How It All Began – My Financial Background

I started this blog in 2010 and have written a lot on how I’m investing for the future.  But I’ve just realized I haven’t written much about my financial experiences prior to 2010. You probably won’t learn anything new from this post today but for anyone who might be interested, this entry is about how my road to financial freedom began in 2008, and how it progressed in 2009 and 2010. I’ve dug up and scanned my old tax statements from each year to give an idea of my financial back story.

2008 – The Road to Adulthood

In the beginning of 2008 I was just your average student attending a vocational school in Vancouver. I lived at home with my parents to save money. The only real job I had previously was working at a Safeway in 2007 to help pay for my education. It took all my savings, plus student loans to finally graduate in February 2008. At this time I didn’t know anything about the true value of money or how to properly invest it. My main focus, like any other recent graduate’s, was to find employment. Luckily the school I graduated from was looking for part time teaching assistants, so I applied and started to work there during the evenings and weekends. But I still needed to find a permanent full time job. After a couple months of tirelessly sending out resumes and writing cover letters, I was beginning to lose hope and even considered going back to my old retail job. Keep in mind this was in the middle of the 2008 recession. But with $15,000 of student loan debt I couldn’t afford to give up so easily (>_<) Finally after half a dozen different interviews at various companies I landed a job in my field of study, graphic art and design, in May 2008.  The pay was $35,000, so not bad for a starting salary. After tax it worked out to be about $2,400 per month 🙂 I was finally making some decent money compared to the lousy $8.75/hr at Safeway before. I couldn’t help but beam like this (●^o^●) when I received my first direct deposit in the bank. I decided to keep my part time job since it didn’t interfere with my new full time work 🙂

Beginning of 2008 summary:
Income $0 (attending school full time)
Expenses $100/month (cell phone and bus pass)
Assets: $0 (I had no financial assets 🙁 )
Liabilities: $15K (student loans)
Net Worth: -$15K 

At first I wasn’t sure what to do with all the new money I was making. I remembered in high school we learned about compound interest so I thought I should probably start investing while I’m young. Not only can I take advantage of time, but investments are also really cheap to buy due to the recession. So I followed the news everyday and learned more about what the stock market is. I talked to a financial advisor later in the year to help me make a financial plan and he convinced me to buy some mutual funds. Which turned out to be my first investment ever 😉 Since I was working, I figured I could afford to live on my own. But should I buy or rent? I decided to buy because of the low interest rates. But that meant I had to save up for a downpayment, so I did.

End of 2008 summary:
Net Income: $3K/month (about $2,400 from full time work, and $600 from part time)
Expenses: $100/month (my parents cooked at home so I didn’t need to ever buy lunch. Thanks for saving me money, mum 🙂 )
Assets: $12K ($7K in savings to buy a home and $5K in mutual funds)
Liabilities: $10K (remaining student loans)
Net Worth: $2K ($17K more than a year ago :D)



2009 – Home is Where the Money is

By March of 2009 I had saved roughly $13,000 from working those 2 jobs mentioned earlier. Not to mention I got a raise at my full time position 😀 I have already paid off half my student loans and could easily pay off the other half, but decided to use my money to buy a home first because I believe investing in property is more important than paying down debt in a low interest rate environment.  By April I had purchased and moved into my own place which I bought for $230,000. Spent all my $13,000 on the downpayment and had to take out a line of credit to pay for the closing costs haha. Oh well. I was lucky my parents didn’t ask me to pay them rent, or kicked me out as soon as I started working because living with your folks is one of the best ways to save money 😀 If it wasn’t for their support at the time my financial situation today would probably be set back 6 months or so. I decided to sell my mutual funds and buy individual stocks instead to avoid the hefty management fees. This is when I started to learn about how certain stocks pay dividends, which lead to the idea of passive income, which eventually gave me the Eureka moment that if I had enough investments I could technically not have to work ever again 🙂 After many hours of research using the Google, I came to the conclusion that the idea of financial independence IS possible, even with someone making an average salary like me. I ditched my advisor and came up with my own financial plan lol. I bought RioCan, RCI.B, ENB, and a few other dividend stocks. By the end of the year I was making almost $300 in dividends annually! With some rudimentary calculations I figured I could be financially free sometime in my thirties if I continued to save and invest half my net income each year. Sounds almost too good to be true, but the math actually works out 😀 This was also when I started reading other personal finance blogs.

End of 2009 summary:
Net Income: $3.2K/month (slightly more than last year, still working 2 jobs)
Expenses: $1.7K/month (housing eats up over half of all expenses)
Assets: $247K (230K for new home, the rest is in stocks and cash savings)
Liabilities: $216K (99% of this is the mortgage, a small amount is LOC used to pay off student loans)
Net Worth: $31K ($29K more than last year yay 😀 )



2010 – Leverage is the Name of the Game

When I received my apartment’s assessment in 2010, I was shocked that my home is now worth $245,000 on the market. $15,000 more than I paid for in the previous year. I suddenly realized, if I put up $13,000 for the downpayment last year to buy this property, and now it’s worth $15,000 more, I’ve technically made over 100% return on my money already 🙂 I thought if borrowing to invest in real estate turned out well, maybe I can do the same for other asset classes. So I learned about borrowing on margin for stocks. I received incremental raises to my income from both my employers and continued to invest in stocks. Not to mention I was making about $1000 a year in dividends at this time 🙂 I also started freedom 35 blog this year to write about my finances.

End of 2010 summary:
Net Income: $3.5K/month (slightly more than last year, still working 2 jobs, plus a little extra in dividend income)
Expenses: $1.8K/month (slightly more than last year due to lifestyle inflation)
Assets: $279K (237K for home, I didn’t use the $245K assessed value because I thought that’s too high. $42K in stocks and cash savings. )
Liabilities: $217K ($212K for the mortgage, and 5K for money borrowed to buy stocks)
Net Worth: $62K ($31K more than last year 😀 )


2011 – Diversification is Key

In 2011 my home assessment was $270,000 which was $25K more than the previous year. To hedge my over exposure to the real estate market I focused on diversifying my assets in 2011. Throughout this year I invested in a lot of dividend paying stocks in different sectors of the economy. My dividend income more than doubled during 2011. I was also 4 years into my career so my salary increased a bit too. For my 9 to 5 graphic design job I was paid twice a month. Each paycheck worked out to $1,333 in net income, which is $32,000 annually. But my net worth in 2011 increased by more than that. This means even without a full time job my wealth would have still gone up.  By investing and holding onto appreciating assets using calculated leverage I was able to reach a level of financial security in just 4 years, that would have probably taken me over 10 or 20 years to accomplish otherwise. This is why it’s so important to invest.

End of 2011 summary:
Net Income: $3.8K/month (higher than last year, dividends almost make up 10% of total income)
Expenses: $1.8K/month (no change from previous year)
Assets: $318K (Almost $40K increase from last year, mostly from new stocks I bought. Used $243K for the value of my home instead of the inflated assessed value of $270K)
Liabilities: $216K ($209K for the mortgage, and 7K for money borrowed to buy stocks)
Net Worth: $102K ($40K more than last year 😀 )13-8-2011-income

2012 and Onward- You Know the Rest

I purchased some farmland in 2012 and by the end of the year my net worth was $140,000. Stocks, farmland, and Vancouver real estate continued to outperform and by the end of 2013 my net worth was at $209K. Most of the increase came from holding high quality financial assets. A year later in December 2014 my net worth has grown to $320K. Once again the majority of the year’s net worth growth came from investment decisions I’ve made in previous years like buying farmland and stocks. In 2015 I hope to end the year with $400K in net worth.

Obviously my salary now is higher than the $35,000 I started with almost 7 years ago. But it’s still pretty average. The median household income for the Metro Vancouver area in 2006 was $55,231, which is more than my current full time salary in 2015. So in summary, on my graphic designer’s income alone it would be very difficult to reach financial independence. However, by working a 2nd job, using leverage, and diversifying my investments, I’m able to use the help of multiple incomes streams from my dividends, rental income, and part-time work to supercharge my total income past that $55K median amount 😀 which makes it a lot easier to reach my goals. By using money wisely to buy strong stocks and other profitable investments one does not necessarily need to have a high paying  job to become a millionaire and retire early. 🙂  My most up to date net worth can be found on the Fiscal Updates page. Financial independence, here I come \(^_^)/

This was post was last updated in Jan 2015

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04/04/2013 5:39 am

how many hours do you work on your side job ?

My Financial Independence Journey

It looks like you’ve made some great progress. If you keep it up, you should be able to hit financial independence relatively early in life. Good luck!

Yakezie (@Yakezie)
04/04/2013 6:27 am

Great job mate! I love the attitude and the focus! Instead of complaining about your income, you rejoice your income and are determined to make more.

One thing though is to be a little wary of the county tax assessment. Our goal as property owners is to have them assess our properties at close to $0 has possible to pay the least amount of taxes!

Best, Sam

04/04/2013 8:33 am

awesome recap, you achieved so much in a few short years. Looks like the ball started rolling and there is no stopping you now!

04/04/2013 9:53 am

Wow, you started with -$15k just 5 years ago and look at you now! Great jump from your gross income from 2009 – 2010. Your accumulation of wealth is outstanding! Took me twice as long to get to where you’re at now… but then again, I have a way lower income than you.

Mo' Money Mo' Houses (@momoneymohouses)

This post makes me want to buy property and start buy stocks! Great post Liquid!

04/04/2013 3:17 pm

I have to say, your year over year gains are absolutely phenomenal! The fact that you were able do do that at an entry level salary while living in one of the most expensive cities in the world is absolutely unbelievable!

mochimac @ save. spend. splurge.

You are way way way ahead 🙂 You’ve done a great job in a short amount of time.

04/05/2013 4:11 am

And it all started with humble beginnings and a PLAN… which continues to be updated as you expand and roll forward. Enjoy the snowball effect my firend! We’re now 16 years into our plan and bang on track – planning does really payout – Cheers

04/05/2013 5:39 am

For all the times we’ve hung out, I didn’t know the whole story. Thanks for sharing!

04/06/2013 9:22 pm
Reply to  Brian

Hoping others can learn from my experience :0)

John S @ Frugal Rules
John S @ Frugal Rules
04/05/2013 7:02 am

Great work sir! I always like seeing posts like this and seeing the great progression and someone working hard to get it. Keep up the great work!

A.N Rajah
04/05/2013 11:15 am

Great post. I enjoy reading your blog posts.

04/04/2014 4:56 pm

Hi, I will probably sound dumb, but I don’t understand how you come up with your net worth? Are you just using the numbers that your house went up that year? I don’t get how for examples in 2011 you have 40gs of stocks on a net income of 32…

11/11/2014 6:44 pm

Great post liquid! How are you hedging against interest rate rising when mortgage renews? How long is your mortgage term?

04/08/2015 7:40 am

Thank you! – you added a cupful of inspiration in me & your blog is something that I can relate to as I am in the same income group.
I thought that it’s not possible to grow your net worth with what we get from our job but you proved it otherwise & you are a great example of defying odds :).