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?

Continue reading »

Dec 262016
 

It’s time again to learn about you, the readers. 🙂 Last year I asked what people thought about lower oil prices and daylight saving time. Here are the results.

I agree with the consensus here. Although a lower price for oil means cheaper gasoline at the pumps I would much rather see higher profits and more dividends from the energy companies I own. More oil revenue also means more capital expenditures which creates more jobs in the economy. There’s only so much money we can save, but there’s no limit to how much we can earn in the capital markets. It looks like 59% of Freedom 35 Blog readers feel the same way. It probably means most people here care more about investing than about consuming. 😀

Six years ago I complained about the negative health effects and lowered productivity of DST.  It just makes everything unnecessarily more complicated. For example, clocks in most of Saskatchewan match clocks in Winnipeg during the winter, but then match clocks in Calgary and Edmonton during the summer. Wtf? o_O That makes it hard for me to conduct my cross provincial business. According to the results of this next poll, it appears that most people agree with me.

I’m surprised no politician has addressed this issue yet. I would vote for anyone who promises to get rid of daylight saving time. 😀

__________________________________
Random Useless Fact:

Sony is currently working on a new animated feature film. 😀

 

Dec 222016
 

Outgrowing The “Middle Class” Label 

Hello high-income earning friends! It’s been a few years since I’ve written about my income from a holistic point of view. So for the sake of transparency I thought I would give everyone an update on my income situation.

My salary is currently closer to $60,000 than it is to $50,000. I won’t disclose the exact figure because I work with people who read this blog. As for my side incomes, they have gone up as well. 🙂 I’m leaving out rental income below because I use the rent to pay my farmland mortgage so it’s basically a wash.

Gross side incomes per year.

  • Part time job – $10,000
  • Dividends – $8,000
  • Interest – $3,000
  • Freelance – $10,000

Total side incomes = $31,000/year

If we put all the numbers together we see that I am making in the rough range of $90,000. Sweet sassy molassy! I believe this means my income is no longer considered middle class anymore. I am now part of the trendy upper middle class. 😉

In any case, I’m earning more than $75K/yr, which is a very important psychological hurdle. According to the Wall Street Journal, the magic income level for maximum satisfaction is $75,000 a year. “As people earn more money, their day-to-day happiness rises. Until [they] hit $75,000. After that, it is just more stuff, with no gain in happiness.”

Retiring Early on a Modest Salary

It’s rare for graphic designers such as myself to ever earn a six figure salary. What this means is that I have to implement a different strategy for FI/RE than someone else who’s a doctor or engineer. To make up for a lower salary, I boost my earnings by moonlighting, and also by increasing my investment returns by taking on more calculated risks. The extra income streams essentially increase my income by $31,000 a year right now and should continue to grow over time. They should also make the eventual transition to retirement easier. And by using leverage to invest in growing companies and other profitable assets like farmland and high yield bonds, my total portfolio has continuously brought high returns since 2009.

This method of choosing individual investments is admittedly more risky than the passive, Boglehead market indexing strategy. But I’ve also been compensated with higher returns, at least so far. I can’t say this plan is guaranteed to work for everyone or that it’s sustainable long term. But I started investing in my early 20s. Today I’m almost 30 years old, and my passive income is about $1500 per month, while my expenses are about $3000. So it’s working out for me. The only issue is I don’t know how my leveraged portfolio will perform in a bear market or recession, which hasn’t been tested yet.

I believe in the next 12 to 24 months it’s very likely that I will be making $100,000 per year including all my income sources. Wow. Never in my wildest childhood dreams did I expect to earn so much. I know six figures isn’t what it used to be but it still feels like a huge amount of money to me.

Many other high income earners claim that they don’t feel $90K or $100K is a lot of money. I don’t know if they’re just being modest, but I certainly do feel much more privileged and happier now than many years ago when I earned only $40K.

16-12-liquid-income-update

I used to believe that you have to be smart to make a lot of money. But apparently I’m living proof that someone with an average intellect can do so as well. I modelled my financial plan based on the brilliant minds that have already figured out the formula for success. All of my investment ideas and strategies can be boiled down to one simple philosophy; Do what other successful people do. 🙂 That’s it!

Continue reading »

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.

Continue reading »

Dec 152016
 
How to invest in the united kingdom

The United Kingdom has a long history of innovation and creativity. The television, programmable computer, telephone, Mini, and even Calculus are all British inventions. The British government was the first to create a revolutionary missile called the civil servant – it doesn’t work, and it’s nearly impossible to fire.😄 The U.K. also gave us David Beckham, Adele, The Beatles, Emily Blunt, and Christian Bale (heh). By the way, if you ignore the looks, wealth, charisma, and success, then there’s no real difference between me and Christian Bale. 😉

England is such a fascinating country and I’ve always wanted to invest there. But I’ve never found the right opportunity to do so, until now. 😉 With a cheapened currency and rising government bond yields, the U.K. is looking relatively attractive for foreign investors. So a few days ago I invested £11,000 in the U.K. stock market! I think the British would approve of my decision. 🙂

London, England is home to the world’s largest global financial center. Despite the rainy weather, its enduring popularity and rich history make London one of the most sought after cities to live in.

In today’s post we will explore why Great Britain may be a good place to invest in, how to do it, and what we can expect in the years to come. 🙂

Top 3 Reasons to Invest in the United Kingdom

Keep in mind these are my personal reasons and may not apply to everyone else’s situation.

  1. Geographical diversification. Back in 2014, the United States stock market represented 36% of the world’s total stock market cap. But according to the Wall Street Journal, it has recently climbed past 40% after Trump won the U.S. election.But this trend cannot go on forever because the U.S. doesn’t have special privileges regarding innovation, profit growth, or stock market returns. Nearly all of my financial assets are in North America. Investing in the U.K. gives my portfolio some international exposure.
  2. Cheap Pound Sterling. The British Pound (GBP) has recently become one of the most undervalued major currencies in the world. A couple of months ago the Pound fell to a 31 year low compared to the USD. So during my entire life so far, there has never been a better time to buy the Pound Sterling than this year. 🙂
  3. Decent historical returns. Here’s a look at how the FTSE performed over the last 25 years, compared to the Russell 3000 in the U.S. It’s nothing spectacular, but a 200% return in 2.5 decades isn’t bad. 🙂

Continue reading »