2024 Financial Goals – April Update

2024 Financial Goals – April Update

Hey Folks, 

To keep me honest but also focused, I post my financial goals on My Own Advisor. One thing I’ve learned over the years is I have a much better chance at realizing my/our goals if I keep tabs on them…so this post is an update to the 2024 Financial Goals we established a few months ago.

2024 Financial Goals – April Update

French philosopher Blaise Pascal once wrote:

“All of humanity’s problems stem from man’s inability to sit quietly in a room alone.”

Lots of truth in those words.

I feel that more and more to be honest, when it comes to our portfolio, our financial goals, and life in general.

Successful investing should be boring.

That’s because it requires patience and discipline. People who get out of debt, save and invest their money regularly, keeping their money management fees low, is not flashy, headline-seeking stuff – but it works.

In some ways, I feel that. I’m boring. 

I don’t invest in meme stocks. 

I don’t hold any Bitcoin. 

I don’t day trade. 

I/we have a simple “hybrid investing” approach:

  1. We invest in Canadian and U.S. individual stocks, including dividend stocks, that provide income growth. 
  2. We invest in low-cost equity ETFs – that should deliver some long-term price growth.  

That’s about it. 

My portfolio is pretty dull since I don’t sell assets very often although I do make changes when I believe the time is right.

The majority of our net worth resides in a few core assets, beyond my small workplace pension:

  • Our home: maybe 1/3.
  • Our investment portfolio, closer to 2/3 of net worth. 

Our good jobs and savings rate over the years has allowed us the opportunity to max out our TFSAs and RRSPs, and make some taxable investments here and there along the way. Sustained jobs have also allowed us to remain disciplined when money was cheap to pay down our mortgage and eliminate it.

We are now mortgage free!

Mortgage free!!! Now what???

There is something to be said for diligently following a debt-reduction and parallel investment strategy that is sustainable – i.e., one I can stick to. I hope that same applies to you as well…

If you need some assistance mapping out a plan for multiple financial goals, Morningstar has a few tips here. 

2024 Financial Goals – April Update

Since our last update, the mortgage was retired. 

Also, because we saved in 2023 for 2024 TFSA contribution room, like I mentioned above, those TFSAs are now maxed out and we’re fully invested there. Each account has about 30% invested in low-cost ETF XAW for ex-Canada growth – something I suggested we all need more of in our portfolios since investments only from Canada just won’t do…

Weekend Reading – Pros and cons of investing in just Canada

Long-time subscribers will also recall I believe you need to manage the RRSP-generated tax refund every year.

Again, we try and eat our own cooking here so just a few weeks ago, we used our tax refunds to invest inside our RRSPs again. Both of our RRSP accounts are now maxed out of contribution room.

And finally, you might recall from 2023, a goal of ours was to organize our cash wedge for any pending semi-retirement. We believed back in 2023 as we do today in 2024 that keeping some cash or cash equivalents beyond our stock and ETF equity portfolio will not only shield us from any equity market calamity when it happens but cash savings could be advantageous to deploy if/when equities tank in price – only to buy more stocks on sale!

We now have ~ 1-years’ worth of cash available across various accounts (including my corporation) to cover basic living expenses if/when/should we want that.

Based on the very short-list of our original saving/investing goals for 2024, that means we’re down to just one goal to complete (before any sort of semi-retirement announcements may occur!):

  1. Max out our RRSP contribution room by April 2024. (Done) 🙂
  2. Save for our 2025 TFSA contribution room by September 2024. (Work still to occur)

At this point, I should highlight (something I’ve hinted at before) that we’re also looking to buy a new PHEV in 2024, so we’re actually using part of our income/savings now to fund that future expense. Our hope is to own the PHEV in the coming months, pay it off in cash and/or only have a small loan on the books for a few months worse case. 

This way, we’ll have a paid off home and a paid off PHEV to consider more semi-retirement planning around in the coming year or so.

With one goal down and a few other savings goals to go, we continue to believe 2024 may open up new opportunities. I’ll keep you posted!

Mark

My name is Mark Seed - the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I'm looking to start semi-retirement soon, sooner than most. Find out how, what I did, and what you can learn to tailor your own financial independence path. Join the newsletter read by thousands each day, always FREE.

55 Responses to "2024 Financial Goals – April Update"

  1. Wow look at these comments! 🙂 Lively discussion.

    Which PHEV are you guys thinking of getting? We are planning to get a PHEV too but still have some life in our current car. Does your building have a plug in spot to charge?

    Reply
    1. Looking at KIA or Hyundai. RAV4 seems great but a long waiting list…

      We have a charger right in our parking spot, installed and ready to go. 🙂

      Keep ya posted, have a great weekend!
      Mark

      Reply
  2. Hi Mark, I don’t doubt that you have more knowledge investing, and I hear you. I must admit I am so not into ETF’s that it sounds like alphabet soup. I would need to “study” all ETF’s to be more comfortable…to old to do that. Brokers are not my thing either. There is no question that the MER makes a big difference in the ultimate gain in a portfolio, it always has. I have maxed out my TFSA using no work GIC’s. Other investments also are full of GIC’s which will have me paying more income tax but am not likely to lose a penny. Inform me, please. If I invested in ETF’s would I be able to rely on a yield of 10% or more over a 3 year period on a 100K investment with no action on my part? Will their lower management costs exceed this goal? My Canoe Asset Allocation Portfolio Class Series D has all the elements of a portfolio and results that suit me though admittedly at an MER of 1.75%. I can’t find equivalent time frames to compare it with Mawer or an equivalent ETF. I often struggle with my computer. Am I asking for too much? Your answer may also help my daughter to direct her who will be looking to retire in 5 years. Many thanks.

    Reply
    1. Hey Chrispy!

      Great stuff…at the end of the day, your plan is personal and one that meets your needs – nothing more. 🙂

      The TFSA is a good home for GICs, but I would suspect you might have rec’d better returns with common stocks over GICs there – but that’s an asset allocation decision – all good since my returns are lower than 100% pure equities since I hold some cash/cash ETFs here.

      I’m not sure GICs are yielding 10% but I could be wrong?

      If this is the fund you own, Canoe Asset Allocation Portfolio Class Series D, for sure, it has done well…no question:
      https://www.canoefinancial.com/mutual-funds/canoe-canadian-asset-allocation-class

      Don’t fix what isn’t broken related to your investing plan, risk tolerance and goals!! I won’t argue with that. LOL.

      When it comes to your daughter, like you have done (?), once your goals, tolerance for risk and other factors are involved (i.e., debt reduction plan) then you can make some good investing decisions.
      Mark

      Reply
      1. Thank you, Mark, for your reply. No, my GIC’s have had a rate of 6% max but mostly 4.5 to 5.5% not close to 10%. I use them to balance the mostly equities I hold in my other investments, In my RIF account I have, in addition to Canoe, I hold TD US Index MER 0.28% TDCND Index MER 0.06 TD Global Equity MER 1.21 1yr 25.43% Morning Star 5* and another TD balanced fund that had a 1 yr return of 9.10% and is on its way out. What pleases me is that the account gained enough that it will cover my RIF withdrawal so my overall RIF won’t change in value. I have been a DYI since I started to invest over 50 years ago but reassurance that I am OK is highly desirable so I hope you are not placating me. You raised your eyebrows about my comment and my daughter’s investments. Can you expand on that? I thank you for your patience with me.

        Reply
        1. All good, happy to chat. 🙂

          Yes, thought so about GICs – nothing wrong with boring, guaranteed 4.5 to 5.5% returns.

          That’s a good approach, overall, re: if you can obtain returns to cover your RRIF withdrawals, awesome.

          No raised eyebrows here related to your own or your daughters investments, there are many, many ways to invest and many different funds or products to invest in. I’m all for meeting your own needs on your own terms and if you’ve been a DIY investor for the last 50 years, that’s impressive. I have another 30 or so to catch up to you. 🙂

          Mark

          Reply
  3. We’ve pretty much settled on a PHEV as being our next vehicle too. Likely a Toyota RAV4 or Corolla. Currently, if we order today, delivery will be in two years! We’re in no rush as what we have should keep on running for another five years at least.

    On the non-monetary goals, we can now cross off seeing a total solar eclipse! It was a two-day drive from central Canada to be in the umbra, in southern Indiana. It was well worth the journey, and I highly recommend the experience. Added a new dimension to our understanding of how our solar system fits together.

    Reply
    1. Nice. We’ll go PHEV since we have the charger now at home…I hope to pay it off (the PHEV) in the coming 3-6 months and have no car payment now that we’re mortgage-free.

      Nice call on the solar eclipse!! We didn’t see the total here in Ottawa, but still very cool. 🙂
      Mark

      Reply
  4. Question

    It appears that you don’t invest in mutual funds. I have one stock TC Energy that is the result of my father buying Alberta Gas Trunk Line in about 1950 as all Albertans did at the time. I have no intent to buy stocks. I have a couple of 5* performers in mutual funds…nothing lower than a 3* which have hit 4 and 5 stars over time.. Over the past 3 years I have about a yearly 10% gain in my non RIF account. I am 88 so I watch my investments closely. My daughter has been under the care of a financial advisor and she has a varied portfolio which in some months she pays more in management fees than making anything. She is leaving them. I think she could follow my lead which at least has made money. She will inherit a sizeable amount soon (about 300K). I think she should put most of that into the Canoe Portfolio fun that I own. Do you know of them? Few people seem to know of them. (MER is about 1.75%) I would appreciate your comments.

    Reply
    1. Hi Chrispy, thanks for your readership and question. I don’t invest in any mutual funds, including Canoe, since I believe lower-fees, overall, are a key to my long-term success.

      They have a few funds so not sure which one in particular, including the Portfolio Class?
      https://www.canoefinancial.com/

      Mark

      Reply
      1. I had never heard of Canoe financial so I did a quick scan on their offerings. Founded is 2008, after they took over the Canoe EIT Income Fund which has been around since August 5, 1997 they current manage over 14 Billion in assets. The mutual funds they offer are actively managed and so carry higher MER and also have additional “Performance Fees” if they meet a hurdle return rate compared to a low cost market index ETF investment.

        My personal bias is that all these fund managers have a potential conflict of interest taking on more risk to hit a hurdle rate to be able to make more money on fees. They would not have to return the fee if performance lags for the next period. I prefer to taking control of my own investing and getting average returns with low fees. Not saying Canoe funds are bad or will not provide good returns if they work for you sticking with them might be the best plan.

        Reply
        1. Thanks, Tech.

          I’ve heard of Canoe, there are a number of funds and products they offer – but to your point, I stand by my comment to Chrispy in that I prefer to own (and do own) individual stocks and low-cost ETFs.

          I prefer to take financial matters into my own hands, rightly or wrongly, and avoid padding the pockets of other people/advisors/money managers.

          I will have another monthly income update next month to support that journey!
          https://www.myownadvisor.ca/february-2024-dividend-income-update/

          How are your investments coming along? 🙂
          Mark

          Reply
          1. Investments are compounding nicely and I have already reached my initial goals. My early years of stock picking individual investments were hit and miss and very adhoc with below average returns and some total losses. In 2016 I switched to having a documented investment policy statement and plan. I did this all myself using information from sites like this and finiki, The root part of my plan is to invest in low cost index funds from Vanguard using these target allocations:

            USA 50% VTI / VUN (VTI held in RRSP and TFSA, VUN in taxable)
            Canada 20% VCN (held in taxable account)
            Emerging 15% VEE (held in taxable and TFSA)
            Developed ex North America 15% VIU (held in taxable and TFSA)

            Note: This allocation makes sense for me, but wouldn’t be something recommended for others. I will have a defined benefit pension which I consider my bond/fixed income portion of my portfolio which makes my 100% equity not as aggressive/risky as it would appear.

            In hindsight there would be a few different things I would change, but the biggest one would be to start earlier with index investing doing the slow and steady over trying to pick the winners and being greedy.

            Reply
            1. Having a documented plan, is key. I use this blog as part of my IPS (investment policy statement).

              VTI – amazing, very good inside RRSP or LIRA as you know or VUN in any registered account.
              VCN – great in any account for Canadian content.

              You know the rest of the reasons why the others can work! 🙂

              I’m “not there” yet with all ETFs since I’m relying on income from some of my stocks to fund my lifestyle and also, some of my Canadian stocks are beating the TSX index.

              In hindsight, knowing the recent bull run in the U.S., I simply would have purchased more QQQ or XAW but I’ve owned XAW only a year after inception, since 2016, so not too bad. 🙂
              Mark

              Reply
    2. With a 1.75% MER, you might want to consider looking closely at the after-MER returns and the value of the guidance you’re receiving for such a high fee.

      If you’re not into increasing your hands-on investing, it might be best to stay with what you have now.

      Reply
  5. Mark a question , is semi retirement when your still investing a little money say TFSA , and full retirement is when you start using your accumulated assets. I’m still investing in my tfsa , I guess the first withdrawal from my retirement accounts will be a huge life change . What are your feelings on this ?

    Reply
    1. Great question…

      I think I will try and invest inside my TFSA, if I can, but the reality is I don’t think I’ll be able to max out my TFSA like I have been doing/been able to do since my income in retirement will be lower than when working by at least 20-30%.

      So, my thinking is in the early/semi-retirement years:

      1. Drawdown RRSPs/RRIFs slowly in the coming decades.
      2. Spend the dividends from taxable accounts.
      3. Work a bit to keep me busy but not very much.

      Thoughts?
      Mark

      Reply
      1. Heading to this stage of myself. I am still uncertain if I would rather quickly draw down my RRSP (using that to fill up TFSA) and withdrawing enough to even delay taking pension income. Or do I just withdraw from the RRSP whatever is needed and benefit from more tax deferred growth in the RRSP for another 20 years and make that a tax worry for after I am 71. If the RRSP grows more than 2-3x in that time am I still winning even with the higher income tax and income tested claw backs? Hard to predict the market future and changes in tax rules!

        Reply
        1. I think BORING in the Mawer motto. lol. I do like boring in my portfolio. My wife and I both have TFSA north of 100K. Mine has 7 stocks and 1 ETF and my wife’s has 2 ETFs and 2 stocks. None of the investments overlap between the 2 accounts. I am curious how other people construct their accounts. Should there be more stocks? More ETFs? Thoughts Mark?

          Reply
          1. Don, I’ve gone all ETF, save for some former employer stocks that I wish I’d sold on leaving the company. The thing is , ETFs are stocks, just hundreds to thousands of them in one bundle. I now base my portfolio’s equity allocation on the Vanguard all-in-one VEQT ETF. Except, I don’t have any emerging market ETFs; I just add that five or so percent to my developed ex-north America portion. My primary equity ETFs are VCN, VUN, and VIU. I also utilize BMO’s ZSP in the BMO investment account because there’s no trading fee, and BMO’s ZCN as part of my tax loss harvesting strategy in the non-registered account because it follows a different index to VCN; I can grab the tax loss without pulling out of the Canadian market for 30 days.

            All of mine and my wife’s ETFs overlap – we just have the entire global market (excl. developing markets) in every account, except that is for our non-registered accounts, where we only have Canadian ETFs to benefit fully from the dividend tax credit.

            We also have cash and bonds (ZAG), but I look at this fixed income portion as a five-year income buffer and the portfolio percentage is tied to that five-year income requirement. As pensions come online the need drops and so does the fixed-income allocation.

            It’s a lot of spreadsheet work to keep everything to the plan, but I now feel everything is ticking over nicely.

            So, that’s how one Canadian does it! Good luck with your plan.

            Reply
            1. Thank you very much Bob, it’s helpful. I am getting very close to retirement (scares me a little) and was thinking about only having ETF’s in our TFSA’s. They are low cost and as you said you get hundreds of stocks in each ETF. Less trading and less time spent on the portfolio. That being said I do enjoy the investment side as in reading books, articles and blogs like this. There certainly are worse ways to spend ones time. Thanks again Bob for your insights Cheers

              Reply
            2. Great stuff, Bob.

              VEQT ETF is great, as you know….or a good model to hold your own individual ETFs as you wish form that model.

              Smart to keep Canadian ETFs, e.g., XIU or Vanguard products as well, in taxable, to benefit fully from the dividend tax credit.

              When did you switch things up?
              Mark

              Reply
              1. Mark, we’ve been on a gradual path to a simplified portfolio for the last three to four years. There are still a few adjustments to make between the region allocations (Canada, US, International), and I’ll do that using dividends in our TFSAs, and withdrawals from our RIFs.

                We’re 3.5 years into retirement, and I finally feel that we have everything running smoothly.

                Reply
          2. Lloyd (63, retired at 55) · Edit

            Up until a few years ago the equity portions our accounts (RRSPs &TFSAs) were generally constructed with 20-25 individual stocks selected from top-20 lists of the more popular ETFs. Mostly to avoid MERs. I did little analysis (nothing) on these holdings. If they were in the top holdings of XIU (for example), they were good enough for me.

            Then I sat the wife down in front of my computer and showed her the spreadsheet. Within about two minutes, her eyes glazed over and I swear they started to roll back in her head bordering on passing out. The clincher was the ‘my-husband-the-idiot’ look (easily recognized after almost 40 years of marriage) whilst explaining the myriad of dividend dates, DRIPs, and resulting actions. Simplification was obviously required.

            Today, we’re down to 2 ETFs (XEI & XDIV), the DJIA E-series and three stocks (REI, BAM and BIP.UN) for the equity portions over all the accounts. BAM is in the non-reg account and I am using that for charitable in-kind donating. Will probably be depleted in five years or so.

            None of this probably seems logical but it is simpler in order to foster peace in the household. 🙂

            Reply
            1. Thank you Lloyd. I am coming around to the realization that it would be much easier to only have ETFs in our RRSP’s or RRIF’s when that time comes and the same in TFSA’s. With a few exceptions for a few stocks that I don’t think I will ever sell. They are the ones that really got me interested in investing and where this journey began for me. In the non-registered accounts I think I will stay with individual stocks as it is easier to do taxes with, at least for me. Appreciate your input Lloyd. Nice name by the way. It was my dads first name and also my middle name Cheers p.s. You are right about the wife also. If something happens and I go first my wife would really be a lot better off with only ETF’s in the accounts.

              Reply
              1. Lloyd (63, retired at 55) · Edit

                For sure having only XEI and XDIV (for equity) in my RRIF and LIF made those accounts super simple. Distributions show up close to the last day of month, minimum withdrawal (I opted for monthly) taken 10-12 days later and remaining balance swept into TDB8150. No worrying about quarterly dividends etc. But of course one has to acknowledge the associated MERs. As in many things in life, there are trade offs.

                Have a good day!

                Reply
                1. I fully see the tradeoffs, that’s just life. Happens everywhere. 🙂
                  TDB8150 is a great fund for boring 4.5%+ returns on cash before you need to take it out…re: RRIF withdrawals.

                  Is that what you are doing, Lloyd, keep a year or so of RRIF withdrawals in cash/TDB8150?
                  Mark

                  Reply
                  1. Lloyd (63, retired at 55) · Edit

                    “keep a year or so of RRIF withdrawals in cash/TDB8150?”

                    Not really. Currently the distributions from the ETFs exceed the minimum withdrawal required. Granted there is some variance to the amount based on what the fund distributes.

                    The ISA is used to sop up any excess. When the GIC ladder has a maturity, I take some of that ISA and add to the renewal for five years. As an example, the GICs (each $5K) in my LIF ladder mature (1)/renew (4) on April 17th (next week). I will take some of the ISA and add to the maturing GIC to bring it up to $9K and renew for 5 years. When I get the new minimum withdrawal figure at the beginning of the year, I will assess if the monthly distribution will cover it and adjust as necessary.

                    Both my RRIF and LIF are set up very similar.

                    Reply
              2. I hear ya, Don. I’m designing my RRSP to hold a handful of CDN and U.S. stocks, let the dividends accumulate in cash, and then the plan is to withdraw the cash from RRSPs…for living expenses. Rinse and repeat for a few years.

                I keep XAW for ex-Canada investing – turn the brain off investing kinda stuff.

                I will likely always keep my individual stocks in my non-reg. to keep taxation straightforward too…including capital gains and losses, be strategic with those.

                I recall you’re holding many of the stocks I do there:

                -Big-6 banks
                -3 big-lifecos
                -a few utilities: FTS, EMA, CPX
                -a couple of pipelines

                I also keep some growth stocks there too.
                Mark

                Reply
                1. I do have and like XAW and have it in a few of our accounts Mark. Yes you are pretty much bang on with what I hold as far as individual stocks go. On the US$ side I really need to do some selling of individual stocks and buy some ETF’s like VOO for growth and DGRO or maybe SCHD for dividends and a little growth. I am a buy and hold guy so I always find it harder to sell. Thanks Mark

                  Reply
                  1. Good stuff. Again, if even one Canadian bank, one pipeline, one telco or one utility goes “under” it would be calamity so I don’t think that’s going to happen but you never know…hence I spread my risk around just in case. TSX could be rolling in a few years with lower rates, something to consider…buying cheap now. Time will tell.

                    I don’t mind VOO or DGRO or SCHD. All good stuff as you well know to diversify away from Canada – which is needed for growth IMO beyond Canadian returns which should be in the 6-7% range for the coming decades.

                    Mark

                    Reply
                    1. Hmmm, your comments are interesting but I it seems to me that ITFs are just a twist on Mutual funds. I was obliged to cash in the mandatory RIF amount before 71 and then it went back to 71. As I said, I am 88. Over 17 years the mandatory withdrawals brought my RIF account down by about 13 K. What are your expectations over that time frame? Am
                      I not averaging at least a 7% gain yearly in my RIF even with higher MER’s?

                    2. Thanks, Chrispy.

                      ETFs are not the same as mutual funds although there are similarities.

                      In my opinion, there are some good mutual funds. Mawer has a few in fact, as an example. But most mutual funds, including anything charging north of 1% should be avoided.

                      First of all, congrats on 88. Amazing. I hope I get there. 🙂

                      Second, at age 88, it really depends on your income needs – what you invest in.

                      That said, you can get 7-8% returns in investing with low-cost, diversified ETFs or a basket of stocks. I’m proof!!

                      Thanks for your readership and happy to answer any questions.
                      Mark

            2. Ha, Lloyd. You’re getting to what my wife wants more of: simplicity.

              I suspect in the coming decades we’ll be down to just one ETF (ex-Canada) and then about 20 Canadian stocks, a bit of trimming to do but not too much.

              Mark

              Reply
          3. My wife and I have some similar stocks in our TFSAs (e.g., TD) and then some different (e.g., she has CP, I have BN) and then some the same = 1 low-cost ETF = XAW for ex-Canada.

            I like that for diversification but certainly if you own one ETF, an all-in-one ETF like VEQT, XEQT or even XAW or VXC, no need to have much more further diversification IMO. I do like some differences between our accounts.

            You?
            Mark

            Reply
        2. Ya, decisions, decisions!

          I know when I’ve done my own projections, my most tax efficient drawdown is NRT:

          1. A mix of living off dividends + sales over time from non-reg via capital gains (N).
          2. Drawing down RRSPs (R) over many years, likely gone by mid-70s.
          3. Draw down TFSAs (T) in older/senior years.

          Hard to predict the market future and changes in tax rules…yes, very much so, but I do believe it’s in my best interests to smooth out taxation over time and avoid putting off the long-term RRSP/RRIF tax liability until it’s very messy for me.

          https://www.myownadvisor.ca/tag/rrsp-and-rrif-tax-liability/

          Thoughts?
          Mark

          Reply
          1. NRT does sound like a great way to smooth out taxation over time. Drawing down the RRSP over many years would allow one to do that. There is also something about being able to control your income and having the flexibility to take as much or as little as you want (until 71 when the minimum withdrawal rules kick in).

            In my situation the biggest variable I have control of is choosing when to retire and start drawing my defined benefit pension. I could retire and defer my pension a few years and just live off my RRSP. I am currently under 55 and there is a 5% penalty for each year under 55. Going before 55 and delaying my pension will greatly lower my tax bracket letting me withdraw funds out of my RRSP before the pension income starts flowing and also avoid early retirement penalties. The idea of draining the RRSP before CPP, and other income sources start to push up income up would make RRSP withdrawals less of a tax burden.

            I have crunched a bunch of numbers and still not 100% sure what option to pick or know even when I will retire:
            1. Retire and start drawing a reduced pension and supplement my income with RRSP over a number of years
            2. Retire defer the pension a few years and draw down RRSP quickly over those low income years before the pension.
            3. Keep working have a bigger pension and keep building a bigger stache and just pay a high tax rate on RRSP withdrawals (paying more tax comes with having more income).
            4. Different combination or timing of the above.

            As you can see above I have a few different withdrawal strategies for my RRSP, as well my thoughts about tax related to RRSP withdrawals.
            1. Work towards paying the less amount of tax as possible.
            2. Maximize flexibility and control and take advantage of growth on tax deferred investments.

            I have done a lot of number crunching, but haven’t used a fancy tool that could game out all the projections so I can’t be sure what is the most efficient of the above options. *Nobody or tool can know the future.

            My calculations show I will have enough with all the options above so does maximizing every tax decision even matter? * Having a plan is still important because one could make some expensive mistakes and leave a big tax burden to the estate which could have been avoided.

            I am focusing more on physical/mental health and family these days. The number of good healthy days are becoming more important than the money questions. This leads me back to the above options and has me leaning towards earlier retirement rather than work a few more years.

            Reply
  6. I used to have about 50% of my TFSA portfolio with XAW, but then sold my position and acquired VXC instead after doing much reading from CCP and other sites, but mainly because I have a 3 ETF strategy in my TFSA and the other 2 ETFs were all Vanguard, so I thought keeping it the same just made more sense (other than what I read from CCP, etc).

    Reply
    1. All good Moneyhelp!

      VXC is a great fund and equally good to XAW. Returns have been slightly better for XAW vs. VXC over the last 5-years but that’s splitting hairs and while CPP did a deep dive to say one might be better than the other in theory, both should be very equal in performance long-term in practice.

      Continued success with VXC!
      Mark

      Reply
        1. Correct, I keep XAW only for some boring ex-Canada returns, now easily over 5% of the overall portfolio and approaching 10% over time.
          Mark

          Reply
          1. Mark,

            So, and I’ll admit I haven’t spent much time looking at these ETFs, but I’m wondering if you (or any of the other smart investors on here) can explain some discrepancies.

            For example, if I look at VFV.TO compared with VOO, for some reason there is a big difference in return (if Yahoo is correct) – VFV is 27.46 % for 1 year whereas VOO is 97.07. But VFV holding is 99% VOO.

            Instead of XAW I looked at XUU and its return is 11.37 vs IVV of 102.2%. XUU Only holds 47% of IVV, so explains some.

            Both VOO and IVV are expensive compared with the Canadian based equivalent.

            Thoughts.

            Reply
              1. All good, yes, XUU would be 100% (total) U.S. market so investors would have benefited from riding the U.S. stock market run.
                I own a bit of QQQ in my/our portfolio. Check that one out for the last 5-years or 10-years. 🙂 Not recommendations for purchase of course!
                Mark

                Reply
              2. Double mistake…

                I don’t know where I saw the returns for VOO and IVV, but they aren’t what i stated above. They are VOO = 29.85 and 29.86.

                So the Canadian equivalent ETFs are similar.

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                1. All good…VOO and IVV are very, very similar. Hard to go wrong with either U.S. ETF for the S&P 500.

                  If you don’t want to deal with currency conversion headches, then own VFV or XUS for Canadian ETFs to invest in the S&P 500.

                  Mark

                  Reply
            1. Great questions, Jeff.

              When it comes VFV vs. VOO or any Canadian-listed vs. U.S.-listed ETF, recall currency risks and hedging play a role.
              https://etfmarket.cboe.ca/en/news/us-dollar-outperformance-are-currency-hedged-etfs-good-idea-now

              Personally, I will gravitate to more CDN-listed ETFs as I get older for simplicity, no CDN > USD $$ conversion and no concerns with filing any U.S. tax return related to U.S. estate taxes and simplicity for my wife. 🙂

              I like XAW over XUU personally for U.S. and international growth, but certainly anything 100% in the U.S. market would have done very well over the last 5 to 10-years but who knows if that will continue? It might or may not!

              Happy to discuss ETFs anytime!
              Mark

              Reply
              1. I’m in my late 60s and have a US margin account so I don’t do a lot of currency conversion. The returns on these ETFs are ~ 1.3% and so if the withholding tax is 15% on that return, we’re not talking a lot of money. 1.3% down to 1.1%. And, so I’ll have to file a US return on death as it’s over $60k USD at this point, I’m below the $23.98M usd (combined marital) to worry about US estate taxes.

                https://assets.kpmg.com/content/dam/kpmg/ca/pdf/2022/12/private-client-us-estate-tax-for-canadian-en.pdf

                Reply
                1. Good reference.

                  Ha, yes, re: estate taxes not an issue for me at all…but…the problem is as I understand it regardless of worldwide assets…

                  If the value of your “US situs assets” is greater than US$60,000 upon death, your estate must file a US estate tax return, even if no tax is payable.

                  So, there are some tax complications in owning U.S. assets as you age. All my USD assets will be converted to CDN assets before my mid-60s, another 15 years or so.

                  Mark

                  Reply
                  1. Yes if there is a US margin account when the last of either spouse dies, then the estate will have to file a US estate tax. I’ve filed US taxes in previous years because I had an interest in a private US business. And I had an accountant here in Canada that’s also registered/licenced to do US taxes which made it simpler. Agree it does complicate things, that’s why we’ve disposed of all other US assts other than stocks in the margin account.

                    I may convert some of the US stock portfolio to Canadian, but when is the question as it’s done well for me. But as they say in the long run we’re all dead, and so it’s the estate and my heirs problem😁

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                    1. Excellent, Jeff – smart: “I had an accountant here in Canada that’s also registered/licenced to do US taxes which made it simpler.”

                      I think that’s smart to dispose of U.S. assets over time, respective tax system and tax code in the U.S. is simply a mess.

                      I suspect in another 20 years, we won’t own any U.S.-stocks or U.S.-listed ETFs (since RRSPs will be gone by the start of our early 70s); assets will all be sold and/or converted to Canadian or Caanadian-listed ETFs like XAW for ex-Canada investing in fact.

                      Mark

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