2016 Q1 Update – The worst increase yet
So a year has gone by since my first Q1 update and basically since I started this blog. So I’ll be looking back at the entire year to see how I did with my goals. First a quick recap of the year.
I started this blog in the last few days of March in 2015. I started it with the intention of just getting a creative outlet in my life that I can share some thoughts and stuff on my trips and inspire people to start planning their financial futures a little better and earlier then most start to plan. That idea turned into more of a focus on personal finance since my personal life took a big turn and I wasn’t in a good place to talk about it, even typing this now is difficult.
Shortly after I started this blog, my lovely mother fell ill with an infection and ended up on life support in April. So my girlfriend and I dropped everything to head home to be at my mom’s side and with the rest of our family. The life supported state (I don’t know if coma is the correct term or not for it) was induced by the doctors as a precaution to help her body save strength to fight off the infections she picked up. This worked and she came off life support a few weeks later but still had numerous complications that would require her to stay in the hospital for rehab, dialysis and other treatments. Unfortunately, after 7 months of fighting she passed away in November of 2015. Needless to say it was quite a shock. Her family were mostly all able to be there with her in her final few days. So to say the least, that affected my life and views in a very dramatic way.
To add some additional pressure into my life the Oil and Gas industry which my construction job is tied very closely to has been suffering from tumbling oil prices all last year. So for the first half of the year I was a bit worried I would lose my job until I was assigned to a project in July. Even now that I still have a few small projects I’ve seen too many senior employees let go to not worry a little bit. As of writing this, it looks like oil may have hit the bottom and is hopefully gaining some stability so maybe I’ll be able to stop worrying soon.
So that’s what I’ve been up to,
Now on to the finances!
As many of you probably already know the markets over the last 12 months have been less than stellar, most are down several percentage points. Also with me having a townhouse in a boomtown where housing prices follow the price of oil (Fort McMurray, Alberta) I’ve suffered losses there as well. Luckily not as big as most in that region as the average price of a house has dropped over $50,000. So I consider myself to be extremely lucky that my net worth hasn’t decreased over the last 12 months as I’m saving a considerable amount of money from my job to ensure I have a large cushion to fall back on. Well anyway, here’s where I stand after this last quarter.
A 71% increase?!?! Unfortunately, the bulk of this is from my inheritance from my mother’s estate and not my astute investing. It’s a hard thing to accept and I’d gladly give it all away to have her back in my life but I cannot. Now I want to make the most of this gift and do things she’d be proud of me for.
So now let’s break this down and see what each line means and how I did for the goals I set for each category over the past 12 months.
Vehicle – Of course it decreased! It’s a vehicle not an investment but I have saved myself some money by paying off the remaining balance of my car loan, this should save me close to $800 dollars in interest. The vehicle is a 2009 Rav4 with extremely low mileage on it, which is why it costs me so much to drive each kilometer. It’s a luxury I’m fine with keeping since I like to have access to go where I want and be able to pick things up for friends that rely on Car2go and other modes of transportation.
In Q1 I stated how paying off the balance of this loan would be saving the 4.59% interest. It took me almost a year but I managed to pay it in full to eliminate the debt on my vehicle.
YMM Townhouse– Luckily for me I got a reasonably good deal on this property when I bought it but it has still suffered about a 10% drop in value over the last year. The tricky part on this valuation is that not many of these units have sold in the last 6 months but many are listed from $309,000 to 329,000 so I went conservative and took the lowest list price.
TFSA– The increase in contribution room from $5500 to $10,000 for 2015 helped this nicely. Now I topped it up earlier this year which accounts for $11,000 of the $15,657 increase. The rest is just a good return of about 10%.
Margin – This started as a non-registered account that I had from before TFSAs and before I had much RRSP contribution room in University. I was going to get rid of this entirely and sold a portion of it to contribute to my TFSA. The remaining money is now invested in some solid Canadian dividend stocks and I borrowed at a rate of 4.15% to invest in other similar companies with great dividend history. The current yield from the stocks are more than the interest so I feel fairly safe on this one.
One of my Q1 2015 goals was to eliminate this account in favor of a tax sheltered account. I had a change of heart and wanted to take on a little more risk with the margin investing over the next few years and see how it fairs out
RRSP – This is one RRSP account my parents set up for me when I was very young, I have yet to get around to combining it with my work GRRSP, which is currently unlisted on these updates. The work GRRSP is a fire and forget back up plan for me. I take the risks with the above assets and if all else fails, the GRRSP will be my back up.
Another Q1 goal was to manage my RRSPs better, basically to diversify this from the rest of my investments. I also thought about bringing my GRRSP from work into this total but I’ll leave that as it’s own little emergency fall back retirement fund.
High interest E-savings – This is definitely where I’ll get some flak from other investors critiquing my portfolio, why so much cash in an account with a terrible return? Well the majority of this is from my mother’s estate which was split equally between my sisters and I. I’m going to use some of this money to purchase another income property and use it for a large down payment on a primary residence once I finally settle on where I want to stay. So right now it’s not doing me any favors but once part is another investment property and a primary residence with no CMHC insurance I’ll be much better off. Also, until I’m comfortable with my future at work, I don’t mind having this available.
My biggest goal from Q1 was to improve upon the extra cash in this account. Well I did that in the form of a duplex income property and it has been working out great so far. I’m currently in the market for another property, but time will tell if I can get as good of a deal as the last.
Side note: A little over a month ago I had my eye on a STEAL of a deal for another duplex but when I called to talk to my father about checking it out for me and giving me his opinion…he had already had an offer in on it! I never mentioned it before, it was just that good of a deal he scooped it up before anyone else could.
Chequing account – This is where my bills get paid from, money flows in and out. I like to keep more than a month’s balance just as a bit of an emergency fund.
Duplex – My first purposely bought income property. It worked out well in that it was appraised for a slightly higher price than what I paid. I renovated the unoccupied side immediately which may have increased the value a little more but I’m sticking with the appraised value at the time of purchase.
But how much did everything increase without including the inheritance?
Since it was not the best year for the market I was a bit worried about this. And the answer is…my net worth increased a solid 11% which would be fantastic if all I did was have money invested but I saved a large portion of my income this year which would have resulted in more than a 11% increase on that value alone. The worse part of this year was my YMM townhouse, it lost about $30,000 in value which is basically more than I saved. So while my net worth didn’t increase as much as I had hoped, I think my late year investments while the markets were low will help set me up for better success in 2016.
Overall I’m content with the return on my investments (minus the house!) given the current markets and I’m definitely happy with my savings rate. For 2016 I’ll be trying to achieve the following goals:
- Save $30,000 dollars of my income. This will require me to squirrel away $2500/month which is $500 higher than my savings rate last year. At the end of the year $5500 of that will go immediately into my TFSA’s increased contribution room and the rest will go towards the house down payment if I haven’t crossed that point yet or RRSP contributions to be pretty close to maxing out my remaining room.
- Invest in another money making asset – I’m always on the look out for good rental properties but if that doesn’t happen I may pursue one of a couple other avenues I’ve been looking into over the past year.
- Increase my margin account with my tax return – Once I get my tax return, this is the plan for it. I’ll increase the cash in the account to give me more access to borrow additional funds. It’s lower risk as I have cash reserves to be able to handle the call if I need to pay off the margin but I’m going to stick my toes in and see how it goes over the next few years.
What about the blog? How did those goals go?
The blog in general took a back seat to all of other things that occurred but I started to get some good feedback on it and make some real progress in page views. On the past few quarterly updates I made a few goals for myself for this blog. Here’s how they went down:
- Monday and Thursday updates – This was definitely not met. With my two longer hiatuses I was not able to meet this one. Even with my work schedule I don’t think I’ll be able to meet this one as often as I originally expected.
- Social Media followers – I wanted to double my social media following on the first quarter, which didn’t happen and then the goal was for a 50% increase. Neither of these worked out until recently, but only for Twitter. I’m using some social media apps that help target specific followers and I’ve been getting the benefits as I’ve increased my followers by almost 600 in about 3 weeks. As of writing this I have 671 followers. Facebook and Instagram have not been a real focus for expanding my followers, I only have 41 and 59 respectively.
- Get featured on two other Blogs – I achieved this goal, I was featured on Canadian Budget Binder and Blogger of the day. I think I attempted this a little to early in my blogs life cycle as I don’t believe now I had enough quality content for the exposure to gain any traction after the initial visitors.
So what about blog goals for this next year?
Since I failed spectacularly on these goals I set with no experience, I think I can now set better more achievable goals. I won’t make them too easy to achieve though! After all if goals were easy to achieve they’d just be your reality.
- Weekly Posts – Should be seeing a new post every Monday but occasionally you’ll see them pop up on other days.
- Social media – I’ll work a little harder on expanding my social media reach.
- Twitter – I’m going to hope my strategy to increase my following with targeted followers continues with as much success as I’ve been having these last few weeks and put 10-15 minutes each day I can into it. I’m going to push hard for 5000 followers by the end of the year. This will be my main focus for expanding my social media following until I hit the 5000 mark.
- Facebook – I’ll have to look into a better way to capitalize on increasing my facebook followers but I think I’ll be able to hit 150 by the end of the year.
- Instagram – I have no idea how I’ll get this one just yet so I’m just picking a random number at 150 followers by the end of the year.
- Pinterest – I’ll start pinning my posts, which I think is the correct term. Clearly I have not used Pinterest and will have to hop on this bandwagon as some other bloggers like Cash Flow Diaries are seeing great success on pins from several months ago now finally paying off.
- Monetization – No quantifiable numbers for this right now but I’ll be looking to monetize the blog by the end of the year as I’m hoping to have a solid base to start from. I’ve just recently posted some Adsense ads, which really are only worth a few pennies a day at best but I’ll be exploring other avenues such as sponsored content or affiliated marketing.
There we have it! That’s my first 12 months in review. Let’s get on with the next 12! Let me know your thoughts on my new goals and fellow bloggers how’d your years go? Did you learn as much as I did in your first year of blogging? Let me read about it below!