A rough start to the new year
January was such a bizarre month for world news. Bushfires scorched Australia. The U.S. assassinated a general in Iran nearly starting a war. Then out of nowhere Iran shot down a passenger plane full of civilians. Firefighters in France set themselves on fire and fought the police. Britain officially left the European Union. A deadly virus from China caused partial or full lockdowns of entire cities directly affecting over 50 million people. Landslides hit Indonesia causing deaths, mayhem, and displacing thousands of people.
But despite all this, the financial markets don’t seem to be fazed much. Global stocks are down, but the Canadian market is up. 🙂 As long term investors we have to simply ignore the current events and continue to execute our long term plans. In terms of building wealth we can control how much we save, what to invest in, and when we retire. But we can’t control the market’s rate of return. So let’s top up our tax advantaged accounts, find ways to cut back spending, and look for new ways to make money. 🙂
Real Estate Drop
Unfortunately my home fell in price according to the official BC Assessment. Every year in January the assessed value is updated, and mine fell about 10% in 2020. 🙁 That’s in line with other properties around Metro Vancouver. Lending Loop also wrote off $2,000 worth of my portfolio due to bad loans. Overall my net worth took a beating this past month. But we can’t expect things to go up all the time.
The good news is after selling the farmland I’m now holding a big chunk of cash which I can invest in something new. I actually made a real estate purchase recently but I will cover that transaction next month as it’s not completely finalized yet.
Liquid’s Financial Update January 2020
*Side Incomes: = $2,600
- Part time job =$700
- Freelance = $200
- Dividends =$1200
- Interest = $500
*Discretionary Spending: = $2,200
- Food = $400
- Miscellaneous = $800
- Interest expense = $1000
*Net Worth: (ΔMoM)
- Total Assets: = $1,221,000 (-$213,300)
- Cash = $283,500 (+234,000 sold farmland)
- Canadian stocks = $217,700 (+33,700)
- U.S. stocks = $145,200 (-1100)
- U.K. stocks = $23,000 (-400)
- Retirement = $146,600 (+2700)
- Mortgage Funds = $38,500 (+600)
- P2P Lending = $35,500 (-1,800)
- Home = $331,000 (-36,000 assessed land value 2020)
- Farmland = $0 (-$445,000 sold it)
- Total Debts: = $218,800 (-186,000)
- Mortgage = $184,800 (-400)
- Farm Loans = $0 (-161,300)
- Margin Loans = $34,000 (-300)
- Farmland sales cost = $0 (-$24,000)
*Total Net Worth = $1,002,200 (-$27,300 / -2.7%)
All numbers are in $CDN at 0.76/USD
Ouch. A $27K cut to net worth is not a good way to start the year. One month does not make a trend. But there’s an old adage that says, “as goes January, so goes the year.” A gain or loss in January has correctly predicted stock market’s overall movement for the entire year with great historical accuracy. We’ll have to wait and see how the rest of 2020 plays out. But in the meantime I’ve replenished my Canadian stocks. I also contributed to my TFSA for 2020, but haven’t decided what to buy with the money yet. 🙂
Random Useless Fact:
The average time spent by recruiters looking at someone’s resume is 5 to 7 seconds.
Hey, ive been following you on and off for years ever since i saw your article in the province newspaper (i wanna say over 5 years ago). Love your content, I was wondering have you ever thought of starting a YouTube channel for the amount of content that you’re producing? not only for that but also the extra income. I follow quite a few financial people on there and the extra income once you grow seems big. But at the end of the day id just love to see ya make one hahah thanks!
Hey Connordk. Thanks for being a long time reader. I’ve considered running a YouTube channel before. There’s currently a void in that space for quality content for Canadian investors. Graham Stephan does a great job already, and he’s funny. But his audience is more focused in the U.S.
I’m too camera shy to start recording videos of myself, which is why I haven’t created a channel. It’s also a challenge since I want to keep my anonymity. 🙂 It would be great to get someone else to create visuals and readings of my blog posts, but I don’t want to pay for that. If a YouTuber wants to partner with me I’d be open to the idea though.
Having your assessed value drop can be a good thing. That should translate to lower taxes! As for what the market is actually doing in your area, only the comps can tell you that.
I agree. Lower assessed value can be a good thing. The combs are looking pretty steady right now. 🙂
Great job! Your side income is very impressive. I was wondering for its tax efficiency, do you suggest any strategy? (Specifically for part-time job and freelance?
Thanks. I’ve been building up my side incomes for about 10 years now so it has gotten a lot bigger than when I first started. I asked for a wage increase at my part-time job last year and got a 9% raise. To minimize taxes I treat my freelancing gig as a business. It’s registered as a sole proprietorship which means I can deduct any expenses before the net income from my freelancing is added to my personal income.