Year End Review 2021 – Liquid Net Worth Update Q4

So long 2021

What a year it has been. No matter if you switched jobs, made money in the markets, or faced financial hardships, it’s fitting to say that this has been a year of change for many people.

Personally it has been an incredible year for myself and my wife. In terms of income we both made more than 2020. My wife is self employed and works in the mortgage industry. Her business did better this year.

However, there is more risk now than before as the precarious financial system is more reliant now than ever on cheap money. And that’s something everyone needs to be aware of.

2021 a year in review

Roughly one year ago I wrote down 5 goals I wanted to accomplish in 2021. Now that we are at the end of the year let’s see how things are going.

  • Increase household net worth by $250,000 (done)
    This target is $50,000 more than last year’s. I’m happy we were able to reach it. πŸ™‚ We are a duel income, no kids household, so we saved a lot of money this year. But surprisingly most of our net worth increase in 2021 actually came from investment gains. Our stock portfolio alone experienced nearly $200,000 of appreciation excluding any new contributions. We are heavily invested in the tech and financial sectors.
  • Create personal finance videos (done)
    Year to date I’ve uploaded 39 videos. These are created to highlight financial topics that are easier to explain with visual and audio guides than through text alone.
    You can find my latest video here where I share 7 productivity tips that I use to increase my net worth.
  • Invest in the psychoactive drug market (done)
    I put some money towards small companies in making or selling psychedelics. You can read about which stocks I chose in this previous post.
    So far I am down 20% in this space. This is a long term investment for me so I may add more to my positions in 2022.
  • Reassess my investments for a potential deflationary environment (done)
    I purchased a lot more defensive stocks than growth stocks this year. But it looks like we didn’t see much deflation in the economy. Instead we got inflation. Companies that can maintain pricing power are what you should own when inflation is high. Also, real estate is always a good bet. And about half of my portfolio is real estate.
  • Diversify away from North America (WIP)
    This one is still a work in progress. I’ve been selling monthly puts on Emerging Market ETFs. But so far none have expired in the money, haha. I’ve made about $400 in option premiums on Vanguard’s ETF (VWO) but do not own any shares yet. Maybe I have to get more aggressive with my options positioning. πŸ™‚

 

Liquid net worth – Oct through Dec

Here’s a summary of my liquid net worth changes for the last quarter of the year.
The last stretch has been amazing. The stock market is at all time highs.
A few put options got assigned so I was obligated to purchase some new stocks.
But most are performing quite well so far.

Liquid Assets:
Cash = $25,000 (+$4,000)
Canadian stocks & bonds = $386,000 (+34,000)
US stocks & bonds = $234,000 (+12,000)
Retirement = $235,000 (+7,000)
P2P lending = $27,000Β (unch)
Mortgage funds = $45,000Β (unch)
Total = $952,000

Liquid Liabilities:
Margin loan = $115,000 (+2000)
Total = $115,000

Liquid Net Worth = $837,000Β (+$55,000) + 7.0%

All numbers are rounded to the nearest $1,000 and in $CDN at 0.78/USD

 

That is a pretty substantial increase over last quarter. πŸ™‚ It also represents a 30% increase of liquid net worth year over year.

I am only $48,000 away from having $1 million in liquid assets. I’m hoping to become a liquid millionaire in Q1 of 2022. πŸ™‚

 

No Stopping the Real Estate Boom

In terms of fixed assets I’m expecting my real estate holdings to grow by over $100,000 next year as the new government assessed values release early next month in January. If you own BC property, you will probably be pleasantly surprised with your new assessment as prices have increased a lot in 2021. I’m certainly excited to see what my rental properties are worth. πŸ˜€

According to the Canadian Real Estate Association, prices in November across the country was up 20% year over year. I don’t think we’ll see another 20% increase in 2022. But due to a continued shortage of supply, and more residents moving into large Canadian cities, I expected average housing prices to continue to climb another 12% to 14% in 2022. At least that’s just my personal analysis. I could be wrong of course. Like before I didn’t think orthopedic shoes would work. But now I stand corrected. πŸ˜‰

 

The cryptocurrency roller coaster ride

This year Bitcoin has gone up to $88,190 and down to $33,100 CAD. That’s a huge amount of volatility. My plan is just to continue holding it for now.

I try to shake my phone every day and get free Bitcoin.
So far I have collected 0.00183055 BTC total for simply shaking my phone, lol.
That’s over $100 of free Bitcoins at today’s price. It’s not much, but it’s free money. πŸ™‚

You can get up to 1000 free Satoshis every day by spending 2 seconds to shake your phone.

Feel free to use my referral link here, if you want to sign up for Shakepay and get free Bitcoins as well.
I think the holiday $30 cash bonus is still valid for the time being.
Basically we’ll both get $30 if you sign up with that link and deposit $100 into your new account.

Besides Bitcoin and Ethereum I have bought some additional alt coins as well. I keep these in my Binance wallet.

I also have roughly $150 worth of Floki Inu, which has not done very well since I bought it haha.

My plan moving forward is to keep cryptocurrencies between 2% to 5% of my investment portfolio. That way if they all go to $0 it doesn’t have a large impact on my overall finances. But if they 10x in value (unlikely), then it will be substantial enough that I can sell a portion and make some meaningful contributions to dividend growth stocks, earning future passive income. πŸ™‚

 

Closing out 2021

I’m fortunate to have been well positioned when this year started. Most of the gains are just from buying quality companies and wait patiently as they do all the work.
My non-registered stock portfolio is almost worth $300,000 now.

I think once you have a large enough portfolio, it might be worth your time to look for ways to increase your returns instead of relying solely on a passive investment approach.

My margin account performed very well in 2021, thanks in part to my options strategy.
I was able to net $10,000 in option premiums, after accounting for commission and losses. Next year I hope to double this amount. πŸ™‚

It’s possible we’ll see a market pullback next year. Statistically we get a 10% or larger market drawdown about once a year. But if that happens then it’s just another opportunity to buy more. Despite the stock market being overpriced in general, there are still value to be found. For example, last week I uploaded a YouTube video showing how I purchased Richards Packaging (RPI.UN.)

The total purchase price was $6,059 for 100 units. After I released the video this investment shot up, and is currently worth $6,515 today, in less than a week.
Its P/E ratio was trading below its historical average, and I think it’s a good long term hold. It’s also a very thinly traded stock so not many people know about it.

Same thing in real estate. Yes, the overall market in Canada is expensive. But there are still pockets of opportunity where you can reasonably expect 10%+ annual returns, assuming you’re willing to hold the property for 7 or more years. Never interrupt compounding unnecessarily as Charlie Munger would say. πŸ™‚

 

______________________________________
Random Useless Fact:

Santa Claus only worn red since he started shilling for Coca-Cola

 

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Thomas Maurer
12/27/2021 6:18 pm

Congratulations on your performance this year. Impressive results. I agree I think we will see a continued rise in real estate prices in 2022. Probably 2023 as well. After that…who knows? Hopefully crypto has a nice run in Q1 so you rotate back into stocks.

AnotherLoonie
12/27/2021 10:41 pm

Glad to see you had such a great 2021, Liquid! I’m also interested to see what our property assesement is this year.

DreamingOfDividends
12/28/2021 3:53 pm

What a great way to end the year! Here’s hoping for more gains in 2022!

GYM
GYM
01/01/2022 12:05 am

Amazing, wow $55K increase in liquid net worth!! Every time I hit five digit gains I am happy. Here’s to Q1 Liquid Net Worth 2022!

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01/10/2022 11:21 am

[…] year I set out 5 goals and accomplished 4 of them. Not bad overall. πŸ™‚ The act of writing down goals, and tracking them over time has helped me so […]

Moe (Moementum Finance)
01/20/2022 9:04 pm

Quite impressive, Liquid! Well done man. My portfolio with Interactive Brokers also had a decent 1-year return of 25% plus but lots of gains are lost this past 1-2 weeks with all the correction/pullbacks. No worries there though as I am here for the long haul. Keep it up!