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

Jul 052017
 

In an interesting turn of events the Canadian dollar is showing signs of strength. It gained against the US dollar and the British pound. This is a double edged sword. The good news is my wealth is greater since I have more purchasing power. 🙂 The bad news is my net worth in Canadian dollars went down. 🙁

Since I have investments in foreign currency my assets fell in value. Oh well. I’m not cashing out any time soon so I will continue to hold and see what happens. Energy companies also lost value in June, following lower oil prices. I also purchased a vehicle in cash that cost over $1,000. It was expensive, but it’s important to have a life. 🙂

Liquid’s Financial Update

*Side Incomes:

  • Part-Time = $900
  • Freelance = $800
  • Dividends = $800
  • Interest = $200
*Discretionary Spending:
  • Fun = $1500
  • Debt Interest = $1100

*Net Worth: (ΔMoM)

  • Assets: = $1,113,700 total (-6,300)
  • Cash = $5,300 (+2100)
  • Canadian stocks = $146,400 (-200)
  • U.S. stocks = $91,600 (-4600)
  • U.K. stocks = $20,100 (-1300)
  • RRSP = $82,600 (-2800)
  • Mortgage Funds = $31,000 (+300)
  • Peer-to-Peer Lending = $20,900 (+200)
  • SolarShare Bonds = $9,800
  • Home = $270,000
  • Farms = $436,000
  • Debts: = $486,000 total (-5,500)
  • Mortgage = $182,900 (-500)
  • Farm Loans = $188,800 (-500)
  • Margin Loans = $60,300 (-3200)
  • TD Line of Credit = $13,000  (-600)
  • CIBC Line of Credit = $25,000 (-500)
  • HELOC = $16,000 (-200)

*Total Net Worth = $627,700 (-$800 / -0.13%) 
All numbers above are in $CDN. 

 

This is the worst month I’ve had in over a year, lol. It looks like my fixed income assets performed well at least. Hopefully I can turn things around in July and get back to increasing my net worth.

 

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Random Useless Fact:

Canada produces over 80% of the world’s maple syrup.

May 042017
 

Stocks Continue to Climb

Technology stocks in the U.S. have recently performed exceptionally well. The Nasdaq index (full of technology stocks) reached a new high, passing 6,000 points. Stock markets reaching new highs is actually quite common. On average, this happens about once a month. But unlike the tech bubble of 2000, this time I believe technology giants such as Amazon, Apple, and Alphabet are here to stay. The industry has matured now and high tech companies have become similar to utilities. Just imagine an entire week without using any of Google’s services or any iPhones or Apple products lol.

Over the years I’ve written about why AMZN, AAPL, and GOOG are some of the best companies to own for long term investors. I hold all 3 of course. Although I am primarily a dividend investor, I will put money into growth oriented stocks as well if there’s a profitable opportunity. Amazon is up 25% so far this year. Apple is up 27%. And Alphabet (Google) is up 20%. Not bad for a span of only 4 months. 😀

Liquid’s Financial Update

*Side Incomes:

  • Part-Time = $500
  • Freelance = $800
  • Dividends = $700
  • Interest = $500
*Discretionary Spending:
  • Fun = $300
  • Debt Interest = $1100

*Net Worth: (ΔMoM)

  • Assets: = $1,112,800 total (+14,900)
  • Cash = $4,200 (+2000) ~ Saving up to make a major purchase in May.
  • Canadian stocks = $146,800 (+1100)
  • U.S. stocks = $95,300 (+5200) ~ Strong gains here partly due to a lower $CAD
  • U.K. stocks = $20,700 (+1100)
  • RRSP = $78,900 (+2500) ~ I have many U.S. stocks in there.
  • Mortgage Funds = $30,600 (-200) ~ Most MICs lost ground in April.
  • Peer-to-Peer Lending = $20,500 (+200)
  • SolarShare Bonds = $9,800
  • Home = $270,000
  • Farms = $436,000 (+3000) ~ Increasing farmland value due to inflation. 
  • Debts: = $494,800 total (-400)
  • Mortgage = $183,800 (-500)
  • Farm Loans = $189,800 (-500)
  • Margin Loans = $64,600 (+1800)
  • TD Line of Credit = $14,200  (-600)
  • CIBC Line of Credit = $26,000 (-500)
  • HELOC = $16,400 (-100)

*Total Net Worth = $618,000 (+$15,300 / +2.5%)
All numbers above are in $CDN. 

I am so glad I have investments outside of Canada in April. The British Pound gained a lot of strength boosting my U.K. stocks by about 6% in $CDN terms. The United States dollar and stock market also went up a lot. My U.S. stock portfolio gained $5,200. Sweet! But on the flip side, my U.S. margin loan increased by about $1,800. This is the reality about buying U.S. stocks on margin; it’s great for my investments when the U.S. currency appreciates, but it also means I owe more money when everything is converted back into $CDN, lol. Oh well. I hope everything will work out in the long run. 🙂

 

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Random Useless Fact:

Apr 032017
 

When Long Term Planning Works Out

Thanks to my recent investment in Lending Loop I am now making an additional $2,000 per year of interest income. This brings my total passive income to $24,000 per year. Sweet peaches and cream! 😀 Here’s a breakdown.

  • $9,000 dividends
  • $9,000 rent
  • $6,000 interest

Passive income is the best kind of income for 3 important reasons:

  1. It’s stable and requires no effort from the investor.
  2. It has the capability to be tax efficient, eg: by earning it inside a tax advantaged account.
  3. It’s inflation protected. eg: My current passive income from dividends, rent, and interest would all increase under inflationary pressure.

But it takes time to build up $24,000 of annual investment income. Rome wasn’t built in a day, and neither is passive income. It took me about 9 years of saving and investing to reach this milestone. Dividend income was my first passive income stream and it’s starting to really pay off now. 🙂 Many other bloggers are using this popular strategy for early retirement as well.

My current level of passive income by itself is still not enough for me to live on. However, my projection is to grow my passive income by $3,000 per year over the next 5 years so I will be financially independent when I’m 35 years old in 2022, making about $40,000 per year from my investments. 😀

Increasing my passive income by $3,000 a year is actually easier than it sounds due to my special circumstance. I have 3 lucky advantages that most people my age don’t have.

  1. I have over $1,000,000 of investments under my control. Dividend growth stocks increase payments to shareholders over time. Land tends to appreciate in value and extract higher rental income in the long run. Through inflation this $1,000,000 asset portfolio will grow by an estimated 2% a year to keep up with the cost of living. This works out to $20,000 of annual appreciation. We can easily convert any tangible asset into a perpetual passive revenue stream by using the 4% rule. Therefore, I can expect my passive income to increase by $800 by next year simply by continuing to hold $1+ million of productive assets. ($20,000 x 4%)
  2. I do not spend the $24,000 of passive income I currently make. So all of it can go back into buying more investments. $24,000 will generate about 5% of income for me with a combination of high yield income securities and dividend stocks. So that’s another $1,200 of newly created passive income for me to look forward to by next year. ($24,000 x 5%)
  3. Tax efficiency. Nearly all my dividend producing investments qualify for the federal dividend tax credit so I effectively pay only 6% tax on the income they produce. My rental income is offset by my mortgage interest so I pay less than 4% tax on this rental income. As I’ve written about in the past my profits are kept low. Nearly all my other passive income are sheltered in my RRSP and TFSAs, which accounts for more than $150,000 worth of stocks, bonds, mortgages, and other interest producing assets. This means I pay minimal tax on the $24,000 passive income I make.

Due to the 1st and 2nd reasons in the above list, my passive income should grow organically by $2,000 every year without me injecting any new capital into the portfolio. The remaining $1,000 of passive income (to make up my $3,000 increase per year) will come from savings. With an expected 5% income rate I will need to save $20,000 per year on average to make this happen. I think that’s a reasonable goal for me. 🙂

This whole plan all started in 2008. I’m just following through with it now and adding small changes as things move along. What truly amazes me is the fact that my passive income has now reached a point where it is growing at a faster rate than my active income. There is no way I can sustainably increase my salary and wages by $3,000 every year without sacrificing my health and risk getting burnt out. But my passive income can. 😀 This is why investing becomes more effective the longer one does it.

 

Liquid’s Financial Update

*Side Incomes:

  • Part-Time = $700
  • Freelance = $800
  • Dividends = $700
  • Interest = $100
  • SolarShare bonds = $500
*Discretionary Spending:
  • Fun = $500
  • Debt Interest = $1200

*Net Worth: (MoM)16-12-networthiq_chart-nov

  • Assets: = $1,097,900 total (+9,500)
  • Cash = $2,200 (+700)
  • Canadian stocks = $145,700 (+7500)
  • U.S. stocks = $90,100 (-700)
  • U.K. stocks = $19,600 (+300)
  • RRSP = $76,400 (+1500)
  • Mortgage Funds = $30,800 (+200)
  • Peer-to-Peer Lending = $20,300 (+200)
  • SolarShare Bonds = $9,800 (-200)
  • Home = $270,000
  • Farms = $433,000
  • Debts: = $495,200 total (+800)
  • Mortgage = $184,300 (-500)
  • Farm Loans = $190,300 (-600)
  • Margin Loans = $62,800 (+3200)
  • TD Line of Credit = $14,800  (-600)
  • CIBC Line of Credit = $26,500 (-500)
  • HELOC = $16,500 (-200)

*December Total Net Worth = $602,700 (+$8,700 / +1.5%)
All numbers above are in $CDN. 

I got my first SolarShare bond payment! This is the first of 30 total payments I will receive over the next 15 years.

Much like black holes, climate change can really suck. 😄 I invested in SolarShare last year because I wanted to make the world a greener place and earn a profit while doing it. 😀

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