Weekend Reading – Worried about inflation edition
Hello again folks!
Welcome to my latest Weekend Reading edition – sharing some of the best finds from the personal finance and investing blogosphere to help you save, invest, and prosper!
In case you missed the last few weekend editions:
Check out the Become Your Own Advisor here.
This was the best early retirement blogs in Canada edition here.
This week, I published this latest monthly dividend income update. We’re now earning about $2.50 per hour from part of our portfolio, even in my sleep! It was great to see more monthly progress towards my ultimate semi-retirement goal…
Lots of other material and content to get into so without ado, here is your Weekend Reading.
Stay well and have a great weekend,
Henry Mah is not a fan of most retirement calculators – but he does see value is using some online calculators to demonstrate growing, passive income.
I like passive income too. I do however enjoy using some FREE calculators from my Helpful Sites page from time to time. They offer a decent starting point to figure out your financial math.
These are some of the best free retirement calculators from Cashflows & Portfolios.
Free is good 🙂
One heckuva dividend income profile on Tawcan this week.
Wise words from Financial Mechanic – she didn’t save any money recently:
“The point of money is not to have more– but to put it to good use. The best way to do this is to take care of yourself, others, and the planet.”
“Many economists agree that inflation is easy to identify in hindsight but is difficult to predict. However, they will admit that almost all instances of inflation share one common trait: inflation is caused by an increase in the money supply in an economy.”
While you might believe more money in general supply is good, and a sign of growth, growth also means money is plentiful; demands for goods and services rise. Therefore, goods and services cost more.
Here at home this month, Canada’s inflation rate increased to 3.6% in May, which is the fastest pace in a decade, according to Statistics Canada. Our centralized data agency mentioned the price of several goods is increasing much faster than usual, which includes everything from home renovations, energy, groceries, and other consumer products.
Of course, you could argue some inflation is actually very good. Better than deflation. Deflation is associated with a shrinking economy and depressed times – less money in supply and therefore less money to spend.
Are you worried about inflation?
Do you have a plan to combat inflation? If so, how and what might you invest in?
Advisor.ca discussed preparing for inflation as well.
Dale Roberts shared average inflation by the decade.
Frugal Trader has not given up on the Smith Manoeuvre yet – even though it might be another 25-30 years before his debt is paid off. His thesis: low rates are here to stay.
“At this rate, based on my projection and assuming that I do not borrow more, the HELOC should be paid off between 25-30 years. While the spread between dividends and interest paid is wide right now, it may start to close in as interest rates rise. If this ever gets inverted, I may need to revise my plan and start aggressively paying down the loan.”
Great work by Kornel Szrejber on the Build Wealth Canada podcast – another highlight of the Best ETFs in Canada to own for 2021.
Thanks to GenY Money for including me in your latest PF roundup!
Financial Independence – Retirement
As part of my ongoing commitment to share some financial independence, early retirement or retirement articles from the blogosphere, here are some links!
Did you know that Old Age Security (OAS) benefits are indexed for inflation, based on consumer price increases, and reviewed and potentially indexed quarterly? Yup.
You can also read about the Guaranteed Income Supplement (GIS) and its relationship to OAS here.
With inflation here, this is how to generate retirement income.
Is the traditional 60/40 stock/bond portfolio dead? Some believe so:
“Thanks to the declining returns of bonds, the model 60/40 portfolio may eke out real returns — after inflation — of just 1 per cent-2 per cent a year over the next decade, said Lim Chow Kiat, chief executive officer of GIC.”
Yikes. So, a good idea is to own more stocks to combat inflation and even then, consider stock companies that can easily raise their prices of goods and services delivered – things you cannot live without.
This retiree has no worries…inflation or otherwise. Well done in this bulletproof retirement income plan.
There are also dozens of Retirement stories and essays you can learn from here.
Save, Invest, Prosper!
As always, check out my Deals page.
Some of these personal promos codes are unique in Canada – you can’t find these codes or deals anywhere else in Canada – to save on investing and more!
Enjoy your weekend!
My BMO ETF’s have continued to pay good dividends over the past 15 months during the Covid crash, I was concerned that they may cut dividends but did not. Did you write about an ETF portfolio in the past or will you in future?
Thanks for your email. I haven’t explicitly written about an ETF portfolio but I do have on other brother-site if you will, a few model ETF portfolios that we believe are tax-efficient and offer good low-cost, diversification. Here is the link. Let me know your thoughts!
You can see the various combinations of great low-cost ETFs to consider owning, some are BMO’s, here:
Hope that helps!
While already retired I’m beginning to wonder if perhaps there comes a point dollar wise in a non-registered account where it actually becomes inefficient as far as taxes to invest only in higher yield Canadian dividend growth equities. I don’t know exactly where that point lies, but looking at Taxtips for my province, at least I’m thinking about it. Perhaps include lower or no yield equities at some point. Something like ATD.b as an example for low yield or BRK.b for no dividend or just build up a global equity ETF like XAW in the taxable account along with the individual Canadian dividend growth stocks. Any thoughts?
Interestingly, I own a few low-yield growers in my taxable account. I still get the DTC but not hit hard on taxation on dividends while still working full-time. Own ATD.B and WCN for growth potential. I might consider owning some XAW in taxable for extra diversification beyond Canada as well in the coming years. Not sure yet!!
For now, only CDN dividend payers in taxable account but I won’t rule out changes 🙂
Thanks for the mention Mark. Yup, Reader B has done REALLY well with that $360k a year dividend income.
Yes, indeed!! All the best.
Amazing interview by Tawcan. This line sounds familiar “To buy gradually over time, high-quality Canadian tax-efficient dividend paying stocks and hold them indefinitely.” Thanks fro the mention, even though I got the idea from one of your posts.
Have a great weekend Henry!