Weekend Reading – #PuraVida and home edition
Hi Folks!
Welcome to a new Weekend Reading edition – my #PuraVida and home edition (now that vacation and travel is over…for a bit).
Here are some recent reads on my site and from Cashflows & Portfolios:
I shared what I bought inside my TFSA this year in this post – investing is one of the great things you can do with your TFSA this year.
Could you retire if the Global Financial Crisis happened, again? We break down the mix of stocks and bonds that could impact your retirement plans if you attempted this!
Thanks to Rob Carrick for mentioning one my posts in The Globe and Mail recently:
IN RETIREMENT, HOW MUCH INCOME IS ENOUGH?
An investing blogger works through the question of how much income is enough in retirement. A key step here is estimating your retirement income needs. Some good news – you’ll need less than in your working years because you won’t be saving for retirement any more.
Weekend Reading – #PuraVida and home edition
Always great to travel, but also very good to be home.
In case you missed my last Weekend Reading edition, my wife and I just returned from Costa Rica and living #PuraVida for a week – the pure / simple life.
Indeed it was.
This was our third time visiting Costa Rica, and along with going back to Belize, hopefully more trips will happen to Central America and these countries in particular in our financial future.
For the locals, Pura Vida is more than just a catch phrase. While it may be part of a pleasant “hello” from locals to tourists, it’s also an attitude and a gratitude.
Pura Vida is about living the good life…cherishing simple pleasures…and simply slowing down.
This “good life” is what Costa Rica offers. There’s a climate and location to suit every taste…you can enjoy cooler mountain towns and the lush tropical jungle or head to the warmer Pacific-coast beach towns to enjoy more lazy days by the beach.
We’ve been fortunate to visit the rainforest before in Costa Rica (we’ve visited volcanoes, did hiking, ziplining and more) so this vacation was more beach and sun – doing the aforementioned slowing down thing at our private casita at the Airbnb we booked.
Just one of our morning views from the Airbnb, in the hills above Tamarindo overlooking the ocean.
Our private plunge pool and rooftop patio above our accommodations.
Our private casita with ensuite bath and full kitcken.
As you can likely appreciate from the pictures, I feel our place was phenomenal and very much worth the trip.
I’ll keep you posted as we plan for more trips via the site, but for the near-term, it’s back to some reality and work – at least for a few more years full-time!
Weekend Reading – #PuraVida and home edition – more reading…
I still managed to get in some reading in over the holidays/vacation, and here is what caught my personal finance and investing eye for you as part of this Weekend Reading edition below.
I’ll be back to post my latest dividend income update next week (this was my last edition!) including announcing some changes to the format and approach that I hope you’ll appreciate – as readers but also for anyone who might be more curious about income planning as part of diving into semi-retirement or retirement. More to come!
Have a great weekend!
I enjoyed Ben Carlson’s take on deconstructing 10, 20 and 30-year stock market returns.
A heckuva reminder to remain investing and avoid tinkering too much with your equity portfolio for sure:
“Allow me to repeat that stat for the people in the back — the worst 30 year return over the past 100 years or so was a total gain of 850%.1″
I read that some Canadians believe they will need to save up $1.7 million to retire, up 20% in fact, from 2020, according to a study published by BMO Financial Group recently.
That’s a bundle to save…
…but let’s not forget it’s what you intend to spend in retirement that really matters.
Based on my case studies and work with clients, with that amount of money, you could very easily spend more than $6,000 per month with 3% inflation and still have a few million dollars in net worth remaining at age 95. If that’s your goal.
This Financial Post article and BMO study implies to me that Canadians either have very expensive retirement tastes and/or they don’t understand how far $1.7 million dollars invested can ever go and/or Canadians are downright fearful about their financial future – probably unnecessarily so.
Thoughts???
If inflation has you spooked over the last few months, well, it’s not all bad here in Canada unless you take some time to look around the world – consider some comparables. With thanks to Visual Capitalist:
Dale Roberts also talked inflation and U.S. markets recently in his latest Cut The Crap Investing post.
Kudos to Kanwal and Bob on this podcast edition, bloggers and fellow investors I’ve known for years. Certainly, the tone of “balance” and “optionality” has always been very important to me and remains a cornerstone of my personal finance journey.
Andrew Hallam has an entire book on that worth reading:
As a blogger and passionate DIY investor that has many U.S. readers, I enjoyed Chrissy’s updated content here related to U.S. and Canadian investing accounts.
Image and infographic above with thanks from owner: https://eatsleepbreathefi.com/us-canadian-fi-glossary/
On Farnam Street for my weekly dose of Brain Food:
Bertrand Russell on Growing Old:
“Psychologically there are two dangers to be guarded against in old age. One of these is undue absorption in the past. It does not do to live in memories, in regrets for the good old days, or in sadness about friends who are dead. One’s thoughts must be directed to the future, and to things about which there is something to be done. This is not always easy; one’s own past is a gradually increasing weight. It is easy to think to oneself that one’s emotions used to be more vivid than they are, and one’s mind more keen. If this is true it should be forgotten, and if it is forgotten it will probably not be true. The other thing to be avoided is clinging to youth in the hope of sucking vigour from its vitality. When your children are grown up they want to live their own lives, and if you continue to be as interested in them as you were when they were young, you are likely to become a burden to them, unless they are unusually callous. I do not mean that one should be without interest in them, but one’s interest should be contemplative and, if possible, philanthropic, but not unduly emotional. Animals become indifferent to their young as soon as their young can look after themselves, but human beings, owing to the length of infancy, find this difficult.”
Thanks for your readership and have a great weekend!
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.
Looks like a great vacation spot Mark – Costa Rica is definitely on my futures list (if we can ever stop going back to Italy – first world problems lol). BTW, I listened to the podcast where Bob Lai (Tawcan) was interviewed. During the podcast, he peeked my interest about a couple he wrote about that were generating 360K – yes 360K! – in dividends per year. That just blew me away! The other thing that really surprised me was when they talked about how much dividends could be generated that would be tax-free. I always knew that dividends received pretty favorable tax treatment – but they wrote that you could generate about 55K (110K per couple) in dividends tax-free! I had no idea! Am I missing something or is this truly the case??
Ya, that’s an exceptional case though with Bob’s “Reader B” I recall, making that much in dividends ~ $360k per year. Incredible…
Yes, I suspect what “Reader B” left out and probably wasn’t well mentioned is this assumes you have no, other, income. Meaning, no CPP or OAS or pension or other income to report. Assuming your only income is from Canadian dividend paying stocks, then yes, you can earn on average about $55k per year, per adult and not pay any tax on that income earned.
The folks at Taxtips.ca in particular run an outstanding site and all tax tables are there to read so you can see how different income is taxed at different rates.
Here a a link to Ontario for me 🙂
Look at the table “TaxTips.ca – Combined Federal & Ontario Tax Brackets and Tax Rates Including Surtaxes”
https://www.taxtips.ca/taxrates/on.htm
Let me know your thoughts 🙂
Mark
Understood re: other income. I guess what I was getting at is that up to 55K is tax-free in dividends. So does that mean if I had, let’s say 25K in regular/pension income, then the tax I would pay is the same as if I had 25K reg/pension + 55K div income? If that’s the case, then one really needs to try and get as much dividend generation outside of their RRSP/RIF!
Pretty much.
The way it works is, as you likely know, we pay income taxes on a marginal scale. However, income is taxed differently in that scale.
So, your workplace income will be taxed X but your Canadian dividend income will be taxed Y.
If you had $25k in pension income, that would be taxed one way but the other $55k income from Canadian dividend paying stocks would be taxed differently.
This is why there is a focus by some to invest outside of their RRSP/RRIF for dividends or better still, capital gains 🙂
Mark
Also, one other comment – are most of the dividends that get paid from eg. the banks, utilities, etc that we normally hold, qualify as eligible dividends for these tax credits? Or are there lots of cases where regular blue chip holdings lead to non-eligible dividends?
Correct, depends on the company and their decision to pay an eligible dividend (or not).
Hi Mark: All those extra boxes are on the T5013 from Brookfield platform companies. Since the government stopped allowing bank safety deposit boxes as carrying charges these are the only boxes I can use to declare carrying charges.
Gotcha. Thanks for the clarification.
Hi Mark and Trace: I took my taxes into H&R Block and the problem was partly m8ine and partly Revenue Canada and caused by Brookfield. In 2020 Brookfield took BPY.UN private and so bought out the shareholders so this resulted in a capital gain or loss. BIPC also bought out the shareholders of Inter Pipeline LTD. You could take the cash or the shares and I took the shares but this also triggered a capital gain or loss. Both were reported on my T5008 But this slip you don’t have to send just report the capital gains or losses. This Revenue Canada didn’t have. The other was the Brookfield slips which have many boxes on them but Revenue Canada does not have all the different boxes. There is ROC, Interest, Foreign Dividends, Other, Carrying Charges, Capital Gain and Withholding Tax. My taxes would be simple if not for the Brookfield platform companies which are located in Hamilton, Bermuda. I have done my taxes the same way every year and this is the first year that they wanted a review. Lucky me.
Gotcha. Thanks for the update and such are the challenges with taxable investing but you have a good problem to have – if you can maintain such a healthy taxable account 🙂
Lots of boxes and items to be mindful of on T5 and T5008.
Mark
Hi Mark: Thanks for that Trace. Its a pain but has to be done.
Looked like a great place you had in Costa Rica Mark, and it sounded like you had a very enjoyable trip. Hope it recharged the batteries for another round of work/blog and all the else you manage to do.
Yes, a bit Murray – thanks very much. 🙂
Mark
Hey Mark you got my attention with #puravida! Such beautiful photos. We have a little place in Ocotal and look forward to going in March. Glad you got away to enjoy some crucial downtime.
Excellent, Karen! Do you visit Ocotal often?
Mark
Not as often as we’d like! it’s a great area, away from busyness of Coco.
Hi Mark: With Hawaii we started off with a cruise to both sides of the big island and then on to Maui. From there we went to Kauai and then back to Oahu The rest we were on our own and visited Diamond Head, Peal Harbor and took in some Hawaiian feasts. My brother and his wife celebrated their 35’th anniversary there. As for my stocks BCE is not the most I have as I have 21000 shares of ENB and 12187 of BN. Between home and Waterhouse I have 10000 shares of CU. These stocks are non registered so as you can see it adds up when bumped up so the CRA wants their slice quarterly. It isn’t a full blown audit as they say they want to review my taxes so they want me to send copies of the work sheets and slips with the reference number written at the top of each sheet and slip. A full blown audit would entail multiple years which this doesn’t.
Thanks Mark for sharing those beautiful pictures. Great to know you are having a blast and happy for you. Keep on the great work and best of luck in your investing journey and having fun along.
Very kind, thanks very much, Ken! 🙂
Mark
Hi Mark: Your vacation sounds and looks great. I haven’t been to Costa Rica but I have been to Mexico, Jamaica, Hawaii, Aruba and Cuba. My niece got married in Cuba in ’11 and we have been going back ever since. Lately before the pandemic we went to Melias Las Americas in Veradero. It is just like ground hog day. We would get up and have a bite of breakfast and the the guy’s would head to the golf course and the girls would go to the beach. After golf we would come back and have lunch and the waiter would give us a second beer before the first was finished. then we would go to the beach and meet up with the girls. Then we would dress for supper and after supper go to the lounge area and get a drink and play euchre. We used to go to the shows but found them all to be the same. The next day would be the same. Mark I received a nasty letter in the mail from Revenue Canada. According to the letter they picked mine to review and found something missing so they want me to send copies of my ’21 taxes and slips with the reference number written on the top of each page and slip and I can fax it to them. How many retirees do you know that have a fax machine. This just one more pain in the rear. I am not doing my ’21 taxes again so I guess I will have to take it to H & R Block and let them straighten it out. For some reason BCE is dropping in price so I’m thinking of watching it with a sense to buy it as 300 shares would give me 10000 shares. My neighbor always asks me why I keep buying stock as I have enough but can you really have enough. The more money you have the more secure you are and with the compounding effect of dividends you can’t help but get more.
Nice!
We’ve been to Mexico a few times, same with Jamaica, Aruba and Cuba. Not yet visited Hawaii but on the list!!
I know where Melias Las Americas is, nice spot.
Sorry about CRA. Audits can happen. I don’t know of any retirees that have a fax machine 🙂
10,000 shares in BCE would be epic. Is that your largest stock holding? I’m only at 1,000 or so now so I have some catching up to do!
Mark
Ha. I have a fax machine, but no telephone line to transmit on.
Thanks to Mark I switched to internet phone many years ago, thus saving a bundle.
Nice, I don’t many folks that have a fax machine. You are one of them 🙂
Have a great weekend,
Mark
Hi Ron,
You may upload your documents to your on-line CRA account.
I recently had to send 41 pages to the CRA — fortunately I have a printer/scanner at home which just created a PDF file for upload.
Alternately, you can go to STAPLES and scan (or FAX !!!) your documents.
Just note if you elect to use your CRA account, you’ll get a confirmation the document was received.
Trace.
Thanks for that!
Mark
Hi Mark,
I enjoy reading your posts, I constantly learn something new!
Just wanted to say thanks for including your vacation photo’s! Looks like you had a fabulous place to stay and beautiful views. I’m so jealous…happy for you though!
Thanks and enjoy your weekend!
Awesome, Lisa 🙂
Thanks for the kind words and honestly, very much appreciated!
Have a great weekend back,
Mark
Welcome back Mark! Thank you for sharing the pictures with us, our trip to Cancun last october was so relaxing and enjoyable so when I came back the whole week I was looking for a place to buy down there ( by the way I do that every time we go for a vacation to Mexico :))
Airbnb is something we never tried on a vacation maybe I’m to sceptical and also the idea of being on a vacation and having to go get your grocery and cook at home won’t go together for my wife 🙂 so this is why we always stick to an all inclusive where the only thing we have to think about is what we gonna eat or drink next 🙂
I’m so excited this week because I finally was able to transfer the intrust-marginal account for my daughter from Questrade into her TFSA with Wealthsimple so she started with 12k in her TFSA not bad at age of 19 I guess and got few blue chip Canadian stocks to start like TD FTS T and BCE and EMA my son had his the year before and I tell you that 0$ comission fees are really attractive and the fractional shares are even better for young kids who just got part time work while attending university .
Hope you have a great weekend!
Thanks, Gus!
Been to Cancun, fun there, how was your trip? Going there again soon? We last stayed there in 2005.
Airbnb is good, overall, helpful to get to know the owner, understand the area and understand the cancellation policies. Otherwise, not too worried since travel challenges can occur anytime, anywhere, in any country really.
Congrats – re: “…transfer the intrust-marginal account for my daughter from Questrade into her TFSA with Wealthsimple so she started with 12k in her TFSA not bad at age of 19…”
Absolutely.
Not sure if she reads personal finance blogs, but as long as she keeps at investing inside that account, for a few decades, she can retire early on the TFSA likely 🙂
https://www.cashflowsandportfolios.com/can-you-retire-using-just-your-tfsa/
$0 commission fees are great for everyone! 🙂
Smart.
Have a great weekend back,
Mark
The trip was excellent as we consider those trips as a reset button for our go go go life but hey we shouldn’t be complaining since we’re blessed with our health and family.
Thank you for the link about the TFSA I enjoyed reading it and I hope they get to read it as it shows the powerful effect of starting early.
Excellent stuff 🙂 Yes, health is the ultimate form of wealth.
Mark
Can you provide the listing for the accommodation you had in Costa Rica?
Sure!
https://www.airbnb.ca/rooms/48078312
Wow, Costa Rica looks amazing. I wonder how much that casita cost you per night? I would love to see more travel-related content on your blog. Hopefully you travel even more as you get closer to retirement.
Thanks a lot for sharing that great podcast with Bob and Kanwal. Always on the lookout for FI or dividend-themed podcasts to listen to.
Well, it was a bit on the higher side, we booked this during high season but I don’t regret it 🙂
https://www.airbnb.ca/rooms/48078312
I hope to post more travel-related stuff over time including reviews and other once semi-retirement hits. I will have more time to do so…at least that’s the plan…
Yes, Bob has done an amazing job with his investing to date and Kanwal remains a very passionate dividend investor too.
Thanks for your comment, Loonie, have a great weekend. 🙂
Mark
I do a lot of travelling and am currently in Colombia for five weeks. You need to research a lot and find what you like or want. There is an infinite amount of info available.
What I can say is that most we have encountered have been 40 years younger than us, lol. Not quite as easy as when we were that age.
Great stuff, enjoy Colombia!
Mark