2025 Annual - Wealth Growth Update (Part 1)
š -5.65% Yearly Return / ā¬ļø 23.53 % 9 Year CAGR / āļø Doubling 3.06 Years
To start off a little background listening - because - why not?
Well Well Well - a negative return - it happens! The doubling point is still pretty close to every 3 years.
I hold ~12% of my wealth in the Stock Market.
Weāre focused on aiming for sub 3 years - as this is our doubling point. Our money doubles every 3 years.
Last yearās return was 80.79% so it all balances out.
I donāt count house or personal possessions in my net worth.
Our title last year -
Raking Back Wealth
I donāt contribute to investments anymore and I havenāt done for a few years. Once I figured out that I had enough invested to hit where I wanted to be at an older age I figured it made more sense to focus on āraking backā quality of life from the future to now. (COAST FI)
I didnāt want to be a Trillionaire at age 80. Iād rather be an extremely-well-lived centi-millionaire.
Keep in mind - weāre all different. And even I was different to me of 10 and 20 years ago. What drove me 10 years ago is different to what drives me now.
10 and 20 years ago it was all about numerical wealth. Now it is freedom then moving back to wealth accumulation.
Change in Income
I really wanted to work from home (or anywhere in the world) to maximize freedom so I really focused on finding a job that would allow me to to work from anywhere. I wanted to experience it and see what it would be like being able to move to different locations and work from there for a few months.
Iāve really enjoyed being able to exercise at lunch as well as help the kids out as/when they needed me. This has definitely been a great step towards freedom.
The idea of driving down town with millions of others to end up in a soulless gray cubicle makes my blood boil at the idea.
Having this extra freedom meant my income dropped quite a bit, but Iām OK with that for the quality of life.
Finding these remote jobs is pretty hard nowadays. Post Covid the sheep thinking of management was to pull everyone back into the building so they can collaborate and enjoy the culture.
I for one, experienced working from home during Covid and would find it extremely difficult to go back.
Horses for Courses
An old fashioned English saying -
Horses for courses
such as - you may want to ride a different horse for a different course.
There are two variables in life. Money and Time. They are interchangeable. When you are born you have more time than money and when you die - you have more money than time.
At some point in the value shifts from one to another. This for me, hit precisely around mid-life. Now time is more valuable than money.
Time is also analogous to the economic term of Time Preference - or how much value you place on living now than some future date.
For me mid-life coupled with Covid coupled with introduced risk of the the End of the Long Term Debt Cycle (Globally) meant my preferences pivoted.
Disconnect With Reading Materials
I started bumping into a disconnect between how I was feeling and what I was reading. Iād read one thing and feel a disconnect, it didnāt sit well with me.
Remember - there are two contexts. Time, Money.
Most financial reading and YouTubers will sit in the context of Money (i.e. all guidance is aligned with getting you the maximum amount of money). It will be written to mathematically give you the best return. Such as stick it in a tax deferred account because it will probabilistically give you a better return. Or do this or that with your money because it provides the best Tax Protection.
However - this blindly shuts out anyone who values freedoms or one could say those with a bias towards Time preference. Having your money locked away until you are 65 isnāt Freedom and it isnāt Time oriented. Having constraints around my wealth is not Freedom enabling and this is what has been bugging me about financial education.
Iāve remarked on the difference between Speculator and Investor recently. Iām feeling a draw towards the Investor aspect recently - the want to have cashflow as a priority and as a Freedom enabler rather than a later in life option. I do fully aim to flip back to growth mode once I have hit a comfortable freedom point.
The Small And Mighty Real Estate Investor
I remember being a huge fan of alternative music when I was younger as well as playing computer games.
Generally speaking - NO ONE DID THIS. People would make fun of me, how I dressed, what I listened to, what i did with my time. This went on for decades.
Luckily, early on I realized that I should never care about what people thought about me.
However - Iād always be looking for some sort of confirmation of others doing the same. Seeing that acknowledgement that it OK to be doing what you are doing is some innate human want. The minute you see it - you double down and go harder on whatever weird thing you are doing.
Well I feel the same way about the way I see finance.
What Iāve realized is that opinion that I receive comes from - People who want to stay inside the Matrix (or are unaware of being part of the Matrix).
Or said another way - they donāt have the same strong opinions on Freedom as I do. And they likely in the same Time preference as I am.
The idea of paying down rental mortgages to have cash flowing assets is alien to them. The idea of having investments outside of deferred Tax mechanisms is also alien.
They are seeing the world from a Money point of view. Iām now seeing the world from a Time point of view.
I was reading The Small and Mighty Real Estate Investor and walked past an approach that Chad Carson called āEndingā. His book points out that things donāt need to be in a linear fashion. Such as the canonical build wealth, retire, die.
He writes that things can be done in phases, building and leverage then perhaps de-risking by paying down a property and securing some income. And then maybe perhaps going back to the building phase again.
Reading this resonated with me. This is what I want to do and it having someone call it out in a book makes me feel less crazy for wanting this.
If I pay off one of my rentals, Iāll get an immediate 20% return on my cash per year going forward. This is a step towards swapping out earned income with an alternative cash flow source.
Plotting the course towards Time preference.
Bigger Buys
Part of the drop of assets is down to me buying a $40,000 SUV cash, a $10k KTM Dirt Bike and a fairly expensive Bullion Scanner.
It looks like I did what I said I was going to do last year - so thatās good!
The bike has brought me so much joy. The vehicle extends the runway for us to drive around to jobs, maintaining our income.
Excerpt from last years end-of-year review:
The Good, The Bad, The Ugly
The Good - Bullion.
Iāve been talking about Bullion since I started writing in early 2024. Yes; Gold Bugs have been talking about it since it became an element. But for me there were better investment opportunities at the time.
I had put 2.5% of Net Worth into Gold and Silver early 2024. I look at investment moves in percentages. 1, 2.5, 5 or 10%.
I had a previous small position of Silver. After that I moved into buying Gold and Silver stocks in my equities accounts.
Since then the price of Gold and Silver has doubled and Silver is gaining a lot of momentum. So yea - over 100% return on all of those investments. Some of the stocks were a lot more. As I previously mentioned, unless the investment is a unicorn, I typically sell 100% of my buy in amount so that the returns are infinite.
The chart above is one of importance. Everything reverts to the mean (average). You can see from this chart that the ratio between Gold and Silver (gold and silver ratio) is now, visually, landing smack center of a ~25 year average. Implying that the sky rocketing Silver prices will slow down relative to Gold.
Now I know that the Gold/Silver ratio was in ancient times a lot closer to single digits rather than in the 50s. My understanding that from a pure metals in the ground point of view, Silver is roughly 10 to 1 in there with gold.
I can imagine a bit more room for silver to gold repricing however, logically, I would imagine Silver to peg itself to the gold price and rise relative to Gold soon.
The LBMA and COMEXās long running paper market manipulation is becoming less and less relevant and China seems to be taking over as the true spot price. There has been a recent price discrepancy between East and West with prices being higher in the East. Any delta becomes a target for arbitrage.
I think Gold and Silver will continue to rise in 2026, 2027. I think there are so many leftfield factors that could affect the price including: BRICS, Russia/NATO, End of Fiat and so on that the numbers could really jump.
The Bad - Stock Market
I ācorrectlyā sold all of my stocks like literally the day before they dropped a million percent. HOWEVER - timing the market is not a thing and should not be done. I think having an opinion on where something is going at a Macro level makes sense, but timing it - thatās tough.
I shouldnāt have exited to cash. Iām not saying being in the stock market during 2025 was bad, just that I shouldnāt have exited to Cash.
Iāve seen statements about Buffet say being heavily cash, however I now realize that the reason he is heavily cash is that he is playing in a different game, where he can only invest in certain investment vehicles. Where an individual investor can invest really in anything.
2025 Me regrets being in ANY Tax Deferred accounts for the inability to move cash around to wherever and whatever I choose.
Iāve now changed my internal rule set for Capital Allocation to never be cash.
Yes the Stock Market is up a ton this year and yes I think it will continue to go up. However as per my previous posts - I believe this to be the work of mal-investment.
Would I swap my investments outside of the stock market kind-for-kind with more shares in the stock market? Never.
We have just re-entered quantative easing round (5/6/7 not sure which) meaning that more dollars go into circulation, slowly pumping up all assets. I think quantative easing, global trust of the United States Dollar mean that as Iāve mentioned before - the USD will go up like a firework, outpacing everything - then pop.
This Chief Investment Officers take on 2025 is an interesting watch as an alternate opinion to mine.
He highlighted the Canadian Stock Markets return being quite excellent during 2025.
However with a straight face, he states that he wouldnāt recommend Bitcoin or Bullion in oneās holdings.
Looking at the holdings of the Canadian Stock Market - S&P TSX - unsurprisingly a good chunk of it is Mining. The other large chunk is banks. Iām morally against banks. Mining Iāve already got a lot of - just mainly hedged to the USD.