March 31, 2016 Net Worth Update: $160,473 (+$12,962, +8.8%) 14

Hi Everyone! Welcome to my end of March 2016 net worth update. Thank you so much for coming.

March 2016 seems to be the month that finally the market turned its head upwards.

TSX moved from 13,000 to 13,500 up about 3.9%.

Source: Google Finance

Dow moved from 16,600 to 17,700 up about 6.5%.

Source: Google Finance

Nasdaq moved from 4,596 to 4,895 up about 6.4%.

Source: Google Finance

It feels kinda good and bad at the same time. I feel that the market is getting more expensive so I comparatively hesitate more when purchasing stocks that are on my watch list but feel great that my net worth is getting boosted.

March 2016 was one of the rare months that boosted my market value closed to 10% since 17% growth during February 2015. Is my slump that lasted between 2015 May to September finally over? Who cares? I am optimist so I would rather say “the glass is half full” than “the glass is half empty”

Or you can say the glass is always full.

I somewhat hoped that the market drops further and further so that I can buy quality assets at discount. Or I probably want to see 2008-2009 short and quick super major correction to happen which may be actually scary but that’s the time you can make the most money. As you know, luckily, I have constant cash flow from my day job with help of our family’s frugal habits to pour more money in the market every month.

Investor sentiment wheel

I am fascinated to observe how human psychology work especially in stock market. Most of businesses that I invest are exactly the same businesses as usual making constantly solid cash flow. They may be facing a temporary business setback however a lot of times, the stocks of them are punished a lot harder than the actual problems and setbacks. Many people in the market think that this is the end of the world for many businesses but I think differently and that’s when the most money can be made.

Do exactly opposite of what this wheel shows then you will be golden! (source: personalfinanceapprentice.com)

Remember this… As long as business is solid, the stock price will eventually follow.

It is only a matter of time until you see more greens in all of the stocks in your portfolio if you are a long term investor. Just keep being invested in your quality stocks. If you are a lucky one who gets regular paycheque and have some money to invest after your monthly spending, then keep buying at lower prices every month.

Keep it simple. Don’t think too hard. Just find good quality undervalued dividend stocks, buy them at low and weather the rainstorm until sun rises again. When the sun rises which it always do, it will be swift.

Ironically, people get more excited when market climbs up when they have to pay premium for the same stocks whereas when the market is headed downward, they tend to avoid buying the same stocks at discounted prices. I would worry more and look to restructure my portfolio when the market keeps climbing up. Time for me to say my favorite investor of all time, our legendary old man, Warren’s most famous quote.

 “You want to be greedy when others are fearful. You want to be fearful when others are greedy. It’s that simple.”

Remember 2008-2009 market crisis?

2008-2009 market turmoil made so many people richer and poorer. People who became poorer are the ones that sold their stocks at loss and never looked back. People who became richer are the ones that bought stocks at 30-80% off the original prices then they triple and quadruple their original investment within 2-3 years.

This turmoil in Canada isn’t as opportunistic (or bad) as 2008-2009 market crisis but still a good time to buy low. There are still some undervalued stocks. That simple concept will make us richer sooner or later. I have no way of knowing and an ability of forecasting the market but all my efforts will be dedicated to find undervalued stocks.

Red everywhere! (WSJ)

My net worth increased by $12,962 (8.8%) from 147,511 to $160,473 during March 2016.

This is my third 2016 net worth update. Net worth update is posted monthly to keep track of the progress of my journey to become a millionaire. I believe anyone can be a millionaire with good saving habits and smart investing plans. If you would like to join the journey, please follow me through my Facebook and twitter pages and subscribe your email for free updates.

Compared to March last year, it grew by $35,984. That’s 29% growth. It grew by $3,000 every month. Not bad huh? I am quite pleased with the result but it could have been better. Well… the downturn of the economy will eventually turn up and I will be a very happy man when that happens. Until then, I will keep buying undervalued stocks and see where this takes me. If you are afraid of losing 20-30% of your portfolio value then investing in stock market isn’t for you. Risk and rewards always follows. Always perform your due diligence researching the fundamental of the stocks before you buy or just buy amazingly reasonable Vanguard ETFs. That’s called indexing.

I thought I would be happy to reach $150K level this month but it reached $160K.

Cash

The cash balance has decreased from $4,764 to $3,219. My wife had $5,000 of cash in her TFSA account and purchased some stocks which will be mentioned below. The cash was deployed as it saw its chance to transform itself to something more useful. Cash isn’t investment. It actually loses its value everyday right?  Even after reduced annual TFSA contribution limit from $10,000 to $5,500 from a stupid political move by the new regime in Ottawa, (Yes I am talking to you Justin!) TFSA is still an amazing instrument to invest so for someone who do not take advantage of TFSA and RRSP (for US citizens, 401K, IRA, ROTH IRA…) please use them for your future. They are wonderful instruments that will make your future brighter.

My majority of cash is sitting in President choice Debit account. I use it for the most of the money transfer, bill payments, cheques etc… as there is no transaction fee in this amazing card and cheques are free. Major banks typically charge $50-100 for 50 cheques but I pay nothing for that. Due to its partnership with CIBC bank, I can use their extensive CIBC ATMs network which is awesome. Their customer service is great as well.

I use TD bank card as well which is mainly used for investment fund transfer purpose as it is connected to TD warehouse brokerage account which gives me some convenience of transferring fund and invest.

Investment

March 2016 was a growth month. Our non-registered accounts grew by $6,000 which includes $5,400 of fresh capital. TFSA accounts that contain many Canadian stocks grew by $7,000 (8%) and RRSP grew by $2,000 (5%). Actually it grew higher than that but a weakness in US currency negatively impacted the growth.

Ups and Downs. We don’t really care. We are not selling the quality stocks until they become overvalued. I would much prefer for better opportunities to pick up more shares at favorable prices. As long as fundamentals are there, I am not too concerned about the noises.

Although it hurts to see my portfolio decreasing its value but I have a coping mechanism built in me. Not the end of the world for me. Tides will eventually turn. Buy low and sell high right?

Only problem I have right now is how to come up with more cash to take advantage of discounts in the market. I think values are still here and there in the market and I will patiently wait for temporary setbacks.

I am reserving cash to get ready for RRSP (For US Citizens,  401K, IRA, ROTH IRA…). If you recall my November net worth update, I kinda hoped that the market stays like this or even drop further temporarily so that when January 1 2016 hits, I can afford to buy more stocks at good discounts, I pulled my triggers already as I said previously. See below for what I bought.

When you invest, you should always look at long term investing horizon, not tomorrow, next month, next year etc…. If you foresee that you would need cash in a near future then investing in stocks isn’t for you. However when you start to focus on longer term view, then you will do quite well as long as you buy good stocks with great fundamentals at attractive price.

Recent buys

As I said

In January 2016 we bought Dream office REIT and Orvana Group

Then Dream office went up by 21% as of today writing this. What a lucky guess.

Then Orvana Group went up by 76% as of today. Another lucky shot.

I did a poll last month to listen what you think whether to crystallize 63% of gain and majority of my readers believe I should hold the stock so I did.  and I will for a while.

In February 2016 we bought about $5,500 worth of Corus Entertainment stocks.

I could not resist its solid cash flow and I was confident that recent regulation of CRTC’s pick and pay will go a lot more smoothly for the company than many people expect. The stock was severely punished for last one year and of course that’s when I jump in. I bought at 593 shares at $9.32 total of $5,500 worth of stocks and now it is being traded at around $12.05 (30% up) bringing the value of the stocks to $7,200 including dividends. Not bad but still a long way to go to be fairly valued. I love their dividend commitment of increasing it year after year. They have increased it for 12-13 years now.

In March 2016 we bought about $6,140 worth of Black Diamond Group Ltd.

When the stocks start to exceed my target prices then I will seriously consider to sell and crystallize gains and not look back until the stocks get punished unfairly again. Until then, I will keep DRIP it.

We will buy more stocks probably soon if the market keeps giving away discounts but it seems that stocks are moving up quickly last 6 weeks. That puts me in a difficult spot because everything just got 5-10% more expensive.

Our Portfolio Performance

So I opened direct investing account on Sep 12 2014. Last 18 months our portfolio gained closed to 14% whereas S&P and TSX composite dropped by -13%. Not bad huh?

Annualized gain is 8.8% so which is pretty much aligned with historical index average. I guess we will keep doing whatever we have been doing last 18 months.

Check out my portfolio page to see what stocks I own and the following article for more investment tips-How to Simply Invest and Get Richer for Dummies in 8 Easy Steps.

Did I mention you can be a millionaire in about 30 years if you can save $10 a day?

Have you heard about Peter Lynch, a wallstreet legend? Check out Peter Lynch’s top 13 best stock picking tips. You won’t regret it.

If you are also a dividend investor like me, then you should check out the following page to see how other dividend investors are doing. You won’t regret a moment of reading their valuable and inspirational articles. Blogroll

Credit card

My credit card debt soared from $550 to $1,330 because we had to pay $500 of deposit for my wife’s next semester. Another $1,300 will have to be paid later on. Sad but future return is lucrative.

As I said before, my wife is back in school. I don’t know whether you will remember this but my wife is a mad artist (I will show you some of her artworks later if she allows) and have spent several years to do her soul searching. Well guess what? She wants to be a nurse in Canada then combine her artistic talents with the nursing degree to be an art therapist eventually. She is from South Korea and recently immigrated to Canada. I have emphasized this to you before, if you are a foreign immigrant, getting right education is one of the most important things that you will have to do to be treated equally (not to mention your language skills but you will pick up while you go through your degree programs) and self-sustaining. Let me tell you, it is not going to be easy. I have been through it but very well worth it.

Well,,, you can get a job without educations from where you immigrated but you will find hard time finding your career. Job and career are two different things just as Chris Rock says.

While I love to see my wife showing off her artworks and helping me out with this blog (She designed this BeSmartRich blog. She also helps me with maintenance, research, promotion, advertising etc…), I am extremely pleased with her decision to going for her dream which is a great cause for the community we reside in.

I see it impacting our net worth as one step back and ten steps forward. We may be spending $2-3K per semester which will temporarily and negatively impacting our net worth but that will give back hundred times guaranteed returns during our lifetime. That’s the power of education. Only sky is the limit. Not to mention we can recoup some tuition costs through tax credits, courtesy of Canadian Government. Thank you Canada. I love you so much!

$1330 of credit card debt isn’t still too bad as I am still close to debt free and I like it that way. I just love the feeling of keeping my debt balance low as I feel empowered to be debt free.

We tried to minimize spending over last couple of months and it worked out pretty well. We use Capital one Costco credit card as it gives us 3% cash back on restaurants (6% on first 3 months). We also have MBNA cash back card that we use mainly for grocery and gas for 2% cash back and everything else for 1% cash back (5% on first 6 months) without any annual fee. Unlike capital one cash back card and all other cash back cards out there, MBNA card is well beyond expectation. First of all, MBNA pays cold hard cash back (not points toward purchasing goods and services) and secondly, MBNA directly deposits the cash right away to your bank when it hits $50 mark. That’s great as I don’t have to wait until the end of the year to collect cash. Remember. Everything adds up.

Check out the following links if you are interested in getting awesome credit cards like MBNA and Capital one credit cards.

US residents

Canadian residents

Cashback rebates

I started using Ebates not so long ago just to give a shot.

I am all about sharing my getting richer everyday tips with you so sign up through the following link (for Canadians only)

and start collecting cash from Ebates. For limited time, if you sign up and spend $25, then you get $10 cash back.

Here is how you do it.

1. Sign up
2. Visit, let’s say, Amazon.
3. Shop as you typically would from Amazon
4. Ebates credit your account with cash back earnings based on qualifying purchases.

For example, I shop at Amazon very often buying many necessities from facial lotions to electronics. I always visit Ebates and type Amazon then make purchases from Amazon.ca. I get 2% cash back from my credit card company and another 4% cash back from Ebates. That’s a total of 6% cash back. I spend about $150 from Amazon monthly which gives me $10 cash back which is equal to $120 per year from Amazon alone. 🙂 Better than $0 back right?

Ebates gets referral fee from Amazon directly and instead of keeping the money, Ebates shares it with me. So whenever I need to make online purchases, I always use Ebates. This is a smart habit to make you richer. I use the following website most often to get some cash back.

4% cash back from Amazon

6% cash back from Expedia

2% cash back from Walmart

5% cash back from Chapters-indigo

3% cash back from Staples

1% cash back from Ebay

3.5% cash back from Starbucks

Spending

We have been tightening up spending. We set up two major rules and following religiously so far.

1. My wife added some more healthy option after watching some documentary films about how chickens, milk cows etc… are raised so we have been purchasing quality organic ingredients, cook home meals most of time and go out and enjoy restaurant meal once a month together in a mutually agreed restaurant.
2. We shop at Costco once a month for majority of grocery (They are always fresh and love their AAA beef so much for very attractive prices) then for urgent needs, my wife goes grocery nearby our place for eggs, milks, vegetable and fruits as in need basis. Our monthly grocery budget is $500 per month. I know it is high for just two people but we love healthy and good quality food and I am a meateatarian.
3. We will keep being frugal on all other expenditures. See the following links for excellent ways to save money.
   • 7 extremely easy tips to save 20-50% on flight tickets
   • 30 most important tips to be a millionaire no matter how much you make.
   • Renting vs Buying
   • 16 most important tips to save on car insurance by 40-60%
   • Norbert’s Gambit- Save thousands of dollar from foreign exchange conversion fees
   • What’s in my wallet
   • Needs vs Wants
   • 20 smart moving tips that will save you time and money
   • How to save $1,000 annually from your TV cable bill

Hope you enjoyed this month’s net worth update. Remember, if you haven’t, set your saving & investing plans up and try to see how much net worth you have reached as of now and how much it has fluctuated in the past. Knowing where you are and where you will be headed will be a great starting point to be a millionaire and retire comfortably. Hang in there. I will be on the journey with you.

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