Liquid Independence

Liquid is the main editor of the Freedom 35 Blog.

Apr 122014
        Knowledge is power, but just knowing alone cannot lead us to victory. We must also take action if we are to succeed :) I’ve presented dozens of financial strategies here over the years, such as my investment last week in Dollarama. Many readers have told me they appreciate all the tips I share. But one thing that I can never give to my readers is the confidence to take that knowledge, and turn it into something real for themselves.
        This is because the only person who can give you confidence is yourself :D This is why financial literacy is so important for every individual. It gives you the confidence you need to make wise judgements and take control of your finances.
        If someone proved to me that they have consistently made huge profits from trading copper futures, will I jump in head first? Probably not. That’s because I haven’t done enough research on the futures market yet to build up the confidence I need to decide whether or not that’s a good idea for me.
Apr 092014

Last Fall I made some bold predictions that low interest rates are staying until 2016, which will keep the housing market stable. I also suggested that investing in parts manufacturers like Magna International would be a profitable venture due to the consumer’s love for cars :D

Fast forward to today and it looks like events are unfolding thus far :) The Prime lending rate is still at 3%, unchanged from last year. Mortgage rates have not moved higher. Home prices have not corrected. And Magna International’s stock price is now 25% higher since last year’s post.

14-04-magnaint Low Interest Rates

Anyway, the International Monetary Fund (IMF) recently published their growth projections for countries in 2014. Canada’s economy is expected to grow at 2.3% this year, lower than that of the U.S. at 2.8%, and the U.K. at 2.9%.

So we must create a plan to make the best of this current economic situation, because if we fail to plan – then we plan to fail ;) The following image demonstrates the importance of planning ahead. Can you figure out what’s wrong with this sandwich?

14-04-sandwichmayo Low Interest Rates

Today I will make some more predictions :) I think the overnight lending rate in Canada, currently at 1%, will increase to 1.25% in 2015. And by 2018, it would only be at 1.75%. Since rates are going up so slowly I would continue to own instead of rent, because I think the national average real estate price will move higher in the next few years :D

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Apr 072014

I’m pretty confident that there will always be a healthy number of frugal people in this world. So last Friday, as some of you may already know, I purchased 15 shares of Dollarama Inc (DOL). Each share was purchased at $87.61 for a total investment amount of $1,324.


This is a dollar store chain with over 800 retail locations across Canada. The reason I decided to invest in this company is because I’m really impressed with how fast it’s expanding, and don’t want to miss out anymore on that growth. It’s also a recession proof company. There are frugal consumers when times are good, and there are even more of them when times are bad. So Dollarama has a very solid customer base that is not going anywhere. Here’s a look at how much profit Dollarama made in the last several years.

2010 – $73 million
2011 – $117 million
2012 – $173 million
2013 – $217 million
2014 – ??? (not released yet)

That looks like a pretty good track record of growing profitability to me ;)

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Apr 052014

Remember last year when I explained how investing in coffee businesses was an awesome idea? Well good news, because it looks like the daily grind is paying off ;) One of those companies, Tim Hortons (THI), recently increased its dividends from $0.26 to $0.32 per share!

That’s a 23% dividend increase! Holy hamburgers! That’s amazing eh (゜∀゜) I only bought 20 shares of Tim Hortons at $50 per share, so all it took was just $1K of my personal savings to make this happen. Ain’t it great that we don’t need a ton of money to start investing :) The first payment under the new increased rate was distributed last month. Here’s a look at what that dividend payment looked like for me.

Capturetim Tim Hortons

If you buy your doughnuts or coffee from Timmy’s I would like to say thank you on behalf of all Tim Hortons shareholders :D Without loyal customers like you, this company would not exist today. I look forward to receiving another $6.40 in June, and so on and so forth until the dividend is raised again! Aw yiss :D Collecting passive income is so exciting \(^_^)/

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Apr 042014

To become successful investors we have to think like burglars, because we must be constantly on the lookout for windows of opportunity :lol: So today’s post is about finding those opportunities with the help of math and probability :)

In a recent Poll, I asked if readers would prefer to receive a guaranteed $3,000 or an 80% chance of getting $4,000. If you didn’t get a chance to vote, make a choice now, and remember your decision. You might be asked about it later ;) Here are the poll results (^_^)


85% of you who voted chose the first outcome :?

*Sigh* (-_-) Folks, this is NOT okay (>_<) Dagnabbit, you guys :-x It’s time we had a serious discussion about this. I know it’s probably my fault for not blogging about this sooner but today’s concept is uber important and may change the way you look at money forever.

In probability theory, Expected Value means the “expected” average outcome if an event were to run an infinite number of times. And the law of large numbers dictates that the average of the results obtained from a large number of trials should be close to the Expected Value.

For example, a 6-sided die produces one of 6 numbers when rolled, each with equal probability. Thus, the expected value of a single die roll is 3.5.

 \tfrac{1+2+3+4+5+6}{6} = 3.5.

According to the law of large numbers, if we rolled a die a large number of times (like 1,000 times) then the average of the produced values is likely to be very close to 3.5, with the precision increasing the more times it’s rolled.

14-04-die probability


Below is a graph showing a series of 1,000 rolls of a single die. As the number of rolls increases, the average of the values of all the results will automagically approach 3.5.

14-04-dieroll probability

The same thing would happen with a coin toss. The Expected Value that a coin will land on heads is 50%. So if we flipped a coin a gazillion times eventually the actual data that we witness will come closer and closer to the expected value of 50%.

Now that we understand what expected value and law of large numbers mean we can approach the poll again from a mathematical angle. The expected value of the first outcome is $3,000 as there is a 100% chance of receiving exactly $3,000 every single time. The expected value of the second choice is $3,200 since (80% x $4,000)+(20% x $0)

If math isn’t your strong suit allow me to sum it up for you :D Basically we should choose the second outcome every time because it has a higher Expected Value.

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