I receive a number of emails every week about my approach to saving and investing. I’ll be the first person to acknowledge my investment strategies have been far from perfect execution. I’ve made a bunch of mistakes actually. I’m probably making some today; do I own the right stocks? Did I buy my stocks at the right prices? Am I holding stocks that will eventually tank? Should I just index invest everything? Should I own more bonds?
I could go on and on but I’ve come to realize that while the outcomes to investing are very important, the journey is vital. I enjoy learning about personal finance, investing and tax management and largely because of that I’ve been able to stick to a plan I believe in. Investing is very much like keeping an exercise routine. A little discipline every day can go a long ways.
On that theme of discipline, I feel in my late-30s I’ve finally started to get my financial act together. When things started to turn the corner for me, I started this blog and I’ve been writing ever since. Many of you have decided to follow along, so thanks for that. With readership comes questions and I welcome those. Here are some frequently asked questions about my retirement plan.
Can you tell me more about your savings approach?
We do our best to pay ourselves first. We treat savings like bill payments every month. Money is automatically transferred from one account to another. It’s not as much as we’d like some months but every month, some money is transferred for investment purposes. We figure every tiny bit counts.
What stocks do you own?
Although I need to do some research before I buy any company, the simple fact is, there are not that many established dividend paying companies to own in Canada. An easy way to identify them – they are the top holdings of Exchange Traded Funds (ETFs) like these: XIU, XIC, VCE or XDV. Check out this page to learn more. I own many well-known companies in Canada like banks, telcos and energy companies. I also own a few household names such as Coca-Cola and Johnson & Johnson.
Do you ever sell these dividend paying companies?
Are you worried you’re not that diversified?
No. This is because I own a number of stocks in my Tax Free Savings Account (TFSA) and unregistered accounts. I also invest in low-cost, indexed ETFs to gain even more diversification. I’m a pretty conservative investor.
Are you investing in bonds now?
Not really, I haven’t invested in any bonds other than running my dividend reinvestment plans (DRIPs) for the ones I already own.
When do you think you’ll be able to retire?
Not sure actually since it depends on so many things. I do know I’d like see our mortgage killed in another 8 years. I’d also like us to continue to maximize our TFSAs and optimize our Registered Retirement Savings Plans (RRSPs). I wish I had a date to give you but maybe when the house is paid off I’ll be able to narrow that down. I’d like to realize my dividend income goal in 15 years.
Thanks for your questions and I look forward to hearing from you again soon.