Liquid Independence

Liquid is the main editor of the Freedom 35 Blog.

May 212018
 

Schedule the Life You Want

Without focus and direction, it’s easy to get lost. Imagine we are sailors looking for a remote island to retire on. We could sail aimlessly in the open waters for 40 days before finally finding something we like. But if we plan and pick a destination beforehand, then we can arrive there much sooner. Most people work 40 years before retiring. But what if they planned ahead? The famous psychologist Dr. Jordan Peterson argues that “planning is unbelievably useful. You need to figure what it is you’re aiming towards, and why.” His calendar is fully booked, often weeks in advance. I’m a planner as well. I find it boosts my productivity by at least 2x and really puts my goals into perspective. 🙂

Millennials are the first generation in history who can anticipate reaching the age of 90 in large numbers. This means we will spend about one-third of our lives as what we now refer to as “old people” lol. Planning for how we want to spend those last decades is pretty important. It doesn’t have to be detailed, but having a rough schedule for the next 60 years of our lives would provide us with some direction that matches our goals and values. Most millennials don’t do this. And as a result, they will likely have the following life broken down into 3 stages.

But our bodies and minds won’t be the same when we’re older. So by the time most people retire in their 60s they are no longer able to fully take advantage of their leisure time. Jordan Peterson said he enjoys giving himself a limited time to finish complicated tasks. It’s fun to see if you can achieve something far more than you thought, in far less time. This is why I plan to retire by age 40 at the latest. Here is what my life will look like.

Continue reading »

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.

 

__________________________________
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: = $444,200 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 = $742,400 (+$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. 🙂

 

__________________________________
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.

 

__________________________________
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 »