March 31, 2009, 5:00 am

What Happened To My Plan To Become A Millionaire?

by: The Financial Blogger    Category: Assets and Net Worth,Financial Planning

moneyI recently had a comments by James-Montreal on my post about what age do I think I’ll reach one million dollar in assets. He was asking what happens now that we see the economy down and we don’t expect to see it coming back for the next year or two. Since this post was done about a year ago, I though it would be a great idea to update it and see where I stand now!

In my previous plan to become a millionaire, I started with the assumption of getting a 7% annualized returns. Since I am heavily invested in stocks, there should not be a problem over the long run. Historically, the market has been doing 9% before taxes and fees. Do I have to change my numbers since the market went down 40% and I did -27% with my Smith Manoeuvre last year?

The answer is the following: if you invest in the long run, you will still get a positive yield of return. I remember that only a year ago, the 5 years, 6 years and 7 years result for a growth fund (asset allocation of 75%-80% equity and 25%-20% fixed income) was in the double digit. Now it is about 3 or 4 % ;-).

Therefore, no changes here. However, Since the market is pretty low right now, I decided to increase my monthly investment and do some cost averaging. Therefore, I am now investing $500 per month in my Smith Manoeuvre. So If I try to become a millionaire at the age of 45, I will get 245K in my Smith Manoeuvre investment account (7% yield, $500 per month, already $8,500 sitting in the account).

I decided to become more realistic in regards to the mortgage I would pay off at the same time. Even though I pay prime –2 (yeah, this is a huge advantages of working for a bank!), I decided to calculate my mortgage rate at 4% (which would suppose a prime rate at 6% when we are currently at 2.5%). Therefore, I would pay off 21K by the age of 45K.

Then, if my house increase in value by 3% (it already grew up by 8% annualized for the past 2 years), my house would worth 510K. That is a huge improvement since we are starting with a market value of 300K instead of 275K last year (it was a professional appraisal and there is actually 2 houses selling on my street for 325K and 350K).

Then, there are no much changes on my pension plan. I think will keep growing by 7K per year. However, I decided to drop the yield to 4% since I have little control on how it is invested and they will probably slow down the risk in pension plans according to what is going on in this crazy market 😉 Then again, it is a determined pension plan so it is very hard to get a “real value”. Therefore, at the age of 45, I assume it will worth 200K. This is a very small number considering that at the age of 57, I will have right to the full pension (which is 70% of my 5 best years for life).

Small RRSP contribution of $2,500 will still grow over time as well. At the very same rate of return (7%), I should get at 115K considering that I have a few thousands already accumulated.

Since last year, I have added an important growing asset in my financial situation: my company! I have invested $7,000 last year in a partnership with one of my friend. Assuming a conservative 15% return (I’m already receiving a 30% dividend and income is still growing steadily), my investment would worth 86K by the age of 45. I am actually convinced it will worth more than 200K but my financial planner side tells me to stay conservative 😉

So by the age of 45, I will get almost 1.117M$ in asset! However, I would have to take off a mortgage of 260K (my only debt) out of the equation. Therefore, I would have a net worth of 917K. Since I have been pretty conservative on most of my assumptions, I will probably become millionaire by the age of 45.

Now, the key points of increasing my net worth:

– using other people’s money (leveraging baby!)

– using the power of compounding interest

– investing in my own company

We will make money working for an employer but we will never make as much as working for ourselves. This is the true path to financial freedom

image source: planetgreen

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March 30, 2009, 12:25 pm

I need your vote… again!

by: The Financial Blogger    Category: Uncategorized



hello everybody,


as you know, I am still in the March Madness contest over at Free Money Finance. Then again, if I win the best post of 2008, $500 will be given to a charity (I selected children’s wish).


so pleaes vote “banks” in the comment on the following url:


thx to all!!

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March 30, 2009, 5:00 am

How to start investing – A DIY Growth Investment Strategy Part 7 – What Does A Financial Planner? (Besides having diplomas and telling you to stay invested)

by: The Financial Blogger    Category: Financial Planning,Investment, Market and Risk

Back to our Monday series about how to start investing by yourself and what you need to know before dealing with a third party. As DIY investing becomes more and more popular, a financial planner can be very helpful for several people. Since financial planners are much more than only investment specialist, I personally think that you should get one even if you plan on becoming a DIY investor.

However, while a broker can help you giving specific information on stocks and help you becoming a DIY investor, this is not the job of a financial planner to do so.

First things first, you have to make the difference between a financial advisor and a financial planner. In regards to investment, they have most likely the same mandate: determining your investor profile and offer you an asset allocation according to it. However, the financial planner will also be able to provide advices on:

– Retirement planning

– Insurances

– Estate planning

– Tax planning

– Personal finance

Depending on where you live, becoming a financial planner can require a lot of studies or not. In Quebec for example, you need a certificate in financial planning (university degree) along with passing a final exam in order to get your title.

Financial planners will be of great help if you are looking for someone to take care of your investment and give you general information about the field mentioned above. He can do an investing plan and show you how much money you will get at retirement.

However, he will not be the guy to tell you what to buy or to sell. His mandate is to offer mutual funds with the correct asset allocation corresponding to your investor profile. He should not give you trading advices.

With this kind of investment strategy, you will not have to make researches or read financial newspaper. If you want to get a general feel of the economy, call your financial planner and he will be able to explain what is going on on the markets.

Another important note is that he won’t be able to make any trades if you don’t sign paperwork (or give a verbal confirmation over a taped phone line). The broker can make trades on a verbal confirmation or even without your acknowledgment if you have signed for it (some people really trust their brokers 😉 ).

If you are looking for a global strategy that will not only cover your investments but all the aspect of your personal finance, the financial planner will be able to meet your needs.

The financial planner is the right person if:

– You don’t want to trade stocks and look for an “all inclusive” offer

– You want to get the global picture

– You are looking to get a financial plan or a retirement plan

– You want someone you can call when you have questions about credit, insurance, estate planning, etc.

– You are basically looking for a one stop shop.

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March 28, 2009, 7:06 am

Financial Ramblings

by: The Financial Blogger    Category: Financial Rambling

madonna-gym-mirrorI registered to the gym last week (Wednesday) and since then, I’m going every day! I actually decided to come at work at 9AM instead of 8AM (I had to open the stupid door and do small talk most of my first hour anyway!). I caught on my lunch break and I am good for going to the gym every morning:-D

I actually loss 2 pounds right up front! Now at 198 lbs!

On the other side, I still ate ice cream twice this week (they open a ice cream store 10 houses from mine!)… I feel that there is a conspiracy against my goal!

Interesting article from The Credit Toolbox saying: The Hell With You Dave Ramsey! I’m Paying my High Interest Debt First! Who thought that someone can be against Dave Ramsey?

I really like this post from Four Pillars about public speaking.

Here’s the part 2 of the Best Stocks for 2009 by Buy My Stock Picks.

Million Dollar Journey is wondering about the purpose of money… this is quite a question!!

Retirement might be a source of nightmare with what is going on in the markets.

The Digerati Life ask if you would follow financial gurus advices? Hint: half of them are wrong… but I don’t tell you which part of them are!

If you are looking for ETF’s, look at the BMO ETF’s by Canadian Capitalist.

Canadian Dream writes about selling out our dreams.

Intelligent Speculator thinks that Google should feel threatened by Twitter and Facebook.


Carnival of Personal Finance

Carnival of the Capitalists

Make Money Blogging Carnival

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March 27, 2009, 5:00 am

Does A Blackberry Makes You A More Effective Person?

by: The Financial Blogger    Category: Miscellaneous

black-berryI have been debating with my evil mini-me and my angel mini-me (yes, I am like Homer Simpson…I’ll let you guess who wins most of the time!) if I should buy one of those small and so cute piece of plastic with a screen called a (evil) BlackBerry (have you ever seen a black fruit anyway?). While I previously found a way to get a Blackberry for almost free, I felt the need of having access to my emails on a real time basis.

So I thought about it for a few months, my partner bought one and I still resisted at that time (I am strong against the dark side… sometimes). I finally gave up about a month ago and get myself a (nice) Blackberry!

Since our company was paying for it, it felt like it was almost free 😉 So the cost didn’t matter much (I know, it is still my money… but what the heck? Says evil mini-me). A lot of person around me asked me if I was a more productive person with a Blackberry in my pockets. Most of them were telling me right away (before I start answering!) that they would never accept such things. This product of evilness has been created to become the ultimate tool of control for your employers.

They might be right… however, I own the company who is paying for the Blackberry 😉 Therefore, I was not quite worry about it! I must admit that I would have probably been more reluctant if my employer was offering me such tool of productivity (i.e. slavery).

So, am I a more productive person with a Blackberry? Hell yeah! (that’s, again, evil mini-me answering 😉 ). More seriously, I am. Gaining access to my emails doubled with the possibility to answer back in such timely manner had helped me taking over a lot of stuff while I was:

– waiting for the bus

– waiting for the metro

– bored at lunch time

– waiting 3 hours in a clinic watching Wall-E with my son before he gets to see a doctor!

– at the dentist waiting… and waiting… and waiting (before suffering!)

– everywhere when I had 3 minutes + of waiting time in my life!

A great example was that visit at the dentist. During this 15 minutes wait where I could have read a very interesting article about purple birds slowly disappearing in North Africa, I took care of 2 MBA tasks, register my son to soccer and answer all my other personal emails.

Another thing I really like is that I know what is coming even though I don’t have the time to take care of it right now. It is also my personal agenda (I don’t forget friends birthday any more).

However, there is a big disclaimer: you must be able to put it on the kitchen counter when you get back home. WIVES GENRALLY HATES BLACKBERRY. Just handle carefully because this thing become addictive as well ;-).

image sources (nope, it wasn’t my kid!)

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