Weekend Reading – $5 phones, bull markets, tax tips, products and more #money stuff

Welcome to your Weekend Reading edition, listing some of my favourite financial articles from the week that was.

In case you missed it:

I had an interview with Andrew Hallam and a giveaway for Millionaire Teacher here.

I reported we’re inching closer, almost halfway to our dividend income goal.

I’m paying $5 per month for my home phone.  You can too or pay even less by reading this post here.

I suppose I was overly optimistic about spring coming to Ottawa soon – it’s going to feel like a ridiculous -23 Deg. C with the windchill this weekend.  At least that deep freeze is only one night.  Seasonal temperatures are coming next week; I can finally see grass on my lawn.  Until then, enjoy your downtime this weekend and time with friends and family.

Mark

Here is some advice about how to build a dividend portfolio.  I’ll write my own take on this soon but in the meantime, check out Million Dollar Journey’s article on the same subject.  We share a very similar investing approach.

Here are some top personal finance recommendations aimed at millennials just starting out.

Ben Carlson wrote about bull markets affecting your intelligence.

A reminder about my special offer (to help you in any market climate):  For My Own Advisor readers, TSI is offering its lowest possible discount.  You can begin with one free month of TSI Dividend Advisor—and in a recent issue you get the editors’ picks for the 3 Best Dividend Stocks of 2017 at no charge.  After your 30-day free trial, you can have TSI Dividend Advisor for just $68 for one full year – you save $129 off the regular annual rate.

A reader shared this old Vanguard white paper, aimed at financial advisors, to help determine an investor’s risk profile.

Dividend Earner helped you out with understanding the tax treatment of dividends and distributions.

Half Banked is striving to save half her income, with support of her side-hustles.

Dividend Growth Investor isn’t aiming to tick off index investors with his post – but he will – with myths about indexing.

Indexer Michael James on Money has some thoughts about Tangerine fees.  With any new bank fees that means I’m bound to get a dividend raise by Bank of Nova Scotia again.

Steadyhand Funds advised you to “choose easy” when it comes to investing.

Cait Flanders wonders if you’re selecting the best financial products for you.  We certainly try in this house!

Big Cajun Man shared some tax tips.

Susan Brunner reviewed super-REIT RioCan.

My friends at Canadian Mortgage Trends reported 8 in 10 millennials intend to buy a home in five years.  That number seems staggering to me given where house prices are but maybe they have a helluva lot more money (or their parents do) than I ever did.

March is fraud prevention month and you can read up here how to protect yourself thanks to the Competition Bureau of Canada.

Robb Engen believes his four-minute portfolio is very tough to beat; investing in VXC and VCN.  His portfolio is very simple and likely very effective.

Mark Seed is the founder, editor and owner of My Own Advisor - one of Canada's leading personal finance and investing blogs. As my own financial advisor, I've grown our portfolio from $100,000 to well over $500,000. Our next big goal is to own a $1 million investment portfolio for an early retirement. Come follow my saving and investing journey by subscribing to my site.

15 Responses to "Weekend Reading – $5 phones, bull markets, tax tips, products and more #money stuff"

  1. Some good reads, Mark.
    Like the Myths and it reminds me that no one is ever 100% correct or that two people can both be correct, by their own standards.

    As for Tangerine, I’m surprised it took so long, but if one owns BNS I’m sure any fees would be offset by their dividend increases.

    Reply
  2. Thank you very much for the mention Mark. My goal was just to try and dispel some beliefs that I believe to be incorrect. I would think that some of the readings on My Own Advisor, as well as interactions here were a part of my inspiration to post it. And your reader SST has been helpful in referring me to Mr Roche’s work.

    Btw your dividend income is doing pretty well.. And you didn’t even have to lift a finger to get those last few raises 😉

    Reply
    1. Always good to mention good and/or controversial articles. SST is rather bright and I like his points. Mr. Roche’s site is excellent.

      Yes, the dividend income is coming along. I am optimistic we can hit $15,000 later this year, close to half of that money is tax-free income.

      All the best.

      Reply
  3. re: Bull markets affecting your intelligence — “the brain activity of a person who is making money on their investments is indistinguishable from a person who is high on cocaine or morphine.”
    More than anything, this speaks volumes about our relationship with money: when we lose it, it’s highly painful/distressful; when we gain it, it’s highly pleasurable/addictive. I would guess the percentage of society susceptible to money “addiction” is similar to that who are prone to other types of addiction. They are all substances, after all. The financial sector might as well be a counterpart to any number of addiction-based cartels — tobacco, coffee, alcohol, gambling, drugs (both legal and illegal), etc. A good reason to develop self-knowledge in tandem with financial knowledge (e.g. this is money, this is my brain on money; markets go up slowly, markets go down swiftly…just like a roller coaster…).

    re: Bank Fees — would be interesting to create a long-term fees:inflation chart…y’know, just to see the true price of gouging.
    “…if one owns BNS I’m sure any fees would be offset by their dividend increases.” — cannew
    A helpful insight into the nature of dividends. User fees are increased to increase earnings/profits which, in turn, increase stock holder dividends. Is this the most intelligent corporate action? I read an interesting take on monopolies and how, since they don’t have to focus exclusively on profit unlike competitive companies, they can focus on innovation, making their product better. Unfortunately, there is exactly zero innovation coming from the monopolistic Canadian banks, with an exclusive focus on archaic generation of greater profit (e.g. increasing prices seems to be their ONLY play. That, and illegal activity). An ill of operating as a public company, I guess.

    re: Index Fund Myths — a good take away for this would be a statement from Michael James in his most recent article, “…I don’t have to get the best answer, just a good one.”
    Personal finance, being part ‘personal’ and part ‘finance’, is inherently dynamic; meaning we will never get it perfect. The best answer we can hope for, as MJ states, is a good one, which is 100% better than a bad one. Or we can take a Munger POV and first eliminate all the courses of action leading to negative outcomes, leaving only an array of positive outcomes. The long-term investment strategies which do better than indexing are most likely few (and much more complex); there are a considerably greater number of strategies which will do worse than indexing. By indexing, you might beat 80%+ of available investment strategies. If this is not enough for you, or you actually need to beat the market to fulfill your financial goals, then you are doing something wrong in one or more other areas — saving, spending, etc.

    re: March is Fraud Prevention Month — I’m sure the painful irony of this is not lost on the execs at TD. From the GoC website: “Fraudsters are professional criminals that know what they are doing.” Doubt any criminal charges (or even criminal investigations) into the recently enlightened matters will ensue.

    Don’t forget to mourn the loss of one hour of weekend time.

    Reply
    1. As always, interesting perspectives…

      There are abuses everywhere which means you should, as you say, strive to develop yourself and be self-aware. This goes beyond money stuff of course but when it comes to money, as Mr. Money Mustache says “don’t suck at money”.

      re: BNS, absolutely but nothing new. For the most part, investors in Canada partake in this monopolistic activity via indexing, dividend paying stocks, pensions, etc. I just wish people (not Michael James at all) would stop complaining and act with their wallets if they are not happy. This comes back to your first point though – being self-aware and developing knowledge. Most people don’t give a $hit.

      I also believe we’ll never get personal finance perfect but I’m just striving to make few money mistakes and when I make them, ensure they are small ones over time.

      Have a great weekend,
      Mark

      Reply
  4. Interesting points about indexing! We see again and again that individual investors struggle to make certain decisions. I can only wonder how much harder that is with 30 stocks vs 2 index funds. Admitting that we don’t know the future goes a long way.

    There are certainly some who take the basic idea too far. Allocating capital based on the relative size of the stock and bond markets wouldn’t make sense. Companies and governments decide on their sources of capital for different reasons than investors decide on their allocation. No need for one to follow the other.

    Ultimately two people with different opinions can both be right for different reasons. I hold only index funds with no bonds and everything I’ve seen leads me to believe this serves my goals very well. It certainly has so far. Others may need to avoid that kind of strategy for their own reasons.

    Reply
    1. Great to hear from you Richard. How is the indexing going? I recall you own a number of indexed products:
      http://www.myownadvisor.ca/whats-portfolio-diy-investor-richard-garand/#.V1N56JErLIU

      Still holding the same?
      ZCN, ZRE, VTI, VEA, VXUS?

      I hold VTI but leaning on owning more VYM going-forward given within the next 5 years we might, if lucky, we might work part-time.

      “Ultimately two people with different opinions can both be right for different reasons.”

      I agree. Asset allocation and location is really different for everyone and it doesn’t make it wrong.

      Reply
      1. Still pretty much the same – I switched to XIC back when the fees were being changed because iShares has more history with index funds.

        Interestingly, VYM has almost the same 5 and 10-year total returns as VTI. The US market seems to have a lot more share buybacks in place of dividends which may limit the options. I checked on this recently and they have gone down a bit after reaching record levels last year.

        I’m not sure if that has spread to Canada at this point since it’s not hard to find willing dividend investors here! (although I do like the tax advantages of capital gains myself)

        Reply
        1. Yes, VYM and VTI have been virtually identical in the last 10 years. MER for VYM is very low. As I intend to live off yield in my RRSP, about $10,000 per year initially, it will be important to keep some capital intact so VYM (or HDV) is a good choice for me – but VYM is more diversified.

          Reply

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