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:
Almost a week later.
Still smiling. 🤩
— Mark Seed (@myownadvisor) January 19, 2024
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.
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.
- 100%. Agreed. A bit more saving and investing in 2024 is definitely planned which is fully aligned to these financial goals.
- 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.”
“In the stock market, the most important organ is the stomach. It’s not the brain.”
“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.
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.
Save, Invest, Prosper!
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Have a great weekend!