Weekend Reading – Surviving the Capital One hack, side hustles for extra income, housing bubble risks and more #moneystuff

Weekend Reading – Surviving the Capital One hack, side hustles for extra income, housing bubble risks 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.

Earlier this week, I wrote about the pros and cons of dividend reinvestment plans.  Of course this approach to investing is not perfect (no approach is), but I believe it’s a great way to put your portfolio on autopilot and build tremendous wealth over time by taking your emotions out of investing

Rob Carrick from The Globe and Mail agreed with me, and put this article in his Carrick On Money column recently.  Thanks for the mention Rob!

This is how I built my dividend income portfolio, and how you can too!

I hope you enjoy these articles and you have a great weekend!

Mark

I contributed to Dan Kent’s post about the best Canadian dividend paying stocks to own this year.

Yet another hack in the financial industry this week.  Earlier this week, Capital One announced that a hacker had breached their cloud data systems and stolen personal information tied to around 100 million American customers, and six million Canadian customers.  I have a card in my wallet.  *Sigh*.  Here are the steps I’m going to take as this hack plays out:

  1. I’m going to monitor my credit score more frequently.  This way, if I see a significant drop, I’ll know something is probably up.
  2. I’m going to review all my credit card statements – diligently. I will watch for any unauthorized transactions and report them promptly.
  3. I will continue to report any suspected theft/fraud right away. If and when I see anything, I will report it to the Canadian Anti-Fraud Centre, tell my bank(s), and contact the credit reporting agencies like Equifax.
  4. I will likely order an Equifax credit report again – soon.  

What would you do?

Boomer and Echo was kind to include one of my latest articles in their Weekend Reading edition – the upside down mortgage rate edition.

A reader asked my take on how to retire with about $250,000 inside his RRSP.  I offered some analysis here:  how to retire at age 60, on a lower income.

My friends over at How To Save Money highlighted 25 ways to earn some extra income via various side hustles.

This infographic highlighted various housing bubbles from around the world.  Where do you think Canada is on this list???

Here are some common mistakes by Canadian investors.  In this article, there is a proposal for wealthy Canadians with no employer pensions to draw down, to obtain 7 years of GIS (Guaranteed Income Supplement) benefits by drawing down their TFSAs or savings first, between ages 65 and 71, and letting the RRSPs grow until mandatory withdrawals start at age 72.  This is a rather controversial loop-hole in our tax system – since those benefits can be worth tens of thousands of dollars to already very wealthy Canadians that might not need any sort of “income supplement”.  Thoughts?  

Reader question and email this week (information adapted slightly below):

Hi Mark,

I recently backed into your site. Very impressed!  Perhaps I missed this, but have you shared your portfolio’s performance?  Any insights you can share about market growth vs. just dividend yield?

What is your typical dividend payout each month?  Maybe more details could be shared over time about each dollar invested assuming no dividend reinvestment?

Thanks very much!

Great detailed questions.  Thanks for those!

In a previous post, I disclosed some benchmarking details on my site.  I will probably provide another update later this year or early next year given I will have 10 years of dividend history as a DIY investor.  Time flies!

That said, while I love dividends, I do believe investors should be mindful that total return matters.  Based on your questions to me, it seems like you’re already aware of the power than low-cost, indexing can provide. 

While total returns matter, there is a wrinkle in Canada.  Given the oligopoly nature of our Canadian market, I’ve decided to unbundle one of my favourite Canadian ETFs that delivers solid income and growth over time for our market: XIU.  I used to own this fund but now I own most of the top-20 holdings in this fund directly for dividend income – and save money management fees in the process. 

I know from my dividend income journey, my plan is to have cash flow cover some of our basic living expenses.  I’m not “there yet” with that desired income level but we are getting there.  I figure we’re 63% of the way there to realize one of our big lifelong financial goals: earn $30,000 per year in dividend income from some key accounts.

Here is my latest dividend income update.

I hope post my July dividend income update soon!

Thanks for being a new fan and reader of the site.  I hope to see your comments on my posts.

To help you save, invest and keep more money in your pocket for retirement – take advantage of these deals thanks to my partnerships:

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Use my Bank of Montreal promo code MYOCASH to save hundreds of dollars when you invest with one of Canada’s best discount brokerages.

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Cheers,

Mark

My name is Mark Seed and I'm the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, we're inching closer to our ultimate goal - owning a 7-figure investment portfolio for semi-retirement. We're almost there! Subscribe and join the journey. Learn how I'm getting there and how you can get there too!

8 Responses to "Weekend Reading – Surviving the Capital One hack, side hustles for extra income, housing bubble risks and more #moneystuff"

  1. Everyone must be gone for the weekend.
    Since I wrote my book, I’ve gotten even more convinced that I really dislike sites that list “The Best” and say which stocks they feel qualify. They are the best in “their opinion” and at the time they prepared the list. They may not now be the best as thing change as do the status of companies.
    Not that many or even most are not good stocks, but I prefer for people to do their own evaluation and come to their own conclusions. Rather than using the words The Best, why not change it to Stocks to Consider.

    Reply
    1. Fair point cannew and selections (of stocks) can be very personal. I figure my “best” list is owning things that people need: people like money, borrow money; so banks are good. Insurance is a requirement in some cases, so I own insurance companies. Last time I checked, people love the internet so I own telcos. I want to be warm and cool in the winter and summer respectively, so I own utility companies.

      As you say, some stocks are good for some reasons and terrible for other reasons!

      All the best,
      Mark

      Reply
      1. Hi Mark: totally agree, but most measure stocks by price growth, even those who profess to be
        DG investors, as they always seem to refer the price growth%, as the stock is up 15%. Check out my latest blog post on that topic.
        Enjoy your weekend.

        Reply
  2. “you end up saying “no thank you” to money from the Government of Canada so that you can spend your own instead. This is just bad planning.”

    Horse feathers. Not all of us aspire to qualify for welfare and that is what GIS is, welfare for seniors. Wasn’t brought up that way.

    As for having too much in an RRSP, absolutely, it can happen. Too bad one quite often doesn’t know how much is not enough until one is too old to do anything about it. I will NEVER regret “buying” RRSPs starting at 19 and pretty well every year I had qualifying income. There was no way of knowing what life was going to deal me back then and the options I have now are well worth paying some taxes to give back to the country that gave me so much.

    Reply
  3. Sorry to read about you being involved in that hack. Guess that’s pretty much all you can do. I have yet to experience that issue.

    “Common mistakes” LOL. GIS isn’t something to aspire to. It’s originally meant those for who saved little to nothing and truly need assistance. Now its morphed into some kind of government entitlement pool for those who actually have money but can choose not to spend it until later. Most planners now seem to advocate using it, even calling it a mistake not to. Wrong. To think I could actually apply for that. Government…..FIX the *&$%I~^# thing.

    Always better to have too much money in any of your accounts than too little.

    Housing bubbles. Canada is ripe in some big cities.

    Reply
  4. Hi Mark,
    Most of us will probably have our identity hacked at some point. In today’s society it is prudent to get your Free full credit report from Equifax ( Equifax was hacked May 2017 https://www.cbc.ca/news/business/equifax-canada-cyberbreach-1.4296475) and TransUnion annually. I’ve been doing this every year for 10 years now. Also because I have a bank account at RBC and on-line access they provide a free semi-full credit report monthly for FREE with TransUnion. I check this every month since it has been available (actually today is the day that I can check again) It will only let you check 30 to 31 days after your last check so put it in your phone as a reminder and check it regularly. You will see if any new accounts have been opened in your name which you don’t recognize and all your current balances on all of your credit accounts. PLUS it gives you your current Credit Score each month. (Bonus) because you don’t get a Credit Score when you call or mail in for your free annual reports. Wish us all Luck.

    Reply
    1. Same Ed. I just asked for my report actually – both of them.

      With the CapitalOne scam/hack – I have the opportunity to use a credit service but I’m not sure I’m going to sign up. It seems like yet another way something will go wrong.

      I might just watch my credit score more closely (free service via Borrowell) and get my credit reports more frequently like you do.

      I just checked my score and I’m hovering around 850. That’s pretty good. If it drops by more than 10 pts. I’m going to inquire about it.

      I didn’t know that about RBC. That’s a nice perk. Is that advertised well? Surprised more brokerages don’t get on that?

      Cheers,
      Mark

      Reply

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