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:

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 Door. What 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.

Stay well!

Mark