A few years ago on this site I reached out to various bloggers and financial experts to ask what’s in their portfolio. I pursued this because I was curious about their financial goals, their investments strategies to realize these goals and how they might differ from my own. You can find the links to some of the folks I wrote to and how they responded in the past below.
- Author, blogger, economist – Larry MacDonald portfolio
- Blogger – The Passive Income Earner portfolio
- Blogger – Big Cajun Man portfolio
- Blogger – The Dividend Guy portfolio
- Blogger, financial planner – Robb Engen portfolio
- Blogger – Kyle Prevost portfolio
- Blogger, entrepreneur – Richard Garand portfolio
Over the past few weeks I had a chance to catch up with a couple of these investors and see what’s new, what’s different in their portfolio, and just as importantly why things are different.
Thanks Richard for revisiting your portfolio with me. Richard, can you provide me with an update on your investing goals – in one or two sentences?
My investing goal is to keep a healthy portfolio that will let me do what I want with my life now and in the future without worrying about how I’ll pay the bills next month.
Please share your elevator speech on your current investment strategy to realize these goals.
I try to keep a high savings rate and invest in a portfolio of index funds that requires almost no management. It’s important to build this up as early as possible so that it has time to grow and benefit from the positive surprises that sometimes happen in the market while giving me time to wait out any negative surprises. I would rather get too aggressive and possibly have to cut back later or withdraw a little cash instead of taking the risk of letting the opportunity slip by while I try to decide what to do. I’ve had to slow down a few times but I’ve never had to take anything out of my portfolio. It just keeps growing.
List some of your current investments. Why do you own them?
The core holdings are XIC, VTI, VXUS, and ZRE. That gives me a diversified global portfolio that has consistently done well at almost any time. At times I might use VEA or VWO to balance out the allocation in VXUS.
What’s changed with your approach or investments over the last couple of years? Why? Why not?
I’ve moved more towards investing in a taxable corporate account. This allows me to defer some taxes, giving me part of the benefits of an RRSP, while being a lot more flexible. It’s also a margin account where I can borrow half of the account value at any time without selling investments. I don’t think I can borrow money at such a low interest rate anywhere else since I don’t own real estate.
I mostly use this to manage my cashflow. I did decide a couple of years ago to leverage my investments a bit. Right now the leverage is around 7% of the net portfolio value. I sometimes see people asking how they can find more high-risk investments to increase their returns. The thing is that you don’t need to go buy IPOs of startups you don’t understand.
Instead you can easily increase the risk and return for the assets you already own. Over time I gradually cut down my bond allocation to 0 and then started adding leverage. My portfolio didn’t change other than that. You have to look at how the whole portfolio delivers what you want instead of thinking that you need to add one specific asset.
You do have to understand the risk. That’s much easier with assets you already know. The biggest risk for me is a margin call so I have several ways to avoid that. The chances of forced selling after a drop are very small. As long as I hang in long enough I expect this to be a profitable strategy.
Any big financial concerns right now? Why? Why not?
In the last two years I’ve moved to another city and made major changes in my business and the type of work I do. Throughout the whole process I never had to worry about coming up with cash thanks to my focus on keeping a highly liquid portfolio built for long-term growth and using tools like the margin account. It would have been a bit harder if there was a major market crash during that time. I always make sure I have multiple options if that happens so I don’t have to take a big loss. With the long-term potential of investing like this I don’t think there’s anything to worry about.
What takeaway message do you have for other investors?
Investing makes a difference now, not just at retirement. Retiring with $1 million in 30 or 40 years might seem far away from your regular life. If you can get to a fraction of that it will give you more security and freedom while you’re young so you can do more things you want. It also means that portfolio will grow to the point where it’s probably more than enough for retirement.
The three keys to building a larger portfolio are: 1) invest early 2) invest monthly 3) increase the monthly amount regularly.
As I get more experience in managing my investments I think less and less about how I could find a slightly “better” way and I spend less time managing it. Get it to the point where it’s good enough then live your life.
My investment strategy is so simple that it’s left me enough free time to write a book that explains everything and gives the exact steps to follow it. Here’s a link for your readers Mark. Thanks again for this post on your site.
I want to thank Richard for this update and providing some insight into how he invests on his journey to financial freedom. What questions do you have for Richard? Share them below. Thanks for reading.
Disclaimer: The contents of this post are not recommendations for any individual investor but have been shared to educate readers and provide insight into how other investors are managing their portfolios. My Own Advisor is not a financial professional. Every reader is encouraged to seek help from a financial professional before making any important investment decisions.