Liquid’s Mensa Results, 2020 Financial Plans, and More

I attempted to join Mensa. What happened next wont surprise you.

So I ran a Twitter poll asking what topic people would like me to write about. The top 2 picks were my Mensa test results and financial plans for next year. 🙂

What should I blog about next?

— Liquid Independence (@Liquid_f35) October 7, 2019

In today’s post I will discuss all 4 topics from the poll, but focus primarily on the 2 that got the most votes.

Mensa: The smart people club

So out of vanity I decided to take the Mensa exam earlier in the fall. 😎 Mensa is a non-profit international organization for the intellectually gifted. Only the top 2% smartest people in the world can be accepted into this private club. In Vancouver there are only about 200 Mensa members. There are other high IQ societies out there, but Mensa is the oldest, and most well known with over 130,000 members worldwide. Mensa members can attend local meetups and enjoy exclusive intellectually stimulating social events. I decided to join this club because I wanted to feel special. 🙂 So I handed over the $90 to take the formal Mensa exam.

There were 4 other applicants that day. We had a chance to make some small talk. They all seemed to be smarter than me. I felt like a Morty in a room full of Ricks. The test was 50 questions, and we only had 12 minutes. In the end I managed to answer 30 questions correct. Not bad. But unfortunately I needed 35/50 to pass.

So I failed to get into Mensa. 🙁 Oh well. I guess I’m just an ordinary peasant after all. Apparently I can re-take the test after a year. But I don’t think I can handle the rejection a second time. 💔

The Real Estate Market

Sales is a leading indicator for price. Both Vancouver and Toronto saw strong sales in the last couple of months, signalling potential higher real estate prices in the new year. In a typical cycle the market goes through 3 stages: from boom, to slump, to recovery, and then repeats.

In Vancouver I believe we are currently in a real estate slump. However we are either nearing the bottom of this slump, or have already hit the bottom and are now transitioning into the recovery stage where prices will start to climb again. If you plan to buy property around the Greater Vancouver area, the latest data from the Real Estate Board suggests the window to get in at the lowest point of this real estate cycle is closing fast.

Toronto is a bit of a different story. The low point was already hit last year in 2018. The recovery has been strong, and average prices now rival the 2017 peak. I anticipate interest rates will fall early next year. If that happens, property prices in major Canadian cities will become more expensive by the summer of 2020.

Cryptocurrencies

After selling all my Bitcoins a couple of years ago I haven’t found a good price to get back into it. The other problem is the exchange I used to buy BTC and ETH went bankrupt and lost all their client’s money. Luckily I got out before all that happened. I think the cryptocurrency market still needs time to mature before most Canadians can feel safe buying into it. I will keep an eye out for any regulatory changes, but don’t plan to jump back in any time soon.

Liquid’s 2020 Financial Plans

One of my goals next year is to become a landlord. 🙂 Technically I already am since I rent out my farmland every year. But I want to switch it up and buy a condo in the Vancouver area to rent out, maybe to a yuppy. I plan to do this by selling my farms, and using part of the proceeds to buy a local rental property. Based on my in-depth calculations, a good quality property in B.C. should give investors 10% to 15% annual return on investment over the next decade. In preparation to buy a rental unit, I have reduced by exposure to the REIT sector by selling all of my holdings in Allied Properties REIT (AP.UN) for a whopping $7,700 in profit. Yay! Hard to believe it’s already gone up 160% since I bought it 8 years ago. 🙂

Another theme I want to focus on in 2020 is dividend investing. I plan to increase my annual dividend income from the current $12,000 per year, to $20,000 per year. The TSX has underperformed the S&P 500 in 2019. Canadian stocks are now trading at a discount relative to U.S. stocks. I currently have 18% of my assets allocated to Canadian stocks. Ideally I would like to increase this to 25%. 🙂 And of course I plan to max out my RRSP and TFSA contribution room as usual. By the way, the 2020 TFSA contribution room is $6,000 so that would bring the total contribution room to $69,500 by next month.

I also plan to grow my net worth by at least $200,000 next year. That might seem like a big increase. But I have the advantage of a large portfolio. I currently have $1.4 million worth of assets. If it gains 10% next year, then I can make up the rest through passive income and savings. 😉

Lastly I am looking to pull back from my investment in Lending Loop. P2P lending has been a fun place to experiment with high yield loans. But the returns have been lower than expected this year. I also have a lot of loans in default – more than 10% of my portfolio. The liquidation process can take a long time to complete. That’s just the nature of small business loans in Canada. So I will take some money out of my Lending Loop account starting Jan next year. I’ll write more about this next week.

If all my plans work out then by this time next year I’ll have a higher net worth, a more balanced portfolio, and about 80% of the way to financial independence. 😀

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