Dec 022019
 

Best Bull Market Ever

Stock markets are at record highs. The year to date return of the S&P 500 is 25% – a staggering performance! But of course making money from companies isn’t just about percentages. Otherwise everyone would simply invest in hard liquor. Because where else can you get 40%? 😎

In 2008 my net worth was $0. But thanks to the strong market performance over the last 11 years I’m finally a legit millionaire! Hurray! 😀

I’m currently worth $1,024,500 😀.  Apparently only 1% of self-made millionaires become wealthy before the age of 40. So I feel very fortunate to have this experience now. But my journey is far from over. In about 3 years I will be 35 yrs old. By then I hope to realize my ultimate goal of becoming financially free – hence this blog’s name. 😀

Every few years I update my financial freedom progress. The last time I fully inspected my finances was in 2017. During that update I calculated my net worth to be $610,000. I guess I should post another update soon to see if I’m still on track.

In terms of which investments got me to where I am, the biggest heavy hitters I have in my portfolio are stocks and real estate. 🙂 Both asset classes have performed tremendously over the last decade. That’s the wonderful thing about investing. You don’t have to be highly educated or technically skilled. You can simply buy something and wait for it to go up. Then you automatically go along for the ride and watch your money grow. 😉 As a buy-and-hold investor of dividend stocks and real properties I’m able to keep my trading and management fees to a minimum. Here is my current asset allocation breakdown.

Why have investments gone up so much in value since the great recession? It’s primarily thanks to the central banks. Around the world they have quadrupled the money supply in the financial markets from $5 trillion, to over $19 trillion. Apple cannot issue shares via a new IPO, and nobody is making new land out there. So nearly all the newly printed money is chasing after existing, finite resources. The result? Investors win. Investors who use other people’s money to invest win more. And savers lose.

Although my wealth hasn’t changed much month over month, there’s something visceral about that $1 million figure that makes me feel like a proper Bourgeoisie. 🙂 Maybe it’s all in my head. But it feels pretty amazing to have this level of financial security.

However I have to be careful. With great wealth comes great temptations. The average millionaire goes bankrupt at least 3 times, haha. Both Henry Ford and Walt Disney lost all their money and filed for bankruptcy before achieving a more permanent level of success. I hope I can keep the moment going and continue to build up my portfolio. 😀 It would be nice to eventually earn a six-figure passive income from my investments.

Liquid’s Financial Update November 2019

*Side Incomes: = $3,200

  • Part time job =$800
  • Freelance = $500
  • Dividends =$1200
  • Interest = $700

*Discretionary Spending: = $2,400

  • Food = $400
  • Miscellaneous = $700
  • Interest expense = $1300

*Net Worth: (ΔMoM)

  • Total Assets: = $1,406,600 (+22,100) 
  • Cash = $13,200 (+4100)
  • Canadian stocks = $200,500 (+5400)
  • U.S. stocks = $140,500 (+5600)
  • U.K. stocks = $22,700 (+800)
  • Retirement = $143,000 (+5300)
  • Mortgage Funds = $37,700 (+600)
  • P2P Lending = $37,000 (+300)
  • Home = $367,000 (assessed land value)
  • Farms = $445,000
  • Total Debts: = $382,100 (-3,000)
  • Mortgage = $185,600 (-500)
  • Farm Loans = $161,900 (-500)
  • Margin Loans = $34,600 (-200)
  • Line of Credit = 0 (-1800)

*Total Net Worth = $1,024,500 (+$25,100 / +2.5%)
All numbers are in $CDN at 0.75/USD

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Dec 012016
 

More Millionaires 

The best way to make a lot of money is to work for the mint. 😄 But even if you don’t, chances are your finances have been improving. About 25,000 Canadians became millionaires in the past year according to a report released last week by Credit Suisse. The bank claims that there are currently 1,117,000 individual adults with net assets exceeding US $1,000,000. 😀 We normally see studies of Canadian millionaires based in $CAD, but this study uses $USD to define millionaire status. These kinds of wealth studies are telling, but they tend to underestimate real net worth because participants may forget, or choose not to disclose particular assets such as their precious metals, art, collectables, jewelry, etc. Many of these items such as gold can be acquired anonymously with no paper trail. I think the real number of millionaires is quite a bit higher.

Based on its forecasts in the growth of Canada’s GDP and equity market capitalization, Credit Suisse expects the number of millionaires to increase by 50% to 1,680,000 in 2021. I hope one of those new entrants will be me. 🙂

But 2021 is still five years away and a lot can happen since then. I believe low interest rates are the main cause of asset price inflation which has resulted in so many new millionaires in recent years. But a pull back could be right around the corner. Let’s take a look at history.

16-12-snp-500-index-chart

Between 1988 and 1990 much of the world was in recession with riots breaking out in the UK. 10 years later between 1998 and 2000 we had the Asian financial crisis and the dot-com crash. 10 years after that between 2008 and 2010 we had the great recession with the Lehman and AIG panic, and European banking crisis. They say history doesn’t repeat itself, but it rhymes. And I am certainly seeing a pattern here. 🙂

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Sep 012016
 

Millionaire Status

After checking my balance sheet for the month of August I realized that the value of all my assets is worth $1,006,200. Great Scott! For the first time in my life I own a million dollars worth of stuff! 🙂

According to the official Oxford Dictionaries website, a millionaire is “a person whose assets are worth one million dollars or more.” The word “assets” is commonly defined as any owned items or properties that have financial value. So according to this official definition I am now technically a millionaire! ? Gosh almighty! Below is my reaction right now.

16-08-owl-smile-aww-yeah-millionaire

I started investing about 8 years ago. I mostly just buy a wide range of investments and use diversification to lower my risk. I also intend to hold my investments until I retire. It sounds like a simple strategy, but it works for me. 🙂 Some readers may think I’m a good stock picker. But that’s not true.

In the last 7 years falling interest rates have pushed up asset prices across the board for stocks, bonds, and real estate. The S&P 500 index in the U.S. returned over 150% to investors since 2009. 😀 Good heavens!

My point is anyone could have randomly invested in a basket of different securities starting in 2009 and would likely see similar appreciation in their assets as I have. 😉 So I didn’t get lucky choosing stocks. But I am lucky to have started investing near the bottom of the great recession in 2008.

Continue reading »

Nov 032013
 

In 2011 Asia overtook North America as the region with the most High-Net-Worth-Individuals in the world. A HNWI is someone who has at least $1 million of investable assets, not counting primary residence. But last year in 2012 there were more new millionaires in North America than in Asia and we pulled into the lead again according to a study by Capgemini and RBC Wealth Management. Fantabulous! 😀 We now have a total of 3,730,000 HNWI on this continent. We’re number 1 🙂 And Asia follows closely behind in second place with 3,680,000 HNWIs. Europe is ranked 3rd with 3,400,000.

However Asia is set to retake the top spot again by as early as 2014, the report’s researchers predict. Oh man, it seems to be a neck-and-neck millionaire race between us and Asia. C’mon fellow North Americans. We can’t let them out rich us 👿  By the way the Asian countries in this study include Australia. Sorry my Aussies friends, you guys are involved in this matter whether you want to be or not 😉

One of the reasons for the large influx of new Asian millionaires over the last decade is because of high wage inflation in most Asian countries. Right now the Asian region, including Australia, is growing their economy faster than us Westerners. Below are charts showing income growth in China and Australia.13-11-asian-wage-inflation

Can you imagine working in China where your wage increases by over 10% EVERY year! Holy habanero sauce! Similar deal in Australia where if you made $1,000 a week in 2012, then chances are you’ll be making over $1,100 a week today! What?! 😯 That’s very improbable for the average North American worker. So unfortunately for us the long term trend does not look promising for Canadians and Americans 🙁 Hopefully we can find new ways to improve our competitiveness and create more millionaires!

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Random Useless Fact: The older you get, the better you get. Unless you’re a banana

 

May 062011
 

Another study making the rich feel average and the middle class feel poor. Found an article on the Financial Post about a study done by Deloitte, one of the Big 4 auditing firms, that says there are currently about 1.75 millionaire households in Canada. Millionaire in this case is defined by the total net worth, including home equity, of a household being more than $1M. There are about 13.2 million households in Canada according to my research.

Image from financialpost.com

Which means….

About 13% of all Canadians are millionaires!
In other words, roughly 1 out of every 8 people you see on the street lives in a home where the household’s net assets is worth a million dollars or more. I can see 1/8 of all married couples with millionaire wealth but there are lots other types of households such as unattached individuals, like myself, living alone in small apartments, so I find it really surprising that there are so many millionaire households of all types. If this study is accurate then even I should be able to become a millionaire some day.