Dec 052017
 

Yet another month of record highs in the financial markets. I hope everyone had a great November. 🙂  In terms of changes to my balance sheet I’ve added 100 shares of Enbridge stock to my portfolio, creating more passive income for future months. Part of this purchase was financed from a margin loan at 2.3% with IB. Borrowing money at low interest rates to invest in long term appreciating assets was how many people became millionaires in the past.

Liquid’s Financial Update

*Side Incomes:

  • Part-Time = $700
  • Freelance = $800
  • Dividends = $700
  • Interest = $400
*Discretionary Spending:
  • Fun = $400
  • Debt Interest = $1300

*Net Worth: (ΔMoM)

  • Assets: = $1,150,700 total (+14,300)
  • Cash = $8,500 (+700)
  • Canadian stocks = $164,200 (+7300)
  • U.S. stocks = $105,800 (+4000)
  • U.K. stocks = $21,100 (unch)
  • RRSP = $91,100 (+1900)
  • Mortgage Funds = $32,000 (+100)
  • P2P Lending = $22,000 (+300)
  • Home = $270,000
  • Farms = $436,000
  • Debts: = $468,700 total (-2,100)
  • Mortgage = $180,900 (-400)
  • Farm Loans = $186,300 (-500)
  • Margin Loans = $58,900 (+1200)
  • TD Line of Credit = $6,700  (-1300)
  • CIBC Line of Credit = $21,000 (-1000)
  • HELOC = $14,900 (-100)

*Total Net Worth = $682,000 (+$16,400 / +2.2%)
All numbers above are in $CDN. 

I’ve been trying to save enough money over the last few months to invest another $8,000 into my Lending Loop account by the end of the year. I’m also currently looking for a new job to increase my cash flow. We’ll see how that goes. 🙂

 

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Random Useless Fact

At any given time, about 174 quadrillion watts of the sun’s energy is hitting the earth.

 

Nov 012017
 

This was one of the best months of the year in terms of investment gains. The stronger U.S. dollar and farmland rent income were very helpful for me. Furthermore, Amazon.com reported its financials last week and the results were stronger than expected. AMZN stock shot up 13% that day. Hurray! 😀

Check out the stock market performance since August below. The gains are incredible for just 3 months. 🙂 Dow Jones is up 6.79%, S&P/TSX Composite is up 5.82%, and Nasdaq is up 5.98%. It’s a good time to be long in stocks. 🙂

Liquid’s Financial Update

*Side Incomes:

  • Part-Time = $700
  • Freelance = $1000
  • Dividends = $900
  • Interest = $800
  • Rent = $4700
*Discretionary Spending:
  • Fun = $400
  • Debt Interest = $1300

*Net Worth: (ΔMoM)

  • Assets: = $1,136,400 total (+14,700)
  • Cash = $7,800 (+4200)
  • Canadian stocks = $156,900 (+5200)
  • U.S. stocks = $101,800 (+7900)
  • U.K. stocks = $21,100 (+900)
  • RRSP = $89,200 (+5300)
  • Mortgage Funds = $31,900 (+600)
  • Peer-to-Peer Lending = $21,700 (+200)
  • SolarShare Bonds = $0 (-9600)
  • Home = $270,000
  • Farms = $436,000
  • Debts: = $470,800 total (-3,900)
  • Mortgage = $181,300 (-400)
  • Farm Loans = $186,800 (-500)
  • Margin Loans = $57,700 (+100)
  • TD Line of Credit = $8,000  (-1400)
  • CIBC Line of Credit = $22,000 (-1000)
  • HELOC = $15,000 (-700)

*Total Net Worth = $665,600 (+$18,600 / +2.9%)
All numbers above are in $CDN. 

Last month I mentioned my year end goal was to have a net worth of $675,000. There are two more months to go. I think I can do it. 🙂 I have decided to remove my Solarshare bonds from my asset list to simplify my net worth calculation. Similar to my Ethereum holdings, Solarshare bonds will no longer be in my monthly update going forward.

 

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Random Useless Fact

 

Oct 032017
 

We are now 3 quarters into the year. The S&P 500 and Nasdaq both hit an all time high to close out September. Up here in Canada the S&P/TSX Composite grew by 3.7%. Gross domestic product (GDP) was essentially unchanged, at zero per cent growth in July compared with June, Statistics Canada said last week. I suspect that the slower start to Q3 is indicative of what’s to come for the rest of the year. The good thing is inflation should remain low at sub 1.6%. I wonder if the Bank of Canada raised interest rates too quickly over the summer.

September had turned out to be a great month. A rising stock market raises all boats so my brokerage accounts performed well across the board. I’m quite happy with the outcome. 🙂

Liquid’s Financial Update

*Side Incomes:

  • Part-Time = $700
  • Freelance = $1200
  • Dividends = $800
  • Interest = $600
*Discretionary Spending:
  • Fun = $400
  • Debt Interest = $1300

*Net Worth: (ΔMoM)

  • Assets: = $1,121,700 total (+9,100)
  • Cash = $3,600 (+600)
  • Canadian stocks = $151,700 (+3200)
  • U.S. stocks = $93,900 (+3500)
  • U.K. stocks = $20,200 (+500)
  • RRSP = $83,900 (+1500)
  • Mortgage Funds = $31,300 (-200)
  • Peer-to-Peer Lending = $21,500 (+200)
  • SolarShare Bonds = $9,600 (-200)
  • Home = $270,000
  • Farms = $436,000
  • Debts: = $474,700 total (-4,000)
  • Mortgage = $181,700 (-400)
  • Farm Loans = $187,300 (-500)
  • Margin Loans = $57,600 (-100)
  • TD Line of Credit = $9,400  (-1800)
  • CIBC Line of Credit = $23,000 (-1000)
  • HELOC = $15,700 (-200)

*Total Net Worth = $647,000 (+$13,100 / +2.1%)
All numbers above are in $CDN. 

My year over year net worth gain is $109,500. I plan to continue paying down debt while building up my retirement fund over the next 3 months. By the end of this year I hope to have a net worth of $675,000.

 

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Random Useless Fact

Sep 052017
 

After the FED raised interest rates in the U.S., the Bank of Canada did the same. In July the central bank increased rates by 0.25%. This means the Prime lending rate at banks is now 0.25% more expensive for borrowers. What does this mean for Canadians in debt? It means we should reduce our debt balances to normalize our interest expenses and keep our debt load under control. 🙂

How to Adjust Debt Levels Based on Interest Rates

So if the interest rate is higher by 0.25% how much debt should we try to pay down? We can use the following formula to find out. 🙂

Debt amount to pay down = (Interest rate increase amount) x (total debt balance) ÷ (new interest rate on loan)

For example, let’s say I have a variable loan with $100,000 outstanding and my interest rate was 5% before the interest rate hike. So this loan was costing me $5,000 a year in interest payment. But the central bank raised rates by 0.25% so now the loan is costing me 5.25% or an extra $250 per year more than before. I want to know how I can lower my cost of borrowing back down to $5,000/year.

Debt amount to pay down = (0.25%) x ($100,000) / (5.25%)
Debt amount to pay down = $4,761

This means in order for my borrowing cost to stay at $5,000 per year, I will need to pay down $4,761 of my $100,000 debt balance. So at this point I have a decision to make. I can either pay down my debt quickly to bridge the $4,761 gap so I can go back to my initial budget. Or I can accept paying more interest (0.25% or $250 more) every year and work that extra cost into my budget.

Personally I like to adopt a combination of both. 🙂 Earlier this year I used half of my monthly savings to pay down debt, and the other half to invest. But after July’s rate hike I’m putting roughly 75% of savings into debt repayment, and 25% into new investments. Anyway, below are the results of my August finances.

 

Liquid’s Financial Update

*Side Incomes:

  • Part-Time = $1100
  • Freelance = $800
  • Dividends = $600
  • Interest = $300
*Discretionary Spending:
  • Fun = $300
  • Debt Interest = $1200

*Net Worth: (ΔMoM)

  • Assets: = $1,112,600 total (+900)
  • Cash = $3,000 (+500)
  • Canadian stocks = $148,500 (+2100)
  • U.S. stocks = $90,400 (-1000)
  • U.K. stocks = $19,700 (-200)
  • RRSP = $82,400 (-700)
  • Mortgage Funds = $31,500 (unch)
  • Peer-to-Peer Lending = $21,300 (+200)
  • SolarShare Bonds = $9,800
  • Home = $270,000
  • Farms = $436,000
  • Debts: = $478,700 total (-2,900)
  • Mortgage = $182,100 (-400)
  • Farm Loans = $187,800 (-500)
  • Margin Loans = $57,700 (-200)
  • TD Line of Credit = $11,200  (-1200)
  • CIBC Line of Credit = $24,000 (-500)
  • HELOC = $15,900 (-100)

*Total Net Worth = $633,900 (+$3,800 / +0.6%) 
All numbers above are in $CDN. 

 

 

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Random Useless Fact

According to Wikipedia, Iceland does not have a standing army. But it is recognized as the world’s most peaceful country.

Aug 092017
 

It was a slow month in July. But  at least I’m back in the black. 🙂 Household expenses were pretty normal, but incomes were above average; I received $800 of interest payments from a variety of loans such as P2P lending contracts and mortgage investment corporation funds. Yay!

Liquid’s Financial Update

*Side Incomes:

  • Part-Time = $1100
  • Freelance = $700
  • Dividends = $800
  • Interest = $800
*Discretionary Spending:
  • Fun = $300
  • Debt Interest = $1100

*Net Worth: (ΔMoM)

  • Assets: = $1,111,700 total (-2,000)
  • Cash = $2,500 (-2800)
  • Canadian stocks = $146,400 (Unch)
  • U.S. stocks = $91,400 (-200)
  • U.K. stocks = $19,900 (-200)
  • RRSP = $83,100 (+500)
  • Mortgage Funds = $31,500 (+500)
  • Peer-to-Peer Lending = $21,100 (+200)
  • SolarShare Bonds = $9,800
  • Home = $270,000
  • Farms = $436,000
  • Debts: = $481,600 total (-4,400)
  • Mortgage = $182,500 (-400)
  • Farm Loans = $188,300 (-500)
  • Margin Loans = $57,900 (-2400)
  • TD Line of Credit = $12,400  (-600)
  • CIBC Line of Credit = $24,500 (-500)
  • HELOC = $16,000 (unch)

*Total Net Worth = $630,100 (+$2,400 / +0.4%) 
All numbers above are in $CDN. 

I took some savings in July and paid down some of my higher interest debts. Now that the cost to borrow is 0.25% higher I have to lower my overall debt to not become overwhelmed by interest payments.

 

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Random Useless Fact

Sometimes tough love is the best way to learn.