Liquid Independence

Liquid is the main editor of the Freedom 35 Blog.

Mar 282015
 

According to a Financial Post report the average price of detached homes in Toronto passed the $1 million mark for the first time last month. :) The GTA has experienced a housing bull market for almost 2 decades and there is no sign of it stopping.

I want to congratulate Torontonians for reaching the $1 million milestone. Welcome to the club. :) Meanwhile the average detached home in Vancouver now stands at about $1.4 million. But hey, it’s not a competition. ;) And extreme cases like the Point Grey mansion that was sold a few months ago for nearly $52 million will skew the average results. Can you imagine the commission real estate agents make around here?

We often hear complaints about how unaffordable housing is in Canada. But there are two sides to each coin. My friend’s parents bought a home for $70,000 over 40 years ago. They have since paid off their mortgage, and their home is now worth over $1 million. :D They plan to sell their house soon in order to downsize and will become liquid millionaires. That sounds great to me. The majority of Americans and Canadians are home owners. So financially speaking rising home prices should benefit most of us. :)

Recently a Vancouver house sold for $567,000 over the asking price. It was listed for $1,600,000, but sold at $2,167,000. People are even making jokes about how insane the housing market is. Below is a short video I found of a Vancouver real estate agent talking about his inexperienced clients. It captures the ridiculous nature of the current market around here. :lol: www.youtube.com/watch?v=wcAMtvNfp78

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Mar 252015
 

I was browsing CanadianMoneyForum.com recently and came across the following thread.

I saw some commercials saying if you contribute to your TFSA (Roth IRA) every year, in 30 years you will have over one million dollars assuming a ROR in the 4-5% range. One million dollars should churn out $40-50k in tax free income.

Now thinking about this further, does anyone know of someone who got rich this way? I mean start investing a few hundred a week at age 25 and come out with millions at age 60? I personally do not. People who made a fortune got it other ways, by owning a business, getting stock options, or by making a lucky stock or real estate purchase.” ~tygrus

There are many ways to retire wealthy. Owning a business or hitting a home run on a single stock can increase the probability of becoming a millionaire. But to address the question, yes, I do know of someone who became rich simply by investing small amounts of money over many humbling decades. Well, I don’t know him personally. But I know his story. :)

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Ronald Read, from Brattleboro in Vermont, had $8 million to his name when he died last year at the age of 92. Most of his fortune was donated to a local hospital. After graduating from high school he worked at a gas station for many years. He also served in the military during WWII. Most recently he worked as a janitor for the department store chain JC Penny for 17 years. The secret to his financial success can be attributed to his thrift and his financial acumen.

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Mar 222015
 

I really like new cars. I kept on trading and trading…and I was buying a lot of gifts for people and getting more and more into debt,” says D’Arcy George who lives in Lethbridge, Alberta. Eventually his spending habits caught up to him and D’Arcy was up to $70,000 in debt and struggled with a bank account constantly in overdraft. But D’Arcy’s experience is not unique.

In a province where the average wage is over $28/hour, a sustained period of low interest rates has caused consumers to become overconfident in the economy which has led to rising consumer debt. But now that oil and gas prices have slumped some people are forced to re-examine their financial situations. :?

D’Arcy has realized this reality and has taken dramatic steps to get his debt under control. He started a second job at Costco to make more money. He now works every day of the week, often more than 12 hours a day, and he drives a used car. “I feel more confident that I can save money and know how to handle it,” he says. “I always have a balance of $8,000 in the bank and I get worried if I have less.

Canadians are getting the message when it comes to our consumer debt. A recent report from TransUnion shows the average Canadian individual owed $21,428 non-mortgage debt by the end of 2014. This number includes credit cards, lines of credit, student loans, and other types of credit products but does not include mortgages, home equity lines of credits, or margin loans.

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$21,428 is up 2.3% compared to the previous year. However digging deeper into the number we see that Lines of Credits, which make up 40% of consumer debt, has increased by 4.4%, while credit card debt has actually fallen by 2%. In other words consumers are getting smarter about where they’re borrowing money from. People are familiarizing themselves with how credit works and are making better decisions about their spending habits overall. :)

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Mar 192015
 

A couple days ago I made $220 in about 5 minutes from trading options. Today I will explain exactly what I did, why I did it, how others can do the same if they wish to, and the risks involved with this maneuver. Out of all the option trading strategies out there, buy write options are probably the least risky, especially done with underlying large cap, blue chip stocks. They also require minimal knowledge, no money down, and are accessible to the general public. :D

So first, what the heck is a Buy Write options strategy? Simply put it’s when we buy a stock, and then write (sell) a covered call against the stock we just bought heh. ;)

The reason we might want to implement a buy-write is because we believe the stock will not move a lot in either direction in the near future and we want to generate some extra returns in the mean time!

Through a suggestion from a friend I decided to perform my first buy write strategy earlier this week. I chose to do it using the National Bank of Canada, which is one of the largest financial companies in the country with a strong balance sheet and growing profits. :) Canadian banks are ideal for doing Buy Writes with because they are fairly stable and grow their dividends over time.

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So let’s quickly run through my thinking process. What is the purpose of buying a stock and then writing a call option against it? For me, it’s to make some quick and easy money with minimal risk, but a high chance to beat the market. :D

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Mar 182015
 

The following article was contributed by a staff writer.

All Americans are well aware of what debt is and how it can negatively impact our lives. While the amounts and types may differ, when it comes to resolving debt issues, many opportunities are similar for everyone. However, there are special services and consideration for members who have served in our Armed Forces.

According to certain studies, members of the military often carry more personal debt than civilians, with at least a quarter of military personnel facing credit card debt of $10,000 or greater. Other types of debt most common among military veterans include auto loans, education loans, and mortgages. Fortunately, like civilians, service members have options when it comes to tax debt relief.

Debt consolidation is one of the more popular choices because it can combine all debt into one payment at a lower interest rate. Often it’s hard to make even minimum payments because of interest rates that are sky high. Mix that with potential late fees, and a minimum monthly payment may not even begin to cover the actual accrued debt. Military veterans also have the option of taking a consolidated loan from the VA, which offers reduced interest rates and more appealing lending terms to help pay down debt.

Another option is debt settlement. Some credit card companies and loan providers may consider a debt settlement amount that is lower than the overall total due in order to have it paid in a timelier manner. Calling on the help of an industry professional and the options they offer like Community Tax Services can help ease the burden of dealing with the IRS or other collecting parties on your own.

A debt relief company can help you negotiate lower amounts due on your debt, so that you can make payments more aligned with your current financial situation to allow you to achieve a clean slate. When looking into a debt settlement option, take a look at your income and be honest with how much per month you’d be able to pay. This will help when you discuss possible payment plans with a debt relief specialist.

When it comes to other tax services for military veterans, there are programs provided by the IRS to help assist with preparing and filing tax returns. The Volunteer Income Tax Assistance Program gives veterans who make less than $53,000 or suffer from a disability an opportunity to receive tax support from IRS-certified volunteers to make sure tax forms are filled accurately and on time. This can help with late fees, penalties, or audits.

These tax tips are helpful for military veterans who may be overwhelmed or just in need of a little help when it comes to filing tax returns or handling tax debt. There are solutions available for those who are willing to work towards the goal of paying off any money owed. Make sure to research other opportunities within your own city that may focus on helping members of our military during tax time.

Have you used a tax debt relief service? How did they help you? Would you recommend them to others?