October 2018 Financial Update

Slowing growth.

October 2018

October was a rough month for many of us – shares dipped globally, meaning everyone’s net worth was largely flat, mine included.

This month I spent $2187.34, for an incredible 66.35% savings rate with a net worth gain of $2051.62. This should really increase next month when I start a new job with an added signing bonus!

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I Furnished My Bedroom for $7.50

Mattress not included.

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For the entirety of my adult life, I never stayed in any one spot. I rented basement apartments, condo closets dens, regular apartments, lived at home, etc. By my calculations, I had moved 11 times in the period between 2011 and 2016 mostly due to school and employment circumstances.

The brevity of these living experiences led me to meet many interesting roommates (for another day…), but also adopt the mentality of “own less”. “Own less” meant for every new purchase I made, I’d have to find a way to either throw something away or make it fit in my car upon the inevitable move. This worked very well for a period of time as it optimized my frugal habits but it got exhausting having to live knowing this particular roof over my head was temporary.

Finally when I got a full-time job, I decided it was time to get settled. I signed a one-year lease with a former roommate and we were in business. “No more moving!” I cheered, until I realized a big problem: that I owned zero furniture. Nothing except clothes and a laptop. For the past 5 years of my life, I had been subletting or renting furnished rooms. All of a sudden, I was going to be walking into a completely empty apartment.

Where do I start? What do I do? Where do I go?

I started to think about the things I’d need: a bed for sure. A desk. A dresser. A lamp. Probably a book shelf. Unwisely, the first place I started to google was Ikea and was quickly unimpressed with their pricing.

Then I took a breath and realized a few things:

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What’s Your Marginal Rate?

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Not too long ago, I used to work for minimum wage in my spare time lightwalking for the Canada Opera Company. What lightwalkers do is stand on the stage wearing some neutral colours as the lighting designer and crew adjust the lighting to make sure faces are lit and unintended shadows are mitigated. Reason: it’s cheaper than having the actual opera singer stand there doing nothing.

The gig was fun. I’d work a 4 hour shift one weekend and pocket $44 and get to hang out on the majestic stage of the Four Seasons Centre in Toronto and rekindle my love of theatre.

But one day I stopped altogether. Why? Because my marginal tax rate caught up to me. Let me explain.

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September 2018 Financial Update

A deceiving month.

September

September was a deceiving month, one that I guess is me deceiving myself into believing, I saved more than I did.

Let me explain: this month I spent $1658.59, for an incredible 74.49% savings rate… yet my net worth only went up $704.09. For reference, the month before my net worth jumped over $13,000!

So what happened? I went on vacation and I spent roughly $3000. Why is it not factored into my monthly savings rate? Because I tally vacation spending into my year-end figures, not month-to-month. Reason being is that vacation expenses might create some outliers and inconsistent month-to-month data for the purpose of analysis.

More on the vacation on a future post (it was British Columbia, which was beautiful, by the way…)

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Things I Never Cheap Out On (Part 2)

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Last week I talked about something very anti-frugal: the concept of purposely cheaping out on things as opposed to buying high-quality and potentially long-lasting things.

However, there are just some no-go things when it comes to spending money, where I will spend obscenely larger amount to get the highest quality I can. Some of these items are just basic common sense, whereas others you might think are a bit borderline – I’ll let you decide.

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Things I Purposely Cheap Out On (Part 1)

And there is something about drugs in here, I promise.

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Frugal folk are all about quality. That means buying things of excellent quality and workmanship because they know it’ll last longer or taste better than the cheap stuff. It’s simply a matter of ROI – why buy something for $1 that might break any minute when you could spend $10 and keep it for life?

However, we all have our vices when it comes to cheaping out on things. And personally: I cheap out on quite a few…

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The S&P 500 is at all-time highs. Should you sell?

Short answer: No.

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Index investors have much to be pleased with, particularly those who bought American.

The S&P 500 has rocketed to all-time highs in recent weeks with NAFTA negotiations trending positive and solid corporate earnings. At the same time, journalists, investors, and regular people alike are all talking about how the bull market is on its last legs.

“Be careful. You should sell. I don’t think there’s much room left to grow,” said a colleague to me as we chatted personal finance. We were talking pensions casually when the conversation shifted to ETFs and index funds (he is all in on real estate, by the way…).

As he walked away, I smirked, but I had a second guess moment: what if he was right?

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