Aug 172013
 

Is the United States of America still the land of opportunity or is it becoming more difficult for people at the bottom to live the dream? The answer depends on where you live 😉

Upward mobility measures the likelihood for people to move up their economic status. A recent study published by the Equality of Opportunity Project shows that some US locations have adequate upward mobility compared to other countries. However, other parts of the US have lower levels of economic mobility than any developed country based on current data.

The researchers looked at how many children from families in the bottom 20 percentile of the income distribution ended up rising to the top 20 percentile. They discovered that where you live can make a difference on your upward mobility.

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Mar 022013
 

Real estate continues to soften in Canada but is picking up steam in the US. Stocks were relatively flat but overall nudged up slightly. I’ve decided to finally add my US trading account to my net worth. There’s not much in there. It’s only worth maybe $30K, made up of different US companies like Starbucks, Caterpillar, and other stocks I’ve blogged about buying in the past, but it is practically all leveraged. For every dollar worth of stock I have in there I’ve pretty much taken on the same amount of debt lol. I used my CIBC line of credit for the initial funding of $10K last year and then borrowed the remaining $20K on margin. So it’s basically a completely leveraged portfolio of US stocks :0) I have to pay about 3.5% a year after tax from my own pocket to maintain this portfolio at the moment. But I think there’s a pretty good chance I’ll get a 3.5% after tax return or higher on my stocks this year, so that’s why I’m doing it! Yay for low interest rates.

I’ve never added this US account to my net worth before because I thought my RRSP contribution room would be plenty to house all the US stocks I would ever want to buy. And it probably still is. But one thing I can’t do in an RRSP (401K equivalent) is use margin :D, and the reason my Canadian stocks are worth over $70,000 today is not because the TSX has done so well, but because I used lots of leverage. But the biggest reason I didn’t want to include it in my net worth is because I’m not sure how to consolidate 2 different currencies. The banks have done a great job of splitting my net worth so I have a balance for all my Canadian accounts, and then a separate balance for just my US accounts.

However I don’t want to have 2 separate net worths. Do I convert all USD to CAD when listing my assets and liabilities, or should I do the conversion at the very end when I calculate the final net worth? It’s not a huge issue right now because the Canadian loonie is worth almost the same as the US dollar. But in the future when the gap widens it could make for some very inaccurate calculations 🙁  Nevertheless this USD account is becoming too large to simply ignore anymore, so starting from this fiscal update and onwards I will include it’s balance and the debt that goes along with it. Of course since it’s all leveraged, it doesn’t really affect my net worth 😀

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*Side Income:
  • Part-Time Work = $1200
  • Dividends = $300

*Discretionary Spending:

  • Eating Out = $100
  • Others = $100 (renewed Costco membership)

*Net Worth: (MoM)

  • Assets: = $538,000 total
  • Cash = $1,700 (-$100)
  • Stocks CDN = $72,400 (+$300)
  • Stocks US = $30,500 (new)
  • RRSP = $31,400 (+$600)
  • Home = $252,000 (Same)
  • Farm = $150,000 (Same)
  • Liabilities: = $382,400 total
  • Mortgage = $203,800 (-$400)
  • Farm Loan = $111,400 (-$300)
  • Margin Loan CDN = $18,800 ($100)
  • Margin Loan US = $18,500 (new)
  • Line of Credit = $19,900  (+$500)
  • Line of Credit CIBC = $10,000 (new)

*Total Net Worth = $155,600 (+2.0%

About $3K gain from last month, which is about the same as February of last year. My side hustle and dividend income pretty much covered half of that total increase. So lucky I have 2 jobs in this economy (~_~)  I calculated the net worth this time by simply adding up all the numbers both USD and CAD so the result is a mix of two currencies lol. I need to find a better solution going forward though. I wonder how other people calculate their wealth if they have financial assets in different countries.

Feb 282013
 

I often like to compare lifestyles between different countries. I think where each of us are born has a huge impact on not only our own lives but also how we influence those around us. I recently found this ifitweremyhome.com that compares countries and the average lifestyles of people from all over the world. Coincidentally Canada is currently featured as their country of the week lol. It’s a pretty nifty tool if you want to do some research on another country before you move, or even just go there for a vacation. You can compare Mexico to Australia, United Kingdom to South Korea, etc.. Below lists some of the things it said comparing US and Canada (my comments in italics).

If I lived in the US instead of Canada I would……

Spend 83% more money on health care.
Our government recently announced that health insurance premiums are going up 4% next year. At first I wasn’t too happy about this because over the last 12 years our MSP premiums have almost doubled. However NOW since I realize it’s still relatively cheap I would have no complaints even if they raised it by 10% because that’s still a discount compared to alternatives 🙂
Experience 40% more of a class divide.
I think this is why we’re generally perceived to be more friendly. Even when we get angry we’re nice about it. Unfortunately it also makes for some boring politics sometimes.
13_02_comparison_upsetHave 35% more babies.
Americans have about 138 births per 10,000 people every year. Canadians only have about 103. Not sure exactly why but some people are talking about immigration reform to help grow our population. Why do you think Canadians aren’t having as many children as our southern neighbors?
Have 23% more chance of dying in infancy
The number of deaths of infants under 1 year old in a given year per 1,000 live births in the US is 6.14 while in Canada it is 4.99.
Use 21% less electricity
Makes sense. It’s colder up here in the winter. ~Brrrr~
Make 20% more money
Maybe this is why a lot of smart people finish their studies in Canada and then move to the US to find career opportunities.
Die 3 years sooner
Maybe you live longer in colder temperatures 🙂
Consume 6% less oil
Looks like Canadians aren’t as environmentally friendly as we would like to be
Work 72 hours longer each year
That works out to about 6 hours a month.

So ideally if you want to have the best of both places, you should be born in Canada. Spend your working years in the US. And then move back to Canada to retire and live out the rest of your life. But of course life has too many moving parts to put it that simply. It’s hard to say which country really is better to live in. Both Canada and the US have their pros and cons.

Apr 292012
 

For a more complete look at Canadian’s net worth including by age group and family type click the following link.
http://www.freedomthirtyfiveblog.com/resources/median-and-average-net-worth

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I recently read this article on lsminsurance which says Canadians have a higher net worth than Americans. The data shows that the median net worth per adult in Canada is $89,014. That means $89,014 represents the perfect cross section of our economy because half of Canada’s society has more, and the other half has less. In the US however, the median net worth per adult is $52,752. So in other words, most Canadians have more money than most Americans.

Median net worth matters in an economy because it determines the spending, financial security, and lifestyle of the typical middle class person. With a higher net worth we can take on larger amounts of debt without too much risk. A higher personal net worth in the economy also means more purchasing power for the middle class, less poverty and more equal wealth distribution.

However the article also states that the average net worth of Canadians is only $245,455, but that of Americans is $248,395, which is slightly higher than ours. So in this sense, our US friends are actually wealthier than we are. Average doesn’t give us an accurate picture of the common middle class person. However it is still an important statistic because it determines the spending, financial security, and lifestyle of an upper class person.

In the end I think both median and average indicators in these kinds of studies are important. But statistics and facts are only that. They represent information that we have to interpret ourselves to give them meaning. In Canada the common person can spend $60,000 on an expensive vacation and still have more assets then debt, but the policies here make it difficult to become very rich. In the US most people don’t have the luxury to spend $60,000, unless they are comfortable having a negative net worth (o.O), but it’s easier to become wealthy there. 32% of the world’s billionaires live in the US after all. Both economies have their pros and cons. Maybe one day I will move to the US if I ever develop a successful business idea or see an opportunity to make it big. But since I don’t at this point, I’m happy staying in Canada.

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Random Useless Fact: The average cost of a wedding in the United States last year was $27,021 (U.S.)