Weekend Reading – $64 million pension, COVID-19 budget impacts, 5 types of investors and more #moneystuff

Weekend Reading – $64 million pension, COVID-19 budget impacts, 5 types of investors and more #moneystuff

Hey Everyone,

Welcome to my latest Weekend Reading edition where I share some of my favourite articles from the week that was across the personal finance and investing blogosphere.

Last weekend in Ottawa, it was snowing. 

This weekend, while overcast weather today, it’s much nicer out all things considered.

Here is a view from our terrace now that garden centres are open and we have some plants. Looks good, no?? (There is a cold beer behind the first chair you see – that is mine – do not dare touch it!)

Terrace time

Well folks, nobody said investing is always easy.

After I reported this recent monthly dividend income update I learned I had another dividend cut in my portfolio. H&R REIT (one of Canada’s largest fully internalized real estate investment trusts with total assets of approximately $13.4 billion as at March 31, 2020) cut their dividend by 50%.

April 2020 Dividend Income Update

That’s going to make another (small) dent in my income portfolio but thankfully that cut can be offset by recent dividend increases in my portfolio, such as Algonquin Power, Johnson & Johnson and Procter & Gamble.

Take the good with the bad but as I always say on this site – need to stick to the plan.

Year to date my Canadian stock portfolio is down almost 20% fueled by steep declines in the oil and gas sector, a struggling life insurance industry, and real estate investment trusts (REITs) that remain heavily battered. With all these sectors struggling though, I remain committed to my plan:

  • investing in a basket of Canadian dividend paying stocks, along with
  • U.S. ETFs and stocks inside predominantly my RRSP.

I pretty much DRIP every stock I can to earn more shares commission-free every month and quarter. At last count, I believe across my entire portfolio I’m reinvesting 596 shares each year. 

Will more TSX stocks cut dividends over time?

Undoubtedly.

But I’m confident many of these companies will survive and eventually thrive again. It’s just going to be a long road back…and dividend cuts are responsible for management to do to get back to where they were. 

How is your portfolio doing? Down for the year like me? How are you holding up?

All the best this long weekend friends and I hope you get some downtime to enjoy it. See you next week!

Mark

Weekend Reading

A quick reminder about this giveaway below – the winner will be announced soon!

Your TFSA Compounder – Work Your TFSA Harder So You Can Retire Sooner

Ben Carlson shared 5 types of investors in this market. Which one are you?

Fans of this site Stocktrades.ca continues to keep their list of TSX stocks that have cut their dividends during COVID-19 updated here. I own three in this list, hopefully not too many more to follow but you never know. These times are totally unprecedented.

A solid list of reads in Robb Engen’s weekend reading list is over here. Robb shared a few of his big money mistakes. We’ve all made a few for sure…

I have my own list of big money mistakes so you don’t need to make them too!

Some of my best personal finance advice – so you don’t have to make the same mistakes I did!

Hard to fathom this amount of money but it’s apparently true – the outgoing AT&T CEO is retiring with a pension worth about $64 million. I would have no idea how to spend $274,000 USD per month, for life. 

Interesting to read how folks are dealing with COVID-19, including impacts to the “FIRE” (Financial Independence, Retire Early) crowd. Millennial Revolution profiled one of those FIRE-seekers, Clover from SimplyCloverLiving, a flight attendant who is in the beginning part of her FIRE journey.

Some wisdom in her answers about her journey:

“Strangely enough, the lessons and experiences I have learned since my divorce 6 years ago also prepared me for this, because it’s usually in crisis that we deeply reflect on the inner workings of our lives and adjust accordingly. When we completely overhaul our lives and look back at this time, it MIGHT just as well be a blessing in disguise.”

For a few reasons, Cheesy Finance believes you shouldn’t bother with FIRE.

Fans of this site will know I don’t subscribe to the FIRE-journey per se but I am a huge fan of Financial Independence (FI) and my wife and I are actively striving for it. We figure once our debt is gone in ~5 years we will be largely financially independent. 

On my site recently, I provided an overview about U.S. Dividend Aristocrats and why I own a few. 

What are Dividend Aristocrats and Should You Own Them?

These real estate investors feel like ‘prisoners of their property’ given they own $763,000 on five mortgages. I would pass out if that was me from the anxiety and debt-stress…

Incredible stuff by Questrade recently. Deemed Canada’s leading online brokerage – I read they donated 1 Million Meals to its long-standing charitable partner, Food Banks Canada to help its neighbours in need in communities across the country. Great stuff.

Partnerships and deals…

Speaking of Questrade, I’ve been very fortunate that many major financial institutions (like Questrade) want to partner with yours truly thanks to my shared passion for personal finance and investing.

Here are just some of the great offers you can take advantage of on my Deals page:

Reader question of the week (adapted slightly for the site):

Hi Mark,

I recently stumbled upon your website and found it very helpful, especially for a newbie investor like e…thank you so much for your lessons learned and successes!

I’m in the process of opening a self-directed RRSP and TFSA and would like to know what you think is the best?

I look forward to hearing from you!

Thanks for your questions folks. Keep them coming as I try and answer as many as I can…

It takes time to research the “best of” for anything so I’ll point you to MoneySense who highlighted who they believe are the best online brokerages in Canada right now. 

Here is how I got started for some tips and pointers:

Self-directed investing 101

If I was just starting out, as in today, I would certainly lean on owning some low-cost ETFs including some simple all-in-one ETFs and buying them commission-free (with Questrade).

That said, BMO InvestorLine (I have a partnership with them), TD Direct Investing and RBC Direct Investing continue to float to or very near the top of any “best of” brokerages list year after year. I would definitely learn more about offerings from those companies to help you make a solid decision. 

Happy Investing!

Mark

The best all-in-one Exchange Traded Funds (ETFs)

My name is Mark Seed and I'm the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, we're inching closer to our ultimate goal - owning a 7-figure investment portfolio for semi-retirement. We're almost there! Subscribe, join the journey to learn how I'm getting there and how you can get there too! Follow my on Twitter @myownadvisor.

7 Responses to "Weekend Reading – $64 million pension, COVID-19 budget impacts, 5 types of investors and more #moneystuff"

  1. Interesting how lifestyle creep becomes more evident when you can not spent the money.
    I have gone from having budgeted $3.5K per month as my cash burn rate down to some place between $1.5K – $1.9K per month burn rate. That puts me very slightly below what I receive from the “guaranteed” pensions.
    I am retired with paid off house and cars so no debt other than what I incur spending during the month on credit card.
    Last time I filled the gas tank was March 17th and it is still at 3/4’s so that is one expense that has diminished greatly. No films, no restaurants, no trips (especially to the US of A), no bar hopping, etc, etc.
    I was going to convert one RRSP to a RIF this year but will put that off till next year. A good reason is that the RRSP value, and therefore the required minimum withdrawal (Note to financial bloggers – it is not 4%) is determined as of Jan 1st of each year. So I will not need to withdraw so much by converting next year.
    This “not spending” also makes you realize how much the service/entertainment industry is suffering. So buy local where you can even if it is a bit more. It will help keep your neighbourhood alive.

    RICARDO

    Reply
    1. You’re where I want to be Ricardo: “with paid off house and cars so no debt other than what I incur spending during the month on credit card.”

      The mortgage is our biggest anchor right now but will be dead in the coming years. Then, everything we make will go to living and padding our retirement fund. Once we reach a $1 M portfolio outside our pensions from work, I figure we can work part-time from there. I will be updating our FI journey finances this week.

      We try and buy local as much as we can. Great point 🙂
      Mark

      Reply
    2. Hi Ricardo.
      Good idea to talk with your RRSP/RRIF holder well in advance when setting up RRIF. I tried to set up monthly RRIF in middle of last year (2019) and ran into some minor issues. Converted to RRIF no problem but because they needed to know Jan 1 account amount for minimum withdraw numbers, I couldn’t set up the monthly withdraw. Had to take out lump sum, move that to Chequing and then to TFSA where I did my own monthly withdraws. Following Jan (2020), the monthly withdraws came from my account as I originally wanted. Just a little RRIF quirk I ran into.

      Reply
      1. Thanks for the advice Gruff.
        I do want the lump sum at the beginning of the year for myself so that will not be an issue.

        RICARDO

        Reply
      2. No plans to do quarterly or lump sum withdrawals? Curious.

        I got my dad set up for a lump sum withdrawal every January. It was easier for him/them to budget that way.

        Reply
  2. Hey Mark,

    Beautiful terrace view you have. Nothing like sitting outside with a nice brew.

    Reinvesting ~600 shares yearly is great. It’s wonderful how the DGI style allows things to get easier over time. You just gotta get started and let the compounding do the heavy lifting.

    Some nice reads you shared. In terms of the type of investor I am, I suppose most closely aligned with the first, but not in relation to tech stocks. I simply think it’s a great idea to be investing for the long-term, while the specifics of which type of stock are less important. The habit of regular contributions and reinvesting to get the benefits of compounding are what counts, while healthy diversification is important (i.e., don’t bundle just into tech or any other type of business).

    Interesting reading as far as the pension for Stephenson with AT&T. Hard to fathom that level of a pension. Far more than even the average higher earner’s regular salary while gainfully employed. Boggles the mind.

    Take care,
    Ryan

    Reply
    1. Thanks Ryan! Yes, at last check, almost DRIPping 600 shares per year commission-free. Need to and want to build up that income stream from future semi-retirement income.

      I can’t fathom what spending even $100K per month would be like, let alone $274,000 per month for life. Just wow.

      Stay well and thanks for your readership,
      Mark

      Reply

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