5/20/2019

Things to do during your journey to financial independence


Starting your journey to financial independence can be very exciting at first, tracking your monthly cash flow, seeing your net worth change, learning about investing, and even planning what to do with all your wealth once you've accumulated them. After the initial excitement, you'll probably start wondering what else is there to do? Today I am going to share things that I've been doing since I started this journey to keep the excitement alive.

5/13/2019

A money tree that gives you $1 a day.


As the saying goes, "What, Do you think money grows on trees?". Well, I am going to show you that money does grow on "trees" and how you can get your hands on such a tree. This idea came to me the other day when I was talking to my wife about the current materialistic culture that we lived in. She said people don't want to invest in stocks because they can't show off their investment. I started thinking, what if you can buy a tree that gives you $1 a day, how many people will buy such a tree and how much will it cost? I can't answer the first question, but I can roughly tell you how much it should cost.

5/09/2019

Why you actually make less than minimum wage!


So I've recently read a book called "Your
Money or Your Life" by Vicki Robin, it's a personal finance book about how to become FI (Financial Independent). It layout a 9 step program on how to achieve FI, which I am proud to say that I've been doing a lot of the steps already. One of them was tracking your net worth and your monthly cash flow. I use an app called Mint to track my cash flow, it can be linked to your bank account and credit card so you have a dashboard of all your finance. You can then login to their website and it gives you a history of your monthly cash flow, it is very cool especially if you love looking a past statistic of your finance like me.

Anyway, back to my topic today, in this book one of the steps was to find out your true hourly wage. The reason for the exercise was to make you realize what your time is truly worth and give you a different perspective about working.

5/01/2019

Neighbour Joe - May 2019 Net Worth

Time for another monthly Net Worth update.

Asset
Chequing: $2,685.62
Savings: $6,515.11
TFSA Investment: $91,285.85 (Market Value)
RESP: $2,039.45 (Market Value)
*Real Estate: $224,000 (Purchase Price of my house)
**Define Benefit Work Pension (Transfer Value): ~$153,000 (Last checked in Jul 2017,aprox $1000 a month of contribution)

*These have not been updated since the start of this blog.
**Automobile is not included (No monthly car payment)

Liabilities
Mortgage: $121,099.50

*Credit Card is paid in full every month

Last Net Worth Update: $347,353
Current Net Worth: $358,426.53(+3.2%)

Passive Income
Current Passive Income: $2,940.24/Year or $245/Month

Quite an increase this month for my net worth. A few factors contributed to this increase, a large tax return from CRA, investment performance, and aggressive savings. Also reached a small milestone this month, this is the first month since I started this journey that my liquid assets, which is all my assets minus real estate and pension, is over $100,000. My next milestone will be when my liquid assets become greater than my liabilities. These milestones are important for motivation and momentum purpose.

4/16/2019

Neighbour Joe - Current Investment Portfolio

Today I am going to a quick summary of my investment portfolio. The last time I posted about my portfolio was back in 2017, shortly after this blog started. In the past two years, I have read a lot of books about investing and my current strategy is very different from what I posted in 2017. My current strategy is based on the focus value investing embraced by billionaire investor Warren Buffet. Basically, you find a good company that is undervalued and you go heavy on it. Your portfolio should be focused so that you maximize the gain from your winners. Personally, I am trying to keep a portfolio of around 10 companies. Here is a picture of my current portfolio.

Most of my holdings are dividend paying company with a few growth companies. A majority of the company are big and well-known because, in my opinion, it indicates that it is a successful and established company. Feel free to use my portfolio as a starting point to build your own wealthy portfolio, just make sure to do your own research.

4/08/2019

Two years into the journey and time for a quick summary

It's been two years since this blog started along with my journey to wealth. Just figure this will be a good time to summarize my progress and what I have learned in the past two years.

Net Worth
So I've plotted out my net worth on excel and added a 3-year linear projection trend line. For my initial net worth, I added in my pension value into it so the data makes more sense. From the trendline I should be well on my way to half a million net worth in the next 5 years, guess we'll wait and see. 

Net Worth April 2017: $265,905
Net Worth April 2019: $347,353 (+30%)

It's been a pretty good two years, my investment portfolio did exceptionally well which gave me a good boost in my net worth. I've also been saving my income more diligently which helps a lot.


What I have learned?
One of the big things I learned is that getting rich is simple but requires a lot of discipline and effort. It's very similar to getting fit, there is no shortcut, you just need to work out often. Similarly, to grow your wealth, you just need to save more and invest your money wisely. The journey to wealth is not a sprint but a slow long marathon.

From an investment perspective, I am starting to learn about income investing and value investing which is a little more complicated than index investing. Starting to understand the ownership perspective in investing rather than from a trader/speculator's perspective and to think long term investing.

Summary
After starting this journey I have read a lot of books and blogs on personal finance, listened to a few podcasts and become more in tune with my money than ever before. I have shared my passion for personal finance, investment and early retirement with whoever wanted to listen. After two years, I would say that I am truly passionate about personal finance.

4/03/2019

Neighbour Joe - April 2019 Net Worth

Time for another monthly Net Worth update.

Asset
Chequing: $800
Savings: $1,505
TFSA Investment: $87,734 (Market Value)
RESP: $1,749 (Market Value)
**Real Estate: $224,000 (Purchase Price of my house)
**Define Benefit Work Pension (Transfer Value): ~$153,000 (Last checked in Jul 2017,aprox $1000 a month of contribution)

*Automobile is not included (No monthly car payment)
**These have not been updated since the start of this blog.

Liabilities
Mortgage: $121,435

*Credit Card is paid in full every month

Last Net Worth Update: $342,217
Current Net Worth: $347,353(+1.1%)

Passive Income
Current Passive Income: $2,308/Year or $192/Month

So starting this month, my wife and I have decided to try to save 50% of our take-home income, which translates to around $2,300 a month in savings. Hopefully, by doing this we'll be able to achieve financial independence quicker and retire early. 

3/31/2019

Low cost DIY RESP, no more high management fee!


Hello, today I'll be writing about RESP and how you can open and manage your own RESP to avoid paying a hefty management fee. First off, for those that don't know what RESP is, it stands for Register Education Saving Plans. Like the name suggests, it helps with parents saving for their kid's education fund. There are two big benefits to this plan, the first is that the gains are not taxed if the money is used for education. The second benefit is the Canada Education Savings Grant (CESG), which is the government's contribution to the RESP. The government will contribute a maximum of $600 into the RESP depending on your income and contribution.

For more information with regards to CESG, you can find it on the CRA website. Here is the link: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/registered-education-savings-plans-resps/canada-education-savings-programs-cesp/canada-education-savings-grant-cesg.html  

There is also a lifetime contribution limits of $50,000, again I'll suggest you check out the CRA website for all the information.

Opening an RESP
Well, first of all, you must be a parent to open an RESP. Sorry, if you are just planning to become a parent, the government won't let you plan that far ahead. Once your child is born then you can go to any organization that can sell investment or securities and open an RESP account. I myself opened an RESP Direct Investing account through my bank, similar to what I did for my TFSA. A lot of people think that just because it's an RESP you have to go through some education mutual fund company. However, you can buy individual stock, ETF or index fund within an RESP account. Banks will never tell you that option because they'll want to sell you one of their mutual fund for your RESP, therefore you'll have to specifically ask for a direct investment account.

Why do you want to do this? Because this way you can invest in a low-cost index fund for your RESP instead of a high-cost mutual fund. One of the RESP funds I saw had an annual management fee of 3% compared that to an index fund where the management fee is around 0.05-0.5%.

Managing your RESP
There isn't much management to be done, once you have an account open, set up for an automatic monthly contribution of $210, this will max out the government's contribution. Then you can go in every month to buy a low-cost index fund, mine is currently invested with the TD e-series Index funds. Then in a few months time, you'll see the government's contribution automatically being put into your account. I usually spend 5 minutes a month managing the RESP, so it is completely doable for any parents.

Watch it Grow
Then now you can sit back and watch your child and the RESP grow for the next 18 years.


3/20/2019

Neighbor Joe - Passive Income March 2019 - $2,308/Year

Here is my latest passive income updates. I have reshuffle my portfolio to be more defensive, dividends and blue chip stock focus. I won't write out the details of my portfolio but will just provide a screenshot of my income page from my investment account.



My account is setup for DRIP, which means that dividends if possible are reinvested for addition share of that company. For example, every quarter, the dividend from Fortis (TSE:FTS) buys me two additional share of Fortis. If you want to learn more about DRIP, check out my post here.

November 2019 ($1704/Year):
http://www.slowlybutwealthy.com/2018/11/neighbor-joe-passive-income-november.html 

February 2018 (1577/Year):
http://www.slowlybutwealthy.com/2018/02/neighbour-joe-february-2018-157733year.html

December 2017 ($1463/Year):
http://www.slowlybutwealthy.com/2017/12/neighbor-joe-passive-income-update.html 

Original Post ($1024/Year):
http://www.slowlybutwealthy.com/2017/10/neighbor-joe-passive-income-1024year.html

3/12/2019

Neighbour Joe - March 2019 Net Worth

Here is my latest and greatest net-worth update as of today 13 March 2019.

Asset
Chequing: $1,146
Savings: $1,005
TFSA Investment: $84,830 (Market Value)
RESP:$1,304 (Market Value)
**Real Estate: $224,000 (Purchase Price of my house)
**Define Benefit Work Pension (Transfer Value): ~$153,000 (Last checked in Jul 2017,aprox $1000 a month of contribution)

*Automobile is not included (No monthly car payment)
**These have not been updated since the start of this blog.

Liabilities
Mortgage: $121,764

*Credit Card is paid in full every month

Last Net Worth Update: $336,139
Current Net Worth: $343,521(+2.2%)

As you can since, in comparison to last month's breakdown, I have shifted focus from paying down my mortgage to max out my TFSA. Also, since I have recently opened a DIY RESP, I'll putting a post together later this month to give some simple advice on RESP. I'll also be providing an update on my passive income as I have recently shuffle up my portfolio to focus more on defensive stock. Here was my last passive income update.