Weekend Reading – Advice from legendary investors
Welcome to a new Weekend Reading edition, including some good, sage advice from some legendary investors.
I’ll share that information soon.
First up, a few reminders:
Some serious caution to avoid any firm retirement rules of thumb including a whopping 8% withdrawal rate.
I just posted an update on our Financial Independence path including some details I very rarely share on this site!
Weekend Reading – Advice from legendary investors
Image source: Pexels, Jordan Benton.
Chris White’s article at 5i caught my eye this week, which inspired this weekend theme: advice from legendary investors.
Over the investing years, I’ve read dozens of personal finance and psychology books on money and while I can distill those gazillion pages down into some of my own bullet-items advice below, I really liked what Chris and Peter put together, this particular gem included:
“Good investing is not necessarily about making good decisions, it’s about consistently not screwing up.” – Morgan Housel, The Psychology of Money.
Here are some of my own thoughts and advice on money:
- You should spend less than you make. This might require a budget.
- You should establish and maintain an emergency fund. Ideally, at least a few months’ worth in cold-hard cash. (We have this and maintain this.)
- You should make savings for investment purposes automatic.
- You should invest a good portion of your savings for long-term growth; as in equities.
- Once invested, you should keep your investing fees as low as possible for as long as possible. Avoid trading.
- You should diversify your investments across companies, countries and world economies.
- You should obtain adequate life and disability insurance for the “what ifs” in life to protect against a catastrophic financial loss.
- You should continue to educate yourself; continuous improvement will keep your mind growing and active.
- Money doesn’t mean much if you don’t have your health. You should do what you can to stay healthy. Health is always the ultimate form of wealth.
Of course, all these “shoulds” are easier said than done. I’m not perfect on them all either…
Staying with my partner on this site, 5i, read more about 5i free trials and free research here, they blogged about some pros and cons of the new FHSA account that might be relevant to someone in your family.
A key takeaway:
“We can see that the FHSA combines the best elements of both the RRSP and TFSA, and has a higher annual contribution limit than the TFSA. Although, an FHSA does have an upper limit on how much can be deposited ($40,000) and the maximum carryforward amount is not all unused contribution room from prior years like the RRSP and TFSA.”
Image source: 5i:
A shoutout to Dale Roberts on calling out bearish predictions. Bulls make money.
I’ve always liked this simple advice on stocks from Ben Graham, Warren Buffett’s mentor.
“The individual investor should act consistently as an investor and not as a speculator.” — Ben Graham.
Reference: The Intelligent Investor, via Revised Version, Commentary by Jason Zweig.
Thanks to Tawcan for mentioning my post in his latest round-up of personal finance reads.
In The Globe and Mail, John Heinzl hinted that Canadian banks might increase their dividends…again.
“Desjardins Securities predicts the Big Six banks will raise their dividends by about 3 per cent, on average, when they report fourth-quarter results in late November and early December. Specifically, it expects that Toronto-Dominion Bank (TD) will hike its dividend by 5 per cent, with Bank of Montreal (BMO), Canadian Imperial Bank of Commerce (CM), National Bank (NA) and Royal Bank (RY) each raising their payouts by about 3 per cent. The only big bank not expected to raise its dividend is Bank of Nova Scotia, which typically reviews its dividend when it posts second-quarter results in May.”
I can’t wait…
Congrats to my friend Chrissy on two years of financial independence with her husband.
Dividend Growth Investor demonstrated Microsoft’s lost investing decade.
“Even a business that does well over time would have long periods of time where the stock price goes nowhere. Being a long-term investor is not easy, because to earn the great returns of investing, you need to be sitting through the long periods of poor performance, in order to experience the joys of good performance. There is no way around that.”
Save, Invest, Prosper!
As always, check my Deals page – partnerships and discounts to help you make the most out of your money – some of them you can’t find anywhere else!
Check out my partnerships with:
- Dividend Stocks Rock (including my deep lifetime discount from Mike!)
- 5i Research
- and more!
As always, you can also consider reaching out here for some low-cost financial projections services – anytime.
I launched this service with my DIY investor good friend – a service founded by DIY investors for DIY investors without the conflict of any advice, without costly fees (like some folks charge), while offering money-back guarantees because we’d expect that as DIY folks ourselves…
Enjoy your weekend. 🙂