Weekend Reading – Debt free edition

Weekend Reading – Debt free edition

Yup, the title of this post says it all, welcome to some new Weekend Reading about being debt free. 

I hope all is well with you too!

Weekend Reading – Debt free edition

Here is how I’m feeling of late:

To the hundreds of folks that have left a comment on my site or sent me a personal email in the last week, and to the thousands who have viewed my post about being mortgage-free, thanks very much. 

via GIPHY

Your personal stories, insights and reflections about your own debt free journey made me smile too. 

For everyone who isn’t yet debt or mortgage-free, what can I say but keep at it.

My/our journey was years in the making. This stuff doesn’t happen overnight, at least for us it didn’t…

Based on my own experiences, life choices (good and bad!) I always appreciate everyone has a different journey. 

“Life is like driving on the freeway. Lots of cars and different cars, all going to different places. Focus on your drive to your desired destination. My TED Talk.” – My Own Advisor.

While my site remains dedicated to my own financial journey, as My Own Advisor, I continue to run this site some 15 years later since it’s a tool to engage and interact with other DIY and like-minded investors too – wherever they are on their path – which is extremely rewarding. Via the comments, emails / reader questions and through putting my own thoughts “on paper” per se each week, I figure we all learn a bit about each other here…

On that note, I wanted to summarize some themes in my “Now what???” question in my recent post:

  • Many of you beyond the congrats (thanks again!) feel I should live it up more, by taking a trip or at least enjoying a celebratory dinner or night out on the town.
    • Well, we did enjoy that great dinner out here in Ottawa recently and we are planning a new international trip this fall to celebrate as well. 
  • Without the mortgage to pay for, paying other people first, some of you shared it’s also important to continue saving and investing for any retirement or semi-retirement journey that you follow here. 
  • A few of you also wrote me over email to highlight that it could be time to take a sabbatical from full-time work and revisit some different lifestyle choices. Life is short, and precious, including spending time with those you care about. 
    • Your point is well taken. I continue to work towards a lifestyle that I actually don’t need to retire from. I call it financial independence, work on own terms. We’re not quite there yet and while there will probably never be any “right time” to take any life-work leap of faith I can confess without the mortgage anchor that I’m getting more comfortable with any decision to come. I hope to share more for sure within the year since a few pieces of our puzzle need to fall into place. 

Beyond saving and investing, and spending money on travel in a few months, we’re also looking at replacing our existing 12-year-old vehicle and ensuring we have a new(er) vehicle that could last us another 12+ years as life-work balance evolves. We have considered a full electric vehicle (EV) for that car replacement but after having no car payment for the last 9 years I can’t quite reconcile in my head taking on even a bit of debt or EV car lease at this point. The math doesn’t add up for me…

So, we’re leaning on a hybrid vehicle / PHEV in particular for the new(er) car given:

  • 90% of our travel is within the city/surrounding area within 50 km. 
  • Any hybrid vehicle, while a capital expense, should cost less an EV would. 
  • I believe EV technology is likely to evolve, including cold-weather use in snowy Ottawa, and to that end I would not want to be “stuck” with a quickly depreciating asset as those EV technology shifts occur.

I would be curious to hear from you what your logic might be if you’re considering a new(er) vehicle on the EV > PHEV / hybrid > ICE spectrum. What are your plans in the coming years when it comes to transportation?

2024 will unfold for everyone, including some ways we don’t see coming. Whatever is in store, I look forward to keeping you updated while hearing about any changes that come your way too. 🙂

More Weekend Reading – Debt free edition and year end reviews 

From Dividend Growth Investor, a terrific list of Peter Lynch investing quotes. Happy 80th Peter. A few gems:

“Debt is saving in reverse. The more it builds up, the worse off you are.”

And…

“In the stock market, the most important organ is the stomach. It’s not the brain.”
And…
“A stock-market decline is as routine as a January blizzard in Colorado. If you’re prepared, it can’t hurt you. A decline is a great opportunity to pick up the bargains left behind by investors who are fleeing the storm in panic.”

Congrats to Gen Y Money on her 2023 portfolio report.

Although that’s a bundle of money in cash that 99% of us simply don’t have…I thought the reply was measured to anyone that is super fortunate to experience a major financial windfall and/or for investors that might be very conservative when it comes to money management: Is it OK to leave $100,000 in a high-interest savings account?

While it is important for all us DIY investors to have some margin of cash safety, I think any answer for you depends on your near-term spending needs and/or contingency needs for things you can’t predict. Everyone’s tolerance for investing risk is different…and can vary significantly. 

From an outstanding book: 

The biggest single point of failure with money is a sole reliance on a paycheck to fund short-term spending needs, with no savings to create a gap between what you think your expenses are and what they might be in the future.” – The Psychology of Money. 

Congrats to Another Loonie for a fine saving and investing year in review. Kudos. 

Related to another example of impressive saving and investing work, Millennial Revolution shared their portfolio details including how much hustle income they’ve earned in recent years in their 2023 portfolio update. Here is their portfolio breakdown, very simple:

And their portfolio? Very impressive!

Sources: Millennial Revolution.

I enjoyed learning how this money manager is constructing portfolios here (subscription). He has had a bias to growth in recent years, including owning Berkshire and Brookfield, and anticipates more long-term growth to come…

“We try to own a mix of 30 to 35 high-quality North American businesses that think and act long-term and are run by management teams that have skin in the game. For us, high-quality companies generally have lots of recurring revenue, capital-light business models, high returns on invested capital and the ability to compound those returns. Many investors want to own dividend-paying stocks. The problem with a company focused solely on dividends is that there’s little left to reinvest in the business. We prefer to own companies with managers skilled at allocating and reinvesting capital, such as Constellation Software Inc. CSU-T, Brookfield Corp. BN-T, or Berkshire Hathway Inc. BRK-A-N, BRK-B-N.”

And when in doubt where to find growth and how to invest in it:

“You have to learn by experience. For new investors, you should own index funds. I know that’s strange advice coming from an active manager, but if you’re not willing to commit the time to studying stocks, if you don’t have the obsession like my team and I have, then buy an index fund that tracks the S&P 500.”

Long $QQQ and $XAW here. 

Image Source: Portfolio Visualizer.

For those investing in bonds, you might have experienced a bunch of volatility lately. On that note: why have bonds been so darn volatile of late? From the article:

“Investors were able to breathe a sigh of relief in 2023 not just thanks to big gains in stocks, but also because the bond market broke a two-year losing streak. However, bonds’ road to positive returns last year was a white-knuckle ride. By one measure, the bond market was more volatile than it was in any other year for at least the last decade.”

A reader asked me what it might take to retire at age 55? Well, I’ve done the math and depending on any modest spending needs, assuming no debt, you might not need as much as you think even with much higher inflation.

Can I retire at age 55 with higher inflation?

Save, Invest, Prosper!

As always, be sure to check out my Deals page – partnerships and discounts I maintain to help you make the most out of your money – some of them you can’t find anywhere else!

Even better 🙂 – you can also consider reaching out here for some low-cost financial projections services – anytime.

Cashflows & Portfolios

With my partner on that site, we use professional financial software to deliver customized, personal reports to you whenever you want. 

In fact, there are now two (2) low-cost services to choose from:

  • Done-For-You – we do the work and data entry, and provide your reports OR 
  • DIY – whereby you do all the work, you do your own data entries, and you get your own results in the software – we essentially open up some professional financial software for you to use to be your own retirement income planner!

I launched this service with my DIY investor good friend – a service founded by DIY investors for DIY investors without the conflict of any advice.

Have a great weekend! 

Mark

My name is Mark Seed - the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I'm looking to start semi-retirement soon, sooner than most. Find out how, what I did, and what you can learn to tailor your own financial independence path. Join the newsletter read by thousands each day, always FREE.

13 Responses to "Weekend Reading – Debt free edition"

  1. Our travel patterns are also 90% short trips but the 10% are really long trips for vacations. We went with hybrid just to avoid the extra time and planning associated with pure EV. PHEV was also an option but the extra cost over the hybrid was hard to justify.

    Reply
    1. Thnaks very much for your insights, and we believe hybrid or PHEV is the way to go for us.

      You are reading my mind, that’s part of our reasoning too: “We went with hybrid just to avoid the extra time and planning associated with pure EV.”

      Safe hybrid travels in 2024!
      Mark

      Reply
  2. The EV’s seem to be great to drive and make people think like they are saving the planet as well as some short term savings. But I have a hard time jumping on this bandwagen. Here in BC we had an EV with a damaged battery and the insurance company had to write the whole car off because it cost more to replace the battery, $60,000. We have not yet figured out how to recycle these batteries, and our government is not approving any more infrastructure to create more electricity. And all the mining required to build these cars? Who is going to buy these EV’s as a used vehicle? Old batteries charge even slower and lose range. What an environmental mess we are creating for the future. But I guess as long as we feel better now and buy into this, that’s all that matters. I will stay with my gas vehicle and try to conserve in other ways. In investing we learn not to follow the heard. But what are we doing here?????

    Reply
    1. Lloyd (63, retired at 55) · Edit

      “Who is going to buy these EV’s as a used vehicle?”

      I’d seriously consider a 75-80% capacity EV if the price was favourable. Being retired we just go to town once or twice a week anyways. The garage is already wired for 100 amp service with a circuit for a construction heater already installed.

      Our 2019 Trax only has 15K on it now and a lot of those were put on for frequent medical trips to the city that are in the past. We also have the old 2003 Silverado for any snow day we might have to get to town on.

      Having said that, we only put in $50-60 worth of gas into the car every two months or so. It wouldn’t be for a financial gain to go EV.

      Reply
      1. Ya, that math for you Lloyd doesn’t provide much incentive to switch to an EV. A hybrid however could offer some savings for the value.

        Paying $50-$60 worth of gas each month is really pocket change for transportation expenses if any car is paid off. We probably average about $100 per month in gas. That should drop quite a bit once we get a hybrid or PHEV.

        Kudos.
        Mark

        Reply
    2. That’s part of the struggle, right Div? Reqiured, broad infrastructure.

      We’ll have a charger here in the building so I like the idea of having a new(er) vehicle, paid off, with hybrid technology so likely do that: PHEV.

      Until (better?) battery technology becomes the norm, I’m not sure how many folks will buy a used EV unless the price comes down. It has to. Nobody is going to pay $30k for a used EV that is 5-6+ years old that may cost $50k-$60k to replace the battery. It makes no sense right now.

      Mark

      Reply
  3. There will always be pros and cons for EV/hybrid/ICE vehicles. Each category has their own very good and valid reasons and not so good factors. Personally, it’s the extra high cost to replace the electric battery for the EV when the time comes which makes me very hesitant to get one. The lack of charging stations and the range anxiety are other negative factors for the EV.

    Mark, you have to feel comfortable in whatever decisions you decide otherwise you won’t be happy. Take all your time and do your research and I am sure you will make the right decision in the end.

    Best of luck.

    Reply
    1. Thanks, Ken.

      I think we feel very good not going with a full EV yet. PHEV is likely our choice given our condo partly subsized the charger infrastructure (costs shared amongst everyone) in the building we live in. So, we have a charger to use that will be dedicated to us in fact since it lowered the cost for us to buy our personal charger.

      I look forward to paying for this car debt-free, in cash. 🙂
      Mark

      Reply
  4. Hi Mark, Congratulations on being Mortgage free, very happy for you.

    I would highly recommend an EV. We leased one when my wife took on a new role with a space tech firm that needed her to come into work 3 times a week. It’s a Hyundai Kona and we pay way more than I’d like to, but we were glad we get a new car in July 2022, when getting your hands on a car was difficult.

    You know the economics better, but to the point made earlier in this thread, if you pick the right model at the right dealership the price difference isn’t much. But why I recommend it, is the pure joy of driving. Yes it is sustainable at some level, but once you drive one, I don’t know why you would drive an ICE. The tech change is not as frequent as it is with mobile phones/TVs etc. so you will be just fine for 3-5 years. The next big change is coming closer to the end of this decade and the minor upgrades the manufacturers can send to your car over the air anyway.

    The EV gives access to the HOV lane for my wife, that cuts commute time and peace of mind while driving through crazy drivers in Brampton. Can’t put a price to the peace of mind. Apart from the commute, we’ve done Toronto Montreal, spending only $26 for a long weekend (in Onroute charging) stopping only once each way for 38 minutes each (for charging that is, for food and toddler breaks more).

    For me stepping into my 2018 Mazda seems like stepping into the 1900s now. Test drive a few and pick what size works best for you, but can’t recommend an EV more.

    Reply
    1. Thanks, Guatam. I appreciate those insights. I know a few EV owners, and they are very happy with them to date. Maintenance costs are way down for them as well.

      Interestly enough, we have been looking at the Kona. I believe Hyundai and KIA both make good cars. We’ve owned a KIA for >12 years with high satisfaction and KIA in particular seems to have good PHEV / EV choices. There is also the EV6 too!

      Good point about OTA updates.

      “For me stepping into my 2018 Mazda seems like stepping into the 1900s now.”

      Ha. I hear ya in our 2012 KIA. Another key for us is no debt/no car payments, so we need to save up!

      Mark

      Reply
  5. Hi Mark,

    Based on our experience, especially given you say you have access to a charger, I think you should reconsider going to an EV. We bought a VW E-Golf in 2018 and love it. We took advantage of all available grants and took it initially on a 3 year lease, figuring the technology would improve so much after 3 years that we would then buy a newer model (after grants, it was no more expensive up front than our previous new ICE vehicle purchases – e.g. Toyota Hylander ICE). But what we discovered was that the car met all our needs so we bought out the lease after 3 years. Like you, most of its use is within 50-100km of our home. We have saved a huge amount of money in the last 6 years on gas and mai tenancy costs (very little cost to maintain a fewer trips to the dealership than an ICE vehicle) and that went to our investments and helping our kids with post secondary and wedding expenses. We’ve also done longer trips to Whistler, etc. with no issues since resorts these days tend to have charging infrastructure. We figured if we really wanted to do a long trip without dealing with chargers, then we could just rent an ICE vehicle. After 6 years, still haven’t had to do that. Don’t let the range anxiety, price or other mainly misleading stories out there deter you – take a really good look at an EV option. I bought an all electric motorcycle too, so now we are a completely ICE free household and we don’t plan on looking back. Best wishes on your final decision.

    Reply
  6. We decided to go with a new gasoline powered vehicle for these reasons: delivery date of over a year,for hyrbrid, lack of recharging infrastructure, concern about adequate electricity generation in future, difficulty in planning longer road trips.
    And then someone further confirmed out decision. They commented that hybrid vehicles give you the maintenance issues of both gasoline engine and battery powered vehicles.

    Reply
    1. Nice to hear from you, Gail.

      Ya, hybrids could have some concerns for some – totally see that – but technology is improving for those and with PHEV, can still rely on ICE.

      We also have a charger in our building ready to use so not concerned about larger infrastructure yet but I see what you are saying. I believe in Ottawa here, depending on the dealer, wait time for hybrids are about 6-12 months so that’s pretty good.

      I think I continue to have some concerns going fully EV at this point but optimistic things will improve in the coming decade +.

      What new ICE car did you get?
      Mark

      Reply

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