Apr 012014
 

Sometimes it may feel like we’re being gouged :?

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But if we adapt to our surroundings we should be able to live the lifestyle we want on a relatively modest income :) Luckily I live in what is arguably one of the most affordable cities in the world – Vancouver, B.C. Canada. :D I currently make more than $3,000 a month from my 2 jobs combined, but if we exclude my consumer/investment debt-related expenses for the moment, my total cost of living each month is less than $1,500. Here’s the breakdown.

Housing related $800
Food $150
Hydro+Internet+phone $100
Transportation $150
Miscellaneous $200

This budget doesn’t feel restrictive because it’s so darn cheap to live here :D

I don’t even try to be thrifty. Things are just naturally cheap in Vancouver. As I’ll explain below, there is probably no other major city in Canada or the U.S. where I can buy the same degree of security, freedom, opportunity, and general quality of life as I have today, for just $1,500 a month.

Housing

Trying to pay for a roof over our heads in large cities like San Francisco or New York City (where the average rent is over $3,000/month.) can be financially challenging :? But not in Vancouver (^_^)  With interest rate so low my monthly mortgage payment on my 800 sq ft condo is less than $900/month :D

There are lots of cheap options for renters too. Here’s a one bedroom apartment recently listed. It’s only $875 per month and has a really high Walk Score.14-04-marpoleproperty vancouver affordable city

Here’s another 1 bedroom suite I found on craigslist recently for just $675 a month.

14-04-houserent Vancouver most affordable city

I hear 1 bedroom suites in Calgary and Toronto (outside city centers) normally rent between $1,000 to $1,200 a month. Phew (^_^;) Glad I don’t live in those expensive cities :)

Food

Eating well can be quite costly. But not in Vancouver (^_^) I can usually buy 2 full bags of groceries for about $10 at discount produce markets.

14-04-food Vancouver most affordable city

Restaurant food and other prepared dishes are cheap too :) At Yamato Sushi in downtown for example, you can get a 22 piece assorted sushi combo including soup for just $5.95! How are they still in business? 8-O

Food courts and bakeries across Metro Vancouver usually drop their prices a lot before they close for the day :) Often $4 can buy 2 full take-out boxes of food that can last me a full day lol.

14-04-foodcourt Vancouver most affordable city

Supermarkets like Loblaws and its franchises (Superstore, t&t, etc)  will often mark down their pre-packaged foods in stages starting in the late afternoon. Each hour or so lower priced stickers would be applied.

14-04-cheapdinner Vancouver most affordable city

This is the perfect opportunity for busy people like myself, who may not always have time to cook, to conveniently grab something cheap and easy for dinner :)

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Mar 032014
 

I hope the Canada Revenue Agency doesn’t come after me for writing this post :P If too many people read this article then our government will never have a balanced budget lol. Since it’s that time of year again the topic I’d like to discuss today is income tax, and how rich people are able to dramatically reduce their taxable incomes because they understand that tax brackets are a moving target, and we all have the ability to manipulate our income tax rates as we see fit 8-)

Let’s look at an example below. The following chart shows the income tax rates for B.C. Canada. There are only 6 cells we need to be aware of for the purpose of this article, which I’ve highlighted in yellow.

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Let’s say a hypothetical person named Tyler works full time at a retail bank branch and makes $43K a year there. Tyler also bartends a few nights a week. He has a small rental property, and some dividend paying stocks in a margin account. And finally Tyler has a small pasture of alfalfa in the boonies that he operates as a small business and is generating revenue via renting it to cattle ranchers.

Here’s a summary of all his annual incomes.

  • Bank employment T4: $43K
  • Bartending T4: $10K
  • Rental unit: $12K
  • Dividends T5: $5K
  • Small business income: $10K

___________________________
Total income = $80K

At first glance it appears Tyler is in the $75,213 to $86,354 income range, which should put him in the 32.50% marginal tax bracket according to the tax chart above. But not so fast. Sometimes we need to take a closer look at a situation before we can make an educated assessment.

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The more money we make the higher percentage of our incomes should go to the government right? But if that was true, why do some people who earn six-figures have lower tax rates than most middle class people? The answer is because those particular high-income earners are masters at manipulating their tax brackets! #likeaboss

Tyler believes he can use the same tools as the rich and reduce his taxable income in the eyes of the government. Let’s see how he does this.

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Feb 202014
 

In a recent poll commissioned by the Bank of Montreal, 34% of Canadians say they are planning to fund their retirement by winning the lottery. That has to be the most optimistic retirement plan I’ve ever heard of :lol:

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Most personal finance experts will probably tell you that buying lottery tickets is a waste of money and isn’t worth your time. And they would be right, if for financial reasons only.  After all, the odds of winning the jackpot is something like 1 out of 14 million (O_o)

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Oct 082013
 

Most investments I blog about are moderate to aggressive in nature. Some readers may feel neglected because they’re looking for a more conservative (safe) way to invest. Well if you’re one of those people then today’s post is for you :)

13-10-liquidstampEarlier this week I mailed a letter. When I went to buy a booklet of stamps however I noticed they didn’t have any indication of value on them. Instead of “63¢” I only found the letter “P” in the corner of the stamps. The friendly post office lady, Jackie, kindly explained that these are Permanent Stamps :) They are always accepted at the current domestic postage price. So if we buy a Permanent Stamp today, we can still use it at any time in the future. No more adding those 1 or 2 cent stamps when the postal rates increase 8-) Hallelujah  \(~o~)/

Why have I not heard of this brilliant investment opportunity before? I must have been living under a rock all this time lol :D These perma-stamps were first introduced to Canada in 2006. Back then regular stamps sold for 51 cents. Today they sell for 63 cents as I mentioned earlier. That means if you bought perma-stamps 7 years ago, they would be worth 24% more today!  [63¢/51¢]

On average that’s a 3% return per year :)  [(63¢/51¢)^(1/7yrs)]

Year Stamp Price
2013 63¢
2012 61¢
2011 59¢
2010 57¢
2009 54¢
2008 52¢
2007 52¢
2006 51¢
2001 47¢
1979 17¢

 

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Sep 092013
 

The Dilemma

A lot of people across the country including a few of my acquaintances like Cait, Jess, and Brian, are going back to school this fall. But with the unfavorable employment prospects for younger workers some people may be hesitant to take out student loans and get back into debt. Is improving your human capital through further education a good reason to take on debt? Since the cost of education, even just for textbooks, is growing every year if anyone is thinking about going to school it’s probably better to take those courses sooner rather than later.

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The Changing Times

In 2002 there was $300 billion Federal student loans outstanding in the US. Today it’s more than $900 billion. Sacré bleu ( ゚д゚)!! Part of this dramatic increase is due to the extended period of low interest rates which creates incentives for people to take on more credit (loans.) The other reason is that the western world feels more entitled to creature comforts and luxuries than ever before. Of course I’m generalizing but when our parents went to college their dorms were cheap and dirty. They drank cheap beers. They ate cheap pizza and baloney sandwiches. They saved more of their own money to pay for things instead of using credit cards, or relied on the government for financial aid. If they didn’t have enough cash to buy a TV, they simply wouldn’t buy it. Period. But today young people like myself live in nice apartments. We eat steak, sushi, only drink quality beers, and enjoy posting photos of our Bloody Caesar on Facebook for the world to see. Some people even purchase gym memberships on their credit cards, which puts them further into debt. But it’s okay, because they have to impress their friends right? ;)13-09-gymyolo

There’s a cost to everything. The older generation funded their lifestyles by saving and producing real goods and services. But today most of our lifestyles are funded by debt. The whole world is changing. Debt isn’t seen as a bad thing anymore. It’s actually necessary if we want a normal life. As long as we go into debt for the right reasons and not waste it on frivolous spending then every dollar we borrow today will be an investment in our future. Corporations WANT us to keep spending. Universities WANT more enrollment. Financial institutions make their profits via interest on our debts. Even our governments (despite what they tell us) WANT us to continue carrying debt because if too many people stopped borrowing the economy would slow down.

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