Wednesday, July 16, 2008

..and the book winner is...

The winner of the book A Million Dollars By 30, drawn at random, instinct

Your instincts were correct cash. Please email me at themoneygardener(at)gmail(dot)com to obtain the book.

Tuesday, July 15, 2008

net worth update july, 2008

Results for the 2 Months Ended July 15, 2008

Debt/Asset ratio rose to 0.52%
Net Worth moved down 4.9%
Total Assets decreased 2.9%
Total Liabilities decreased 0.9%
House Value/Total Assets rose to 71.7%
Non-Registered Portfolio declined 12.9%

Calendar Year to Date Gain/Loss: +7.1%

Ouch...what a horrible 60 day period. Almost 5% of our net worth was lost since May 15, 2008. This is our first ever net worth decline. Obviously the poor stock market performance has hit our net worth pretty hard. The S&P 500 index is down 16.4% year to date.

Monday, July 14, 2008

I'm giving away a million bucks! 30

I'm Giving Away A Million Bucks By 30!

If you are interested in obtaining a free copy of A Million Bucks By 30, by Alan Corey (reviewed and pictured in the post below this one)....please leave a comment on this post. I will draw a winner this week and you'll be sent a copy right away.

Sunday, July 13, 2008

a million bucks by 30

"How to overcome a crap job, stingy parents, and a useless degree to become a millionaire before (or after) turning thirty."

A Million Bucks By 30 is a unique personal finance book by self proclaimed 'fame whore' and cheapskate, New York City-based entrepreneur, and author Alan Corey. By his own account Corey has no particular skills, and is not really good at anything, but yet he was able to reach a net worth of a million dollars before he turned 30. The basis for the 'fame whore' title are his many television appearances including Queer Eye for the Straight Guy, The Restaurant, and The Big Idea with Donny Deutsch. The basis for the cheapskate moniker is due to the fact that, among several other examples, Corey maintained a food budget of $2 per day during his journey to a million.

My Thoughts on A Million Bucks By 30

What I really liked about this book was the simplicity of the writing, the story, and of the author himself. Not that Alan Corey is a 'simple' man by any terms, but it is refreshing to read a personal finance book that comes from a really down to earth, easy, and straightforward place. The book is an easy read, it's funny, it's inspirational, and it begins every chapter with guy in his twenties talking to himself.

Without giving the book away Corey proves that living an extremely frugal lifestyle, being innovative, creative, and a little bit lucky is the formula for financial success. The book is stuffed with loads of smart personal finance tidbits as well as several 'cheapskate strategies' (some that would even make Canada's Mr.Cheap blush). Some of these strategies are at the root of living below your means, while some are downright uncalled for. The book also delves into the world of real estate investing in a big way.

Overall I really enjoyed the book mainly due to it's humour, simplicity, and motivational qualities. It really makes you want to find a way to save an extra $100 this week. Corey does a great job of portraying himself as someone with no special money making advantage over any one else. I would argue that the man possesses an outgoing entrepreneurial spirit, great discipline, and an amazing will to win. Admittedly Corey got lucky due to a very hot real estate market, however his outgoing and courageous personality and dedication to his goals would have likely allowed him to succeed no matter what the market held. In summary the overriding theme of this book in my eyes is; sacrifice now for your future goals. Alan Corey took sacrifice to a new level as he focused on squeezing every dollar he could out of his every day twenty-something life. Absolutely worth the read and a great read for someone just out of university.

the moneygardener was not compensated for this book review

Friday, July 11, 2008

blogs I read

I wanted to highlight a neat new feature that I've added to the right side panel of the moneygardener called 'blogs I read'. This is a compilation of my favourite personal finance/investment blogs. Each blog lists the latest post underneath the title of the blog. For the next week or so, I'll have this feature right up at the top of the page for your browsing convenience. There are some great blogs there by some unique Canadian as well as American authors so please visit them and let them know that I sent you.

Canadian Banks & Insurance

Canadian Capitalist
This and That # 100

Canadian Dream: Free at 45
The Green Spot: Ground Rules & What’s Wrong

Disciplined Approach to Investing
Market In A Downtrend But Ready For A Bounce?

Dividend Growth Investor
"Determining Withdrawal Rates Using Historical Data" - My Opinion

Weekly Links: Carnivals & Articles - July 11, 2008

Financial Jungle
Bye Bye Zero Down and Forty Year Mortgages

Michael James on Money
The Trap of Trying to be Normal

Middle Class Millionaire
High Interest Saving Accounts - Guest Post

Million Dollar Journey
Weekend Reading - July 11, 2008

my Value Idea
Distressed Investing

Personal Finance 101
Dividend Growth Investing At Work

Quest For Four Pillars
Friday Linkstuff Home Page
Fannie and Freddie Waterfalls are Too Big to Bail

10 Free Ways to get into Fitness this Summer

Stock Market Prognosticator
Smart Money - May You Rest in Peace

The Div Guy
Zecco: Great broker for dividend investors and get $25 for opening an account

The Dividend Guy Blog
The 9 Rules of Risk Management

Thicken My Wallet
The Running Man

Triaging My Way To Financial Success
Templeton's Touch
A Lap Of The Blogs

Thursday, July 10, 2008

dividend income milestone - $2,000!

My Favourite Graph - July 10, 2008 Update

Of all the Excel charts and graphs that I keep in managing our personal finances and investments, I must admit I am partial to one. I have explained previously how powerful I believe dividends can be, as well as how I consider them crucial to our investing philosophy long term. Dividend increases mean more money in your pocket, and they have the added benefit of being one of the more permanent aspects of investing. The graph below is immediately affected in this relatively permanent way every time a company that we own raises their annual dividend, as well as every time I add new shares of a dividend paying company to our non-registered portfolio. It is this relative permanence of value that really has me routing for this graph to rise week to week and month to month.

Our Annual Portfolio Income has now reached $2,000! The latest dividend raise by Walgreen (WAG) allowed us to hit this wonderful milestone. Please see the graph below for our progress over the past year and one half. Our investment income is now up 126% from one year ago. $5.48/day and counting...

Wednesday, July 9, 2008

Walgreen ups dividend 18%

the moneygardener darling, Walgreen Co. (WAG) increased their quarterly dividend 18% to 11.25 cents per share from the previous rate of 9.5 cents per share. The dividend increase raises the annual rate from 38 cents per share to 45 cents per share. Walgreen has paid a dividend in 303 straight quarters (more than 75 years) and has raised its dividend for 34 consecutive years. Walgreen shares make up about 8% of my non-registered portfolio, so needless to say I appreciate the healthy raise.

Last year in July WAG increased their dividend by about 23%.

Monday, July 7, 2008

reading for the long term

...and down and down the stock markets go as we all lose thousands of dollars in paper value every day... The S&P 500 index is now at it's lowest point since mid 2006.

Here are a few good articles to convince investors to stick to their knitting.

Dividend Growth Investing At Work by Dividend Money
Investing & Hockey by The Dividend Guy
Intelligent Value Investing from The DIV-Net

Thursday, July 3, 2008

what's your net freedom?

For those of us that like to think that we are living below our means, there exists an interesting alternative to net worth in determining your wealth level. Mr.Cheap from Quest for Four Pillars does a great job describing this alternative, in his 'An Alternative to Networth' post.

This metric is mentioned in the book 'The Millionaire Next Door' and is an interesting way of looking at one's wealth level, as it factors in your personal cost of living. In essence this formula compares your assets to your lifestyle costs, quite simply - How Long Could You Go Without Receiving a Paycheque. Simply take your net assets (assets minus liabilities) and divide by your monthly expenses. This will give you the number of months that you or your family could go without regular income. I think I will call it 'Net Freedom'

Whether you would include your home equity in the calculation or not depends on personal choice. If you use your home equity as an asset then don't forget to include an amount in your expenses that you would be paying for rent. Also, if you are a homeowner, when adjusting your expenses think about how they would change if you no longer owned a home. If you would choose not to move when you became paychequeless then the calculation becomes simpler. Obviously there are flaws to all of this as many more changes to your expenses could come to light if you suddenly were without a job (ie benefit loss).

When I perform the calculation for our family, our Net Freedom is about 46 months, or 3.8 years. I like this metric because it not only measures wealth, but it measures wealth against lifestyle costs. This allows those who live below their means to score higher and rightfully so, as their financial situation is truly more flexible and powerful than someone who lives high on the hog and earns just enough to get it done. Certainly it is an interesting, and perhaps eye-opening exercise to calculate this for your personal situation. As always, I'd enjoy hearing reader's thoughts on this.

Wednesday, July 2, 2008

blogging net worth

As regular readers know I track our net worth by posting a summary of our current net worth breakdown along with some other personal financial statistics every second month. I'm due for my next update on July 15, 2008. I'm actually not the only personal finance blogger in Canada who reports regularly on net worth. Here are two in particular that I always read with great interest.

Million Dollar Journey reports his net worth each month. His net worth currently stands at $310,483. That is a gain of just over 2% from May, 2008 to June, 2008 due to some good performance by a micro cap stock in his RRSP, as well as some solid savings results despite a maternity leave situation. Year to date MDJ has been able to increase his family's net worth by just over 11%.

Tim at Canadian Dream: Free at 45 also track his net worth bi-monthly as I do. His net worth currently sits at $247,900. That is a 10% drop from February due to a reduction in his home's value due to local real estate market conditions. Year to date Tim has been able to increase his family's net worth by just over 15%.

My last look at our net worth was on May 15, where it stood at. This represents a 13.6% increase since the start of 2008.