Going Cold Turkey

I have been battling a financial addiction since 2008. It has unfortunately gotten worse every year 😐 I just kept going back for more, and couldn’t help myself. The potential harm of this long term abuse came up in a discussion recently when a friend in Toronto asked me what would happen if I lost my job 😕 So I decided it was time to do something about it and take control of my situation.


The first step is to admit that I have a problem. So yes, I was powerless over my habit and my life had become unnecessarily complicated. But I can change. So today I have made the difficult decision to stop taking on new debt cold turkey, for the rest of the year 😯 This means I will only make new investments when I actually have cash on hand. Stephanie would be proud 😉 From now until January 1st, 2015 I will not write any more of those obnoxious posts along the lines of “OMG! Best opportunity evar! Borrowed $10,000 to buy new investment. LMAO. Gonna be rich! #Sweg!” As for my existing debts which sits at only $535,000, which includes a mortgage, lines of credit, consumer debts, and long term loans, I will continue to service those debts and make the minimum payments. I only pay about $1,500 a month on interest so it’s no big deal given I make about twice as much from my job 😉

14-08-coldturkey cold turkeyI could even pay off all my existing debts today if I really wanted to by selling my farms and some under performing stocks.

If I did that I would probably get swamped by media requests and become famous overnight because it’s not everyday a bachelor in his twenties can buy a home in Vancouver without any financial help from parents or friends, and pay off the mortgage in just five years by himself, and be completely debt free, and still have a six-figure investment portfolio. Many people may not even believe my story, unless they read my past blog posts which demonstrates how I doubled the performance of the stock market last year, and how I turned a $20K investment into $60K in two years.

But I’m not going to sell any investments just yet because I don’t want to cut off my nose to spite my face. De-leveraging too quickly now could limit my future financial growth. Being debt free is a priority for many other people, but not me 🙄 What I really want is financial freedom, which requires stable income to come from valuable assets. This means selling those assets prematurely can actually be detrimental to this long term goal 🙁 It doesn’t feel right for me to reduce my investment capital during the growth stages of my career, and when the cost of borrowing is cheaper than dirt.

But taking a break from borrowing new money sounds prudent, so that’s what I will do for the remainder of 2014 😀 Abstaining from leverage won’t be easy though. Old habits die hard and I will probably be temped by promising stock charts and bullish analysts. But fortunately I update my fiscal situation at the start of each month so you guys can help keep me accountable. I couldn’t ask for a better support group than my readers 🙂 If it sounds like I’m about to give in you guys can talk some sense into me 😉

Random Useless Fact:
Females only make up about 2% of all firefighters in the U.S.

14-08-firefighter-women cold turkey sexy firefighters


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08/11/2014 3:07 am

I think that is a great move, to work on stop leveraging and potentially spying down some of it. Your portfolio freaks me out with the amount of borrowed money in it (to each their own though), so I think it’s great that you’re going to try stop leveraging.

hungry hungry artist (@blerghhh)

Ok man… I’ll be the devil’s advocate. I just moved my margin account to Interactive Brokers. They offer you more margin credit for the same cash and they charge you less interest on the loan. Plus commissions are crazy cheap. $1 to buy 100 shares. $0.20-$1.50 options. (No pesky assignment fees!) Which means I can nearly double all my dividend paying positions. The Interest rate is essentially half. So I’ll double my monthly income.

Doooo it!

The Asian Pear
08/11/2014 6:07 am

As mentioned, I’m on the opposite side of the coin. I’m playing TOO safe with my investments. ^__^;

Asset Grinder
Asset Grinder
08/11/2014 6:22 am

ohhhh Thats a tough task for you. You are programmed to jump on opportunities. Without extreme changes I think you mqy be tempted to jump back in especially after a couple months when you have more wiggle room to do so. Best of luck buddy!

08/11/2014 10:02 am

Interesting. Well good luck quitting and with the portfolio you have left over

08/11/2014 10:06 am

I did not expect to come over here today and see this. I always admired your gutsy moves with leverage since I am very conservative in my own investing and they have been working well. I will continue to follow and see how the new Liquid evolves 😀

08/11/2014 10:49 am

Cool man! I think your on your way to finding that right balance between leveraging responsibly vs over-leveraging. While I personally won’t apply leverage to my investments (with the exception of a house/mortgage), you definitely have a lot to teach people about responsible uses of leverage!

save. spend. splurge.
08/11/2014 11:36 am

Don’t forget that if you liquidated, you pay taxes on half of capital gains, you’d have to pay selling costs to get rid of your farmland, etc.. it isn’t a straight transaction of “$200K in investments, $200K in debt, and done!”

08/11/2014 12:27 pm

Oh, I bet you won’t last long! Has there been any layoffs in your department? If not, then you’re most likely safe unless you slack off…

08/11/2014 5:44 pm

Wow! I’m very proud… This is great. I’ll remind you of this post if you change your mind. 😉 I think it’s a wise thing to do, to at least cool it with the leveraging. 1500 a month is a *lot* of interest. But fair enough point about your goals toward financial freedom, and money being cheap right now. I think you’re doing great for someone in his 20s. (Tho… Sorry to burst your bubble… But based on your last progress update, you would have a paid off condo plus a five figure investment portfolio if you were to liquidate now. I.e. 300k minus 250k for your condo valuation = about 50k, minus the fees mentioned above.) Which is still great for someone your age!

All in all, high fives on this decision!

Finance Journey
08/12/2014 10:22 am

As you might know, I also borrow money to invest, especially I take advantage of low interest rate credit cards offers to buy dividend stocks.

But I always have a backup plan (plan B- use margin) to pay down the debts when the special offers are expired. Most of the time, banks extend or give new offer when an old offers about to expire.

Best of luck with your new move..

My Road to Wealth and Freedom
08/12/2014 10:40 am

Good luck on quitting the debt addiction Liquid. You know where I stand when it comes to debt…I hate it and try to avoid it like the plague! That said, if we get another market meltdown I wouldn’t hesitate to dive right in again!


08/12/2014 1:52 pm

Good luck on treating your addition lol. We’ll see if you can keep it up or not. 🙂

My Own Advisor
08/12/2014 3:57 pm

Good call 🙂

No More Waffles
No More Waffles
08/12/2014 10:59 pm

Hey Liquid,

I hope you’ll make it!

The amount of leverage you have would freak me the hell out, but to each their own of course. You’ve shown in the past that you’re quite responsible with leveraging and not just going into debt without running the numbers.

I think it’s great that you’re able to still put things in perspective even though you’ve had an excellent run this far.

Good luck,

JC @ Passive-Income-Pursuit.com
08/13/2014 5:51 pm

I think that’s a good idea even if you leverage up a bit more on January 2nd. Whenever I make a lot of financial moves in a relatively short amount of time I try to take a breather for a bit to let things settle and see how things do given my current situation. Given the debt load you have, even though it’s cash flowing debt, I think it’s prudent to take a bit of a break and at least build up some cash cushion in the event something happens or for your next investment!

Money Pincher
08/15/2014 8:00 pm

Good luck on going cold turkey! You can do it! 😀

I think I would be quite anxious to have over $500K in debt. My husband was suggesting us to take on a $700K mortgage so we that we can get a second house to rent it out or flip it. I was hyperventaliting and thinking of all the “what ifs” as he was talking.


[…] borrow money from the bank (leverage) and go ahead with the investment. But since I blogged about abstaining from using new debt for the rest of this year, I’m actually not able to invest in this opportunity right now. […]


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