July was a decent month. So far in 2014 my wealth has grown by $100,000! Most of that came from investment gains. Awesome possum! 😀 My asset column is growing steadily. If I hypothetically buy a one bedroom, shoebox condo tomorrow for $200,000 then BOOM! I’d technically be a millionaire by gross assets! Just thinking about that gets me all kinds of excited 😀 But I have to be careful not to over extend myself with leverage.
It’s an interesting realization that my current $303,600 net worth is about 36% of my total assets. This means a 36% correction of my overall investments right now would WIPE OUT my entire net worth. POOF! All my wealth would just disappear before my eyes 😥 Hopefully that won’t happen but who knows what the future holds 😕 That’s what I love about finance, it’s like a box of chocolates; I never know what surprise will await me 😉
Anyway it’s getting harder to find undervalued investments these days with the equities market being so darn high. So I took a slightly different direction with my investments recently. Rather than picking stocks, I spent over $10,000 instead on a huge shopping spree in July to purchase fixed income assets like bonds and MICs. Most of this spending had to come from new borrowed money but that’s okay. I’m not too worried right now because I emphatically feel like my debt will somehow take care of itself later 😉 #fingerscrossed
*Side Income:
- Part-Time Work = $800
- Dividends = $500
- Eating Out = $100
- Others = $200
*Net Worth: (MoM)
- Assets: = $838,300 total (+13,100)
- Cash = $2000 (+1200)
- Stocks CDN =$92,600 (-300)
- Stocks US = $52,700 (+600)
- RRSP = $49,000 (+6600)
- MICs = $15,000 (+5000)
- Home = $254,000 (same)
- Farms = $373,000 (same)
- Debts: = $534,700 total (+6,800)
- Mortgage = $197,700 (-400)
- Farm Loans = $205,600 (-500)
- Margin Loan CDN = $30,400 (-400)
- Margin Loan US = $23,900 (-1000)
- TD Line of Credit = $32,200 (-400)
- CIBC Line of Credit = $12,700 (-400)
- HELOC = $18,700 (-1000)
- RRSP Loans = $13,500 (+10,900)
*Total Net Worth = $303,600 (+2.12%)
All numbers above are in $CDN. Conversion rate used: 1.00 USD = 1.09 CAD
On the asset side, thanks to the inclusion of the new bonds, my RRSP is now almost at $50K 🙂 I decided to add my $5K of new MICs to the “MICs” asset category (and did not include the value in my “RRSP” category) even though they’re held in my RRSP account. This is for more descriptive bookkeeping purpose only. On the debt side my “RRSP loans” went up big time, but I plan to pay it down at least $1K a month. For the time being I want to just hold onto my current assets. Today I have about 75% of my assets in hard wealth, and 25% in paper wealth. That seems to be a good balance for me 🙂
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Random Useless Fact:
The Hawaiian pizza was invented in Ontario, Canada. And the California Roll (sushi) was invented in Vancouver, BC Canada.
Wow!! You are killing it, man. Congrats on yet another very successful month. Inspiring as always.
cheers
R2R
ps: had no idea the hawaiian pizza and california rolls were Canadian inventions 🙂 I knew the California roll was a western thing and the Japanese hate it when you call somethign a Calif roll.
Thanks dude. You’re killing it with your passive income too, especially your year over year growth. 😀 Haha, I love them Calif rolls 😛
I am about to shift you i am at $261,249.08 now, my entreprise is going sooooo well i can’t believe it.
Keep working hard men it’s gonna be all worth it when we are old 😀
Whoa, that’s amazing mon ami. I remember in 2013 you were at $100K maybe? I’m glad your retail career is so successful 🙂 Pretty soon your net worth will surpass mine lol. Keep me updated!
Great to see your net worth continue to rise. 2014 has been a banner year for you. Keep up the aggressive asset building.
Do you know if MIC’s allow international investors?
Thanks 🙂 Publicly traded MICs on the Canadian stock exchanges can be bought by international buyers, but I’m not sure how much tax will have to be paid 😐
Congrats on another solid month… A $100000 increase this year in net worth is quite impressive
Thank goodness for diversication 😉
Exponential curves are truly amazing things if you have the patience to watch them grow… Congratulations as usual my friend….. Keep an eye on the prize at all times, and listen only to your own drum beat. Only you will know what will work for you. – Cheers
I am almost nervous about a potential large correction coming. So many asset classes (real estate, stocks, bonds) have had a great run and are starting to look a bit wobbly 😕 But then I realize there’s no way I could hope to properly time this bull market so there’s no point worrying about something that’s out of my control.
Awesome gains, congrats on breaking the $300k net worth 🙂 I’m falling behind, I better step it up a bit!
July was a rising month for my stocks, but the last couple days wiped me out $6k in paper profits.
My stocks were hit hard too. I’m down about the same amount over the last week. I wonder if this is the beginning of something worse.
Wow, another solid income, congratulations! I love pizza too, but I didn’t know that it came from Canada.
You should try our Poutine if you haven’t already. It’s a bit high in caloric content, but full of deliciousness 😉
“…I emphatically feel like my debt will somehow take care of itself later”
LOL, I really hope you’re right. You are leveraged WAY beyond my comfort zone.
Good update
Thanks 🙂 My secret plan for my debt is to actually inflate my way out of it, which is what I believe the central banks around the world are doing for their sovereign debts.
2% gain is pretty damn solid if you ask me especially after theat huge upward swing u had couple months ago. I like you have everything working for you with the rrsp loan and Heloc. Things I might consider when the time and opportunity is right. Yes it has accelerated your gains as long as you are fine with leveraging its all good.
Good Day and Grind On!
Looks like you’ve recently taken on a bit of risk as well with your Apple options. Glad to see I’m not the only crazy one around here. I find it easier than most to say “yes” to leverage because if I know I can borrow at 3.5% today and am pretty certain I’ll get 7% or higher in a farm, high-yield bond, or a MIC. That’s just my opinion but it’s not one that is shared by most lol. I actually don’t know if my investments will fail or succeed because I haven’t built up enough confidence or experience yet. But what I do no for sure is I can’t reach my goal of freedom 35 if I just do the same thing as everyone else. I’m going to get rich or go broke trying 😀
Liquid congrats on increasing your net worth by $100,000 so far this year! That’s great, it usually takes me an entire year to get an increase like that. I just wouldn’t feel comfortable using that much leverage, but like you say to achieve your goal you gotta step it up a little!
Cheers!
Your net worth is a lot larger so reducing risk to focus on capital preservation makes the most sense as your top priority 🙂
Huh, I didn’t know you farmed. What crop(s)?
Rape plants 🙂 We call them canola up here.
Huh. Interesting. I was expecting “corn”.
Great job, you are having a very successful month!
Thanks Chelles 🙂 It’s amazing we haven’t seen higher levels of inflation yet with asset prices so high.
Love the steepness of the net worth graph at the end there!
Looks like I’m really lucky this year 🙂
Luck has nothing to do with it, when you pre-plan where you want to be – Freedom Thirty-Five ring a bell? I’m not saying everything will work out all the time, but the trend will work out with the effort in. Your chart is a result of your thoughtful planning and execution of said plan my friend. – Cheers
High yield bonds can be found at most discount brokerage firms. I purchased some last month. The risk is losing part of the initial investment if the company defaults on its debt payments. Farmland return of 7% is a mixture of 3% cash rent, plus 4% expected capital appreciation. The risks are higher property taxes in the future, floods, and not being able to find a suitable tenant 😐
That’s a good part time income! I’m a big fan of pizza and sushi too btw! 🙂
Pizza is my guilty pleasure lol. I find even the not so good kinds of pizza are still pretty decent.
He don’t include a single negative cash flow item in your calculations.
Things like loan interest payments, rental property maintenance and property tax would decrease the yearly cash flow.
Other investment cash flow like the dividend 15 percent tax rate also would drag down the total yearly cash flow from 60,000.
It’s also important to note that such aggressive leveraging as way to get rich works great in a economic feast period/credit bubble like for Canada but will have a much more miserable outcome during any economic down turn especially when the investor has minimal liquid assets in reserve to survive a famine period.
Based on general accounting guidelines I don’t think my budget should be included in my net worth calculations. But I’ve written in previous posts about my $1100 monthly farmland mortgage, my condo mortgage, and details about the interest rates of my LOCs and margin loans. You can look through my older posts for more information. 🙂 My dividends are usually taxed pretty lightly thanks to the Canadian dividend tax credit. It uses a gross up formula based on one’s earned income which for my personal situation works out to an effective tax rate of roughly 5%. But again, that’s a separate variable that has to do with an income statement, so I didn’t include it in my balance sheet. Also, I’m not sure what you mean by drag down my cash flow from $60,000. How did you calculate this number? My annual cash flow is less than $20,000, which I’ve blogged about also in the past. And when I run out of money I simply just borrow more to sustain myself, which is why my debt level keeps getting higher every year since 2010. I agree that using leverage during an economic downturn is not the best situation to be… Read more »
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Great work. Wow borrowing money to invest is risky but you are managing the risky very well. keep up the great work!
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