My quest for financial independence

Every month I get a bit closer to my goal of financial independence.

I put a little bit of money into the market and I let the market do its thing.

I have never been a high earner. In fact my annual income skirts around the poverty level, every year.

My monthly income fluctuates between $1,500 and $2,000 per month, so my annual income fluctuates between $18,000 and $24,000. I am not exactly rolling in dough. Yet… I live like a millionaire.

How am I rich already?

I am rich because I have everything I require to live a comfortable life. I have:

• a cell phone
• a laptop computer
• a comfortable apartment in a nice trendy neighborhood
• all the utility services
• public transportation and low-cost auto-sharing

I have all that and work less than four hours per day (mostly at home).

In addition, I have no boss, no one to answer to. I used to teach dance classes, and take photography at weddings and corporate events (pre-COVID), now I create websites and offer SEO consulting.

If I don’t like a client, I simply fire them and accept another one.

From my window, I see people who have a much higher income than me. But they have to kiss someone’s butt and be somewhere at 9:00 and only allowed to leave at 5:00 pm, and I rather have less and be owner of my own life than to be accountable to someone else.

Another side of my wealth is that now I am geographically independent. I am thinking of escaping the next winter and spend it in South America.

I sold my car

I just sold my KIA Rio 2014 for $5k.
I was spending $140 per month on:
1. Insurance
2. Registration
3. Parking.
without counting gas, repairs, visits to the mechanic, snow removals, cleanings, etc.

Now, with the $5K, I invested it in the stock market. I am hoping to get 6% on my money, which means $25 per month for the rest of my life.

I borrowed $10,000 to buy more stocks

Here is the situation:

The bank was lending me money at 2.45%. This is a secured loan with my rental property as collateral.

At the same time the index ETF that I bought (VCN) is paying 2.9% in dividends. So I am getting more money in dividends than I am paying out in interest for the loan.

And then, I am making monthly payments to reduce my $10,000 debt.

As I pay down my debt every month, I will have less interest to pay with the same (or bigger) pool of dividends.

Borrowing money is always risky, but many people don’t think twice about borrowing money to buy a real estate property. They usually put 20% of their money as a down payment and borrow the other 80% from a financial institution.

Well, it’s the same with stocks, if you are planning to hold them for long periods of time, let’s say 10 years or more. Chances are that if you are holding for 10 years or more, you will sell at a higher price than your purchase price.

Stock Market Return Year to Date

For almost a decade, I tried to figure out the stock market, and I failed. Now that I think I figure it out, I ask my self:

• Why couldn’t I see this before?
• Why do other people so energetically refuse to see it?

Here is the big stock market secret:

1. You put all your money in a well-diversified index, like the Standard and Poors 500
2. You leave it there for over 20 years
3. When you take it out you will have returns between 6% to 8%

Yet, when I speak to people, they always talk about the latest crypto-currency, gold prices, inflation, what the FED is talking about, whether Donal Trumps is racist or not, etc.

All of those are distractions that will keep you from the real money making strategy, which is to let your money grow undisturbed.

My main three investments are always the same 1/3 Canada, 1/3 US, and 1/3 international. These are the symbols of my investments: VCN, VFV, and VIU.

For the month of June, my returns were 0.78%
For the year may returns are -2.65%

This negative return is acceptable, considering that last year (2019) I had a return of 20.30%.

Emergency fund

Covid-19 made us realize the importance of an emergency fund.

Sure, people on good standing can always sell some of their stocks or they can draw on a line of credit. I have both of those and fortunately, during this Covid-19 era, I didn’t have to rely on any of those funds, but Covid-19 made me realize how unpredictable life is, and if we can afford it, then it’s nice to have a bit of cash, sitting there, with no other purpose than to save us in case of an emergency.

Think of your emergency fund as having a spare tire in the trunk. For most of its existence, it will be dead weight that you are just carrying around, but one day you will be so grateful to have it there.

Right now I have $8,000 cash, sitting there, in my checking account, doing nothing, just waiting to be called to action.

Considering that my monthly expenses are about $1,500. I have about 5 months worth of emergency money.

Many members of the FIRE community feel inclined to have 3 years worth of emergency money. They all admit that it’s a bit too much, but the value they get in peace of mind makes it worth it. I will shoot for the same.

Income for July 2020

My income was a bit higher than June. here is the breakdown.

Revenue source	Amount
SOE consulting	$180
Rental income	$150
Portrait photography	$360
Dividend Income	$402
Website building	$200
Advertising income	$529
Total	$1,821

Online influence

Since my plan is to live out of the internet, and have a digital life, online influence is of great importance.

Website visits	1,541
Domain Authority	22
LinkedIn Followers	4158
Twitter	388
Instagram	153
Podcast downloads	798
Youtube subscribers	85

My most important metric is website visits, even more important (to me) than podcast downloads, but it’s very difficult to continuously bring more people to the website.

I will continue showing up and hopefully, with time, the website traffic will go up.

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