Weekend Reading – Mistakes with time off work, investing like your grandmother, “I’m not a math person” and #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.
A reader recently asked about where they could find a free, super simple, easy retirement calculator?
I directed them to this post and book.
It was a busy week at work but I’m enjoying supporting my new team – they are passionate, engaged and strive to make a difference. It’s a nice change for me and looking forward to more momentum in the months to come.
That brings me to this – have you ever changed roles at work and if so, how did you feel about it?
Earlier this week, I profiled financial author and fan of this site Jon Chevreau. We discussed how he’s structured his portfolio for retirement and how he feels about the #FIRE community.
Thoughts on his thoughts? Happy to hear your take.
While I enjoyed the time-tested advice in The Millionaire Next Door, I think this personal finance classic left out a major ingredient on the path to financial wealth. Read what that missing element is here.
Last but not least before Weekend Reading, I think you should at least consider downsizing for various health, financial and environmental benefits – at some point.
Canadian Financial Summit is here!
Before we get to the Weekend Reads, just a quick reminder the Canadian Financial Summit is now underway – including my talk coming up soon: How I’m preparing my portfolio to fund my early retirement.
You can get your free ticket to the summit here – taking place online from September 25-28, 2019.
I look forward to your feedback on my talk!
Weekend Reading
Financial Mechanic said even though you’re not a “math person” that’s not any excuse to avoid getting your financial $hit together. Bang on.
My FI (Financial Independence) friends at PrairieFireCanada believe you need to avoid lifestyle inflation to succeed. Agreed – to a point. I also believe life is for the living. So, automate your savings, invest in low-cost funds or a diversified basket of stocks, and spend what is leftover. Save your 10-15% net and enjoy the rest.
DividendsDiversify offered some tips to streamline your finances. Again, huge fan of automation friends.
A HUGE congratulations goes out to my blogging pal Million Dollar Journey, who recently reached a cross-over point with more than $53,000 in dividend income. Incredible. I hope to post my latest dividend income update related to our FI journey sometime next month. This was my last update (MDJ keeps reminding me I’m not that far behind him with my workplace pension factored in…)
The Money Geek reminds folks that it’s OK to invest your own way. You don’t need to follow the herd to have financial success.
Deals and more deals!
This page will help you make the most out of your money and save big bucks in the process!
Have a great weekend!
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.
Thanks for the clarification Mark!!!
This is probably a dumb question to ask (not that being dumb has ever stopped me before), but what is a “corporate portfolio”?
I must have missed that wherever it was but I’m guessing it is the investments that are held within a corporation.
ie a doctor has established a corporation to operate his business under. The corporation holds various assets some of which can be investments like stocks (the corporate portfolio).
One of the links has one as a major part of their dividend income. Wasn’t sure what they meant by it. Is this the type of system the government was trying to curtail awhile ago? Where people sheltered unrelated income within a corporate structure to avoid taxation?
Ok, now I know what you’re talking about. He owned a well known financial web site (probably held by his corporation), which I am sure was sold. The corporation likely remains and the sale proceeds are invested creating dividends that are counted in his overall dividend income.
ah, gotcha. thx.
You’re welcome.
He sold one (Canadian Money Forum) and continues to run MDJ.
You are correct, he had the proceeds from sale under the corporation and kept them there and bought more stocks and assets over time as far as I know.
Great. That’s as I thought.
I hope you have the same success Mark.
Me too 🙂
Indeed. I provided more details to Lloyd.
Lloyd, I assume you never considered your farming business as a corporation?
I never did. Probably should have as it appears to be a lucrative course of action.
I assume you’re talking about my friend MDJ?
He has, for many years, built his blog and online business in a way that makes decent money and as such, runs it like a corporation.
In doing so, he has many tax benefits:
1. He take any repayments to his corporation – without any tax implications.
2. Owners of a corporation – if they want cash – can enjoy dividends on tax-free basis. Once cash is within the holding company/”corporate portfolio”, you can reinvest those dollars in whatever way you see fit.
3. Pay capital dividends. There is a tax-free portion of any capital gains realized by the corporation over time, any capital dividends from the corporation itself, AND, value of life insurance proceeds paid into the corporation. Crazy…
4. You can pay dividends to low-income family members. I recall if you have adult family members who are shareholders of said corporation, you can pay up to about $50,000 (varies by province) in tax-free dividends if that family member has little or no other income.
The list goes on….
MDJ has build a VERY successful blog (he has x5-x8 more daily readers than I do), arguably one of the biggest blogs in Canada besides my other friend Tom Drake (MapleMoney) and because of that, makes great income from his site.
I hope that provides some insights.
Mark
I have a couple of farmer neighbours that have mentioned something that sounds similar. A farm corporation with family members being the shareholders. I have next to zero knowledge of how these work, the tax implications, or if all/some of the “dividends” are generated by the underlying business or un-associated investments, hence my question. I’m still not totally clear on how these things work but suffice to say many are using them so they must be beneficial. I’m not criticizing, just trying to understand the posted numbers and what they mean. Everything else in the list is self explanatory.
Good morning.
Very nicely done with MDJ. He’s a machine, just like you Mark.
Really liked the article and approach by Dale @cut the crap.
Yes, Financial Mechanic, Blunt Bean Counter, Money Geek. Right on.
Had an absolute fantastic Running Relay yesterday. Life is great!! Have a great weekend all.
MDJ is a mentor to me – he is phenomenal really. I mean, how many near 40-year-olds are pulling in > $50k per year from their portfolio? Very, very, very few. Crazy good.
He remains an anonymous blogger but I know him rather well behind the scenes. An inspiration to me to say the least.
Yes, how was the relay? Did you win your age category?
Mark
That is fantastic Mark. Indeed, I can think of worse things than generating good income, especially if that is a goal.
A valuable relationship.
Relay was awesome. One of the best days I’ve had in many many years rekindling some old memories and creating new ones!!!! It’s an amazing experience 68 teams of 10 people – giant caravan travelling 110kms over the day. They’ll likely have results put up at some point next week or two- our team The Reluctants and my leg #6. All volunteer so kinda slow. No age categories in this.
I ran a bit faster than expected so very encouraged for my key event Oct 13 -half marathon when I will be gunning for it! Heading up tomorrow with the person I coach, and spouses to drive the course, mentally prepare and have a nice lunch in a beautiful area.
Sorry to others for the digression.
I like the Bean Counter article, accept it’s interesting that he can’t really accept what he writes about:
“What I found remarkable, as I saw this time and time again, was that blue-chip stocks dominated these portfolios. (Mutual funds were just coming into vogue and no one had heard of an exchange traded fund (ETF).) Each portfolio had the big Canadian banks, insurance companies, utility companies and the Bell Canadas, Canadian Tires and Thomsons of the Canadian stock universe, plus some large high-quality U.S. stocks sprinkled in”
Then he suggests:
“1. Buy high-quality stocks, ETFs or mutual funds”.
Why not stick with Quality stocks as he discovered and forget: “Mutual funds and ETF”.
You know how I feel about this stuff 🙂 Blue-chips or index. Keeping it simple. Stay tuned for my next dividend income update my friend!