Weekend Reading – Work in retirement, early retirement, financial plan on a page and more #moneystuff

Weekend Reading – Work in retirement, early retirement, financial plan on a page and more #moneystuff

Hi All,

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.

You can find my last edition here – key money moves to weather the pandemic this fall and winter.

Fall has hit Ottawa for sure, cooler nights and days are here but I’m still walking or biking daily to get some exercise in. I hope to continue that throughout the winter except on very cold days!

via GIPHY

I hope things are well in your world – all things considered!

First up this weekend, my friend Tom Drake had my other friend Bob Lai on one of the most popular personal finance podcasts in Canada – The Maple Money Show of course – discussing if the FIRE movement is retired thanks to COVID-19. Good stuff guys.

My take on this is: most people in the FIRE movement have good paying jobs. This is not discussed nearly enough. To retire early or other, you need to have a high savings rate for investing purposes. So, while the FIRE (Financial Independence, Retire Early) movement is not strictly related to top income jobs, it certainly makes things FAR easier. On the flipside and sadly for others, many service-oriented jobs and frontline workers are having their financial lives turned upside down during this pandemic. Definitely something I think about… You?

Congratulations to A Purple Life who retired early this week and chronicled her last day of work here.

I enjoyed the Modernfimily interview about easing into retirement via part-time work. It’s absolutely something I’ve been thinking about during my entire 10-year blogging career myself. Once we reach a few of our major financial milestones, I figure we can entertain that idea.

You can see some of my thinking on our financial independence plan here.

Financial Independence Update – May 2020

The best part of the interview above, in my opinion, were the concepts of taking time to figure out what you truly value and avoiding the mad rush to financial independence (if you’re missing out on other things in life). Life is short, and precious, and you need to enjoy your journey….

Courtesy of Morgan Housel, here is a financial plan on a page:

Listen to 25 experts at this year’s Canadian Financial Summit!

As a passionate investor and reader of my site, I wanted to reach out today and tell you that I’ll be speaking at the upcoming Canadian Financial Summit taking place October 14-17, 2020.

The great thing about this Summit – it’s 100% FREE for that weekend.

Dale Roberts considers the BMO Monthly Income ETF (yields about 4.5%) as a great way to deliver retirement income. Interestingly, I also wrote about ZMI many years ago as a major alternative to some pricey income mutual funds.

Alternatives to some pricey monthly income funds

I read that Shell is cutting some 9,000 jobs to move to a lower-carbon footprint business.

While I believe we’ll still need some oil and gas companies, I don’t intend to own many in my portfolio. In fact, my overall portfolio weight in pipeline stocks (Enbridge and TC Energy combined) is only about 5%. Over time, I will reduce this. See my reader question of the week below!

Reader question of the week (adapted for the site):

Hi Mark,

Love the blog and your journey. OK, so my big questions are:

1. What are your biggest stock or ETF holdings and more importantly – why?
2. If you own pipeline stocks, with energy crashing, what’s your plan?

Thanks!

That’s at least a few blogposts worth of questions!

Kidding aside, thanks for your readership and here are my answers in brief.

1. My biggest stocks and ETFs and why?

At the time of this post, they are:

• TD Bank (TD)
• Emera (EMA)
• Vanguard High Dividend Yield ETF (VYM)
• Royal Bank (RY)
• Fortis (FTS).

Why?

I believe in the long-term dividend growth capability of some key Canadian banks. TD and RY are just two of them.

I like the major utilities in Canada (such as EMA and FTS) because last time I checked, people like electricity and use it often. Utilities are also a hedge for any upcoming inflationary risk – they can raise their prices and they likely will.

(REITs (Real Estate Investment Trusts) are also somewhat kind when it comes to inflation, since owners can increase their rents – but I think all bets are off as long as we are in a COVID-19 world on that.)

Lastly, when it comes to VYM, I have a plan to live off dividends (and distributions) in the coming years. Owning some low-cost U.S. ETFs that pay out decent distributions (so I don’t touch the capital in the early years of semi-retirement) is part of that plan. Those days are about 5 years away, plus or minus I think. Right now, conservatively based on VYM distributions and units held, that fund will pay us at least $1,200 in U.S. dollars per year. We also own some U.S. stocks for dividend income. You can see some holdings on this juicy Dividends page here!

You should also know even though these are my top-5 holdings by weight, only TD right now makes up more than 5% of my total portfolio (just over). I prefer to keep any one stock holding at no more than 5% of my portfolio.

That said, I would only more than happy to see low-cost ETFs rise to a higher portfolio weight over time. They probably will. I’m buying them. At the time of semi-retirement, I think it would be great to have a balanced mix of individual dividend paying stocks from Canada and the U.S., mixed in with some low-cost ETFs. The latter are bought and held for additional diversification, mostly covering the U.S. market, therefore mitigating some stock selection risk.

2. If I own pipeline stocks, with energy crashing, what’s my plan?

 Stay invested. I have no intention of selling such stocks. Boring I know!

Thanks for your questions and keep them coming. I try and answer as many as I can on the site.

Partnerships and Deals!

Thanks to my passion for personal finance and investing, some great companies want to offer deals. As always, never an obligation…

From my Deals page:

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Happy investing and see you in the comments section!