Weekend Reading – Debt in retirement, an easy way to save $1,300 bucks, getting wealthy eventually and more #moneystuff
Welcome to my first 2019 Weekend Reading edition!
How is your new year so far?
I got back to work this week. The start of my 18th year in the same company. Crazy how time flies.
I got around to posting these articles this week:
These were my 2018 prediction results. Same fails, some wins, but it is fun to try and predict the future.
Do you intend to own debt in retirement? Should you own debt in retirement? It’s not something I plan to do but this retiree has done well with that approach – read more here, how and why.
Have a great weekend folks and best wishes for 2019. A new post is coming soon so stay tuned.
Mark
Want some guidance for 2019 investing?
Here are 10 ways to master your money in 2019.
Here’s why the new TFSA contribution limit is totally worth it. (I already contributed to mine – post coming soon!)
Other reads…
Some great lessons and quotes here from Charlie Munger, investing guru but likely better known by others as Warren Buffett’s partner-in-crime. My favourite from the list?
“Keep learning: Be a learning machine. Never stop reading. Be curious. Surround yourself with smart people. Set aside time to read and think.”
Want to save more money in 2019? Sure you do. Here are some super saving tips from super savers.
I also liked PT Money’s 2019 Money Challenge. Save $1 every week and increase it by $1 every week for a year. Sounds simple, and it is, but also very effective. Do it and you’ll have more than $1,300 by December 2019.
In 2019, millennials (and everyone else for that matter….) can get wealthy eventually if they do these five things. By the way, this link includes a FREE ebook on investing.
Happy Investing!
Mark
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.
Hey Mark, thanks for the mention. Really appreciate it.
All good Sherry. Have a great 2019 and stay in touch!
Mark
Thanks for the mention Mark!
Thanks for the support GYM. All the best to you in 2019. Stay in touch often via Twitter and on our sites.
Mark
I’m not sure what a net worth comparison to others accomplishes. Seems like it might be a continuation of the old high school attitude that mine’s bigger than yours. One might generate a net worth summary to help one in formulating a plan but to compare to others? I don’t see the point.
I do keep a net worth of the financial stuff just because that’s the way I always did it but can’t be bothered to for the other “stuff”. It’s only been recently that I’ve tracked the income generated from the investments and I wish I had done THAT from day one.
Same here Lloyd on the NW, and on the income generated. Good thing we read, learn and adapt.
Interesting you say that Lloyd because I have a post I might put up why I don’t care about posting net worth updates on my site.
I’m FARRR more focused on the income my portfolio generates – I can live off that 🙂
It would be an interesting conversation to see how everyone handles their record keeping. I never really thought about tracking income until I started reading MOA and I now regret not doing so. I faithfully tracked net worth of the financial assets since 1980 and I’m glad I did but by not tracking the income and how it increased over the years I missed out on piece of the big picture. Having said that, I now track the income but I don’t keep the data on an annual basis. I should, as it would only require a couple of entries on the spreadsheet, but that procrastination issue I have keeps getting in the way. 😉
I track the income as you know Lloyd but it wasn’t until I started my dividend investing journey that I did that – about 10 years ago – tracking for income. What was pushing me as well was knowing my adjusted cost based with the full DRIPs and SPPs.
https://www.myownadvisor.ca/drips/
I keep my dividend income spreadsheet really simple – no point in over-complicating things when you don’t have to.
I put my dividend income tracking tool on this page here for folks to play around with:
https://www.myownadvisor.ca/helpful-sites/
I use basically something like that.
I track investment values monthly/annually to get returns and VPW spreadsheet suggested withdrawals. Essentially this is our net worth less house which I only see as roof over our heads – similar to if we liquidated and used $ for rent. Track only the investable important part…house is a guess and doesn’t provide income.
Since retiring I also closely monitor but not exactly to the dollar income from all investments. I’ve recently also started tracking divvy in tfsa/unregistered (using MOA spreadsheet with adjusted RBull goals. Lol. Thanks.
Yes, I see things the same way…re: need to live somewhere and while technically correct of course to list house as an asset – it’s also a MAJOR operational expense!
As you know, I’ve been closely monitoring our dividend income + distribution income across our portfolio for almost a decade now. I believe doing so (and largely ignoring portfolio changes) is helping us tremendously reach our goals.
That approach is unquestionably serving you well.
For us I like moniotring that as a income floor, in combination with a total return approach, as ultimately we want to die broke or at least utilize a good part of investable assets.
I spot-checked the net worth of those 45-54 and 55-64 and the table matches the Statscan numbers. These are Economic Families and Persons not in an Economic Family (i.e. households of all types). What makes these data hard to compare is that they are based on means/medians of those holding each type, not means/medians of all Canadians (including the zeros or those who don’t hold). As a result, you can’t add them up to verify or create a percentage-based net worth distribution.
Also, I prefer to look at medians (midpoints of a distribution) rather than simple arithmetic means since outliers skew the latter. For those 55-64, mean net worth of $1.11 mn drops to a more reasonable $669,500 if you look at medians. Principle residences account for $350k when looking at medians for this group (among the 70-80% in this age group who own).
Happy New Year Mark and all readers/commenters – no matter what the markets do, I’m looking forward to another year of great education from this site!
We can always count on you for good insight with these stats BartBandy.
Yes, great discussion and education here.
Great point about average vs. median. “For those 55-64, mean net worth of $1.11 mn drops to a more reasonable $669,500 if you look at medians.”
Those medians make WAY MORE sense to me including principle residence. There is no way most Canadians 55-64 have a net worth more than $1 M. Crazy stuff.
A very happy new year to you as well and thanks for being a fan – kind words 🙂
Agree. Also these are also household not individual #s too. They include pensions $ too.
Stats? I looked at that post and went to the link. Had to because for some strange reason all 10 provinces weren’t included. Mine (NS) was not listed. KInd of obvious oversight?
I couldn’t begin to figure this out. First off the whole list seems to be “economic families” not “average net worth of a Canadian” as stated in the post. That’s a big difference and very misleading otherwise. Unless it’s not and in that case very hard for me to believe these numbers. Canadians would be “richer than they think”.
ie It’s highly doubtful to me avg individual net worth in Canada for my age category (55-64) is 1.11M even including a large chunk for half of a house. For an avg household (economic family) sure. For my province in my age category net worth is showing is $69,217 and avg for all ages is $199,473. I know its not a wealthy province but ????
When I went to the stats Can page I couldn’t seem to get the same numbers even close to those posted – ie CDN avg 55-64 showed 3.13M with personal residence shown as 999K and other real estate 350K? Average in Canada? Huh? Must be doing something wrong.
Yeah, I found the numbers interesting…but really, with little depth on the survey approach, information missing – don’t take any numbers to heart. We didn’t 🙂
I don’t post our net worth on this site for many reasons…I’ll probably write a post about my top-3 reasons at some point. Back you, I would agree, it’s VERY unlikely avg. net worth in Canada for your age category (55-64) is 1.11 M even including a large chunk real estate.
I mean, does my cohort, on average, have $789K in net worth? I doubt it – that is phenomenal for that group.
Can you share that Stats Can page? Are you kidding that 55-64 on average have >$3 M in net worth???
Cheers,
Mark
We’ve never really been into concerning ourselves with net worth comparitively. Our objective was to see ourselves moving forward while working our own financial plans through the years and become FI in our 50’s, to the extent one truly can be.
I played around some more and figured out what I was doing wrong, so ignore what I wrote Mark. Changed total values to avg values and got sensible #’s. For NS in my age category median (household) NW is $588K. All ages = $225K. No city #’s available probably due to population. It’s households not individual so the numbers seem to make sense. Okay.
Bart Bandy has good comments below on means/ median and totals not adding up. ie principal residence, other real estate, business values etc. That’s partly what was confusing me.
Ya, I mean, it’s interesting stuff – comparisons – but I don’t dwell on it. Otherwise I’d drive myself nuts.
I can see that. Really I’m pretty much beyond really caring much about it at since we’re on the slow slide in decumulation mode. Just didn’t like stuff that’s misleading for those that do care or follow.
Fair point. I find it interesting to link to but sometimes annoying since numbers mean nothing without context; survey approach; statistical relevance; etc.
Agree. That’s a very good point that solid interpretation is critical to useful information.
Just read that Doug Hoyes debt link. I’m shaking my head. It isn’t really news to me but just a reminder how concerning things are on personal debt, and I know federal govt debt, prov debt, municipal debt, corp debt are also bad.
I’m sure things will work out but it seems we’re increasingly at risk of staying an economically stable healthy country.
Our love affair with debt is definitely not helping us go in the right direction… Sure, modest borrowing is good. We need people to take risks, spend money, etc. but not excessively. Which reminds me – going to put another $500 lump sum payment on our mortgage soon now that TFSAs are full of contribution room again 🙂
Post on the latter coming up – what I’ve considered buying for TFSA.
Agree. Over the top now though.
Good stuff.
Ended up moving cash into our TFSAs vs in kind. Decided to move the in kind to unregistered and build that up as well. Within a month will do more in kind to unregistered from LIF min withdrawal.
Have to decide on Tfsa purchases too. Have ideas.
Keep us posted!
Sure thing. We’ll have to chat soon.
Way to go on the lump sum payment. Imagine when you don’t have to do that anymore!
Well, when I add up our mortgage payments + annual TFSA contributions + RRSP contributions + any lump sum payments (if we can….) = it’s a lot!
Yep, I get it. Good for you.
Been there done that!
IIRC correctly we were making ~19K/yr mortgage payments back in ’89 in order to end that in ’95, plus our savings & work pension contributions!
Ya…crazy when I add it all up….
1. TFSAs = $1K per month for 2020 (2019 financial goals post coming soon).
2. Mortgage including any lump sum payments averages close to $2,000 per month.
3. RRSP contributions….
Sigh.
Can’t wait until debt is gone. Huge anchor but also need to strike the balance to max out TFSAs and RRSPs – now.
Yep, that’s a nut, but a good balance between saving and investing is smart IMO.
I think your number is about where we were last 2 years of mortgage with 10% increase & 10% lump sum (all that was allowed) in 1994, 1995, but with 9.5% rate, to meet my goal of mortgage free age 35.
I’m guessing you’ll have some big changes being mortgage free and possibly no RRSP contributions in coming years. Very good.
Correct.
Priority #1 remains our TFSAs – maxing them out. Done for 2019. Just need to execute those picks and let the investments settle – should be done today 🙂
https://www.myownadvisor.ca/5-stocks-im-considering-for-my-tfsa-in-2019/
Priority #2 – well, I have to pay our mortgage so we pay that.
Priority #3 – contributions to RRSPs – mine are maxed out for 2018 tax year. My wife has > $20K in contribution room. I’m hopeful (?) we can max it out by year’s end. 2019 financial goals coming soon….
So, you’re right, when TFSAs maxed, mortgage is debt (5 years?), RRSPs are maxed – we’ll have some fun decisions to make 🙂
Stick to the boring but effective plan!
Orders in for tfsa but won’t hit unless we have another bad round. No rush.
Another transfer this aft. 2 more to go.
Whilst debt is a four letter word to me I tried to keep in mind that; A) each mortgage payment had a principal portion to it, B) the asset was appreciating AND, C) I was paying back in depreciated dollars. Somehow in my delusional mind that made it a *bit* better and certainly waaay better than consumer debt.
Part of me wishes that when we paid off the mortgage on the first house in ’93 we hadn’t gone overboard on the renovation on the current house in ’94. Hindsight eh?
Ha. Well, we are moving in 2019 Lloyd and we’re prolonging our debt because of it. If I really had to, we could pay it all off if needed (using non-reg. assets) but I wouldn’t want to do that. Too much capital gains.
We’ll pick away at the debt over the coming 5 or so years – hopefully be debt-free then with maxed out x2 TFSAs and x2 RRSPs in the meantime. That will be pretty good if we can do that 😉
I have some 20/20 vision as well. I’m sure we all do!
Hello Mark !
Happy new year for everyone on this blog ! another excellent article as usual Mark .
Today was an exciting day for me i just came back from TD after opening a TFSA account , so I’m kind of anxious to start saving money without the worries about paying taxes during retirement , and this year I’ll be moving to our new place in april so i’m more excited about that but we’re keeping both current properties and we’re going to rent them out , with the income generated from both units we figured we pay off the new one in no time . Now i have to think what first stock I’m going to buy in my tfsa because for now all i have is a plain vanilla index etf’s and td e-series , I’m leaning toward FTS .
I just wanted to thank you for all the hard work that you put into your site it’s been a great help for me and i’m sure for others as well .
Hope this year will be a good year for everyone.
Great work re: opening your TFSA! That’a gift of an account Gus.
FWIW, we own a bit of FTS in our TFSAs as well, about 325 shares I recall. We own a number of stocks inside the TFSA because who knows about FTS long-term but my hunch is, everyone needs energy and more of it will be needed long-term.
All the best with your financial decisions and thanks for being a fan of the site – tell others 🙂
2019 cheers,
Mark
Hey Gus. Good to see you made a decision on your real estate and you’re getting moving on your TFSA.
We have a chunk of FTS in my wifes TFSA too. Seems like a good choice for a defensive dividend grower.
Hi RBull,
I know it was a hard decision but at the end i gave in to my wife’s wishes of trying to renting out the properties for about a year and see how it goes , i couldn’t convince her so i gave in 🙂 after all happy wife happy life i guess 😉 ( so they say anyways ).
as for tfsa yeah i’m excited about it and i learned from you guys to buy individual stocks of things that you use and things that makes sense this is why for me personally I don’t think I’ll invest in crypto or in weeds .
I have two teenagers at home and they both learn about Shakespeare as if Shakespeare going to help them in their life getting a better job or learn how to invest or buy real estate.
Blogs like this are priceless !
Sounds like a wise move Gus. I hear you on book learning vs practical life/financial things.
Have a great 2019.
About the only line from Shakespeare I take to heart (and I admit I use it out of context from the play) is “to thine own self be true”.
re: net worth.
Here we go again. If one looks at the underlying stats instead of the slick graphs, it shows that ‘Principal Residence’ makes up 1/3 of ‘Total Assets’. Take out PR and related PR mortgages and TA drops by the same — 1/3. Didn’t have the patience to run different age groups but I think you can logically suss out how that drop effects specific demographics. Additionally, the BC stats should contain nothing but a very large asterisk due to the obese RE prices. How many average income families with no savings are now “millionaires”?
re: Charlie
This guy is awesome, far more than his more famous once-partner. A great example of someone with tremendous skill in both observation and execution. He figured out the basics early, adhered to them, and fine tunes them along the way. Much more an inspiration on how to live life well rather than just mere money matters. Many times when embarking on a new path I’ll take his approach and think of all the way which contribute to failure…then don’t do those, which gets me at least half way to my goal. It’s brilliant.
Sorry I haven’t graced these pages in quite a while. I’ve been training…so much training…for National Championships in June. High level amateur sport is one of the worst financial decision one could ever make. Oh well, guess me and my gold medal get buried in a pine box instead of mahogany.
Happy 2019!
re: “millionaires” – include Toronto with BC and closing in, Montreal maybe.
Ya…where the heck have you been? Is this your cycling road race coming up? Do tell. Congrats on working so hard towards your goals. Impressive.
Happy New Year,
Mark
Kudos on your training commitment and goals. I have some small idea of the time, effort and commitment involved towards trying to be your best in an endurance sport. Best wishes in June.
Do you feel like stats in that average net worth of ages is skewed? I am wondering how they reached their results.
Especially considering that another post other post explained how much more debt Canadians are incurring.
I hear ya Braden. It seems like a bunch doesn’t it? I don’t know the survey data/approach in detail but I thought the numbers were interesting – even if I don’t try to compare ourselves to anyone else. Every net worth statement, financial plan, is personal as it should be.
Hope all is well with you and thanks for being a fan.
Mark