2010-2019: Financial reflections of the last decade
Geez, another decade gone. Time flies.
Personally, professionally and financially, it’s been a great decade. I feel so grateful for what I have.
While I’ve put a fair amount of work into my career, my relationships at home and beyond, and various hobbies and pursuits over the years, I’m humbled when I reflect upon how much has actually happened over the last decade.
Here are my reflections, mostly financial ones, from 2010-2019.
2009 ish – 2010
I can’t really recall the definitive date that I wanted to launch My Own Advisor but my first post was 10-years ago this month (December 2009). That utterly, most basic post (published as I learned about website management) highlighted my recent plunge into investing via owning more Canadian dividend paying stocks – money we had after we sold our rental condo in the city.
While I was always passionate about personal finance and investing, curious about wealth building, I never really thought I should run my own blog until I realized it would be an excellent way to chronicle my thoughts, my failures, my success stories and mostly importantly, maintain my accountability as an investor.
Little did I know then what the blog would be now, and how much of an enabler it would be to our financial success…
Much like household spring cleaning, I focused on cleaning up my portfolio in the spring of 2010. I ditched my pricey mutual funds (along with duds in my wife’s portfolio) as I became far more knowledgeable about the power of dividend investing and low-cost Exchange Traded Fund (ETF) investing.
I bought more shares in companies like Bank of Nova Scotia (BNS) and Bell Canada (BCE), companies I have held and bought more shares of ever since.
I also remember calculating our net worth later that year, after we moved into our former home just outside of Ottawa. Although I didn’t post it on this site, I recall in my late-30s we were already millionaires on paper with our combined assets. Our new home was worth north of $500k even though we had a bunch of debt. We had a modest amount of Registered Retirement Savings Plan (RRSP) assets. I had/still have a growing pension at work, so does my wife. TFSA (Tax Free Savings Accounts) were just taking off, and we maximized contributions those accounts as soon as we possibly could.
I decided to use my/our TFSAs for a dividend investing account. I’m glad I did, more on that in a bit.
As 2011 rolled out, I continued to read up about dividend investing and what that approach could provide in terms of wealth building – even though I was already on that investing path.
The more I wrote, the more confident I became in my investing skills. So much so, I quit the mutual fund industry for good and had fully transitioned my portfolio (along with my wife’s) completely away from mutual funds into a basket of dividend paying stocks and low-cost ETFs.
It felt like I was really on to something special…
By 2012, I made my monthly dividend income updates a habit on the site. I reported on how my Canadian dividend portfolio might continue to rise over time if I stuck to what seemed to be a very boring investment plan:
- Buy and hold these dividend paying companies and REITs.
- Reinvest dividends paid.
- Do nothing. Wait.
- Reinvest dividends (again) when they are paid next month or next quarter.
- Wait some more. Watch more income roll in. Reinvest dividends again.
- Rinse and repeat until wealthy.
Could investing be this simple I wondered?
Beyond investing in Canadian dividend paying stocks in my non-registered account and TFSAs, I also strived to max out my RRSP, and sought to buy more U.S. stocks and ETFs for our RRSP accounts to diversify away from the Canadian dividend payers I had become so fond of. I bought Procter & Gamble (PG:US) that year and have held that company ever since. Of note: the dividends generated by PG alone now churn out more than $500 USD per year in tax-deferred money.
While articles will continue to surface on the RRSP vs. TFSA investing debate, I learned almost a decade ago now that ultimately depending upon what you do with the RRSP-generated refund, that’s what settles the debate for good.
“Based on my personal investment plan, I feel the TFSA ultimately trumps the RRSP as a retirement vehicle even though I contribute to both every year. All the money in the TFSA is mine to keep, grow and manage with no tax consequences. The RRSP refund is great but it’s actually temporary; you need to give it back at some point. This makes reinvesting the RRSP refund year after year absolutely critical in my opinion to optimize wealth building – to take major advantage of an essentially long-term but not permanent government loan.”
Reading more books, following other bloggers more, gaining more insight into what makes great investors tick were critical building blocks on my path to financial growth. There is simply some investing advice that never goes out of style!
By early 2014, we had made annual financial goal setting at priority. Those goals focused on a combination of debt repayments (mortgage), continuing to max out contributions to our TFSAs, and striving to contribute more to RRSPs over time. While my RRSP was not yet maxed out yet of contribution room, I was getting very close. Our balancing act of debt payments and investing was working well. It also allowed us to keep some money left over for some international trips every now and then.
Throughout the 2010s, my wife and I were fortunate to visit Argentina, Costa Rica (twice), Puerto Rico, Scotland, Portugal and Barbados for international travel. Beyond that, there were dozens of trips to the U.S. (Chicago, Phoenix, Fort Lauderdale, New York City, Washington D.C. to name a few) along with a few trips out west to Vancouver, Kelowna and Whistler, BC.
I’m looking forward to seeing what future travel adventures are in store…
From our catamaran cruise in February 2019 in Barbados.
We finished the calendar year of 2015 by earning almost $12,000 per year in dividend income from the various dividend paying stocks we held inside our non-registered account and TFSAs. The quick math told me assets combined in these accounts were delivering almost $1,000 per month in additional cash flow. But, we didn’t spend a penny of that money – that year or going-forward.
By early 2016, the dividend income machine I worked so hard at building in the previous 5-6 years was now well-oiled and running along smoothly. I had cemented my plan to try and “live off dividends” in future years and largely ignore any portfolio value.
A successful financial plan isn’t all about investing, far from it. It’s about general savings, risk mitigation, having ample insurance and more.
This is why in 2016, we were thrilled when we had saved up $10,000 for our emergency fund – and have largely kept it at that level ever since.
With the emergency fund in place, debt payments and sometime mortgage pre-payments going along smoothly, I started to branch out and learn more about investing from others. I talked to Ross Grant about his Beating the TSX strategy to see what I could leverage from successful investors that have “been there, done that”.
I created my Retirement page to highlight other stories and case studies from successful investors. I will continue to do so!
During 2016, I recall thinking that some form of early retirement might be in our financial future should things continue to go well. I mean, dividends were compounding away without lifting a finger. Debt was going lower. My job was secure. I had my health. I remember thinking I was very fortunate. I remain very fortunate.
After another successful year of investing, I wondered if I or anyone else actually needed any more investment advice.
A reader used to comment on my site to say he could distill 80,000+ personal finance books into two simple messages:
- Live below your means.
- Keep doing #1 as long as possible.
He is right of course.
But that didn’t stop me from reading more books, interviewing more authors, giving away more books on this site on the subject of financial independence and more.
Decades ago, I had always dreamed of owning a $1 million portfolio for an early retirement. By 2017, while we certainly hadn’t reached that mark yet with combined assets I could see we were getting closer. Our simple buy and hold and reinvest dividends and ETF distributions approach seemed to be working very well. Passive income was moving higher. So much so, we ended the calendar year 2017 earning $15,150 in dividend income from our accounts excluding our RRSP assets.
In late-2017, we signed paperwork to move back to the city and by early 2018, we owed some considerable money for down payments on our pre-construction condo. I wrote about our housing decision made, to downsize here.
Although we had saved up considerable money for this purchase in advance, we needed to borrow money to fulfill our purchase agreement. Moving back to the city was going to be a big but welcomed change for us. I was already starting to calculate the savings we could yield from it:
- The ability and flexibility to walk to work, groceries, entertainment and more within a short 20-30 minute stroll.
- We could sell one car, keep only one car; likely save $300 or more per month.
- We would have much lower monthly utility bills in a smaller place.
Even with a line of credit to pay down and a mortgage to carry, with the stock market rolling in recent years, my daydreaming about early retirement or some form of financial freedom continued. Maybe that destination could even be accelerated by living in a smaller place, with less stuff to buy and repair.
I figured with our current rate of mortgage debt repayments while continuing to invest the way we do, semi-retirement in a few years at age 50 might even be within reach.
Towards the end of 2018, I re-established my investing approach to readers and told them any dreams to “live off dividends” to a degree remained alive and well.
I ended 2018 by sharing how investors might be able to master their money in the upcoming year – tips I would follow myself. I try and eat my own cooking as much as possible.
When I did the math, we ended up with $17,221 in dividend income from our non-registered account and two TFSAs at the end of 2018 – a number that was undoubtedly going to climb higher in 2019 if I continued to follow the same approach.
Coupled with our RRSP assets with more U.S. stocks and more U.S. ETF units like VYM in particular, the goal of owning a $1 million portfolio across all accounts we own was getting even closer. It remained very motivating to see that number climb thanks to recent investing returns. Even still, I figured realizing that goal would be a number of years away. Heck, I only predicted the stock market would climb a few percent in 2019. I had no idea what returns were actually in store…
Thanks to some great reader questions, I completed some case studies with some fee-only-planners to help others determine what their “enough number” might be. In one particular case, it was interesting to read about how this couple with $1.2 million saved in their 50s, but no pensions mind you, could easily spend $40,000-$50,000 per year from their portfolio without fail to age 100.
Assuming our basic spending needs would not exceed that (for condo property taxes, condo fees, utilities, groceries and more) this meant realizing our $1 million goal with some part-time work (and future workplace pensions to draw from) would likely be “enough” for us.
Retirement is such a fickle word. I reflected on that word immensely this summer, including what some form of retirement actually means to me. I concluded I never really want to retire per se. Rather, as long as my health (body and mind) are always willing, I would simply like to work on my own terms. That’s what I’ve really been striving for in recent years – FIWOOT if you will – Financial Independence Work On Own Terms.
With that defined, I assured myself that our path to financial independence had been fully clarified. We just had to keep doing what we are doing.
To those that wish to pursue any form of financial independence, I shared the six phases you need to work through yourself.
As 2019 comes to a close
As 2019 comes to a close in another couple of weeks, while we’re not yet at our dream-like $1 million portfolio goal nor debt-free those milestones are right in front of us.
Should the stock market continue to go up in 2020, say 10%, we’ll reach our investing goal. Something that seemed so distant a decade or more ago will occur. That reader who distilled 80,000+ financial books into a one-liner was right – by continuing to live within my means and paying myself first, everything else will take care of itself with time.
Regarding the debt, it’s in the low 6-figures now. In another year, it should be 5-figures. Slaying the debt dragon is another goal that is not that far away.
A decade seemed to pass in the blink of an eye but upon reflection I know I thoroughly enjoyed it. I can only wish for the next decade to be just as fruitful. It’s incredible to look back and see how far we’ve come.
Thanks to our health first and foremost, we’ve taken advantage of good paying jobs, maturing our professional careers; improving our financial acumen with time. Some deep investing knowledge has been an enabler to financial success. Financial security should be around the corner.
My site was established ten years ago to hold myself to account for various personal finance decisions – decisions I continue to struggle with but also thrive from. With this decade coming to a close, with giving back top of mind during any holiday season, maybe you’ve learned something about personal finance or yourself for that matter by reading my site.
It is my hope for the coming decade that more health and happiness will occur on our financial independence path. And I definitely hope the same for you too 🙂