Fiscal Update December 2018


Changes in the Financial Markets in 2018

  • Currencies:
  • Canadian dollar weaken from 0.80 to 0.73 USD.
    (Less purchasing power and more expensive imports, such as food from the U.S.)
  • U.S. dollar index up to 96 from 92.
    (Non Americans pay a higher premium to buy U.S. investments.)
  • Stock Markets:
  • Most markets around the world dropped in 2018, especially Emerging and Asian markets.
  • Canadian S&P/TSX stock index fell about 12%
  • U.S. stock market fell about 6%
  • Canadian Aggregate bond index ETF (ZAG) total return = 1.8%

It wasn’t a great way to end the year but on the whole I’m pretty happy with my situation. The last quarter has been the worst for my net worth performance so far. But the good news is I’ve still gained $96K overall in 2018 thanks to a great first half of the year. 🙂 Below is my net worth update for December.

Liquid’s Financial Update

*Side Incomes: = $3,400

  • Part time job =$1100
  • Freelance = $800
  • Dividends =$1000
  • Interest = $600

*Discretionary Spending: = $2,000

  • Food = $300
  • Miscellaneous = $800
  • Interest expense = $1300

*Net Worth: (ΔMoM)

  • Assets: = $1,211,300 total (-14,300)
  • Cash = $20,400 (+600)
  • Canadian stocks = $155,800 (-6800)
  • U.S. stocks = $112,700 (-4700)
  • U.K. stocks = $19,400 (-1000)
  • Retirement = $114,900 (-2500)
  • Mortgage Funds = $34,500 (-200)
  • P2P Lending = $33,600 (+300)
  • Home = $275,000
  • Farms = $445,000
  • Debts: = $418,800 total (-1400)
  • Mortgage = $189,900 (-400)
  • Farm Loans = $180,000 (-400)
  • Margin Loans = $48,900 (-600)

*Total Net Worth = $792,500 (-$12,900 / -1.6%)
All numbers are in $CDN at 0.74/USD

At the end of 2018 my net worth has grown to $792,500. This is a $95,900 increase from the previous year’s end when I had $696,600. It’s not a smooth progression, but I’m grateful to be going in the right direction overall. 🙂

2018 was a bit of a strange year. I lost my job, stocks entered into a bear market, and interest rates climbed 3 times. This series of events has never happened to me before so it’s been fun trying to navigate the new economic landscape.

In terms of what I want to do for 2019, I will be changing my financial strategy a bit. Here are some themes I plan to focus on.

  • Preparing for higher interest rates. Should the Bank of Canada continue to increase rates this year I will be drastically reducing my debt.
  • Buying more bonds. It wasn’t until the recent stock market correction that I truly realize how fixed income investments can keep volatility at bay. Investment grade bonds rated A and BBB currently pay over 4% coupon. It’s not a bad alternative to equities these days.
  • Reassess how I calculate the value of my primary residence. My initial method of using my purchase price + inflation isn’t keeping up with reality anymore. How do you guys value your real estate when calculating your net worth? Do you use the government assessed value, or get someone to come appraise the property?

Random Useless Fact:

Author: Liquid Independence

Editor in Chief at Freedom 35 Blog.

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S Arun
01/07/2019 12:04 pm

Hey Liquid,

You have well diversified assets from real-estates to stocks to bonds. The damage caused by recent market volatility is very minimal compare to the people who have 100% in stocks, especially in tech stocks.

You had a great year despite the recent market pull back and your career changes. Hopefully, you hit your first one million dollar net-worth in less than 2 years (may be by end of this year 🙂 .

So far, I calculate my home value same way as you do (my purchase price + average inflation rate), but I know that my home value is much higher.

Keep up your good work


01/07/2019 4:10 pm

Great progress! For my home value, I prefer to use the government assessed value…either that or Zillow (or equivalent). This is more volatile, but it gives you a better real time estimate, both good and bad.

01/09/2019 12:19 pm

Why do you want to value your home? Are you planning to move to a cheaper home once you pull the trigger?

I think calculating your income stream (dividends, bonds, rents, ect) is much more valuable than net worth. You have to live somewhere and it seems to me that your condo is a fairly efficient option in Vancouver. But it doesn’t help your income stream.

So I would place minimal value on calculating your net worth and maximum value on building a reliable income stream to cover expenses.

On that note I suggest you consider paying off your condo before you retire. The reason is taxes. Without the additional condo mortgage payment you could probably keep your income down very close to the personal exemption limits and pay almost no taxes. But the condo payment income would likely be also income you need to pay taxes on. So you probably have a 25% additional cost to your mortgage in pre-tax dollars.

Thanks for the great, easy to read blog

02/07/2019 8:43 am

Interesting perspective. You are right that the value of the home matters, especially if you are thinking of moving. So when you have a family are you thinking of leaving Vancouver area to an area with a lower cost of housing? I personally would but that’s mostly because I prefer living in less crowded places.

PP Gal
01/09/2019 1:14 pm

Under your asset you have a Retirement fund. Is it in cash or invested in equity or fixed income?

PP Gal
01/15/2019 12:36 pm

Thanks for the breakdown. It’s interesting to know that bonds are added to one’s portfolio. I also have it in small proportion. Because the market is somewhat down, I can see that bonds do well. Stay calm and invested.

01/17/2019 11:34 pm

I use the value from BC Assessment that I get every year, I just started doing that recently. I’m sure your home value/ apartment value is much higher than $275,000!

01/21/2019 8:44 am

I had a great year myself! Pulled out the old spread sheet and updated things. I’ll be 37 this year and could be financially independent by 40!

Year Net Worth +/-
2019 1242755 309363
2018 933392 358564
2017 574828 284937
2016 289891 117783
2015 172108 137067
2014 35041

01/23/2019 12:36 pm

Bought a great business in 2016, so the larger increases in net worth can be attributed to that. At this point I’m looking at other business opportunities to further drive up the net worth 🙂

02/20/2019 3:41 pm

Would you pls share where you buy the bonds? Are they traded in stock market?

02/22/2019 6:50 pm

got it, thanks!! 🙂


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