Weekend Reading – Important numbers for 2022 edition
Hi folks – a very Happy New Year to you!
Welcome to a new Weekend Reading edition – my important numbers for 2022 edition.
I know for 2022 at this point, what is old is new again for 2022 when it comes to the pandemic, but I’m confident we’ll make progress after our winter is done. I say this because all (historical) pandemics do eventually end, even if Omicron is complicating the question if this will ever happen…
Weekend Reading – Important numbers for 2022 edition
As I watch this ultra-contagious Omicron mutant pushing cases to all-time highs and causing yet another wave of uncertainly, while scary, I see a shining light. We are armed with at least one solid layer of protection against this virus for most who understand the way out: vaccines. While the vaccines taken for this pandemic won’t eliminate the virus (I have three shots by the way), they do offer strong protection from serious illness, even if they don’t always prevent an infection. Omicron doesn’t appear to be as deadly as some earlier variants (thank goodness) and so as this virus continues to mutate at least we’ll have some protection against it.
My personal feeling is at some point, maybe in another year or so down the line, when the World Health Organization determines that enough countries have seen some downward trends from severe COVID-19 cases – or hopefully far less deaths – the pandemic will be declared over.
I’ve been reading reports that Omicron is so hugely mutated, this essentially triggers a sign that there will be endless new variants (so don’t be surprised as more emerge) however they will be evoluntionary speaking, less severe. That makes a great deal of sense to me as a graduate of biology and chemistry, things mutate but only to an extent for virulence. We’ve all had this experience in fact with various virus-triggered colds. Some folks experience more serious illness from existing viruses than others for a long list of reasons. Thanks to boosters and an on-going set of defence tools in our virus-fighting toolbox, it is my hope our immune systems will continue to get better at recognizing new variants and fighting back on their own. Our memory cells have a phenomenal skill of getting “trained up” quickly even years after the fact.
In one article I read:
“In a new study, Ellebedy’s team found Pfizer vaccinations rev up “T helper cells” that act as the drill sergeant in those training camps, driving production of more diverse and stronger antibodies that may work even if the virus changes again.”
Great, so there should be a steady decline in severe illnesses, hospitalizations and deaths over time.
Just not now.
I wish I could predict the future and signal to myself, to family, to friends, and others, when this thing might be over. However, I have no such skill. What I can do however is focus on the things that I have direct control of: my healthy habits, my general wellness, my attitute and of course my goals for 2022.
I hope 2022 will find you in a good place, that you stay healthy and you work on whatever is important to you too!
I look forward to another year of My Own Advisor with you. Have a great weekend 🙂
Weekend Reading – Important numbers for 2022 edition
Headling this Weekend Reading edition, check out Cashflows & Portfolios where we highlighted a few very important new year financial checklist items.
From that list, when it comes to important numbers for 2022, here are the ones I’m keeping a close eye on for my savings and investing goals:
The TFSA contribution limit. The maximum contribution for Tax-free Savings Accounts (TFSAs) is once again set at $6,000 for 2022. This means the total lifetime cumulative contribution room for your TFSA account is now $81,500.
In my opinion, these are the great things you can do with your TFSA (including getting cash back when you open an account for investors who meet all eligibility requirements with my investing partnership at BMO). Take a look, have a read, and find out more.
The RRSP contribution limit. After I max out my TFSA every year (and I do, more in future posts) you should know the max contribution you can make your RRSP is the lesser of 18% of your 2021 earned income or $29,210 (unless of course you have unused contribution room from previous years). Historically, since I have a defined benefit pension plan from work that I consider “a big bond”, my RRSP contribution room is far less than that. Even still, with a workplace pension, I max out my RRSP contribution room every single year.
So, this spring, after both of our TFSAs are maxed out you can bet we’ll strive to max out our RRSPs as well.
I prefer to max out my TFSA over the RRSP for a few reasons, but this is a VERY big one if you don’t already know yourself.
Further Reading: Managing the refund well is the linchpin in any RRSP vs. TFSA debate!
From the article:
“If you’re going to put money in a registered retirement savings plan and “blow the refund on something stupid,” then a major advantage of the RRSP – the immediate tax benefit – is lost…”
Those are my important numbers for 2022, to focus on in my house, what about you?
I read from Business Insider recently that some famous investors, including Michael Burry, are predicting an “epic” stock market crash.
On the dividend income file:
Kudos to Melissa at Our Life Financial, realizing some major income investing goals including this one:
“I finally crossed the $1,000 mark with my Enbridge quarterly dividends. I received $776 in March from Enbridge and for the last quarter in December I received $1,026.”
Congrats to Matthew and his updated income stream.
Adventure blogger Chris Istace was pleased that boring but dependable ex-Canada ETF XAW (from my top-ETFs to own page you might know!) delivered to investors recently:
Related to important numbers, I recently published my December 2021 dividend income update. I can’t wait to see what January brings and see if I can trend higher in 2022 thanks to TFSA contribtuions made and growing tax-free.
GenYMoney is realizing new dividend income highs – as part of her long-term goal to earn $35,000 per year from dividends.
Dividend Daddy continues to impress:
“My December 2021 dividend total is $6,718.76. In December, my dividends meant: I earned $216.73 every day from dividends ($6,718.76 / 31 days). I earned $39.99 per hour (assuming a 9-5pm job) I earned 9.03 every hour of every day of the month. Including rental property income, my total passive income in December was $7,125.21…”
Other fine personal finance reading:
Always interesting to see what other investors/bloggers spend in any given year. Here is an interesting example from Dave at Accidential Fire in the U.S related to his total spend in 2021:
“My total of $36,478 is $1715 higher than my total for 2020 for an increase of 4.9%. So my spending increased less than the inflation rate! Everything went up except my mobile phone bill which stayed the same and my car insurance which went down.”
That’s very good I believe, since while I our mortgage is almost dead, that consumes about $2,000 in payments for us a month alone. Add in Ottawa property taxes at $500 per month and there’s $30,000 I need to make after-tax right there.
Interesting thoughts from Carl Richards’ newsletter that I’ll summarize here – for you to ponder this 2022 new year:
“Just for a minute, imagine what it might feel like to be satisfied with simply having “Enough.” How might that change your priorities? Your daily schedule? It’s important you actually sit down and think about it because only you can define “Enough.”
What might happen if you were to make this shift? Would you work less? Would you spend less? Would you sleep more? Would you quit your job and start something new? Would you give more to charity?
Maybe nothing new would happen. But what I can tell you is this: If you can’t find a way to be satisfied with enough, you may never be satisfied with anything. There will always be someone else ahead of you, even if the only person ahead of you is the future self you are constantly killing your current self to become.”
Tawcan wondered if he should invest in high-yield stocks. I know him well enough that his answer like mine is “no” since I believe a blend of growth stocks is always helpful since total returns are key.
Robb Engen wondered what it might take for you to save more $$$ this year.
I enjoyed Dale’s write-up in trying to make sense of the markets in 2021 – it’s going to be interesting in 2022!!
On that note, here are five themes to watch from 5i Research and my friends there including Peter Hodson.
One that caught my eye:
“Value Stocks May Finally Rocket: As a growth investor we always struggle with this. Growth stocks are, simply, way more fun. Value stocks don’t triple in a year, as some growth stocks can do. But we have to accept reality. In a world where investors are worried, and rates and inflation may rise, investors might see value stocks as the best, or at least safest, bet in the next couple of years.”
Some phenomenal work on Dividend Strategy and the annual BTSX (Beat the TSX) update.
From Matt and some reminders:
“Beating the TSX doesn’t always beat the index. At this time last year, I was writing about 2020 which was BTSX’s second-worst year ever, when it lagged the benchmark TSX60 index by 15%. Of course, periods of under-performance are to be expected with any investment method, even evidence-based ones. In last year’s article, I put this sentence in bold: A good investment plan is not one without periods of underperformance, but one that is durable enough to recover and outperform.”
Thanks to Matt’s site here are the BTSX stocks to consider owning in 2022:
On Cut The Crap Investing, Dale highlighted some portfolio returns for 2021.
Same goes for Justin Bender, model portfolio returns for 2021, here is a great image with thanks to his wonderful site:
In case you missed some of my recent posts:
This was my best of from 2021.
I believe LSI (lump-sum investing) beats DCA (dollar-cost averaging) for the most part but as always friends, personal finance is personal!
I’ll be back next week with answers to some reader questions and more!
Save, Invest, Prosper!
As always, check out my Deals page.
Have a great weekend!
Another great year of investing and learning thanks to you. I have my annual TFSA contribution to consider and was looking at increasing my REIT exposure. SGR.UN is on my radar and is a pure play of US Grocery tenants. There are other REITs that diversify across various geographies other than Canada. Are you aware of any tax or distribution concerns to consider when purchasing these (out of Canada) REITs.
Thanks and keep the great guidance flowing,
Great stuff Rob and Happy New Year to you!
I think you need to be mindful of the RoC, interest, etc. for U.S. REITs in your TFSA, beyond the 15% U.S. withholding taxes. So, if you’re going to own U.S. stocks, REITs, ETFs, etc. at all, best to hold those in your RRSP for the most part. Read on, on this page.
Not advice of course, don’t let tax issues wave the investing dog, rather, just things to be mindful of.
I like Summit REIT myself in Canada and DIR.UN might be one to look at for international diversification that you can own in Canada, beyond our borders!
Happy New Year to you too, and appreciate the quick reply. The Slate Grocery REIT trades on the TSX, and was hoping that even though all the properties are in the US, would be treated differently with regards to RoC, interest etc. I’ll check out Summit and DIR for some international diversification too.
Thanks, and keep the great input flowing.
Gotcha Rob, I thought you were thinking of ownin U.S. REITs directly for a bit. Yes, Slate could thrive…hard to say of course but an interesting play for U.S. as well. As long as Slate REIT is domiciled in Canada, you should be fine = TFSA and no withholding taxes. 🙂 Not tax advice of course. Ha.
Summit should be pure Canadian (hit hard lately?) and DIR.UN is more international but also trades on TSX. 5-year charts on both are awesome but could be some reversion to the mean per se short-term this year! Then again, if that happens, good time to buy right? 🙂
Keep strong little sunshine $XAW … you make my happy when skies are grey as the song goes
Thanks for the mention Mark
LOL. Great stuff. XAW is a great fund as you know. I wouldn’t expect another $0.40+ per unit payment but likely in the mid-20s ($0.20-0.25) would be good 🙂
Have a great weekend,
So many good wins in 2021. I like seeing other pf bloggers reach their financial goals and milestones like Melissa’s incredible $1026 Enbridge dividends. I’m going to pay more attention to value stocks this year and maybe add some to my TFSA. My goal is to reach $200,000 balance in my TFSA by 2024, lol. All the best to you going forward in this new year, Mark. 🙂
Yes, seems that way. I enjoy reading other blogs. Hard to keep up with all of them but I try 🙂 $200K would be outstanding by 2024. I think mine has returned about 140% since inception, TSX about 118% last time I checked over the same period. So, I would happily join you at the $200K mark in 2024. Let’s do it.
Just emailed you back some things to consider 🙂
My best to you in 2022.
I also believe that a major market crash is going to happen. It will happen either while I’m alive or after my demise.
I know because I am the the wisest investor that I know. LOL
Thanks for the great weekend reading.
Ha. Great call David. All the best.
Great post! Just got boosted this week. TFSA is fully funded and working on RRSP 2022 I always boost my RRSP with my refund. Best wishes for 2022!
Congrats on the boost and TFSA! Two great things!
Best wishes back for 2022!
Happy New Year and continued success with your financial endeavours. I had a couple questions about the TFSA………
1. If you have the 6K to invest and you are with a brokerage that charges for buying/sellling equities (10.00 per buy/sell)- do you break up this 6 k and buy more shares in what you already own or decide perhaps to buy a new dividend paying stock that you don’t already own but have been contemplating. what is the minimum amount that makes this fee transaction worthwhile? ie is it 2K ……..I realize in the bigger picture it may not matter paying 10.00 a trade 🙂 but I was just curious how you approach this every year?
2. Do you have a max% per stock in the TFSA? ie 4-5 % of the overall total and do you consider this in relation to the total % if you consider the spouse’s TFSA and/or if there are some stocks that have creeped up in the market value dept (nice problem to have) what do you do with this if a particular stock exceeds your ideal % of the portfolio.
Great questions Sue! HNY!
1. FWIW, I don’t see $10 or $6.95 or other as a huge cost to buying. Of course, commission-free buying is best but I only buy a few times per year. When I buy, I usually buy when I have a few thousand to invest, more than $2K to make the transaction cost less impactful per se.
So, for the TFSA, even if I’m paying $10 for that, that’s $10/$6,000 or < 0.2% of the transaction. Pretty good. As for buying more of what I own vs. new. It depends on the value I see out there. Generally, you can read here on how I rebalance my portfolio per se in Canadian assets: https://www.myownadvisor.ca/reader-questions-how-do-you-rebalance-your-portfolio/
2. I have a 5% rule, on this page as well.
This is in relation to our total portfolio (shared with my wife).
Hope that helps a bit!
All the best for 2022!
Great post as always 😃👍 I love the BTSX stocks. I already contributed to my TFSA for this year 6k$ ✓ Dividend Daddy is indeed a money machine with his dividends! 💰 Impressive! Cheers Mark, it’s happy hour! 🍺
Me too – love the BTSX stocks and owned most for many years, as in decade + !
Best wishes to you and looking forward to your updates in 2022.