# Gunstar's Money Diary



## Gunstar (Nov 8, 2011)

I havn't been that active on the forum, so allow me to introduce myself:

I am a 27 year old individual that works in the Oil and Gas industry. My financial goal is to be semi-retired at 55, I don't have any plans of every fully retiring, but of course this may change after another 20 years of work. I also wanted to build a dividend stock portfolio of $1 Million and be able to live off of the dividends by that age.

To date in 2012, I have collected $363.61 off of dividends.

I consider myself moderately experienced when it comes to finance, but I'm always looking for feedback, critical or otherwise.

As of the end of May 2012, here are my stats:

*Assets*

Cash	
Chequing $2,914.36
Savings (CAD)	$3,000.39
Savings (USD)	$38.00
Trade Account	$2,041.33
*$7,994.08*

Registered	
TFSA $519.85
RRSP $29,453.91
DCPP $16,375.75
*$46,349.51*

Non-Registered	
Trading Stocks	$0.00
Dividend Stocks	$13,167.60
Options $14,742.00
*$27,909.60*

Vehicles $25,500.00
Real Estate $450,000.00

*Total Assets	$557,753.19*

*Liabilities*

Credit Card $0.00
Homeline $35,318.00
PLOC $36,250.00
Mortgage $320,121.78

*Total Liabilities $391,689.78*

*Net Worth $166,063.41*


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## the-royal-mail (Dec 11, 2009)

Please explain:

Homeline $35,318.00
PLOC $36,250.00


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## HaroldCrump (Jun 10, 2009)

Homeline is a HELOC
PLOC I assume is a personal LOC


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## Jon_Snow (May 20, 2009)

I wouldn't be able to sleep well at night with that kind of debt...


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## sharbit (Apr 26, 2012)

If your P-Loc rate is high you may want to liquidate your unregistered account to clear that balance. Ie, say paying it off is a guarenteed 7% return. Thats not half bad. Depends on your risk tollerance though and if you feel the portfolio rate is > then the ploc rate.

Otherwise your doing well for your age.


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## m3s (Apr 3, 2010)

It's not really cut and dry though to compare a LOC rate to an after tax return in the non-reg. Considering OP's age, those investments could eclipse the initial LOC costs with a longer outlook if dividends/equity steadily increases etc. Of course the stocks may be the same price when the LOC is paid off, so anyone's guess is as good as mine. There is always risk to the debt but I don't think the tar sand demand is drying up too soon anyways.

OP, I had a similar situation at that age although the RE was much lower. I'm curious why you have neglected the TFSA while you have $30k non-regs? Is it because of the options? Is $15k enough to really get into options? I'm curious because I plan to get into them soon but figured with lots of 100 shares I would need more capital. I believe you can use options within a TFSA but must do not because of the $15k cap at this time. A LOC secured on your home equity probably has a decent rate, but afaik a margin account such as Interactive Brokers would certainly be lower than a PLOC rate. My only advice would be to redirect any future deposits from the non-reg acct to the PLOC and consider margin to borrow instead. You are essentially "borrowing to invest" as is, but with a margin account you could deduct the interest from your taxes easier.


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## Gunstar (Nov 8, 2011)

Thanks everyone for the replies. 

@the-royal-mail and HaroldCrump: You are correct, the homeline is a HELOC at prime + 0.5% and the PLOC is a currently prime + 1% (Privately financed, not through a bank).

@Jon_Snow: I've always had debt ever since owning my first car, so I guess my tolerance to it has grown substanially over the years. Most of this debt has been acquired in the past couple of years due to finishing off my house as well as borrowing to invest.

@Sharbit and mode3sour: The unregistered account did 10% last year (including dividends) and this year has hovered right around 1%. I should have clarified when I listed options; these are actually company stock options that I calculate monthly as (Market Price x Shares) - (Option Price x Shares). I exercised these options at the end of May, and they will be going into a direct investing account held inside a TFSA. I will sit and collect the dividend on these ($100 a month) until I can get 2.5x the option price (Right now sitting around 2.2x). I hold a margin account with QuestTrade, but have never actually dabled in margin trading; something I still need to do more research on.


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## the-royal-mail (Dec 11, 2009)

Gunstar said:


> ...borrowing to invest.


Terrible idea. 

What's wrong with saving the money first and then invest some of your savings? The amount of debt you have must mean you're paying way more than $363.61 in interest.

I dunno Gunstar. I think you are in WAY over your head in debt and monthly expenses. But you can't change what you don't acknowledge - stop playing shell games and borrowing to invest. This is costing you time and money. A far better approach is to first have a rainy day fund, second save up for investing or whatever matters to you and then invest that money if things are still going ok for you. In the meantime, sell those investments and pay off the debt ASAP.

My opinion.


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## Gunstar (Nov 8, 2011)

the-royal-mail said:


> Terrible idea.
> 
> What's wrong with saving the money first and then invest some of your savings? The amount of debt you have must mean you're paying way more than $363.61 in interest.
> 
> ...


Thanks for your feedback, I'll take it under advisement.


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## Sampson (Apr 3, 2009)

The amount of debt you hold isn't outrageous. Sure, the nominal value is high, but what if the OP earns $200,000 per year?

We don't know enough details, only that the OP is young'ish and has decent income (reasonable RRSP size for age). We don't know personal situation (relationships), near/mid term plans (children, more cars,) etc.

If you posted something about how much of your after tax you save, we could probably better assess whether you are 'in-over' your head or not.

I personally believe in, AND subscribe to lifecycle investing, and it's clear you are on your way to your goal of Freedom 55. Welcome! and Good luck!

Come on, to have $120k equity in a home by age 27 is quite an accomplishment.


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## Young&Ambitious (Aug 11, 2010)

I agree with Sampson^. I know I'm jealous! I don't think I could make that net worth by his age (darn it!). 

I would also wonder about why so much is in non-registered accounts.


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## Gunstar (Nov 8, 2011)

Happy early Canada day everyone! 

Thanks to some of the feedback that I've received from some replies of this thread, in addition to doing some of my own research, I've decided to: 

- Take a stronger stance on paying off some of my outstanding debt. 
- Start to deplete my non-registered accounts and invest these funds into registered accounts.

As I mentioned before, I appreciate all feedback, critical or otherwise.

June is typically a bad month financially, mostly due to property tax being due and having a handful of other personal commitments to tend to. However, thanks to a positive surge in the company stock price, I did exercise a portion of my company stock options and invested them into a TFSA under a DRIP plan.

Total dividends accumulated in 2012 is sitting at $516.01

*Assets*

Cash
Chequing $2,312.53
Savings (CAD) $1,498.44
Savings (USD) $38.01
Trade Account $313.77
_$4,162.75_

Registered
TFSA (Mutual Funds) $519.85
TFSA (Direct Investing) $16,300.00
RRSP $29,453.91
DCPP $16,375.75
_$64,341.30_

Non-Registered
Trading Stocks $0.00
Dividend Stocks $9,916.80
Company Stock Options $5,200.00
_$15,116.80_

Vehicles $25,500.00
Real Estate $450,000.00

*Total Assets $559,120.85*

*Liabilities*

Credit Card $0.00
HELOC $34,500.00
PLOC $30,000.00
Mortgage $319,185.49
*
Total Liabilities $383,685.49*

*Net Worth $175,435.36*


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## Sherlock (Apr 18, 2010)

If your hosue is worth 450k I don't think you can just add 450k to your assets, because of the expenses involved with selling it, ie 5% to a realtor, lawyer fees, land transfer tax, etc. Also I don't count my car as part of my assets as I don't see any point in counting something that I need and therefore can't liquidate, not to mention it is steadily falling in value.


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## Gunstar (Nov 8, 2011)

And.... I'm back! 

After a couple (8) years of mostly just exploring different options, climbing the Corporate ladder, starting a business, and throwing all caution to the wind - I figured that this may a great time to focus on this money diary a little further. Lots has changed since my initial posts, gotten married, had a child, I've made some great deals, and some really lousy ones, over the last couple of years. 

The great thing is that this process kicked off my obsession with tracking my net worth, so I have data on every month since 2012!

On to the details:

*2020-04 (April)

Assets*

Cash and Equivalents: $58,976.39

_Registered Funds_

Olympia Trust (RRSP / TFSA / LIRA): $231,609.80 _(Cash: $37,063.26)_
RBC RESP (Direct Invested): $3991.00
Total Registered funds: $235,600.80 

_Non-Registered_

Lending Loop: $17,501.42
Cryptocurrency: $250.00
Total Non-Registered: $17,751.30

Joint Venture Interests: $107,000.00

Notes Receivable: $559,094.78

Vehicles: $46,000.00

Real Estate: $1,219,015.00

*Total Assets: $2,243,438.39

Liabilities*

1st Mortgage Debt: $699,013.48
2nd Mortgage Debt: $340,000.00
HELOC Debt: $76,000.00
Credit Card: $14,040.43

*Total Liabilities: $1,129,053.91

Net Worth: $1,114,385.48*

_*% Ownership (Net Worth / Assets): 49.67% *_
- I've traditionally kept this around 50%


*Background

Assets*


I keep a larger than usual amount of cash on hand as part of an agreement that I have with my Joint Venture partners, related to interests that I have in Real Estate.
I began investing in private 1st and 2nd mortgages, utilizing Olympia Trust Company, a couple of years ago, and have since continued to focus most of my investing here.
I have one smaller RESP with RBC that has taken a real beating since the beginning of the year (-60%). I just plugged some cash into it this month, and I want to recover it up to around $20K and then move it to Olympia (Or if I find I am not sick of the stock market - perhaps keep participating there). A big part of my reactivating my account was actually to do some stock research 
Joint Venture interests are my portion of ownership for a couple of Real Estate deals that I setup a couple of years ago - most of this will be cashed out in the next 2 years.
The large balance of notes receivable includes a settlement that I am taking payments on, private loans, and investments into businesses - This makes up a large part of my income from monthly distributions.
Real Estate includes a deposit on the home that we are renting, and will be purchasing in a month, and 3 Rental Properties that are scheduled to be sold in the next 2 years. Valuations are based off of recent appraisals in the past year.

*Liabilities*


1st Mortgage debt all relates to A Lender mortgages (That I setup before going self employed thank god)
2nd Mortgage debt is a blanket mortgage covering all of my properties (100% LTV on everything) - pulling out the equity allowed me to take advantage of some private business investments for monthly income. 5 Year term, 4% Interest Only with some fees up front - Was a private deal with lenders that I knew personally, facilitated through Olympia Trust.
The Credit Card was a lower interest (5%) cash advance option that RBC offered last year - flipped it over into private investments, and will pay it off prior to the low interest grace period being over.

For simplicity I haven't included any valuation of my businesses into this calculation, as I don't typically keep a lot of equity in them.

As you can see my financial situation is somewhat complicated, but insight and feedback is always appreciated.

Thanks in advance!


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## scorpion_ca (Nov 3, 2014)

Are you still working in the O&G industry? Would you mind to share your annual income? 

What would you do differently if you can go back when your started this money diary?


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## Gunstar (Nov 8, 2011)

scorpion_ca said:


> Are you still working in the O&G industry? Would you mind to share your annual income?
> 
> What would you do differently if you can go back when your started this money diary?


I no longer work in O&G other than some side work as a consultant here and there - I anticipate that is going to be very quiet here going forwards, but it’s still more cost effective to hire me for the odd job than to keep someone on payroll, so who knows.

What would I do different? Perhaps planned a little more, and taken a greater interest in finance at an earlier age.

I'd attribute alot of my earlier financial success to luck of the dice, having a well paying corporate job, and various side hustles - but I had no actual "plan" so to speak.

That's a really difficult question to answer - hahha - so apologies for my somewhat ambiguous answer.


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## Gunstar (Nov 8, 2011)

*2020-05 (May)

Assets*

Cash and Equivalents: $59,181.02

_Registered Funds_

Olympia Trust (RRSP / TFSA / LIRA): $243,851.51 _(Cash: $29,744.00)_
RBC RESP (Direct Invested): $10,209.00
Total Registered funds: $243,851.51

_Non-Registered_

Lending Loop: $16,632.24
Cryptocurrency: $250.00
Total Non-Registered: $16,882.24

Joint Venture Interests: $107,000.00

Notes Receivable: $558,634.81

Vehicles: $46,000.00

Real Estate: $1,209,000.00

*Total Assets: $2,250,758.58

Liabilities*

1st Mortgage Debt: $696,956.30
2nd Mortgage Debt: $340,000.00
HELOC Debt: $76,000.00
Credit Card: $14,093.52

*Total Liabilities: $1,123,708.76

Net Worth: $1,123,708.76
+ 9,339.28 over April*

_*% Ownership (Net Worth / Assets): 49.93%*_
- I've traditionally kept this around 50%


*Background

Assets*

Cash position remains largely unchanged.
Funded a new mortgage in April, and topped up the cash in my TFSA account with Olympia Trust in anticipation a new mortgage deal that is closing here in early May.
Topped up the RESP with around $5K in cash, and saw the account recover in about $1K in value - purchased some discount positions in TD, Scotiabank, and Enbridge.
One Joint Venture is looking to pay out here in the couple months, just in a waiting period for the tenants to qualify for the mortgage.
No real difference in Notes Receivable - I have one borrower that asked to re-amortize his outstanding loan of around $4K from the remaining 8 months to another 2 years to assist him with cash-flow.
Unfortunately we are personally struggling to get insurer approval on the mortgage for the place that we are living in, and I also found an accounting error on the valuation of our real estate, so I wrote down those values by roughly $10K

*Liabilities*

Tenants continue to pay off the mortgages, only had to make one payment arrangement - also opted in for the mortgage payment deferrals and will just start flipping that extra cash to pay off some variable debt.
I have a $13,600 interest only payment due on the 2nd mortgage here in August

Thankfully most of my investments are somewhat insulated from public market volatility, so with some decent deal proceeds this month, and even with the real estate write-down, it was nice to see the net worth number still go up.

Looking forwards to what the month has in store!


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## Gunstar (Nov 8, 2011)

*2020-06 (June)

Assets*

Cash and Equivalents: $70,542.68

_Registered Funds_

Olympia Trust (RRSP / TFSA / LIRA): $245,232.52 _(Cash: $9,028.35)_
RBC RESP (Direct Invested): $11,305.00
Total Registered funds: $256,537.52

_Non-Registered_

Lending Loop: $15.446.69
Cryptocurrency: $250.00
Total Non-Registered: $15,696.69

Joint Venture Interests: $107,000.00

Notes Receivable: $558,098.04

Vehicles: $46,000.00

Real Estate: $1,209,000.00

*Total Assets: $2,262,874.93

Liabilities*

1st Mortgage Debt: $697.447.06
2nd Mortgage Debt: $340,000.00
HELOC Debt: $76,000.00
Credit Card: $14,021.47

*Total Liabilities: $1,127,468.53

Net Worth: $1,134,406.40
+ 11,697.64 over May*

_*% Ownership (Net Worth / Assets): 50.18%*_
- I've traditionally kept this around 50%


*Background

Assets*

Cash position is increasing - The Mrs and I are trying to qualify for a mortgage, infinitely more difficult when self employed, and finding that carrying a larger cash balance is helping here.
Funded a new mortgage in May with my TFSA.
No new purchases in the RESP - account has appreciated around $1K from market recovery.
One Joint Venture is looking to pay out here at the end of June.
No real difference in Notes Receivable - borrowers continue to pay as planned.
*Liabilities*

3/4 mortgages have a deferral on them now - mostly just to increase cash positions. This is causing the 1st mortgage balances to rise roughly $500 in total each month.
I have a $13,600 interest only payment due on the 2nd mortgage here in August
Looking to do some home improvements here shortly after the purchase, so while I am excited inside about this, I know that it's not going to help the Net Worth much. Ah well - upwards and onwards!


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