Feb 022014
 

In a normal month my net worth would grow by about $2,000 or $3,000 depending on how much I save and how my investments perform. But January is often a special month where my net worth often grows by many times than usual, which I like to call the New Year’s Bump. This has happened every January for the past several years now. Anyone can take advantage of this annual phenomenon 😀 Just buy a home, and choose the right stocks! I will list the stocks I own below, but your portfolio could be different. The important thing is to do the research.

January is the time when I update my home’s worth, which is adjusted to inflation. In 2013 inflation in Canada (CPI) was about 0.9% overall, which means I add $2K to my condo’s value. Easy money right there 🙂 The real market value is probably higher, but I like to be conservative. I think buying real property is one of the fastest ways to get rich quickly and passively 🙂 Another reason for the Bump is because the stock market usually does well in January, averaging 1.5% positive return over the last 140+ years.

13_01_stocktrendsjan

Some people are pulling their money out of stocks because they think there might be a pull back since we had huge gains in 2013, but I’m staying fully invested because according to historical patterns it looks like the next few months will likely yield more positive gains. Don’t try to time the market, just stay invested for the long run.

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Jan 042014
 

Overall in 2013 my net worth increased by $68,600 or 49%. Not bad 😀 But I can’t take most of the credit for it. As I will explain further below, more than $40,000 of my newly created wealth was purely coincidental. My financial performance in 2013 was mostly a reflection of the overall positive market trend, and not so much the results from my own acumen 😛

In 2012 with only $20K of my own savings I was able to buy a property worth $150K. That investment worked out so well that I used the same strategy in 2013 to buy another property for $172K. I’m very grateful to the financial services industry for lending me other people’s money, so that I may use their emergency funds and hard earned savings (which they’re not currently using themselves) to boost the economy and multiply profits for my own gain! 😀 Don’t worry, I’ll pay them back some day 😉 But without borrowing money from the bank in this low interest rate environment, there is no way I could have accumulated so much financial assets today.

 

*Side Income:

  • Part-Time Work = $600
  • Dividends = $400
*Discretionary Spending:
  • Eating Out = $100
  • Others = $500 (including a $400 microscope)

*Net Worth: (MoM)

chart_13dec

  • Assets: = $742,500 total (+3,700)
  • Cash = $200 (-1000)
  • Stocks CDN =$79,600 (+2700)
  • Stocks US = $46,500 (+1500)
  • RRSP = $39,200 (+500)
  • Home = $252,000 (same)
  • Farms = $325,000 (same)
  • Debts: = $533,600 total (-1,000)
  • Mortgage = $200,400 (-300)
  • Farm Loans = $208,800 (-500)
  • Margin Loan CDN = $27,400 (+1300)
  • Margin Loan US = $24,000 (+400)
  • TD Line of Credit = $34,700  (-1200)
  • CIBC Line of Credit = $14,800 (-200)
  • HELOC = $18,000 (same)
  • RRSP Loan = $5,500 (-500)

*Total Net Worth = $208,900 (+2.3%)
All numbers above are in CAD. Conversion rate used: 1.00 USD = 1.07 CAD

The way to invest successfully isn’t necessarily trying to pick winners and losers. We just have to be in the game 🙂

For example I have a $U.S. trading account to buy U.S. stocks in. A year ago $1 CAD = $1.01 USD. But by now $1 CAD = $0.93 USD. Which means it’s now 8% cheaper for Americans to shop in Canada, haha. So it’s not about picking the right equities (stocks) because any Canadian could have simply put some idle cash in a U.S. account at the beginning of the year, not invested in anything, and still make 8% in profit simply from the exchange rate delta, lol. Easy money 🙂 And if that cash was used to buy stocks like I did, then that’s even better since the markets really outperformed in 2013.

I blogged about how I purchased super awesome companies like Google, Disney, Starbucks, etc. Which all performed well last year. The TSX Composite (Canadian index) returned 10.6% in 2013. The S&P500 did even better with a 31.8% return, jumpin’ jellybeans 😯 that’s a huge gain. But technology stocks grew the most with the Nasdaq Composite up 41%, Bloody Nora! 😯 All one had to do to gain from these market returns was just buy an index ETF, such as the Vanguard S&P 500 ETF (VOO) or the iShares S&P/TSX 60 index fund (XIU), which typically holds a large basket of blue-chip companies that track the stock market indexes. Again, easy money 🙂 No research or thinking necessary. I personally like to choose individual companies to invest in, but because I have a large diversified portfolio of large cap stocks, my overall performance pretty much tracks the index as well 🙂 My stock portfolio returned $15,000+ in 2013, not including new purchases. Thank goodness for leverage too. Anyone could have borrowed money from the bank at 4.25% like I did (regardless of their credit rating) and invested that money in the stock market for double digit profits 🙂 Without leveraging my margin account I would not have so much gains on paper today.

Same goes for real estate. The Canadian Real Estate Association released a report last month which estimates home prices in Canada on average rose by 5.2% in 2013 (4.1% in B.C.) So a $250K condo in B.C., like the one I have, would have appreciated by about $10,000 in 2013 on average. Home appreciation = passive easy money 🙂 By the way, did anyone else hear about the insane housing numbers out of Kitimat B.C.?

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Jul 032013
 

Last month at this time I mentioned I had $15K ready to deploy for the downpayment of my second farmland. Each farm produces 2 rental cheques. Once in the spring/summer when seeding occurs, and the other cheque gets deposited in October when the crops are harvested. As luck would have even though the second farmland isn’t legally mine until later this year, the renter was nice enough to still pay me the first part of this year’s rent 🙂 So I deposited the $2520 cheque into my bank account in June. Thank goodness for that, because my stock portfolio dropped in value on average by about 2.5%.

The Canadian loonie is approaching the lowest value since almost 24 months now. This is good news if you live in the US and like to come across the border to shop for fur coats and maple syrup 🙂 However a higher USD also means I owe more in my US margin account 🙁 Gold, silver, copper, and other hard commodities are super cheap now. I think this would be a good time to start looking at Canadian mining companies to invest in if you haven’t already. It’s smart to take advantage of low prices when business are on sale (^_^)

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*Side Income:chart_13jun
  • Part-Time Work = $900
  • Dividends = $300
  • Farm Rent = $2,500

*Discretionary Spending:

  • Eating Out = $100
  • Others = $200

*Net Worth: (MoM)

  • Assets: = $569,800 total (-$100)
  • Cash = $7,200 (+4000)
  • Stocks CDN =$71,000 (-$3500)
  • Stocks US = $39,000 (+$200)
  • RRSP = $30,800 ($800)
  • Home = $252,000 (same)
  • Farm 1 = $152,500 (same)
  • Farm 2 deposit = $17,300 (same)
  • Liabilities: = $392,500 total (-4,300
  • Mortgage = $202,500 (-$300)
  • Farm 1 Loan = $110,500 (-$200)
  • Margin Loan CDN = $26,100 (-$100)
  • Margin Loan US = $22,400 (+$300)
  • TD Line of Credit = $13,000  (-9000)
  • CIBC Line of Credit = $13,000 (same)
  • Credit Card = $5000 (new)

*Total Net Worth = $177,300 (+2.52%)
All numbers above are in CAD. Conversion rate used: 1.00 USD = 1.06 CAD

Not as spectacular as May’s net worth increase but I’m still really happy with this month. The big increase to my cash on hand is due to the rental income, savings from work, and the $5,000 credit card transfer 🙂 I then used the savings to pay off some debt (mostly my line of credit.) Because of this extra money I now have 20K ready for my farmland fund. That means only $5K more to go 😀 It seems like luck was on my side again for the month of June. Since I have a US margin account with US dollars, I was able to not lose as much because due to the conversion rate my US portfolio is worth 1.5% more than it did in May when converted to Canadian dollars. That’s important because CAD is the currency I use to live on 🙂 And it just so happened that my farm rent came in on the same month that the stock market corrected. Couldn’t have predicated any of this but really happy with how things worked out :0)

May 042013
 

April was a pretty eventful month financially. Gold had a big correction but has regained some of its loss now. Many companies which I own shares in such as Apple and Suncor reported their quarterly earnings. Most were good news 😉 Precious metals and other commodities were cheaper in April due to slower than anticipated growth in Asia. Canada’s S&P/TSX Composite index fell about 2% but the S&P500 in the US gained about 2%. Part of the reason why my portfolio didn’t do worse is because over $50K of my stocks are US companies 🙂 I love investing in Canada, but it’s important to diversify.

I also did my income taxes and received a nice tax return of just under $1K. This is thanks to the large sum of RRSP contribution I made last year (about $10K.) Thank you CRA 😀 I will use this money wisely by not spending it on expensive souvenirs like I did last month.

But the biggest impact to my net worth in April was when I found out that farmland in Saskatchewan grew by nearly 20% last year and increased the value of my farm by $2,500. I love investing in stocks, but again, diversification is paramount  😀

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*Side Income:chart_apr13
  • Part-Time Work = $400
  • Dividends = $400

*Discretionary Spending:

  • Eating Out = $100
  • Others = $2,400 (bought a silver coin)

*Net Worth: (MoM)

  • Assets: = $577,200 total (+$27,200)
  • Cash = $1,500 (-$700)
  • Stocks CDN =$80,800 (+$5,700)
  • Stocks US = $40,500 (+$1,700)
  • RRSP = $32,600 (+$700)
  • Home = $252,000 (same)
  • Farm 1 = $152,500 (+2,500)
  • Farm 2 = $17,300 (new)
  • Liabilities: = $411,100 total (+21,000)
  • Mortgage = $203,200 (-$300)
  • Farm 1 Loan = $110,900 (-$300)
  • Margin Loan CDN = $26,200 (+$3,700)
  • Margin Loan US = $22,900 (+$100)
  • TD Line of Credit = $33,900  (+14,900)
  • CIBC Line of Credit = $14,000 (+4000)

*Total Net Worth = $166,100 (+3.2%)
All numbers above are in CAD. Conversion rate used: 1.00 USD = 1.01 CAD

On the Assets side I’ve bought about $7K of new stocks in my Canadian portfolio for the swing trade which I started a couple weeks ago. Otherwise the portfolio would have decreased in value instead of increased. On the Liabilities side I’ve borrowed some money in my Canadian margin account for the swing trade. Borrowed about $19K between my two line of credits most of which was used to pay for the farm deposit which you all know about from my post earlier this week. I’m going to consolidate my debt later this year so it’s less messy 🙂

Overall, that’s a $5,200 net worth increase in one month so I’m pretty happy with that (^.^) Thank goodness for property appreciation, a tax return, dividends, diversification, a part-time job, and savings. I almost feel guilty because most of that stuff just happened automatically without me even doing anything 🙂