Jul 042015
 

Greece is holding a referendum tomorrow, Sunday, on whether or not they want to accept the bailout terms from their creditors. I’m not great at economic forecasts but I feel like the majority will vote yes for better or for worse.

[Edit] The result is out. Greeks voted No, lol. This is why I’m not an economist. [/Edit]

In other news it hasn’t been a very good month for global markets. Both the U.K. FTSE 100 and the French CAC 40 indices are down about 4% for the month of June. But China experienced the most dramatic loss. The Shanghai Stock Exchange Composite Index fell by 25%. Sufferin succotash! 😲 A whole bunch of millionaires in China just lost 1/4 of their wealth in the span of 30 days.

Here in Canada our stock market index dropped 3.5%, not as bad as other countries, but still enough to wipe out any gains it’s accumulated so far in 2015. As a result my net worth is down for the first time in years, lol. This means my portfolio is finally large enough that my change in wealth is determined more by the fluctuations in the market than by my savings rate.

*Side Income:

  • Part-Time Work = $600
  • Dividends = $500
  • Interest = $0
*Discretionary Spending:
  • Fun = $100
  • Debt Interest = $1500

*Net Worth: (MoM)15-06-networthiq_chart

  • Assets: = $897,400 total (-5000)
  • Cash = $2,500 (-2000)
  • Stocks CDN =$93,600 (-1300)
  • Stocks US = $65,100 (-200)
  • RRSP = $51,200 (-1500)
  • MICs = $15,000
  • Home = $259,000
  • Farms = $411,000
  • Debts: = $508,100 total (-4300)
  • Mortgage = $193,500 (-400)
  • Farm Loans = $200,700 (-500)
  • Margin Loan CDN = $29,600 (-1900)
  • Margin Loan US = $25,800 (+100)
  • TD Line of Credit = $26,000  (-1000)
  • CIBC Line of Credit = $10,000
  • HELOC = $18,200
  • RRSP Loans = $4,300 (-600)

*Total Net Worth = $389,300 (-$700 / -0.2%)
All numbers above are in $CDN. Conversion rate used: 1.00 CAD = 0.80 USD

This is why it’s important to understand our financial decisions. Warren Buffett said “if you understood a business perfectly and the future of the business, you need very little in the way of a margin of safety.”

For example, when I look at my assets listed above I know what purpose each line item plays in my financial plan to reach early retirement. I know why I have $2,500 in cash right now, not more, not less. When I look at any of my investments I know why it’s in my portfolio. As another famous investor Peter Lynch once said, “know what you own, and know why you own it.” 😀

Continue reading »

Jun 032015
 

Sell in May and go away. It’s typical for stock markets to fall in May and that’s exactly what happened this year in Canada. Since stocks make up a quarter of my net worth, a 2% decline to the TSX Composite translates into thousands of dollars of paper loss for my investment portfolio. If this was a normal month my net worth would drop. :( But luckily I was paid $4,500 of rent in May. The next time my tenant pays me again will be in October. I also received a small tax return. :) When assets are worth less, it’s nice to have some extra sources of income to make up the gap. :) I used the extra money this month to invest in chocolate.

*Side Income:

  • Part-Time Work = $600
  • Dividends = $400
  • Interest = $200
*Discretionary Spending:
  • Fun = $100
  • Debt Interest = $1500

*Net Worth: (MoM)

  • Assets: = $902,400 total (+3900)
  • Cash = $4,500 (+100)
  • Stocks CDN =$94,900 (-1600)
  • Stocks US = $65,300 (+5900)
  • RRSP = $52,700 (-500)
  • MICs = $15,000
  • Home = $259,000
  • Farms = $411,000
  • Debts: = $512,400 total (-200)
  • Mortgage = $193,900 (-400)
  • Farm Loans = $201,200 (-400)
  • Margin Loan CDN = $31,500 (+2300)
  • Margin Loan US = $25,700 (+500)
  • TD Line of Credit = $27,000  (-1600)
  • CIBC Line of Credit = $10,000
  • HELOC = $18,200
  • RRSP Loans = $4,900 (-600)

*Total Net Worth = $390,000 (+$4,100 / +1.1%)
All numbers above are in $CDN. Conversion rate used: 1.00 CAD = 0.80 USD

I’m planning to shake up my asset column in June by adding a sizeable stake in a renewable energy company. At the beginning of this year I mentioned that one of my goals is to use my money to help make this world more environmentally friendly by investing in green technologies and renewable energy companies. I’ll be blogging more about this topic shortly. So far I can see there is huge potential in this space to make a 10% return or higher. I’m currently in talks with a broker about investing five figures into a clean energy fund for myself. Over the next month or so I’ll let you guys know how things are going and how I plan to earn large returns in this relatively new sector without too much risk. I’m already looking forward to my next net worth update! :)

——————————————————————–
Random Useless Fact

15-06-showing-pictures-boys-girls

 

May 042015
 

April has turned out to be one of the best months of the year so far. 😀

-Stock markets climbed roughly 2% in Canada and the U.S. (27% annualized return)
-The bond market is paying higher interest rates. Great for new fixed income investors. :)
-Real estate market continues to stand strong. What bubble? 😛
-Canadian dollar strengthens against other currencies such as the USD & Euro. This means more purchasing power for fellow Canucks.
-FCC released its annual farmland report which states Saskatchewan farmland value increased 18.7% in 2014, more than any other province!

All this growth in the markets simply equates to a $40K+ increase to my existing financial assets. Holy pumpernickel! There has never been a better time to be a diversified investor in the North American economy. 😀

I will be updating my farmland values in this month’s net worth update. As usual I’ll use a 50/50 blend of the CPI inflation rate of the previous year (1.9%) and Farm Credit Canada’s report to revalue my farmland. Thus, the average increase is 10.3% or about $38,000 more!

* Side Income:

  • Part-Time Work = $600
  • Dividends = $600
  • Selling Options = $0
*Discretionary Spending:
  • Fun = $300
  • Debt Interest = $1500

*Net Worth: (MoM)

  • Assets: = $898,500 total (+43,100)
  • Cash = $4,400 (+900)
  • Stocks CDN =$96,500 (+3000)
  • Stocks US = $59,400 (+700)
  • RRSP = $53,200 (+500)
  • MICs = $15,000
  • Home = $259,000
  • Farms = $411,000 (+38000)
  • Debts: = $512,600 total (-2,500)
  • Mortgage = $194,300 (-300)
  • Farm Loans = $201,600 (-500)
  • Margin Loan CDN = $29,200
  • Margin Loan US = $25,200 (-700)
  • TD Line of Credit = $28,600  (-400)
  • CIBC Line of Credit = $10,000
  • HELOC = $18,200
  • RRSP Loans = $5,500 (-600)

*Total Net Worth = $385,900 (+$45,600 / +13.4%)
All numbers above are in $CDN. Conversion rate used: 1.00 CAD = 0.82 USD

Continue reading »

Apr 042015
 

The overall stock market in March dropped a little bit. It appears growth has stalled in Canada due to continuing low oil prices. But thanks to my side incomes I ended the month with a slightly more positive net worth. :) The only new stock I purchased was 100 shares of National Bank, which I blogged about last month. I must make savings a priority during tough economic times because if I lose my job at least I’ll have a financial cushion to fall back on.

Emerging countries have been growing their economies faster than Canada or the U.S. in recent times. One way to profit from this trend is to invest directly in the currencies of those countries. The value of the Chinese currency, for example, should make people in North America pay attention. But instead, too many of us just yuan. 😀

Back in late 2013 I wrote an article about how I had invested in China’s currency, the RMB. I mentioned I would keep everyone posted. So today I’ll give you guys an update. :) Back then I purchased ¥5,000 for $900 CAD. Today, my ¥5,000 is worth $1015 CAD if I convert it back into Canadian currency. It appears my instincts were correct. Wahoo! 😀 I made 12.7% return in 15 months. It’s not a lot of money. But every little bit helps to reach early retirement.

*March Side Income:

  • Part-Time Work = $600
  • Dividends = $500
  • Selling Options = $200
*Discretionary Spending:
  • Fun = $300
  • Debt Interest = $1500

*Net Worth: (MoM)15-04-networth-update-beyond-borders

  • Assets: = $855,400 total (+800)
  • Cash = $3,500 (-500)
  • Stocks CDN =$93,500 (+2600)
  • Stocks US = $58,700 (-400)
  • RRSP = $52,700 (-900)
  • MICs = $15,000
  • Home = $259,000
  • Farms = $373,000
  • Debts: = $515,100 total (+500)
  • Mortgage = $194,600 (-400)
  • Farm Loans = $202,100 (-500)
  • Margin Loan CDN = $29,200 (+2400)
  • Margin Loan US = $25,900 (+100)
  • TD Line of Credit = $29,000  (-500)
  • CIBC Line of Credit = $10,000
  • HELOC = $18,200
  • RRSP Loans = $6,100 (-600)

*Total Net Worth = $340,300 (+$300 / +0.1%)
All numbers above are in $CDN. Conversion rate used: 1.00 CAD = 0.79 USD

Continue reading »

Mar 042015
 

The owner of the company showed up to the office one day in a fancy new sports car. One of his employees complimented him on the new vehicle. “Well,” replied the business owner, “if you set goals, show determination, work really hard and put in the long hours, I can get an even better one next year.” 😀

The moral of this short story is simple. If we want to drive nice cars we have to own companies. But not everyone is suitable to become an entrepreneur. Well thankfully the securities exchange commission requests any corporation with over 500 shareholders to become a publicly traded company. This means anyone can own a piece of the company and be entitled to its future profits and dividends. :)

Owners of companies in major stock markets around the world rejoiced as stocks gain in February. Dividend stocks have been particularly strong in South East Asia recently. The Indonesia stock market hit an all-time high. U.S. stock market indexes are up 5% month over month. Earlier this week the Nasdaq went over 5000 points for the first time in 15 years! This is why I’m heavily invested in stocks (company ownership) and don’t keep a lot of cash sitting in the bank. When the Canadian stock market gained 3% in February, my portfolio gained thousands of dollars!

*Side Income:

  • Part-Time Work = $700
  • Dividends = $500
*Discretionary Spending:
  • Fun = $200
  • Debt Interest = $1500

*Net Worth: (MoM)15-01-networth-update-jan

  • Assets: = $854,600 total (+7,300)
  • Cash = $4,000 (+800)
  • Stocks CDN =$90,900 (+2500)
  • Stocks US = $59,100 (+3000)
  • RRSP = $53,600 (+1000)
  • MICs = $15,000
  • Home = $259,000
  • Farms = $373,000
  • Debts: = $514,600 total (-2,100)
  • Mortgage = $195,000 (-400)
  • Farm Loans = $202,600 (-400)
  • Margin Loan CDN = $26,800
  • Margin Loan US = $25,800 (-500)
  • TD Line of Credit = $29,500  (-300)
  • CIBC Line of Credit = $10,000
  • HELOC = $18,200
  • RRSP Loans = $6,700 (-500)

*Total Net Worth = $340,000 (+$9,400 / +2.8%)
All numbers above are in $CDN. Conversion rate used: 1.00 CAD = 0.79 USD

“Over the last decade,” says automotive economist Dennis DesRosiers, “the luxury market for new vehicles has increased by about 50%” in Canada. And if we look at the chart of the Canadian stock market index (TSX Composite) over the same 10 year period, we’ll see that it has gained by about 50% as well. In 2005 the index was at 10,000 points. Today it’s around 15,000 points. So there we are; a direct correlation between business ownership and luxury car sales. :) It wont be long before I can afford to buy a new sports car myself. 😀

—————————————————————-
Random Useless Fact:

Both versions exist

15-03-the-dress-white-gold-blue-black