Weekend Reading – Comparing the COVID-19 market crash, what next, income loss advice, free financial apps and more #moneystuff

Weekend Reading – Comparing the COVID-19 market crash, what next, income loss advice, free financial apps and more #moneystuff

And the wild market ride continues…I hope you are doing OK…

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.

What a difference a month makes. One month ago today, this is what I woke up to from our Belize villa:

Belize morning from villa deck 2020-02-21

This week, the Bank of Canada made another emergency rate cut in support of financial relief related to the COVID-19 crisis. This is good news for those Canadians, who get variable rate loans including mortgages from their bank. This extra 50 basis point reduction should now put my mortgage close to 1.5%. That is insane and I’ll take it.

The COVID-19 crisis has triggered some reflections on my part, to help me better understand how I could continually improve upon my financial affairs. Here are some time-tested truths to become your own Millionaire Next DoorWhat is very important to me now and going-forward:

  1. Live below my means. I will continue to save and invest the difference with rigour.
  2. In good times, learn to set aside a growing portion of our money for cash savings. That includes owning more cash on hand to survive any prolonged stock market crisis. We have plans to do just that even before this crisis occurred. We’ve already surpassed what we keep here. 
  3. Keep things in perspective. Improve upon my existing belief that achieving financial independence is far more important than displaying any high social status. The COVID-19 events unfolding in front of me signal loud-and-clear that financial independence, including continual work on my own terms, is a much better way to live rather than succumbing to or broadcasting any “retire early” rhetoric.

In fact, while I don’t think the FIRE (Financial Independence, Retire Early) movement is dead I think this market crisis will shock some investors who tout this way of living into much better behaviour. Well put Tanja Hester. 

Thoughts on the above? How has the COVID-19 pandemic changed the way you think and will act and behave about money?

Earlier this week, I wrote these articles:

A reminder to not beat yourself up – there is no perfect personal finance plan.

Given the market calamity, here is a take on the power of postponing any retirement for many people.

I don’t have very much planned this weekend so I’ll consider some new blogpost topics to write about and I will try and get to some reader questions. I also have another retirement case study to post with my friend Owen Winkelmolen, an advice-only financial planner (FPSC Level 1) and founder of PlanEasy.ca.

This is the last article we worked on:

They have $1.2 million and no pensions, can they retire?

Shall I publish that new post sooner than later about a bulletproof retirement plan? Thoughts?

Whatever your plans are this weekend, stay well and stay safe. Thanks for your continued readership. 

Mark

Weekend Reading

Has the rapid spread of COVID-19 got you thinking about life insurance of other forms of insurance? Brian So has a take on that.

The insightful Rob Carrick highlighted three things you can do, right now, to defend your family finances during this pandemic.

Smart and sensible personal finance advice and reflections from personal finance pro Jon Chevreau in this short Down to Business podcast. Of note from Jon in how this market chaos compares to 2008:

“One thing that came out of the interview was that there may be big generational differences in how this market crash is viewed.”

Millennial money expert Jessica Moorhouse has some good money advice if you have recently experienced an income loss on her YouTube channel.

Thanks to the team at CampFIREFinance for highlighting my recent post: there is no perfect personal finance plan. Stay well state-side please!

Good stuff from local Ottawa guy Kanwal Sarai on the popular Maple Money Show with host and personal finance good-guy Tom Drake. Kanwal and Tom discussed how to deal with market volatility. I think Kanwal’s advice to be cautious about any money you absolutely need to spend in the next five (5) years is a good one.

MoneyMaaster highlighted a few f-bombs in what he’d like to see as positive outcomes from this COVID-19 crisis.

Always enjoy reading quality stuff from Michael Batnick, as in, what do you do now??? A reminder:

“The point is, with investing, less is more because every decision you make makes the next one harder.”

Dale Roberts continues to pump out great content. Should you de-risk your portfolio in this market crisis? 

I’ve been a fan of the premise behind The Money-Ready App for Canadians since Day 1. Although I have yet to review it in detail (on my to-do list with the owner of this app as they well know), I simply like the fact you’re able to test out your financial plan, as part of a free trial. Well done!!

The Dividend Guy highlighted a couple of stocks that should rebound quite nicely

GenY Money offered some help to prepare for any recession. 

Henry Mah wrote about dumping your financial advisor. 

Reader question #1 of the week (adapted for the site):

Hello Mark,

Do you have any recommendations for Canadian high dividend ETFs for a TFSA? I read this article for the RRSP.

Thanks!

No problem, this could be one of my shortest email replies yet! These are some of the top dividend ETFs to own for your TFSA or RRSP.

Reader question #2 of the week (adapted for the site):

Hi Mark,

Any suggestions on this? I have $75k in my RRSP and $27k in my TFSA for self and spouse. Forgot to invest last year left in cash account. I look like a genius now, was good to forget. Should I wait for more stabilization way things are going downhill to invest?

Great question. The reality is, I have no idea. 🙂

Now, that is not to say that you shouldn’t invest!

In fact, I tend to invest when I have money. I have a fairly set schedule myself. For my TFSA, I save up money during the year and I invest that money to buy my stocks every January. In hindsight, not ideal but that’s my plan. What’s done is done. I’ll probably do the same next year in 2021.

For my/our RRSP accounts, we have monthly, automatic contributions set up. That money goes in and after it accumulates to a few thousand bucks, to keep my transaction costs low, we invest in mainly U.S. stocks or low-cost U.S. listed ETFs. 

I don’t really invest new money into my non-registered account now, since I focus on maxing out TFSAs, RRSPs every year first. Then, with any money leftover we pay down some debt and use anything else to travel and live our life. Or we used to! 

Thanks to these readers for their questions. I’ll get to more reader questions (and my backlog of them) in the coming weeks.

Physical distancing decision tree

Stay well!

Mark

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 and join the journey. Learn how I'm getting there and how you can get there too!

17 Responses to "Weekend Reading – Comparing the COVID-19 market crash, what next, income loss advice, free financial apps and more #moneystuff"

  1. “Improve upon my existing belief that achieving financial independence is far more important than displaying any high social status.”

    I really like that, Mark. It’s an all around healthy way to live. I think that’s why I enjoy reading what you write.

    Reply
  2. 1. Live below my means. I will continue to save and invest the difference with rigour.
    2. In good times, learn to set aside a growing portion of our money for cash savings.
    3. Keep things in perspective.
    Great advice Mark I’d only add
    4. Stick with quality investments.
    Thanks for the mention!

    Reply
  3. Mark, thanks for drawing attention to the FIRE article by Tanja Hester. I’ve been fascinated by this movement for years. But so many have been touting financial “snake oil” in the name of living below your means and investing your savings. I appreciated her approach to realism about FIRE. Sustainability of the lifestyle that people seem to adopt has always been suspect. I wonder if any academic studies have been done to examine this. I couldn’t find any. Have you looked? It’s important to know how many people have tried FIRE but not been able to sustain their efforts and the reasons why, to better understand the entire movement. Keep up the great work, Mark.

    Reply
    1. Tanja and her husband Mark (I’ve met them) are very down to earth folks who were quite simply, very driven to achieve FI.

      I can’t speak about others but FI/FIRE takes some serious discipline and a sustainable focus over many, many years. Some of these folks are driven by minimalism. I suspect others drawn to this “movement” are simply in it to hack some extra money and sell a dream.

      I really couldn’t care less about the “RE” part of FIRE. I’m a huge fan of FI (Financial Independence) and much rather continue to work on my own terms. I hope someday I will get my wish 🙂

      All the best Will and thanks for the kind words,
      Mark

      Reply
      1. I’m a huge fan of the FI part, too. The RE part is optional. The FI part provides the choice, the freedom, to RE. I only wish I’d got started much much earlier.

        Mark, I tried to email you directly through the site last week. Not sure if you received it.

        Be well.

        Reply
          1. Thanks, Mark. I just sent another message through the form on your about-contact page. Apologies if I missed an email address on the page that I could message directly, but I couldn’t find one.

            I hope you’re having a great day.

            Will

  4. Thanks for the mention Mark. How I wish things are back to normal again. Must seem like Belize was such a distant memory- so different from right now.

    Have a good weekend 🙂

    Reply
    1. I almost barely remember the trip but I would go back in a second. Love that place and the snorkeling on the reef – with sharks no less 🙂

      All the best GYM.
      Mark

      Reply
  5. Hi Mark, with BOC rate cut will it necessarily reduce one’s mortgage rate if it is a variable mortgage? i have my mortgage from BMO its 4 years rate at 2.94% not sure if it is fixed or variable. Any idea. I checked mortgage rates and it appears most lenders have rate over 2.7%.I appreciate any information on this. Thank you!

    Reply
    1. Hi Dipu,

      It’s not a given, but if you have a variable loan like a mortgage, and that mortgage is tied to the prime lending rate, then there is an opportunity that when rates go down as they have recently, your interest rate on your mortgage goes down with it.

      Some lenders have rates north of 2.7% or more because they might be their “posted” rates, i.e., what they advertise and not what you can negotiate.

      Have you called BMO to discuss? They would be your best source if that’s who your mortgage is with.

      Stay well!
      Mark

      Reply

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