Weekend Reading – Phases of financial independence, podcasts on #FIRE, rent vs. own debates and more
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 – including phases of financial independence, podcasts, thoughts on FIRE and more.
Earlier this week, I published these articles:
What happens when passive investing takes over the world? A senior manager from Vanguard has some thoughts on that in my post including why indexing investing is hardly an investing bubble.
I shared our latest financial independence (FI) update in my September dividend income update. How are your cashflow plans coming along for retirement? I’m looking forward to seeing how December 2019 eventually compares to last year:
I hope you have a great long weekend and happy Thanksgiving here in Canada. Definitely a time to be reflective and thankful for all that you have. I will certainly be doing that.
Best wishes,
Mark
Weekend Reading – Phases of financial independence, podcasts on #FIRE, rent vs. own debates and more
Financial Mechanic wrote about her five stages of #FIRE.
- The Spark – the idea takes hold.
- The Flicker – “…the kindling is often followed by disbelief.”
- The Kindling – learning accelerates.
- The Smolder – learning to stay the course and avoid feeling bored…
- FIRE – “…Don’t think of financial independence as an escape. It is actually an adventure onto something new….“
Her thoughts align nicely with what I mentioned on The MapleMoney Show with blog pros Tom Drake (of Maple Money), Doug Nordman, of The Military Guide, and JD Roth, from Get Rich Slowly.
We discussed FIRE at the 2019 edition of FinCon (Financial Independence Conference, Washington, DC).
The Fioneers highlighted their favourite money milestones.
Rob Carrick highlighted TD efunds are now more widely available but in my opinion they may not help you beat other lower-cost funds.
I listened to the The FI Garage guys (older podcast) that discussed an important topic for investors – over a few pints – the asset allocation approach that referenced my way/how I treat our portfolio:
- Non-registered account: Canadian dividend paying stocks.
- TFSAs: Mostly Canadian dividend paying stocks and ETFs.
- RRSPs: Some Canadian stocks and ETFs.
I had a reader email me recently asking if close to $1 M in the bank in their mid-50s with no pension was enough to retire on. Well, here is an article on that very subject. Compare notes!
Reader question of the week (adapted for site):
Hello, Mark
I have a question regarding diversity. I have been following you for a while now and know you are a DGI (dividend growth investor), and have built up your dividends to a substantial amount for a 40-something. That being said, are your stocks mostly Canadian?
I am a new investor and have very few stocks of blue-chip Canadian companies. Should I be concerned about diversifying my portfolio at the early stages of growing my dividends? How important is it to diversify? Do you have U.S. and international stocks in your portfolio? Please let me know your thoughts. I look forward to hearing from you!
Great questions!
Answers to these questions deserve their own blogpost, so I’m going to write that soon enough. In the meantime:
Yes, about 60% of my portfolio is in Canadian content but I’m working to bring that number down to about 50% over time. (I used to be 100% Canadian content almost 10 years ago (!) in 2009.)
Check out this article about how I intend to open up the investment taps at some point – I hope to have roughly a 50/50 mix of Canadian stocks and ETFs before we retire before 2030.
I don’t think you need to be concerned about diversification per se but think of diversification this way: look at portfolio diversification like a healthy diet – eating a variety of good foods over time increases the potential for your body to be healthy (and wealthy in this financial case), but it won’t guarantee it.
Have a great weekend!
Mark
Good stuff Mark. Looking forward to your blog post on diversification – the only free lunch. Did some research on my own as I was curious how much of retirement income might already came from outside Canada without intentionally investing in foreign markets. Was surprised to see that it was 35% – 40%. Many of my Canadian stock holdings have international business, 40% of my DBPP and 85% of CPP. Investors might have more diversification than they realize.
Keep up the great work.
Funny, that’s part of my article. Will CPP be less of Canada over time? I suspect so. I fully agree, investors in Canada might have more diversification than they think. That’s my thesis 🙂
We bought our water heater as it made more financial sense- then it had issues and the labor costs to repair it wiped out that advantage. Renting with a service plan would have been cheaper. Labor’s never included under the warranty
Definitely exceptions to the rule Geoff but I would think most homeowners are better off owning appliances and equipment directly.
I know when we got our hot water tank it came with a 5-year warranty but yes, I don’t recall labour included.