Oct 262015

What a Liberal Government Means for Canadian Investors 📈

Last week the charismatic Justin Trudeau lead the Liberals to win the 2015 federal election. I’m sure his good looks has nothing to do his popularity and success. 😛


Justin pledged to make meaningful policy changes to the country that could benefit millions. But will his commitments help you? The jury is still out on the long-term effects, but here’s a TL;DR summary of what Trudeau’s government means for Canadian personal finance and investors in the short term.

The new Liberal majority government will…
  • spenders
  • low-income seniors
  • stock market investors
  • students
  • most middle-class workers
  • savers
  • high-income households
  • single-income nuclear families

These are only generalizations. The rest of this post will explain individual policies that could affect your pocket book. Keep in mind that just because politicians promised something during their campaign, it doesn’t mean they will always follow through. Any of these policy changes below could be altered or cut completely going forward.

Borrowing To Invest. 💲 Going back into Deficit. 

According to the federal finance department, Canada’s government had a $1.9 billion surplus in the 2014-2015 fiscal year. :) But the new Liberal government under Trudeau plans to run a $10 billion deficit for each of the next 3 years, before balancing the budget again in 2019.

Going into more debt as a way to expand economic output isn’t necessarily a bad idea. $10 billion is peanuts relative to our $1,827 billion/year economy (0.6%.) Also, our national debt to GDP ratio is quite low by international standards, which means we can borrow money at ridiculously low costs. New 10 year Canadian government bonds are currently yielding 1.5% in annual interest.

After factoring in inflation, there might actually be no real cost to tax-payers, lol. :) Craig Alexander, the Vice President at the C.D. Howe Institute, said that despite digging deeper into debt, the debt to GDP ratio of Canada is still going to decrease over the next three years because our GDP is expected to increase as well. 😀

About a third of the new spending will go towards much-needed public transportation and infrastructure development and repairs. This means building more roads, highways, bridges, etc. This should improve the country’s productivity because gridlock and urban densification are causing major problems right now in large cities such as Toronto, Montreal, and parts of Vancouver. The other two-third of public spending is planned for social housing, seniors centers, and clean energy projects like solar and wind farms.

Due to more deficits and fiscal stimulus the Bank of Canada will be less likely to further cut interest rates for the time being.

What this means for you: Invest your money. Historically the S&P/TSX Composite performed well during times of deficit spending. Below is a graph I put together using stock market returns and government budget information courtesy of the CBC. During the two decades from 1995 to 2014 there have been 9 years where the government ran a deficit budget. And the stock market had positive returns in 8 out of those 9 years.


Economic stimulus increases employment and grows the economy so people and businesses feel more optimistic about their investments which tend to be bullish for the financial markets. :) In particular I would consider investing in stocks or sectors that have exposure to financials, cannabis, industrial goods, construction, utilities, preferred shares, and green technology (solar panels, wind, etc.)

Goodbye annual $10,000 TFSA contribution limit 😭

The Tax-Free Savings Account annual contribution limit will revert back to $5,500 and increase in $500 increments based on inflation. This will make it harder for Canadians to save and won’t benefit the middle class. There’s a rumor that the TFSA only helps the rich get richer. But that’s baloney! The TFSA actually helps anyone who wants to save get richer. Here’s a table courtesy of the National Post which shows that many low and middle-income families still managed to max out their TFSA contribution rooms in 2013 when the limit was still $5,500.

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Oct 222015

Purchasing a 100 Oz Silver Bullion

Gold and silver may not be good investments, but I consider them to be a form of currency because they store financial value that can be easily exchanged for goods, services, or other currencies relatively quickly. :)

The idea of sitting on cash to stay safe and secure sounds innocent enough. But that’s only if we isolate the discussion to one domestic country. Today the world economy is more connected than ever before. Due to low commodity prices Canada’s economy isn’t as productive as it once was. This drives down the price of our currency because global investors are less confident in our productivity. Over the last year the Loonie has lost 20% of its value relative to the $US.

This affects Canadian’s ability to trade with other countries because it makes importing goods like fruits and gasoline from the U.S. more expensive. :( However, those who held some silver as a substitute for the Canadian currency during this time would have kept most of their purchasing power. That’s because the price of silver has increased 13% over the past 12 months when priced against the Canadian dollar. 😉

So earlier this week on Tuesday I went out to my local bullion dealer and bought a 100 ounce silver bar for $2,241 CAD. The shape reminds me of an iPhone 6 Plus, except the silver is almost 3 times thicker measuring 2 cm (3/4 inch) thick. And it weighs about 3.11 Kg (6.86 lb,) which is literally 18 times the weight of an iPhone 6 plus, lol. Who needs the gym when you can workout at home with silver? 😛


This highly purified block of silver was produced by the Royal Canadian Mint. The front of the silver bar shows the RCM signature stamp and the year it was produced (2011,) along with a serial number. The bar is also engraved with the weight of silver in it, and the purity of the metal. :) RCM is known for its quality and its brand is recognized worldwide. There is some clear scratching and general wear on the bullion, but nothing too noticeable. Overall I give this purchase 8/10. :) Great product. A+ experience. Would buy again! After taking some pictures I’ve stored the bullion in my safety deposit box at my bank. I don’t plan to sell it until I retire, or run into some kind of emergency.

Last year I blogged some step by step instructions on how to convert one’s wages into physical silver. This 100 oz bar I purchased represents about 4% of my income for this year. So instead of making 100% of my money in Canadian dollars I’ve essentially divested 4% of cash earnings into precious metals. I’ve also converted about 16% of my income this year into U.S. dollars and bought U.S. stocks. 😀 Diversification isn’t only about asset allocation. It’s about a holistic financial perspective, including currency considerations. 😉

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Oct 222015

The following post is my staff writer, Peter.


In the past decade, the global economy has suffered more than a few troublesome episodes where billions of dollars have been wiped off stock exchanges due to financial fluctuations. Such episodes have far-reaching effects over all of our lives, and what’s worse is that such occurrences are just about impossible to predict.

This has lead many to ponder just how safe making an investment can be, and whether it is any more safe than that other speculative activity – gambling.

Finance basics

Making an investment can be a highly profitable activity and can do much to help secure your long-term future. By investing a quantity of your money into a business, you can help it grow, and in turn, enjoy the dividends earned by its future profitability.

Those lucky enough to have invested in the likes of Apple early on have reaped spectacular benefits. And as such, the question amongst many investors is how to judge the next areas of growth. Whilst traditional manufacturing industries have been decimated by the digital revolution, other industries such as online gaming have seen sites like Lucky Nugget Casino show impressive growth due to their abilities to provide a range of casino games that can be enjoyed from the convenience of a mobile device.

Despite such technological success, investors should always be wary of the fickle nature of new technologies, as for every Facebook, there is the unfortunate example of MySpace who threw away early innovations in social media development to cause many financial headaches for their investors.

Different Duration

The differing timelines for gambling and investment are worth considering in that a huge profit or loss can be achieved within a matter of minutes in a casino or in sports betting. Whereas the time taken to see a large return on a stock investment can often be a case of years or even decades. It took over five years for stocks to return to their pre-recession levels of 2007, and as a result the canny investor should always have an awareness of their own long-term financial strategy.

The sheer variety of investment options on offer should be able to supply even the most cautious investor with a large scope for financial reliability and assurance. However, for those seeking a more short-term fix of adrenaline and quicker payout potential, then the doors to the world of gambling are always open.

Sep 212015

The Profit Motive

What is profit? It’s often described as a financial gain, especially the difference between the amount earned and the amount spent in buying, operating, or producing something. For example if the mint makes 25 cent coins, then it should expect quarterly profits. 😆 But here on Freedom 35 we like to think outside the box. So here’s another definition.

Profit: Any type of advantage or benefit that’s gained from an investment.

This means that profit doesn’t have to be measured in currency. In fact, we all have different profit motives that drive us to get out of bed each morning, and most of those motives aren’t related to money intrinsically. If we attend school and hope to gain more than the time and effort we invest into our education then our profit is more knowledge. If we cook a meal then our profit is the food we get to eat.🍗 If we invest in a marriage then we expect to profit from being in a stable and committed relationship. If we decide to hangout with some pals, then everyone is investing their time hoping to profit from mutual friendship, fun experiences, and companionship. If we invest in working out then we profit by becoming healthier, or living longer.


Profit in regards to actual money, as in a financial profit, is only a small part of our overall desire to profit in general. Since money isn’t useful in and of itself we can only use it as a proxy to hold value so that we can exchange it for something else later. :) This is why it’s important to not get emotionally attached to money. Money is the form of profit that is not personalized. If our friend offers to drive us to the airport, we would feel very grateful of course. But if they tell us it would cost $30, then we would feel offended. How dare they undermine our friendship and disrespect us. 😠 That’s because there’s a personal relationship at stake. But if we take a taxi to the airport it’s then conventional to use money to measure the value of that service. So cash is what we use to gauge profit if there’s not a personal relationship involved with a transaction.

Profit can come in many different shapes and forms. We’re always hoping to profit, or gain more, than we’re investing into something. Otherwise there’s no point in doing it. It’s not selfish to think of life as this way because it’s just part of nature. The entire animal kingdom is driven by profit motives. :)

Random Useless Fact: 

Thousand Island dressing is called American Sauce in Germany.


Sep 182015

Millennials Create Their Own Opportunities

Some people believe millennials are the screwed generation because there are no jobs for us. And that we have every right to be angry at the older generation for pillaging public coffers, taking on loads of debt, and leaving the broken economy for the younger generation to fix.
But I don’t see it that way. So what if there aren’t a lot of high paying jobs out there for young workers anymore? Any job is a good job because any income is better than no income. The world can be an amazing place if we just lower our standards a bit. 😀
And just because there are no jobs, it doesn’t mean there is no work. Jobs are given to us, but work can be self created. Don’t ask what the world can give us. Ask what we can produce for the world instead. 😉 Starting a small business is easy. When I was 14 I shovelled snow for my neighbours during the winter. Clearing each driveway earned me $10. Cutting grass would be a great opportunity to make money in the summer. There are plenty of busy households who would gladly pay $25 for someone else to mow their lawn every couple of weeks. Their time is valuable. And all that’s required for this to happen is for some proactive entrepreneur to go knock on their door and say, “Hey, here’s what I can do for you. How about it?”
We can also develop knowledge based skills to make money. Being the first group of people to grow up with cell phones, laptops, and the internet millennials have a technological advantage over other working adults today. We can create a free blog in minutes. Social networks keep us informed and enable us to discuss our ideas with anyone from anywhere on the planet. We can download entire first year courses from Yale, Harvard, and other universities for free from their websites. There are non-profit organizations, such as the Khan Academy, which have free lectures on subjects like math, science, computer programming, history, art, philosophy, economics, and more. There’s also plenty of informational YouTube videos that teach everything from how to put on make-up, to how to start a small business, to how to make ricotta and spinach ravioli. 🍴 Yum! Access to information is so ubiquitous today we can develop any knowledge based skills we desire to learn! And then use our new expertise to earn an income.

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