tag:blogger.com,1999:blog-80933759686433252322024-03-18T23:50:58.807-04:00Slowly But WealthyOur journey to financial freedom.KKLhttp://www.blogger.com/profile/02443516906861976858noreply@blogger.comBlogger77125tag:blogger.com,1999:blog-8093375968643325232.post-46879458101551923212020-08-31T03:30:00.001-04:002020-08-31T03:30:00.742-04:00A money tree that gives you $1 a day.<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj4rAVq-pW-BuJYSdbq1YJ89JiKU4Z9RZ8aTyYzqyMEJx5hNZr659XxQ5E8tYl8yuiX41mLn0LrjmrGtT9BNO5rhr6dJM7x3pS-EioOoc1dMrPtrl6pbab_NsUEctdyP2jqaSIKtRU4Nyo_/s1600/XBxQZLNBM0Q_Full.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="1067" data-original-width="1600" height="266" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj4rAVq-pW-BuJYSdbq1YJ89JiKU4Z9RZ8aTyYzqyMEJx5hNZr659XxQ5E8tYl8yuiX41mLn0LrjmrGtT9BNO5rhr6dJM7x3pS-EioOoc1dMrPtrl6pbab_NsUEctdyP2jqaSIKtRU4Nyo_/s400/XBxQZLNBM0Q_Full.jpg" width="400" /></a></div>
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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.<br />
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If you haven't figured out, I am using the "tree" as a metaphor for a stable blue-chip dividend paying company. Let's use a company from my <a href="http://www.slowlybutwealthy.com/2019/04/neighbour-joe-current-investment.html">investment portfolio</a>; for simplicity, I am going to use RioCan REIT(TSX: REI.UN); it currently pays $0.12/shares every month. To receive $1 a day from dividends, you'll need to get about $31 every month. Therefore, $31/$0.12 = 258 Shares, which at about $15 shares will equal to a total of $3,870. So, that's how much a RioCan REIT "tree" will cost you, and you don't even need to water it. Prices can vary, some trees are more prone to failure due to bad genetics problems so those might cost a little less.<br />
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This is just a fun little way to get you thinking about investment from a materialist perspective. Sure that beautiful jewelry or that new watch do look good on you, but wouldn't a money growing tree be so much cooler.Neighbour Joehttp://www.blogger.com/profile/16132272848801206152noreply@blogger.com0tag:blogger.com,1999:blog-8093375968643325232.post-65462676245487117282020-04-20T16:12:00.000-04:002020-04-20T16:12:02.298-04:00Must read personal finance books!<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgYaQQZPmDbRPstYS8t7obOkQ3ujKmtXw-YqxPn9Yca8IDAanFKdsBhB_RbQBAcCeJIitguZd8v96uO54YI1LRruycOzGbHpe-lmUNRklh84yhrIMPp2XpAZZV_3JFajervGJBD8r8PvW15/s1600/sharon-mccutcheon-532782-unsplash.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="1067" data-original-width="1600" height="266" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgYaQQZPmDbRPstYS8t7obOkQ3ujKmtXw-YqxPn9Yca8IDAanFKdsBhB_RbQBAcCeJIitguZd8v96uO54YI1LRruycOzGbHpe-lmUNRklh84yhrIMPp2XpAZZV_3JFajervGJBD8r8PvW15/s400/sharon-mccutcheon-532782-unsplash.jpg" width="400" /></a></div>
The question a lot of people, myself included, ask when they start their journey is, what are the must read personal finance books. Reading has been an essential part of my journey, and I will highly advice anyone trying to reach financial independent to try and read a book a month. Here is a list of books that I've personally read and will recommend for people that want to learn more about personal finance.<br />
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<u><b>Practical</b></u><br />
These books provide straightforward, practical advice on how to become wealthy and simple advice on developing a wealthy mindset. If you are just starting out and not sure where to begin, take a quick read at some of these books. After reading these books, I remember thinking to myself, "This whole getting wealthy thing is pretty simple."<br />
<ul>
<li><i>The Wealthy Barber Return</i> by David Chilton</li>
<li><i>Total Money Make Ove</i>r by Dave Ramsey</li>
<li><i>Unshakable</i> by Tony Robbins</li>
<li><i>Your Money or Your Life</i> by <span data-ved="2ahUKEwjEor3p_cPiAhUQT98KHdAEBdwQ2kooAjAUegQIDBAL">Vicki Robin</span></li>
<li><i>You Can Retire Sooner Than You Think</i> by Wes Moss</li>
</ul>
<u><b>Mindset</b></u><br />
These books focus on the wealthy mindset and how to develop such a mindset. They show you how you should think about money the way wealthy people think about money. These books will change the way you save, the way you earn, the way you spent, and how you invest.<br />
<ul>
<li><i>Rich Dad Poor Dad by Robert</i> by Robert Kiyosaki</li>
<li><i>The Art of Thinking Clearly</i> by <span data-ved="2ahUKEwjWttj3_sPiAhWKd98KHdPaAS8Q2kooAjAVegQIDhAL">Rolf Dobelli</span></li>
<li><i>Secrets of the Millionaire Mind</i> by <span data-ved="2ahUKEwiXo7qB_8PiAhVJuVkKHa3nBz0Q2kooAjAcegQIDBAL">T. Harv Eker</span></li>
<li><i>You Are a Badass at Making Money</i> by <span data-ved="2ahUKEwjQkJCL_8PiAhUDWN8KHatRA4gQ2kooAjATegQICxAL">Jen Sincero</span></li>
<li><i>Millionaire Next Door</i> by <span data-ved="2ahUKEwjwpfuc_8PiAhXyRt8KHV-CB9EQ2kooAjAeegQIDBAL">Thomas J. Stanley</span></li>
<li><i>The Millionaire Mind</i> by <span data-ved="2ahUKEwjwpfuc_8PiAhXyRt8KHV-CB9EQ2kooAjAeegQIDBAL">Thomas J. Stanley</span></li>
</ul>
<u><b>Investing</b></u><br />
These books are all about investing and the skills, and personality you need to become a good investor. Reading these books will definitely make you a better investor<br />
<ul>
<li><i>Big Mistake</i> by <span class="st">Michael Batnick</span></li>
<li><i>Invested</i> by Danielle Town</li>
<li><i>The Warren Buffett Way</i> by <span data-ved="2ahUKEwi6t6PI_8PiAhVKT98KHSSbCuUQ2kooAjANegQIDBAL">Robert G. Hagstrom</span></li>
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<span data-ved="2ahUKEwi6t6PI_8PiAhVKT98KHSSbCuUQ2kooAjANegQIDBAL"><b>How to Read Books on a Budget</b></span><br />
<span data-ved="2ahUKEwi6t6PI_8PiAhVKT98KHSSbCuUQ2kooAjANegQIDBAL">I used to buy a lot of books from stores, until one day I realize how much money I was spending on books. Then I decided to never pay for books ever again. Instead, I got a library card (Yes, it still exists) and started burrowing ebooks for free. It was the best decision ever, not only was it free, but I can also read my books anywhere at any time.</span><br />
<span data-ved="2ahUKEwi6t6PI_8PiAhVKT98KHSSbCuUQ2kooAjANegQIDBAL"><br /></span><span data-ved="2ahUKEwi6t6PI_8PiAhVKT98KHSSbCuUQ2kooAjANegQIDBAL">Leave a comment and let me know what your favourite personal finance book is. </span>Neighbour Joehttp://www.blogger.com/profile/16132272848801206152noreply@blogger.com0tag:blogger.com,1999:blog-8093375968643325232.post-22017764060878038672020-04-11T22:25:00.001-04:002020-04-19T14:51:16.031-04:00Neighbour Joe - April 2020 Net Worth<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjplVYfGWh6-flAsVCrZRG42g_dd6dkZKr6xh67j-snWX4cwzb3PzdJFrB2NZmf-uuv5Hkwa3QdVxlZIPlIBfjx9TvtIkpZRbd1p7YBBBAbv01JWexuJYvnlH2vs9xUe4pXyWfrRxARzqON/s1600/michael-longmire-RhBVoJnRqVg-unsplash.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="1067" data-original-width="1600" height="266" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjplVYfGWh6-flAsVCrZRG42g_dd6dkZKr6xh67j-snWX4cwzb3PzdJFrB2NZmf-uuv5Hkwa3QdVxlZIPlIBfjx9TvtIkpZRbd1p7YBBBAbv01JWexuJYvnlH2vs9xUe4pXyWfrRxARzqON/s400/michael-longmire-RhBVoJnRqVg-unsplash.jpg" width="400" /></a></div>
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<span style="font-family: inherit;"><b><u style="background-color: white;">Asset</u><br style="background-color: white;" /><span style="background-color: white;">Chequing: $300.00</span><br style="background-color: white;" /><span style="background-color: white;">TFSA Investment: $97,466.04</span></b></span><b style="font-family: inherit;"><span style="background-color: white;">(Market Value)</span></b><br />
<span style="font-family: inherit;"><b><span style="background-color: white;">RESP: $4,192.89 (Market Value)</span><br style="background-color: white;" /><span style="background-color: white;">Real Estate: $224,000 (Purchase Price of my house)</span></b></span><br />
<span style="font-family: inherit;"><b><span style="background-color: white;">Real Estate Rental Property: $200,000 (Purchase Price of the house)</span><br style="background-color: white;" /><span style="background-color: white;">Define Benefit Work Pension (Transfer Value): ~$278,000(Last checked in December 2019)</span><br style="background-color: white;" /><br style="background-color: white;" /><span style="background-color: white;">*Automobile is not included (No monthly car payment)</span><br style="background-color: white;" /><br style="background-color: white;" /><u style="background-color: white;">Liabilities</u><br style="background-color: white;" /><span style="background-color: white;">Mortgage: $117,698.99</span></b></span><br />
<span style="font-family: inherit;"><b>Rental Mortgage: $193,974.95</b></span><br />
<span style="font-family: inherit;"><b>Line of Credit: $5,942.00</b><br style="background-color: white;" /><span style="background-color: white;">*Credit Card is paid in full every month</span></span><br />
<span style="font-family: inherit;"><br style="background-color: white;" /><span style="background-color: white;">Current Net Worth: $486,342.99</span><br style="background-color: white;" /><br style="background-color: white;" /><u style="background-color: white;"><b>Passive Income</b></u><br style="background-color: white;" /><span style="background-color: white;">TFSA Passive Income: $4,844.08/Year or $</span></span><span style="background-color: white;">403.67</span><span style="background-color: white; font-family: inherit;">/Month </span><br />
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<span style="background-color: white;">So in the last month when the stock market was taking a hit, I took leverage up and took money from my line of credit to max out my TFSA contribution for this year. I brought a lot of quality dividend stock such as Canadian Banks which is why my passive income has increased.</span>Neighbour Joehttp://www.blogger.com/profile/16132272848801206152noreply@blogger.com0tag:blogger.com,1999:blog-8093375968643325232.post-55081752437596153512020-03-13T15:46:00.000-04:002020-03-13T15:46:06.244-04:00Net Worth Update & Comments on Market<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiGQRRSJ3yGJ_aRbHQQEa6gMi_xA0CPk0rcLc2Bn7MHhyphenhyphenoSxDG2DEPRegxRHzbLTiDuT9J4w7fdj021kFA5ryCWecHc4J6k3acYKrpnYmG2jdeM7-Gd6xr2Pu8_1vVvw3NGgEVqGZCF8Wuw/s1600/Networth+march+2020.bmp" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="441" data-original-width="432" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiGQRRSJ3yGJ_aRbHQQEa6gMi_xA0CPk0rcLc2Bn7MHhyphenhyphenoSxDG2DEPRegxRHzbLTiDuT9J4w7fdj021kFA5ryCWecHc4J6k3acYKrpnYmG2jdeM7-Gd6xr2Pu8_1vVvw3NGgEVqGZCF8Wuw/s1600/Networth+march+2020.bmp" /></a></div>
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Here is my net worth update for both February and March 2020. My investment took a big hit due to the recent market downturn, but I was able to see all my Amazon shares at near the peak back in February. I have since put all those cash back into the market, picking up some stable blue-chip stock on the way down. </div>
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There is a lot of fear and panic going on right now, my advice for those that are in the market is to stay put and look for opportunities to buy. There is currently a lot of good companies that are trading at a deep discount right now, some of these company have a good track record of safe and reliable dividends. As the saying goes, "Be greedy when others a fearful." </div>
Neighbour Joehttp://www.blogger.com/profile/16132272848801206152noreply@blogger.com0tag:blogger.com,1999:blog-8093375968643325232.post-51806193572427256712020-01-06T14:35:00.000-05:002020-01-06T14:35:03.123-05:00Neighbour Joe - January 2020 Net Worth<span style="background-color: white;"><br /></span>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgHvOLd0dEPs821O0-waDhEMSOi342C0Tw87a7F5QztHvg3TykxaI0HiYvOdKHzEorYpH2hbQi2n6iEy-lFufX0rdohwed5ovxtp3boa8KsBb3gKCQHNkpDWKBbTFgfkXl_VWebeL-yvDv2/s1600/jamie-street--d6kTMGXV6E-unsplash.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="1200" data-original-width="1600" height="300" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgHvOLd0dEPs821O0-waDhEMSOi342C0Tw87a7F5QztHvg3TykxaI0HiYvOdKHzEorYpH2hbQi2n6iEy-lFufX0rdohwed5ovxtp3boa8KsBb3gKCQHNkpDWKBbTFgfkXl_VWebeL-yvDv2/s400/jamie-street--d6kTMGXV6E-unsplash.jpg" width="400" /></a></div>
<span style="background-color: white;"><span style="background-color: whitesmoke; color: #111111; font-family: -apple-system, BlinkMacSystemFont, "San Francisco", "Helvetica Neue", Helvetica, Ubuntu, Roboto, Noto, "Segoe UI", Arial, sans-serif; font-size: 14px; white-space: nowrap;"><br /></span></span>
<span style="background-color: white;"><span style="background-color: whitesmoke; color: #111111; font-family: -apple-system, BlinkMacSystemFont, "San Francisco", "Helvetica Neue", Helvetica, Ubuntu, Roboto, Noto, "Segoe UI", Arial, sans-serif; font-size: 14px; white-space: nowrap;">Photo by </span><a href="https://unsplash.com/@jamie452?utm_source=unsplash&utm_medium=referral&utm_content=creditCopyText" style="background-color: whitesmoke; box-sizing: border-box; color: #767676; font-family: -apple-system, BlinkMacSystemFont, "San Francisco", "Helvetica Neue", Helvetica, Ubuntu, Roboto, Noto, "Segoe UI", Arial, sans-serif; font-size: 14px; text-decoration-skip-ink: auto; transition: color 0.1s ease-in-out 0s, opacity 0.1s ease-in-out 0s; white-space: nowrap;">Jamie Street</a><span style="background-color: whitesmoke; color: #111111; font-family: -apple-system, BlinkMacSystemFont, "San Francisco", "Helvetica Neue", Helvetica, Ubuntu, Roboto, Noto, "Segoe UI", Arial, sans-serif; font-size: 14px; white-space: nowrap;"> on </span><a href="https://unsplash.com/s/photos/2020?utm_source=unsplash&utm_medium=referral&utm_content=creditCopyText" style="background-color: whitesmoke; box-sizing: border-box; color: #767676; font-family: -apple-system, BlinkMacSystemFont, "San Francisco", "Helvetica Neue", Helvetica, Ubuntu, Roboto, Noto, "Segoe UI", Arial, sans-serif; font-size: 14px; text-decoration-skip-ink: auto; transition: color 0.1s ease-in-out 0s, opacity 0.1s ease-in-out 0s; white-space: nowrap;">Unsplash</a></span>
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<span style="background-color: white;">Happy New Year, hopefully, you had a wonderful 2019. Here is my first net worth update for 2020.</span><br />
<span style="font-family: inherit;"><u style="background-color: white;"><b><br /></b></u></span><span style="font-family: inherit;"><b><u style="background-color: white;">Asset</u><br style="background-color: white;" /><span style="background-color: white;">Chequing: $271.34</span><br style="background-color: white;" /><span style="background-color: white;">TFSA Investment: $</span></b></span><b><span style="background-color: white;">105,801.22</span></b><b style="font-family: inherit;"><span style="background-color: white;">(Market Value)</span></b><br />
<span style="font-family: inherit;"><b><span style="background-color: white;">RESP: $4,311.772 (Market Value)</span><br style="background-color: white;" /><span style="background-color: white;">Real Estate: $224,000 (Purchase Price of my house)</span></b></span><br />
<span style="font-family: inherit;"><b><span style="background-color: white;">Real Estate Rental Property: $200,000 (Purchase Price of the house)</span><br style="background-color: white;" /><span style="background-color: white;">Define Benefit Work Pension (Transfer Value): ~$278,000(Last checked in December 2019)</span><br style="background-color: white;" /><br style="background-color: white;" /><span style="background-color: white;">*Automobile is not included (No monthly car payment)</span><br style="background-color: white;" /><br style="background-color: white;" /><u style="background-color: white;">Liabilities</u><br style="background-color: white;" /><span style="background-color: white;">Mortgage: $118,640</span></b></span><br />
<span style="font-family: inherit;"><b>Rental Mortgage: $194,949</b><br style="background-color: white;" /><br style="background-color: white;" /><span style="background-color: white;">*Credit Card is paid in full every month</span></span><br />
<span style="font-family: inherit;"><br style="background-color: white;" /><span style="background-color: white;">Current Net Worth: $498,741.33</span><br style="background-color: white;" /><br style="background-color: white;" /><u style="background-color: white;"><b>Passive Income</b></u><br style="background-color: white;" /><span style="background-color: white;">TFSA Passive Income: $3,774.92/Year or $312.08/Month </span></span><br />
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<span style="background-color: white;">The biggest change here is my Work Pension value, I recently checked my transfer value and it has increased significantly, almost double from the last time I checked. </span>Neighbour Joehttp://www.blogger.com/profile/16132272848801206152noreply@blogger.com0tag:blogger.com,1999:blog-8093375968643325232.post-47445830637847415912019-12-16T22:42:00.003-05:002019-12-16T22:43:10.655-05:00Neighbour Joe - December 2019 Net Worth<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiPMGLAn89kC7YyyhWOAt2jMdM2eur4nRronLhl_HQpxxkH_eL1XA9WpD6xLYUrUkrRPYa0CsvLllZE5GzksVcf_-Z9LO23kPjARTTHZ_8VTezCaVO4b_kBoWLggAYAK2RhRw1ypdYMg61J/s1600/December2019Networth.bmp" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="441" data-original-width="730" height="386" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiPMGLAn89kC7YyyhWOAt2jMdM2eur4nRronLhl_HQpxxkH_eL1XA9WpD6xLYUrUkrRPYa0CsvLllZE5GzksVcf_-Z9LO23kPjARTTHZ_8VTezCaVO4b_kBoWLggAYAK2RhRw1ypdYMg61J/s640/December2019Networth.bmp" width="640" /></a></div>
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<span style="background-color: white;">Here is my net worth for December 2019.</span><br />
<span style="font-family: inherit;"><u style="background-color: white;"><b><br /></b></u></span><span style="font-family: inherit;"><b><u style="background-color: white;">Asset</u><br style="background-color: white;" /><span style="background-color: white;">Chequing: $311.96</span><br style="background-color: white;" /><span style="background-color: white;">TFSA Investment: $105,942.34(Market Value)</span><br style="background-color: white;" /><span style="background-color: white;">RESP: $4,051.82 (Market Value)</span><br style="background-color: white;" /><span style="background-color: white;">Real Estate: $224,000 (Purchase Price of my house)</span></b></span><br />
<span style="font-family: inherit;"><b><span style="background-color: white;">Real Estate Rental Property: $200,000 (Purchase Price of the house)</span><br style="background-color: white;" /><span style="background-color: white;">Define Benefit Work Pension (Transfer Value): ~$153,000 (Last checked in Jul 2017)</span><br style="background-color: white;" /><br style="background-color: white;" /><span style="background-color: white;">*Automobile is not included (No monthly car payment)</span><br style="background-color: white;" /><br style="background-color: white;" /><u style="background-color: white;">Liabilities</u><br style="background-color: white;" /><span style="background-color: white;">Mortgage: $118,942.14</span></b></span><br />
<span style="font-family: inherit;"><b>Rental Mortgage: $195,272</b><br style="background-color: white;" /><br style="background-color: white;" /><span style="background-color: white;">*Credit Card is paid in full every month</span></span><br />
<span style="font-family: inherit;"><a href="http://www.slowlybutwealthy.com/2019/04/neighbour-joe-march-2019-net-worth.html" style="background-color: white;"><span style="color: black;"><br /></span></a><a href="https://www.slowlybutwealthy.com/2019/11/neighbour-joe-november-2019-net-worth.html">Last Net Worth Update: <span style="background-color: white;">$369,917.66 </span></a><br style="background-color: white;" /><span style="background-color: white;">Current Net Worth: $373,091.98 (+0.86%)</span><br style="background-color: white;" /><br style="background-color: white;" /><u style="background-color: white;"><b>Passive Income</b></u><br style="background-color: white;" /><span style="background-color: white;">TFSA Passive Income: $3,774.92/Year or $312.08/Month </span></span>Neighbour Joehttp://www.blogger.com/profile/16132272848801206152noreply@blogger.com0tag:blogger.com,1999:blog-8093375968643325232.post-50534200782614543132019-11-10T20:04:00.001-05:002019-11-27T16:18:37.574-05:00Neighbour Joe - November 2019 Net Worth<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh0Zq8PLCPyCplracwS1t32TAxOYY3cR8EYt3VRaWbm8DrinPLKQHRZBnVguVePHCGw32JqW9hMa-o05ioenzUDB7IQcDQiVGXzU_0Gu1VZZOh5Z2r5SP6CYpDvznJBNKJ0IIkeUxlp637O/s1600/November+Networth.bmp" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="441" data-original-width="730" height="384" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh0Zq8PLCPyCplracwS1t32TAxOYY3cR8EYt3VRaWbm8DrinPLKQHRZBnVguVePHCGw32JqW9hMa-o05ioenzUDB7IQcDQiVGXzU_0Gu1VZZOh5Z2r5SP6CYpDvznJBNKJ0IIkeUxlp637O/s640/November+Networth.bmp" width="640" /></a></div>
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<span style="background-color: white;">Here is my net worth for November 2019.</span><br />
<span style="font-family: inherit;"><u style="background-color: white;"><b><br /></b></u></span><span style="font-family: inherit;"><b><u style="background-color: white;">Asset</u><br style="background-color: white;" /><span style="background-color: white;">Chequing: $321.10</span><br style="background-color: white;" /><span style="background-color: white;">TFSA Investment: $103,734.37(Market Value)</span><br style="background-color: white;" /><span style="background-color: white;">RESP: $3,709.19 (Market Value)</span><br style="background-color: white;" /><span style="background-color: white;">Real Estate: $224,000 (Purchase Price of my house)</span></b></span><br />
<span style="font-family: inherit;"><b><span style="background-color: white;">Real Estate Rental Property: $200,000 (Purchase Price of the house)</span><br style="background-color: white;" /><span style="background-color: white;">Define Benefit Work Pension (Transfer Value): ~$153,000 (Last checked in Jul 2017)</span><br style="background-color: white;" /><br style="background-color: white;" /><span style="background-color: white;">*Automobile is not included (No monthly car payment)</span><br style="background-color: white;" /><br style="background-color: white;" /><u style="background-color: white;">Liabilities</u><br style="background-color: white;" /><span style="background-color: white;">Mortgage: $119,253</span></b></span><br />
<span style="font-family: inherit;"><b>Rental Mortgage: $195,594</b><br style="background-color: white;" /><br style="background-color: white;" /><span style="background-color: white;">*Credit Card is paid in full every month</span></span><br />
<span style="font-family: inherit;"><a href="http://www.slowlybutwealthy.com/2019/04/neighbour-joe-march-2019-net-worth.html" style="background-color: white;"><span style="color: black;"><br /></span></a><a href="https://www.slowlybutwealthy.com/2019/10/neighbour-joe-october-2019-net-worth.html">Last Net Worth Update: <span style="background-color: white;">$364,930.51</span></a><br style="background-color: white;" /><span style="background-color: white;">Current Net Worth: $369,917.66 (+1.37%)</span><br style="background-color: white;" /><br style="background-color: white;" /><u style="background-color: white;"><b>Passive Income</b></u><br style="background-color: white;" /><span style="background-color: white;">TFSA Passive Income: $3,574.64/Year or $297.89/Month (TFSA only, RESP and rental property not included)</span></span>Neighbour Joehttp://www.blogger.com/profile/16132272848801206152noreply@blogger.com0tag:blogger.com,1999:blog-8093375968643325232.post-81307252124794034262019-10-02T19:09:00.003-04:002019-10-02T19:09:52.622-04:00Neighbour Joe - October 2019 Net Worth<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEheDHxnGgreY8b8yJoPSVUKT3VH-vlL6zSNKFDsbMbubWfgVximkQflNB0J1BPcmKjzTZfj_5vXRKsavQKIgUWiczFa3SyfHLnSaai1gFb6vGX8WgE7FjSHp-9JeYqJE_dv1VDi3pLLttOk/s1600/October+19+Net+worth.bmp" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="441" data-original-width="730" height="386" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEheDHxnGgreY8b8yJoPSVUKT3VH-vlL6zSNKFDsbMbubWfgVximkQflNB0J1BPcmKjzTZfj_5vXRKsavQKIgUWiczFa3SyfHLnSaai1gFb6vGX8WgE7FjSHp-9JeYqJE_dv1VDi3pLLttOk/s640/October+19+Net+worth.bmp" width="640" /></a></div>
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<span style="background-color: white;">Here is my net worth for October 2019. Last month I put some money into my TFSA and invested into Canopy Growth (TSX: WEED) as well as TD Bank (TSX: TD). The market was doing well in September but as soon as we entered October it has been on a decline. Hope you are enjoying the fall weather. </span><br />
<span style="font-family: inherit;"><u style="background-color: white;"><b><br /></b></u></span><span style="font-family: inherit;"><u style="background-color: white;"><b>Asset</b></u><br style="background-color: white;" /><span style="background-color: white;">Chequing: $650.41</span><br style="background-color: white;" /><span style="background-color: white;">Savings: $610.53</span><br style="background-color: white;" /><span style="background-color: white;">TFSA Investment: $98,826.87(Market Value)</span><br style="background-color: white;" /><span style="background-color: white;">RESP: $2,804.00 (Market Value)</span><br style="background-color: white;" /><span style="background-color: white;">Real Estate: $224,000 (Purchase Price of my house)</span></span><br />
<span style="font-family: inherit;"><span style="background-color: white;">Real Estate Rental Property: $200,000 (Purchase Price of the house)</span><br style="background-color: white;" /><span style="background-color: white;">Define Benefit Work Pension (Transfer Value): ~$153,000 (Last checked in Jul 2017)</span><br style="background-color: white;" /><br style="background-color: white;" /><span style="background-color: white;">*Automobile is not included (No monthly car payment)</span><br style="background-color: white;" /><br style="background-color: white;" /><u style="background-color: white;"><b>Liabilities</b></u><br style="background-color: white;" /><span style="background-color: white;"><b>Mortgage: $119,554.40</b></span></span><br />
<span style="font-family: inherit;"><b>Rental Mortgage: $195,914.90</b><br style="background-color: white;" /><br style="background-color: white;" /><span style="background-color: white;">*Credit Card is paid in full every month</span><br style="background-color: white;" /><a href="http://www.slowlybutwealthy.com/2019/04/neighbour-joe-march-2019-net-worth.html" style="background-color: white; color: #274e13;"><br /></a><a href="https://www.slowlybutwealthy.com/2019/09/neighbour-joe-september-2019-net-worth.html">Last Net Worth Update: <span style="background-color: white;">$3</span>63,756.24</a><br style="background-color: white;" /><span style="background-color: white;">Current Net Worth: $364,930.51 (+0.32%)</span><br style="background-color: white;" /><br style="background-color: white;" /><u style="background-color: white;"><b>Passive Income</b></u><br style="background-color: white;" /><span style="background-color: white;">TFSA Passive Income: $3,574.64/Year or $297.89/Month (TFSA only, RESP and rental property not included)</span></span>Neighbour Joehttp://www.blogger.com/profile/16132272848801206152noreply@blogger.com0tag:blogger.com,1999:blog-8093375968643325232.post-3982269785608625802019-09-18T14:55:00.000-04:002019-09-18T14:55:00.184-04:00How setup a low cost RESP?<div class="separator" style="clear: both; text-align: center;">
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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.<br />
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For more information with regards to CESG, you can find it on the CRA website. Here is the link: <a href="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">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 </a><br />
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There is also a lifetime contribution limits of $50,000, again I'll suggest you check out the CRA website for all the information.<br />
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<u><b>Opening an RESP</b></u><br />
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 stocks, 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.<br />
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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%.<br />
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<u><b>Managing your RESP</b></u><br />
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.<br />
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<u><b>Watch it Grow</b></u><br />
Then now you can sit back and watch your child and the RESP grow for the next 18 years.<br />
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<br />Neighbour Joehttp://www.blogger.com/profile/16132272848801206152noreply@blogger.com0tag:blogger.com,1999:blog-8093375968643325232.post-30765392486135973252019-09-16T16:14:00.000-04:002019-09-16T16:14:01.959-04:00Tips to reduce monthly expenses!<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjSskeMSK33jV_vtca-NeT8R5Y1JQpFuAXZQFyxM1VaHlX_iLUgqrxcXJG98VZqiUgUnUNKaythnM45RqVbPJoKDzhKfte3bU8xZXbw5ckYw9fzmZzEigToVigm4rKRGfIGYWg10UrjLKLz/s1600/fabian-blank-pElSkGRA2NU-unsplash.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="1067" data-original-width="1600" height="266" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjSskeMSK33jV_vtca-NeT8R5Y1JQpFuAXZQFyxM1VaHlX_iLUgqrxcXJG98VZqiUgUnUNKaythnM45RqVbPJoKDzhKfte3bU8xZXbw5ckYw9fzmZzEigToVigm4rKRGfIGYWg10UrjLKLz/s400/fabian-blank-pElSkGRA2NU-unsplash.jpg" width="400" /></a></div>
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<span style="font-size: small;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Here are some cost-saving tips that I have learned over the years. My <a href="http://www.slowlybutwealthy.com/2017/04/neigbour-joe-monthly-budget.html">post </a>about my monthly budget also talked about a few cost-saving tips that my wife and I use.</span></span><br />
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<li><span style="font-size: small;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><u><b>Utilities Cost</b></u> Doesn't matter if you rent or own a
house you'll still need to pay for utilities. Depending on where you
are living the price of utilities vary drastically (i.e Ontario vs
Alberta). The thing about utilities is that the less you use the less you paid. A very obvious statement that a lot of people fail to use to their advantage. Here are a few things that usually cost you the most but are easy to cut back on:</span></span></li>
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<li><span style="font-size: small;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Heating - Setting your house to a high temperature so that you can wear a T-Shirt around the house in the winter is a very costly habit. A
few degrees less can save you big time over the span of winter. </span></span></li>
<li><span style="font-size: small;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Shower - Taking a long shower does two things, uses water and uses electricity or gas to heat up the water. Just remember
that it is not just the water you are using but also the boiler for the
hot water.</span></span></li>
<li><span style="font-size: small;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Dishwasher - Dishwasher is the same as shower, it uses hot water for washing then electricity for drying the dishes. Set your dishwasher for
air dry if possible, it'll take a little longer to dry but will use
less electricity.</span></span></li>
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<li><span style="font-size: small;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><u><b>Auto Insurance</b></u> A very simple cost-saving measure is to increase your deductible on your insurance. This means that if you ever decide to claim insurance you'll have to pay more out of pocket for your repairs. If you think about it, most people don't claim insurance for the minor incident and when you require major repairs the cost will be much higher than your deductible. Also, remember your insurance policy gets taxed so having a
more expensive plan means paying more tax. Increase your deductible, pay less tax and save the difference. </span></span></li>
<li><span style="font-size: small;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><u><b>Internet/Cables</b></u> You don't need the fastest internet available unless you have a lot of people living with you. The cheapest plan is often enough for all your internet needs such as Netflix or gaming. If you need more then upgrade to a better plan after. As for TV,
I realize that a lot of on-demand option such as Netflix or Sports TV
subscription will still end up being much cheaper than a cable package.</span></span></li>
<li><span style="font-size: small;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><u><b>Repair > Replace</b></u> When something breaks in your house you can either repair it or replace it. Sadly a lot of people opt for the latter and end up spending way more than they need to. I
remember when my refrigerator broke my first instinct was to get a new one to replace it. After some research on Google, I was able to diagnosis the problem and end up buying a replacement part for $70. If you try to replace things when they break then you will spending a lot of money. </span></span></li>
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<span style="font-size: small;"><span style="font-family: "arial" , "helvetica" , sans-serif;">I'll share more saving tips whenever I discover them myself. Feel free to comment if you have any saving tips that you'll like to share.</span></span><br />
<span style="font-size: small;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span>Neighbour Joehttp://www.blogger.com/profile/16132272848801206152noreply@blogger.com0tag:blogger.com,1999:blog-8093375968643325232.post-55868878084126641662019-09-09T15:15:00.000-04:002019-09-16T16:33:46.359-04:00TFSA vs RRSP<div class="separator" style="clear: both; text-align: center;">
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Hello everyone, today I am going to write about Tax Free Savings Account (TFSA) vs Registered Retirement Savings Plan. A lot of people I've spoken to knows about the two products but don't truly understand the difference between them. To start off, the ultimate aim of these products is to promote you to save money by giving you tax incentive.<br />
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<b><u>TFSA</u></b><br />
So what is TFSA? It is a special type of account that was introduced in 2009 that allow people to put money aside and any gain(interest, dividends, capital gains, etc) in that account are tax free. There is a limit to how much you can contribute every year but if you have unused contribution room then you can carry it to next year. If you were 18+ in 2009 and you just decided to open a TFSA today you'll get all the contribution room for the past 8 years.<br />
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The name is kind of misleading since it doesn't have to be a "savings" account. It can be a mutual fund account or an investment account. I am going to use myself as an example, I have a TFSA Mutual Fund Account and a TFSA Direct Investment Account. When I invest into the stock market in my investment accounts the quarterly or monthly dividends I get are not taxed as an incomes when I withdraw it. Remember, you don't have to put it in a savings account.<br />
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<b><u>RRSP</u></b><br />
RRSP has been around for a long time, but the concept is similar to TFSA. You can have RRSP Mutual Fund or RRSP Direct Investment. The difference is when you contribute to your RRSP that amount gets deducted from your income when you file your tax. Let say you make $50,000 annually and you contribute $2000 to your RRSP then you only get tax as if you were making $48,000. When you file your tax return you'll get some money back if tax was deducted from the $2000. Some HR department will not deducted the tax from your pay if you let them know ahead of time so you don't have to wait for CRA to give you your money back. However, when you withdraw from your RRSP it'll be taxed as income.<br />
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<b><u>TFSA vs RRSP</u></b><br />
Most of my understanding of the two is by reading the CRA website as well as a book called "The Wealthy Barber Returns". The book by David Chilton, he was on Dragons Den for a few seasons, have a whole chapter on this very topic. He breaks it down in details the difference between the two and concluded that they are very similar so it's really a personal choice. Have a read if you get a chance, the book also provides other useful financial information.<br />
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<ol>
<li>Tax - The difference is when do you want to be tax. You'll either pay your normal income tax and take your after tax earning to contribute to your TFSA. Or, you can take your pre-tax earning, contribute to your RRSP and get tax when you take the money out. The key thing to consider is what your tax bracket is right now compare to your tax bracket will be when you retire. </li>
<li>Flexibility - TFSA is by far way more flexible than RRSP since you can take money our of your TFSA anytime like a normal savings account. RRSP is usually more complicated because of the tax implication during withdrawn.</li>
<li>Contribution - In most cases TFSA has a lower contribution limit than RRSP. TFSA currently has a contribution limit of $5,500 per year plus any unused contribution room from previous years. They also inflation index contribution limit from previous years. RRSP has a contribution limit of 18% of your last years income on your tax return to a maximum of $26,010. Therefore you can actually save more money with RRSP.</li>
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One big thing I want to point out for TFSA is the potential for a substantial amount of tax free income. Let say you continue investing the maximum amount every year for 20 year in your TFSA you can easily grow it to a substantial amount. Then all passive income from your investment in your TFSA are now tax free for life. In comparison, any money coming out of an RRSP will be taxed as income.<br />
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The second big advantage of TFSA is that the income will not be consider income on your tax return. This means that benefits such as OAS will not be affected by the income from your TFSA. Income from RRSP will be on your tax return and will have an effect on your OAS<br />
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My personal recommendation is to contribute into your TFSA first before RRSP unless your company matches your RRSP contribution. I personally don't have a RRSP since I contribute to a defined benefit pension plan with the government. Hope this post helped and if you have any comments feel free to put it in the comment section.<br />
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Resource - Here are links to the CRA website for both products.<br />
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TFSA - <a href="http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/tfsa-celi/menu-eng.html">http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/tfsa-celi/menu-eng.html</a><br />
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RRSP - <a href="http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rrsp-reer/rrsps-eng.html">http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rrsp-reer/rrsps-eng.html</a><br />
<br />Neighbour Joehttp://www.blogger.com/profile/16132272848801206152noreply@blogger.com0tag:blogger.com,1999:blog-8093375968643325232.post-78825782663199879172019-09-01T13:40:00.000-04:002019-09-01T13:40:30.316-04:00Neighbour Joe - September 2019 Net Worth<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgqDXwI3KiyLUU5Pbi2WYeYw8Wv8x9aYF_vKnMuGWQmRutKCB5sA9u-QTL0hyIYL4_qwp33ZJD8xYQr_J9S-_hdeU_ZqrNDajvbFbOX_8XwKQyOIciHXbdMY9bEY6WNii9e7VJwuoivHsn_/s1600/September+19+Net+worth.bmp" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="441" data-original-width="730" height="385" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgqDXwI3KiyLUU5Pbi2WYeYw8Wv8x9aYF_vKnMuGWQmRutKCB5sA9u-QTL0hyIYL4_qwp33ZJD8xYQr_J9S-_hdeU_ZqrNDajvbFbOX_8XwKQyOIciHXbdMY9bEY6WNii9e7VJwuoivHsn_/s640/September+19+Net+worth.bmp" width="640" /></a></div>
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<span style="background-color: white;">Here is my net worth for September 2019.</span><br />
<span style="font-family: inherit;"><u style="background-color: white;"><b><br /></b></u></span>
<span style="font-family: inherit;"><u style="background-color: white;"><b>Asset</b></u><br style="background-color: white;" /><span style="background-color: white;">Chequing: $2,009.60</span><br style="background-color: white;" /><span style="background-color: white;">Savings: $2,010.53</span><br style="background-color: white;" /><span style="background-color: white;">TFSA Investment: $96,040.11(Market Value)</span><br style="background-color: white;" /><span style="background-color: white;">RESP: $2,804.00 (Market Value)</span><br style="background-color: white;" /><i style="background-color: white;"><b>Real Estate: $224,000 (Purchase Price of my house)</b></i></span><br />
<span style="font-family: inherit;"><i style="background-color: white;"><b>Real Estate Rental Property: $200,000 (Purchase Price of the house)</b></i><i><br style="background-color: white;" /></i><i style="background-color: white;">*Define Benefit Work Pension (Transfer Value): ~$153,000 (Last checked in Jul 2017,aprox $1000 a month of contribution)</i><br style="background-color: white;" /><br style="background-color: white;" /><span style="background-color: white;">*Have not been updated since the start of this blog.</span><br style="background-color: white;" /><span style="background-color: white;">**Automobile is not included (No monthly car payment)</span><br style="background-color: white;" /><br style="background-color: white;" /><u style="background-color: white;"><b>Liabilities</b></u><br style="background-color: white;" /><span style="background-color: white;"><b>Mortgage: $119,864</b></span></span><br />
<span style="font-family: inherit;"><b>Rental Mortgage: $196,235</b><br style="background-color: white;" /><br style="background-color: white;" /><span style="background-color: white;">*Credit Card is paid in full every month</span><br style="background-color: white;" /><a href="http://www.slowlybutwealthy.com/2019/04/neighbour-joe-march-2019-net-worth.html" style="background-color: white; color: #274e13;"><br /></a><a href="http://www.slowlybutwealthy.com/2019/08/neighbour-joe-2019-net-worth.html">Last Net Worth Update: <span style="background-color: white;">$359,147.97</span></a><br style="background-color: white;" /><span style="background-color: white;">Current Net Worth: $363,765.24 (+1.29%)</span><br style="background-color: white;" /><br style="background-color: white;" /><u style="background-color: white;"><b>Passive Income</b></u><br style="background-color: white;" /><span style="background-color: white;">TFSA Passive Income: $3,365.42/Year or $280.45/Month (TFSA only, RESP and rental property not included)</span></span>Neighbour Joehttp://www.blogger.com/profile/16132272848801206152noreply@blogger.com0tag:blogger.com,1999:blog-8093375968643325232.post-70493390955354534122019-08-12T15:39:00.000-04:002019-08-12T15:39:02.755-04:00Neighbour Joe - Return on Assets<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhhmpM-c0tki-Ucq0HoXLUc5whujTfht8myHeuzfvtXTNYQLqr2XX-tQz66Um23mLKZpNAnicQjT1qgkLP2XE1QV5z-Kv3nQHvCiJdyrff-KHMLjzWyItojcRP7hQuftT2uNSiNDoy0rTWR/s1600/austin-distel-EMPZ7yRZoGw-unsplash.jpg" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1067" data-original-width="1600" height="266" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhhmpM-c0tki-Ucq0HoXLUc5whujTfht8myHeuzfvtXTNYQLqr2XX-tQz66Um23mLKZpNAnicQjT1qgkLP2XE1QV5z-Kv3nQHvCiJdyrff-KHMLjzWyItojcRP7hQuftT2uNSiNDoy0rTWR/s400/austin-distel-EMPZ7yRZoGw-unsplash.jpg" width="400" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;"><span style="background-color: whitesmoke; color: #111111; font-family: , "blinkmacsystemfont" , "san francisco" , "helvetica neue" , "helvetica" , "ubuntu" , "roboto" , "noto" , "segoe ui" , "arial" , sans-serif; font-size: 14px; white-space: nowrap;">Photo by </span><a href="https://unsplash.com/@austindistel?utm_source=unsplash&utm_medium=referral&utm_content=creditCopyText" style="background-color: whitesmoke; box-sizing: border-box; color: #999999; font-family: -apple-system, BlinkMacSystemFont, "San Francisco", "Helvetica Neue", Helvetica, Ubuntu, Roboto, Noto, "Segoe UI", Arial, sans-serif; font-size: 14px; text-align: start; text-decoration-skip-ink: auto; transition: color 0.2s ease-in-out 0s, opacity 0.2s ease-in-out 0s; white-space: nowrap;">Austin Distel</a><span style="background-color: whitesmoke; color: #111111; font-family: , "blinkmacsystemfont" , "san francisco" , "helvetica neue" , "helvetica" , "ubuntu" , "roboto" , "noto" , "segoe ui" , "arial" , sans-serif; font-size: 14px; white-space: nowrap;"> on </span><a href="https://unsplash.com/search/photos/assets?utm_source=unsplash&utm_medium=referral&utm_content=creditCopyText" style="background-color: whitesmoke; box-sizing: border-box; color: #999999; font-family: -apple-system, BlinkMacSystemFont, "San Francisco", "Helvetica Neue", Helvetica, Ubuntu, Roboto, Noto, "Segoe UI", Arial, sans-serif; font-size: 14px; text-align: start; text-decoration-skip-ink: auto; transition: color 0.2s ease-in-out 0s, opacity 0.2s ease-in-out 0s; white-space: nowrap;">Unsplash</a></td></tr>
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Hello everyone, today I am going to be calculating a popular ratio used by security analysts when evaluating a company, on my personal finance. The return on assets (ROA) ratio is a quick measurement to show how well the company generate income from its assets. You take the net income and divided by the total assets. My assets were all layout in my latest net worth update <a href="http://www.slowlybutwealthy.com/2019/08/neighbour-joe-2019-net-worth.html">post</a>. Let us begin:<br />
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<b style="text-decoration-line: underline;">Total Assets</b> - $522,845 (As of August 2019)<br />
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For the total assets, I did not include my define benefit pension because it will make this calculation very complicated. I contribute to it monthly, but it'll be tough to find out exactly how much monthly income the portfolio is currently generating.<br />
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<b><u>Income</u> </b>(As of August 2019)<br />
<b><u><br /></u></b> TFSA Investment - $3267.33/Year<br />
RESP Investment - $51/Year<br />
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Rental Income - $8,880/Year<br />
<u>Rental Expense</u><br />
Insurance - $588/Year<br />
Property Tax - $1,504/Year<br />
Mortgage Interest - $7,172/Year<br />
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Net: $2,934.33<br />
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For income, I am strictly focusing on passive income, since employment income is generated by me, and I did not include myself in the total assets.<br />
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<u><b>ROA Ratio</b></u>: 0.56%<br />
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<b><u>Insights</u></b><br />
Not a bad ratio, since TD Bank's latest ROA, is at 0.88%. Anyway, one thing I learned from going through this calculation is that my rental property is actually not generating income for me right now. That's the price you pay for doing 100% debt financing on the house. I am about $300 in the red right now, but it won't stay that way for long, the rent increases every year, and the interest expense decreases every year. In a year time, I should be breaking even and into the positive.<br />
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Hopefully, as I continue on this journey, I'll be able to make better use of my assets and start increasing my return on assets ratio. <br />
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Neighbour Joehttp://www.blogger.com/profile/16132272848801206152noreply@blogger.com0tag:blogger.com,1999:blog-8093375968643325232.post-86744754519655679482019-08-03T13:37:00.000-04:002019-08-04T08:49:30.315-04:00Neighbour Joe - August 2019 Net Worth<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEivV5WwAtLboaZwojLiMi0EDje7CHT4cUKZCuHCT4FgpqKUv5k5ri3LAbtHvunOoZTBFYIOR1P5TpTyvHeNRoPAwyuYQdDCwklmq4HkOHZc3WZ-zF0vsxEv0df6oTNve2oko3B-xM1WJ0-n/s1600/August+19+Networth.bmp" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="450" data-original-width="750" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEivV5WwAtLboaZwojLiMi0EDje7CHT4cUKZCuHCT4FgpqKUv5k5ri3LAbtHvunOoZTBFYIOR1P5TpTyvHeNRoPAwyuYQdDCwklmq4HkOHZc3WZ-zF0vsxEv0df6oTNve2oko3B-xM1WJ0-n/s400/August+19+Networth.bmp" width="400" /></a></div>
<span style="font-family: inherit;"><span style="background-color: white;"><br /></span></span>
<span style="font-family: inherit;"><span style="background-color: white;">Here is the net worth update for August 2019. The market is very volatile this year, which has caused my net worth to fluctuated quite drastically on month by month basis. Overall, my monthly employment income is still the most significant contributor to my net worth increase. I have also started tracking my rental property in my net worth. I've had the property for a year now but never got around to putting it into my spreadsheet. The rental property is a partnership between my parents and me. They didn't have the income to qualify for a mortgage, so I took on the debt while they put down the equity. Cost and profit are shared accordingly.</span></span><br />
<span style="font-family: inherit;"><br style="background-color: white;" /><u style="background-color: white;"><b>Asset</b></u><br style="background-color: white;" /><span style="background-color: white;">Chequing: $1,498.38</span><br style="background-color: white;" /><span style="background-color: white;">Savings: $1,210.48</span><br style="background-color: white;" /><span style="background-color: white;">TFSA Investment: $93,360.57(Market Value)</span><br style="background-color: white;" /><span style="background-color: white;">RESP: $2,776.01 (Market Value)</span><br style="background-color: white;" /><i style="background-color: white;">*Real Estate: $224,000 (Purchase Price of my house)</i></span><br />
<span style="font-family: inherit;"><i style="background-color: white;"><b>NEW*Real Estate Rental Property: $200,000 (Purchase Price of the house)</b></i><i><br style="background-color: white;" /></i><i style="background-color: white;">*Define Benefit Work Pension (Transfer Value): ~$153,000 (Last checked in Jul 2017,aprox $1000 a month of contribution)</i><br style="background-color: white;" /><br style="background-color: white;" /><span style="background-color: white;">*These have not been updated since the start of this blog.</span><br style="background-color: white;" /><span style="background-color: white;">**Automobile is not included (No monthly car payment)</span><br style="background-color: white;" /><br style="background-color: white;" /><u style="background-color: white;"><b>Liabilities</b></u><br style="background-color: white;" /><span style="background-color: white;">Mortgage: $120,769.98</span></span><br />
<span style="font-family: inherit;"><b>NEW Rental Mortgage: $196,533.81</b><br style="background-color: white;" /><br style="background-color: white;" /><span style="background-color: white;">*Credit Card is paid in full every month</span><br style="background-color: white;" /><a href="http://www.slowlybutwealthy.com/2019/04/neighbour-joe-march-2019-net-worth.html" style="background-color: white; color: #274e13; text-decoration-line: none;"><br /></a>Last Net Worth Update: <span style="background-color: white;">$355,996.77</span><br style="background-color: white;" /><span style="background-color: white;">Current Net Worth: $359,147.97 (+0.89%)</span><br style="background-color: white;" /><br style="background-color: white;" /><u style="background-color: white;"><b>Passive Income</b></u><br style="background-color: white;" /><span style="background-color: white;">Current Passive Income: $3,267.33/Year or $272.28/Month (TFSA only, RESP and rental property not included)</span></span><br />
<br />Neighbour Joehttp://www.blogger.com/profile/16132272848801206152noreply@blogger.com0tag:blogger.com,1999:blog-8093375968643325232.post-1931164753029792019-07-01T14:15:00.000-04:002019-07-01T14:15:04.428-04:00Neighbour Joe - July 2019 Net Worth<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEglasC-DLt_oRbXJn0aqXhq7839_ruRQKKlVWIAAoOu3CDJaIOa97HhyphenhyphenB2qkZCUPK7ZPoBfgjImWW006aGht70QANa7EvBVq_29GbSpcAt1NWENmH7CyY0-wPZNO8YQae5gqwcOEzIfN-DQ/s1600/July+Networth.bmp" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="288" data-original-width="480" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEglasC-DLt_oRbXJn0aqXhq7839_ruRQKKlVWIAAoOu3CDJaIOa97HhyphenhyphenB2qkZCUPK7ZPoBfgjImWW006aGht70QANa7EvBVq_29GbSpcAt1NWENmH7CyY0-wPZNO8YQae5gqwcOEzIfN-DQ/s400/July+Networth.bmp" width="400" /></a></div>
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Happy Canada Day! Here is the net worth update for July 2019.<br />
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<u><b>Asset</b></u><br />
Chequing: $2,228.21<br />
Savings: $2,705.30<br />
TFSA Investment: $92,569.79(Market Value)<br />
RESP: $2,263.41 (Market Value)<br />
<i>*Real Estate: $224,000 (Purchase Price of my house)</i><br />
<i>*Define Benefit Work Pension (Transfer Value): ~$153,000 (Last checked in Jul 2017,aprox $1000 a month of contribution)</i><br />
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*These have not been updated since the start of this blog.<br />
**Automobile is not included (No monthly car payment)<br />
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<u><b>Liabilities</b></u><br />
Mortgage: $120,769.98<br />
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*Credit Card is paid in full every month<br />
<a href="http://www.slowlybutwealthy.com/2019/04/neighbour-joe-march-2019-net-worth.html"><br /></a><a href="http://www.slowlybutwealthy.com/2019/06/neighbour-joe-june-2019-net-worth.html">Last Net Worth Update: $353,583.24</a><br />
Current Net Worth: $355,996.77 (+0.68%)<br />
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<u><b>Passive Income</b></u><br />
Current Passive Income: $3,213.81/Year or $267.82/Month<br />
<br />Neighbour Joehttp://www.blogger.com/profile/16132272848801206152noreply@blogger.com0tag:blogger.com,1999:blog-8093375968643325232.post-55490198247341689902019-06-19T10:55:00.000-04:002019-06-19T17:25:54.700-04:00Beginner's Guide to Mortgage<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj-h_RqyWZwz6pYkTe9DpJNFUglVSEEnIJ01_KUaIJH348D0eJ5JUNv-E0ZMrZ8-QdUdwRrm9l_j9pql3zsmRPZqYZLjv-JbTsGhpueBdElxUasrXQyCBXmxVAXAEpJwhDO7rw4P6ozgCKZ/s1600/mortage-choosing-the-right-home-loan-feature-image.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="450" data-original-width="1050" height="171" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj-h_RqyWZwz6pYkTe9DpJNFUglVSEEnIJ01_KUaIJH348D0eJ5JUNv-E0ZMrZ8-QdUdwRrm9l_j9pql3zsmRPZqYZLjv-JbTsGhpueBdElxUasrXQyCBXmxVAXAEpJwhDO7rw4P6ozgCKZ/s400/mortage-choosing-the-right-home-loan-feature-image.jpg" width="400" /></a></div>
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Hi, today I am going to talk about mortgage and things to consider when getting a new mortgage. Since my near term goal is to pay off my mortgage within three years, I figure it only makes sense to do a post about mortgage. OK, so what is a mortgage? It's a fancy term for a loan to allow you to buy a house, meaning you are borrowing money. Mortgage is a big business and banks love them. Let's just think about this, when you get a mortgage, you pretty much are sharing ownership of the house with the bank since they, in theory, are buying the house for you. In return you pay interest and you assume almost all the risk for that property. There is a reason why you must have home insurance on your home or else the bank will not give you the loan. If you stop paying your monthly payments then the bank will come and evict you from the house, this is known as foreclosure. Intro asides, let us get into the process of getting a mortgage.<br />
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<a name='more'></a><br />
<b><u>1. Buying A House</u></b><br />
You found a beautiful house that you like, and for argument say that it is $300,000. Using this lovely <a href="https://www.ratehub.ca/cmhc-mortgage-insurance"><b>tool</b></a> by ratehub.ca, we can see how much mortgage we need based on how much money we have saved up for down payment. Please note at the at 5% down payment, the CMHC fee is 4% of your mortgage value, this is a sink cost.<br />
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj08K42ZOA53iQSa8m9ViKZxd883w71OHMny4SSOiFytq9vyi3DUhaZTsDATonNPeKbpXz1wIAH2Lkpj3hS8zIARu78QbYPLUSuCAaF3q7J50VHjBIRYlhRlSlPLbRb89dexH8d7xQufdNg/s1600/New+Bitmap+Image.bmp" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="417" data-original-width="839" height="197" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj08K42ZOA53iQSa8m9ViKZxd883w71OHMny4SSOiFytq9vyi3DUhaZTsDATonNPeKbpXz1wIAH2Lkpj3hS8zIARu78QbYPLUSuCAaF3q7J50VHjBIRYlhRlSlPLbRb89dexH8d7xQufdNg/s400/New+Bitmap+Image.bmp" width="400" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Comparison of down payment amount.</td></tr>
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Let say you've been saving for a while and can afford to put 20% down payment, therefore, you don't have to pay for the CMHC insurance (This is a Canada thing). You either have already gone to the bank for a pre-approval or you now go to the bank and ask them for a $240,000 mortgage. You'll have to give them the info of the property you just purchased and proof of income (just to make sure you can pay them back). Banks will take your monthly income (gross), so before tax and other deduction, and check what percentage of that will be going towards debt payments. They want to keep that percentage below 40%. Meaning, if you make $5,000 a month then your total debt payment(credit card, loans, car payment) should be less than $2,000. In Canada, they have recently implemented a rule that forces the lender to do a stress test before they can approve your mortgage. What this means is that during that approval process, they will calculate your monthly mortgage payment at a higher interest rate (~4.64%), and use that number to check if you still below the 40% mark. If you pass all the check then they will give you your $240,000 mortgage.<br />
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<b><u>2. Mortgage Terms</u></b><br />
During this whole getting a mortgage process you'll have to consider a few things. The terms for your mortgage, this is quite important, this is basically deciding how long you want to be on contract with the bank and the terms of that contract. Think of it like this, when you get a cellphone plan most of us will be on contract for a certain amount of time with that cellphone company. A mortgage is pretty similar, you negotiate all the condition and then sign on for a set amount of time.<br />
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<ul>
<li>Interest Rate - Mortgage interest rate in most banks are based off something called the prime rate which usually follows the overnight rate from the Bank of Canada. So when you hear on the news that the interest rates are going up, that usually refers to the overnight rate from Bank of Canada. Regardless, the lower the rate the less you pay in interest every month, which means lower monthly payment. Then there is the fixed rate and variable rate. A fixed rate means that your rate will stay the same for the length of the contract. A variable rate will constantly be adjusted based on the current prime interest rate.</li>
<li>Length - This is how long your contract and all the terms in it are good for. </li>
<li>Open vs Closed - Open mortgage means you can pay off the mortgage anytime you want without incurring a fee. The catch is usually a higher interest rate, however, this option is good if you think you are going to sell your house or you know you'll have a large sum of money coming your way. A closed mortgage is the opposite, you will be given a specific condition on how much extra you can pay every year and a penalty if you decided to pay off the mortgage early. This is to protect the bank and make sure they get the interest they were promised. </li>
<li>Terms of Payment - Two basic things to look at when shopping for a mortgage are how much can you repay every year and how much can your monthly payment be increased by. These two things will be important if you are considering the pay off your mortgage faster sometime down the road. The more flexible it is and the higher the amount the better.</li>
</ul>
<div>
Just remember that when picking a mortgage, find the one that suits you and don't try to outsmart the bank. They have a lot of smart people working for them to make sure they'll not get rip off. It doesn't matter what the term is, they'll still make money off you.</div>
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<div>
<b><u>3. Mortgage Payment </u></b></div>
<div>
You have your mortgage approved and have moved into your new residence. Suddenly, you realize how much interest you are paying every year and how long you'll be in debt for. Let's face it, nobody likes giving their hard earn money to the bank. You start thinking, how can I not give my hard earn money away. There are a few simple things you can consider if you want to drastically reduce the amount of interest you pay and the overall length of your mortgage. </div>
<div>
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<div>
<u>Frequency of Payment</u> - There is three frequency that most bank offers. Monthly, Bi-Weekly and Weekly. Let us break these down to the number of payments annually to show you the difference. </div>
<div>
<ol>
<li><b>Monthly</b> - 12 Payments, </li>
<li><b>Bi-Weekly</b> - 26 Payments (13 Months), </li>
<li><b>Weekly</b> - 52 Payment (13 Months)</li>
</ol>
<div>
As you can see that you actually make one extra payment every year by switching to a Bi-Weekly payment frequency. If you select "Rapid Bi-Weekly" payment options, what the bank does is take your current monthly payment and divide it in half. Although you make an extra payment every year, this not affect your payment increase limits nor your early repayment limits. Some banks allow a 100% payment increase, so if you do that with rapid bi-weekly you can make a big dent in your mortgage. By doing so, you'll bring your 25-year mortgage down to about 11 years. TD Bank has a nice little <a href="https://tools.td.com/mortgage-payment-calculator/"><b>tool</b></a> that lets you compare different payment frequency. </div>
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<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiQznDRAKBWtnNM3GBOmLHdBkA1fkBEQoE5aL0SMQn0uNZCNNXf2wafBSTBA9MYiMiRVNv4FynpNi71iEr1YkjNFbE-qcAB8addA_yPH-Ob0SCT10UFS3Bg4CjVxKQCrEbwIr0BksB1IRkM/s1600/New+Bitmap+Image+%25282%2529.bmp" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="544" data-original-width="1600" height="135" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiQznDRAKBWtnNM3GBOmLHdBkA1fkBEQoE5aL0SMQn0uNZCNNXf2wafBSTBA9MYiMiRVNv4FynpNi71iEr1YkjNFbE-qcAB8addA_yPH-Ob0SCT10UFS3Bg4CjVxKQCrEbwIr0BksB1IRkM/s400/New+Bitmap+Image+%25282%2529.bmp" width="400" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Look at the difference in Principal and Interest between the three.</td></tr>
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<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgA6Ltq3jOVz1JtXSsxi6YHej2H077_ZcrMLa3AYrw6kDLEVALSVtYBugrCriABeE6ju9GEnmF8p240AmuaocpJRoaiIyPVwpOOek_VCag7uPsXX_-m-HIMrnzMPU_XTfiOaYv57mBfYlOg/s1600/New+Bitmap+Image+%25283%2529.bmp" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="403" data-original-width="1600" height="100" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgA6Ltq3jOVz1JtXSsxi6YHej2H077_ZcrMLa3AYrw6kDLEVALSVtYBugrCriABeE6ju9GEnmF8p240AmuaocpJRoaiIyPVwpOOek_VCag7uPsXX_-m-HIMrnzMPU_XTfiOaYv57mBfYlOg/s400/New+Bitmap+Image+%25283%2529.bmp" width="400" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">This graph shows the difference between Monthly vs Rapid Bi-Weekly vs Rapid Bi-Weekly(100% Payment Increase)</td></tr>
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<u><br />Early Repayment</u> - Usually in your mortgage contract it will state how much you can payback every year without incurring any penalty. My bank allows me to pay back 15% of my original mortgage amount. So in our example, 15% x $240,000 = $36,000. Remember this amount will go directly towards the principal. In the above rapid bi-weekly example, if I paid $5,000 annually, I can shave off 8 years off my mortgage, bringing it from 23 years to 15 years. If you don't believe me, just go play around with the TD Bank tool and see for yourself.</div>
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<b><u>Conclusion</u></b></div>
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If you are thinking about buying a house I hope this little guide will help you out when shopping for a mortgage. If you already have a mortgage hopefully this post gave you some tips on how to pay off the mortgage faster. There is no real secret for paying off your mortgage faster other than put as much money as you can into it and save huge on interest. Just think of that amount of flexibility you'll have once your mortgage is paid off, you no longer "MUST GO TO WORK" for you to have a place to live. That's not completely true cause tax and upkeep, but you get the point. </div>
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Neighbour Joehttp://www.blogger.com/profile/16132272848801206152noreply@blogger.com0tag:blogger.com,1999:blog-8093375968643325232.post-29298260532552127222019-06-01T15:34:00.003-04:002019-06-01T15:34:46.896-04:00Neighbour Joe - June 2019 Net Worth<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjF81DnDK4JKH1TPWOj5FTdjsjLTMcJZI2vDSwrzkZ9vcNJ7ZOjs45cjdhbeScwM_RelQ1UjyN-IzdfHx52JJh1cm-o5u8kQnBg58BqN5DlQ-JnaSSkCzTBDV7TERtziqjWmzLfgHjmJuDk/s1600/Networth.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="282" data-original-width="475" height="236" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjF81DnDK4JKH1TPWOj5FTdjsjLTMcJZI2vDSwrzkZ9vcNJ7ZOjs45cjdhbeScwM_RelQ1UjyN-IzdfHx52JJh1cm-o5u8kQnBg58BqN5DlQ-JnaSSkCzTBDV7TERtziqjWmzLfgHjmJuDk/s400/Networth.jpg" width="400" /></a></div>
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Networth update for June.<br />
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<u><b>Asset</b></u><br />
Chequing: $1,777.14<br />
Savings: $2,705.30<br />
TFSA Investment: $90,912.50 (Market Value)<br />
RESP: $1,958.28 (Market Value)<br />
<i>*Real Estate: $224,000 (Purchase Price of my house)</i><br />
<i>*Define Benefit Work Pension (Transfer Value): ~$153,000 (Last checked in Jul 2017,aprox $1000 a month of contribution)</i><br />
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*These have not been updated since the start of this blog.<br />
**Automobile is not included (No monthly car payment)<br />
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<u><b>Liabilities</b></u><br />
Mortgage: $120,769.98<br />
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*Credit Card is paid in full every month<br />
<a href="http://www.slowlybutwealthy.com/2019/04/neighbour-joe-march-2019-net-worth.html"><br /></a> <a href="http://www.slowlybutwealthy.com/2019/05/neighbour-joe-may-2019-net-worth.html">Last Net Worth Update: $358,246.53</a><br />
Current Net Worth: $353,583.24(-1.35%)<br />
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<u><b>Passive Income</b></u><br />
Current Passive Income: $3,213.81/Year or $267.82/Month<br />
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A drop in net worth this month had to spend around $2400 on tuition for my MBA. Also, my portfolio dropped this month due to a few bad earnings reports and the on-going trade tension between the US and China. Neighbour Joehttp://www.blogger.com/profile/16132272848801206152noreply@blogger.com0tag:blogger.com,1999:blog-8093375968643325232.post-10211495673136502682019-05-27T08:08:00.000-04:002019-05-27T08:08:05.308-04:00Asset Management: Putting your money to work!<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi6q3rAyYKpWOfu8xyGaORFep13LJzsZmeZNfHO44d3S3dnlZBZro8CNuZvQA3nNOGuLapm2_wz1jYIoYXd5KcRR_aLrXLV8Pm40E1zDD5f_X_FkYF7NdLprqjpmtIlO7hkhDG2kRI2lIXK/s1600/Sw2XNTgA-wc_Full.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="1600" data-original-width="1200" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi6q3rAyYKpWOfu8xyGaORFep13LJzsZmeZNfHO44d3S3dnlZBZro8CNuZvQA3nNOGuLapm2_wz1jYIoYXd5KcRR_aLrXLV8Pm40E1zDD5f_X_FkYF7NdLprqjpmtIlO7hkhDG2kRI2lIXK/s400/Sw2XNTgA-wc_Full.jpg" width="300" /></a></div>
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Assets management is an important skill you must learn during your journey. You must develop the mindset of money as your workers, and you are their manager. Just like at any job, the manager gives tasks for workers to perform. Therefore you must do the same thing with your money. </div>
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A fundamental problem with the way a lot of people manage money is that they allow their workers to be idle. They let their money sit in a savings account or have too much of their money tied up to their house. By doing so, it makes your money unproductive and lazy, so as a good manager, you need to reassign them to a new task so they can work hard for you. </div>
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Let's use the house as an example, and I've<a href="http://www.slowlybutwealthy.com/2017/04/your-house-is-not-asset.html"> posted before</a> on why I think your house should not be a large part of your total assets. When a significant portion of your assets is tied up in your home, not only are they unproductive, they also start demanding an upkeep cost for their idleness. I am talking about more property tax, utility cost, and maintenance. I genuinely believe that having your house make up for less than 25% of your assets is the way to go. I am personally working towards building up other asset class while avoiding buying a more expensive house. At the end of the day, to be financially independent, you need your assets to generate income that you can live on. A house won't produce income for you to pay for the bills required for owning that house. </div>
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If you are like me and have your house make up for a significant portion of your assets, then start taking steps to balance out your asset allocation. Start putting your money to work in places like the stock market or other types of investment.<br />
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Neighbour Joehttp://www.blogger.com/profile/16132272848801206152noreply@blogger.com0tag:blogger.com,1999:blog-8093375968643325232.post-85688224238486240382019-05-23T03:00:00.000-04:002019-05-23T10:06:39.894-04:00Why is car a horrible asset class?<div dir="ltr">
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhNKHs8hEEehxQGAloItMRtm8W_PUZ1NQAcP00jJzBmxNBKK7Qo4dKdtKxcOn_QMfkzaBuXlfB_VNUevRZxYx3KDOjptLMVRdM8bFPNhmIiKQ3srbSsgrP6P1J_GsE0PzOQoruHMg2kE753/s1600/20190518_174726.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="900" data-original-width="1600" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhNKHs8hEEehxQGAloItMRtm8W_PUZ1NQAcP00jJzBmxNBKK7Qo4dKdtKxcOn_QMfkzaBuXlfB_VNUevRZxYx3KDOjptLMVRdM8bFPNhmIiKQ3srbSsgrP6P1J_GsE0PzOQoruHMg2kE753/s400/20190518_174726.jpg" width="400" /></a></div>
If you've been following my monthly <a href="http://www.slowlybutwealthy.com/search/label/Net%20Worth%20Updates">net worth updates</a>, you'll know that I don't include my car as an asset. This is done on purpose to highlight my belief that car is not a wealth building assets. I've also talked in a <a href="http://www.slowlybutwealthy.com/2018/02/poor-mans-asset-vs-wealthy-mindset-asset.html">previous post</a> on what I consider good assets. </div>
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To expand on my <a href="http://www.slowlybutwealthy.com/2018/02/poor-mans-asset-vs-wealthy-mindset-asset.html">previous post</a>, car and automobile is not a good asset class. Obviously, most people require some form of transportation to get around for errands and work, but you don't need a shiny luxury brand to fill that need. Therefore, you should not allocate a lot of capital into your car and use that capital on a better asset class.</div>
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Many studies have shown that a new car loses 30% of its value in the first year and then lose the rest of its value in seven to ten years. Therefore, the more expensive your car, the bigger the annual depreciation value. I'll use an analogy from Dave Ramsey, he compares driving a luxury car the same as opening your car window and throwing $100 bills out the window. I mean, if that's your idea to building wealth then I please enlighten me on your secret. Also, wouldn't it feel better to donate some of that money instead? A car is a sink cost item, the depth of this sinkhole is yours to decide.</div>
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So should you never buy a luxury brand car? For me, I don't plan on purchasing any luxury brand car till I've reached financial independence. I am not willing to retire later over a car, I prefer retiring early, so I have the freedom to do what I want with my time.</div>
Neighbour Joehttp://www.blogger.com/profile/16132272848801206152noreply@blogger.com0tag:blogger.com,1999:blog-8093375968643325232.post-25127880966004354622019-05-20T23:55:00.000-04:002019-05-21T10:29:35.518-04:00Things to do during your journey to financial independence<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgQ_PBQa9-_UAPwAFu8C9qVTWKZK9iweYS_cP47wBuDE9xajnmZuclvi-DqwIRuYJj7A5LWf2yg2upB8RKJjqCkrGwavfFT9r_wT0PRaG2GkNDTtkGb5HJF3cyeSBBz5_OC5ZFBoCWO0OBc/s1600/A4iL43vunlY_Full.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="899" data-original-width="1600" height="223" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgQ_PBQa9-_UAPwAFu8C9qVTWKZK9iweYS_cP47wBuDE9xajnmZuclvi-DqwIRuYJj7A5LWf2yg2upB8RKJjqCkrGwavfFT9r_wT0PRaG2GkNDTtkGb5HJF3cyeSBBz5_OC5ZFBoCWO0OBc/s400/A4iL43vunlY_Full.jpg" width="400" /></a></div>
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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.<br />
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<a href="https://www.blogger.com/null" name="more"></a><u><b>Keep Learning</b></u><br />
After a while, you might start getting tired of reading about the same advice, such as living within your means, paying yourself first or index investing. However, once in a while, you'll come across something that offers another perspective about certain philosophies. Even after reading lots of books, articles, journals, and watching the countless hour of the youtube video, I am still amazed at how much there is to learn about wealth and money. Alternatively, you can also enroll in classes to learn fundamental skills such as accounting. Regardless of what you do, continuing to learn about finance will keep you committed to this journey. I personally try to read a book a month; I use a library app that lets me sign out ebooks for free.<br />
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<u><b>Talk about personal finance</b></u><br />
Discuss personal finance and investment philosophies with anyone willing to listen and share. Sometimes, the hardest part about the journey to financial independence is being the only one to behave a certain way. By talking to other like-minded or supportive people, it'll reinforce the idea that you are doing the right thing. After all, if people around you are always going out to eat and you are eating leftovers from last night, it might be a little discouraging.<br />
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<u><b>Find ways to increase your monthly savings</b></u><br />
The first part is looking at your monthly spending habits and sees if there are any areas that you can be more efficient in. For some, finding ways to save money for monthly routine spending can be very satisfying. The second part, which takes more energy, is finding ways to increase your earning. This can be as simple as a second job, or, spending time on formal education to increase your monthly salary. <u><b><br /></b></u><u><b><br /></b></u> <u><b>Conclusion</b></u><br />
The main idea is to find ways to direct your desire and energy for financial independence. When you commit to financial independence, you start to become passionate about it, and if you don't have an outlet for that passion, it could quickly go away.Neighbour Joehttp://www.blogger.com/profile/16132272848801206152noreply@blogger.com0tag:blogger.com,1999:blog-8093375968643325232.post-85098916443794589202019-05-09T00:39:00.000-04:002019-05-21T07:01:17.120-04:00Why you actually make less than minimum wage!<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEisECeJM9Upq_ewzy3y1ZKlWUBsOsjsoqhfiEFSVUDMSBnw2QwH9ooVQMz1VW1N5LbRxjfRNNtv43I2zS6WaDItL7EMVFGbV6Gdtsw_vTRSOe8JOULZlWZ2WVgxImYMpyVklwp73PKfZQwV/s1600/Z3ownETsdNQ_Full.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="1200" data-original-width="1600" height="300" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEisECeJM9Upq_ewzy3y1ZKlWUBsOsjsoqhfiEFSVUDMSBnw2QwH9ooVQMz1VW1N5LbRxjfRNNtv43I2zS6WaDItL7EMVFGbV6Gdtsw_vTRSOe8JOULZlWZ2WVgxImYMpyVklwp73PKfZQwV/s400/Z3ownETsdNQ_Full.jpg" width="400" /></a></div>
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So I've recently read a book called "Your<br />
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.<br />
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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.<br />
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Here what you do, you take your posted hourly wage, that's the number you are told when you get hired. So let say you make $28/hour which is close to the average hourly wage in Toronto in 2016 according to Stats Canada. To make this example easier to visualize I am going to convert the hourly wage to a daily wage using a 7.5 paid work hour. Therefore at 28/hour, you make $210 a day. The first person you paid before the money even reaches your bank account is the tax man, so at $28/hour your average tax is about 23%. <a href="https://simpletax.ca/calculator">I used this calculator.</a><br />
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Then you start adding in your daily expense that you attribute for having to work at your current job. For this part, you have to be brutally honest as to rather or not the expense will exist if you didn't have to work. For example, will you have to buy a coffee and bagel at the coffee shop if you had time to make breakfast in the morning if you didn't have to work? Will a $5 breakfast become a $1 homemade meal? These are the things you have to consider and be honest, this will give you a clear picture of how much you are spending to sustain your job. Below is an example of expenses I can think come up for someone living in a suburb of Toronto and working downtown.<br />
<ul>
<li><b>Wage(For 7.5 paid hour @ $28/hour)</b>: $210/Day</li>
<ul>
<li><b>Tax (23%)</b>: -$48.3/Day</li>
<li><b>Commuting (Go Train)</b>: -$12/Day</li>
<li><b>Car Insurance ($150/30Days)</b>: -$5/Day</li>
<li><b>Gas to Train Station</b>: $2/Day </li>
<li><b>Car Usage (Maintenance and Repair): </b>$1/Day</li>
<li><b>Coffee/Breakfast/Snack</b>: -$3/Day</li>
<li><b>TGIF($20/Week)</b>: -$4/Day</li>
<li><b>Random Dine-Out or Take Out cause too lazy to cook ($20/Week): </b>-$4/Day</li>
<li><b> Buying Lunch cause too lazy to pack your own food days ($20/Week): </b>-$4/Day</li>
<li> </li>
<li><b>Total Expense:</b> $83.3/Day</li>
</ul>
<li><b>Net Wage</b>: 126.7/Day or $17/Hour</li>
</ul>
I haven't factored in the time you spend on commuting and other time spend because of your job. Let say you get paid 7.5 hours with half an hour for lunch. So now you are actually spending 8 hours at your job. Now if you add in 1.5 hours of commuting to your job, that's 9.5 hours total spend on your job. Then let say you add in another half an hour of decompression time at the end of your hard work day, this will bring our total to 10 hours/day.<br />
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If we take $126.7/Day and divide it by 10 hours/Day we get <b>$12.67/Hour</b>. The minimum wage in Ontario right now is <b>$14/Hour</b>.<br />
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What does this show you? A lot of things actually, it might show that you can just quit your job and sustain your lifestyle off a minimum wage job close to where you live and get more time back to yourself. It could show you how little you are valuing your time and might decide that it is time for a change. This will definitely show you how much you are paying in upkeep for your job.<br />
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In conclusion, I suggest everyone give the book "Your Money or Your Life" a read. Also, I think we should shift our mindset and stop using wages as an absolute measure of success because it doesn't tell the full story. Value your time and trade it wisely. <br />
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Neighbour Joehttp://www.blogger.com/profile/16132272848801206152noreply@blogger.com0tag:blogger.com,1999:blog-8093375968643325232.post-18690485768949095592019-05-01T23:17:00.001-04:002019-05-05T16:35:08.127-04:00Neighbour Joe - May 2019 Net WorthTime for another monthly Net Worth update.<br />
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<u><b>Asset</b></u><br />
Chequing: $2,685.62<br />
Savings: $6,515.11<br />
TFSA Investment: $91,285.85 (Market Value)<br />
RESP: $2,039.45 (Market Value)<br />
<i>*Real Estate: $224,000 (Purchase Price of my house)</i><br />
<i>**Define Benefit Work Pension (Transfer Value): ~$153,000 (Last checked in Jul 2017,aprox $1000 a month of contribution)</i><br />
<br />
*These have not been updated since the start of this blog.<br />
**Automobile is not included (No monthly car payment)<br />
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<u><b>Liabilities</b></u><br />
Mortgage: $121,099.50<br />
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*Credit Card is paid in full every month<br />
<a href="http://www.slowlybutwealthy.com/2019/04/neighbour-joe-march-2019-net-worth.html"><br /></a> <a href="http://www.slowlybutwealthy.com/2019/04/neighbour-joe-april-2019-net-worth.html">Last Net Worth Update: $347,353</a><br />
Current Net Worth: $358,426.53(+3.2%)<br />
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<u><b>Passive Income</b></u><br />
Current Passive Income: $2,940.24/Year or $245/Month<br />
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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. Neighbour Joehttp://www.blogger.com/profile/16132272848801206152noreply@blogger.com0tag:blogger.com,1999:blog-8093375968643325232.post-41762151058226076052019-04-16T22:52:00.004-04:002019-05-28T15:37:17.061-04:00Neighbour Joe - Current Investment PortfolioToday I am going to a quick summary of my investment portfolio. The last time I posted about my <a href="http://www.slowlybutwealthy.com/2017/08/my-investment-portfolio.html">portfolio was back in 2017</a>, 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 Buffett. 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.<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgfKc7FlpUrmXhTNGToJYfJ56a3rD-cpVClc2ILM7CPGOQtGjWhwbCYsl_8sergrz2f-40bsioh06LpcojNxFeQRxBNq5e58vszB7MIQJn1QOh6ZTMtvULHF2dHqXaPnQg0lNGQvAhtbFD5/s1600/portfolio.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="471" data-original-width="1050" height="287" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgfKc7FlpUrmXhTNGToJYfJ56a3rD-cpVClc2ILM7CPGOQtGjWhwbCYsl_8sergrz2f-40bsioh06LpcojNxFeQRxBNq5e58vszB7MIQJn1QOh6ZTMtvULHF2dHqXaPnQg0lNGQvAhtbFD5/s640/portfolio.jpg" width="640" /></a></div>
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. <br />
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Neighbour Joehttp://www.blogger.com/profile/16132272848801206152noreply@blogger.com0tag:blogger.com,1999:blog-8093375968643325232.post-4920796830836500172019-04-08T15:59:00.000-04:002019-05-09T00:51:44.266-04:00Two years into the journey and time for a quick summaryIt'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.<br />
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<u><b>Net Worth</b></u><br />
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. <br />
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<b>Net Worth April 2017</b>: $265,905<br />
<b>Net Worth April 2019</b>: $347,353 (+30%)<br />
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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.<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiIApS44KxxhCaJKJxPH9SAyXgiUg9q1XOQQny7OK-iHdkbrFiWnCBbKpRqSXICvbapKW1FYGo6tTKhiKg_Z9e0V0-aRu2am1v-GmpAt84LzDlv7VcRoVQzXZd2resmZ7Ye5O37kLHoZbCa/s1600/Two+Year+Summary.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="502" data-original-width="967" height="332" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiIApS44KxxhCaJKJxPH9SAyXgiUg9q1XOQQny7OK-iHdkbrFiWnCBbKpRqSXICvbapKW1FYGo6tTKhiKg_Z9e0V0-aRu2am1v-GmpAt84LzDlv7VcRoVQzXZd2resmZ7Ye5O37kLHoZbCa/s640/Two+Year+Summary.jpg" width="640" /></a></div>
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<u><b>What I have learned?</b></u><br />
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.<br />
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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.<br />
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<u><b>Summary</b></u><br />
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.<br />
<br />Neighbour Joehttp://www.blogger.com/profile/16132272848801206152noreply@blogger.com0tag:blogger.com,1999:blog-8093375968643325232.post-91405812862988025832019-04-03T13:23:00.000-04:002019-05-05T16:33:42.372-04:00Neighbour Joe - April 2019 Net WorthTime for another monthly Net Worth update.<br />
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<u><b>Asset</b></u><br />
Chequing: $800<br />
Savings: $1,505<br />
TFSA Investment: $87,734 (Market Value)<br />
RESP: $1,749 (Market Value)<br />
<i>**Real Estate: $224,000 (Purchase Price of my house)</i><br />
<i>**Define Benefit Work Pension (Transfer Value): ~$153,000 (Last checked in Jul 2017,aprox $1000 a month of contribution)</i><br />
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*Automobile is not included (No monthly car payment)<br />
**These have not been updated since the start of this blog.<br />
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<u><b>Liabilities</b></u><br />
Mortgage: $121,435<br />
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*Credit Card is paid in full every month<br />
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<a href="http://www.slowlybutwealthy.com/2019/03/neighbour-joe-march-2019-net-worth.html">Last Net Worth Update: $342,217</a><br />
Current Net Worth: $347,353(+1.1%)<br />
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<u><b>Passive Income</b></u><br />
<a href="http://www.slowlybutwealthy.com/2019/03/neighbor-joe-passive-income-march-2019.html">Current Passive Income: $2,308/Year or $192/Month</a><br />
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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. Neighbour Joehttp://www.blogger.com/profile/16132272848801206152noreply@blogger.com0