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 has recently concluded 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!

Weekend Reading
Earth to Investors

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:

Weekend Reading - Climate crisis edition
Inflation

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:

XIU ETF Returns August 11, 2021

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

XUS ETF Returns August 11, 2021

(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.

My name is Mark Seed and I'm the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I've surpassed my goal and I'm now investing beyond the 7-figure portfolio to start semi-retirement with. Find out how, what I did, and what you can learn to tailor your own financial independence path. Subscribe and join the newsletter! Follow me on Twitter @myownadvisor.

20 Responses to "Weekend Reading – Climate crisis edition"

  1. Bit late to reply here Mark, but for a small hybrid SUV your shortlist should basically be the Ford Escape and Toyota Rav4. They have similar setups (e.g., eCVT) and decent fuel economy for their size. They also come in plug-in versions (which I see you’re looking into). For some reason many other automakers put a conventional transmission on a hybrid which I don’t really get, but if you can get over that it opens the options up (or you can just limit yourself to the two).

    But depending on what you want/need from an SUV (e.g. do you need to be able to tow?), I’d suggest looking at some non-SUVs, too. The Prius comes surprisingly close to the Escape in interior room and usable trunk space, and the Hyundai Ioniq is just a bit behind that, and you’ll get even better fuel economy. No issues with the Prius in Toronto winters with decent snow tires if that’s a concern.

    Reply
    1. Thanks Potato! I am strongly considering a hybrid RAV4. I may want to tow some cargo now and then so potentially the RAV4 will do with modest towing capacity. Was looking at the Limited AWD Hybrid model actually 🙂 I’ll keep ya posted!

      Reply
  2. I love the tittle of your post Mark, honestly the future doesn’t look that great and this is why we all have to do something about it no matter how big or small of a foot print we have, last june when it hit 46C here in Vancouver it felt so awful and a lot of people lost their lifes.
    Liked all the links that you have and I listened to Mike the dividend guy in his podcast and his got some great picks,but I like to know what you think Mark of the best one Canadian stock from 5 sectors to hold in a black box and hold for the next 25years 🙂

    Reply
    1. Yes, our planet is in a dire situation now for sure. Going to get worse sadly….

      I will try and do my part.

      As for the black box stock? I like BIPC in Canada and BLK (BlackRock) in the U.S.
      I own both in fact 🙂 I have a few more favourites like CNR, FTS, TD and CAR.UN. Own all those as well.

      Reply
  3. I bought the Tesla Model 3. Best vehicle I have ever owned and very fun to drive. For my wife to go to work, used to cost about $400/month in fuel unfortunately but after her car got totaled in October last year by a guy who ran a red light, it was the only vehicle she felt safe to drive after 2 month of her avoiding driving altogether.

    It costs about $8 on average to charge and takes about 3 hours as I had a charger installed at my house and we use about $60 a month in charging. We get about 325km of range in summer months but winter is far less, when really cold it gets us about 200km to 225km of range on a charge. Still pretty amazing for the cost.

    We also started being a lot smarter in when we use our electricity at the house, laundry, car charging, dishwasher, etc etc so in doing that we actually don’t even see an increase in our electric bill since buying the Tesla, just a small bit higher than it used to be.

    Love your blog, read it every time you post, also regular reader of Bob’s blog. Nice work gentlemen!

    Just curious, have you ever written about alternative ways to melt down RRSP before retirement? My RRSP’s are getting very large? ( have to do large contributions to mitigate taxes yearly) I was thinking of increasing my HELOC to tap into my home equity for a large sum to invest in my taxable account in dividend stocks and pay the interest payments from my RRSP. Then just DRIP dividends. Any thoughts or resources on this you can suggest?

    Keep well, thanks for all you guys share!

    Charles

    Reply
    1. Great stuff Charles. Those Model 3s look great. If we could get a charger in our condo, I would definitely consider one.

      Sorry to hear about your wife’s accident, scary stuff and glad things are OK.

      Yes, around our place, trying to do the laundry, dishwasher, etc. at night during off peak hours for sure. Limit plastics, etc.

      Thanks for the kind words about the blog. Yes, I enjoy Bob’s site as well.

      A large RRSP is a great problem to have. 🙂 I have a few strategies I hope to pursue myself – the biggest one is withdrawing from RRSP before I have to (age 72). I wrote about that a bit here:
      https://www.myownadvisor.ca/overlooked-retirement-income-and-planning-considerations/

      A reader sent me an email a while back, wondering something similar. They were also thinking of borrowing against HELOC to use for taxable. I said as long as they are comfortable with debt, as long as they could pay off debt readily, not a major issue in my book but leverage is not advised unless you can sleep at night. I have a taxable account for investing but I don’t borrow money for it at this point. Just make the odd purchases every few months and max out TFSAs. That’s the income updates I report:
      https://www.myownadvisor.ca/july-2021-dividend-income-update/

      How much might you borrow?
      Mark

      Reply
  4. RAV4 Hybrid. Great vehicle – 3 years, no problems, great performance, better quality than Ford, great warranty.
    Thanks for your great advice.

    Reply
  5. Good reads this weekend! I enjoyed a couple in particular. Dividend Earner’s investment rules were definitely worth a bookmark. I also enjoyed listening to Dividend Guys List of 5 stocks. Both were first time visits for me.

    August is my low month of the quarter for dividends, but last month I raked in nearly $4,400. Too bad that’s not every month!

    Reply
  6. Thanks, as always, for the shout-out. I feel your frustration and worry too about the plight of our planet. We also try to do as much as we can, in similar ways to you and your wife.

    However, simply being alive as a modern-day human means stealing from the Earth’s resources, no matter how hard we try. It may sound depressing, but, even as the optimist I am, it’s hard to see how we’re going to get out of this.

    That said, I remain hopeful and will continue to fight and do what I can. Let’s hope there’s enough alarm and concern now that our governments will finally take the bold steps needed to change things.

    Reply
    1. Yes, sad times a bit really – it’s going to be much worse too. I do try and stay optimistic but our planet is dying right in front of us. We’ll continue to do our part and improve, including getting that hybrid in a few years.

      Not sure we can count on our government – I really don’t like this election call and it’s very selfish/political.

      Reply
      1. Personally would go all electric (EV) just one system to take care of. The old axiom of KISS comes to mind.
        Although technology has changed I read an article quite some time ago that compared a Prius to a Hummer over the cradle to grave (mining to junk yard recycling) and the Hummer actually came out as more environmentally friendly simply because it is simpler and easily recycled.
        Losing life expectancy by retiring later??? The usual fall back of IT DEPENDS would definitely apply here. If you are happily and gainfully employed then retirement might be more of a drag on your life expectancy. At any rate, no one size fits all. Best to figure out what makes you content rather than trying to figure out how to live longer.

        Take care

        RICARDO

        Reply
        1. Wise words when it comes to being content. Trying to get better at that as I age – ensuring I’m trying to be happy as much as possible for as long as possible. Stress is bad for health all around 🙂

          Take good care yourself!

          Reply
    1. You might also consider the Ford Escape plug-in hybrid – almost as much range as the RAV4 Prime (60km vs. 68km) and a lower MSRP. Toyota quality and higher residual value may make it the better choice though. Canadian selection can be seen here: https://ev.plugndrive.ca/vehicles

      Does your condo have available charging? Most don’t, which is a real drawback for EV adoption – condo owners typically have lifestyles most suited to EVs but retro-fitting charging stations is extremely expensive compared to house installations. If you can’t home charge (or work charge) then a standard hybrid (e.g. a used RAV4 hybrid) may be more cost effective.

      Reply
      1. That’s the challenge Bart – no plug-in right now. I believe the condo is plumbed for it, but need to install unit of course. I have to talk to the condo Board about a few things – this is on my list for later this year. Likely going to get a more “standard” hybrid of electric and gas like RAV4 or other. We’ll probably start saving for it / hybrid car next year. It will take a few years to save up.

        Reply

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