Liquid Independence

Liquid is the main editor of the Freedom 35 Blog.

Sep 042018
 

We are now officially in the longest bull market in history. Hurray! 😀 Generally speaking a bull market begins when the market rises 20% from the end of a bear market. The last low set by the benchmark S&P 500 index in the U.S. was on March 9, 2009. It’s been 3,465 days of fairly steady growth since then, with the stock index climbing by more than 320% over that period. The previous record bull run was set between Oct. 1990 and March 2000 where the S&P 500 gained 418% between those 9.5 years!

Liquid’s Financial Update

*Total Income: = $6,000

  • Full time job = $3000
  • Part time job = $1100
  • Freelance = $500
  • Dividends = $900
  • Interest = $500
*Total Spending: = $3,500
  • Food = $300
  • Housing = $1200
  • Utilities = $100
  • Miscellaneous = $1000
  • Additional Debt Interest = $900

*Net Worth: (ΔMoM)

  • Assets: = $1,238,600 total (+9,700)
  • Cash = $11,200 (-400)
  • Canadian stocks = $177,800 (+4800)
  • U.S. stocks = $126,000 (+4500)
  • U.K. stocks = $21,600 (-300)
  • Retirement = $115,800 (+800)
  • Mortgage Funds = $33,900 (0)
  • P2P Lending = $32,300 (+300)
  • Home = $275,000
  • Farms = $445,000
  • Debts: = $426,400 total (-3,600)
  • Mortgage = $191,600 (-400)
  • Farm Loans = $181,900 (-500)
  • Margin Loans = $49,900 (-200)
  • TD Line of Credit = $0 (-1500)
  • CIBC Line of Credit = $3,000 (-1000)

*Total Net Worth = $812,200 (+$13,300 / +1.7%)
All numbers are in $CDN. 

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Aug 292018
 

According to a recent Northwestern Mutual study, nearly 1 out of 3 Americans have less than $5,000 saved for retirement. The average retirement savings for all Americans is $84,821. That’s a far cry from enough. Experts typically recommend building at least $1 million in savings by retirement. So it doesn’t look good for the average American. And we aren’t doing much better up here. A CIBC poll shows that 32% of Canadians between 45 and 64 have nothing saved for retirement. 😼

The 3 pillars of retirement savings

I recently finished reading a book called The Subtle Art of Not Giving a F*ck by Mark Manson, which explains that we can’t possibly care about everything in our lives because that would be too exhausting. So we have to choose what’s actually worth giving a hoot about. For those who are having trouble saving for retirement the best way to get ahead is to focus on a few things that will make a substantial difference. 😀

Below are 3 important factors that are absolutely the mutt’s nuts to building up a retirement nest egg.

Income

This is the number one tool to accumulating wealth. You can’t have savings if you never have income. Prioritize finding new ways to make additional income. This could be through a side job. Investment income is another method that requires patiences but ultimately has extremely lucrative results. For example this is what consistently investing in dividend growth stocks for 10 years can do in a bull market. 🙂

Another strategy that usually gives a lot of mileage is to constantly apply for new jobs. Every month make it a goal to send your resume to a few different companies, and follow up with any interviews or feedback you get. The worst case is you decline a job offer with a lower salary than what you’re currently earning. But if you are offered a better compensation package then you’ll receive an immediate raise in your career, either by joining the new company, or negotiating a higher salary with your current employer. 😉

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Aug 232018
 

Have you seen a human body? It is an accident waiting to happen. Every aspect of it is prone to injury. Toes sticking out of the end of our feet are just begging to get stubbed and broken. We are all soft and squishy, making us depressingly easy to puncture.

The sun gives us cancer. Much of the water on the planet is problematical. Much of the air is unbreathable. And don’t even get me started on the brain. It is so easily distracted, it is a wonder we ever complete tasks without hurting ourselves.

Personal responsibility 

You can’t completely stop people being careless and irresponsible. But you can make them pay when their irresponsible actions cause you damage. And it helps. It used to be that people thought drinking and driving was no big deal. Now, people are much more hesitant to do it because there is a price attached.

Places around NYC used to be a lot more dangerous. It is a lot safer today thanks in part to the efforts of people like these Bronx personal injury attorney groups out there that make people accountable for their irresponsibility. 

It is not overly litigious to seek remunerations for damages someone else caused. By holding them responsible, you make it less likely that they will cause someone else similar damage. 

We used to deal with these situations with blood feuds. Today, we settle it through the law. There are ways to settle disputes without bloodshed.

Reduce your risk

Driving is one of the biggest responsibilities we have. And yet it is taken for granted more than most. How serious a responsibility could it be? After all, we let 16-year-olds do it. And if there is one thing we know about teenagers, especially boys, is that they are the furthest thing from responsible.

Don’t text and drive seems obvious until you watch a teen or young adult behind the wheel of a car. We are evolutionarily predisposed to do unwise things when young. According to the experts, our brains aren’t even fully formed until age 25. Our current laws and what we know about science are at odds.

What can you do? Be excessively responsible when you do drive. Perhaps, take public transportation. Ride a bicycle. Better yet, walk. Don’t just do it for exercise. Do it to reduce congestion on the roads and to make it a little less likely that an accident will clog the highway in the morning.

The bottom line

Besides all the hassles that often accompany accidents like car repairs, hospital and doctors’ visits and the pain of recovering, we should also address the impact on our wallets. While you will probably recoup your expenses and even a bit on top of that, you’re still like to have shell out money for those hassles just mentioned. There’s the deductible on your car insurance for repairs, and if the car gets “totaled” by the insurer a lot of the time the payout doesn’t come close to covering the cost of a comparable vehicle. Then the medical bills, even if you have insurance, could add up. Once you account for deductibles, copays and medicines the total can be financially devastating. Things like supplemental insurance or a rainy-day fund can be a make-or-break lifeline.

The human body is easily damaged. But it also has a brilliant self-healing mechanism aided by modern medicine. When self-healing is not enough, we need to make the people who are responsible for causing accidents in the first place accountable for their actions. We can reduce our accident footprint by driving less. And we can take care of our bodies so that they are more accident resistant.

Aug 152018
 

The idea that higher minimum wage helps the working poor is utterly ridiculous. It’s a lie spread by liberal politicians and their supporters so they can take more tax money from individuals.

According to the Calgary Herald, rising minimum wage was the cause of 25,700 jobs disappearing in the city. But things will likely get worse as Alberta’s minimum wage will soon grow to $15 an hour. The Bank of Canada warned that minimum wage hikes could cost the country up to 136,000 jobs by 2019. Ouch. That’s some hard cheese. 🙁

Minimum Wage is a violation of basic human rights

Instead of protecting our life, liberty, and the pursuit of happiness the government actually violates our rights by creating a minimum wage law, which prevents mutually beneficial, voluntary labour contracts between two parties from taking place. It’s absurd that some government official can think they have the right to prevent others from offering their personal services for pay.

You have to be an egotistical control freak to believe that you somehow know the magic amount of what a minimum wage should be. You also have to believe that this one arbitrary number can be fairly applied to millions of agreements and transactions between people living in different cities, with different costs of living. That kind of patronizing thinking is pure buffoonery to me.

What gives them the right to decide how much my service is worth? Apparently these politicians think it doesn’t matter if the work is shoveling snow, teaching calculus, or giving CPR, because everyone’s time and labour is magically of equal value! But anyone who reads this blog regularly is smart enough to realize this is simply not true in the real world.

When I worked at a warehouse earlier this year I was making about $14/hr. My coworkers and I were pleased with our pay. Nobody talked about unionizing because we were all treated fairly. But if minimum wage were to increase then some of us would lose our jobs for sure. Even if we want to come back the law would make it illegal for the company to hire us at $14/hr. It would be very difficult for laid off workers to find a similar job that pays better. Raising the minimum wage displaces workers and increases the incentive to leave the job market altogether to live on social assistance. This is very damaging to the lives of low income workers.

 

How Minimum Wage hurts the poor the most

There is a myth being spread that governments can somehow mandate employers to pay all their minimum wage workers more money. And therefore, an increase in the minimum wage will benefit those workers.

Unfortunately the reality is not that simple. The actual fact is that governments can only give employers the choice of either paying their workers more or employing fewer workers – both scenarios are bad news for low income earners.

  • If the owner employs fewer workers, the least skilled employees are the first to get canned.
  • If workers are paid more, the least productive employees will lose their jobs and be replaced by other people who are more qualified and can provide more value to customers in the marketplace.

If an employee only creates $12/hr of value then it wouldn’t be sustainable for a business to pay him $15/hr for his labour. Either that worker’s productivity/ skills/ efficiency have to improve, or he will be laid off. Companies can also invest in new technology to bypass human workers altogether.

When minimum wage is forced onto employers it's the busines sowners that hurt the most.

Furthermore increasing the minimum wage across the board will create inflation and raise the price of goods and services. The people who are most disadvantaged by rising minimum wage are the working poor because their cost of living will increase disproportionately to everyone else. The dollar is devalued and the affordability gap widens between the rich and poor.

So if the idea is to help low income workers, then increasing the minimum wage is the antithesis of what we need to be doing. If you are making around minimum wage, then logically speaking you should be the most against raising it because you are most at risk of losing your job.

 

Why the Minimum Wage is Racist

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Aug 072018
 

Apple recently became the first US company to surpass $1 trillion in market value, wowzers! 😀 It’s hard to imagine that merely 2 decades ago the company was on the verge of bankruptcy. But then Steve Jobs came back as CEO and turned the whole company around. I didn’t have the foresight to buy Apple stocks in 1998 when it was less than $1/share. Amazon and Alphabet (Google) shares are probably next in line to breach the trillion dollar milestone.

We’re living in a digital world where technology companies today have become like utility companies in the past. I have owned all 3 for many years now and will continue to add more tech stocks to my portfolio over time. A devastating tech crash like in 2000 shouldn’t happen again because the big companies today actually have sales and profits to backup their market value. 🙂 The only major risk, albeit not very likely, is a prolonged, global internet blackout or some other technological black swan event.

As North American stock markets climbed in July so did my investments.

Liquid’s Financial Update

*Total Income: = $7,500

  • Full time job = $4000
  • Part time job = $1100
  • Freelance = $600
  • Dividends = $900
  • Interest = $900
*Total Spending: = $4,300
  • Food = $300
  • Housing = $1200
  • Utilities = $100
  • Miscellaneous = $1800
  • Additional Debt Interest = $900

*Net Worth: (ΔMoM)

  • Assets: = $1,228,900 total (+6,400)
  • Cash = $11,600 (+1100)
  • Canadian stocks = $173,000 (-600)
  • U.S. stocks = $121,500 (+3700)
  • U.K. stocks = $21,900 (-300)
  • Retirement = $115,000 (+1800)
  • Mortgage Funds = $33,900 (+600)
  • P2P Lending = $32,000 (+100)
  • Home = $275,000
  • Farms = $445,000
  • Debts: = $430,000 total (-3,400)
  • Mortgage = $192,000 (-500)
  • Farm Loans = $182,400 (-500)
  • Margin Loans = $50,100 (-900)
  • TD Line of Credit = $1,500 (-500)
  • CIBC Line of Credit = $4,000 (-1000)

*Total Net Worth = $798,900 (+$9,800 / +1.2%)
All numbers are in $CDN. 

 

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