# No plan survives contact with the enemy...



## Sm5

New member here. I have been reading the 'money diaries' for a while now and they seem like good motivation to keep saving (and avoiding 'lifestyle creep'). Nothing like public accountability in that regard.

Therefore, it seemed prudent to 'get in on the fun' and, hopefully, maintain motivation to continue to invest and learn from the experts here.

So far, only been investing for about 2 years now. 2013 was 'jumping in' with a small TFSA (mutual funds) and far too much consumer spending. I only really started in earnest in 2014 with the realization that 'I ain't getting any younger', have no pension, and don't want to work forever... I like what I do (at times) but would definitely like to do _less_ and scale back as time goes on.

Hopefully, I can continue to keep moving onward towards that loftiest of goals of financial independence and living off dividends.

This money diary will simply be account balances and random thoughts on investing and spending. With that said, I am already seeing complexity seep into my financial life as 2015 started with me incorporating my practice. The plan is that writing about all of this may make the complexity more bearable (and additionally, more reasoned) as well as 'give back' - as the money diaries on here were great motivation to get into investing.

With that preamble, and realizing it is the start of 2015.

As of January 2, 2015:

Age: 29, Renter

*Assets:*
TFSA: C$37,998 
RRSP: C$28,784 
Non-Registered (CAD): C$27,778
Non-Registered (USD): US$ 341

Savings Account 1: C$2,271
Savings Account 2: C$ 49

Corporate Current Account: $ 90.00 

*Liabilities:*
Margin Loan (@4.25%): C$3,864
Mastercard: ~C$2,000.00 *this is just the revolving balance as of January 2, it is paid in full monthly
LOC: C$ 0
Visa: C$0

*Net Worth: C$93,889* (converted at TD's listed rate)

The margin loan was simply a result of market timing when the banks dropped a little while back to a point where after tax cost of margin was comparable to the annual dividend on the bank stocks I bought with the margin money this meant taking my 'cash reserve' cash as well as margin when the deal was ripe. So far, it is working out. Wish I had gone in further but hindsight is 20/20. However, the downside is this (ill-conceived market timing?) has moved my asset allocation out of balance quite substantially. Currently I am sitting at 38% Canadian equities (target is 25%), 31% International Equities (target of 35%), 31% US Equities (target of 35%), 3.7% fixed income (target 3%) and negative for cash (target of 2%). 

My goal, for 2014 was $100,000 net worth so fell slightly short of that target. 

The plan is that over 2015 I can be re-balanced through additional contributions since net worth is low enough that contributions will have, hopefully, enough of an effect (we will all see if 'letting it ride' as I re-balance is a good idea or not I guess). 

Goals for 2015 are:
1) Get a net worth of $160,000.00 (estimated) or better on or before December 31, 2015 - for this purpose I will be including corporate holdings and adjusting downwards for unpaid corporate taxes - any idea of a good adjustment factor?
2) Put $4,000.00 into Savings Account 1 as part of 'cash reserve';
3) Make a 2015 TFSA contribution ($5,500), and use it to re-balance; 
4) Make a 2015 RRSP contribution (whatever the 2015 maximum is), and use it to re-balance;
5) Put a base of $4,000.00 into corporate account to avoid bank fees;
6) Open and fund with at least $15,000.00 (to avoid small account fee) a corporate brokerage account; and
7) Get each asset category within 3% of their target allocation.

Let's see what 2015 brings!


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## nobleea

Looks good overall, though without some indication of your income it will be tough to judge whether your goals are achievable or realistic.


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## Sm5

I guess that would be useful information for an assessment. Income is variable but will range between $100,000 and $175,000 a year.


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## Sm5

Ok, time for the first month's update.

January was actually a quiet month finances wise. Didn't spend "that much" overall but a few one of expenses will be coming up in February. Also, had to make a shareholders' loan into my corporation to cover start up expenses. With that said, it was also the month I received my Q4 draw at work -- so that helped. Of course the markets didn't.

I have not yet made my TFSA contribution but am currently moving the funds to do so -- does anyone know a good (free) non-cheque way to move money between Canadian banks? I've been using cash and it is a bit of an annoyance having to first order the cash, then get it and walk it 'across the street' to the other bank. I've been suggested to use Interac transfers but everything I read on them suggest that the system limits make then quite useless to move funds back and forth unless done over a 1 week period in smaller batches which I fear will raise red flags. Thoughts?

Anyways, here is where we sit on February 1, 2015, I've decided to start rounding instead of going "to the dollar" as well.

*Assets*
TFSA: $39,100 ($100 monthly contribution)
RRSP: $31,000 
Non-Registered (CAD): $ 37,400
Non-Registered (USD): $330
Savings Account 1: $14,700
Savings Account 2: $2,550 (money on its way to TFSA)


Corporate Current Account: $500

*Liabilities*
Margin Loan: $10,450 - paid 400 towards paying down this
MasterCard: $1,000 (revolving balance, paid monthly)
Visa: $0
Line of Credit: $0
Corporate MasterCard: $0 - new, for the corporation's expenses to keep them separate.

*Net Worth*, converted at TD prevailing rate: *$114,960*

For the next month, my plan is to draw down on Savings Account 1 for living expenses instead of investing the funds. The reason being to allow the corporation, who I will now be paid through, to accumulate enough to avoid bank fees, repay its shareholders loan (to keep things clean) and to get the base amount established in its account. Also, in February, I hope to get the 2015 TFSA contribution made after funds settle though the various accounts needed to make it. Asset allocation is still very much 'out of whack' as I haven't made any contributions except to paying back the margin loan a bit and my monthly contribution of $100 to my dollar cost averaged mutual fund TFSA.


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## Spudd

You could open an account at Tangerine. Transfers to/from other banks are free and can be done with large amounts. Keep $1 or so in the account so it stays active, and mainly just use it as an intermediary. The disadvantage is it takes around 2 business days each direction, so you'd be waiting for 4 business days altogether.


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## Sm5

Thanks for the idea Spudd. I am actually just in the process of doing this but having issues with them needing a cheque to open the account. Since I don't have a chequing account (anywhere), they won't take a one of credit cheque nor a counter cheque, it may be a dead end.


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## Sm5

Monthly update time. Never did get the tangerine account to work, but given my recent restructuring, it looks like I won't have to be moving cash back and forth any more regardless. So the "do nothing" approach may have worked out in the end. 

Had a bit of 'start up' spending for the corporation and had to buy a new phone -- my old one was well past its prime.

It was also a quite month for investing, just the one 'move' of moving my TSFA contribution into the TFSA account. Continuing to draw on unallocated personal funds to allow corporate funds to accumulate.

So here is the numbers:

Assets
TFSA: $41,000 ($100 monthly contribution)
TFSA 2: $4,400 (contribution of $4,300)
RRSP: $32,000 (no contributions) 
Non-Registered (CAD): $ 38,500
Non-Registered (USD): $350
Savings Account 1: $8,800
Savings Account 2: $50 (money on its way to TFSA)

Corporate Current Account: $6,500 (unadjusted)

Liabilities
Margin Loan: $10,460 
MasterCard: $1,200 (revolving balance, paid monthly)
Visa: $0
Line of Credit: $0
Corporate MasterCard: $800

Net Worth, converted at TD prevailing rate, rounded after calculation: $119,350 (+$4390, unadjusted for taxes).

Hopefully better next month, a bit high on the spending this month.


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## Sm5

Quarter 1 update time!

March was a pretty standard month. No substantive investment activity other than starting the process of opening a corporate brokerage account (they haven't completed that yet, way too much paper) and little in the way of unusual spending. The 'economic slowdown' is starting to become apparent at work as workload is becoming more and more erratic, and receivables are getting longer. Here is hoping Q2 is better in that regard. Also, I finally got a chance to complete my personal taxes and it looks like a nice size refund is forthcoming in April/May. Of course it is 'already spent' on next years RRSP contribution.

With the quarter ending, I thought this would be a good time to also look back on my 2015 goals:
1) Get a net worth of $160,000.00 (estimated) or better on or before December 31, 2015 -- not nearly there yet, but lots of time to go.
2) Put $4,000.00 into Savings Account 1 as part of 'cash reserve'; - DONE!
3) Make a 2015 TFSA contribution ($5,500), and use it to re-balance; - sort of done, I've contributed enough that the monthly $100 automatic contributions will do the rest. SO I'll preemptively say this is done.
4) Make a 2015 RRSP contribution (whatever the 2015 maximum is), and use it to re-balance; - Not done.
5) Put a base of $4,000.00 into corporate account to avoid bank fees; - DONE!
6) Open and fund with at least $15,000.00 (to avoid small account fee) a corporate brokerage account; - not done.
7) Get each asset category within 3% of their target allocation. - Not done, my asset allocation is still way off (and heavy Canadian which is hurting). However, there is still lots of time for the contributions to balance this back before year end.


Here is where we are with the numbers:
*Assets*
TFSA 1: $41,350 ($100 monthly contribution)
TFSA 2: $4,400 (no contributions)
RRSP: $32,100 (no contributions)
Non-Registered (CAD): $ 38,200 (no contributions)
Non-Registered (USD): $340 (no contributions)
Savings Account 1: $5,500
Savings Account 2: $20


Corporate Current Account: $12,000

*Liabilities*
Margin Loan: $10,360 - paid $90 towards paying down this with some cheques I needed to deposit. 
MasterCard: $960 (revolving balance, paid monthly)
Visa: $0
Line of Credit: $0
Corporate MasterCard: $110.

Net Worth, converted at TD prevailing rate (as of April 2, 2015): *$122,600* (+$3,250, so a pretty average month)

I've also had the chance to look at rates of return on everything, so far my time weighted return over my investments (TFSA1, TFSA2, RRSP, and Non-Registered) is 5.78% YTD (25.595% annualized). My non-registered portfolio is the dog (-3.03% YTD) but this is my predominately Canadian holdings so somewhat to expect. My international/USA holdings (predominately in RRSP) are up 11.58% YTD and my somewhat properly balanced TFSA is an acceptable 7.99% YTD. 

Obviously, this can change a lot throughout the year and is actually worse with the 'cash drag' of funds not invested, but still nice to see a reasonable rate of return covering the margining costs regardless of the accuracy of the calculation.


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## Sm5

*A good, but not great, month.*

April was a unique month and somewhat busy. GST was due and paid, a tax refund was received (and promptly 'spent' on RRSPs) and a quarterly draw from work (down about 20% from usual quarterly revenue, the economy is hurting) and opened a brokerage account for the corporation Overall, this means a 'messy' month. Oh, and the TFSA limit was raised meaning another $4,500.00 needed to get placed in TFSA. New money is still in cash unfortunately, but is either at or making its way to the correct accounts and currencies (convert to USD in RRSP and purchase US securities for balancing purposes).


Here is where we are with the numbers:
*Assets*
TFSA 1: $40,900 ($100 monthly contribution, down a bit with market movement)
TFSA 2: $8,900 ($4,500.00 contribution, still in cash as I'm waiting for the 45 day holding period to expire on the e-series funds that I was previously holding here to expire so that the full amount can be used on a stock or mayer fund purchase -- the change in TFSA limit adjusted my plans a bit with this account)
RRSP: $41,500 ($10,000 contribution from tax refund)
Non-Registered (CAD): $ 37,700 (no contributions)
Non-Registered (USD): $350 (no contributions)
Savings Account 1: $3,700
Savings Account 2: $10,300 ( waiting on $10,000 cheque to clear then this goes into RRSP)

Corporate Current Account: $13,000
Corporate Investment Account: $nil (just opened).

*Liabilities*
Margin Loan: $10,050 - paid approximately $260 towards paying down this with some cheques I needed to deposit, may pay another 300 or so to this in May with money I don't have any use for currently. 
MasterCard: $1750 (revolving balance, paid monthly, higher than usual as I had to book a flight across country as well as purchasing some printing supplies)
Visa: $0
Line of Credit: $0
Corporate MasterCard: $450.

Net Worth, converted at TD prevailing rate (as of May 1, 2015, close of business): *$145,400 *(+$22,800, so a pretty good month, but should have been about $3,000-5,000 more if it weren't for the work slowdown). Though to put things in perspective, 'tucking away' over $20,000 in a month is probably not something to complain about too much.

For next month, the plan is to get that remaining $10,000 into the RRSP and then use the funds in various accounts to make purchases and reduce cash on hand. 

Onwards and upwards!


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## janus10

Looks like the big goal of $160k net worth will be achieved before the end of summer. Nicely done.


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## scorpion_ca

just wondering what you do for living...you are making a lot of money monthly....good job


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## RBull

Great job. 

It's refreshing and encouraging to read the money diaries of young people with goals and good financial smarts.


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## Sm5

Thanks for the encouragement Janus10, I'm hoping to hit the 'magic' $160,000 sooner, rather than later so I can allocate funds to some upcoming liabilities (2015 corporate and personal taxes for one, I'm going to have to start saving liquid capital for these inchoate liabilities).

scorpion_ca: I practice law, specifically corporate transactions/business structuring and corporate/commercial dispute resolution.

Bull: thanks for the kind words, I hope this diary gives the motivation to others that those that 'came before' gave to me.


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## RBull

Sm5 said:


> Bull: thanks for the kind words, I hope this diary gives the motivation to others that those that 'came before' gave to me.


You're welcome. 

Yes, I gathered that from your preamble. A worthy cause. From what I observe there are many that need financial leadership.


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## Sm5

*May update - rampant consumerism abound*

Posting a few days early because I don't expect to get a chance on Monday. As expected, May was a bit rough (June will be as well) with some significant one-off expenses. The good news is that overall it was still a positive month, just not positive enough! Unfortunately, with the economy in Alberta how it is, I'm down around 20% - 25% for net revenue which is meaning some timing of receivables is necessary.

A few financial related items occurred in May, I funded the corporate brokerage account and got that rolling and planned out the rest of the year with my accountant (decided to start drawing a salary, which means source deductions are starting which will slow down net worth growth for the rest of the year since CRA will be taking around $35,000 off the top over the next 7 months :-().

Anyhow, since this is a day early, I am anticipating for a rent payment that comes out tomorrow; meaning that this months update is 'as of' June 1, 2015 and not the date of posting.

*Assets*
TFSA 1: $41,600 ($100 monthly contribution)
TFSA 2: $9,000 (no contributions)
RRSP: $53,700 ($10,000 contribution, only around $4,000 more room here -- I expect I'll top this off in July)
Non-Registered (CAD): $ 38,600 (no contributions)
Non-Registered (USD): $350 (no contributions)
Savings Account 1: $3,550 ($5,200 less a $1,650 rent payment coming out tomorrow)
Savings Account 2: $300

Corporate Current Account: $7,800
Corporate Investment Account: $8,200.

*Liabilities*
Margin Loan: $10,070 - decided not to pay anything against this and will let it ride for a bit. 
MasterCard: $4,200 (revolving balance, paid monthly, 2 major expenses this last month and another couple coming in June before this goes back to normal :-( this one hurts a bit)
Visa: $0
Line of Credit: $0
Corporate MasterCard: $1,200.

Estimated net worth (USD converted on May 29, 2015 close of business and accounting for rent payment) is *$149,000* (+$3,600).

On the rate of return front, of the accounts I track (the major ones, all Excel XIRR method), my non-registered CAD is the dog (heavily Canadian financials with a -1.34% YTD return; TFSA 1 (balanced in its own right) is at +8.16%; TFSA 2 (global small cap) is +4.88%; and RRSP (foreign / USA) is +14.93% which gives an overall investment return of +7.54% YTD (+19.64% annualized).Can't complain about that! I have not started tracking the corporate investment account yet. 

Until next time...


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## Sm5

*June 2015 - Rampant Consumerism (take 2) and a turn of the market*

Posting a day early (again) because I don't expect to get a chance tomorrow. As anticipated, June was rough. This is a mix of the rampant consumerism (which was expected), and a turn of the market.

A few financial related items occurred in June, I threw some funds at margin and made a purchase of some additional bank shares in the financial turmoil (thank you Greece). I need to stop buying Canadian financials as it is affecting the portfolio balance placing me 5% over my Canadian equity allocation. It is just hard to say no to blue chips that are paying dividends higher than the *pre*-tax cost of money! Unfortunately, this means until the end of July I am basically illiquid -- going to be tight on cash flow from some expected and unexpected expenses. The good news is next month looks like I'll be receiving a reasonable income, so merely a timing of receivables issue. I have also started a salary (with everything that entails tax and reporting wise), so asset growth will slow now with the additional tax burdens this entails.

With that said, I'm a bit concerned I'm taking too much risk so likely will back down a bit on the margin over the next few months.

As with last month, since this is a day early, I am anticipating for a rent payment that comes out tomorrow; meaning that this months update is 'as of' July 1, 2015 and not the date of posting.

*Assets*
TFSA 1: $40,800 ($100 monthly contribution)
TFSA 2: $8,700 (no contributions)
RRSP: $51,800 (no contributions)
Non-Registered (CAD): $ 41,100 (around $2,800 contributed)
Non-Registered (USD): $340 (no contributions)
Savings Account 1: $1,900 ($3,550 less a $1,650 rent payment coming out tomorrow)
Savings Account 2: $30 

Corporate Current Account: $4,500
Corporate Investment Account: $8,100 (no contributions).

*Liabilities*
Margin Loan: $11,100 - paid a bit towards this, also drew on it a bit. 
MasterCard: $1,100 (revolving balance, paid monthly)
Visa: $0
Line of Credit: $0
Corporate MasterCard: $3,500 (the rampant consumerism expected last month has hit! This is one off).

Estimated net worth (USD converted on June 30, 2015 close of business and accounting for rent payment) is *$143,000* (-$6,000). Not a good month overall, but still not that bad considering and, realistically, a negative month was bound to happen at some point!

On the rate of return front: my non-registered CAD is still the dog and getting doggier (heavily Canadian financials with a -5.78% YTD return; TFSA 1 (balanced in its own right) is at +5.80%; TFSA 2 (global small cap) is +0.00%; and RRSP (foreign / USA) is +8.53% which gives an overall investment return of +3.32% YTD (+6.81% annualized) which shows how much of a difference a month makes.

Plan for next month is to continue with filling the RRSP, put some cash aside for expected tax liabilities for year end, and top up general operating accounts again from the rampant consumerism (personal and corporate). I'll let everyone know in a month how that went!


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## Sm5

*July update - a good month overall*

July 2015 has come and gone, in some ways good, others bad. Had to dip into line of credit for a few weeks to maintain liquidity - which is never good. The good news is that it was only for a week and a half and has been cleared off. Equities are all over the place but rebounded a bit near month end, which helps. I sold out of BB as some of the news of the new market direction seemed to change my view of the company's future (thankfully, sold out before it dropped too much further at nearly identical value to when I purchased). On holding it, I practically broke even, however I am quite ahead from the covered call writing I did while I did hold it.

Also, I was able to hit all three monthly benchmarks. RRSP is now full for the year, a little cash is aside now for CRA, and there is some residual liquidity left. I'll have to run the numbers more closely to see if there is any excess after reserves that can be invested too. With that said, the plan is to invest the amount for tax liabilities in a HISA, GIC or like product until needed to get a little, minuscule, return. This leaves a heavier cash allocation than i usually maintain but is the 'safe bet', so to speak.

With all the activities in July, I am happy to say asset allocation is much better (or will be on Tuesday when the last of the RRSP contribution is allocated as I only rebalance through purchases). My target allocations are:
25% Canadian Equities currently at 27.8%; 
35% US Equities, currently at 34.9%;
35% overseas Equities, currently at 35.0%;
3% fixed income, currently at 2.3%; and
2% cash and equivalents, currently at 0% as I'm in margin. 

This is not counting the funds allocated for known upcoming liabilities.

So time for the big numbers, as of August 1, 2015:

*Assets*
TFSA 1: $42,300 ($100 monthly contribution)
TFSA 2: $9,300 (no contributions)
RRSP: $59,200 (around $3,800 contributed, now full for the year) 
Non-Registered (CAD): $ 39,500 (no contributions) 
Non-Registered (USD): U$340 (no contributions)
Savings Account 1: $4,500
Savings Account 2: $250 

Corporate Current Account: $11,000
Corporate Investment Account: $23,600 ($15,000 contribution, the cash being pooled for upcoming taxes so not truly an investment, but stored here).

*Liabilities*
Margin Loan: $9,600 - no payments. 
MasterCard: $1,100 (revolving balance, paid monthly)
Visa: $0
Line of Credit: $0 - dipped into for a few weeks and paid off
Corporate MasterCard: $400 (revolving balance, paid monthly)

Estimated net worth is now *$182,800* (+$39,800 ). 

With that said, the number is not as good as it looks as upcoming liabilities (not yet assessed corporate and personal taxes) aren't reflected. 

No real plan for August, other than to attempt to reduce consumer spending and try to get the revolving personal master card balance to start being under $1,000 per month. On the rate of return front, I've now added in the corporate investment account into my tracking sheet given it will be holding a few different investments for different purposes (short term, and long term holdings).

My non-registered CAD is still the dog, as expected, (heavily Canadian financials) at -6.50% YTD return; TFSA 1 (balanced in its own right) is at +9.28%; TFSA 2 (global small cap) is +9.18% YTD; RRSP (foreign / USA) is +17.61% YTD, and corporate investment account (global small cap, and a lot of cash) is at 10.77% YTD, which gives an overall investment return of +8.05% YTD (+14.25% annualized). Obviously, my portfolio has a lot of volatility, as I am heavily exposed to foreign currencies but so far I seem to have the stomach for it as I've not sold anything other that the BB stock - but I chalk that up to deteriorating fundamentals and being time to 'let it go'.


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## Sm5

"Black Monday" update, although really, it wasn't that big of drop. 

On paper, lost about $2700.00, which is actually _less_ than I lost last Thursday. Acting irrational, I bought 50 shares in BMO whilst it was down. Thinking being as that the yield on cost was around 5% and well below their 52 week moving average. Although, I really have to stop buying banks! 

Anyways, since it was an abnormal day, I went and ran my XIRR calculations:

Non-registered CAD (heavy Canadian financials) is now -17.99%;
TFSA 1 (balanced) is +2.66%;
TFSA 2 (global small cap) is now 0.00%;
RRSP (US and foreign) is +11.24; and
Corporate account (global small cap and cash) is now +5.34%

Overall, YTD is now 0.31%, 0.49% annualized. It appears in the last week I have lost, on paper, the years gains, curious what the rest of the week brings!


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## Sm5

*August 2015, a post-mortem*

August 2015 has come and gone. Bad month. Very bad month. Markets were down. 


I bought 50 shares of BMO on the big dip. Didn't sell anything, and didn't even come close to doing so. I guess that's good.

I am still maintaining large cash buffers and paying far too much to CRA in remittances to catch up for the year ($4,500.00 per month from now until the end of the year so this will make capital growth stagnate). Also added around $2,200.00 to margin account to reduce margin a bit in case of another big drop. Between the drop and large CRA remittances, I’m down this month and expect to sit about even throughout the remainder of the year unless some large unexpected receivables come though (or I win LottoMAX).

Asset allocation is still close to target, a few more deposits and it should be right where it should be:

25% Canadian Equities currently at 29.1%; 
35% US Equities, currently at 32.6%;
35% overseas Equities, currently at 33.2%;
3% fixed income, currently at 2.3%; and
2% cash and equivalents, currently at 2.9%. 

Assets as of September 1, 2015:

*Assets*
TFSA 1: $41,000 ($100 monthly contribution)
TFSA 2: $8,600 (no contributions)
RRSP: $56,700 (no contributions) 
Non-Registered (CAD): $ 41,000 (no contributions) 
Non-Registered (USD): U$320 (no contributions)
Savings Account 1: $4,000
Savings Account 2: $20 

Corporate Current Account: $6,500
Corporate Investment Account: $23,400 (no contributions).

*Liabilities*
Margin Loan: $10,800 - $2,200 paid. 
MasterCard: $950 (revolving balance, paid monthly, but under $1,000 for a change)
Visa: $0
Line of Credit: $0 - dipped into for a few weeks and paid off
Corporate MasterCard: $700 (revolving balance, paid monthly, bought an external hard drive I needed for work)

Estimated net worth is now *$167,300* (-$15,500). Ouch. 


My non-registered CAD is still the dog, as expected, (heavily Canadian financials) at -12.790% YTD return; TFSA 1 (balanced in its own right) is at +0.61%; TFSA 2 (global small cap) is +0.00% YTD; RRSP (foreign / USA) is +10.55% YTD, and corporate investment account (global small cap, and a lot of cash) is at 4.94% YTD, which gives an overall investment return of +0.704% YTD (+1.06% annualized, woohoo). Obviously, my portfolio has a lot of volatility, and is down significantly. I have sold nothing and don’t intend to. I just hope a few more stocks can drip before prices come back up.

No real plan for September. Just try to break even by the end of the month (not likely to happen this month) and watch out for business opportunities in the deteriorating Alberta economy.


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## Sm5

*September 2015 update*

Short update, not much to say other than a rough month.

*Current asset allocation*:
25% Canadian Equities currently at 29.9%; 
35% US Equities, currently at 32.3%;
35% overseas Equities, currently at 32.4%;
3% fixed income, currently at 2.3%; and
2% cash and equivalents, currently at 3.1%. 

Assets as of October 1, 2015:

*Assets*
TFSA 1: $38,900 ($100 monthly contribution)
TFSA 2: $8,600 (no contributions)
RRSP: $55,000 (no contributions) 
Non-Registered (CAD): $ 43,000 ($300 contribution) 
Non-Registered (USD): U$320 (no contributions)
Savings Account 1: $1,100
Savings Account 2: $60 

Corporate Current Account: $7,600
Corporate Investment Account: $23,300 (no contributions).

*Liabilities*
Margin Loan: $10,500
MasterCard: $1,100 (revolving balance, paid monthly, back over $1,000 again :-()
Visa: $0
Line of Credit: $0 
Corporate MasterCard: $300 (revolving balance, paid monthly)

Estimated net worth is now *$166,700* (-$600). Not that bad given the markets lately. Hopefully returns to positive balances again soon...


*Rates of return*:
Non-registered CAD, (heavily Canadian financials) at -6.035% YTD return; TFSA 1 (balanced in its own right) is at +0.017%; TFSA 2 (global small cap) is +0.00% YTD; RRSP (foreign / USA) is +5.857% YTD, and corporate investment account (global small cap, and a lot of cash) is at 3.165% YTD, which gives an overall investment return of +0.563% YTD (+0.753% annualized).

At least it is still (barely) a positive year!


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## james4beach

If I did this calculation right, your net worth is increasing at 9.1 K per month (a rate of +109 K per year)

You said that your income is 100K-175K. Is that _net_ income? The numbers don't add up if those were gross numbers.

In any case, it looks like you're able to save at a rate of over 100 K per year. Why bother with stocks at all? Just do 5 years of this pumping the money into GIC ladders, and you will have well over half a million $, with no equity risk at all. Furthermore, your line of work is likely highly correlated to equities. "You are a stock". Why take on more stock risk? If stock markets tank, your income will also likely fall.

If you're in corporate law, I would guess that when stocks fall, the wealthy people paying your bills will become tighter with money, less likely to do M&A, etc.


----------



## Sm5

james4beach said:


> If I did this calculation right, your net worth is increasing at 9.1 K per month (a rate of +109 K per year)
> 
> You said that your income is 100K-175K. Is that _net_ income? The numbers don't add up if those were gross numbers.
> 
> In any case, it looks like you're able to save at a rate of over 100 K per year. Why bother with stocks at all? Just do 5 years of this pumping the money into GIC ladders, and you will have well over half a million $, with no equity risk at all. Furthermore, your line of work is likely highly correlated to equities. "You are a stock". Why take on more stock risk? If stock markets tank, your income will also likely fall.
> 
> If you're in corporate law, I would guess that when stocks fall, the wealthy people paying your bills will become tighter with money, less likely to do M&A, etc.


I never really thought of how much net worth increases per month or ran that number. However, from my records (only going back 2 years) it looks like it increased around $90,000.00 from October 2, 2014 to October 2, 2015 (so about $7,500 per month if you annualize things). The year before (October 2, 2013 to October 2, 2014) was an increase of $58,000, though I am making more now than then. 

However, this year is likely not an entirely accurate number as this is the first year incorporating my practice so there is a large inchoate tax liability that will arise at year end that is not reflected in the numbers for this year as yet since installment payments don't start until year 2 and I am 'catching up' on payroll deductions since I didn't start salary until late in the year but want to have salary high enough to maximize RRSP contribution room for next year -- meaning I have to draw off more than I'd like in the last months (with associated remittances) to draw the $135,000 or so required to generate this room before year end.

With that said, hard to get an accurate picture for this year. I expect this means that once taxes are determined and deducted, that around $60,000 - $80,000 per year contribution is more likely than $100,000. Based on my records, I contributed $63,000 last calendar year (don't have records handy for the calendar year before) and I am drawing a bit higher this year than last so should be able to contribute a bit more, we will see.

So although it might not be half a million contributed in the next 5 years, it will be at least a third of a million. I'm taking the equity risk for a few reasons:
1) I like watching the numbers go up and down -- a bit of a hobby;
2) half a million is really not enough to do much with long term (this may sound crasser than intended)-- I likely won't hit my retirement target at that rate of savings and GICs are returning below inflation;
3) I'll need to stop renting sooner rather than later ($20,000 a year at the moment) so won't be able to continue with this contribution rate forever, so I want to get a good 'starting buffer' in the retirement accounts before having to allocate money for a house, other side business ventures, etc..

I'm sure I am quite correlated to stocks; this is one of the reasons I avoid Canadian Oil and Gas stocks (and am trying to reduce my Canadian exposure) to try to externalize this risk a bit whilst still maintaining return.


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## Sm5

*November 2015*

Extrapolating for rent payment on the 1st as nothing will post to accounts over the weekend otherwise. It has been a pretty dull month financially. Had to borrow some cash out of the corporate investment account for a few weeks for cashflow purposes but promptly put it back. Also, getting a bit cash heavy at the moment, normally I'd be allocating this but given the upcoming year end, I think I may just hold on to the cash (or at least most of it) until January and put it into TFSA (how much depends on Trudeau) and RRSP and taxes...


*Current asset allocation: *
25% Canadian Equities currently at 27.7%; 
35% US Equities, currently at 30.6%;
35% overseas Equities, currently at 30.3%;
3% fixed income, currently at 2.0%; and
2% cash and equivalents, currently at 9.5%. 

As of November 1, 2015 (anticipated for rent):

*Assets*
TFSA 1: $40,900 ($100 monthly contribution)
TFSA 2: $9,000 (no contributions)
RRSP: $58,800 (no contributions) 
Non-Registered (CAD): $ 44,700 (no contribution) 
Non-Registered (USD): U$350 (no contributions = C$450)
Savings Account 1: $2,200 (once rent clears)
Savings Account 2: $60 

Corporate Current Account: $9,300
Corporate Investment Account: $35,500 ($12,000 contribution, currently sitting predominately in cash ISA earning next to nothing).

*Liabilities*
Margin Loan: $10,500
MasterCard: $2,500 (revolving balance, paid monthly, car insurance was paid this month which made this high)
Visa: $0
Line of Credit: $0
Corporate MasterCard: $370 (revolving balance, paid monthly)

Estimated net worth is now *$187,500* (+$20,800). However, we will see how much the tax man is entitled to.


*Rates of return:*
Non-registered CAD, (heavily Canadian financials) at -0.497% YTD return; TFSA 1 (balanced in its own right) is at +5.099%; TFSA 2 (global small cap) is +3.891% YTD; RRSP (foreign / USA) is +14.783% YTD, and corporate investment account (global small cap, and a lot of cash) is at 5.069% YTD, which gives an overall investment return of *+6.860% YTD* (*+8.349% annualized*).


----------



## Sm5

*Dec 1, 2015*

As at December 1, 2015. Not much of note, still holding far too much cash in anticipation of tax liabilities (once determined this can/will be allocated).

*Assets*
TFSA 1: $41,600 ($100 monthly contribution)
TFSA 2: $9,200 (no contributions)
RRSP: $59,900 (no contributions) 
Non-Registered (CAD): $ 45,900 (no contribution) 
Non-Registered (USD): U$350 (no contributions)
Savings Account 1: $3,800
Savings Account 2: $60 

Corporate Current Account: $4,900
Corporate Investment Account: $35,700 (no contribution).

*Liabilities*
Margin Loan: $10,500
MasterCard: $1,100 (revolving balance, paid monthly)
Visa: $0
Line of Credit: $0
Corporate MasterCard: $370 (revolving balance, paid monthly)

Estimated net worth is now *$191,000* (+$3,500). However, we will see how much the tax man is entitled to.


*Rates of return:*
Non-registered CAD, (heavily Canadian financials) at +3.368% YTD return; TFSA 1 (balanced in its own right) is at +6.542%; TFSA 2 (global small cap) is +5.564% YTD; RRSP (foreign / USA) is +17.109% YTD, and corporate investment account (global small cap, and a lot of cash) is at 5.412% YTD, which gives an overall investment return of +9.065% YTD (+9.978% annualized).


----------



## Sm5

*January 1, 2016*

Happy (and productive) new year! 

December was a bit turbulent, firstly, there were a lot of one off or annual expenses (Christmas bonuses, annual permit renewals, etc.) which made everything a bit up in the air. Had to borrow $5,000 from the corporate 'reserves' account to keep the float high enough to avoid bank fees for a day or two between receivables -- the downside of running a small float. Also, drew a bunch of extra income in December instead of next year in case the liberals make detrimental changes to the tax act for incorporated professionals moving forward (risk aversion wins out to a small tax savings). Overall, the year was successful, not too many rash expenses.

As for the year's goals:
1) Get a net worth of $160,000.00 (estimated) or better on or before December 31, 2015 _I'll say done, I can't say I will have to remit that much in taxes to drop under $160,000 for the year._
2) Put $4,000.00 into Savings Account 1 as part of 'cash reserve'; _Not done._
3) Make a 2015 TFSA contribution ($5,500), and use it to re-balance; _Done; however the limit increased for the year and contributed $10,000._
4) Make a 2015 RRSP contribution (whatever the 2015 maximum is), and use it to re-balance; _Done._
5) Put a base of $4,000.00 into corporate account to avoid bank fees; _Done. _
6) Open and fund with at least $15,000.00 (to avoid small account fee) a corporate brokerage account; and _Done._
7) Get each asset category within 3% of their target allocation. _Not done. Close, but looking at the allocation my Canadian Equity is still 3.3% over target, US equity is 3.1% under target, and International equity is 4.8% under target so close but not quite there yet. Hopefully 2016 puts everything back into line._


Anyways, for the numbers... (Anticipating to new years as I won't have time to update this weekend.)


*Assets*
TFSA 1: $41,400 ($100 monthly contribution)
TFSA 2: $9,500 (no contributions)
RRSP: $62,000 (no contributions) 
Non-Registered (CAD): $ 46,300 (no contribution) 
Non-Registered (USD): U$350 (no contributions)
Savings Account 1: $2,600
Savings Account 2: $60 

Corporate Current Account: $43,400 (need to get a chunk of this invested ASAP)
Corporate Investment Account: $31,200 ($5,000 temporary withdrawal for current expenses).

*Liabilities*
Margin Loan: $10,500 (no payments)
MasterCard: $1,600 (revolving balance, paid monthly -- a bit high this month)
Visa: $0
Line of Credit: $0
Corporate MasterCard: $2,300 (revolving balance, paid monthly -- very high due to Christmas related expenses, and annual fees/dues coming due -- still hurts though)

Estimated net worth is now *$222,600* (+$31,600). Annually, I increased my net worth by 128,700 which is frankly startling. However, again, this is subject to some tax liabilities to be determined (Q4 GST of a few thousand due in January, and corporate income tax in one lump sum coming up).


Rates of return (as of December 30, 2015) are:
Non-registered CAD, (heavily Canadian financials) at +4.76% YTD return; TFSA 1 (balanced in its own right) is at +5.82%; TFSA 2 (global small cap) is +7.98% YTD; RRSP (foreign / USA) is +21.75% YTD (the obvious winner for the year thanks to our depressed dollar more than anything else!), and corporate investment account (global small cap, and still a lot of cash) is at 7.98% YTD, which gives an overall investment return of *+11.20%* YTD (annualized is practically identical). 

As for yearly benchmarks, even with the small internal loan out of the investment account, I contributed just over $70,000 to investments in 2015 (happy with that as my target contribution is only $50,000) and received a double digit return on a flat economy (pure luck!).

2016 snuck up on me so I've not really put too much thought into the goals for the upcoming year. With that said, what comes to mind currently is the obvious ones of staying the course:
1) Make a 2016 TFSA contribution ($5,500), and use it to re-balance; 
2) Make a 2016 RRSP contribution (whatever the 2016 maximum is), and use it to re-balance;
3) Make a total retirement contribution (TFSA, RRSP, retained earnings, savings, etc. put aside specifically for retirement and not other purposes) of another $50,000;
4) Continue to try to get each asset category within 3% of their target allocation.

Additionally, I'd like to aim for the following (not sure how realistic they are):
5) Obtain a total net worth of $300,000 by December 31, 2016 (seems FAR too ambitious but let's give it a shot);
6) Start some kind of 'hobby' side business and have it break even; and
7) reduce general living expenses so the credit card ends up under $1,000 a month on average.

Anyways, onward to 2016.


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## mind_business

Interesting diary. Congrats on a steady, and fairly rapid NW increase. Well done!

Question - have you considered calculating a rough tax liability number to reflect a more accurate Net Worth through the year? That way you won't have to take a major write-down of your NW come tax time.


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## Sm5

*Feb 1, 2016*

Sorry mind_business, didn't see your response. I sort of do keep an internal "tax ledger" of a liability of 10pc of gross revenue as the tax exposure. Personal taxes should be about par, and 10pc should overestimate corporate tax expose for a variety of reasons -- this is why I'm keeping the $20,000 cash 'kicking around'.

Anyhow... January 2016 was rough, a drop in the market, timed perfectly with annual accounts, car registration renewal, etc. to create a perfect storm. Down significantly. Hopefully February is better.

With that said, as of February 1, 2016 (rent anticipated)

*Assets*
TFSA 1: $39,500 ($100 monthly contribution)
TFSA 2: $13,300 ($4,300 contribution, so with the $100 a month to the other TSFA this is full with the new lower limit)
RRSP: $58,000 (no contributions) 
Non-Registered (CAD): $ 44,600 ($2000 contribution) 
Non-Registered (USD): U$320 (no contributions)
Savings Account 1: $3,400
Savings Account 2: $60 

Corporate Current Account: $12,600
Corporate Investment Account: $50,300 ($5,000 temporary withdrawal for current expenses last month has been returned, also dropped another $15,000 into the account).

*Liabilities*
Margin Loan: $8,300 (payments of the $2,000 contributed)
MasterCard: $1,400 (revolving balance, paid monthly -- a bit high this month again, sigh, need to work on that)
Visa: $0
Line of Credit: $0
Corporate MasterCard: $1,600 (revolving balance, paid monthly)

Estimated net worth is now *$212,100 *(*-$10,500*, ouch). Not calculating rate of return for the month, I don't want to look. Hopefully things turn around soon.


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## Sm5

*May 2016 update*

:frown:Been less than diligent in keeping the diary up to date. So last 2 months will be missing. with that said, have no paid corporate taxes which ended up being entirely offset (and then some) with my tax refund as, because of start up, etc. grossly over-contributed when it was all said and done.

Also, I re-jigged my banking to remove the monthly fee on my personal accounts ($120 per year savings) and am in the process of opening up a credit facility for the corporation to smooth income if/when necessary without dipping into the investment account. The added upside is it will have over $100,000 of available credit shortly and it looks like the bank is signing off on 4.7% unsecured -- might be usable for investment purposes as well if we get a nice market crash(!). I was hoping for a bit lower for that purpose but I guess this isn't bad as this is comparable to the margin rates at the banks and avoids under margin calls if I do use it. No holding costs to seemed worthwhile just as standby. 

Being exposed to international/US equities predominately, the current markets have not been kind so I won't run rate of returns this month (mildly negative currently):

*Assets*
TFSA 1: $40,000 ($100 monthly contribution in March and April)
TFSA 2: $13,000 (no contributions, maxed out once the $100 per month goes to the other TFSA)
RRSP: $70,100 ($13,000 contributed in April) 
Non-Registered (CAD): $ 48, 600 ($100 contribution in March, don't really recall why I did that) 
Non-Registered (USD): U$350 (no contributions)
Savings Account 1: $5,700
Savings Account 2: $7,300 (another $7000 going to RRSP as soon as funds off hold period) 

Corporate Current Account: $7,900
Corporate Investment Account: $49,100 (net $1,000 withdrawal - withdrew $10,000 in March to cover taxes and contributed $9,000 in April).

*Liabilities*
Margin Loan: $8,200
MasterCard: $1,400 (revolving balance, paid monthly -- a bit high this month again, sigh, need to work on that)
Visa: $0
Line of Credit: $0
Corporate MasterCard: $300 (revolving balance, paid monthly)

Estimated net worth is now *$232,200* (change of *$20,100* since last update so average over the 2 months of +$10,050). 

*2016 Goals* 

After quarter 1:
1) Make a 2016 TFSA contribution ($5,500), and use it to re-balance; _I Consider this done, the automatic $100 per month will max this out in December_
2) Make a 2016 RRSP contribution (whatever the 2016 maximum is), and use it to re-balance; _Waiting on a cheque to clear to transfer to RRSP, then just a case of deploying to balance. 50% done_
3) Make a total retirement contribution (TFSA, RRSP, retained earnings, savings, etc. put aside specifically for retirement and not other purposes) of another $50,000; _Net contributions are $18,950 year to date. Not done._
4) Continue to try to get each asset category within 3% of their target allocation. _Not done._

Additionally, I'd like to aim for the following (not sure how realistic they are):
5) Obtain a total net worth of $300,000 by December 31, 2016 (seems FAR too ambitious but let's give it a shot); _Not done, but this is the 'pie in the sky'_
6) Start some kind of 'hobby' side business and have it break even; and _Not done, not started._
7) reduce general living expenses so the credit card ends up under $1,000 a month on average. _Very much not done :-(_


----------



## Sm5

*June 1 (effective)*

Anticipating two days as I know this week will be hectic and I won't get an update in otherwise. Corporate line of credit is set up now and I think I am done tweaking banking things for the next little while. Which is good. Hopefully, an opportunity presents itself so we can get some of that capital deployed. Markets have been a bit kinder to me lately, so that's nice. Spending has been a bit high (that isn't). With the movement of cash into the RRSP and where it was deployed, that will now start to drip another security. Also looks like I may be remitting a bit too much in monthly installments, might drop that back a bit for the second half of the year which would help with liquidity.

As at June 1, 2016 (rent and tax remittance anticipated)
*Assets*
TFSA 1: $41,500 ($100 monthly contribution)
TFSA 2: $13,600 (no contributions, maxed out once the $100 per month goes to the other TFSA)
RRSP: $80,300 ($7,000 contributed, now full for the year) 
Non-Registered (CAD): $ 50,500 ($300 contribution - had some cash I didn't have any use for) 
Non-Registered (USD): U$350 (no contributions)
Savings Account 1: $6,100
Savings Account 2: $100 

Corporate Current Account: $8,800
Corporate Investment Account: $50,400.

*Liabilities*
Margin Loan: $7,600
MasterCard: $1,000 (revolving balance, paid monthly -- a bit high this month again, sigh, need to work on that)
Visa: $0
Lines of Credit: $0
Corporate MasterCard: $1,400 (revolving balance, paid monthly, bought some equipment)
Corporate Line of Credit $0


Estimated net worth is now *$240,000* (change of *+$7,800 *since last month. 


*Rate of Return*
Rates of return (as of May 30, 2016) are:
Non-registered CAD, (heavily Canadian financials) at +13.052% YTD return (34.79% annualized); TFSA 1 (balanced in its own right) is at -0.391% YTD (-0.95% annualized); TFSA 2 (global small cap) is -1.758% YTD (-4.22% annualized); RRSP (foreign / USA) is -2.141% YTD (-5.13% annualized), and corporate investment account (global small cap / cash equivalents) is at 0.414% YTD (1.01% annualized), which gives an overall investment return of *+1.579%* YTD (*3.88%* annualized). 

My benchmark, made of a mix of index ETFs (35%VFV, 35%XEF, 25%XIU, 3%VBB, 2%cash), is returning -0.97% so I'm beating it so far this year (for now). Hopefully, it stays that way!

*Goal Tracking for 2016*

1) Make a 2016 TFSA contribution ($5,500), and use it to re-balance; _Considered done. On autopilot now._
2) Make a 2016 RRSP contribution (whatever the 2016 maximum is), and use it to re-balance;_ Done_
3) Make a total retirement contribution (TFSA, RRSP, retained earnings, savings, etc. put aside specifically for retirement and not other purposes) of another $50,000; _Net contributions are $26,357 year to date. Not done._
4) Continue to try to get each asset category within 3% of their target allocation. _Done, barely. Furthest deviation is 2.9% This will drift again with new contributions for sure though._
5) Obtain a total net worth of $300,000 by December 31, 2016; _Not done, seems unlikely_
6) Start some kind of 'hobby' side business and have it break even; _Not done, not started. Need to come up with a viable idea_
7) reduce general living expenses so the credit card ends up under $1,000 a month on average._ Still very much not done_


----------



## Sm5

*July 1, 2016*

Post-Brexit update. Made a small ($20,000) play on the drop post-Brexit by buying into XEF the Friday directly after. Didn't time the bottom but came close. Unfortunately, wanted to go more on this but could not as one broker, TD, wouldn't load that day -- good reason to keep multiple brokers 'on the go'. Ideally, I wanted to go $50,000 into XEF that day but couldn't. The hypothesis is that I don't anticipate Brexit will affect the large cap stocks in that index very much at all once the paranoid wears off. So far, the market appears to agree with me but we shall see. I have a sell threshold on this for 1 month out -- if the market rebounds enough, I'll reduce my international exposure back into line with where it should be and take a quick profit. If they do not, I have no issue holding XEF and being slightly overweight international for a few months and then will bring asset allocation back into line with new money.

Also had to cover a family members large expense for a few days on the credit card, however, already have been re-imbursed so I'll make 1% credit card cash back as interest for fronting some money for approximately 3 days. I guess that's not bad considering. Also, increased my BCE exposure a bit using margin near the middle of the month.


Anyways,

As at July 1, 2016
*Assets*
TFSA 1: $40,800 ($100 monthly contribution)
TFSA 2: $13,500 (no contributions)
RRSP: $78,900 (no contributions) 
Non-Registered (CAD): $ 56,000 ($200 contribution -- getting rid of some cash on hand) 
Non-Registered (USD): U$355 (no contributions)
Savings Account 1: $10,400
Savings Account 2: $10 

Corporate Current Account: $8,600
Corporate Investment Account: $51,000. ($1,000 contribution)

*Liabilities*
Margin Loan: $13,500
MasterCard: $7,000 (revolving balance, paid monthly -- this has that one off expense that I am fronting included)
Visa: $0
Lines of Credit: $0
Corporate MasterCard: $500 (revolving balance, paid monthly)
Corporate Line of Credit $0

Estimated net worth is now *$240,000 *(nil change). 


Rate of Return
Rates of return (as of June 30, 2016) are:
Non-registered CAD, (heavily Canadian financials) at +11.587% YTD return (24.74% annualized); TFSA 1 (balanced in its own right) is at -2.136% YTD (-4.26% annualized); TFSA 2 (global small cap) is -2.401% YTD (-4.78% annualized); RRSP (foreign / USA) is -4.062% YTD (-8.02% annualized), and corporate investment account (global small cap and large cap) is at 0.266% YTD (0.44% annualized), which gives an overall investment return of +0.216% YTD (0.44% annualized). 

My benchmark, made of a mix of index ETFs (35%VFV, 35%XEF, 25%XIU, 3%VBB, 2%cash), is returning -3.72% YTD according to google's portfolio summary so I'm still beating it so far this year. Also, ran XIRR since January 2014, when my records begin, and see I have an annualized XIRR rate of return of 8.62% which is 'in the ball park' of what I would like to maintain for the next 40 years!

*Goal Tracking for 2016*

1) Make a 2016 TFSA contribution ($5,500), and use it to re-balance; _Considered done. On autopilot now._
2) Make a 2016 RRSP contribution (whatever the 2016 maximum is), and use it to re-balance; _Done_
3) Make a total retirement contribution (TFSA, RRSP, retained earnings, savings, etc. put aside specifically for retirement and not other purposes) of another $50,000; _Net contributions are $27,657 year to date. Not done._
4) Continue to try to get each asset category within 3% of their target allocation. _Not done, given the XEF play.
_5) Obtain a total net worth of $300,000 by December 31, 2016; _Not done, seems unlikely._
6) Start some kind of 'hobby' side business and have it break even; _Not done_.
7) reduce general living expenses so the credit card ends up under $1,000 a month on average. Still very much not done. This is something I really need to work on!

Anyways, onwards to next month, hopefully it will be better!


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## james4beach

Does Google's portfolio include all the distributions though? I've never used that feature but you definitely need google to take into account distributions to get a meaningful performance


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## Sm5

james4beach said:


> Does Google's portfolio include all the distributions though? I've never used that feature but you definitely need google to take into account distributions to get a meaningful performance


It seems to do reinvested distributions.


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## Sm5

*August 2016*

As at August 1, 2016

Short on commentary this month. Had a decent rally post-brexit and a big cheque came in (the majority of which is in the process of moving over to the brokerage accounts but hasn't arrived yet given the long weekend). Onwards and upwards.

*Assets*
TFSA 1: $42,700 ($100 monthly contribution)
TFSA 2: $14,000 (no contributions)
RRSP: $83,000 (no contributions) 
Non-Registered (CAD): $ 57,500 ($150 contribution, getting rid of some cash on hand)
Non-Registered (USD): U$370 (no contributions)
Savings Account 1: $5,500
Savings Account 2: $15 

Corporate Current Account: $41,200
Corporate Investment Account: $53,600. (no contributions)

*Liabilities*
Margin Loan: $13,400
MasterCard: $1,100 (revolving balance, paid monthly)
Visa: $0
Lines of Credit: $0
Corporate MasterCard: $500 (revolving balance, paid monthly)
Corporate Line of Credit $0

Estimated net worth is now $*281,300* (+*$41,300*).


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## Janus

Your growing net worth is pretty incredible! Well done. Your detailed tracking is something I need to do more of myself.


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## Sm5

Thanks Janus.

I do find that keeping detailed information does help ensure I stick with the plan (at least so far!).


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## Sm5

*September 2016 update*

Gambit'ed some funds over to USD this month and deployed and transferred in to investments a portion of cash from last month. Other than that, quiet month. Expenses were very high, a lot of traveling unfortunately (and more to come in September).

*Assets*
TFSA 1: $43,300 ($100 monthly contribution)
TFSA 2: $14,000 (no contributions)
RRSP: $84,000 (no contributions) 
Non-Registered (CAD): $ 58,500 (no contributions)
Non-Registered (USD): U$370 (no contributions)
Savings Account 1: $5,100
Savings Account 2: $40 

Corporate Current Account: $5,100
Corporate Investment Account: $89,000. ($35,000 contribution)

*Liabilities*
Margin Loan: $13,400
MasterCard: $1,500 (revolving balance, paid monthly)
Visa: $0
Lines of Credit: $0
Corporate MasterCard: $1,200 (revolving balance, paid monthly)
Corporate Line of Credit $0

Estimated net worth is now *$284,900* (*+$3,600*).


*Rate of Return*
Rates of return are:
Non-registered CAD, (heavily Canadian financials) at +19.095% YTD return (30.02% annualized); TFSA 1 (balanced in its own right) is at 3.271% YTD (4.95% annualized); TFSA 2 (global small cap) is 0.627% YTD (0.94% annualized); RRSP (foreign / USA) is 2.830% YTD (4.28% annualized), and corporate investment account (global small cap / cash equivalents) is at 5.423% YTD (8.026% annualized, which is unusual as this is my most conservative account holding cash at times), which gives an overall investment return of *+6.217% YTD (9.48% annualized)*.


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## Sm5

*October 1, 2016*

Expense heavy month with a business trip that cost more than it should. Otherwise, pretty normal but treading water a bit on the net worth front.

*Assets*
TFSA 1: $43,600 ($100 monthly contribution)
TFSA 2: $14,100 (no contributions)
RRSP: $83,200 (no contributions) 
Non-Registered (CAD): $ 58,800 (no contributions)
Non-Registered (USD): U$370 (no contributions)
Savings Account 1: $7,300
Savings Account 2: $30 

Corporate Current Account: $4,400
Corporate Investment Account: $89,600. (NO contribution)

*Liabilities*
Margin Loan: $13,400
MasterCard: $1,100 (revolving balance, paid monthly)
Visa: $0
Lines of Credit: $0
Corporate MasterCard: $2,200 (revolving balance, paid monthly, high because of some business travel)
Corporate Line of Credit $0

Estimated net worth is now *$283,800 (-$1,100)*.


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## Sm5

*November 1, 2016 (effective)*

Pretty quiet month economically, didn't complete any transactions other than to 'dip in' to $4000 of corporate HISAs to pay some corporate taxes. General market direction was down but was saved by contributions.

All numbers are anticipating for November 1 (rent, remittances).

*Assets*
TFSA 1: $43,900 ($100 monthly contribution)
TFSA 2: $13,700 (no contributions)
RRSP: $83,000 (no contributions) 
Non-Registered (CAD): $ 58,300 (no contributions)
Non-Registered (USD): U$370 (no contributions)
Savings Account 1: $6,000
Savings Account 2: $30 

Corporate Current Account: $4,700
Corporate Investment Account: $114,800. ($30,000 contribution)

*Liabilities*
Margin Loan: $13,300
MasterCard: $2,300 (revolving balance, paid monthly, high with car insurance being in addition to usual expenses)
Visa: $0
Lines of Credit: $0
Corporate MasterCard: $400 (revolving balance, paid monthly)
Corporate Line of Credit $0

Estimated net worth is now *$309,200* (+$25,400.00).


Rate of Return
Rates of return are:
Non-registered CAD, (heavily Canadian financials) at +18.034% YTD return (22.35% annualized); TFSA 1 (balanced in its own right) is at 4.304% YTD (5.26% annualized); TFSA 2 (global small cap) is falling back into losses -1.347% YTD (-1.64% annualized); RRSP (foreign / USA) is 2.299% YTD (2.80% annualized), and corporate investment account (global small cap / cash equivalents) is at 4.483% YTD (5.48% annualized), which gives an overall investment return of +5.648% YTD (6.91% annualized). Not looking like a great year, but you never know what the last 2 months will bring.


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## Sm5

*December 2016*

Eventful month. Played a bit of a gamble on the US election results and drew on the corporate LOC hoping for a bit of a sell panic, which didn't come. Put the majority of the money back over the next day or so. Left some outstanding ($13,000) in USD and transferred this from the LOC to margin on the corporate margin account for a lower rate long term and will be deploying over the next month. Bought some BEP (for the yield) with a portion of the funds and some US index.

Also, met with a few friends about a business idea for a side gig which is relatively high risk/reward but will provide something to do, looks like we may give it a go which necessitated meetings with suppliers, accountant etc. but pieces are falling into place for a side 'gig' that will be somewhat of a fun side business.

All numbers are anticipating for December 1 (rent anticipated).

*Assets*
TFSA 1: $45,300 ($100 monthly contribution)
TFSA 2: $13,200 (no contributions)
RRSP: $85,100 (no contributions) 
Non-Registered (CAD): $ 59,700 (no contributions)
Non-Registered (USD): U$380 (no contributions)
Savings Account 1: $5,500
Savings Account 2: $30 

Corporate Current Account: $3,500
Corporate Investment Account: $115,500. (no contributions)

*Liabilities*
Margin Loan: $13,400
MasterCard: $1,100 (revolving balance, paid monthly)
Visa: $0
Lines of Credit: $0
Corporate MasterCard: $300 (revolving balance, paid monthly)
Corporate Line of Credit $0 (drew down, and brought back to nil balance all within the month)

Estimated net worth is now *$313,500.00* (+*$4,300.00*).


*Rate of Return*
Rates of return are:
Non-registered CAD, (heavily Canadian financials) at +21.428% YTD return (23.64% annualized); TFSA 1 (balanced in its own right) is at 7.486% YTD (8.21% annualized); TFSA 2 (global small cap) is still the current loser, and falling -4.654% YTD (-5.07% annualized); RRSP (foreign / USA) is 4.54% YTD (4.98% annualized), and corporate investment account (global small cap / US index ) is at 4.483% YTD (5.48% annualized), which gives an overall investment return of +7.488% YTD (8.21% annualized). Still not looking like a great year, but better than it was last month.


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## Sm5

*January 1, 2017 - Year in Review*

Eventful month return wise. Also, end of the year review time. Very passive month activity wise, don't recall doing anything with my portfolio. Work wise, very slow, so spent most of the month on administration and recovering outstanding accounts.

Expense wise, high expenses between Christmas, events, and renewals of licences and registrations, etc. means that my credit cards are a bit on the high side at the moment, but they should recover fine in January. Anyways... let's see how we did for 2016.


*Assets*
TFSA 1: $46,800 ($100 monthly contribution)
TFSA 2: $13,400 (no contributions)
RRSP: $86,700 (no contributions) 
Non-Registered (CAD): $63,900 (no contributions)
Non-Registered (USD): U$380 (no contributions)
Savings Account 1: $4,100, (anticipated rent)
Savings Account 2: $140 (paid a mileage cheque into this account as I happened to be at that bank) 

Corporate Current Account: $4,200
Corporate Investment Account: $117,400. (no contributions)

*Liabilities*
Margin Loan: $13,400
MasterCard: $1,000 (revolving balance, paid monthly)
Visa: $0
Lines of Credit: $0
Corporate MasterCard: $700 (revolving balance, paid monthly)
Corporate Line of Credit $0

Looking at the year in review, I contributed just shy of $90,000 ($89,400 or so) to these accounts and have an unrealized gain of $26,500 over the year. Estimated net worth is now *$323,800* (*+$10,300*). Year over year, this means that net worth increased $101,200.


*Rate of Return*
Rates of return are:
Non-registered CAD, (heavily Canadian financials) at +32.31% return; TFSA 1 (balanced in its own right) is at 10.85%; TFSA 2 (global small cap) is ending the year at a loss -3.57%; RRSP (foreign / USA) is 6.71%, and corporate investment account (global / US) is at 7.83%, which gives an overall investment return of *+11.28%*. The last 2 trading days dropped my return significantly unfortunately.

I've also calculated my 3 year return (as far as my records go back) at 11.73% annualized (XIRR basis). Quite happy with this.

As for the 2016 goals:
1) Make a 2016 TFSA contribution ($5,500), and use it to re-balance; _DONE!_
2) Make a 2016 RRSP contribution (whatever the 2016 maximum is), and use it to re-balance;_DONE_
3) Make a total retirement contribution (TFSA, RRSP, retained earnings, savings, etc. put aside specifically for retirement and not other purposes) of another $50,000;_DONE -- nearly double._
4) Continue to try to get each asset category within 3% of their target allocation. _NOT DONE, allocation is still wacky, but will bring back into place through contributions (hopefully)_
5) Obtain a total net worth of $300,000 by December 31, 2016;_DONE - didn't think this one was going to be possible but thanks to Mr. Market, was able to do so._
6) Start some kind of 'hobby' side business and have it break even; _NOT DONE, though in the process and will be working on this in early 2017._and
7) reduce general living expenses so the credit card ends up under $1,000 a month on average._NOT DONE, beginning to think this is not reasonable._

Haven't thought about 2017 goals yet, year end snuck up on me in that regard, will have to circle back on this later.


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## Sm5

*Feb 1, 2017 (effective)*

Don't have much to say this month. Made a wallop of cash (almost, but not quite, embarrassed about how good the quarter was given the economy around here). This needs to be invested, but haven't had time to even think about investing it and balancing the portfolio. Pretty dull month financially because of not getting around to doing anything. Anyhow, for posterity:

*Assets*
TFSA 1: $46,600 ($100 monthly contribution)
TFSA 2: $13,400 (no contributions, todo list for this week is to make my contribution here)
RRSP: $85,700 (no contributions) 
Non-Registered (CAD): $64,700 (no contributions)
Non-Registered (USD): U$390 (no contributions)
Savings Account 1: $4,200, (anticipated rent for tomorrow)
Savings Account 2: $340 

Corporate Current Account: $19,700
Corporate Investment Account: $151,500. (35,000 contribution)

*Liabilities*
Margin Loan: $13,400
MasterCard: $1,500 (revolving balance, paid monthly)
Visa: $0
Lines of Credit: $0
Corporate MasterCard: $200 (revolving balance, paid monthly)
Corporate Line of Credit $0

Estimated net worth is now *$371,800* (*+$48,000*).


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## Sm5

*March 1, 2017*

Don't have much to say this month either. Markets had quite a run up this month, filled up my TSFA and paid my corporate taxes, which were less than expected - meaning personal ones will be higher come April but still estimating a small refund. Trying to decide whether I want to increase my leverage (given what looks like an ongoing stock rally) or decrease it (given the uncertainty I'm seeing), probably will just stay the course though with the minor amount of leverage I'm holding currently. Otherwise, a boring month financially.

*Assets*
TFSA 1: $47,800 ($100 monthly contribution)
TFSA 2: $18,100 ($4,300 contributed)
RRSP: $89,800 (no contributions) 
Non-Registered (CAD): $65,700 (no contributions)
Non-Registered (USD): U$400 (no contributions)
Savings Account 1: $5,900, (anticipated rent for tomorrow)
Savings Account 2: $270 

Corporate Current Account: $7,300
Corporate Investment Account: $154,800. ($1,000 contribution, USD$2,000 withdrawn)

*Liabilities*
Margin Loan: $13,400
MasterCard: $1,000 (revolving balance, paid monthly)
Visa: $0
Lines of Credit: $0
Corporate MasterCard: $110 (revolving balance, paid monthly)
Corporate Line of Credit $0

Estimated net worth is now *$375,740* (*+$4,000*).


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## Sm5

*April 1, 2017*

Well, the last month the markets went on a bit of a tear for most of the month, but the correction ate most of my gains. Spending was a bit high as some items came up on the cards from a recent and much needed vacation. I've been putting some thought into goals for this year, I'm going to try to:
1) reduce spending and increase savings by not eating out as much;
2) working a bit more than I currently am (damn economy makes it difficult),
3) attempt to hit a net worth of $500,000 by year's end;
4) contribute maximum to RRSP and TFSA; and
5) attempt to contribute $100,000 to accounts this year (been a bit below that the last few years, so far, YTD, I've contributed about $38000 so I think this is doable). 

This will all be a bit of a stretch, but we will see if its possible.


*Assets*
TFSA 1: $48,400 ($100 monthly contribution)
TFSA 2: $19,000 (no contributions)
RRSP: $91,500 (no contributions, once taxes are done and I know what my contribution limit is for the year I'll contribute here) 
Non-Registered (CAD): $65,400 ($250.00 contribution, just some cash I had floating around and needed to get rid of somewhere)
Non-Registered (USD): U$400 (no contributions)
Savings Account 1: $7,600
Savings Account 2: $100 


Corporate Current Account: $7,400
Corporate Investment Account: $157,600. (no contributions)

*Liabilities*
Margin Loan: $13,100
MasterCard: $1,600 (revolving balance, paid monthly, high from vacation expenses)
Visa: $0
Lines of Credit: $0
Corporate MasterCard: $300 (revolving balance, paid monthly)
Corporate Line of Credit $0

Estimated Net Worth is now at *$382,500.00 (+$6,700)*


*Rate of Return*
Rates of return so far are:
Non-registered CAD, (heavily Canadian financials) at +2.556% return (10.91% annualized); TFSA 1 (balanced in its own right) is at 2.378% (10.12% annualized); TFSA 2 (global small cap) is at 8.466% (39.55% annualized); RRSP (foreign / USA) is 5.678% (25.42% annualized), and corporate investment account (global / US) is at 4.593% (20.22% annualized), which gives an overall investment return of +4.437% year to date (19.49% annualized).


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## Sm5

*May 1, 2017*

Quite month financially again, got very busy at work (hopefully can keep up this increased workload) and as such didn't get a chance to do much of anything else. Got a small tax refund ($200.00) which suggests payroll deductions are right where they should be (happy with that) and have taken a quarterly draw of just around my RRSP contribution amount in addition to my usual drawings - so that is in the process of moving over to the RRSP once the cheque clears the various banks. This will go into US index fund to get it to the point where it starts DRIPing again. With the recent increase in US stock prices, it currently does not generate enough for a Unit per quarter so although this will push my asset allocation out of whack a bit, I'll be allocating it this way. Further funds throughout the year will be used to draw back the asset allocation closer to targets as this will put me about 10% high on US and 10% low on Canadian from my target.

Hopefully, this is not the wrong play, but it would just be nice to get the RRSP DRIP operating again. 

Contributed $250 against margin account and am a bit on the fence about paying this down in the short term. Markets are high, and the interest rate is starting to creep up, but this is such a minor amount outstanding that I'm indifferent to letting it roll or paying it down (either by turning off DRIPs for a while in that account or by paying new money in to cover), we will see what is decided in the long run.


*Assets*
TFSA 1: $49,400 ($100 monthly contribution)
TFSA 2: $20,300 (no contributions)
RRSP: $95,500 (no contributions; funds on the way over in about a week once the cheque clears) 
Non-Registered (CAD): $65,100 ($250.00 contribution, just some cash to get rid of)
Non-Registered (USD): U$400 (no contributions)
Savings Account 1: $5,900
Savings Account 2: $26,300 (moving to RRSP)
USD Savings Account: $1,700 


Corporate Current Account: $7,700
Corporate Investment Account: $164,100. (no contributions)

*Liabilities*
Margin Loan: $12,800
MasterCard: $1,000 (revolving balance, paid monthly, high from vacation expenses)
Visa: $0
Lines of Credit: $0
Corporate MasterCard: $200 (revolving balance, paid monthly)
Corporate Line of Credit $0

Estimated Net Worth is now at *$419,300 (+$36,800)* - anticipating for tomorrows rent.


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## james4beach

Sm5 said:


> Rates of return so far are: . . . TFSA 2 (global small cap) is at 8.466% (39.55% annualized); RRSP (foreign / USA) is 5.678% (25.42% annualized), and corporate investment account (global / US) is at 4.593% (20.22% annualized)


So you're getting
39.55% annual return in global small caps,
25.42% annual return in foreign/USA,
20.22% annual return in global/USA

These are outlandishly high performances and far above index returns for those sectors. Can you share with us what your exposures are?

You mentioned you work in the legal field related to M&A. Are you sure that your investments are free from conflict of interest/insider trading? The very high returns raise some flags.


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## Sm5

Totally conflict free - I represent private businesses and have no financial stake in any of them or any marketable knowledge at all, none are publicly listed/traded. Just some luck in the market timing and leverage effects is all it is, not really anything special. If the markets go down, likely I will go down even further.

Biggest exposures are:
Global small caps - Mawer global small cap fund 
Global large cap is mixed: mostly Mawer again, some PH&N funds, plus BEP, XEF (market timing a bit on this on events like Brexit, Trump, etc.)
USA is just IVV, CLU, and a few small amounts in mutual funds for when distributions come in (a few hundred bucks here and there).

Your rates of return estimates may be a bit out though. I don't track based on asset class but based on accounts and there are, at times, some mis-allocated funds in accounts so where I refer to one as global/small cap it mostly would be that but also could be holding US (for example). However, on that basis, based on my numbers, I'm seeing (as of today):

Margin account (primarily Canadian banks, but does have some US holdings): 6.49% annualized (2.035% YTD)
Balanced TFSA: 13.74% annualized (4.213% YTD)
International TFSA: 59.71% annualized (16.192% YTD) - This is just holding a Mawer fund currently, for example.
RRSP (International and US funds) 36.12% annualized (10.389% YTD)
Corporate holdings (mostly international small cap / US index but a few Canadian holdings, TD for example was bought on the 'scandal' dip): 31.22% annualized, 9.101% YTD.

Annualized since Jan 1, 2014, on all accounts in only 14.42% return. 

Nothing to write home about. No insider knowledge. Just luck and leverage.


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## mordko

If the "annualized" rate is based on YTD then Sm5 returns don't look "outlandishly high". My son started investing this year (via XIC and XAW) and his "annualized" gain is ~35%. Meaningless but high.


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## james4beach

Thanks for sharing your exposures! If you started a thread in Investments, I'm sure many people would be interested in learning about how you're investing. Those look like some nice vehicles you've chosen.

Oh, is that annualized rate just based on the YTD performance? That makes sense... not a very useful measure, by the way.



> Annualized since Jan 1, 2014, on all accounts in only 14.42% return.


Ah, I see!

I thought you were showing your CAGR (compounding annual growth rate) over the life time of your investment, and I was about to say that if you're getting 20% to 25% annual rate of return over several years, that you should quit law and start a hedge fund


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## Sm5

Just YTD annualized as mordko surmises. 

I have the lifetime numbers and each account ranges from 9.88% - 15.37% lifetime CAGR (over everything 14.42% as stated above). I'd love for it to be in the 20-25% range(!), as would anyone, but sadly returns aren't quite that good.


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## Sm5

A couple days late, effective June 1st:

*Assets*
TFSA 1: $49,900 ($100 monthly contribution)
TFSA 2: $21,300 (no contributions)
RRSP: $121,700 (no contributions, once taxes are done and I know what my contribution limit is for the year I'll contribute here) 
Non-Registered (CAD): $50,500 - net of margin, as I didn't write it down ($300.00 contribution, just some cash I had floating around and needed to get rid of somewhere)
Non-Registered (USD): U$400 (no contributions)
Savings Account 1: $4,700
Savings Account 2: $200 


Corporate Current Account: $5,500
Corporate Investment Account: $167,500. (no contributions)

*Liabilities*
Margin Loan: $listed as net this month.
MasterCard: $1,000 (ish, I didn't record it accurately)
Visa: $0
Lines of Credit: $0
Corporate MasterCard: $500 (ish, not recorded )
Corporate Line of Credit $0

Estimated Net Worth is now at *$419,600* (+$300 or so, not quite as accurate as usual)


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## Sm5

*July 1, 2017*

Down month, mostly from appreciation of the Canadian Dollar (in the long run good, short run a bit of pain as most of my portfolio is foreign and US equities which dropped with the CAD appreciation, oh well). Didn't really do anything with the portfolio this month, and am actively trying to enjoy life a bit more this summer -- so expenses have been a bit higher than usual. But quite happy with the decision to be a little less workaholic for a change.

Anyhow, for posterity:

*Assets*
TFSA 1: $48,800 ($100 monthly contribution)
TFSA 2: $20,200 (no contributions)
RRSP: $118,000 (no contributions) 
Non-Registered (CAD): $65,400 ($100.00 contribution, slowly trying to pay down margin before an anticipated rate increase)
Non-Registered (USD): U$400 (no contributions)
Savings Account 1: $6,800
Savings Account 2: $100 


Corporate Current Account: $4,300
Corporate Investment Account: $161,000. (no contributions)

*Liabilities*
Margin Loan: $12,500
MasterCard: $1,500 (revolving balance, paid monthly, a bit high)
Visa: $0
Lines of Credit: $0
Corporate MasterCard: $350 (revolving balance, paid monthly)
Corporate Line of Credit $0

Estimated Net Worth is now at *$409,000.00* (*-$10,000*). Not concerned with the drop, will come back with time.


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## Sm5

A few days late for August 1, but tracked the values on that day -- just haven't had time to post. Last month was busy finance wise with a raft of very adverse potential tax changes announced, a significant appreciation of the CAD which hurt my mostly foreign portfolio, quarterly GST remittance, and starting to look for a house again. It feels like everywhere I look there is money going out. 

It also means I need to keep some cash around as a down payment/deposit and currently have about $45,000 in cash in the investment accounts for such purposes. I wrote an offer one one place and it went to multiple offers and got outbid, which is fine. There is always the next place...

Anyhow, effective August 1, 2017:


*Assets*
TFSA 1: $48,800 ($100 monthly contribution)
TFSA 2: $20,300 (no contributions)
RRSP: $117,500 (no contributions) 
Non-Registered (CAD): $52,200 (net of margin, which I'm decreasing currently, contributed $250.00 against margin)
Non-Registered (USD): U$425 (no contributions)
Savings Account 1: $4,600
Savings Account 2: $18 

Corporate Current Account: $10,100
Corporate Investment Account: $191,000. ($30,000 contribution, left in CAD cash in case I find a house)

*Liabilities*
Margin Loan: Net amount reported
MasterCard: $1,300 (revolving balance, paid monthly)
Visa: $0
Lines of Credit: $0
Corporate MasterCard: $600 (revolving balance, paid monthly)
Corporate Line of Credit $0

Estimated net worth is now *$442,000 *(+$33,000).


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## james4beach

It sounds like you're getting pretty serious about buying a home. Have you considered reducing your stock exposure in your TFSA & non-registered accounts? Just curious.

If you buy a house, you have more money available than just the downpayment and could pay a healthy amount of the home off right away. But stock exposure is a mismatch for such things since stocks should be held for decades, ideally. This is coming from a risk-averse guy, but it might be prudent to reduce your exposure to stock volatility ahead of the home purchase.

The counter argument might be that you have so much cashflow at the moment that you could aggressively pay down a mortgage anyway.


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## Sm5

james4beach said:


> It sounds like you're getting pretty serious about buying a home. Have you considered reducing your stock exposure in your TFSA & non-registered accounts? Just curious.
> 
> If you buy a house, you have more money available than just the downpayment and could pay a healthy amount of the home off right away. But stock exposure is a mismatch for such things since stocks should be held for decades, ideally. This is coming from a risk-averse guy, but it might be prudent to reduce your exposure to stock volatility ahead of the home purchase.
> 
> The counter argument might be that you have so much cashflow at the moment that you could aggressively pay down a mortgage anyway.


J4B, you are far more risk adverse than I. 

I've got no intention of dropping equity exposure or aggressively paying it down at current interest rates. Quite the opposite; will try to float it as long as possible and direct cashflow to other productive assets. The way I see it, why reduce an asset that is averaging easily 5-8% return in the long term in order to pay against a ~3%-4% liability.

In effect, I'm looking for diversifying into this asset class but not go 'all in' on housing by reducing exposure to productive assets. Once one is found, I'll be paying the minimum mortgage payments until interest rates creep higher. At that time, if it no longer looks like the spread between equities and mortgage rates is beneficial, I'll just redirect cashflow against the mortgage (without touching the equities as they sit now, no matter what their price at the time). Between rent currently being paid ($20,000 per annum) and redirected excess cash flow (conservatively $80,000 per annum after increased costs of homeownership are factored in), that is $100,000 per year against the mortgage P&I if necessary. Won't take long to reduce principle at that rate if necessary as prices here are not that high.


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## james4beach

Sm5 said:


> J4B, you are far more risk adverse than I.


Well, I'm just not a big fan of buying stocks on margin (see below) and I've expressed caution about this whenever the issue arises.



Sm5 said:


> The way I see it, why reduce an asset that is averaging easily 5-8% return in the long term in order to pay against a ~3%-4% liability.


This reasoning is popular, but consider this argument that preserving your portfolio instead of paying down the mortgage is equivalent to buying stocks with leverage (or stocks on margin). Kitces addresses exactly this issue.

https://www.kitces.com/blog/Why-Is-...n-Margin-But-Prudent-To-Buy-Them-On-Mortgage/
https://www.kitces.com/blog/why-keeping-a-mortgage-and-a-portfolio-may-not-be-worth-the-risk/

_Functionally, the only real difference between the two happens to be the collateral involved; yet it’s not entirely clear offhand why buying stocks using stocks as collateral is “risky”, but buying stocks and using your home as collateral is less risky!?
...
In the end, though, the fundamental point remains: from the perspective of the client’s entire financial balance sheet, buying stocks “on mortgage” is remarkably comparable to the risk of buying stocks on margin, which is almost (but not quite!) as risky as just investing in a portfolio that is twice as volatile in the first place._​


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## james4beach

And I realize you might be totally comfortable doing (effectively) leveraged stock investments. Perhaps the added risk/volatility of leverage does not bother you; no problem. I just wanted to present the argument in case it never came up before.


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## Sm5

Looks like I missed last month, work has been a bit busy the last little while so a bit behind. With the increase of the Bank of Canada rate, I elected to simply pay out my margin save for a minor nominal amount (dividends will kill this off before the end of the year). Basically did this as I've got more cash sitting around (more than is needed for the down payment on a house) with more building up shortly with my next quarterly draw at the end of October and nothing looking appealing on the markets currently to deploy against - so might as well reduce margin since nothing else really to do with it. I consider a home an investment so my portfolio is going to get highly leveraged shortly if i do find one -- if not, depending on interest rates, I may just leverage up on other assets on an interim basis - possibly with protective puts to hedge downside until a house can be found and closed on.

House hunting is a slow trudge given the market here. It seems the market is bifurcated with good homes going within days and the overpriced ones not reducing in price or moving after many months. However, not being in any real rush to buy other than as a perceived trough in the market, I can continue to see what's out there and hopefully something comes up at a fair price. 

Given the increase of the CAD, my returns are diminished as I am heavily foreign/USD exposed. August/September are also high expense months with insurance being paid these months, so that hits the net worth a bit this time every year.

Anyways: 

*Assets*
TFSA 1: $50,000 ($100 monthly contribution)
TFSA 2: $20,500 (no contributions)
RRSP: $117,500 (no contributions) 
Non-Registered (CAD): $63,500 (net of margin, contributed $11,000 to basically clear off using excess cash)
Non-Registered (USD): U$433 (no contributions)
Savings Account 1: $7,300
Savings Account 2: $100 

Corporate Current Account: $7,200
Corporate Investment Account: $181,500. ($11,000 withdrawn to pay off margin)

*Liabilities*
Margin Loan: Net amount reported
MasterCard: $2,400 (revolving balance, paid monthly)
Visa: $0
Lines of Credit: $0
Corporate MasterCard: $800 (revolving balance, paid monthly)
Corporate Line of Credit $0

Estimated net worth is now $444,800. Basically flat over a 2 month period.


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## james4beach

Still, impressive results. If I'm reading this right, you're up 160 K in one year right? Very few people can increase their NW at that kind of pace, so you're really on a strong track to a comfortable future. Just four years like this will land you at over 1 M.

And look at the rising CAD this way: you're becoming wealthier relative to the rest of the world. A strong CAD is good for anyone who has net positive savings.


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## hboy54

james4beach said:


> And I realize you might be totally comfortable doing (effectively) leveraged stock investments. Perhaps the added risk/volatility of leverage does not bother you; no problem. I just wanted to present the argument in case it never came up before.


Why do you call this scenario stock leverage instead of real estate leverage? I about twice a year pose this question or one like it, and nobody ever answers it: Why is one house purchased in one market on one day universally regarded ( other than me I guess) as lower risk than 20 stocks accumulated over 50 or 100 transitions and a number of years?

Hboy54


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## james4beach

I don't think it's lower risk, the exposure to a non-diversified massive asset (the home) is risky too. It's probably more accurate to say the person is leveraged overall. It's not just stock leverage, it's overall leverage. Might be better to discuss this in a new thread instead of going off top in the money diary.


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## Sm5

hboy54 said:


> Why do you call this scenario stock leverage instead of real estate leverage? I about twice a year pose this question or one like it, and nobody ever answers it: Why is one house purchased in one market on one day universally regarded ( other than me I guess) as lower risk than 20 stocks accumulated over 50 or 100 transitions and a number of years?
> 
> Hboy54


I actually agree, its an un-diversified, rather illiquid asset. Yet for some reason the banks, society, etc. consider it lower risk, as reflected in their interest rates than a diversified blue chip portfolio which is incredibly liquid and could be liquidated by the lender in a second (with nil cost). Yet, generally, the former is easier to leverage than the later.

I think the best approach is to consider real estate leverage along with every other type of leverage as an overall portfolio (very much not 'a house is a home', more 'a house is an asset') and just attempt to keep the leverage ratio, as a whole, in line.


----------



## Sm5

*November 1 (effective)*

Past month has been rather busy work wise - as in one of the busiest months ever. Still looking for a house (when I have time to look, which isn't that often). Not much available in my preferred areas, but no rush. Thanks to the last month's run up and a quarterly draw, net worth has finally breached the $500,000 mark which was one of the yearly goals. Now to see if the market will cooperate and leave it there. Leverage, currently is practically nil (less that $500 in margin and dividends will probably clear this up for year end), and cash is accumulating too much for comfort (though allocatable towards the house, if found, so I guess this isn't too much of an issue). I'm tempted to put the house hunting on hold until regulation b-20 is in place, it may have an effect on cooling the market, but hard to predict.

Anyhow, after anticipating for tomorrow's payments (because I know I won't be able to post tomorrow):

*Assets*
TFSA 1: $52,000 ($100 monthly contribution)
TFSA 2: $21,400 (no contributions)
RRSP: $124,500 (no contributions) 
Non-Registered (CAD): $66,400 (net of margin, contributed $200.00)
Non-Registered (USD): U$443 (no contributions)
Savings Account 1: $4,500
Savings Account 2: $100 

Corporate Current Account: $48,000 (will move $40,000 or so to investment account tomorrow to either deploy or earn a tiny bit of interest on)
Corporate Investment Account: $189,700. 

*Liabilities*
Margin Loan: Net amount reported. However basically nil now.
MasterCard: $2,600 (revolving balance, paid monthly, this is really high this month with insurance payment due)
Visa: $0
Lines of Credit: $0
Corporate MasterCard: $600 (revolving balance, paid monthly)
Corporate Line of Credit $0

Estimated net worth is now $*504,000*. (*+$59,200*).

For the years stated goals:
1) reduce spending and increase savings by not eating out as much; _- Not happening from the looks of things. Really need to work on this a bit._
2) working a bit more than I currently am (damn economy makes it difficult); _- will have to see what the last 2 months bring, sitting close to average due to a bad spring._
3) attempt to hit a net worth of $500,000 by year's end; _- On an interim basis, hit this. However, now it will be up to the vagrancies of the market whether it stays there._
4) contribute maximum to RRSP and TFSA; and _- Done_
5) attempt to contribute $100,000 to accounts this year (been a bit below that the last few years, so far, YTD, I've contributed about $38000 so I think this is doable). _- Once the cash in my business checking account is deployed, this will be done._

What is apparent is that spending related items are not being hit, while income related ones are. Need to watch that lifestyle creep / spending moving forward.


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## nobleea

Sm5 said:


> Still looking for a house (when I have time to look, which isn't that often). Not much available in my preferred areas, but no rush..


What neighbourhoods in the city are you considering?


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## Sm5

nobleea said:


> What neighbourhoods in the city are you considering?


Laurier, Valleyview, Crestview and Parkview areas.


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## nobleea

Sm5 said:


> Laurier, Valleyview, Crestview and Parkview areas.


Very nice areas. We're building specs in Parkview and a lot of our friends live in those areas. Another is building in laurier right by the zoo.


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## Sm5

*December 1, 2017*

Was a bit bored at work last month, so did a bit of short term trading. Made some quick money on ENB (already sold out of it as I avoid oil/energy related stocks entirely given I'm in Alberta) and am trying to deploy some of my house downpayment funds as not much appearing on the market for housing options and an expected large cash infusion coming with next draw either January -- if I find a house in the interim, I likely won't need cash to close until at least then anyways. So instead of getting too much dead cash sitting around waiting, deployed some of it. Down to holding around $50,000 cash in my investment accounts. Also bought a few call options on WEED for April of next year, thinking being that the hype should push the stock over my strike price by then ahead of the legalization and I can make a few quick bucks in the hype -- if not, it was some fun money to watch (won't break the bank). Regardless, I have no intention of a long term hold.

Other than that, uneventful month.

*Assets*
TFSA 1: $52,300 ($100 monthly contribution)
TFSA 2: $21,600 (no contributions)
RRSP: $126,000 (no contributions) 
Non-Registered (CAD): $67,400 (net of margin, contributed another $200.00)
Non-Registered (USD): U$455 (no contributions)
Savings Account 1: $4,200
Savings Account 2: $50 

Corporate Current Account: $6,700
Corporate Investment Account: $232,000. 

*Liabilities*
Margin Loan: Net amount reported. However basically still nil.
MasterCard: $1,400 (revolving balance, paid monthly)
Visa: $0
Lines of Credit: $0
Corporate MasterCard: $300 (revolving balance, paid monthly)
Corporate Line of Credit $0

Estimated net worth is now *$509,000*. (*+$3,000*).


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## Sm5

*Year End 2017*

Well 2017 is 'in the can' so to speak. December was quite quiet at work with the holidays but the markets were generally cooperative. Goals in 2017 were to reduce spending and increase savings (which, sadly, does not appear to have occurred be being addressed adequately); increase employment income by working more (handled that quite easily even given the economy by targeting more lucrative work); reach a half-million net worth (done) and maximize all accounts/invest $100,000.00 over the year (done).

For December I made a few transactions, I had a few WEED calls outstanding that I rolled up for a significant (on percentage basis) profit -- because of the dollars involved they don't even move the needle on a dollar basis, but fun non-the-less. I'll probably roll these up or out one more time before closing out of WEED and related entities ahead of the purported legalization deadline (when I see the market peaking). The play money is now entirely the gains from rolling up/out options (and the rest cleared off the remaining margin) so we'll see if it was worth the effort come July. 

Speaking of margin, I'm now, for the first time in a few years (since 2014) paid out of margin -- which probably means that 2018 is going to be a blockbuster year when I don't have any of that leverage in play.

For 2018 goals:
1) Still trying to reduce spending a bit, will really have to put a concerted effort in this. I've already cancelled out of my usual spring vacation.
2) Increase net worth to $750,000.00 by year end (trying to stretch a bit on this one);
3) Contribute another $100,000.00 to investment accounts by year end;
4) Increase net practice revenue by 10%; and
5) finally find and buy a house.


*Assets*
TFSA 1: $53,000 ($100 monthly contribution)
TFSA 2: $21,700 (no contributions)
RRSP: $126,500 (no contributions) 
Non-Registered (CAD): $69,500 (no contribution, margin is now repaid from options income)
Non-Registered (USD): U$464 (no contributions)
Savings Account 1: $3,600 (anticipating for January 1, 2018 rent)
Savings Account 2: $4,400 (moved some money from my corporate account over as it is on its way to my TFSA for January 1 as the 2018 TFSA contribution)

Corporate Current Account: $6,700
Corporate Investment Account: $228,000 (removed $4,300 which is on its way to my TFSA). 

*Liabilities*
Margin Loan: Nil margin now.
MasterCard: $990 (revolving balance, paid monthly, this is really high this month with insurance payment due)
Visa: $0
Lines of Credit: $0
Corporate MasterCard: $590 (revolving balance, paid monthly)
Corporate Line of Credit $0

Estimated net worth is now *$512,000*. (*+$3,000*). It seems very consistently that if I don't receive a draw, my net worth moves around $3,000.00 per month plus or minus. 

For rates of return over 2017 (XIRR method) I made 13.27% and increased my net worth by around $183,000.00 in 2017; $132,000 or so was in contributions. Since January 1, 2014 (4 years), my rate of return (XIRR method) is 12.54% per annum (which I'd be happy to keep up for the next 30 years or so).


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## Sm5

*Feb 1, 208 (effective)*

Very late for February 1st update, have been incredibly busy at work. January was a good month but as everyone will have noticed, early February was a bit of a drop in the markets -- which is, of course, immediately after I deploy some new capital. Oh well, it will come back up (hopefully).

Effective as of February 1, 2018:


*Assets*
TFSA 1: $53,000 ($100 monthly contribution)
TFSA 2: $27,000 ($4,300 contributions, with the $100 in the other TFSA per month, this is maxed out now for the year)
RRSP: $131,000 (no contributions) 
Non-Registered (CAD): $69,500 (no contributions)
Non-Registered (USD): U$490 (no contributions)
Savings Account 1: $4,700
Savings Account 2: $500 

Corporate Current Account: $14,200
Corporate Investment Account: $271,000 ($40,000 added). 

*Liabilities*
Margin Loan: Nil margin now on all accounts, some minor positive cash holdings, which I don't like.
MasterCard: $3,500 (revolving balance, paid monthly, had some car repairs this month unfortunately)
Visa: $100, (used it to keep it active).
Lines of Credit: $0
Corporate MasterCard: $250 (revolving balance, paid monthly)
Corporate Line of Credit $0

Estimated net worth is now *$567,000*. (*+$55,000*) as of February 1. However, unless things change for the rest of the month, a significant drop is coming for March 1 update.


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## Sm5

*March 1, 2018*

Well, February was a ride, but thankfully by the end of the month had somewhat recovered. Still waiting on my accountant to get a ballpark corporate tax picture together so I can deploy some dead money (cash holdings in investment accounts), and still house hunting without much luck as there doesn't appear to be too much on the market at the moment. 

Effective as of March 1, 2018


*Assets*
TFSA 1: $52,000 ($100 monthly contribution)
TFSA 2: $26,000 (no contributions)
RRSP: $130,000 (no contributions) 
Non-Registered (CAD): $67,000 (no contributions)
Non-Registered (USD): U$450 (no contributions)
Savings Account 1: $6,400
Savings Account 2: $500 

Corporate Current Account: $10,000
Corporate Investment Account: $269,000 (no contributions). 

*Liabilities*
Margin Loan: Nil margin now on all accounts.
MasterCard: $1,700 (revolving balance, paid monthly)
Visa: $0.
Lines of Credit: $0
Corporate MasterCard: $300 (revolving balance, paid monthly)
Corporate Line of Credit $0


Estimated net worth is now* $560,000.00*, (*-$7,000.00*) from February 1 -- but much better than the -$22,000.00 I was at one point during the month.


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## Sm5

*May 1 - effective*

Got very busy at work / generally, so missed my April update. Looks like I'll be receiving a small inheritance on the coming months/year or so of $100,000 and renegotiated my engagement with my firm on a more lucrative basis (though not quite as well as I was hoping). I'm not including the inheritance in net worth until received (cash based accounting as opposed to accruing it). Similarly, on my personal taxes my accountant is indicating a refund but until received I won't accrue it. A large amount was owing on corporate tax which has been paid.

Investments have been 'tanking' lately, so all gains over the past 2 months have been effectively from free cash flow being directed into investments/savings. Still far too much cash kicking around, but having trouble pulling the trigger on anything just yet -- hopefully in the next week or so. I did buy some Telus common shares back in March as something to do, but thats it for investment changes.

*Assets*
TFSA 1: $53,000 ($100 monthly contribution)
TFSA 2: $27,000 (no contributions)
RRSP: $130,000 (no contributions) 
Non-Registered (CAD): $69,000 (no contributions)
Non-Registered (USD): U$450 (no contributions)
Savings Account 1: $7,100
Savings Account 2: $27,000 (money on its way to RRSP)

Corporate Current Account: $17,000
Corporate Investment Account: $280,000 ($30,000 withdrawn for taxes and to move funds to RRSP, $50,000 deposited for a net of $20,000 deposit). 

*Liabilities*
Margin Loan: reported net -- slight bit of margin in play from purchasing Telus shares while waiting for funds to percolate through to that account.
MasterCard: $1,800 (revolving balance, paid monthly)
Visa: $0.
Lines of Credit: $0
Corporate MasterCard: $150 (revolving balance, paid monthly)
Corporate Line of Credit $0

Estimated net worth is now *$607,000.00*, (*+$48,000.00*) from March 1 with anticipated rent.

As for 2018 goals:
1) Still trying to reduce spending a bit, will really have to put a concerted effort in this. ** So far, not going well **
2) Increase net worth to $750,000.00 by year end (trying to stretch a bit on this one); ** depending on if the inheritance comes through this year or next, this won't be much of a stretch any more **
3) Contribute another $100,000.00 to investment accounts by year end; ** well on track. Based on my 'back of the napkin calculations', so far, net, it looks like I've contributed almost $81,000 since January 1 to investments **
4) Increase net practice revenue by 10%; and ** on track for this or greater **.
5) finally find and buy a house. ** also not going well; you can either get close in to the city center, or reasonably sized, not both, no matter the price it seems **


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## Sm5

*June 1 2018*

Not much of interest happened this month financially on the investment end. Monies from corporate end went into the RRSP and I had a few larger expenses (accountant bills for the year etc.) drop in May.

Trying to deploy cash but need to deploy to my Canadian allocation and I don't see anything I'd like to own in Canada at current prices -- might end up putting it towards banks which are my 'go to' for Canadian allocation when I can't find anything to buy.

*Assets*
TFSA 1: $54,000 ($100 monthly contribution)
TFSA 2: $27,000 (no contributions)
RRSP: $161,000 (around $26,000 contribution) 
Non-Registered (CAD): $71,000 ($1,500 contributions)
Non-Registered (USD): U$475 (no contributions)
Savings Account 1: $7,400
Savings Account 2: $300 (money made it to RRSP, so back to nil balance)

Corporate Current Account: $5,600
Corporate Investment Account: $286,000 ($3,000 contributed). 

*Liabilities*
Margin Loan: reported net -- around $5,500 of margin in use.
MasterCard: $1,300 (revolving balance, paid monthly)
Visa: $0.
Lines of Credit: $0
Corporate MasterCard: $900 (revolving balance, paid monthly)
Corporate Line of Credit $0

Estimated net worth is now *$612,000.00*, (+*$5,000.00*) from May 1st.


Also (finally) had time to run XIRR calculations for the year: sitting at annualized 7.00% overall, but early in the year.


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## Sm5

*Jan 1, 2020*

I've been deleterious in keeping this updated - life has got in the way. Not going to try to update back to June 2018, but can give a 2019 update as a few financial items of note.

1) Bought a new car, a Porsche sports car. Don't regret it for a minute even though it was totally consumer spending; but a blow out here and there is to be expected. Effectively paid cash for it as the financing on offer was not competitive enough - I just had to bridge on an operating line for a week or two while moving money around. Picked it up in late fall, and put 1 good road trip on it and around 6,000km. 

2) Took 2 vacations, one over Christmas and New years of 2018/19 and another in December 2019 to the same country. Again, a bit expensive, but enjoyable non-the-less. All indications is that 2020 will be a big year at work so might as well come in a bit rested and relaxed ahead of time.

3) No luck on a house yet, nothing much appealing in Edmonton for sale - I'm finding that everything is the newer floorpan 1/2 lot houses (which I dislike) or too much commute for what I'd be willing to put up with (or so grossly overpriced that they won't sell in this market). Still looking.

4) Received a small inheritance, which I promptly invested in the markets. 

Currently trying to rationalize asset holdings a bit and have the paperwork sent in to move TFSA 1 into TFSA 2 and consolidate. The provider of TFSA 1 (a mutual fund company from when I used those) was sold around 8 years ago and their returns have been lagging on a 6 year (as far back as I tracked) basis. They are also adjusting a bunch of funds indexes and investment objectives which I dislike. Once those assets are moved to TFSA 2, I'll be liquidating and redeploying this capital.

Given the lack of updates, I'll just post the contribution information for all of 2019.

*Assets*
TFSA 1: $63,000 ($100 monthly contributions - total $1,200 contribution)
TFSA 2: $34,000 ($4,800.00 contribution to max out, made in January 2019)
RRSP: $224,000 (around $26,500 contribution to max out, made in mid 2019) 
Non-Registered (CAD): $90,000 ($1,200 contributions, not sure why I contributed here, probably had some cash kicking around)
Non-Registered (USD): U$90,000 (CAD$100,000 contributed using Norberts Gambit)
Savings Account 1: $6,000
Savings Account 2: $6,030 (money in this account getting ready for TFSA contribution time)

Corporate Current Account: $3,000
Corporate Investment Account: $286,000 ($110,000 contributed). 

*Liabilities*
Margin Loan: reported net -- around $17,500 of margin in use.
MasterCard: $2,100.00 (revolving balance, paid monthly)
Visa: $0.
Lines of Credit: $0
Corporate MasterCard: $200 (revolving balance, paid monthly)
Corporate Line of Credit $0

Estimated liquid net worth is now *$1,060,000* (rounded, not including vehicles which may or may not have any value). Past the $1MM mark. Next step, the $2MM mark. 


Also had time to run XIRR calculations for the year, which is part of why I'm pulling TFSA 1: sitting at annualized 22.50%. However, this is entirely based on December of 2018 being a down period and starting from a 'trough'. 

For 2020, I'd like to keep the savings rate around the $140,000 to $150,000. There are a few consumer expenses I know are coming up in 2020 that might hurt this, but $140 - $150 shouldn't be pushing it too far.

Onwards and upwards.


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## scorpion_ca

Congratulations for becoming a millionaire...

Have you decided about your final goal such as 5MM, 10MM or 20MM?


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## james4beach

Wow, so you went from 100K net worth to 1M in just five years! The law field has been good to you.

Also, you've enjoyed big gains using leverage / aggressive investments during a bull market.


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## Sm5

scorpion_ca said:


> Congratulations for becoming a millionaire...
> 
> Have you decided about your final goal such as 5MM, 10MM or 20MM?


No fixed amount, I have a number that I'll adjust for actual inflation as time goes on, which provides for a comfortable retirement and, once I've hit it I will be a bit less misery.





> Wow, so you went from 100K net worth to 1M in just five years! The law field has been good to you.
> 
> Also, you've enjoyed big gains using leverage / aggressive investments during a bull market.


Yes both career and markets have been good of late. Hopefully both continue for the next 30-35 years!


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## james4beach

Have you considered increasing your leverage to get to 2 million more quickly? Whether it's using the mortgage, lines of credit, margin, etc. Maybe even something with options, like using SPY calls.

Since people may wonder how I can say that when I'm such a conservative investor myself, I'll add: our situations are different. I don't have a high income, nor a steady income, and just don't make the kind of money a lawyer can make. I need to be more conservative with my investments. I'm only 30% equities. But perhaps someone like Sm5 can afford to take much higher risk like 150% or above 200% equities, since they can bring in enormous income. In my situation though, I have to be more careful to not risk losing what I already have.

Additionally I am somewhat risk averse (or I am concerned about how I might react to sharp drawdowns). Sm5 does not appear to have the same concerns, and that changes everything as well.

I have a friend who has a net worth of around 10M. His annual income ranges from 500K to 1M. He _does_ take incredibly high risks, including options positions to effectively be _very_ long the market. We've debated on this topic but we both agree, he can afford to do that. I can't.


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## peterk

^ Reported for Sarcasm.


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## james4beach

peterk said:


> ^ Reported for Sarcasm.


I think I added my clarification after you posted. It isn't sarcastic, I'm serious. It comes down to differences in personality, risk tolerance, and overall finances.

I'm 30% equities and it's right for me. For other people, the right number may be 80% or even 250% equities.


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## peterk

james4beach said:


> Since people may wonder how I can say that when I'm such a conservative investor myself, I'll add: our situations are different. I don't have a high income, nor a steady income, and just don't make the kind of money a lawyer can make. I need to be more conservative with my investments. I'm only 30% equities. But perhaps someone like Sm5 can afford to take much higher risk like 150% or above 200% equities, since they can bring in enormous income. In my situation though, I have to be more careful to not risk losing what I already have.
> 
> Additionally I am somewhat risk averse (or I am concerned about how I might react to sharp drawdowns). Sm5 does not appear to have the same concerns, and that changes everything as well.
> 
> I have a friend who has a net worth of around 10M. His annual income ranges from 500K to 1M. He _does_ take incredibly high risks, including options positions to effectively be _very_ long the market. We've debated on this topic but we both agree, he can afford to do that. I can't.


Ohhh I see.

Well, yes an upper middle class person can "afford" to take more risks without risking their middle class life when they're older, due to new incoming cashflow, but this risk taking is also entirely "unnecessary" unless one desires an opulent lifestyle of hedonistic pleasures, where $10M provides what $1M will not. A lower middle class / middle class income earner, however, is more and more likely to slip downwards towards a low income old-age, unless they invest fairly aggressively, like a 60/40. They can't "afford" to be so conservative.

Seems to me that if you are in your 30s-40s and thriving in a career, you should invest your large income fairly conservatively (perhaps like your own portfolio James - I'd be getting very interesting in something like that if I were 40 with $2M). But if you are 40 with a bit of money, not a lot, and a middle-class or uncertain income, I don't think you can afford to be only 30% equities and expect that your disposable income is not going to erode away over the forthcoming decades, leading to a low income retirement.

Myself and wife are targetting 60/40 for investable assets, excluding home equity, and I think that's just about right to balance inflation risk and ease volatility. I've actually been very impressed with my wife's Tangerine Balanced fund (60/40), and would probably use it myself if I were able to control my investing urges effectively.

This is all rather an impossible discussion though to make conclusions about, because lifestyle desires is the real driver for most people choosing their investments. Change your lifestyle desires, change your investments. 

If one only desires to have a comfortable, simple life - Buy a smaller than average detached house that's walking distance to your stores, pay the mortgage as quickly as possible, become handy at fixing your own stuff around the house, be thrifty with your purchases, and invest the remainder of what you got in a "Balanced" diversified fund of some kind that has around 50-70% equities... That is the surefire best bet to not end up impoverished during the age 55+ part of life or have your income decay.


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## james4beach

I don't want to derail his money diary, but these are really neat things to think about. Personally I am putting more emphasis on the "psychology" aspect over purely theoretical returns. The ideal return of say 60/40 or 150% equities only is valid if you are able to stick with the plan and don't get freaked out during bear markets. I use a conservative allocation so that I can tolerate the bad times and continue sticking with the plan, even under worst case conditions.



peterk said:


> But if you are 40 with a bit of money, not a lot, and a middle-class or uncertain income, I don't think you can afford to be only 30% equities and expect that your disposable income is not going to erode away over the forthcoming decades, leading to a low income retirement.


The expected performance loss with my 30% equity allocation is only about 0.5% to 1% CAGR versus 60/40 so I'm not too worried that I'm ruining my life by not taking more risk.

I also suspect that I will end up with superior long term returns to some more aggressive investors because of emotional reactions they will have during bear markets. I've already seen this in real life. I'm already doing better than some of my friends with higher equity allocations. Yes, I'm getting higher _long term_ returns with less stock risk.

Advisors and books never account for those real world effects, namely, human reactions to volatility and bear markets.


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## peterk

james4beach said:


> The expected performance loss with my 30% equity allocation is only about 0.5% to 1% CAGR versus 60/40 so I'm not too worried that I'm ruining my life by not taking more risk.
> 
> I also suspect that I will end up with superior long term returns to some more aggressive investors because of emotional reactions they will have during bear markets. I've already seen this in real life. I'm already doing better than some of my friends with higher equity allocations.
> 
> Advisors and books never account for those real world effects.


I agree your portfolio is appealing for those reasons, and would be especially more appealing if you had $2M+ (don't think you're there yet though?)

But also that without the backstop of a paid off primary residence, your preferred asset allocation applied to a smallish portfolio has inadequate inflation protection, IMO.


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## james4beach

peterk said:


> But also that without the backstop of a paid off primary residence, your preferred asset allocation applied to a smallish portfolio has inadequate inflation protection, IMO.


I really don't think 0.5% CAGR will make much of a difference over the long term, so I think mine is just as good as 60/40. There are so many other real world factors that can impact performance that completely blow away such a small difference as 0.5%


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## Sm5

james4beach said:


> Have you considered increasing your leverage to get to 2 million more quickly? Whether it's using the mortgage, lines of credit, margin, etc. Maybe even something with options, like using SPY calls.
> 
> Since people may wonder how I can say that when I'm such a conservative investor myself, I'll add: our situations are different. I don't have a high income, nor a steady income, and just don't make the kind of money a lawyer can make. I need to be more conservative with my investments. I'm only 30% equities. But perhaps someone like Sm5 can afford to take much higher risk like 150% or above 200% equities, since they can bring in enormous income. In my situation though, I have to be more careful to not risk losing what I already have.
> 
> Additionally I am somewhat risk averse (or I am concerned about how I might react to sharp drawdowns). Sm5 does not appear to have the same concerns, and that changes everything as well.
> 
> I have a friend who has a net worth of around 10M. His annual income ranges from 500K to 1M. He _does_ take incredibly high risks, including options positions to effectively be _very_ long the market. We've debated on this topic but we both agree, he can afford to do that. I can't.


I've actually been thinking of increasing margin for around 6 months or so, just waiting until after taxes are paid for this year and an idea of how busy this year will be for work (need time to keep an eye on the accounts) before doing so. What I've been considering is only a minor amount of margin usage - around $50,000 to $100,000 at most using the available brokerage margin (my cheapest costs of funds) and having this backstopped by my lines of credit in case of any margin calls. This would put at around 110%. I have access to around another $200,000 on lines of credit to backstop (sightly higher interest in the 5.5% range) if necessary. If it goes sideways, is an amount that shouldn't take more than 6 months or less to repay if I get concerned and would provide the opportunity to see how I feel on being this exposed to the market before increasing further. Worst case, instead of selling, just start dumping free cashflow agains the loan to bring down LTV.

Feel free to derail the thread, interesting discussions.


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## Eclectic12

james4beach said:


> Have you considered increasing your leverage to get to 2 million more quickly? ...
> 
> Since people may wonder how I can say that when I'm such a conservative investor myself, I'll add: our situations are different. I don't have a high income, nor a steady income, and just don't make the kind of money a lawyer can make ...


IIRC, most of your threads have tended to be one-size-fits-all, which ignore situational factors. 
In my case, I'm wondering why for this thread - different circumstances matter.


I do agree that where one keeps the leverage within what can be dealt with, should things go badly - considering it should be on the table.


Cheers


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## james4beach

Eclectic12 said:


> IIRC, most of your threads have tended to be one-size-fits-all, which ignore situational factors.
> In my case, I'm wondering why for this thread - different circumstances matter.


He can clearly afford to take more risk without ruining his life and he's talked about his ability to handle risk.

In many other cases (people in retirement or people who have not demonstrated high risk tolerance) I wouldn't even want to raise the idea. In *most* circumstances, high risk investments are not a good idea, for most investors. That's why my generic answers are indeed one size fits all.

There are very few investors out of the population who are well positioned to handle higher risks. _It's a rare situation_. This poster appears to be one of them. Most importantly, he has enough income that he can afford to blow up and start from square one.

My default for most threads is to assume that someone cannot afford to blow up. I think I'm doing the right thing by making that assumption for nearly all cases.


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## Eclectic12

james4beach said:


> He can clearly afford to take more risk without ruining his life and he's talked about his ability to handle risk.
> 
> In many other cases (people in retirement or people who have not demonstrated high risk tolerance) I wouldn't even want to raise the idea. In *most* circumstances, high risk investments are not a good idea, for most investors. That's why my generic answers are indeed one size fits all ...


From my point of view - the willingness to take into account personal factors seems tied to this thread it about one person with lots of details about that one person. I can recall others in the general threads talking about both factors indicating they are similar but can only recall once the info was paid attention to.

Then too - with the number of people who don't want talk about their resources, I suspect there are far more here that are well positioned than randomly asking people.


IAC ... my curiosity is satisfied so feel free to resume the regular programmer. :biggrin:



Cheers


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## Sm5

*Feb 1, 2020*

Trying to not be deleterious in keeping this up to date. However, work has been incredibly busy of late, which has made doing anything outside of work difficult. Should get back to normal in a couple weeks through.

Received my quarterly payment from the firm for Q4 2019, which has been promptly placed into an investment account - but is sitting in a brokerage ISA as I've not had time to think how to deploy it within my asset allocation. Bought a bit more Brookfield Energy Partners units with some USD cash that was 'sitting around' and bought into a (very small) position on TD with personal funds -- just enough for the DRIP to start DRIPing (I hold a bunch of it in my corporate account but don't DRIP that account). Also the transfer for TFSA 1 into TFSA 2 occurred, but I see they didn't cancel the remaining monthly purchases -- sneaky. I'll just wait until December and then either withdraw to recontribute since the funds will be minor, or let it re-grow since any drag will be minuscule given the remaining size of the account. 

*Assets*
TFSA 1: $0 (transferred to TFSA 2, but see that the automatic purchase came out after Feb 1)
TFSA 2: $102,000 (funds from TFSA 1 transferred in, also a $4,800 contribution to top off for the year)
RRSP: $228,000 (no contributions) 
Non-Registered (CAD): $94,000 ($1,200 of excess cash contributed, just to put it somewhere)
Non-Registered (USD): U$91,000 (no contributions)
Savings Account 1: $6,700
Savings Account 2: $30

Corporate Current Account: $17,000 (left a bit more in here for now as not sure what tax liability will be in a few months)
Corporate Investment Account: $586,000 ($60,000 contributed). 

*Liabilities*
Margin Loan: reported net -- around $22,000 of margin in use.
MasterCard: around $3,000.00 (revolving balance, paid monthly, I put a bunch of court filing on it to get the points)
Visa: $0.
Lines of Credit: $0
Corporate MasterCard: $500 (revolving balance, paid monthly)
Corporate Line of Credit $0

Estimated liquid net worth is now *$1,174,000* as of February 7th, not 1st, (rounded and using current values not reported, since I didn't have month end liability numbers handy). Increase of *$116,000* or so since Jan 1, 2020, which is quite incredible when you think of it. I guess compounding interest is starting to take hold.


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## james4beach

Sm5 said:


> I've actually been thinking of increasing margin for around 6 months or so, just waiting until after taxes are paid for this year and an idea of how busy this year will be for work (need time to keep an eye on the accounts) before doing so.


Curious what you think under the current circumstances of using leverage. Could this be a good opportunity to start? Interest rates have dropped even lower and now markets are getting a significant haircut.

Looking at the S&P 500 leveraged SSO vehicle for example, the price now appears to be down to where it was in late 2017. That's kind of like a chance to time travel 2 years into the past!

Or as you say, one can use traditional margin loans or lines of credit. One could simply buy XIU or XIC for example.


_(Disclosure: I don't do any of these things, but am a more conservative investor than you, and my employment is economically sensitive... equities generally correlate with my ability to earn employment income and so I can't afford to have high equity exposure... plus I personally can't stomach the huge draw downs that would come with high equities)_


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## Sm5

I wish I was. the last week has been so busy at work I've not had a chance to look at deploying further leverage.



james4beach said:


> Curious what you think under the current circumstances of using leverage. Could this be a good opportunity to start? Interest rates have dropped even lower and now markets are getting a significant haircut.
> 
> Looking at the S&P 500 leveraged SSO vehicle for example, the price now appears to be down to where it was in late 2017. That's kind of like a chance to time travel 2 years into the past!
> 
> Or as you say, one can use traditional margin loans or lines of credit. One could simply buy XIU or XIC for example.
> 
> 
> _(Disclosure: I don't do any of these things, but am a more conservative investor than you, and my employment is economically sensitive... equities generally correlate with my ability to earn employment income and so I can't afford to have high equity exposure... plus I personally can't stomach the huge draw downs that would come with high equities)_


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## Sm5

*April 1, 2020 (effective)*

So Coronavirus hit, and like expected in a leveraged portfolio, it went down. at one point around $350,000, but since then it has come up again quite a bit. Generally, I was pretty OK with the drop, so I guess that means my risk tolerances are within reason. Unfortunately, because I was just a bit lazy, I lost out on some loss harvesting opportunities which, by now have mostly evaporated again. Lesson learned, I need to be a bit more decisive on these opportunities.

I increased a few positions, but generally quite small amounts, and had to move some funds from corporation to personal margin account to reduce risk of a margin call exposure there as, at the time, that account was drawing down quite quickly. I'm regretting not buying more when I was considering in - but was holding out until after tax season.

Still employed and still have work to do, but starting to dry up as clients 'hunker down'. By end of April it is going to be getting quiet. But all indications are Q3 -Q4 to be booming for work, so going to try to enjoy the downtime as much as possible whist stuck inside.

*Assets*
TFSA 1: $150 
TFSA 2: $68,500 
RRSP: $188,000 (no contributions)
Non-Registered (CAD): $79,000 ($15,000 contributed to reduce margin on this account)
Non-Registered (USD): U$84,000 (no contributions)
Savings Account 1: $5,700
Savings Account 2: $30

Corporate Current Account: $1,700 
Corporate Investment Account: $482,000 ($13,000 (net) withdrawn and applied to non-registered CAD account to reduce margin usage in that account).

*Liabilities*
Margin Loan: reported net -- around $30,000 of margin in use.
MasterCard: around $3,000.00 (revolving balance, paid monthly)
Visa: $0.
Lines of Credit: $0
Corporate MasterCard: $100 (revolving balance, paid monthly)
Corporate Line of Credit $0

Not sure of estimated liquid net worth as I didn't capture the exchange rate on the first. However, as of April 10th it sits at *$1,003,000* as of April 10th, not 1st, (rounded and using current values, which have been increasing for the last few days).


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## james4beach

Have you done any planning on how you want to increase leverage, if markets crash again? There's a good possibility markets are now in a bearish period and could fall again. You may get another chance, both for tax loss harvesting and leveraging up.

If you still like the idea it might be good to prepare the plan of what you intend to buy, where you are going to borrow, etc. You could even enter some buy orders now as "good to cancelled" with very low limit prices, so that the buying will happen automatically, unattended.

e.g. buy XIU with limit price 18.60 good to cancelled (or good til date 30 days out), means the most you are willing to pay is 18.60 and the order will last for 30 days


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## Sm5

james4beach said:


> Have you done any planning on how you want to increase leverage, if markets crash again? There's a good possibility markets are now in a bearish period and could fall again. You may get another chance, both for tax loss harvesting and leveraging up.
> 
> If you still like the idea it might be good to prepare the plan of what you intend to buy, where you are going to borrow, etc. You could even enter some buy orders now as "good to cancelled" with very low limit prices, so that the buying will happen automatically, unattended.
> 
> e.g. buy XIU with limit price 18.60 good to cancelled (or good til date 30 days out), means the most you are willing to pay is 18.60 and the order will last for 30 days



Actually one step ahead of you. 

I've been placing my 'stink bids' this morning along with opening a few positions/increasing existing positions. I'm of the opinion that any rebound after this COVID will likely be done with infrastructure spending, so I've increased my materials exposure slightly (internationally, wouldn't touch this in Canada). Margin usage has increase substantially from April 1st, now closer to $120,000 through some positions opened or increased from April 1st. Beginning to top out on what I want for margin exposure at the moment, however should have around $50,000-$100,000 coming in at the end of the month (depends on what the firm holds back for contingency reserve at their end), but this should allow me to increase exposure a bit further as well -- so hopefully asset prices remain depressed until then.


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## scorpion_ca

Although I have a margin account at Questrade, I use it as a cash account. Would you mind to help me for the following queries?

I have 50k worth of VCN in the margin account. If I buy another 20k worth of VCN on margin, how much interest do I need to pay on that 20k. What is the frequency of interest payment in the margin account? 

With regards to margin call, if that 20k become 9k, then I would have to deposit more or if that total 70k become 35k, then I would have to deposit more.


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## andrewf

I would strongly advise against using Questrade for margin. Their margin rates are very high, currently 7% for borrowing under 100k CAD. Either use a line of credit (3% ish for HELOC) or Interactive Brokers (1.5%) . A LOC is probably safer because you won't have to liquidate immediately under a margin call situation.






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## nobleea

I think the chances are extremely slim that a large ETF like VCN could go down 50% from here. From the peak to the most recent bottom was -38%.
Given that you have 50K equity and was adding 20K, I don't think you'd be getting margin calls after a 50% drop.


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## Sm5

scorpion_ca said:


> Although I have a margin account at Questrade, I use it as a cash account. Would you mind to help me for the following queries?
> 
> I have 50k worth of VCN in the margin account. If I buy another 20k worth of VCN on margin, how much interest do I need to pay on that 20k. What is the frequency of interest payment in the margin account?
> 
> With regards to margin call, if that 20k become 9k, then I would have to deposit more or if that total 70k become 35k, then I would have to deposit more.



As the other aspects are "asked and answered", on the margin interest, it is based on the amount you are into the loan, calculated daily at your brokers interest rate, and compounded monthly (it gets posted to the account monthly and then interest will accrue on that balance unless you put money in of an equivalent amount).

I like to keep margin usage well away from the threshold for a call, but have the unique situation that I can move funds from my corporate account to balance out if needed - which I did in March when I was getting close to my comfort level on a margin call as your available margin comes down pretty fast in a bear market. Also, remember that your interest _can _be tax deductible if you follow the CRA requirements, so a higher interest broker, whist not ideal, isn't as bad as it looks on face value. But I'm also a fan of minimizing the interest cost - if that is a HELOC (one of the lower costs of funds) or a refinanced mortgage (even cheaper generally) then that likely is preferable to broker margin lending. Not sure why, the risk to the bank is likely lower on stock margin accounts than real estate (costs more in time and money to liquidate a home, not directly mark to market, etc.)...

Not being a home owner, I don't have these options and rely on my commercial operating line(s) and broker margin; but if you have cheaper sources, use that first IMO. Just make sure you have some safety (non-callable or less likely callable line, to bridge liquidity issues if you have to deposit funds to reduce margin on short notice).


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## james4beach

andrewf said:


> I would strongly advise against using Questrade for margin. Their margin rates are very high, currently 7% for borrowing under 100k CAD. Either use a line of credit (3% ish for HELOC) or Interactive Brokers (1.5%) . *A LOC is probably safer because you won't have to liquidate immediately under a margin call situation*.


I like the LoC method as well since it's immune to margin calls. I suppose HELOC is one option, but you're putting up your house as collateral.

Don't rule out an unsecured LoC. I've got one from a big bank at prime+2 which is 4.45%. It's not a very high rate, and involves no collateral!


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## Sm5

*May 1, 2020*

April was an up and down month, as I am sure it was for all. I significantly increased margin exposure during the month - at one point close to $120,000.00, but received a reasonably sized quarterly payment and, absent time to figure out what to buy with it, I placed it into my corporate investment account -- paying down the margin loan at that end. I opened a few new option positions selling covered calls on stocks I hold that are depressed which I see as remaining depressed for the next little while -- might as well make a few minor $$ in the interim (mostly for something to do, these are all less than $1,000 in premium). Also opened some option positions on recovery from Coronavirus -- nothing like a little market timing -- again, very minor position around $4000 in total, gambling practically, for something to do.

Value of accounts have gone up and down all month, and I expect it to continue. Currently down about 10pc YTD. So far the volatility hasn't bothered me in the least.


*Assets*
TFSA 1: $300 
TFSA 2: $92,000 
RRSP: $212,000 (no contributions, once I get my Notice of Assessment I'll contribute for the year -- probably in the next 2 weeks)
Non-Registered (CAD): $80,500 (no contributions, reported net of margin of $41,000)
Non-Registered (USD): U$79,000 (no contributions, no margin in use)
Savings Account 1: $4,800
Savings Account 2: $40

Corporate Current Account: $700 (cash moved out for now to reduce margin usage)
Corporate Investment Account: $563,000 ($56,000 contributed, reported net of margin of $21,000).

*Liabilities*
Margin Loan: reported net -- around $62,0000 of margin in use.
MasterCard: around $1,800.00 (revolving balance, paid monthly. There are a bunch of 1-time expenses on here too from stocking up the freezer at a COVID induced meat sale)
Visa: $0.
Lines of Credit: $0
Corporate MasterCard: $10 (Not much marketing going on, so not much to spend on here)
Corporate Line of Credit $0

As my number from last month was from April 10th, my monthly net account value is slightly off, but since that date it is *$1,063,100* (*+$60,100*). Basically, flat for the year so far based entirely on contributions making up for market losses.


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## Sm5

*June 1, 2020*

Not much to report in May, still working in the _new normal_ and it has created a bit of a revenue hit, but manageable. Haven't really done much on the investment end of things other than making my annual RRSP contribution. Expenses were rather high this month as car insurance and accounting fees come due, but otherwise, steady ship moving forward.

*Assets*
TFSA 1: $400
TFSA 2: $96,000
RRSP: $250,000 (made my annual contribution)
Non-Registered (CAD): $84,000 (no contributions, reported net of margin of around $40,000)
Non-Registered (USD): U$84,000 (no contributions, no margin in use)
Savings Account 1: $7,700
Savings Account 2: $40

Corporate Current Account: $8,000 (moved $7,000 cash in to cover higher than anticipated expenses)
Corporate Investment Account: $588,000 ($7,000 withdrawn, reported net of margin of $68,000).

*Liabilities*
Margin Loan: reported net -- around $108,000 of margin in use currently (so around 10% LTV).
MasterCard: around $3,900 (revolving balance, paid monthly)
Visa: $200.
Lines of Credit: $0
Corporate MasterCard: $2,800 (accounting fees and a few marketing expenses)
Corporate Line of Credit $0

Liquid net worth is around *$1,106,000 (+$42,900 from April report)*. Net worth is now up for the year, but investment returns are still down, all gains remain have been through contributions.XIRR calculations put me at -4.4% return so far this year, but looking long term (since January 2014 as that's as far back as I have numbers) the rate of return remains a (respectable, I hope?) 8.10% annualized return over all accounts even with the COVID crash we are going through.


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## Sm5

*August 1, 2020*

Pretty quiet couple months. Closed on a purchase of a bit of gold that was in the family, just to keep it in the family. Originally, I thought it would make a fun paperweight to have around and had negotiated the price a year or so back. Little did I expect the price to have climbed so much by the time I closed the transaction. As such, I'm already sitting on a reasonably large gain as soon as I closed on the purchase. Pure windfall.

*Assets*
TFSA 1: $630
TFSA 2: $101,000.00
RRSP: $260,000 
Non-Registered (CAD): $87,000 (reported net of margin of around $40,000)
Non-Registered (USD): U$91,000 (no contributions, no margin in use)
Gold: $106,000
Savings Account 1: $5,500
Savings Account 2: $80

Corporate Current Account: $47,000 ($40,000 is going to go against loans when I can get around to moving the funds, as its very manual to pay down the corporate line - have to go into the bank to do it).
Corporate Investment Account: $603,000 (net of margin of $35,000).

*Liabilities*
Margin Loan: reported net -- around $75,000 of margin in use .
MasterCard: around $2,600 (revolving balance, paid monthly)
Visa: $0.
Lines of Credit: $0 
Corporate MasterCard: $100 )
Corporate Line of Credit $40,000

Liquid net worth is around *$1,293,000 *(*+$187,000* from June 1).


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## Sm5

Interesting month this past month: in checking numbers, it appears I was short paid last month on a quarterly payment, which they corrected this month. Also, have decided to pick up a 1/3rd interest in a rental property; closing on the purchase will be late this year but the terms are set. It won't be a great rental - its 3 hours drive away and the purchase price of the property is not conducive to cash flow. Thankfully others are closer. However, under reasonable expectations it will hopefully break even and the lands are in a _very_ good infill potential when the market turns. So it is a bit of a capital gains play hoping that oil recovers in the next 5-10 years.

The property that has been in the family for over 60 years so its really just putting some cash towards keeping it in the family; and I'm only into this for 1/3rd. I'll just buy it using available margin. I've had it appraised and am getting my interest at basically appraised value. However, it needs renos prior to renting and are currently pricing these out / deciding what we can DIY on this. Its more a hobby purchase than anything (but a pricey one). In 5-10 years we'll see just how bad of investment this was.

I'm hoping once it is renovated we can refinance it to get enough funds out that can be placed in a blue chip portfolio that covers the holding costs on the property (with any rental income being the 'profit' and being paid against the principal balances). Even though I likely have equity in my interest in the property now, I'll leave it 'off the books' until there is a cash outlay to fund the purchase.

*Assets*
TFSA 1: $760.00 ($100.00 monthly contribution)
TFSA 2: $103,700.00
RRSP: $274,000 
Non-Registered (CAD): $98,000 (reported net of margin of around $40,000)
Non-Registered (USD): U$97,000 (no contributions, no margin in use)
Gold: $102,000
Savings Account 1: $6,500
Savings Account 2: $100 

Corporate Current Account: $17,000.
Corporate Investment Account: $682,000 (contributed $40,000 which clears margin and puts it into a cash balance at the moment; have to rebalance and make some purchases).

*Liabilities*
Margin Loan: reported net.
MasterCard: around $2,600 (revolving balance, paid monthly)
Visa: $0.
Lines of Credit: $0 
Corporate MasterCard: $1,000
Corporate Line of Credit $0

Liquid net worth is around* $1,383,000* (+*$90,000* from July).


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## Sm5

A little early for year end (tomorrow) but I'm off to work on the rental property for the next few days, so rather than waiting a week or so, year end update. Been rather busy the last few months -- so this is more a quarterly diary than monthly now it seams. This year was good for professional income, as well as for investments. COVID resulted in the professional income being down a bit from projections, but higher than last year. The last three months have not been the best for revenue, but earlier in the year balanced this out -- hopefully this isn't a trend downwards.

I've outlaid a bunch of cash into the rental property renovations (around $24,000 so far, again this is more a capital gains play / hobby than a great investment, it could have been done for MUCH cheaper). Almost done the renovations -- only things left are to install the bathrooms and kitchens (when they arrive) and finish some minor odds and ends. As I've now outlaid cash on this project, I'll add it to my net worth amounts -- however I'm holding it at cost base of the property (not property with renos) on my calculations until it gets re-appraised. It should be a bit higher -- hopefully enough to cover the amounts expended on the renos. Plan is still to refinance and pull out cash -- probably be February or so before doing this as I'll be getting it reappraised ahead of this to determine how much can be withdrawn and to have the appraisal to shop to lenders for the project.

*Assets (As at December 30)*
TFSA 1: $1,200.00 ($100.00 monthly contributions)
TFSA 2: $110,000
RRSP: $299,000
Non-Registered (CAD): $113,000 (reported net of margin of around $75,000, no contributions)
Non-Registered (USD): U$104,000 (no contributions, no margin in use)
Gold: $104,000
Savings Account 1: $8,500
Savings Account 2: $0

Corporate Current Account: $1,000.
Corporate Investment Account: $660,000 (reported net of margin of $146,000).

Rental Property Equity: $190,000 (though probably a little more)

*Liabilities*
Margin Loan: reported net.
MasterCard: around $3,000 (revolving balance, paid monthly)
Visa: $0
Lines of Credit: $0
Corporate MasterCard: $9,000 (a bunch of renovation expenses on here, paid monthly)
Corporate Lines of Credit $70,000

Liquid net worth is around* $1,564,000* (+*$496,000 or so* from year end of 2019 from my records).

Plan for 2021 is:
1) Hopefully, find a home for sale in the right area in the depressed Alberta pricing -- though unlikely as not a lot of good homes on the market for what I'm looking for. 
2) Contribute at least $200,000 to investments / savings / TFSA / RRSP as always - first applied to paying off the higher portion of the corporate credit line (blended interest rates, but it can be brought down by paying the higher interest drawn line), balance to investments.
3) Refinance the rental project to lower interest amounts. Between the corporate lines and margin used the current holding costs are around 3.6%, I should be able to get that down to 2.2-2.0%.


We'll see what the year brings.


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## Sm5

I'm really bad at keeping this diary up to date. However, perhaps it just becomes an annual tradition instead of the intended quarterly. The last year was rather uneventful, thanks to COVID shutting a lot of things down. Took one vacation, returning right before the Omicron waive hit. Rental property is up and running, tenants have been in since February, so far so good. Professional income is down a small amount due to covid slowing down processes and less work generally. I've finally 'given up' (or 'come to my senses' depending on who you ask) and fully moved in with the girlfriend. It has been nice not having to maintain 2 households.

I expect 2022 to remain slow work wise. However, I am just in the process of finalizing a new multi-year engagement, which should be good for an additional $50,000 - $75,000 of income a year if work stays at the same level as in 2021. 

A few unexpected expenses this year (new furnace in December amongst them) made spending a bit higher than I'd like. Trying to deleverage a little bit at the moment, so directing various cash flows towards debt repayment ahead of rate increases (hopefully blunting some of the effect).

*Assets (As at December 31, 2021)*
TFSA 1: $ 3,000 ($100.00 monthly contributions for a total of $1,200 in 2020)
TFSA 2: $131,000 
RRSP: $392,000 
Non-Registered (CAD): $221,000 (reported net of margin of around $34,000, the accountants suggested taking money out of a corporation to reduce the 'due to shareholder', not having a need for it, I've paid down margin)
Non-Registered (USD): U$134,000 (net of around $500 of margin).
Gold: $98,000
Savings Account 1: $5,400
Savings Account 2: $5,100 (mostly money going to TFSA at the beginning of January)

Corporate Current Account: $3,000.
Corporate Investment Account: $802,000 (reported net of margin of $117,000).

Rental Property Equity: $207,000 (this is cost, with completed renovations. Reasonably there should be closer to $242,000 - $256,000 if the municipal or HonestDoor assessments are in any way accurate).

*Liabilities*
Margin Loan: reported net.
MasterCard: around $1,800 (revolving balance, paid monthly)
Visa: $14,000 (revolving balance, paid monthly - this was used for the vacation, furnace, and a few other 'odds and ends' when the bank offered a double cash back period at an opportune time).
Lines of Credit: $30,000 owing, to be repaid late in 2022 depending on interest rates.
Corporate MasterCard: $100 (revolving balance, paid monthly)
Corporate Lines of Credit $0

Liquid net worth is around* $2,053,000* (+*$500,000 or so* from year end of 2021 from my records +/- uncertainty of real estate values). NOTE: may not add up due to rounding etc. Returns have been good. XIRR for the last year was 22.41%, 8 year XIRR is 14.88%. This is as far back as my records go.

Plan for 2022 is simple:
1) Contribute at least $150,000 to investments / savings / TFSA / RRSP as always - applied to TFSA/RRSP contributions and then to debt repayment.
2) Try to enjoy the excess beyond that.

We'll see what the year brings.


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