Liquid Net Worth Update – Happy New Year!

Hey folks. It’s a new year, and that means new possibilities. This has been a special time for everyone. Quarantine can be hard on many people. But as an introvert I got used to it pretty fast.

We now all have 2020 hindsight. πŸ™‚ Between government aid and appreciating investments things are going well. Many have seen financial improvements in their lives since a year ago. Housing became more affordable thanks to lower interest rates and cheaper rents. And Canadians are saving more money than ever before.

In today’s post I will show my new liquid net worth numbers for the first time as a married couple. I will review last year’s goals, and discuss some exciting content I look forward to making soon. πŸ™‚

Liquid Net Worth Q4 2020

Since I have combined finances with my lovely spouse I will be sharing financial numbers as a single household. In order to respect my wife’s privacy I will only disclose our liquid assets and liabilities. The value of our house doesn’t really affect my stock picks and investment strategy anyway. I think this is a fair balance between showing transparency while maintaining our anonymity. The idea was inspired by GYM, a fellow Vancouver blogger who also tracks her liquid assets publicly.

None of our tenants know we own multiple rental properties and we plan to keep it that way. πŸ˜‰ Not included in the numbers below are the values of our properties, vehicles, precious metals, and other alternative investments.

Liquid Assets:
Cash = $18,000
Canadian stocks & bonds = $288,000
US stocks & bonds = $193,000
Retirement = $203,000
P2P lending = $27,000
Mortgage funds = 41,000
Total = $770,000

Liquid Liabilities:
Margin loan = $124,000
Total = $124,000

Liquid Net Worth = $646,000
All numbers are rounded to the nearest $1,000 and in $CDN at 0.78/USD

One obvious change from last year is my portfolio weighting. Last year about 50% of my portfolio was real estate. But purchasing the house naturally shifted my asset allocation. So now real estate makes up about 75%. Holding that much of one’s wealth in a single asset class may sound high. But I’m familiar with the market and don’t foresee any major risks.

I also sold all of my $20,000 European ETF (FTAL.) I initial purchased the FTSE UK All Shares index fund in 2016 to diversify my investment globally. I rarely sell any investments, but after several years of below average returns I have decided there are better opportunities in North America and Asia. The United Kingdom isn’t necessarily a bad place to invest. But at this time it doesn’t suit my needs.

 

2020 a year in review

The simple process of writing down your plans and then executing them works incredibly well. A year ago I had set out to do the following by the end of 2020.

  • Become a landlord. (Done)
    Due to capitalism wealth and income tend to concentrate among business owners and landlords. So I made it a priority last year to buy rental property. In 2020 I became the landlord of 2 rental suites.
  • Increase my net worth by over $200,000. (Done)
    It was a record year. I was fortunate to have $1.2 million of assets at the beginning of 2020. Nearly all of my net worth gain came from appreciating assets I already have.
  • Reduce my peer to peer lending exposure. (Done)
    I withdrew about $10,000 from Lending Loop. I still have $27,000 in the platform. I am no longer seeing the double digit returns I was once getting in previous years. LL management is doing all they can. But the pandemic has hurt the small business community. As a result many have trouble with loan repayments.
  • Increase dividend income to $20,000 a year. (Done)
    This happened pretty early in 2020. The stock market correction in March was a blessing in disguise for anyone confident enough to buy on the dip. πŸ™‚
  • Reduce my REIT exposure. (Done)
    I sold some Allied Properties REITs. This real estate investment trust operates downtown office buildings. You can imagine how badly it got crushed last year. It will be awhile before REITs recover.

Looking ahead I see huge potential in pharmaceuticals and value stocks for this year. And of course cryptocurrencies can also go a lot higher.

bitcoin price going up again

via https://www.reddit.com/r/Bitcoin/comments/91tgjd/tmrl/

I will be writing liquid net worth updates quarterly. But over the next few weeks I plan to post more details about my financial plans for 2021. I’ll point out what trends I’m looking at, and which asset class is interesting to me. I’ll also try to make a video and upload it discussing how leverage can be used to manage financial risk. πŸ™‚

 

Β Β  β€”β€”β€”β€”β€”β€”β€”β€”β€”β€”β€”β€”β€”β€”β€”β€”β€”β€”β€”β€”β€”β€”β€”β€”
Random Useless Fact:

 

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Chris @ Mindful Explorer
01/04/2021 9:20 am

Great work in 2020 and I am sure 2021 will be a roller coaster. Will the pandemic continue? What will happen with businesses that final can’t handle reduced revenue and closures? What investments will surge? What will the political and economic climate be when it comes to dealing with fiscal stimulus and support from government gets to the point of having to begin the rebuild process out of huge debt?

But this has all happened in the past & will happen again. Just different names and different reasons.

Shrek is 20 years old !! wow

Financial Samurai
01/04/2021 5:23 pm

Wow! Looks like you had an amazing year! This is the first year in review I read with no negatives. Congrats.

Ours was tough bc schools shutdown. So we had two little ones at home all day. Made for long and exhausting and sometimes frustrating days.

Financially, we did Ok. But I’d rather have my freedom! Maybe it’ll come in 2H2021 lol.

My YIR is in the URL.

Sam

GYM
GYM
01/05/2021 12:00 am

Thanks for the mention Liquid. Looking forward to see what you have in store for 2021!

GYM
GYM
01/05/2021 9:48 pm

Haha, you are going to smoke me by the end of this year, I know it!

beth
beth
01/06/2021 5:12 am

Have you hired a rental management company or do you do it all yourself? I am incredibly unhandy and impatient and more suited to owning REITs.

FreshLifeAdvice
FreshLifeAdvice
01/06/2021 11:48 am

Haha Liquid, your 3 memes crack me up! Love the blog! Congrats on smashing all of your 2020 goals – very impressive. Keep up the great work. Happy 2021!

Impersonal Finances
01/08/2021 2:00 am

I still don’t understand cryptocurrencies as much as I should, but holy cow are they on the rise. We’ll see how that plays out, but so far it has included lots of FOMO! Awesome job checking off those 2020 goals!

Rohit Joshi
Rohit Joshi
01/10/2021 10:05 pm

Congrats on the great year over year again. Can you provide some tips on how to become Debt free because not matter what I do my debt increases every year