Weekend Reading – How to start investing, protecting your portfolio, juicy dividend income and more #moneystuff
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.
We’re slowly getting settled into the condo. Some light fixtures are in. Our furniture is now out on the terrace. Some pictures are up on the walls. Still a long ways to go to get organized but over time I know this place will feel like home.
I posted one article this week – a 2,000+ word behemoth about just getting started with investing. Even seasoned investors might enjoy that post since there are many reminders about where you could put your hard-earned savings to improve your long-term investing returns.
Summer is here in Ottawa, the temperature has been turned up, so I intend to go out this weekend and enjoy it a bit while the going is good. GOOOO REDBLACKS tonight!
Have a great weekend,
Congrats to the four winners of Henry Mah’s book Your Ever Growing Income. Your books have been sent to you by Henry – thanks to everyone who participated in the giveaway!
On Financial Independence Hub, there is a strong argument that you should protect your portfolio assets before your actual retirement date. According to Dale Roberts:
“You do not want to guess that a stock market correction is not in the near future. Stock market corrections historically come along with regularity. We are currently in an abnormal period of an extended (mostly) bull market run.”
I think his theory makes sense but again, not all investors are created equal. My plan is to “live off dividends” to a degree. This means I need equities in my portfolio – lots of them. So, my approach entering semi-retirement (in my 50s, some five years from now) is actually to hold a basket of stocks with a modest cash wedge versus any bonds at all.
I believe most retirees would be well-served owning more stocks than bonds in retirement and keeping a modest amount of cash savings just in case…
I included our updated bucket approach in my April 2019 dividend income update where I announced we are now earning over $18,600 per year in dividend income from some key accounts beyond our RRSPs.
Here are those buckets in a table:
Thoughts about my plan to live with more stocks and keep a modest cash wedge otherwise in semi-retirement? What do retirees out there do?
Speaking of dividend income here are some other blogger updates:
Dividend Earner determined his “enough number”, and it’s not trivial. In some emails back and forth with him recently, this includes his workplace pension plan. Based on this BIG number and spending desires, this amount seems more than adequate for a comfortable if not higher-end retirement. Read on to learn more about that below…
Rob is doing well with his dividend income update – for June 2019. I have to get my act together and report mine next week!
Dividends or not, even if you start investing later on in life, Million Dollar Journey said you can still enjoy a comfortable retirement.
Reader question and email this week (information adapted slightly for post):
I hope your week is going excellently so far. Thank you so very much for answering my (other) questions in more depth. I really appreciate your expertise!
I’m almost ready to make another stock purchase, so that’s pretty exciting. Hopefully I can find a good deal this time.
Do you have any thoughts on how much one should have saved by a certain age?
Thanks so much once again!
Good questions. Actually, I wrote about those subjects a few times on my site.
Here is a post about what some experts believe, you should have saved by the decade. If fact, MoneySense did some math for what constitutes a ‘deluxe’ retirement starting at age 65 – if that’s your end game to retire then.
The ‘deluxe’ MoneySense “enough number” is north of $1 million:
Image courtesy of MoneySense.
MoneySense estimates aside, I think in general you should throw retirement savings factors totally out the window. I say that because we’re all different. You might choose to work part-time in your semi-retirement to supplement your income. You may choose to rent in a lower-cost area or have roommates to keep costs lower. Choices abound and I believe there are many roads to Rome per se.
To summarize, there is no specific savings or investments target you need to have by a certain age at any age. Instead, just get started with saving and investing. Over time, come up with a sound financial plan that meets your money goals and continue to refine from there. Above all, at any age, enjoy the life you’ve been blessed to live.