Weekend Reading – Semi-retirement vs. FIRE, Qatar travels, ETF currency exposure 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.
Whether you are like this guy above having a great time or you have other plans – enjoy! Summer will not be here forever…!
Earlier this week, I answered this reader question (below) about investing in taxable accounts including sharing more details about how I invest inside my own account and why.
Enjoy the rest of these articles (including another reader question as you scroll down) and we’ll see you on the site and in the comments section!
Interesting factoids about retirement confidence in the U.S. Meaning, it’s not that strong. From the data:
- 62% of Americans more concerned about retirement today compared to a year ago.
- 72% of Americans now plan to work in retirement. (Up from 67% from study data in May.)
- 1 in 5 Americans in their 60s have been laid off/furloughed due to COVID-19.
- 24% of Americans are planning to tap their 401(k) today. (41% for those laid off due to COVID-19.)
Will the numbers get worse due to COVID-19?
Since we invest in XUU (in our CDN RRSP) and I also own a very small bit of ITOT (in my USD RRSP), I was particularly interested in this part from Justin:
“For example, when comparing their returns in U.S. dollars, we would expect XUU.U to have nearly identical performance to ITOT. And, in fact, during the first quarter 2020 stock market crash, ITOT and XUU.U both lost around 35% of their value in U.S. dollar terms.
But once you convert both funds’ performance to Canadian dollar terms, XUU.U and ITOT provided similar returns to their Canadian-based counterpart, XUU. In fact, during the worst of the downturn, all three ETFs dropped by essentially the same amount – just under 29% in Canadian dollar terms.”
At some point soon I will probably just sell ITOT, keep XUU and not deal with any currency conversion headaches – we’ll see. I already own a bunch of low-cost U.S. ETF VYM for my U.S. ETF component along with a number of U.S. dividend paying stocks. You can see some of my holdings that I keep updated here.
I found this revised article interesting by Late Starter FIRE – why age 40+ is the perfect age range to begin your FIRE (Financial Independence Retire Early) journey.
On the FIRE subject, I was pleased to read a far less rah-rah, rushed approach to any early retirement on Eat, Sleep, Breathe FI. I mean, why not consider semi-retirement?
This is absolutely our path and has been for many years now. The key reason for that path which was nailed in the article:
“Life is unpredictable, and semi-retirement gives you the flexibility to adjust”, says U.S. blogger semiretireplan.
While true, I would also add semi-retirement offers a chance to be productive and have fun!
Congrats to my friend Kyle Prevost on his move to Qatar! Sounds like a great new adventure!
Modest Millionaires wrote about challenges in coping through the pandemic.
Nice to see MoneySense has embraced fine writer and passionate blogger Dale Roberts in this week’s edition of making sense of the markets.
Reader question of the week (adapted only slightly for the site):
I read your articles regularly. You have achieved a significant amount of income from dividends; however, I see no reference to the actual amount invested to achieve your return. Can you share how much you have invested (in market to achieve your dividend portfolio rather than a broad comment like a “seven figure portfolio” that covers a lot of ground)?
Thanks for your readership and question – blunt and to the point!
I haven’t really bothered to calculate the “actual amount invested” to achieve this portfolio value but I can say I’ve/we’ve managed to max out contributions to our Tax Free Savings Accounts (TFSAs) and our Registered Retirement Savings Plans (RRSPs). I also have a decent non-registered portfolio full of stocks – see taxable investing post above.
All combined, those accounts are bringing us much closer to our desired “seven figure portfolio” to start semi-retirement with.
I invested tens of thousands in our non-registered portfolio (after we sold our first condo) over a decade ago and it has more than doubled in value since then.
If you are even more curious, our Canadian stock holdings inside that taxable account and inside our TFSAs specifically have returned about 7% for the last 10-years to this day.
Those are the income updates I report like this one every month:
I benchmark our Canadian stocks a bit since I want to know if I am under-performing my key Canadian benchmark that is iShares ETF XIU. XIU holds the 60 largest cap-weighted stocks in Canada. Given I pick and choose what I want to own from that ETF for my DIY stock portfolio, I figure that’s a good benchmark.
To be honest, I don’t really benchmark my/our RRSP assets since increasingly over the years I am investing in more low-cost U.S. listed ETFs (mostly Vanguard’s VYM) so I just ride those returns. I do hold some Canadian stocks in our RRSPs still however. Besides, while benchmarking is all fine and good ultimately reaching my income goal is all that matters.
So, I’m probably not answering your question directly but I do hope that provides more insight. While I share a bunch of information about me on this site I’m really not that comfortable sharing my entire soul let alone my entire portfolio. I will continue to share whatever I am comfortable with!
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