Weekend Reading – Climate crisis edition

Weekend Reading – Climate crisis edition

Hey Friends,

Welcome to my latest Weekend Reading edition – the climate crisis edition.

You can read my last edition about taxable investing and the superficial loss rule here.

Earlier this week:

I shared an update on our financial goals for 2021, and

I took a deep dive to review the BMO InvestorLine adviceDirect Preview tool – a free solution for Do-It-Yourself (DIY) investors, even if you’re not a BMO client!

Have a great weekend and let me know your thoughts about any articles below. I enjoy reading the comments section! 

Stay well, and help our planet where and when you can. 

Mark

Weekend Reading

Hard to know what to say anymore. I’ve never liked the term “climate change” – the climate is always changing. “Global warming” doesn’t to create any alarm bells either. “Climate crisis” is pretty good since the word crisis implies something will lead to a dangerous situation – for all of us.

So, let’s go with that. Here we are.

A new major UN report I read, reminded us, that crisis is here.

Essentially, a hotter future is all but guaranteed now and more going-forward. From the various news reports I’ve read summarizing this report: “humans have already heated the planet about 1.1 degrees Celsius — 2 degrees Fahrenheit — since the 19th century. Even if nations start sharply cutting their emissions today, the report found, total warming is expected to rise to around 1.5 degrees Celsius.”

That doesn’t sound like much so to be more blunt: the planet is overheating when compared to the past. There is nothing we can do to stop it. We can slow the overheating down, but that’s about it and even then, we’re doing a terrible job collectively.  

You might be saying: Mark, what are you doing about it? Are you doing your part?

Yes, trying but not enough.

We’ll continue to walk to get groceries as much as we can, leaving the car at home. That’s positive. 

We’ve downsized our home in recent years – our footprint is now ½ of what it used to be including our utility bills. That helps a bit too. We try and avoid buying new plastics – although we need to be better with food wrap and other kitchen supplies. 

We shop local (often) but need to ramp that up.

Our next vehicle will be a hybrid to reduce our footprint even further. Any suggestions for a small hybrid SUV?

We have more progress to make; we’re far from perfect but we’re trying.

Where does our planet go from here?

Without collective changes, it just becomes hotter with more extreme weather for future generations. There is really nothing that can really be done except to slow down the crisis. Some damage is done and more is on the way.

It is my hope we can all do our part…

More positive Weekend Reading!

OK, moving forward, some more positive content (?!) – Of Dollars and Data wrote about his investing nightmare and how he might combat it via diversification.

“Though bad markets (and bad decades) will always be out of your control, the one way you can counteract these investing nightmares is to limit your exposure to each of these markets. As bad as Spain was in 1973-1983 or Greece was from 2008-2018, any rational investor should have been diversified across multiple equity markets.”

Curious about frugality? Eat, Sleep, Breathe FI has you covered this week about frugal living. 

The investors polled in this personal finance study are totally out to lunch when it comes to future returns. Have a look!

But it’s not all doom and gloom per se. From the article: “…the most investors can expect is still somewhere in the range of 7% to 8% a year, or 5% to 6% after inflation, if the bond market’s inflation forecast of roughly 2% a year can be trusted.” I don’t know about you – I’ll happily take 6% or so in real returns on average going forward for the coming decades.

Speaking of inflation…source:

Dividend Earner shared a number of his investment rules. Thanks for including my thoughts in one of them – how to invest – when in doubt.

I liked Millionaire Teacher Andrew Hallam’s thoughts when it comes to buying stocks over real estate. He correctly replied he has no idea what the future holds! From Andrew:

“Most importantly, if anyone asks you what is better: real estate or stocks, tell them there are far too many variables to properly consider. Then point to the law that should be taught in every school.”

Million Dollar Journey wrote about Canadian value stocks. A familiar punchline there too:

“Ultimately before deciding whether or not you should invest in Canadian value stocks (or international value stocks for that matter) you need to decide whether an active portfolio strategy is right for you.”

From the Dividend Guy Blog: “If you had a black box to fill with 5 Canadian Dividend Stocks and that could not be opened for the next 25 years, which securities would you choose?” I know my list!

Speaking of dividends, Dividends and ETFs shared his July 2021 update.

So did GenY Money here – she’s doing very well with her income journey to say the least.

One of my favourite U.S. sites to follow shared 7 smart money habits. One of them – think and act long-term is essential to success I believe.

From the oldie but goodie file: DGI&R reviewed a retired government research scientist that highlighted:

“Life expectancy of retirees was reduced by a year for every year retirement was delayed after age 55.”

Amazing stuff. Peter Hodson, original founder of 5iResearch, former Chairman and Senior Portfolio Manager at Sprott Asset Management, provision of executive oversight at Canadian MoneySaver – recently interviewed his centenarian father-in-law, who still invests.

In case you missed other, recent weekend reading – check out Cut the Crap Investing.

Bella Wanana shared 4 simple ways to reduce some monthly expenses.

How to start investing?

We’ve got you covered when Cashflows & Portfolios wrote an epic 3,400+ word essay on this subject. 

Reader question of the week (adapted only slightly for the site)….

Hi Mark,

Your site has been incredibly inspiring to me. I’m wondering if you’re able to share when you started this dividend income journey how much you were investing each month? I know I’m not putting enough away
currently but I would like to see your ballpark figures just to get an idea of how to get on the same trajectory that you’re on.

Thanks!

Thanks for your question and readership. Very nice to know I have provided some inspiration!

To be honest, I’d have to take a deep dive backwards to figure out all the math related to various contributions. I can tell you looking at our portfolio, and various spreadsheets I’ve kept over the years – my returns are largely the following since summer 2011 (10 years):

• *Taxable (Canadian dividend paying stocks only) = over 10.3%.
• *Our TFSAs (x2) (Canadian-listed assets) = about 9%.
• *Our RRSPs (x2) (Canadian and U.S. assets) = just over 11.2%.

*Our returns would have been higher had I embraced more of the U.S. market sooner since the S&P 500 has been on a tear (overall) since The Great Recession 2008-2009. 

For reference, if you just owned large-value Canadian stocks over the last 10-years:

For reference, returns of XUS, the S&P 500 in Canadian dollars:

(A quick aside, you should know the S&P 500 has a very strong history of performing well over time. In 2008, during the Great Recession, the S&P 500 return was negative 37%. In spite of those off years, though, over the past 30 years, the S&P has delivered an average total annual return of more than 12%.)

So, lesson learned in recent years – I own more U.S. equities than before!

OK, back to your question about how much I was investing each month?

Although we had a small taxable account 10+ years ago, most of the gains/returns have been from the following:

• Maxed out TFSA contributions (x2 accounts), every year, without fail (see max TFSA contribution limits here), and
• Getting caught up on RRSP contributions. Now both RRSP accounts are fully maxed out. Those contributions have been a few thousand per year per account for the last 20 years.

To keep some privacy, these monthly dividend income updates focus on just my taxable account and our TFSAs (x2 accounts).

July 2021 Dividend Income Update

They do not include our RRSPs. I answered that reader question on my FAQs page with a bit more detail.

In summary, we’ve saved thousands per year into our TFSAs and RRSPs. It’s been a 20-year journey with only the TFSAs coming into effect since January 2009. We save money first then spend what is leftover essentially. 

I hope that helps!

Mark

Don’t forget:

I have a dedicated Deals/promotion page with promo codes to save more, invest more.

You can always read dozens of retirement (and early retirement) case studies here.

How and why I DRIP stocks and ETFs.