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.
- Part-Time Work = $600
- Dividends = $400
- Eating Out = $100
- Others = $500 (including a $400 microscope)
*Net Worth: (MoM)
- 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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