Feb 162017
 

A survey done a few years ago found that 34% of people rely on winning the lottery as a legitimate retirement plan. 😐 #smh. I’m no financial expert, but when it comes to aggressively planning for one’s retirement, playing the lottery more frequently probably isn’t the best strategy.

But of course some people can get very lucky, like Jane Park, who lives in the U.K. When she was 17 years old she bought her first lottery ticket and won the jackpot of £1 million. That’s roughly CAD $1.6 million, or USD $1.2 million. What did she do with her new found wealth? First, she spent £4,500 on a boob job. 😄 Then she purchased some properties, a Louis Vuitton handbag, and a chihuahua, because why not? 🙄

But it appears her lucky situation had unintentional consequences. At 21 years old today, Jane explains that winning the lottery has actually made her sick. That is to say, “sick of shopping for designer goodies.” She is also “struggling to find a genuine boyfriend who isn’t after her money.” Jane says that despite her wealth people don’t seem to understand her stress of being a millionaire. She says despite her material possessions her life feels “empty and without purpose.” Damn. Poor girl.

“I thought it would make it ten times better but it’s made it ten times worse. I wish I had no money most days. I say to myself, ‘My life would be so much easier if I hadn’t won.’” ~ Jane Park

But don’t feel too sorry for her just yet. Jane is currently thinking about suing the lottery company for giving her the money and ruining her life. She claims that the company should not be selling lottery tickets to 17 year olds because someone at that age can’t handle so much money. Again, I’m no expert. But if money caused her to feel empty and without purpose in the first place, then I’m not sure suing for more money is going to help her situation. 😄

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Random Useless Fact:

There was record snowfall this year in parts of Canada

This is what Vancouver looked like a week ago.

Feb 092017
 

I recently watched an HBO documentary called “Becoming Warren Buffett,” which features the life of the man himself. The show gives viewers an extensive look at Buffett’s achievements, struggles, and challenges with his career, and probably more importantly, with his personal relationships.

Buffett started making money at a young age selling gum door to door, and delivering newspapers. He began trading stocks in his early teens and started college when he was only 16 years old. Today everyone knows him as the investment guru who is currently worth about US $72 billion, which makes him the second richest person in the world, right behind his close friend, William. 🙂

becoming warren buffett review

The documentary covers his family background and personal relationships. It felt like I was watching an honest biography about Warren. For the first time ever I got an inside look at the day to day events and lifestyle choices of Warren Buffett. It has been a real eye opener! For example on his way to work in the morning, he often stops by a McDonald’s and orders a Sausage McMuffin.

Doh! :/ No wonder I’m not rich yet. This whole time I’ve been ordering the Bacon ‘N Egg Bagel like a peasant. If only I had known his secret earlier. 😛 Below are some other important lessons I learned from watching “Becoming Warren Buffett.”

  • Live close to work. It takes Warren only 5 minutes to drive to his office everyday. And he’s been taking the same route for 54 years! Not wasting much time on commuting is why he gets so much done.
  • Be smart. Warren admits that he’s wired in a way that gives him an advantage over others when it comes to understanding businesses. He was always good with numbers starting at a young age and learning about the financial markets comes easily to him. Unfortunately for some, intelligence is largely genetic.
  • Read a lot. Every day Warren goes to work and reads books, newspapers, financial reports, or various other material for 5 to 6 hours.
  • Have role models in your life. In the documentary Warren said, “the best gift I was ever given was to have the father that I had when I was born.
  • Develop your own inner scorecard. Don’t let other people’s standards and expectations define who you are or what makes you succeed or fail.
  • Learn from people you trust. Business partner Charlie Munger helped Warren realize that in order to build immense fortune, it’s better to look for great businesses at reasonable prices rather than okay businesses at cheap prices.
  • Develop focus. Warren believes this is the most important quality to have if you want to be successful.
  • Have patience. The biggest factor to making money is time. Warren says you don’t have to be smart to become wealthy. You just have to be patient. 🙂

If we keep in mind these simple guidelines from Warren then I’m sure his wisdom will have an impact on our lives. Depending on different sources, Warren appears to have either an ISTJ or INTJ personality type. This mean he is a rational planner who likes to keep to himself most of the time. As an INTJ myself I understand what it’s like to live inside one’s own head sometimes. It’s probably why I can relate to his investment philosophy. 🙂

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Random Useless Fact:

Jan 192017
 

Meet the World’s Wealthiest

Charity group Oxfam recently reported that the world’s 8 richest people have as much combined wealth as the poorest 50% of the world’s population.

Here is the list of the 8 richest individuals, in order of net worth:

  1. Bill Gates: America founder of Microsoft (net worth: $75 billion)
  2. Amancio Ortega: Spanish founder of Inditex which owns the Zara fashion chain (net worth: $67 billion)
  3. Warren Buffett: American CEO and largest shareholder in Berkshire Hathaway (net worth: $60.8 billion)
  4. Carlos Slim: Mexican owner of Grupo Carso (net worth: $50 billion)
  5. Jeff Bezos: American founder, chairman and chief executive of Amazon (net worth: $45.2 billion)
  6. Mark Zuckerberg: American chairman, chief executive officer, and co-founder of Facebook (net worth: $44.6 billion)
  7. Larry Ellison: American co-founder and CEO of Oracle  (net worth: $43.6 billion)
  8. Michael Bloomberg: American founder, owner and CEO of Bloomberg LP (net worth: $40 billion)

The level of extreme wealth has become more concentrated over time. In the previous year, it took the net worth of 62 individuals to match the poorest 50% in the world. Here’s a look at the trend over time.

The middle class is feeling squeezed in many parts of the world. From 2000 to 2014 the number of households in the U.S. considered to be middle class fell significantly. A study from Pew Research shows that a majority of Americans no longer lives in the middle class. Median income of U.S. households in 2014 was 8% less than in 1999, according to Pew. For context, a 3 people household making $42,000 would be considered middle class.

One similarity shared by most multi-billionaires today is a focus on philanthropy. 🙂 Bill Gates would already be worth 12 figures today if he hadn’t given so much to charity already. He has been estimated to save over 6 million lives with his efforts to eradicate Malaria, end Polio, and help third-world countries grow rice. Warren Buffett wants to donate 99% of his wealth to charitable causes. Hundreds of other billionaires have signed up for the Giving Pledge, a campaign to encourage the rich to give away most of their money.

We all want to make money. But once we reach a certain level of financial success and become independently wealth, we have to think about how to use our excess wealth in the most meaningful manner possible. Helping other people in need is probably one of the best ways to achieve this. 🙂

I would be inclined to donate more money too if I were rich. I have already decided that if I ever win $1 million from the lottery, I will donate a quarter of it to charity because I am so generous. 😉
I still have to decide how I want to spend the remaining $999,999.75 though. 😄 j/k.

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Dec 292016
 

The Most Expensive Home in Canada

If you’re in the market for the best property money can buy then look no further than Vancouver, B.C. Earlier this year the exclusive downtown penthouse in Coal Harbour went on the market for CDN $58,888,000, which makes it the priciest Canadian home to be listed on the MLS.

This custom designed, upscale penthouse features two full stories, and over 8,000 square feet of living space. It has a spectacular panoramic view of the ocean, mountains, Stanley Park, Lions Gate bridge, and English Bay. The drawback for most apartments is a lack of parking spaces. But you won’t have that problem here. This luxury pad comes with a private garage for 7 cars. 🙂

Luxury Living Near Central Park

What if you have lots of money and want to live on the east coast? Well not to be outdone, New York City has its own selection of ultra expensive homes for sale. A duplex penthouse on the top of the new One57 skyscraper in Manhattan sold last year to an anonymous buyer for US $100,500,000. Nope, it wasn’t me. 😛 At an incredible height of 1,000 feet (~300 m) tall, you can see just about everything from this penthouse. It has unparalleled views of Central Park, the Hudson and East Rivers, and nearly every New York landmark on the horizon. Wow. Imagine waking up to that view every morning. 😀

Located on the 89th and 90th floors, this 11,000 square feet apartment comes with a steam room, a library, a movie theatre, and 6 bedrooms including a rather large 550 square feet master suite. Not surprisingly, this sky high apartment also comes with sky high expenses. The estimated maintenance cost is around $18,000 per month, which actually isn’t bad considering the apartment’s value, eh?

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Dec 192016
 

2016 is turning out to be a spectacular year for equity investors. 🙂 The Canadian S&P/TSX index is up 17% year to date, while the Dow Jones index in the United States is up 14%. Wow! That’s impressive even by historical standards. The markets have done an excellent job of beating expectations lately. 😀 We could even see the Dow hit 20,000 points before December 31st if we’re lucky.

December is usually a good time to re-examine our investment portfolios and see if there’s any adjustments we need to make to our asset allocation or general financial plan. Personally, this last quarter has been quite eventful for me as I’ve contributed over $30,000 in new investments. As of now here is a breakdown of all my assets and liabilities. 🙂 Everything has been rounded to the nearest $1,000 in $CAD.

Net Worth At a Glance

Assets by Account/Type: 
$19,000 – TFSA at Canadian Western. Private mortgage fund.
$47,000 – TFSA at TD. Mostly income trusts.
$14,000 – Cash trading account at TD. Mostly stocks.
$86,000 –  RRSP at TD. Bonds, U.S. equities, and MICs + REITs.
$170,000 – Margin Account at IB. Mostly dividend stocks.
$10,000 – SolarShare bonds.
$263,000 – Primary residence.
$433,000 – Farmland.
Total Assets = $1,042,000

Liabilities:
$186,000 – Home Mortgage
$192,000 – Farm Mortgage
$58,000 – Margin Loan
$17,000 – TD LOC
$17,000 – HELOC
$10,000 – CIBC LOC
Total Liabilities = $480,000

Total Net Worth = $562,000 🙂

Farmland still makes up a rather large piece of the pie chart. I can’t complain that my farmland went up 10% in value, but I would like to see my stocks and fixed income allocation increase to create a more balanced portfolio.

Last year in December 2015, my farmland represented 44.6% of my asset allocation. This year it has gone down to 40.3% so I am making progress. But it is still not enough. I have to stay focused on my goals and make changes to my situation. As George Bernard Shaw once said, “The people who get on in this world are the people who get up and look for the circumstances they want, and if they can’t find them, make them.”

So in 2017 I plan to buy more fixed income assets and dividend paying stocks to increase my relative position in those liquid asset classes. 🙂

Below are some more details about my various investment accounts.

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