# Starting Net Worth



## Lightningdrink (Jul 4, 2018)

Hello:

I just wanted to give a sketch of my current net worth. I graduated with Bachelor's Degree in 2016, and I'll be returning to complete a Master's Degree this fall. 

Investments: $65,163
Cash: $5,057
Debt: $1,445 (cash back cards paid off monthly)
Residence: $0
Net worth: $68,775

One of the challenges I've faced building my net worth is increasing my income. The job market in Calgary is so-so for recent grads, and consequently I count myself lucky to have a "fun job." 2017 I earned about $30K. My feeling is that I should stick with this fun job rather than pursue something else at least while completing the first year of my academic program.

Additionally, I should get some funding for my Master's Degree. With tuition and expenses that will be about $1,000 a month, which I hope to supplement with work (hopefully to at least $2,500/month). Any advice on how to build some more investments would be appreciated. My total expenses are about $1,100/month.

Additionally my portfolio breakdown is as follows. All TFSA while I have room (tax free vs. deferred): 47% S&P 500, 35% BRK, 10% RBC, 8% Suncor. Going forward I'm going to avoid singe equities and lean towards broad index investments, because the timing the market for small investors is a bad bet. I suppose a strategy is to invest in at least $10,000 increments in the S&P 500. Also aware that there will be large stock market corrections.

Any comments or suggestions?


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## Mukhang pera (Feb 26, 2016)

You're doing well to be fresh out of school with other than a negative net worth.

In terms of the challenge of increasing income, I would say from now on do not spend more time pursuing post-secondary education unless you can see it translating into enhanced income. That is unless you have already achieved your financial goals and you are doing it for the love of learning.

You mention an MA in history. What is your career goal? Degrees in history, even at the PhD level, do not open many doors to high wages or well-remunerated self-employment. Those I know who are doing the best in that regard are tenure track types at universities. Their salaries are not making them rich, but they make enough that they have some left over for investing and it seems to work out okay.

As one who spent 9 years in pursuit of advanced degrees at various institutions following Ontario Grade 13, I have had a bit of relevant experience and I have observed a lot about how advanced education can affect income. In some cases it is key; not always. Some who I have seen, who have done the best in the race to riches, are those who spent less time in school and cultivated successful businesses. One or two of those have had some crushing defeats, yet they have persevered and done very well.

As to your portfolio, I'll refrain from commenting. I have never been a stock market investor in any significant way and I am not about to start. My form of stock market investing years ago was to start private resource companies, get them listed on the VSE and sell the seed shares to a bigger fish to run the show. That worked well in the days when Murray Pezim and others like him held sway on Howe Street. The market is now too heavily regulated to prosper in that game. It was fun while it lasted. In those days we did not have the internet - and all the opportunities it brings - to latch onto. But then, as now, there were lots of ways for enterprising types to make money.


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## humble_pie (Jun 7, 2009)

Lightningdrink said:


> Hello:
> 
> I just wanted to give a sketch of my current net worth. I graduated with Bachelor's Degree in 2016, and I'll be returning to complete a Master's Degree (in History) this fall. I'm currently 24.
> 
> ...




your individual stock selections are the right answer. Me i'm not a fan of ETFs. 

it's too hot to get into a contentious discussion of why ETFs today are not all they are cracked up to be. 

instead, here's a useful new book that packs a punch in favour of picking a handful of individual stocks & then sticking with em.

https://www.amazon.ca/6-Pack-Portfolio-Canadian-Stock-Market-ebook/dp/B07BWW55C3


the author debuted the idea for this book here in cmf forum 8 or 9 years ago. Under the username Argonaut, he elaborated a strategy of investing in a small but smart portfolio of common stocks while avoiding ETFs on the grounds that, by definition, they are required to include the index losers.

the idea was not unique to Argonaut. Many others have set forth variations on the same theme: buy & hold a small selection of high quality stocks with strong moats. Owning single equities does *not* mean timing the market btw.


https://www.amazon.ca/6-Pack-Portfolio-Canadian-Stock-Market-ebook/dp/B07BWW55C3


.


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## Mortgage u/w (Feb 6, 2014)

I agree with Mukhang pera - pursuing a Master's in History does not open many doors in the higher income brackets. Without knowing your career aspirations, it would be difficult to offer better advise...


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## AltaRed (Jun 8, 2009)

I'll only respond that young folk busy with careers should go Couch Potato, and focus on their careers instead (better value for the time spent). Easy enough to make switches in registered accounts 5-10 years from now without tax consequences if one is so inclined. The same advice I've gave my now 40somethings.

I second others in questioning the value of a MA in History. That is not going to open very many doors, and for well paid positions at that. I understand one should follow their dreams but some common sense also needs to apply if one does not want to potentially starve. I've seen too many with Arts degrees ending up in retail jobs. Perhaps a M.Ed would be a better choice or some associated practical field that can leverage history into one's primary field. The same advice I gave my then 20 year olds who are having solid careers in Business rather than slogging it out in some civil service social service job with Psychology degrees (which almost require Ph.D for the best jobs).


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## james4beach (Nov 15, 2012)

Congrats Lightningdrink, this looks really good. Having a positive net worth is a huge win, and you have a decent amount of investments for your age!

I'm going to mention a thought on investment that is pretty different than what people usually say. At your age, there are a lot of uncertainties in life. You might move (for a variety of reasons), could pursue more education, or might work. Might meet a partner and decide to have a child. There are so many unknowns that it's pretty hard to leave aside investments that you truly _won't touch_ for the next 40 years. Stock investment works best when you build a portfolio and leave it alone... don't withdraw from it... for a very long time.

Your situation (like mine) is quite different. With all these big uncertainties, it's a stretch to think that you can leave that money alone and just not touch it. To reflect that, consider taking a less aggressive allocation, something like 50/50 or 60/40 with a decent amount of fixed income.

You might even want to look at these good balanced mutual funds we've been discussing in another thread. While it's true that a carefully selected stock index portfolio can do better, the mutual funds offer a bit more flexibility as far as adding small new contributions, and self-rebalancing. Plus, these 60/40 balanced funds are appropriate even if you think you might have to draw out some of the money in the coming years.

When I was your age, not too long ago, I had several friends who pursued aggressive stock portfolios. Unfortunately many of those plans fell apart because they actually needed the money for one reason or another, including for reasons such as the poor job market, or going back to school.


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## lonewolf :) (Sep 13, 2016)

Investing should not be the first primary focus. Savings are most important until build up money to invest. Investing might make 10% difference in your net worth where as cutting expenses & increasing income will effect your net worth by 90%. A larger portfolio investing might effect your net worth 90% & working only effect it by 10% which is when the primary focus should be investing.


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## Pluto (Sep 12, 2013)

congradulations on your pursuing history despite its reputation of low economic value. Money is important, but everything is not about money. its important to do what you value. there is a book called the 7 laws of money. One law is something like 'do what is meaningful to you, and the money will follow'.


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## AltaRed (Jun 8, 2009)

Pluto said:


> congradulations on your pursuing history despite its reputation of low economic value. Money is important, but everything is not about money. its important to do what you value. there is a book called the 7 laws of money. One law is something like 'do what is meaningful to you, and the money will follow'.


I agree with pursuing dreams but the money, at least enough of it, does not necessarily follow. It is a rare* individual I meet that has an Arts degree that is truly happy with his/her overall life. Tenured profs with PhDs perhaps, or someone who has parlayed some Arts background into some business venture.

* One, a relative, eventually leveraged a degree in English into a reasonable paying technical editorial job with an environmental engineering consulting company (editing products for clients).


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## james4beach (Nov 15, 2012)

Pluto said:


> congradulations on your pursuing history despite its reputation of low economic value. Money is important, but everything is not about money. its important to do what you value. there is a book called the 7 laws of money. One law is something like 'do what is meaningful to you, and the money will follow'.


I tend to agree. When reading the responses here, one might also want to take into account that this forum has a lot of people from certain fields -- I see a lot of engineers & finance people, and heavy representation from the industrial/energy/oil sector. So there might be a leaning around here towards _overvaluing engineering_ kind of things, and undervaluing humanities fields.

I write that as an engineer myself. Many of my coworkers have trouble seeing the value of humanities fields, and I'd call that a failing in the engineer's way of thinking, not actually in humanities/history. Among people I know, anyway.


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## Lightningdrink (Jul 4, 2018)

Thanks for the feedback everyone. Here's an update as of August 11, 2018 (turned 25 years a few weeks ago):

Investments: $69,224
Cash: $5,735
Cashback credit cards: -$1,136 (zero interest paid)

Net worth: $73,824* 

*So I'm up $5,049 this month. As you may note this is mostly due price changes from the stock market. S&P 500 continues to rise and Berkshire Hathaway's stock has gone up over the past while. I recognize that this is a risky asset allocation, although I'm fine with that at the moment. I'm considering selling my older vehicle to reduce expenses over the fall and spring terms (?). I have some reservations about completing a Masters Degree, but on balance (scholarship money I've received versus opportunity of working my entry level jobs, etc.) I think that it's what I want to do. I will keep updating you, and thanks for the advice.


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## northernguy (Oct 19, 2013)

Looking at your expenses and posts, am I correct to assume you're still living with parents? The MA won't hurt you if you're not going backwards doing it, however as others noted it may be worth figuring out what you'd like to do and targeting studies, career path, etc toward that goal. If you're planning to purchase a condo/house at some point, you'll need to break past the $30k/yr employment in order to do it.

Great job staying out of debt and growing assets.


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## Lightningdrink (Jul 4, 2018)

In response to the past post—I moved after high school during university. However, my "rent" is quite low in my living situation. I pay for everything else.

Investments: $81,042
Cash: $4,976
Credit cards: -$1,393

Net worth: $84,625*

*I have increased my investment positions, but returns have gone way down with the market correction. I am still ahead, but since I indexed most of these new investments that were made from Sept 30. - Dec. 30 2018 I have sustained some losses since the fall. Once again, I believe that my priority needs to be increasing income. I am extremely frugal (expenses can total less than $1,000 a month [however my cheap rent allows this situation to continue]), but I feel like I really cap out my total savings potential with my current income. 

I am working on that project. Any suggestions are appreciated.


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## Lightningdrink (Jul 4, 2018)

June 16, 2019

Investments: 100,383
Cash: 3,983
Credit cards:-1,226

Net worth: $103,140


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## Lightningdrink (Jul 4, 2018)

I'm updating this form as a lot has happened since my first post. Graduated with my MA, and funding and short jobs with the university was instrumental. Pursuing another master's this time in the public sector. Having something stable where I could improve my standard of living would be great. I seem be suited to academia and not to work, so I may continue that way even though a career is the socially expectation for most.

Investments: $226,578 (84% S&P 500 Index fund, 13% Berkshire Hathaway, 3% RBC. I've never sold a share of S&P 500 [or any of these stocks; I exited Suncor after holding six years about a year ago).
Cash: $6,827 (note that $1,250 is in a damage deposit)
Debt (extremely low-interest ): $26,000
Debt (credit card paid of monthly): $961

Net worth: $206,442.

I'm fairly certain people's net worths have gone up with the pandemic. I really benefited from pursuing the graduate degree, receiving scholarships ($10,000 about a year ago) and related work, but then also having huge market appreciation of index fund from $47 at first buying point to about $88 today with no trades (only constant buying, reinvesting).

The last thing I'd like to do is lever-up, likely with a mortgage. Housing prices are high. the only sector of the market that seems reasonable are apartment condos, so maybe getting a mortgage on one of those is best. I'm not so sold on apartment condos—particularly with remote work meaning it is harder to leave your house.


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## Lightningdrink (Jul 4, 2018)

Only nineteen days and with the S&P 500 up my net worth shot up. Honestly, I will never go back to picking stocks... its worth it to resist the temptation. 

Investments: $247,272
Cash: $4,703
Debt ( low interest housing funded): $26,000
Debt (credit card paid of monthly): $800

Net worth: $220,472


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## Lightningdrink (Jul 4, 2018)

Net worth: 223,901.


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## Lightningdrink (Jul 4, 2018)

Net worth: $443,886.


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## scorpion_ca (Nov 3, 2014)

How come you increased your net worth by 220K in just five months?


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## MrBlackhill (Jun 10, 2020)

Same question. You said you earn $30k.

You went from $100k in June 2019 to $247k in early 2021. The S&P500 has gone up about +50% during that period. That means you certainly invested more than your income.

And 5 months later you almost double from $224k to $444k. I don't get the math.


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## Lightningdrink (Jul 4, 2018)

Hi Scorpion and MrBlackhill,

Those are very good questions. A family member passed on who lived in the U.S. and I received a financial gift of 155K Canadian. I did not explain that initially.

My income in 2018 was 30K but increased. In 2021 I have it at 78.77K total excluding dividends. That income includes one claim that I am not sure if I will realize, so it may be lower once I file taxes.

The June 2019 to early 2021 gain was income related Scorpion—I did not explain the increase above the 30K salary. My tax return for 2018 was more like 27K, not great and I don't want to go back! Up until early 2021 was all from the stock market and income, I know that the S&P rose by 50%, but my income must have accounted for the difference.

Those are very good questions. In my view, my weak point is still income. I have a goal of reaching 100K salary income or higher that I would really like to achieve. Reading this forum and people's earning's shows that it is possible!

Currently, net worth I am at $465,101. It dropped ~$10K due to market pull back.

91% S&P ETF
7% Berkshire Hathaway B Stock
2% Royal bank
1% Apple / cash

Lightning.


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## Lightningdrink (Jul 4, 2018)

Lightningdrink said:


> Hi Scorpion and MrBlackhill,
> 
> Those are very good questions. A family member passed on who lived in the U.S. and I received a financial gift of 155K Canadian. I did not explain that initially.
> 
> ...





Lightningdrink said:


> Hi Scorpion and MrBlackhill,
> 
> Those are very good questions. A family member passed on who lived in the U.S. and I received a financial gift of 155K Canadian. I did not explain that initially.
> 
> ...


Jan 17, 2021: $482,512. 

Peaked on open day between Christmas and New Years at $501,000 – then lost about $18,000 due to market pull back... Still up. Markets look high but continue to invest. USD/CAD currency risk – if reached parity while S&P flat, down -25%. Long-term currency changes should fluctuate and not compound like stock market.


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## Lightningdrink (Jul 4, 2018)

$473,635. Down because of stock market...


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## afulldeck (Mar 28, 2012)

Keep going your doing well...


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## Lightningdrink (Jul 4, 2018)

Essentially zero progress this year despite saving everything I can. Did not sell a share of any holdings, but unfortunately stopped investing to pile up some cash to pay off old student loans with low interest when the interest rate increases on them. So total net worth is 470K including my car (valued at 7.5K) and small amount in a pension plan that I contributed throughout the year.

Difficult not to sell stocks I was 100% in S&P 500 ETF and some small amounts blue chips like Berkshire Hathaway, Royal Bank, Apple, and Google in January 2021. No real estate holdings as I don't want to commit to one city until I explore career more.


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## Lightningdrink (Jul 4, 2018)

Breakdown 77.5% S&P 500 ETF, 10% cash, 7% Berkshire Hathaway and 5% in car, pension, and blue chips.


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