Weekend Reading – Attention Changes Everything
Hey Folks,
Welcome to a new Weekend Reading edition, this one inspired by a recent sketch and reader email – attention to details changes everything.
First up, a few recent posts:
Last weekend, I wondered if we are headed for an AI bubble to burst?
And since I’ve been travelling of late, I wrote this below on planning a travel budget:
Weekend Reading – Attention Changes Everything
Inspiration for this Weekend Reading edition theme arrived from this sketch from U.S. financial planner and Behavior Gap Guy, Carl Richards:
Image source: The Behavior Gap.
And Carl is right, of course.
Most financial progress (just like any other progress for that matter…) doesn’t start with more. More starts with less.
It starts with paying attention. Little things matter.
You find a little extra money one month. You save it. Then you automate some savings. Then things become normalized as you save and invest routinely – it becomes a habit.
That was my approach. I opened my own RRSP at age 22 and I’ve never looked back. That was starting small with my investing journey. I started with just $25 per month.
In starting small, something interesting however happens over time: good things happen. Money compounds. And if you leave it well enough alone, the money will just keep compounding. This what progress looks like. Hardly a straight-line but progress will get you to your destination all the same. 🙂
Image source: Carl Richards, The Behavior Gap.
On that note, I got an interesting email from a fan/subscriber to the site. It went something like this:
Mark, aren’t you concerned your portfolio is no longer growing if your dividend reinvestment plans (DRIPs) are turned off? Aren’t you limiting your spending ability as you age? Do share!
Happy to answer and not at all concerned.
Already in the last month or so of early retirement, we’ve been fortunate to get some dividend raises to increase our spending ability AND we’ve obtained some growth/some price gains as well. Since my wife retired in October 2025 and since I retired in April 2026, our dividend income AND portfolio value is higher now despite not working at all, despite spending money, and despite all DRIPs (except our TFSAs) being turned off for a few years now.
The markets have been kind to our portfolio overall. Here is a snapshot of what we own, not all holdings and certainly not investing advice! 🙂
Dividend reinvestment plans are great, I’m a big fan of them, it’s like taking a total return approach by always reinvesting the dividends and distributions like the stock or ETF never paid a dividend or distribution in the first place but the time has come since late-2025 in fact to spend the money we’ve saved.
It’s a big mindshift for me (the shift from saving to spending) yet one of the best ways I can think of for doing that is spending the dividends and distributions earned every month – keeping our capital intact at least for the time being. Letting dividends and distributions get paid, as cash during 2026, is a small part of our overall investing strategy but I’ve learned doing the simple, small things well over time is just smart money management.
The best approach when it comes to retirement spending (I’m learning…) is to do pretty much next to nothing.
Readers, what’s your take on my early retirement approach – living off dividends and distributions at least for this year? What is your approach to DRIPs? Keep them on, turn them off?
More Weekend Reading – Beyond Attention Changes Everything
I enjoyed Ben Carlson’s Diversification Test:
Ben wrote:
The good news is there has never been a better time to be an individual investor in terms of the investment opportunities available to you for diversification purposes.
The bad news is there has never been more temptation to change your portfolio and overdo it by diworsifying your portfolio with too many funds and strategies.
There are no right or wrong answers when it comes to diversification and asset allocation.
There is no perfect portfolio.
Citing some of my contributions to this Best ETFs in Canada edition, my investing friend Henry Mah wondered what can we agree on when it comes to investing??
Well, I think we can all agree on the fact that your investment strategy is personal and unique to you and at the end of the day whether you focus on growth, income or a balanced mix of both, you must take responsibility for your investing decisions. Or, using Henry’s words:
“I chose a specific investment strategy to follow, because I believed it offered us an opportunity that I could not get from chasing capital growth. I didn’t want to be dependent upon the stock market, and I certainly didn’t want to fret over losses which might occur when specific stock prices dropped, provided my overall portfolio income continued to grow.
It’s been over twenty years that we’ve followed this course, and nothing has happened to change my belief, not only in the simplicity of the strategy, but that it has done exactly what we expected; provide us with more income than we needed, in good and bad times.”
Tawcan interviewed a reader about his early retirement journey on his site. I enjoyed the answer to his path, which is very common for early retirees – they always spend below their means.
“Q7: Why is living below your means so important when it comes to FIRE?
A7: That was definitely the biggest factor that enabled us to be where we are today. As I said earlier, financial freedom was always a priority for us. Even as our incomes increased over the years, paying off debt and investing more was always more important than taking on new debt (i.e. bigger house, fancy vehicles etc).”
Have a great weekend!
Mark
When I took over the investments as a DIYer, I started with DRIPs on. I found it irritating when I was buying “high” and often the price point was the highest for the day. I soon turned DRIP off. As I accumulate some cash, I look at what’s having a bad day, whether individual stocks or ETFs and make my purchase. Right or wrong, that’s my approach and I feel more in control with it. Obviously this takes more time but I enjoy doing it so not an issue.
Because we are doing a corporate and RRSP meltdown, I don’t DRIP or pseudo-DRIP these accounts, I extract the funds or add to the cash wedge. I do reinvest for our TFSA and non-reg accounts. I have a plan I am following, which is our basic spend + travel + TFSA top up annually + gifting TFSA to our kids. Any excess goes into non-reg, with the goal to drain the corporate by 70 years of age and the RRSPs/RIFs by mid-80s. We aren’t spending everything, but I’ve given us permission to enjoy life and travel. It’s difficult to go from frugal cheapskate to spender. Even now, we still have our moments – it’s a work in progress. 🙂
I agree Sandra, we only dripped for a little while in the TFSA’s because amounts were small. But after a couple of years I turned them off and invested to diversify the portfolio. Our portfolios did very well. to the point were we got an article in the Globe & Mail as TFSA Trouncers.
When starting small dripping is good, but not for the long run. It allows you to make decisions about what to buy.
I will have to look up the article from the archive!
Great stuff, Div. 🙂
Share the link if you feel comfortable in doing so.
https://www.theglobeandmail.com/investing/investment-ideas/article-ted-and-his-wife-are-income-investors-so-how-did-their-tfsas-get-to-12/
Excellent. 🙂
Continued success, so well done!
Mark
Nothing wrong with doing what is comfortable as long as it helps you realize your goals.
I know retirees that keep DRIPs on, I know retirees that turn DRIPs off.
What is common amongst successful retirees is they have a plan for the dividends and distributions, all the time, they know how they want to manage that cashflow and certainly, the ones with excess cashflow max out the TFSAs all the time, every time, every year. I hope to do the same in 2027.
I’m a work in progress too when it comes to shifting from saving to spending but that’s happening.
Mark
My DRIPs are still active in my TFSA and RRIF, the non-registered dumps out enough dividend income for my simple lifestyle. I use the RRIF withdrawals to extract in-kind shares for my non-reg and pay off my annual income taxes (I keep a cash wedge in the RRIF for this portion); this gets me a tiny boost in my non-reg dividend income each year combined with the corporate increases should keep me safely funded. It is definitely a tough transition switching from saving to spending, I’m not there yet, I still operate in scarcity mode keeping my lifestyle tamped down to operate on dividend income so I definitely need to work on that.
Great stuff, Zack.
Do you find it’s a challenge to keep track of your adjusted cost base if you continue to keep DRIPs on for the non-registered assets?
I gave up on that years ago. 🙂
I ran the non-registered DRIP up to the time I retired after which the dividend income was important. Up to that point, maintaining the ACB was fine, the TD activity page was easy to copy-paste the # of shares and cost into my spreadsheets (one per stock symbol). That spreadsheet format was the same one I used for DRIP-ing XIU since the early 2000s so in a way it was optimized to copy-paste numbers from the account; I just copy a previous DRIP row, change the date, paste the new numbers, done. Now the only ACB changes are the occasional buy or in-kind transfer from my RRIF.
Good stuff…some brokerages are better than others and TD Direct Investing is very good!!
Ya, we stopped the DRIPs for the taxable accounts many, many years ago.
No ACB issues.
Just reinvest, save, divert, etc. the cash building up as we please moving forward!
Thanks for sharing.
Mark
Our plan is mostly centered on dividends, melting down my RSP, and my wife’s db pension. We will let the TFSAs keep dripping until such time as we have an outsized expense.
We will also tap into the capital in our non registered account with a thoughtful plan that addresses the leverage that was used to build the equity.
We expect to keep most of our capital intact, living off dividends and the pension and then CPP & OAS when they kick in, but we also want to expand our travel and gifting goals so as not to wait until death to help our kids.
Thanks to Cashflows & Portfolios, I have the confidence this plan will work.
Excellent, James. It’s a pleasure to help you out and having an extra set of eyes on things (assumptions, stress-testing, and more) is essential for retirement income planning. We all have biases and blindspots to navigate and mitigate!!
100% you should!! = “We will also tap into the capital in our non registered account with a thoughtful plan that addresses the leverage that was used to build the equity.” Worse case, you gift it forward to future generations. 🙂
Talk again soon!
Mark
Not dripping but reinvest excess income monthly. Portfolio value is not that relevant if you live off income. It, along with your income will grow over time regardless if you remain focused on equities. I think your approach is quite reasonable considering the alternative being chasing total returns + selling assets.
The only 2 things you (and I) need to worry about is inflation adjusted income and covering potential income shortages aka dividend cuts. I was surprised to find very little research exists on the later. Cuts apparently range between 25% (common) to 50% (rare) with a recovery time of 2-5 years depending on the situation. Some sectors do not cut, some do. Some companies recover some don’t or will take much longer. It’s one of the drawbacks of stock picking and dividend investing. I ended up assuming a 30% structural cut as a probable worst case scenario for which I run an income surplus paired with a modest cash position. We’ll see how that holds up in the coming years.
Good stuff, Ben.
Yes…inflation is a huge wildcard but so far, this year at least, income + growth more than covers that.
At 5% returns (which is what I use for my projections) our portfolio makes more money than I did at my job!!
Correct – some sectors do not cut, some do, the key is to avoid having lots of cuts with a diversified portfolio. Otherwise, index invest for the win. We’ll see what the future holds for us!
Thanks for your thoughtful comments.
Mark
I had everything DRIPped when I was building my portfolio. When I retired, I turned the program off in all accounts except for my TFSA. It is an east, free way to compound your investments. I live off the income generated and only sell an investment if I want to travel more then originally thought or gift some of the increase in the value of my investments due to rosy markets, like this year so far and last year.
I also started small early in my investing experience, making some mistakes along the way. But continued learning and positive results are a great motivator. I encourage those just starting out to keep the faith. Results will come your way.
I like it, Jan….we are the same – only keep DRIPs running inside the TFSAs in retirement for all the reasons you already know and mentioned .
Keep the faith indeed. I hope your portfolio is doing well so far this year…
Mark
My take on DRIPS
OK starting out when you do not really have the funds available to do quarterly purchases. That is what I did.
Once your accounts are generating sufficient divs it just might be time to look in to diversification rather than DRIPs.
That is what I did. Once the value of the dividends (monthly/quarterly) attained a sufficient level the DRIPs got turned off and portfolio diversification took over.
Now I have 25 stocks paying monthly or quarterly.
I am in draw down phase and so far the divs are keeping up with mandatory RIF/LIF withdrawals and are even sufficient to re-invest. Obviously this helps keep up with the ever increasing mandatory (not 4%) withdrawals as mandated increasing yearly on a percentage basis. What is becoming a “problem” is the increasing portfolio value (read increasing equity value) which is obviously increasing the cash value needed to be withdrawn yearly. A “nice” problem to have so I try not to complain too much. LOL
RICARDO
Nicely done. We’ll need all dividends and distributions via cash for spending, although I could keep all DRIPs on and just sell off assets too….pros and cons….but having the cash ready to spend is good for us.
Gosh, yes, Ricardo, you have great problems. LOL.
Mark