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Discussion Starter #41 (Edited)
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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Discussion Starter #42
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 ($1,000 contribution, USD$2,000 withdrawn)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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Discussion Starter #43
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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Discussion Starter #44
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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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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Discussion Starter #46
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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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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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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Discussion Starter #49
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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Discussion Starter #50
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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Discussion Starter #51
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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Discussion Starter #52
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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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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Discussion Starter #54
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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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.

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-It-Risky-To-Buy-Stocks-On-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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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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Discussion Starter #57
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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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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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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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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