Jan 2016 Net Worth Update…in September?

I had no idea that I never posted this so here you go about 9 months late, my bad!  I am going to start getting posts up again, maybe as soon as tomorrow so run, don’t walk to my blog next time!

It is that time once again, my semi annual net worth update (yes, it is 2 months late, thank you)

Jan 2016 net worth: $115,000
Change from July 2015 + 0%. (Actually a small increase, but not large enough to worry about)

Change from Jan 2015 + 12% Sweet..I’ll take a yearly return of 12% everyday of the week!

So we are up about 12K year over year.  I’m happy with that especially with the downturn in the Canadian market over the last few months, where we have a good chunk of our investments.  Yes,  we are diversified internationally, but still the majority of our investments are based in Canada.

Does the number make sense for us?  Let see, nice tax refund of $4,000 last year, house went up about $3,ooo in value as per our tax assessment.  We invested about $6,000 in RRSP and TFSAs, and also paid off about $5,000 in debt.   We also actually withdrew about $4,000 from our line of credit* for home renos.  Quickly adding up the assets I just named 3+6+5 = 14 and  subtracting the 4 = 10K, that is reasonably close to the 12K increase I found, so yes those numbers seem to jive.  Remember when I’m doing my net worth calcs, I don’t sweat the small stuff, and I recommend you don’t either.   This isn’t an income tax audit, just some numbers to show you are (or are not) on the right track.

*The balance of this was immediately transferred to a low interest rate offer on a credit card.  And by low rate I mean less than 2%.

Questions you may have from the paragraphs above:

You are off by 2K from your quick calculation from your actual amount, what could cause this?

I would say much of this would be accounted for by 2 main factors: cash we happened to have on hand at the time I calculated my net worth and the remainder would be due to increases in investments.  Even though the Canadian markets are down, other areas are not, also dividends are still being paid by my investments, and mutual fund disbursement also normally occur at calendar year end.  I bought more investments/mutual funds this year, that generally means more disbursement at year end.

Why are you paying off debt and withdrawing from your line of credit at the same time, that don’t make no sense?!

Good question, but work on your grammar.  I could have just as easily made minimum only payments to my low interest rate credit card, and invested the rest for likely a better return.  However, I went the route I did because I will still have this debt at the end of the low rate offer (over a year from now) and yes, there could be more of these offers before this one expires, but there is no guarantee of this.  So yes, I would agree I could likely be doing even better with my money, but I’m The Fake Cheap, remember?

I pay someone to move my snow…..me.

After a recent snowstorm in my neck of the tundra, many comments were heard.  People were commenting how much they enjoyed the luxury of keeping nice and warm inside and not having to go out for snow removal duty, because they had hired someone to come and plow their driveway.

At least they got that part right, luxury indeed.  I know this service runs around $500-$600 a season.  The alternative is to remove the white stuff yourself.  You can do this in two ways: manpower, or horsepower, as in the horsepower in your snow blower.  The great news is manpower is free.  However I must admit that even I, The Fake Cheap, do not use simple manpower for this job.  Have you ever shoveled 30 cms (that is about a foot for you Americans) of snow?  This is truly backbreaking, hard work.  It would take me about 2 hours of work to clear our double wide drive way to make enough room for us to easily get in and out of our cars.  I usually break it into 2 sessions, when I manually chuck the white stuff.  It is too much for this fit 30 something male to handle in one shot.  Hence, I made a very, very wise investment a few years ago.  I bought a snow blower.  A used snow blower at that,for the mere price of $200.  I was hoping at the time (way before I became The Fake Cheap) that I would get a winter or two out of it before I had to buy a new one.  Well I have news for you, I still have that same snowblower…7 years later!!!   I have been clearing my driveway for less than $50 a year (including gas for the snowblower about $10-$20 per year) and these other suckers are paying $500 a year, or about 10 times as much!  You could also look at it this way, I would say in an average winter I snow blow 6 times, so I pay myself about $80 each time!  Add in the fact that this is after tax money, and the $500 spent on plot service is really more like $800!  INSANE!!!!

After just 10 years of saving $450 per year, and having that money wisely invested returning 6%, I would have over $6,200!!!!  See how easy saving for retirement is?  

How do most people handle snow in your area?  Make sure you’re hard earned money isn’t going up in snow!

Season’s Greetings

Just a quick note to wish my millions of readers a Happy Holidays, and to say that I hope to be back to blogging in the new year.  The last few months have been very hectic for numerous reasons, but thanks for checking in on me.  And Happy New Year!

-The Fake Cheap

They Bought A Zoo, We Just Visited

I’ve heard a lot of people talk about how it cost their family of three or four “$75 easy” or “about $100″to go to the city zoo.  So the good old Fake Cheap Family headed to this place called the zoo to see just how expensive it really is.  The results were shocking!

For this exercise, we are going to compare a typical family with the Fake Cheap Family.

Admission

For this facility the price is $15 per adult and $11 per child over 3, under 3 is free.  Assume a family of 3 with one child over 3, so price is $41 just to get in the door.  Since Typical Family’s child probably wont want to walk around for the whole 3 hours, they better rent that zoo stroller for $8.  Why would they want to lug a stroller all the way from home?  Up to $49.50.  Ok, still a long way from the $75 mark.

The Fake Cheap Family spent $28 to enter the zoo.  (We stumbled on 2x $1 off coupons for adults, and our child is under 3)  We also managed to bring a stroller from home.

Food

Since the Typical Family will pend 2 or 3 hours at the zoo, they need to eat there right?  So of course the zoo food stand is hit, where hamburger start at $5.75…and a staggering $6.25 for a cheeseburger, and of course Typical family’s little one will want cheese.  Your kid isn’t the only one hungry, so are Mom Typical and Dad Typical, so they will each have a hamburger, but they can all share a large fries at $3.75 to save some money can’t they?  Drinks, yes drinks too, a nice bottle of water (*shutter*) for everyone at $1.25 each.  Lets not forget that ice cream stand conveniently located next to the food stand, and junior wants an ice cream at the zoo, and they can’t go to the zoo without getting an ice cream, who would do that?  $3.25 for the ice cream, Mom and Dad have opted out here.  Lets see that is a staggering $28.50 spent on food.  Our running total is now up to $78.00.

The Fake Cheap Family spent $0* on food.  We packed a snacks for everyone from home.  yes, it took a bit of prep, but we saved $28 for giving up a bit of convenience.  The Fake Cheap Family has still spent only $28.

The Gift Shop

In fine European fashion, this zoo forces you to exit via the gift shop.  And since Typical Family’s little one wants a stuffed animal of pretty much every creature they just saw, they can’t just not get any, right?  And they don’t go to the zoo everyday, so why not get something?  A stuffed capybara, another trinket and $16 lighter, you finally leave the zoo.

The Fake Cheap Family did not purchase anything at the gift shop, we were smart enough to distract Fake Cheap Jr with a book we brought along while we swiftly made our exit.

Total Cost

Typical family spent a total of $94 at the zoo!

The Fake Cheap Family spent $28.  A $66 savings!  Even if you want to include the cost of admission of $11 for a child over 3, and no coupons, our total goes to $41.  Still way under half of typical family spending.

*Yes, I realize the food we brought from home still cost something, say $4.  Again we are still way under half the cost.

How can I save money when my family goes to the zoo?

Obviously the biggest and easiest area to save here is the food.  And don’t give me that vacation excuse!  You can still go to the grocery store when you are on vacation, in fact it is a regular stop on most vacations for the Fake Cheap Family.  As for the gift shop, most times, we buy nothing there.  But even Fake Cheap Jr does occasionally, very occasionally, get some sort of reasonably priced souvenir.  But it is ok to say no to your little one.  I agree its not easy, but it must be done.  So plan ahead, pack a snack/lunch, throw that stroller in the trunk and let the savings begin.

Annual savings for The Fake Cheap family: $66 per zoo visit.  Since we only go once a year, and I think most families also go once a year, we’ll call the annual savings $66.  In the course of the year, not a huge number, but it is a huge number considering the ease at which these savings take place, and the short time frame (3-4 hours) the savings take place.

 

The Fake Cheap Rating.
The lower the stars, the cheaper I was/am. The higher the stars the more “fake” cheap I am/was.
Not much fake cheapness here. I could probably go to 1 star. Just good old saving/not spending money.

July 2015 Net Worth Update and Some Blog Tweaks

It’s that time again or the good ol’ NW update.  Enjoy.

July 2015 Net Worth: $115,800

Change from July 2014*:   +$20,000  +21.1%    NICE! I’d like to see this number every year.

Change from Jan 1 2015:    +$12,400   +12%      A sweet six month return indeed!

What is net worth?  What does it mean?  How do I calculate mine?  Find that information here.

How did I increase my net worth by over 10K in just six months?  Honestly, I didn’t do much, but there were two big asset increases that happened to come into play during this period.  The first was our tax refund came in at about $4,000 combined, a large chunk of this return (about $1500) is from our RRSP contributions, I haven’t spoken much about investments and RRSPs yet…in good time I will.  The “trick” for the tax return to reflect on your net worth is to apply it to any existing debt you may have or invest it and make it an asset, in other words, don’t just go blow it.   The other big asset mover was the value of our home, I use our tax assessment for this number (yes, I know this is generally understated) this also went up a bit more than $4,000.  Other than that, just our usual RRSP, TFSA and RESP contributions, we didn’t actually pay down much debt due to our ongoing home renovations.   Remember, you can increase your net worth by either increasing your assets or decreasing your liabilities.  I do a combination of both.  Which is right for you?  That depends on your situation.

As for the blog, I’m going to update a thing or two as follows.

For any post where I mention saving money on something, or maybe I should say spending less on things, I’ll add in a clac to show the savings compared to the dreaded Oblivious Consumer on said item/scenario over the course of a year.  This will show how this can help your bottom line, and it should (hopefully) show how just putting a little effort into a few things can make a significant difference for you.

Also I’m going to update the About section.  I’ll do this by adding on a new section to the existing text, since I’m not changing much, but want to expand it a bit more, mostly just adding a bit more about my long term goals.

I have a ton of great topics that I want to cover, I have over 70 drafts (and by draft I mean a paragraph or two) in waiting.  It is just a matter to finding the time to pump those bad boys out.

*I’ve decided to publish my net worth to the blog in January and July only, so the May update cannot be found here.

Do you track your net worth?  If so, do you do anything differently than I do?  Let me know!  Thanks for stopping by.

Churned: TD Aeroplan Visa

Happy Canada Day to all my thousands (ok dozens…maybe?) of Canuk followers!

So I did my first official credit card (cc) churn recently.  I should note that the churn is not complete because I haven’t canceled the card yet, but I intend to do so in the upcoming months.  Not sure what churning is?  Google it out.  In brief churning (does everyone else picture a pilgrim in the late 1800’s leaning over a barrel with the big stirring stick when they hear this phrase?  Good.) is signing up for credit cards, just to get the sign up bonus, often points rewards, then cancelling the card after the bonus is awarded.  Some people have multiple cards on the go at once, this is for professionals only, so stay away!

While is isn’t really the first time I’ve signed up for a card for a bonus, I am planning on signing up for another shortly, so I guess I’m still not a true churner.  Why go through all this bother you ask?   Well that depends on your definition of bother I guess.  For me, in this instance, it took a 15 minute process to sign up on line for the credit card, and then maybe 3 minutes calling to activate the card, which includes declining the INSANE insurance the rep is forced to peddle (post to come).  And then use the card to hit the spending requirement for the bonus, in this case it was $1,000 in 3 months. Really?  Is that all?  As much as I like to NOT spend money, this was a joke, $1,000 in 3 months is covered by our groceries only. …..and that was it.  Aside from calling to cancel the card, maybe another 5 minute call.  So what we got?  about 15 mins of time for the application, a few phone calls, and then just using the card when I get my groceries? FOR A FREE FLIGHT ANYWHERE IN CONTINENTAL US AND CANADA?  F**K YES PLEASE!  Of course I’m aware that I need to pay the dreaded taxes and fees, which I’m sure will still be a few hundred bucks.  But so far, that is a pretty good return for way less than an hour of work.  I should also note, this is especially a good deal for anyone like me who isn’t really near a large air hub, so airline tickets are usually extra pricey.

At any given time, there usually offers to be had for signing up for a new cc.  You will sadly note that the offers in Canada are no where near as good as in The States, there is seems cc companies are throwing thousands of dollars for new customers .  Still worth your time though here in Canada, right now with a quick scan I see American Express offering 25K Aeroplan points for a new sign up, with a measly $500 spend in 3 months. By the way, 25K Aeroplan miles are enough to fly anywhere continental US or Canada, same offer I got from TD.  This free flight offer is definitely on my radar (flight..radar….get it?  Work with me people!).

I should mention, in order to qualify for all these fancy new cards, you need good credit.  How do you get good credit?  By following my blog!  Haha I kid I kid.  Pay your bills on time, don’t rack up debt, and you WILL qualify for most of these offers.  Credit isn’t something I’ve spoken much about, but I assure you, there are many other great PF blogs around, maybe check out my blog roll up there on the right, that do discuss credit, and I’ll likely touch on it more in the future.

Enjoy the summer and the churn!

The Fake Cheap out!

Is $120,000 a midlle class family income?

I’m back trying to rescue my blog from falling off the face of the earth, in terms of new posts  anyway.  I’m still busy plugging away at my never ending home renos, so again please excuse the lack of posts lately.  I hope to be back to a more frequent posting schedule in mid June.  This is an article I drafted up about 4 months ago, and by the time I was done with it I wasn’t that excited about it.  But since it was 99% done here you go, please let me know your thoughts.

In some sort of recent announcement by our Finance Minister, he declared that middle class/income families earn up to 120K per year.  Link here:  http://www.cbc.ca/news/politics/middle-class-families-earn-up-to-120k-a-year-feds-say-1.2932996

There was much fuss about this in the comment section, almost always my favorite part of online articles.  Most of the comments I saw seem to think this was a low figure, meaning middle class would seem to be more in the 130-150K range.  There were also comments about factors such as if you live in an expensive city, or if you have kids or not.

So lets figure this out.  Generally, very generally there is an upper class, middle class, and lower class all decided by an income range.  The article states middle class families have incomes up to 120K.   Lets save the middle class doesn’t exist debate for another day while we resolve this first.

A couple of things to point out, this is a federal statement, so it involves the whole county.  Don’t get me wrong, I couldn’t agree more that there is a big difference between a family making 120K living in T-dot, and one living in Summerside PEI.  But where you live doesn’t come into play here.  Also family size does not come into play either, that is, there is no middle class with 3 kids or lower class with 2 kids.  We are just broadly talking about the 3 classes.

I’ll attack this by going to opposite route.    What would be the definition of lower class?  Around these parts, a full time min wage job would yield an income of about $23,000/year, if each spouse worked that we would a total income of 46K per year.  This is obviously a lower class income.  And really, you’re barely trying if you are still at min wage by the time you get to your late 20s.  Where would the lower class end?  This is the hard part, it starts at zero income and goes too…?.  I’m thinking 70K, maybe 80K?  It seems to me that a couple each earning 40k would certainly at least be on the threshold of breaking into the middle class.  Lets go with 80K.

Now the upper class.  Obviously there is no upper limit for this.  So where would the upper class start?  Two couples making 100K each is obviously upper class to me, 90K each, still upper class, 80K each, still upper class, 70K each…this seems about right to me, so 140K.

These very unscientific results seem to say the middle class would be a family income range of 80K to 140K, a $60,000 range.  Seems about right, so I don’t see what all the hubbub is about if the upper end of the middle class is said to be 120K.  I feel it is definitely in the ball park.

Growing up I feel I was in a middle class family, and I estimate my family’s income at about 50-60K back in the 1980s/90s, this would seem to work out, if inflation was 2% per year for 30 years from 1985 to 2015, this would be about  121K-145K in todays dollars…very much in line with the 120K middle class statement.

What class do you consider your family to be in?  Do you think your class would be different if you live in a different part of the county, but with the same income?