Weekend Reading – Dividend raises, cost of living, #RRSP myths, market bubbles and more!
Welcome to my latest Weekend Reading edition, highlighting some of my favourite (and sometimes entertaining) articles from the week that was across the personal finance and investing blogosphere.
Just in case you missed last week’s edition I wrote about ‘shorting’ stocks, bloggers who pretend to FIRE, if you should really speculate with your retirement portfolio, dividend all-stars to own, and much more.
Well, it was a very busy week on MOA (My Own Advisor) with two original posts!
As a follow-up to the 5 stocks I want to buy (more of) in 2021, I posted this one:
Thanks to R.J. for this guest post focused on U.S. readers – how to not waste your upcoming U.S. stimulus payment.
From the article:
“In researching some data for Mark’s post, I found U.S. households hold on average $5,300 of cash. So an unexpected “windfall” of as much as $2,000 per adult represents a significant change. This is a scary stat unto itself I know…”
To support my future income needs, you all know by now I invest in a mix of dividend paying stocks to deliver passive, growing income and low-cost ETFs for extra diversification.
Well, I welcomed three major dividend raises to my portfolio this week: Bell Canada (BCE), Brookfield Renewable (BEPC), and Brookfield Infrastructure (BIPC). Those raises increased my forward dividend income by a few hundred bucks per year, doing nothing at all.
I hope to post my overdue January 2021 dividend income update – soon!
Enjoy the reading and see you around the comments section!
Love reading the prop bets associated with The Super Bowl. Are you gonna wager anything???
Chrissy from Eat Sleep Breathe FI calculated her family’s basic costs of living in Vancouver (for her family of four). Her math checked in at spending about $30,000 per year, without a mortgage; no entertainment or travel.
That’s very good I think.
I’ve done our math (family of two + two loveable cats), re: what our basic expenses might be in any upcoming semi-retirement, and I have us checking in at about $2,700 per month or $32,400 per year for basic expenses. This assumes we’re not saving for retirement nor do we have a mortgage. These expenses exclude any major entertainment or international travel expenses.
Maybe more incredibly though, when we’re not paying a mortgage nor saving for retirement (using our TFSAs and RRSPs) that will easily save us $3,000 to $4,000 per month in today’s expenses. Basically, our income needs to cover our expenses will drop in half.
I include our savings for retirement purposes as expenses. I’ve been doing this for decades.
You can check out some articles related to our plan to “live off dividends and distributions” in the coming years here.
Some good insights here from MoneySense about RRSP contribution myths and facts. My personal favourite here is you cannot hold your mortgage inside your RRSP. You absolutely can as the author suggests but I wouldn’t hold your mortgage inside your RRSP for these reasons:
- There are opportunity costs – you can hold other growth-oriented assets inside your RRSP (instead of real estate) that are likely to appreciate more in value over time.
- It tends to be more costly, for a mortgage product to do that.
I’ve always seen this as a double-whammy but to each their own.
Bob from Tawcan believes the stock market is not a get rich quickly approach.
I call investing and my approach a get wealthy eventually plan.
As per Bob:
“I don’t believe in these get rich quickly stock trading strategies. Most of them, if not all, are highly risky and you can get into trouble very easily. Please don’t believe the idea that you can just watch a stock price go up and sell it when it stops going up. “
Fritz from The Retirement Manifesto answered the question: are we in a stock market bubble?
Fritz had the same answer I did!
I also liked his comment from the post:
“What we do know is that a bear market will arrive at some point in the future. The bear never dies, he just hides in the woods for years at a time. You can be sure at some point in the future he’ll come back out of hiding. It’s his nature. The more important questions are the ones you should be asking to address this reality, and we’ll get to those in a minute.”
On Cashflows & Portfolios there was the real truth about retirement income planning.
Dale Roberts took a look at Tangerine performance for 2020. Surprisingly good!
Reader question of the week (adapted slightly for the site!)
Thanks for your highly valued information on ETFs above. I am actually moving from individual dividend stocks to solid ETFs, so I fully agree with your list.
Curious, do you personally edge your portfolio against market downturn with ETFs like HSD or HXD?
Thanks for your readership and question.
While I’m a big fan of Horizons ETFs including some of their all-in-one funds, I don’t invest in their bearish funds or any similar funds from any companies for that matter. I own some simple, plain vanilla ETFs and my mix of dividend paying stocks for income.
I like HGRO in particular from their line-up and I could see myself owning a bunch as part of my corporation investing later this year.
My boring plan has served me very well for the last 11+ years and I suspect it will treat me well for many more.
Save, Invest, Prosper!
Thanks to my passion for personal finance and investing, some great companies want to offer deals. As always, never an obligation…
My BMO personal promo code: MYOCASH is back!
Get cash back with them! Awesome.
Make sure you look at the top of my Deals page to take advantage of this code since you can get hundreds if not thousands in cash back when you invest with them!
- You can get $50,000 managed FREE with ModernAdvisor.
- Sign up for commission-free investing with Questrade – that’s right, buy and hold ETFs for FREE!
- Grow your money – invest with Wealthsimple.
- LegalWills.ca now offers a unique code for 15% off any services – that never expires.
- Also, after sharing their thoughts on when to sell a stock after a dividend cut, the guys at StockTrades.ca are offering a Premium Membership at 30% off. Check out that dividend cut post for details.
- With 5i Research, I’ve secured a FREE no obligation trial to learn about model portfolios, the best ETFs to own and more.