Liquid Independence

Liquid is the main editor of the Freedom 35 Blog.

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. ūüôĀ

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

Continue reading »

Aug 072018

Apple recently became the first US company to surpass $1 trillion in market value, wowzers! ūüėÄ 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. ūüôā 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: (őĒMoM)

  • 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. 


Continue reading »

Jul 272018

According to a Fox article,¬†millennials now make up the largest generation in America, and we’re seeing some troubling trends as they are increasingly turning away from capitalism and favouring socialism instead. Based on a study of over 2,000 people, nearly 45% of millennials polled said that they would prefer to live in a socialist country compared to the 42% who said they preferred a capitalist one. Another 7 percent said that the preferred living in a communist country. Oh dear. ūüôĀ

By comparison, most baby boomers polled favor capitalism, compared to 26% who said they prefer a socialist system. Socialism never works in the long run because¬†you eventually run out of other people’s money to spend. For a recent example we can turn to Venezuela, which has a socialist government. Venezuela‚Äôs currency has lost 99.9997% of its value in the past 6 years. In the span of a few months, the International Monetary Fund (IMF) has gone from forecasting that Venezuela‚Äôs inflation rate would hit 12,875% by the end of the year to now saying that it will get to 1,000,000%. Yikes!¬†The country’s economy is on the verge of collapse for the past year. People often struggle to find food, medicine, and other essential goods.

If socialism is better than capitalism then all the socialists should get together and redistribute their properties fairly among themselves. But that has never happened, lol. As Winston Churchill once said, “Socialism is the philosophy of failure, the creed of ignorance, and the gospel of envy. Its inherent virtue is the equal sharing of misery.”



Random Useless Fact:

Eating healthy can cost more money



Jul 102018

I transferred my pension from my previous employer to my personal investment account. The amount is about $20,000, which I currently hold in my TD RRSP as cash. This money exists because I saved 4% of my income and put it towards the company RRSP group plan for 7 years. It’s not a huge amount of money but if I invest all of it into something that can generate 5% return per year, I would earn $1,000 of tax deferred passive income without touching the principal. ūüôā I also have a¬†Deferred Profit Sharing Plan (DPSP) that is awaiting to get paid out as well. But I’m not sure when I will receive that yet. It’s not as much as the RRSP amount though.

Liquid’s Financial Update

*Total Income: = $7,300

  • Full time job = $4000
  • Part time job =¬†$1400
  • Freelance = $500
  • Dividends =¬†$1000
  • Interest = $400
*Total Spending: = $3,600
  • Food = $300
  • Housing = $1200
  • Utilities = $100
  • Miscellaneous =¬†$1100
  • Additional Debt Interest = $900

*Net Worth: (őĒMoM)

  • Assets:¬†= $1,222,500 total¬†(+17,500)
  • Cash = $10,500¬†(-2000)
  • Canadian¬†stocks¬†= $173,600¬†(-1500)
  • U.S. stocks = $117,800¬†(-1700)
  • U.K. stocks = $22,200¬†(-200)
  • Retirement = $113,200¬†(+21,900)
  • Mortgage Funds = $33,300¬†(+700)
  • P2P Lending = $31,900¬†(+300)
  • Home = $275,000
  • Farms = $445,000
  • Debts: =¬†$433,400 total¬†(-2,500)
  • Mortgage = $192,500
  • Farm Loans = $182,900¬†(-500)
  • Margin Loans = $51,000
  • TD Line of Credit = $2,000¬†(-1000)
  • CIBC Line of Credit = $5,000¬†(-1000)

*Total Net Worth = $789,100 (+$20,000 / +2.6%)
All numbers are in $CDN. 

I will be looking at how to invest the extra $20K. Maybe I will buy some U.S. dividend stocks. The Bank of Canada is also expected to raise interest rates later this week. It’s about time.¬†If the cost to borrow money remains at current levels then in 5 years from now home prices in large cities would likely be 25% higher than today. Higher interest rates will help keep inflation tame so home prices don’t climb too much.

Random Useless Fact:

It’s hard for attractive nurses to take accurate pulse readings.

Jul 042018

Five years ago I acquired a variable rate mortgage from CIBC. It was the cheapest rate I could find at the time. I was quite pleased with the rate but that mortgage term expired a couple of months ago. So I shopped around to see if I can find another good deal.

I expected my mortgage to become more expensive. Surely rates would have climbed over the last 5 years right?

But no. To my surprise I found a lender that offered me an interest rate that’s lower than my previous mortgage by 43 basis points. ūüėÄ CIBC was not able to match this offer so I switched. The new financial institution I am with is not one of the big 5 banks in Canada. It is a lesser known company called National Bank.

I was paying 3.05% with CIBC. This was a variable rate 5 year mortgage at prime minus 0.40%. This was the best CIBC could do.
But my new mortgage with National Bank is only 2.62%. This is also a variable rate 5 year mortgage term. Except the rate is Prime minus 0.83%

A 0.43% difference in interest rates doesn’t sound like a lot. But my mortgage balance is around $193,000. So I will be saving roughly $4,000 over the next 5 years because I switched to a cheaper mortgage provider.

However there are costs associated with changing lenders. Appraisal costs $600, and legal documents from a notary public was $800 in my case. Luckily National Bank has a $750 rebate program for transferring over an existing mortgage. ūüôā

In the end the cost of changing banks was worth the extra savings in my case.

Even though most Canadians are choosing fixed rate mortgage I still believe that variable rate is the way to go if you want to save money.¬†The increase in fixed rate mortgages locked in by most home buyers this year is “seen as a response to rate hikes, and fear of higher rates in the future.” But critics have been calling for higher rates for over a decade. Yet rates haven’t actually gone up much. In fact, mortgage rates have dropped over the past 5 years as shown in my post today. That’s why we have to be informed of economic conditions so we can make our own financial decisions, instead of following others. ūüôā

I have been a homeowner for almost 10 years. During this time my mortgage interest rates fluctuated from 2.3% to 3.2%. It doesn’t look like rates will climb significantly any time soon. Until we see increasing mortgage rates, I would expect Canadian housing prices to climb even higher.


Random Useless Fact:

30 years ago only 5% of the population admitted to being chronic procrastinators compared to 25% today. Some believe technological advances is the main cause of this change.