January 2021 Review

Hello!

Already one month behind us! Even though it’s a rather boring time of the year, even without a pandemic, I feel like time went by pretty fast. My blog and Facebook page keep me pretty busy, on top of the overtime I did at work and the time I’ve spent preparing for a job interview!

It just goes to show that the best way to survive this never-ending pandemic is to stay busy. 🙂

So here we are, already starting a new month. Let’s see how my net worth has grown in this past month!

Net Worth as of January 31, 2021

Assets
Checking Accounts:
Questrade TFSA:
Questrade LIRA:
Questrade RRSP:
FTQ RRSP:
Fondaction RRSP:
Non-registered:
$1,369
$32,176
$43,405
$33,916
$5,752
$13,427
$307
Total assets:$130,352
Liabilities
Car Loan:
Line of Credit:
Tangerine Master Card:
Amex Air Miles:
BMO Air Miles:
Amex Aeroplan:
$8,192
$1,000
$0
$0
$31
$11
Total liabilities:$9,234
Net Worth$121,118
Difference+$3,313

My net worth is now $121,118! That’s a $3,313 increase since December 31, 2020. It had been a good month for the stock market, right up until last week, when everything went haywire. It doesn’t matter much, since I continue following my savings and investment plan and as a result, my investments slowly but surely keep going up. 🙂

As a matter of fact, a reader wrote to me recently and wondered if the monthly portfolio value was the best way to track one’s net worth. She thought that it fluctuates excessively from one month to another, and it could be discouraging during periods of decline.

I have to agree that tracking my net worth so closely involves a lot of fluctuations. However, I am aware that this is part of the game and I have an excellent risk tolerance. Since I already track my net worth in my spreadsheets on a monthly basis, I decided to include it on my blog on the same basis, along with my expense reports.

However, I realize that I will eventually have to compress the data on the graph (due to lack of space) on my net worth page, possibly to three-month intervals. This should smoothen the curve a bit. 😉

Portfolio Changes

I decided to start the year with a few small changes to my portfolio. As I mentioned in previous articles, my main investments are with Questrade, split between a LIRA, an RRSP and a TFSA. In all three accounts, I held only XEQT, an all-in-one ETF by iShares made up of 100% equities, 22% of which are Canadian.

Reducing Home Country Bias

After doing some reading, notably Ed Rempel‘s blog, I decided to reevaluate my home country bias, i.e. being too widely exposed to one’s own country’s stocks. Indeed, Canada represents about 3% of the world economy and is primarily based on resources and banks. Knowing this, how is it good diversification to hold 22% of my portfolio in Canadian stocks?

Especially since I have (unfortunately) about 15% of my portfolio in labour-sponsored funds that invest only in local companies. That means my home country bias is actually quite high. It actually amounts to about 33% of my total portfolio in Canadian equities.

After some thought, I chose ZGQ (graciously brought to my attention by one of this blog’s reader) to reduce my home country bias a bit, in addition to getting a bit more exposure to emerging countries. This ETF actually seeks to replicate the performance of the MSCI All Country World High Quality.

However, I only made the change in my TFSA, where I want to get the maximum return. I still hold XEQT in my LIRA and RRSP. This will gradually reduce my portfolio’s total exposure to Canadian stocks as I continue contributing to my TFSA.

A Healthy Dose of FOMO

Yes, I joined the Bitcoin train (or rocket?). It finally went down after its all-time high in early January. So I took the opportunity to learn a bit more about Bitcoin, then invested a small amount of money. Initially, I decided to do this by buying a few units of the new Bitcoin ETF QBTC. This way, I can take advantage of the possible gains of Bitcoin in my TFSA, which cannot be done by the traditional method.

Afterwards, I continued to read up on Bitcoin and learned about the Montreal application called Shakepay and decided to actually buy Bitcoin this way. In fact, by using a referral link, I was getting $30 by buying $100 worth of cryptography. So why not? An instant return of 30%. 😉

More seriously, I prefer to set myself a limit of 1% of my portfolio with regard to cryptocurrency. I think setting a limit will prevent me from going overboard on this. What’s more, it’s an amount I’m willing to lose. And if I ever make a  sizeable profit, even better! I just don’t intend to speculate, but to buy and hold it like with my other holdings.

Savings

Here are the details of my January savings:

  • January 14: $750 out of $1,710.67 (44% savings)
  • January 28: $1,035 out of $2,005.17 net (52% savings)
  • Total savings: $1,785 in January or 48% savings

Of the $1,785 I saved, I contributed $1,550 to my TFSA and added $235 to Shakepay.

The higher pay is justified by a few extra overtime hours in January.

Also, starting at the end of February, I’ll start getting bigger pays because I got a promotion! Before the holidays, I had applied to a higher-level position within another team. I didn’t necessarily have a lot of hope to get a call, as I didn’t know anyone on that team. You know it: it’s better to know someone than to know something. Luckily, I got the call and a few days after the interview, I was offered the job. 🙂

So, I will go from a base annual salary of $71,180 to $76,600, which is a 7.6% increase. There will also be a yearly increase in April, which should be around 3%, which would bring my salary to $78,898.

I’m not just talking about increasing income. Trying to walk the talk!

Finally, my $25,000 savings goal for 2021 will be slightly easier to achieve than I thought. You know me well enough to know I plan to save 100% of my raise. 🙂

Expense Report

DateAmountDescription
2021-01-01$120.00American Express Annual Fees
2021-01-01$6.79Starbucks
2021-01-02$7.15Spotify
2021-01-02$10.00Donation
2021-01-02$18.39Mondou
2021-01-02$13.41Gas
2021-01-03$96.42Groceries
2021-01-04$497.50Rent
2021-01-04$403.85Car Payment
2021-01-05$14.39Home Insurance
2021-01-05$48.04Car Insurance
2021-01-07$14.23Subway
2021-01-07$12.50SAQ
2021-01-09$7.70Netflix
2021-01-09$3.40Starbucks
2021-01-13$29.50Hydro-Québec
2021-01-13$71.95Home Insurance
2021-01-15$403.85Car Payment
2021-01-17$3.40Starbucks
2021-01-17$101.00Groceries
2021-01-21$25.21Pharmacy
2021-01-23$3.40Starbucks
2021-01-25$11.09Pharmacy
2021-01-28$20.82Gas
2021-01-28$15.29Groceries
2021-01-28$2.70Starbucks
2021-01-29$403.85Car Payment
2021-01-30$27.60Home Internet
2021-01-31$3.40Starbucks
Total:$2,396.83

In January, I had $2,396.83 in total expenses, or $28,761.96 annualized. Excluding my car loan payments, it comes down to $1,185.28 or $14,223.36 annualized. The big difference between the two is explained by three car payments I had this month, instead of the usual two.

Otherwise, one month look like the next! I should be ashamed: $23.09 in Starbucks coffee. Just think about it! That’s $277.08 a year! It would take $6,927 invested to generate enough passive income to pay for this bad habit! I just can’t wait to do anything other than car rides. 😉

Also, there are some transactions related to travel hacking, such as the $120 annual fee on my Prestige Aeroplan American Express. I also paid my home insurance policy balance in full to help me reach the required spending on my BMO AIR MILES Mastercard to unlock the 850 bonus miles. Once again, I didn’t spend more to earn points, I spent money I was going to spend in the future. 🙂

It’s ironic, really. My biggest challenge with Travel Hacking right now is to find a way to reach the spending thresholds necessary to unlock my bonuses. Luckily, Milesopedia gives good tips on how to do this.

Reading List

My Facebook page followers may have noticed: I am an avid reader. I often read several books in parallel, in addition to the occasional audiobook. Who knows, maybe one day I’ll reach Warren Buffett’s level:

Read 500 pages like this every day. That’s how knowledge works. It builds up, like compound interest. All of you can do it, but I guarantee not many of you will do it.

In addition to reading, I also like to share about the latest books I’ve read and know what others are reading. In that vein, I thought adding this section to my monthly reviews could be interesting to my readers. 🙂

So, my January reading list looked like this:

I have to admit it: I’m a Self-Help junkie. I still try to balance a bit between fiction and non-fiction. By the way, don’t be surprised to see a Star Trek novel in it from time to time.

Of this list, the one I recommend the most is definitely The Psychology of Money. For me, it was a perfect mix of two subjects I love.  Also, anyone who is struggling to make lasting changes in their lives would also benefit from reading The Power of Discipline.

February Is Going to Fly By!

February only has 28 days, after all.

Next Monday’s article will focus on job interviews and how to prepare for it, especially when you’re an introvert like me. The following week, I’m going to take a little break. I’ll start working on my new position then, and I want to be able to focus mostly on that. 🙂

So I’ll still have two weeks to put together an article on my withdrawal strategy once I’ve reached FIRE. Many of you are asking me to do an article on this, so I’ll try not to disappoint.

I will also have access to my T4 & RL-1 on February 16. This nerd will be very happy to get started on doing tax returns ! In addition to mine, I always do my sister’s and brother’s tax returns. 🙂

I’m especially looking forward to doing my sister’s tax return to apply the method to boost her RRSP contributions as perfectly as possible before March 1st.

As a matter of fact, do you have any suggestions for a good software to do multiple tax returns? I’ve been using UFile since 2014 without looking too closely at what others offer. I’m open to suggestions!

See you next time!

 

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7 Comments

  1. Great post! Thanks for sharing. Looking forward to your withdrawal strategy on your LIRA. I have a measly one at $25K. And I’ve been changing up the thoughts from accumulation to tax efficient decumulation.

    Cheers

    • Oh, thank you for reading and commenting!

      My withdrawal strategy for my LIRA will be according to the provincial laws in Quebec, which I believe are a bit more permissive than in the rest of Canada. I hope it’ll be still be helpful for everyone!

  2. I’m sure you will be helpful and thanks for the reminder that there are different rules per province. I’m in Alberta. I may not be able to get more than $10 a month from the LIRA turned LIF (I’m teasing.) But I am curious how you will set your strategy. I have mine bouncing in my head at the moment.

  3. You’re the best sister ever! How many siblings do each other’s taxes every year? That’s amazing.

    You’re doing great with your savings and investment growth. I’m always pleased to hear of young investors who have educated themselves and thus have developed a high tolerance for volatility.

    In my opinion, it’s a skill that can be developed with knowledge and experience. The more you know and understand how the stock market works long term, the more you understand that short-term fluctuations are just noise that you can mostly ignore.

    I think you should definitely keep tracking your net worth on a monthly basis. For people like you, who are largely able to ignore the ups and downs, it’s a helpful practice, not a hindrance.

    • Knowledge is power, huh? It’s definitely true when it comes to saving and investing. And I like tracking my net worth too much to stop doing it on such a regular and frequent basis. 😀

      Thank you so much for your support, Chrissy! So much appreciated! 🙂

  4. Not only did you have a great month, you’ve set yourself up to have a great year. Those raises will definitely make an pact on how much you can save and invest.

    I love how detailed your updates are. And I enjoy the booklist. As an avid reader myself I’m always looking to add to my list of books to read.

    • I’m glad you liked the book list! I was scared it would come off as pompous, but I just really like to talk about books and enjoy knowing what other people are reading! I figured some people might me interested in knowing what I’m reading in return.

      Thank you for reading and commenting! I really appreciate your feedback. 🙂

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