Weekend Reading – Regrets, toxic DSC funds, money rules to live by, 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.
So, I continue to work on my golf drills at the range at least once per week and the work is slowly starting to pay dividends I think. Here is one of the drills I’m working on – I posted this in a previous Weekend Reading edition: keeping a golf glove under the left armpit. Why?
It will help your arms including your left arm specifically stay “connected” to your chest. Poor golf shots and lack of consistency can come from your arms and chest not working in-sync. I use this drill with 7-irons at the range for about 30-40 balls. I swing at about 50-75%. I figure if this drill is good enough for world #1 golfer Rory McIlroy then it’s good enough for me…!
I believe a more connected swing translated to the course this week when I shot the most solid round of the year: 37-37 for +2 or 74. Let’s hope I can keep these great swing vibes going!!
On to the personal finance and investing stuff people…
I fully agree with investor advocate Ken Kivenko in his latest email to me:
“We recommend that investors consider other firms that do not lock in your investments for up to three years. Many other cheaper and better alternatives available. Think at least three times before you buy a DSC (Deferred Sales Charge) fund from Mackenzie. We have to question the integrity of any mutual fund company that continues to support this toxic product. We hope all our financial blogger friends carry this message.”
I will Ken!
Dale Roberts feels the same: there is no need for DSC funds.
A Purple Life has her priorities and eyes on early retirement. I can see why. With a good paying job she can sock away tons of cash when she only spends about $1,400 per month.
Some highlights from her budget:
- Her share of rent is about $852 per month.
- She only spends about $225 (max.) per month on groceries.
- Her “Entertainment” budget is consistently below $50 per month.
By comparison my wife and I spend:
- Beyond her total monthly spend of $1,400 on just our *mortgage alone! (*mortgage should be dead in 5 years or maybe less…)
- Our food budget is a combined $1,000 per month if I include all dinners out, take-out food, beer and wine each month. We could probably cut back on that for sure but we enjoy nice food and dinners out or take out at least a few times per month.
Besides…now that our x2 Tax Free Savings Accounts and x2 Registered Retirement Savings Accounts are fully maxed out of contribution room we do spend very freely and indulge. I figure we might as well. Life is too short not be living and enjoying it. Comment or judge away!
In case you missed my article this week – we try and avoid sweating the small stuff now. Instead, if you want to save money for wealth building, focus on these two major expenses that will absolutely kill your retirement plan:
Two expenses stealing your early retirement dreams (that are not coffee)
“So, to summarize, a company cannot exponentially grow forever, at some point the growth stabilizes as it reaches maturity. By paying out a dividend it is one of the best ways for management to reward shareholders by placing cash in their hands from company’s earnings. In turn, the shareholders can either invest or spend the dividends as they see fit.”
How To Save Money had a good take on mortgage brokers vs. other avenues for your mortgage needs. Personally, for the last couple of terms, I’ve gone with a mortgage broker. My reasons are simple:
- Negotiating power, and
- I’m not out of pocket. Brokerages are compensated by the lenders.
So, consider using one! This is who I’ve dealt with in the past – great service.
Well done Jordan on his latest dividend income update. Impressive he’s now DRIPping over 40 units of low-cost ETF XAW a couple of times per year!
I liked Canadian Fire’s anti-budget. I used something similar for years – save first, spend the rest. Life is too short to be stressed about money all the time.
This is the better way to budget:
Well done Rob at Passive Canadian Income earning just a titch over $1,500 in passive income in the month of June alone!
Great post on Dollars and Data about regrets. A must read. I know I have a few but I really don’t dwell on them and in the macro picture, those decisions both good and bad make me who I am today. I think the key is to live, learn and improve to become a better person over time. Thoughts??
I look forward to hearing more about Henry Mah’s new book about income investing explained.
I was only happy to provide the foreword to this book of his:
Your TFSA Compounder – Work Your TFSA Harder So You Can Retire Sooner
Incredible stuff on Mr. Tako Escapes about his dividend income – something I aspire to!
Jon Chevreau cited a few work-from-home stocks and ETFs that might be a consideration for your portfolio for income and growth.
Partnerships and Deals!
Thanks to my passion for personal finance and investing, some great companies reach out to me and provide reader offers. I’m happy to share those below from my Deals page:
- As a My Own Advisor reader you get full-access, for FREE, to all of 5i’s research reports, all the model portfolios, top companies and best ETFs to own.
- You can use my promo codes when you invest with BMO to save hundreds of dollars right away!
- You can get $50,000 managed free with ModernAdvisor.
- Sign up for commission-free investing with Questrade.
I’ll be back next week with a reader question of the week, likely sharing my own monthly dividend income update since May 2020, and I’ll find some new articles from the personal finance blogosphere to help you on your own path to financial wealth.
Have a great weekend!
Great to be back here.
Yes, that’s fantastic to have parents encouraging you on getting into at a young age. It’s paid off!
Fortunate…for sure you are. And wise to open up a little more now. You’re going to be set for later.
Yep, staying well. Speaking of the competitive stuff my running is going very well. Best in 12 years. Trouble is all competitive events have been cancelled so very frustrating that I can’t earn the hardware now. Hoping for something by Oct.
Great to hear with the running. I don’t think I’ve walked or biking more this spring/summer than I’ve done for the last few years combined. Feels good.
Continued success on the running regimen!
Great to read that Mark. Keep it up!
Thanks. Appreciate it. And all the best with your exercise and golfing!
Its been a lot of physio, massage and help with a naturopath, to get to 72k/week and increasing (used to get to 130k), along with 8 hours of strength training a week (the most I have ever done in my life). Feeling awesome!!
Wow. That’s wild. Not sure I walk 72 km per week but biking that for sure now! Well done and you’re quite fit.
I don’t golf but I do know that’s a an impressive score Mark, taking much talent and practice. Awesome.
I agree with what you say on personal spending beyond your extensive savings amounts and the mortgage payments you make. Live it up now too.
Nice to hear from you! I used to play competitively and I’ve been fortunate to have supportive parents who encouraged me to get into the game and get some practice in at a young age. I don’t always shoot 74 but I’m happy when I do. It was a solid round for me with few mistakes and lots of boring pars. I like those rounds when they happen!!
Yes, I figure if our TFSAs and RRSPs stay maxed out, it’s time to open up the purse strings a bit and enjoy spending a bit more. Hard to do sometimes but I think we’re going to hit our $1 M personal portfolio mark and more so I need to chill more in my 40s. We are very fortunate….
Staying well I hope?
You sure keep yourself busy so many great articles each week + writing your own content! Love seeing the articles you highlight each week.
Thanks Court! Feel free to flip me some of your own favourite articles on your site and happy to profile them hear. I suspect if you’re FI you have a great story to tell..
For sure – will do, thanks Mark! 🙂
74…? Wow…I need to drop 20 strokes to compete with you!
Ha. Yup. I mean, I don’t shoot that score often but usually around 80 or under on local courses. A solid/very good round is 74 and last year my lowest was 71 on part 72 about 6,100 yards.
Looking forward to Henry’s new book. Enjoyed to last two.
I also withdrew my lump sum early but I don’t regret it and don’t feel that I was treated unfairly. I wanted my money for 2020 living and my main concern is the amount of taxes that I have to pay on all my RIF withdrawals. It was always there waiting and I had allowed for 30% tax rate in my retirement planning calculations but this may have been an underestimate. With the tremendous deficit that Justin has incurred as he threw money in buckets full to anyone who might vote for him, I’m more concerned that he will jack up the tax rates or find new ways to tax us. Taxes on assets, death duties, higher capital gains taxes, less allowance for dividends? But somehow he and his finance minister will find a way to avoid any personal financial suffering, including keeping their gold-plated indexed parliamentary pension.
Sorry for getting into politics.
No worries Hugh. I suspect our taxes rates are going up and they might go after taxable accounts. Not sure if I should invest more there myself given that.
I am sure that I am not the only person who is troubled by the change in the RIF rule change that was introduced on March 18, 2020. I (and my wife) withdrew the full amounts from our RIF’s before March 18 and now, we are not permitted to recontribute the 25% (the amount of the reduction). But a person who withdrew after March 18 can withdraw 25% less. This can result in a considerable tax benefit. I have written to the Ministry of Finance and they replied that those persons who withdrew while the markets were at record highs would not be in need of relief. This may have been true in March but not so much now as markets are recovering. And, persons who are invested in fixed income would not have suffered losses or much less. This gives persons who withdrew after March 18 a considerable tax advantage.This treats people who withdrew after March 18 a considerable tax advantage and, I feel, is unfair.
Are there any of your readers in the same situation as we are and feel we are being treated unfairly?
Barry: I wonder if the 25% reduction of the 2020 withdrawal applies to 2020 or 2019. For example, I withdrew funds in Jan 2020 based on my closing RRIF value as of Dec 31, 2019. I don’t calculate my required 2020 withdrawal till Dec 2020.
Cannew: The withdrawals in 2020 are based on the value of the RIF at Dec. 31, 2019 and are taxable in 2020. If you withdrew the full minimum before March 18, 2020, then you will pay income tax on the full amount withdrawn. You cannot recontribute the 25%. For example, let’s say you withdrew $40 000 in January, 2020 and your minimum rate at your age is 8%. If you withdrew after March 18, then your minimum rate would be 25% less or 6%. Your minimum amount withdrawn would then be 25% less or $30 000 and you would pay tax on $30 000. This would result in a considerable tax savings.
Guess haste makes waste. Would have been nice to defer the taxes, but we’ll pay them eventually.
The purpose of me writing this blog was to make people aware that if you withdrew the full amount before March 18, you will pay more taxes than if you withdrew after March 18. Hopefully, those affected would write the Ministry of Finance or their local MP and try to get a change so that people who withdrew the full amount before March 18 could recontribute 25% to their RIF. But, not all people feel the same. Hugh, who also commented, doesn’t feel he was treated unfairly and I respect his viewpoint.
I also withdrew more than I needed to with the 25% adjustment factored in but I just figure pay me now or pay me later. It will all eventually have to be withdrawn and taxes paid.
I guess I figure it’s not the big a deal and I’d prefer the gov’t not spend money on processing adjustments. Lord know they’ve already way over-spent.
Thanks for those insights Barry. I assume you’re withdrawing from your RRIF now? If so, are you doing the mins?
Yes. I withdrew the minimum which is 25% more before March 18 than after – a considerable tax disadvantage.
Gotcha. You have to wonder if the government is going to change more rules with our debt and deficit so damn high now with COVID-19. Taxed to death, soon, I think.
I’ll let other readers chime in Barry – seems a bit unfair the way I read it for sure but I wouldn’t put anything past the government to make financial rules far more complex than they need to be. Sadly.
Getting teary eyed from the ‘regrets’ posting. Enjoyed the other links on spending in Seattle and the rules to live by.
Yes, that was quite the post wasn’t it? Geez. Nick’s site is very well written and I enjoy following him. Hard to find time to read so many good blogs.
Stay well and I hope you’re getting some vacation this summer you hard-worker!!!
nice golf tip! I dont golf much but when I do I find a couple beers really helps! Guess it loosens me up and I can happy Gilmore the drive.
thx for the mention. Look forward to your update.
Beers do help…elbow grease…but only to a point where the ball gets a bit blurry for me anything after 2 beers!
All the best and update coming later today over a glass of wine on the terrace perhaps.
Thanks for the mention Mark! Really giving it my all in trying to grow my Financial Literacy channel on YouTube using my CPA experience. It really feels good to be able to help others with their financial journey, something you and I have in common 🙂
Have a great weekend, my friend!
– DG Capital
All the best DG and you’re welcome!
Hi Mark and thanks for the mention. Expect to have the new book completed in August.
Like DC Capital review of dividends.
Hope you do well on the golf course.
Me too (on the course)! Good luck with the book and keep me posted…
Thanks for the mention buddy! I’ve been telling myself for the last 2-3 years I need to start golfing again (haven’t swung a club in over 9 years since I blew out my shoulder)…maybe ill hit up the range a few times this week.
Start slow Jordan and take your time – no need to mess up the shoulder again!
Stay well and thanks for the continued support of my site as well.