Q2 2016 Update – An uneasy time with Fort McMurray Wildfire
Andddd here’s another one! The second quarter of 2016 is over and it seems like time is flying WAY faster than normal. There’s not a whole lot to talk about that happened in this quarter but there’s one major thing you may have heard of.
On May 3rd, my second home of Fort McMurray, Alberta was evacuated. Over the next few weeks 15% of the town was burned to the ground and the majority of the city had major smoke damage. I happened to be extremely lucky and wasn’t in town, was scheduled to fly back the morning of May 4th. Which is now starting to become a trend for me, avoiding major disasters by a day. In 2013 my other hometown of Calgary, Alberta had a major flood that caused billions in damages throughout the province only weeks before their biggest tourist attraction, The Calgary Stampede. Luckily, I wasn’t there for that either, flew out of town for 2 weeks the day before it happened and the evacuation order was lifted just before I got back. I’m like a disaster dodger and I really hope that trend doesn’t stop!
My townhome in Fort McMurray was also quite lucky during the fire, only suffering a small residual odor from the smoke that draped the area for several days. Luckily after a light cleaning this was resolved. It was also in one of the area of town that didn’t have the power cut to it so I didn’t have to throw out my fridge or even have spoiled food to come back to.
Luckily for a lot of my co-workers most of their homes were unaffected as well. As far as I know heavy smoke damage was the worse from a coworker’s housemates leaving windows open because it was 30 degrees Celsius when the evacuation happened. Another colleague’s home was undamaged by fire but covered in red fire retardant chemicals from the bombers. It’s taking weeks to clean and they may need to replace all of the exterior of the house.
For anyone who somehow hasn’t heard of the Fort McMurray Wildfire it rage through a city of 90,000 people forcing all to evacuate. It also threatened the production of over 1 million barrels of oil per day. Here’s a few more facts as of writing this article:
- The wildfire burned more than 1.4million acres of land
- Destroyed approximately 15% of the city, which is approximately 2400 buildings, mostly residential homes.
- Estimates were released today that peg the damage at 3.58 BILLION dollars, which makes it the largest natural disaster in Canada if the news report on my way home was properly fact checked!
The most heavily affected areas are so contaminated with ash from burned metals and plastics that the homes still standing probably won’t be reoccupied for several months. I took the time to drive through some areas that were pretty hard hit and it’s unbelievable what it all looks like.
So that’s what I’ve been up to in my personal/work life…well the work life was on hold for ~6 weeks due to the fires. Needless to say there was a lot of uncertainity for the first two weeks. I wasn’t sure if my house would survive or the damage that may be caused to it once I returned. I also had no idea how work was going to be affected once some of the oilsands sites started shutting down. The only upsides during the evacuation for me were the time I got to spend with some friends and family that I wouldn’t normally. After a few weeks my work’s head office actually closed down for two weeks. Once I was informed of that I was able to go visit family for a week in the East.
Financially speaking this was a pretty decent quarter for me. My company posted an incredible first quarter considering the local economy and how entrenched with the price of oil we are so I received great gains from those stocks, which is great because it’s a large risk for me to tie up my primary income and some investments with the same company. Overall I netted just over $26,600 over the last 3 months which is a 8% increase to my overall net worth. None of my non-liquid assets have been adjusted in price so it was basically all cash gains which is the best kind of gains!
Here’s a breakdown of how each asset is doing
Vehicle – Still paid off! Like my other major non-liquid assets this will be adjusted probably only once a year to reflect it’s depreciation. I almost want to remove it entirely since there are no debts on it and I’ll almost never sell it until it’s scrap metal but I’ll keep it since I started with it from the beginning.
YMM Townhouse– Still not a lot selling in this area, there is one that was just recently listed for $10k less than the old lowest list price but it will be interesting to see how things over the next year with the fire aftermath. Some neighbourhoods may not be rebuilt due to the contamination so that may spike housing in other areas or create a small demand for lower end homes like mine so I’ll ride this out a bit more.
TFSA– This is where I’m holding my company’s stock and some other good performers over the last few weeks. I have a small portion of this account set up similar to the Canadian Couch Potato recommended portfolio but just over half is individual stocks I’ve been holding for quite sometime. Mostly companies I know fairly well or use regularly. One investment strategy I truly believe in is invest in what you know.
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? As I have explained in previous updates, I’m shopping around for another investment property and maybe some private equity financing. A few things have come up that I’m going to explore a little further.
Chequing account – This is where my bills get paid from, money flows in and out. It’s currently pretty high as I was saving for a big trip down to my sister’s wedding in Jamaica later this year. A small chunk of this will go to max out my nephew’s RESP for this year as well, I’ll contribute to his education while I can.
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. I’ve had pretty solid occupancy on this unit, only a few months unoccupied in the first year but now both sides are rented on a month to month basis and hopefully they’ll stay that way.
So overall you can see I’ve kept up an increasing trend since I’ve started this tracking. Assets continue to grow, debt shrinks and net worth steadily climbs as a result!
How are the goals doing after 6 months now?
If anyone doesn’t remember the financial goals, here they are with small updates.
- Save $30,000 dollars – I’m definitely on track to do this, but the majority of my spending usually comes in the second half of the year. Right now I’m forecasting 36,000 at my current rate but we’ll see if I can keep it up through to the finish line.
- Invest in another money making asset – I’ve looked at a couple online and crunched the numbers. One I had someone look at in another area of the country, it’s great shape, well looked after and the numbers work but the units are a bit smaller than I’d like so I think I’ll keep it on the back burner and keep looking.I’ve also just recently began pursuing some private equity funding. This is something completely new and different for me. Hopefully by the end of the year I’ll have some more information to share.
- Increase my margin account with my tax return – Hasn’t happened. I’m debating this or top up more of my GRRSP. I like the GRRSP option for the additional tax return next year especially since taxes have increased slightly in this province so this may not end up in the margin account.
What about blog goals?
- Weekly Posts – I’m my own worst enemy for this. I have ideas I just don’t put in the time and effort to develop them, basically laziness which has been a plague on me and many hobbies, some of which probably had greater potential than this blog. Hopefully I can get motivate to crank out some consistent weekly posts out of this brain.
- Social media – I’ll work a little harder on expanding my social media reach.
- Twitter – I recently just hit the 2000 mark, so I think I can probably get pretty close to 5000 by the end of the 12 month period!
- Facebook – Hit 150 followers – Not trying hard but 1/3 of the way there.
- Instagram – Not even making an attempt to get followers on this, but I think I’m pretty damn funny so check it out!
- Pinterest – Start pinning posts – haven’t started but I downloaded the extension for Chrome…that’s progress right?
- Monetization – I made about $5 this quarter with my ads! Nothing major but interesting to see the spikes and how it all works.
And that about wraps up my second quarter of 2016. What did you think? How’s your own progress going? Let me know in the comments below or send me an email through the contact page.