Weekend Reading – More dividends, paying off your house faster, great capital allocators 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.
This week, I profiled this 30-something investor on his way to building wealth. He reminded me that personal finance and investing success can be rather simple at its core:
1. Live below your means – save the excess.
2. Automate excess savings for investment purposes over time. Never stop.
3. Invest your savings in low-cost, diversified financial products or build a diverse basket of stocks for long-term growth and income.
4. Disaster proof your life. Buy requisite insurance for things you can’t afford to self-insure for.
5. Rinse and repeat until wealthy.
6. Life your life and enjoy your time on this earth every day as a blessing. This is really #1 on this list.
7. The end 🙂
I shared my dividend income update for May. We’re approaching another milestone investing in our non-registered account and Tax Free Savings Accounts (TFSAs) – I hope to report that new milestone later this summer so stay tuned!
A reminder I’ll announce the winner of this giveaway very soon. Thanks to all entrants!
We’re moving soon so I’ll do my best to answer reader emails and post a few articles over the next couple of weeks. I have no doubt we’ll miss this place but change is good.
My friend Sabeel shared some investment ideas that are great capital allocators. A good reminder that you need not invest in just dividend paying stocks to be successful. There are many roads to Rome!
Another Ottawa-area blogger and friend Kanwal Sarai (who runs Simply Investing) provided some practical mortgage burning advice with another one of Canada’s mortgage party burners Sean Cooper.
Reader email of the week:
A reader provided feedback on my REITs post recently after I wrote the following – when discussing our move to a 2-bedroom condo in another week.
Me: “Let’s not forget the health benefits – the ability to walk to amenities and services within 30 minutes of our condo building front door. Being so close to services will be a tremendous boost to my health.”
Reader email: “I thought so too, when I purchased my downtown on the waterfront condo 14 years ago. I love walking everywhere and even spend more on Presto than on gas for me (sic) car. However, as I age (78 now) and the area has constantly been in a business and condo construction boom, the increasing noise and the crowding (people and traffic) that comes with intensification now leads me to believe I am in a constant state of stress from these factors, and that is not exactly healthy. I now dream of moving to a greener and quieter part of the city……. just difficult to find exactly where, but I will.”
Always good to hear different perspectives and certainly there is not one size-fits-all when it comes to home ownership.
Could you live in a condo? Could you live in a condo in a major city?
Thanks for your questions! Keep them coming folks.
According to this article on Jon Chevreau’s Financial Independence Hub – 4 in 10 Americans can’t fathom if or when they might ever be able to retire.
Save, Invest, Prosper!
Use my Bank of Montreal promo codes, so I can provide you with up to hundreds of dollars cash back when you invest with them.
Save, invest, prosper and more with deals on this standing page here!
Thank you very much for your help. I will do that. I couldn’t decide which way I have to set up for RESP. Now, I got it. I really appreciate that.
Thank you for the other information you gave me in this website, too. I couldn’t sleep when I found this first time. Now, I am going through all the information you uploaded and then, I would get the conclusion about what I have to do and what I should not do. Take care.
There are no perfect answers Eun, just make the best risk-based plan available.
I appreciate you reading my site and asking questions. We all make mistakes but it’s best to learn from them. I’m trying to do the same and so are you – good on you!
All the best and thanks for following along, I hope you continue to do so!
Welcome to condo living! I personally prefer living in a small unit than a house. If the condo is reasonably priced and close to amenities , all within walking distance all the better!
The condo is within walking distance (<30 min.) of groceries, restaurants, entertainment (sporting events) and more 🙂
Does your condo have private outdoor space – small yard or terrace? Some sort of a townhouse condo or the sort that is a high rise of apartments? I have been considering my own options and I am not sure if I could live in an apartment style condo.
Our terrace is nice (I think – we’re biased). I’ll put a picture of it up on my site maybe after we move in. The terrace is ~ 6.5 feet wide by 44.5 feet long (it runs the length of the unit) so I think we’re pretty lucky.
It’s not a high-rise at all. 6 story building and we’re happy with that. We didn’t want to live in some glass tower.
Our condo will be close to ~ 1,200 sq. feet on the inside which is a nice size I think for 2 people.
I’ll know more when I’m there in another week Beth!
I really have headache to decide whether I have to buy the bonds or all the stocks.
I have 570,000$ cash now. I lost 96,000$ on December 22nd, 2018. I was the dumbest person at that moment. I didn’t think I could win Trump and decide to sell all the stocks. Now, I have to buy stocks. I am actually waiting to get good sale prices of the stocks. Do you have any recommendations for me? I really like to read your comments. Thank you very much
Well, I can’t really offer much advice on this one. That’s a pile of money to invest. Have you considered a simple all-in-one fund to help you out?
Tough lesson to learn Eun.
My only suggestion is to seriously consider what asset allocation you can live with long term, considering your goals and risk tolerance. Then stick with it and don’t make big bets on market directions, since virtually no one can do this with any degree of long term success.
Agreed (to Eun). Tough financial lesson to learn but definitely one to help learn from.
Thank you for your comment. Like you see, yes, it is a really big problem. On February 15th, I started the buy and sell trading with $100,000 after I had sold all the stocks in last December, 2018. Since then, I could make around $8,500(8.5%) for 2.5 months but I really didn’t know what it was going to happen in the US and China trade war. The market was up and down again and again.
Since then, I was looking for your information and I got your website. Thank you for your helping a lot of people for this.
Is it your recommendation to put all in one ETF fund?
I have two RRSP account and one Resp, I was thinking to buy stocks in my husband’s account and my account for etf. For RESP, I need the cad in 4 years. I cannot take a lot of risk for the fund. I didn’t decide what to do for the RESP. Do you have any recommendations for RESP?
Well, I can’t make recommendations on this site for many reasons but I’m wondering if you shouldn’t consider an all-in-one fund for now, while you do more research. This way, you’re invested, it’s simple, you can take some time to figure out what you really, really want to own and you can get a decent bond / stock allocation.
For the RESP, if you need cash in 4 years….you could consider 50%-75% GIC ladder and 50-25% equities since you want to protect that money and who knows what could happen in 4 years. Here are some links for further reading:
All the best,
Agree. All in one ETF, asset allocation built in, set and forget.
RESP, maybe 50% all in one, 50% GIC ladder.
Hi Mark. My husband has $338,330 in his RRSP.
I am managing his account now. My question is whether I should buy some bonds for him in his account. He is still working and he has 9 years to retire at 65. I want to follow your way with 100% stocks. The bond yield is too low and I prefer to have more dividend stocks for him. He said he saves 20% cash and the rest to be invested in equities. So, last month, I just bought two $10,000 GICs in his account. I will leave some as cash. I am thinking to put all stocks in one account and all the etf in the other account. Do you recommend that way or each account has some stocks and some etf together?
Thank you for your comment. I really have a big headache about the asset allocation. That is why I got this website and I started to read what Mark recommended.
I read almost what I need. I have two RRSP and one RESP. My husband has 9 years left to retire and I have 16 years left. I am going to follow the Mark’s Canadian dividend stocks and US and China ETF.
My question is how much I should allocate the money to each stock for Canadian market and US and China part.
The real question is when I should buy them. Now the market is really up and down. Do you have any idea how to do?
Thank you for your comments. Right now, if I get some help, that will be really helpful for me.
I made my comment since its seems like you were trying to time the market and that you are very concerned about your stock values declining. 100% sell of equities is a strong signal to indicate this. If that is the case IMO you are invested far too aggressively in equities and should choose what allocation you can live with for the long term without trying to time markets.
Bonds aren’t there to provide a strong return or high yield. They ying when the markets yang adding stability and help some investors stay calmer when things don’t look rosy- like in December or when things are much worse. If holding bonds you might consider rebalancing in opportune weaker equity times, perhaps like in December which is what I did. Is it right in the shorter term? I don’t know. In the longer term – yes I believe so.
I can’t help you with when to buy other than to say its impossible to successfully time markets, so perhaps the best invest time is yesterday, especially if your time horizon is long term.
Shorter term needs like the RESP should be invested more conservatively at this point. Look to some of the large all in one funds for potential equity allocations between Canadian, US, and international as you choose. I would not buy just China, and don’t believe Mark owns any.
Good luck Eun.
Thank you very much for your comment. I really appreciate that. I am really thinking which way is better way right now for these accounts. When I sold my stocks, I was scared of losing my profit. At that moment, I thought I might lose all the profits I had so far. I also didn’t diverse the money to a lot of stocks. I kind of put all the money in one basket. In the past, there was time I lost 30% in stocks and I had to leave it for two years, doing nothing. My purpose was trading not investing. Now, at this moment, I have to think which way I have to do and how I have to diverse these accounts. I was 100% aggressive trader and I am turning point to prepare for my husband’s retirement. I cannot lose money for him. Since May, I am reading this website and searching information for my husband and my son. I will take your comment into consideration and get to the conclusion sooner or later. I really appreciate you. Take care.
You are welcome.
Good, you’ve recognized some important things and are better able to implement an appropriate long term plan for your family.
Sorry to hear about your loss. I was in a similar situation year 2017, with a big lump sum of cash to invest. At that time, market was also already very high but I feel that I have to invest the money in order to beat inflation. What I did is that I came up with a list of stocks I am interested. And I set a target for myself that I will buy a certain amount of stocks each week. So each week I look at my list of stocks to see which one I did not buy yet and is relatively cheaper.
Quite a few stocks I bought from that time went down after my purchase. Some of them are still under water. For example, ENB I bought around $49, and today’s price is under $47. Some of them have a nice up of price, for example, CNR I bought around $100, and now is around $120. I am investing for long term and I buy solid blue-chip stocks so I still sleep well in the night.
At this moment, I could not say for sure yet if that’s the right approach. All I know is if I don’t invest then I will lose to inflation for sure. It is a very bad feeling to see the value of my portfolio goes down. I tried to concentrate on the investment income that keeps going up. This is the major reason I chose dividend growth investment as my investing strategy. Although the price of ENB went down, but the 500 shares of ENB I have bought became 554 through dripping. ENB also raised dividend twice during this time. My dividends from ENB increased from $300 to $400. Is there a chance ENB will go bankrupt? I think so but not high. I also keep the percentage of each of my stock under 3%, so even one stock goes broken I lost only 3% of my portfolio.
I am still very new in this game. Just some lessons and experience for your reference. Good luck with investing.
Hi May. Nice to hear from you. Thank you very much for your story. I am really happy to Hearn what and how you did. You gave me some guideline. So far, it was like a foggy dark street in front of me. I actually feel this money is really heavy to carry. I have no idea about how much, what percentage, when, what I have to buy. Considering my husband and my 13 year old boy, the account should have different holdings. So all these questions bothered me since I sold all the stocks. Now, I am getting some answers here and there. What percentage did you put your money? Do you only have stocks or etf too? I am planning Canadian stocks and us and emerging market etf. Because I don’t have US dollars, I cannot buy US stocks at this moment. I read about tax withholding and it is better to have etf in tax free savings account. But I only have RRSP accounts and 1 RESP account. I have to hold all stocks and ETFs in RRSP accounts and RESP account. Thank you for your comment again. I am happy to meet a person same with my situation.
Eun, May is an impressive reader and fan of this site to learn from. All the best once again.
Good luck with the move Mark! Enjoy condo living.
Thanks Chuck. Back to where we started really – lived in a condo 13+ years ago! Cheers.