Apr 222014
 

In 2002 I didn’t have any money of my own yet. But today, I have over $750,000 in gross investments. Sometimes I feel like I don’t value money as much as I used to. I guess a lot can change in 12 years.

Do you ever get the feeling that the more you learn about the world around you, the less you realize you actually know about it? Throughout my adolescent years my view on personal finance was restrained to over simplified rules and models, taught by the public education system, which for practical life purposes meant very little :-( Isn’t it interesting that we learn how to dissect frogs and solve polynomial, algebraic, and transcendental functions in highschool, but are never taught how to buy or sell a home, how to use a credit card, or what kind of investments can be placed into a Roth IRA? :?

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Luckily education doesn’t have to just come from schools. Over the past 6 or so years I have exposed myself to regular doses of financial knowledge from newspapers, business shows, and of course, the internet. And now, in my mid twenties, I have a completely different view on finance. I used to think that money was just a medium of exchange that I could earn, spend, and save. While that’s not necessarily wrong, it doesn’t tell the full picture.

So here’s a better explanation of what money TRULY represents to me.

When I look at money today I see POWER. When I look at my net worth I feel POTENTIAL. When I save money I insure my future SECURITY. When I spend money I’m buying INFLUENCE, and I’m buying back my TIME, which is the most precious commodity in the world! When I read about money I gain KNOWLEDGE & UNDERSTANDING about society. When I invest money I facilitate jobs, wealth, hope for others, and create MEANING to this world. When I waste money I squander my LIBERTY and INDEPENDENCE. When I invest money into stocks I’m buying POSSIBILITIES. When I blog about money I share and disseminate CONFIDENCE. And when I eventually reach financial independence I will experience FREEDOM like never before.

Money gives me perspective and context. By associating money with powerful words it’s easy to understand the importance of financial literacy, not just from a materialistic point of view, but also in terms of reconciling our emotional and personal well being with the modern world we all live in. The more we understand how money works the more dominion and authority we’ll have over all the dimensions of our lives. By controlling our money we control our fates! ;)

Will it take a lot of work to reach financial enlightenment? Maybe. But will it be worth it? Definitely! :D

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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.
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        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.
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        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.
Feb 112014
 

Some people think a raise in income should automatically equal a raise in their spending. But if our spending always follows our earnings then we would have to change our lifestyle habits every time we change jobs or get salary adjustments. Does this mean Elon Musk, CEO of Tesla Motors, who made $78 million last year should only drink water from Acqua di Cristallo? It’s the world’s most expensive bottled water. Each 750 ml bottle sells for $60,000. Jumpin’ jelly beans 8-O After all, Elon has to find ways to spend his money in order to match his income right? :P

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Thinking about income and expenses on a year by year basis leads to myopia and it’s how many people get stuck living paycheque to paycheque :( They fail to see the longer term picture because they can’t escape their short term cycle of income fueled spending. What they should try to focus on instead is goal oriented spending :)

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Jan 132014
 

With a new year comes new challenges. I thought I’d write down a few 2014 goals for myself.

If you want to live a happy life, tie it to a goal, not to people or things.
~ Albert Einstein

1) Increase net worth by $55,000
Last year I aimed for $50,000 and passed. This year I’m upping the figure by 10% to give myself more of a challenge :)

2) Read At Least 3 Books related to money
Started one so far called Currency Wars, by James Rickards. Others I have lined up are “Think and Grow Rich” and “Secrets of the Millionaire Mind”

3) Make $6,000 in gross dividend income
Last year I made about $4,500 so I plan to buy more dividend paying stocks this year.

Stretch Goal: Start an emergency fund and put at least $100 into it. (This one is gonna be tough :? )

Our goals can only be reached through a vehicle of a plan, in which we must fervently believe, and upon which we must vigorously act. There is no other route to success.
~ Pablo Picasso

 

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Random Useless Fact: There are over 2.5 billion people in the world today who still live under a dictatorship.

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Jan 012014
 

In the beginning of 2013 I set out 6 financial goals to complete by the end of the year. Time to recap.

1) Increase net worth by $50,000. Pass :D

  • North American stock markets had double digit gains in 2013.
  • Bumper crop in the prairie provinces pushed farmland values to new highs :)
  • Real estate market in Canada also performed well.
  • US dollar strengthened against our Canadian Loonie which was a nice unexpected bonus :)

My net worth grew by roughly $68K in 2013 :) This is why it’s important to stay invested, because you never know which asset class will perform well.

goals2) Make at least $6,000 more income than last year. Pass :D
Made more than $5,000 extra from my farm rental income :) Plus I got a $1,000+ raise at work this year so yay!

3) Put $5,000 into my retirement account. Pass :D
In late November as a desperate attempt to complete this goal I borrowed $6,000 from the bank to put into my RRSP. The RRSP loan is at 4% interest rate. Maybe this is cheating because I didn’t use my own savings :? But the goal didn’t specify where the money had to come from :P

4) Put $5,500 into my TFSA. (Roth IRA equivalent) Fail :(
Didn’t make any new contributions this year. Used all my savings for better opportunities elsewhere and TD wouldn’t give me a TFSA loan.

5) Put at least $18,000 towards other investments Pass :D
Made a $20K down payment on the $172K purchase of my second farm. Funded the remaining $152K with bank loans.

6) Bring the total value of my non-registered accounts to $100,000. Fail :(
Although my portfolio is worth over $120,000 it wouldn’t be fair to count it entirely as mine since roughly $50,000 of that is margin debt.

Looks like I passed most of my goals (4 out of 6,) so overall I’d say it was a pretty successful year :) Below are a couple of stretch goals, which I didn’t expect to reach anyway.

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