tidy profit without having to lift a finger. Management companies make this even easier.

Using a combination of methods like these, you’ll start to build a lifestyle of financial independence, one that is very possible to make perfect by age 35.

Aug 202015

Best Cities In the World

The Economist recently released its new livability scale report. This study compares 140 cities across the world and ranks them based on factors such as political stability, healthcare, safety, and educational resources. Canadian and Australian cities dominated the top 5 spots for having the best koala-ty of life! 😀 Below are the top five cities in the list.

  1. Melbourne, Australia
  2. Vienna, Austria
  3. Vancouver, Canada
  4. Toronto, Canada
  5. Calgary, Canada and Adelaide, Australia

Similarities Between Canada and Australia

This is probably not a big surprise as both countries have a lot in common. We both export boat loads of natural resources. We have low population density and most people live in small to medium sized cities. Our economies are similar as well with national GDP in the $1.5 to $2.0 trillion range.


Even our currencies are roughly the same in value. $1 CAD currently trades for about $1.04 AUD, lol. The stock market returns between the Canadian TSX Composite index and the Australian S&P All Ordinaries index (XAO) over the past 5 years are practically identical. Both stock markets returned about 18% since August 2010.


I’m not sure if it’s even necessary for Canadians to buy Australian stocks for diversification purposes, and vice-versa, because it might not make any difference in the long run.  😕

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Aug 172015

Donald Trump Reveals His Personal Finances 📈

I watched part of the Republican debate earlier this month. Some Americans warn that if Donald Trump becomes the next President then there will be Hell toupée. 😠 But he also has a lot of dedicated supporters. He’s quite a polarizing political figure. But what’s even bigger than his brash character and bold hairstyle is his impressive portfolio of material wealth. :)

His net worth is not clear as it’s difficult to put an exact value on such intangibles like his brand. Many sources say he is worth about $4.5 billion while Trump himself claims he is worth about $8.7 billion. As a presidential candidate Trump is required by law to disclose his finances to the Federal Election Commission. This opens up his personal finances for the whole world to see. It’s a great opportunity for us to study what makes him so successful in business and how we can possibly do the same. Trump’s financial disclosure documents reveal that over the last 18 months he’s made at least $380 million. This means Donald Trump makes about $250 million a year. Wow! It must be hard for anyone to Trump that kind of income. 😛

If he does somehow over-comb the controversies and become the next U.S. president, I expect he would want to make some changes to the White House. 😉


🏢 Types of Incomes ⛳ 

Surprisingly only $14,000 of his $380 million income is from a salary, lol. This goes to show that the rich are very tax efficient. Salary and wages are the highest taxed income sources one can earn in both Canada and the U.S. Most of Trump’s income comes from his business and investments. He owns the Trump Tower Chicago, the Trump National Golf Club in N.J. and the Mar-A-Lago resort in Palm Beach, Fla, among many other properties. Roughly half of his income, about $200 million during the 18 month filing period, came from golf courses and resorts. He also earned at least $10 million in royalties for licensing his brand to not only luxury hotels, but also to vodka makers and energy drinks companies.

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