Welcome to my Weekly Recap February 2nd Edition where I discuss some of the key events of the past week and provide an update on what I’m doing with my finances.
Stock Market Has Best January in a Generation
Well there you have it. After the most dismal December since the Great Depression, the TSX had the best January in 39 years! The index has risen 8.5% since the December lows. The S&P 500 had the best January in 30 years, up 7.9%. The market rebound helped boost my net worth numbers by nearly $40k. All this goes to show that it pays to stay invested and keep buying in good markets, and in bad.
Interest Rate Relief
Central Bankers hit the pause button on rising interest rates this month which, in part, fueled the stock market rally. The US Fed and the Bank of Canada paused and added a bunch of cautionary language to their statements that basically said what the market has signaled for months…that global growth is slowing. The massive Bull run seems to be coming to an end.
So if you are carrying debt, like I am, you’ll get a little breathing room from rising interest rates for now. But I’m still focused on paying my debt off ASAP.
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Passive Income
In terms of passive income, January was a great month for us. We received a record amount of dividends and online income that you’ll see in my upcoming report this week.
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If you’re new to this site, you’ll hear me talk a lot about the importance of building up sources of passive income. This is simply money that we receive from sources other than our day jobs. I can’t stress enough how important it is for us all to start building up other sources of income.
I meet a lot of young professionals and self-employed people who earn a ton of money but, like the rest of us, are slaves to their work. If they don’t work, they don’t make money. And that’s a problem because a few bad months at work or an unexpected life event can ruin them. Trust me, you want to start building passive income.
If you want to change your financial situation for the better, then consider building sources of passive income. For Canadians, the best place to start doing all that is in your TFSA. And the best time to start doing this is now. 5 years from now you’ll thank yourself. If you haven’t done so already, open a TFSA through a low cost online broker like Questrade and start investing for your future.
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Cutting out Spending
Home renovations aren’t cheap, even if you do a lot of the work yourself. For a while back in the Fall, I was juggling 3 or 4 different credit cards and using our line of credit as a backstop. Well no more, our credit card debt is paid off and we have drastically cut down on our monthly spending since the completion of the home renos.
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One thing that I noticed was that this month’s credit card statement didn’t have any Lowes or Home Depot charges. Also, we hardly ate out at all last month. After spending my days working in our basement I was eating out constantly. Between the hardware stores and eating out, I figure it costs us hundreds, if not thousands, of dollars each month from September to December.
So in January, it was important for me to get a hold of our household spending so we could put more toward our debts. I hope we can stay on track going forward.
Boosting income a priority
Cutting spending is only one part of the equation to improve our finances. Boosting our income is the other. You can only cut out so much spending until there’s really nothing else left to cut. That’s when it’s time to focus on earning more. My wife and I have been working super hard to make extra money to help get us to where we want to be.
None of this has been or is very easy, but we’re willing to suffer some short term pain for the long term gain of being debt free. I’ve been trying to keep a positive attitude and reading lots of motivational material to keep my spirits up. And it seems to be working!
Tax Season
Well it’s that time of year again when I’m getting tax documents every time I check the mailbox. I’m staying on top of my taxes this year because I ended up paying in last year (due to the sale of our rental properties). So I’ve already started the family returns on Turbo Tax. I’m an affiliate of Turbotax and right now you can save up to 15% through my link below:
Thanks for reading to my Weekly Recap February 2nd Edition, have a great week everyone.