December 2020 Financial Update

“Don’t tell me what you think, tell me what you have in your portfolio.”

― Nassim Nicholas Taleb, Skin in the Game: Hidden Asymmetries in Daily Life

My Investment Philosophy

  1. Diversify – investments and taxes.
  2. Do nothing – automate.
  3. Margin of safety – allow assets to compound.

Networth% – December 2020

 

Fixed Income (20%VGRO, VAB, Cash)

35.8%

Equities (80%VGRO, Brk.B)

28.3%

Personal Residence

23.6%

Extra Unit

6.6%

Commercial Unit

5.1%

Other

0.6%

Our Portfolio

I treat all accounts as one portfolio.

Portfolio – December 2020

 

 

 

Account

Ticker

Asset

Portfolio %

Corporate

BRK.B

Berkshire Hathaway

4.3

Corporate

VGRO

80/20 Asset Allocation ETF

45

RRSP1

VAB

Aggregate Bond

2.1

RRSP1

VGRO

80/20 Asset Allocation ETF

1.6

RRSP2

VAB

Aggregate Bond

3.9

TFSA1

VGRO

80/20 Asset Allocation ETF

1.4

TFSA2

VGRO

80/20 Asset Allocation ETF

1.4

Taxable

VGRO

80/20 Asset Allocation ETF

2.2

 

GIC

 

5.5

 

Cash

 

32.5

Total

 

 

100%

Asset Allocation

 

 

45.7%

Mailbox Money- December 2020

“Life is really simple, but men insist on making it complicated.” Confucius (BC 551-BC 479) Chinese philosopher.

My investment philosophy is simple.

I have zero alpha.

I want “know nothing, do nothing” mailbox money.

Mailbox Money – December 2020

 

 

 

Asset

Ticker

$$$

% Total

Aggregate Bond

VAB

792

61.3%

Interest

499

38.7%

December 2020 Total

 

1,291

 

Cumulative Mailbox Money

 

 

Month

2019

2020

January

10,329

17,295

February

26,294

29,166

March

32,239

44,380

April

49,742

56,975

May

55,856

61,936

June

64,013

64,310

July

71,546

86,858

August

73,229

88,339

September

81,357

91,897

October

95,968

122,752

November

101,828

124,096

December

107,264

125,388

Kids’ Portfolios – December 2020

 

VEQT

4% SWR / year

Son, 22 years old

6,988

Daughter, 20 years old

780

VEQT = Vanguard All-Equity ETF Portfolio

December 2020

The past two years have been about simplifying my finances. It was getting slightly unwieldy. It was starting to bother me.

I have always enjoyed the simple things and have had disdain for complexity.

My children are young adults now and I just want less to do. Of almost everything.

Here is what I have simplified over the last two years.

  1. Stopped commingling credit cards to get points. I barely spend the points. I am certain that I am not spending them efficiently. So why bother collecting so many of them? Nothing in life is free. I can not be bothered wasting more bandwidth on unimportant things.
  2. Stopped opening bank accounts for higher interest rates. Seriously? Rates are so low that it is not worth it.
  3. Decluttered my investment portfolio. This one has been wonderful. I sold five ETFs and all the GICs in my taxable account. It is a joy to review my statements nowadays. I am certain that tax season will be simpler.
  4. Started online grocery shopping. I get most of it delivered or we pick up with PC Express. It is amazing.

I learned that my young adult children can use money and guidance. One needs to start accepting that this is the stage for them to try things and make mistakes. This is a good thing. I certainly made many mistakes when I was their age. My parents just were not around to witness them since I had moved out after high school. I learned that I am not a control freak and am very happy to allow them room to grow.

I learned that I am more than happy with good enough. Especially with an activity fraught with luck such as investing. I am not encumbered by the ego of being clever or being right. I just don’t care about any of it enough.

And that has made my financial life easier. I no longer listen to forecasters. I no longer listen to people who tell me they have a better way. I will be grateful if I can stay with this do nothing strategy.

Even if there is a better way, I have come to accept that I am too lazy to follow it. Especially if it will take more time, energy or bandwidth that I can afford to spare.

Because the only reason wealth matters is to allow me the option to leave alone the things I don’t want to deal with.

I am beginning to despise complexity in all its forms. Complexity only helps middlemen and helpers. It rarely helps me. There are entire industries designed to make things complicated so that you are afraid to manage it on your own.

I get no ego inflation from proclaiming being busy or from being hard core. I much prefer simplicity and ease.

I am a woman. I only care about money in how it helps to support my loved ones. I could care less about being the richest. I would not even know what I would do with it.

My adage in life is always better lucky than good. Many of the important things in one’s life are determined by luck rather than skill.

Thus my finances will be much like I do everything else in my life. I insist on doing things my way. Doing things that make sense to me.

The best parts of my life have zero to do with money. Financial independence is simply a foundation. It only takes care of the matters that rely on money.

So my plan is to simplify it all so that I can spend my life on all the other things that I prefer.

Now that to me is a good life.

November 2020 Financial Update – Sold VDY Finally

“Don’t tell me what you think, tell me what you have in your portfolio.”

― Nassim Nicholas Taleb, Skin in the Game: Hidden Asymmetries in Daily Life

My Investment Philosophy

  1. Diversify – investments and taxes.
  2. Do nothing – automate.
  3. Margin of safety – allow assets to compound.

Networth% – November 2020

 

Fixed Income (20%VGRO, VAB, Cash)

35.6%

Equities (80%VGRO, Brk.B)

28.2%

Personal Residence

23.9%

Extra Unit

6.7%

Commercial Unit

5.1%

Other

0.6%

Our Portfolio

I treat all accounts as one portfolio.

Portfolio – November 2020

 

 

 

Account

Ticker

Asset

Portfolio %

Corporate

BRK.B

Berkshire Hathaway

4.3

Corporate

VGRO

80/20 Asset Allocation ETF

43.8

RRSP1

VAB

Aggregate Bond

2.1

RRSP1

VGRO

80/20 Asset Allocation ETF

1.6

RRSP2

VAB

Aggregate Bond

3.8

TFSA1

VGRO

80/20 Asset Allocation ETF

1.3

TFSA2

VGRO

80/20 Asset Allocation ETF

1.3

Taxable

VGRO

80/20 Asset Allocation ETF

1.8

 

GIC

 

5.4

 

Cash

 

34.6

Total

 

 

100%

Asset Allocation

 

 

44.2%

Mailbox Money- November 2020

“Life is really simple, but men insist on making it complicated.” Confucius (BC 551-BC 479) Chinese philosopher.

My investment philosophy is simple.

I have zero alpha.

I want “know nothing, do nothing” mailbox money.

Mailbox Money – November 2020

 

 

 

Asset

Ticker

$$$

% Total

Aggregate Bond

VAB

773

57.5%

Canadian Dividend

VDY

129

9.6%

Interest

443

32.9%

November 2020 Total

 

1,345

 

Cumulative Mailbox Money

 

 

Month

2019

2020

January

10,329

17,295

February

26,294

29,166

March

32,239

44,380

April

49,742

56,975

May

55,856

61,936

June

64,013

64,310

July

71,546

86,858

August

73,229

88,339

September

81,357

91,897

October

95,968

122,752

November

101,828

124,096

December

107,264

 

Kids’ Portfolios – November 2020

 

VEQT

4% SWR / year

Son, 22 years old

6,947

Daughter, 19 years old

773

VEQT = Vanguard All-Equity ETF Portfolio

November 2020

I have finally simplified the portfolio. I sold VDY this month. I will forget about Canadian high dividend investing since Canadian companies already make up about 30% of the equities in VGRO.

I do not plan on any further changes until we are ready to retire. At that time I will sell Berkshire and our office unit.

I currently hold 1 stock, 2 ETFs and 3 pieces of real estate.

Plus some GICs and cash.

And that’s it.

Managing finances is similar to exam prep. One starts with a lot of information but eventually whittle it down to what matters. There usually isn’t much that matters.

I even whittled down my investment philosophies further. The other points did not matter that much.

I would consider having a margin of safety as the most important for me. There is no point in wasting effort buying assets and then not being able to hang onto them.

There is a reason I rarely used leverage. I took that element of risk out of the equation. There are enough things that can happen in life. There is no point in making things harder.

My suggestion would be to decide what matters to you and arrange your finances around that. And no one can tell you what that is. You need to think about this for you and your family.

I wanted money for my financial independence and to be able to support my family. I needed to care for my parents and now I want to help my children navigate their futures.

My plans have been very simple.

I prefer to use VGRO rather than an advisor. I prefer systems rather than rely on individual personalities. How often have you had to change your accountant? The firm I use changes them regularly.

I prefer to use systems that anyone can access. I do not use my investments for status signalling. I am glad that I can invest like my kids.

Because I want my children to be able to manage things eventually. And the best way to help with that is to keep it simple.

It will be easier to maintain by automating so that we almost can do nothing.

Do nothing, know nothing…my how that theme keeps recurring.

October 2020 Financial Update – US Election Day

“Don’t tell me what you think, tell me what you have in your portfolio.”

― Nassim Nicholas Taleb, Skin in the Game: Hidden Asymmetries in Daily Life

My Philosophy

  1. Live below your means enjoyably..
  2. Avoid debt.
  3. Keep things simple.
  4. Keep costs low.
  5. Diversify – investments and taxes.
  6. Do nothing. Automate.
  7. Know nothing. Because “nobody knows nothing.”
  8. Embrace compounding. Buy low and hold.
  9. Embrace social indifference.
  10. Embrace margin of safety. The unlikely is not impossible and the likely is not certain.

Networth% – October 2020

 

Fixed Income

35.4%

Equities

26.9%

Personal Residence

24.8%

Extra Unit

7.0%

Commercial Unit

5.3%

Other

0.6%

Our Portfolio

I treat all the accounts as one portfolio.

Portfolio – October 2020

 

 

 

Account

Ticker

Asset

Portfolio %

Corporate

BRK.B

Berkshire Hathaway

4.1

Corporate

VGRO

80/20 Asset Allocation ETF

42.8

RRSP1

VAB

Aggregate Bond

2.1

RRSP1

VGRO

80/20 Asset Allocation ETF

1.6

RRSP2

VAB

Aggregate Bond

4.0

TFSA1

VGRO

80/20 Asset Allocation ETF

1.3

TFSA2

VGRO

80/20 Asset Allocation ETF

1.3

Taxable

VDY

Canadian High Dividend

0.7

Taxable

VGRO

80/20 Asset Allocation ETF

0.9

 

GIC

 

6

 

Cash

 

35

Total

 

 

100%

Asset Allocation

 

 

43.2%

Portfolio Change 2020 ($$)

 

 

2020

Month/Month$

YTD$

January

37,361

37,361

February

-111,757

-74,396

March

-208,404

-282,800

April

272,159

-10,641

May

139,468

128,827

June

80,935

209,762

July

159,767

369,860

August

110,281

480,141

September

-23,809

456,331

October

-652

454,557

Mailbox Money- October 2020

“Life is really simple, but men insist on making it complicated.” Confucius (BC 551-BC 479) Chinese philosopher.

My investment philosophy is simple.

I have zero alpha.

I want “know nothing, do nothing” mailbox money.

Mailbox Money – October 2020

 

 

 

Asset

Ticker

$$$

% Total

Aggregate Bond

VAB

821

2.7%

Canadian Dividend

VDY

199

0.6%

80/20 Asset Allocation ETF

VGRO

15,626

50.6%

Interest

14,208

46%

October 2020 Total

 

30,854

 

Mailbox Money 12- Month Trailing

 

134,048

 

Cumulative Mailbox Money

 

 

Month

2019

2020

January

10,329

17,295

February

26,294

29,166

March

32,239

44,380

April

49,742

56,975

May

55,856

61,936

June

64,013

64,310

July

71,546

86,858

August

73,229

88,339

September

81,357

91,897

October

95,968

122,752

November

101,828

 

December

107,264

 

Kids’ Portfolios – October 2020

 

VEQT

4% SWR / year

Son, 21 years old

6,488

Daughter, 19 years old

705

VEQT = Vanguard All-Equity ETF Portfolio

October 2020

The US elections are taking place today. We are making bets with the children about the outcome. Makes for fun dinner chatter.

What a difference a year makes. A year ago we were travelling in Asia. No thoughts of traveling anywhere right now.

I will continue to update our finances monthly. That is about all it takes to avoid forgetting passwords.

I continue to simplify our finances. I have been closing minimally used bank accounts. My ability to sense when there is financial redundancy has become more acute.

I plan to keep our finances simple so that there will be minimal upkeep required.

We plan to sell Berkshire and our office unit when we retire. Then our assets would consist of our home, VGRO and cash.

We would live off the dividends and delay our government benefits until 70 years old.

I have been building this strategy for us the past year. My husband is beginning to see how simple I am making all this. He used to avoid looking at anything financial but is now actively reviewing it. I know that I have made it simple if he is starting to get involved.

What has helped was to write down our plan and review it monthly with actual numbers.

Once I did that, refining the plan evolved naturally. It was from updating my accounts where I noticed that I had too many dang accounts.

And once you know what the end game plan is, it allows one to ignore the rest of the noise.

There is too much information and too many options now. The more important goal is to figure out what to ignore.

There is no magic bullet for finances. How well one does with their equity investments is generally due to luck.

I believe there is an entire industry designed to make one believe all this is hard. Personal finance can be very simple.

Investing has become democratized.

If my children can invest the same way that I do, trust me, it’s democratized.

And thank goodness for that.

September 2020 Financial Update

“Don’t tell me what you think, tell me what you have in your portfolio.”

― Nassim Nicholas Taleb, Skin in the Game: Hidden Asymmetries in Daily Life

My Philosophy

  1. Live enjoyably within your means.
  2. Avoid debt.
  3. Keep things simple.
  4. Keep costs low.
  5. Diversify. Investments and taxes.
  6. Do nothing. Automate.
  7. Know nothing. Because “nobody knows nothing.”
  8. Embrace compounding. Buy low and hold.
  9. Embrace social indifference.
  10. Embrace margin of safety. The unlikely is not impossible and the likely is not certain.

Networth% – September 2020

 

Fixed Income

34.9%

Equities

27.1%

Personal Residence

24.7%

Extra Unit

6.9%

Commercial Unit

5.3%

Other

1%

Our Portfolio

I treat all the accounts as one portfolio.

Portfolio – September 2020

 

 

 

Account

Ticker

Asset

Portfolio %

Corporate

BRK.B

Berkshire Hathaway

4.4

Corporate

VGRO

80/20 Asset Allocation ETF

43.7

RRSP1

VAB

Aggregate Bond

2.1

RRSP1

VGRO

80/20 Asset Allocation ETF

1.6

RRSP2

VAB

Aggregate Bond

4.0

TFSA1

VGRO

80/20 Asset Allocation ETF

1.3

TFSA2

VGRO

80/20 Asset Allocation ETF

1.3

Taxable

VDY

Canadian High Dividend

0.7

Taxable

VGRO

80/20 Asset Allocation ETF

0.4

 

GIC

 

8

 

Cash

 

32

Total

 

 

100%

Asset Allocation

 

 

43.7%

Portfolio Change 2020 ($$)

 

 

2020

Month/Month$

YTD$

January

37,361

37,361

February

-111,757

-74,396

March

-208,404

-282,800

April

272,159

-10,641

May

139,468

128,827

June

80,935

209,762

July

159,767

369,860

August

110,281

480,141

September

-23,809

456,331

Mailbox Money- September 2020

“Life is really simple, but men insist on making it complicated.” Confucius (BC 551-BC 479) Chinese philosopher.

My investment philosophy is simple.

I have zero alpha.

I want “know nothing, do nothing” mailbox money.

Mailbox Money – September 2020

 

 

 

Asset

Ticker

$$$

% Total

Aggregate Bond

VAB

744

20.9%

Canadian Dividend

VDY

229

6.4%

Interest

2,580

72.6%

September 2020 Total

 

3,553

 

Mailbox Money 12- Month Trailing

 

117,791

 

Cumulative Mailbox Money

 

 

Month

2019

2020

January

10,329

17,295

February

26,294

29,166

March

32,239

44,380

April

49,742

56,975

May

55,856

61,936

June

64,013

64,310

July

71,546

86,858

August

73,229

88,339

September

81,357

91,897

October

95,968

 

November

101,828

 

December

107,264

 

Kids’ Portfolios – September 2020

 

 

VEQT 4% SWR

Son, 21 years old

6,528

Daughter, 19 years old

720

VEQT = Vanguard All-Equity ETF Portfolio

Retirement

Accumulation is rather simple now. The introduction of asset allocation ETFs work well for lazy people such as myself.

Figuring out retirement income will be more challenging.

Most physicians do NOT have any meaningful pensions.

Here are my thoughts on our retirement plan.

Current Retirement Plan By Age

  1. < 65 years old:
    1. Draw salaries to fund CPP
    2. 58,700 = 2020 CPP Maximum Pensionable Earnings
  2. 65 – 70 years old:
    1. Retire from medicine
    2. Spend mailbox money.
    3. Bridge asset:
      1. Sell our office unit.
      2. Allow us to delay government benefits until 70 years old.
  3. 70 years old:
    1. Drawdown Sequence:
      1. OAS & CPP
        1. Delaying these are the best annuities.
        2. Guaranteed, inflation adjusted income.
        3. Plan to have ⅓ to ½ of our spending from this source.
      2. RRIF RMD
        1. Use maximum ALDA rules to monitor RRSP values. Current maximum is 150,000 or 25% RRIF, whichever is less.
        2. Use RMD tables to spend efficiently.
      3. Taxable
      4. CCPC
      5. TFSA

Estate:

  • PRE – Principal residence exemption. Can pass our home to heirs tax free.
  • Universal life insurance policy. Bought in our mid 30’s.

September 2020

Financial Stuff

I bought a smidge of VGRO with the dividends from VDY in my personal taxable account. I do not have dividend reinvestment in the taxable accounts.

I would like to sell VDY but I am waiting for the value to recuperate from the COVID crash. Everything else has recovered except for VDY.

I am waiting for the last two GICs to mature in my corporate account in late October.

My portfolio is on autopilot now. I will buy more VGRO if the asset allocation drops below 40% equities.

Otherwise I just do nothing.

Life Stuff

How weird has this year been? My children are attending university online. So weird.

My husband is grateful to be working. It can not be that much fun to retire and have nowhere to travel. So I am glad that we are not retired yet.

I missed camping this year. I would have been on a trip right now. I spent the time organizing all our old photos instead. We had this on our to-do list for over a decade. We finally got around to it this summer.

I have been teaching my children about working consistently but having low expectations. I know it is an odd thing for a parent to teach their children. Most parents tell their kids that they can “be anything”.

I am teaching them to be active with their education and careers. But I am teaching them to be passive with their investments.

Doing nothing is not natural. Most people strive to be busy. But the best strategy for health and wealth is probably prevention. Avoiding the bad is more valuable than all the so-called “good” that you can do.

Do I Need An Advisor?

The most useful information that I have encountered came from Justin Bender of Canadian Portfolio Manager.

He showed his Ludicrous portfolio options. I am very close to Example 4 where he built a portfolio with two ETFs.

I will never have a wonderful portfolio. But I will have a good enough one.

I am keeping our retirement plan simple so that my husband can follow it with minimal effort. When I make things this simple, what the heck can an advisor do for me?

They might “save” some taxes and MER but would this offset the AUM one would be paying? No one can guarantee a stock market return.

The reality is that most physicians could use a pension. I am planning to delay our CPP and OAS. Even a small stream of guaranteed, inflation adjusted income will make my plan work. It also helps that I have a solid handle on my expenses.

You don’t need an advisor to delay your government benefits. You don’t need an advisor to draw out the RRIF with RMD tables. There simply are not many levers one can pull without adding more complexity, expense and hassle.

There will always be people who will take your money to do the simplest of things for you.

August 2020 Financial Update

“Don’t tell me what you think, tell me what you have in your portfolio.”

― Nassim Nicholas Taleb, Skin in the Game: Hidden Asymmetries in Daily Life

My Philosophy

  1. Put money in its place. Otherwise you will NEVER have enough.
  2. Live within your means.
  3. Avoid debt.
  4. Keep it simple.
  5. Keep costs low.
  6. Automate
  7. Diversify – invest globally.
  8. Embrace social indifference. Learn to care less what others are doing.
  9. Embrace subtractive knowledge. Ignore forecasts and “experts”. None of it helps much.
  10. Do not treat the unlikely as impossible. Nor treat the likely as certain.

Networth% – August 2020

 

Fixed Income

34.2%

Equities

27.4%

Personal Residence

24.6%

Extra Unit

6.9%

Commercial Unit

5.3%

Other

1%

Our Portfolio

I treat all the accounts as one portfolio.

Portfolio – August 2020

 

 

 

Account

Ticker

Asset

Portfolio %

Corporate

BRK.B

Berkshire Hathaway

4.4

Corporate

VGRO

80/20 Asset Allocation ETF

44.5

RRSP1

VAB

Aggregate Bond

2.1

RRSP1

VGRO

80/20 Asset Allocation ETF

1.6

RRSP2

VAB

Aggregate Bond

4.0

TFSA1

VGRO

80/20 Asset Allocation ETF

1.4

TFSA2

VGRO

80/20 Asset Allocation ETF

1.3

Taxable

VDY

Canadian High Dividend

0.8

Taxable

VGRO

80/20 Asset Allocation ETF

0.4

 

GIC

 

10

 

Cash

 

30

Total

 

 

100%

Asset Allocation

 

 

44.5%

Portfolio Change 2020 ($$)

 

 

2020

Month/Month$

YTD$

January

37,361

37,361

February

-111,757

-74,396

March

-208,404

-282,800

April

272,159

-10,641

May

139,468

128,827

June

80,935

209,762

July

159,767

369,860

August

110,281

480,141

Mailbox Money- August 2020

“Life is really simple, but men insist on making it complicated.” Confucius (BC 551-BC 479) Chinese philosopher.

My investment philosophy is simple.

I have zero alpha.

I want “know nothing, do nothing” mailbox money.

Mailbox Money – August 2020

 

 

 

Asset

Ticker

$$$

% Total

Aggregate Bond

VAB

730

49.3%

Canadian Dividend

VDY

154

10.4%

Interest

597

40.3%

August 2020 Total

 

1,481

 

12- Month Trailing

 

122,376

 

Cumulative Mailbox Money

 

 

Month

2019

2020

January

10,329

17,295

February

26,294

29,166

March

32,239

44,380

April

49,742

56,975

May

55,856

61,936

June

64,013

64,310

July

71,546

86,858

August

73,229

88,339

September

81,357

 

October

95,968

 

November

101,828

 

December

107,264

 

Kids’ Portfolios – August 2020

 

 

VEQT 4% SWR/ month

Son, 22 years old

536

Daughter, 19 years old

61

VEQT = Vanguard All-Equity ETF Portfolio

Retirement

Accumulation is simple. The introduction of asset allocation ETFs work well for lazy people such as myself.

Figuring out retirement income will be more challenging.

Most physicians do NOT have any meaningful pensions.

Here are my thoughts on our retirement plan.

Current Retirement Plan By Age

  1. < 65 years old:
    1. Draw salaries to fund CPP
    2. 58,700 = 2020 CPP Maximum Pensionable Earnings
  2. 65 – 70 years old:
    1. Retire from medicine
    2. Spend mailbox money.
    3. Bridge asset:
      1. Sell our office unit.
      2. Allow us to delay government benefits until 70 years old.
  3. 70 years old:
    1. Drawdown Sequence:
      1. OAS & CPP
        1. Delaying these are the best annuities.
        2. Guaranteed, inflation adjusted income.
        3. Plan to have ⅓ to ½ of our spending from this source.
      2. RRIF RMD
        1. Use maximum ALDA rules to monitor RRSP values. Current maximum is 150,000 or 25% RRIF, whichever is less.
        2. Use RMD tables to spend efficiently.
      3. Taxable
      4. CCPC
      5. TFSA

Estate:

  • PRE – Principal residence exemption. Can pass our home to heirs tax free.
  • Universal life insurance policy. Bought in our mid 30’s.

August 2020

I have more or less fully transitioned to online shopping. It. Is. Fabulous.

Thankfully I am not very picky and thus if the fruits and veggies are not amazing. I don’t care. I will eat it enjoyably.

Our family is doing well. I am grateful for our multiplex. I hear of many families who are getting on each other’s nerves now.

August has been a relaxing month. I am continuing with telehealth. My husband’s work had returned to full time capacity. We took half of August off to relax around our local community.

I do not bother reading or listening to more financial information. None of it helps me much anymore.

Having more information will not help me with the type of investing that I have chosen. I am not clever enough to figure out a way to avoid drawdowns when they occur.

My only plan is to save more and spend less. I don’t think that there will be any magic bullets for us.

I spend most of my energy thinking about risk management. I have no control over the markets. I only think about what levers I can pull when something goes wrong.

Hiring an advisor would not help me. My accountant does my taxes but he is focused only on the taxes. I need to focus on the whole picture.

There are no right or wrong answers. For my children, they can be 100% equities. For us, it’s closer to 50- 75% equities. I have minimums and maximums but no fixed goals.

When my government benefits start at 70 years old I may allow the allocation to drift higher.

I will continue to keep about 25% of our net worth in real estate. If I was to acquire another piece of real estate, it would likely be another multiplex.

If the whole stock market implodes, I would still have my homes and cash.

I have no earth shattering insights for anyone. Sadly I see none from anyone else either.

But the adage of staying safe especially around retirement makes sense. I did not research sequence of returns risk in the past. But I also would not have stopped working when I reached financial independence.

Financial independence is about options. It is not about stopping. I liked my career enough to keep doing it. Plus I am well aware that the best plans can be messed up. Because in life, it’s always something.

Asset allocation is not a goal per se. I could care less if one always carried 100% equities during their entire investing timeline. I am certain one’s tolerance for volatility drops to their boots once the regular income stops. I suspect that would be the case for us. I have zero desire to have side hustles or to hack stuff. If I need more money, I would just keep working.

I continue to DIY this month.

I have started FaceTiming more friends. It feels commonplace now. And it is a wonderful way to connect with distant friends.

I continue to make no knead bread. All. The. Time.

I am the family barber now. I find it relaxing. I am grateful that everyone appreciates my simple haircuts. Cuz if they want anything fancy, I do not know how to do it.

We even groomed the dog at home since COVID started.

My life is filled with lots of baking and lots of gardening.

Plus my home gym rocks. Big time.

My current netflix binge is Modern Family.

I still have the lifestyle of my university days. Except now, I have a career, a 24 year marriage, raised a couple of children and bought the requisite homes and cars.

But overall I still enjoy the same things as I always did.

It is interesting in life how so much changes but so much stay the same.

July 2020 Financial Update

“Don’t tell me what you think, tell me what you have in your portfolio.”

― Nassim Nicholas Taleb, Skin in the Game: Hidden Asymmetries in Daily Life

My Philosophy

  1. Put money in its place. Otherwise you will NEVER have enough.
  2. Live within your means.
  3. Avoid debt. Period.
  4. Keep it simple.
  5. Keep costs low.
  6. Automate
  7. Diversify – invest globally.
  8. Embrace social indifference. Learn to care less what others are doing.
  9. Embrace subtractive knowledge. Ignore forecasts and “experts”. None of it helps much.
  10. Do not treat the unlikely as impossible. Nor treat the likely as certain.

Networth% July 2020

 

Fixed Income

34.9%

Equities

26.8%

Personal Residence

24.9%

Extra Unit

7%

Commercial Unit

5.4%

Other

1%

Our Portfolio

I treat all the accounts as one portfolio.

Portfolio – July 2020

 

 

 

Account

Ticker

Asset

Portfolio %

Corporate

BRK.B

Berkshire Hathaway

4.1

Corporate

VGRO

80/20 Asset Allocation ETF

44.0

RRSP1

VAB

Aggregate Bond

1.7

RRSP1

VGRO

80/20 Asset Allocation ETF

1.6

RRSP2

VAB

Aggregate Bond

4.1

TFSA1

VGRO

80/20 Asset Allocation ETF

1.3

TFSA2

VGRO

80/20 Asset Allocation ETF

1.3

Taxable

VDY

Canadian High Dividend

0.7

 

GIC

 

10

 

Cash

 

31

Total

 

 

100%

Asset Allocation

 

 

43.5%

Portfolio Change 2020 ($$)

 

 

2020

Month/Month$

YTD$

January

37,361

37,361

February

-111,757

-74,396

March

-208,404

-282,800

April

272,159

-10,641

May

139,468

128,827

June

80,935

209,762

July

159,767

369,860

Mailbox Money- July 2020

“Life is really simple, but men insist on making it complicated.” Confucius (BC 551-BC 479) Chinese philosopher.

My investment philosophy is simple.

I have zero alpha.

I want “know nothing, do nothing” mailbox money.

Mailbox Money – July 2020

 

 

 

Asset

Ticker

$$$

% Total

80/20 Asset Allocation ETF

VGRO

15,599

69.2%

Aggregate Bond

VAB

732

3.2%

Canadian Dividend

VDY

273

1.2%

Interest

5,944

26.4%

Mailbox Money Total July 2020

 

22,548

 

Mailbox Money Trailing 12- Month

 

122,577

 

Cumulative Mailbox Money

 

 

Month

2019

2020

January

10,329

17,295

February

26,294

29,166

March

32,239

44,380

April

49,742

56,975

May

55,856

61,936

June

64,013

64,310

July

71,546

88,858

August

73,229

 

September

81,357

 

October

95,968

 

November

101,828

 

December

107,264

 

Kids’ Portfolios – July 2020

 

 

VEQT 4% SWR/ month

Son, 21 years old

578

Daughter, 19 years old

59

VEQT = Vanguard All-Equity ETF Portfolio

My finances are on cruise mode again. Thank goodness. I do not plan to make any outsized changes. I will be tracking monthly and that’s about it.

That is the point of this journey. To develop a simple process whereby I can easily manage my finances. I do not want to rely on too many “helpers” along the way.

This is how I had imagined it to be. I can leave it alone and update my totals monthly. I do not bother to read any financial news or forecasts. I try to keep an eye on changes our Canadian government is making to regulations.

One can follow the financial noise too closely. My accountant tells me what to do each year. If there are any big changes I will find out. As I discovered lately, even when changes occur, it’s not like I can do anything about it.

I am beginning to love my Loblaws grocery pick up. We did not use it during the height of COVID but we love it now. I do not plan to physically shop at Loblaws from now on.

So that has been a huge addition to my life. I love being able to spend well now.

Personal finance is really simple. Just keep doing the really boring stuff over and over. Plus automate as much as you can.

That’s it.

So many words spilled on this. It is not needed.

2020 Simplify Finances

Type

Number

Investment Accounts

8

Bank Accounts

5

Credit Cards

4

Total

17

Investment Accounts

Brokerage1 – Pre-tax accounts

  1. Holdco CCPC – CDN
    1. VGRO
    2. GIC
  2. Holdco CCPC – USD
    1. Brk.B
  3. Opco CCPC USD
    1. Brk.B
  4. RRSP – Mine
    1. VAB
    2. GIC
  5. RRSP – Hubby
    1. VAB
    2. VGRO
    3. GIC

Questrade – Post tax accounts

  1. Taxable
    1. VDY
  2. TFSA – Mine
    1. VGRO
  3. TFSA – Hubby
    1. VGRO

Banks

Credit Union

  1. Opco
  2. Holdco
  3. Trust
  4. Personal

Tangerine

  1. Personal

Credit Cards

  1. TD Visa
  2. Amex Bonvoy
  3. CIBC Visa
  4. Mastercard for Costco

My journey started with the realization that my finances were too complex. And it was not the clever kind of complexity but the junk drawer kind. I started accounts on a whim and due to pure inertia did not take the time to close them down. So they just accumulated.

At this point I am close to the number of accounts that I want to maintain. Until we retire, there is no benefit to minimizing the accounts further.

When we fully retire from Medicine, we will sell the Corporate USD accounts since these hold Berkshire. We currently can not liquidate due to the small business deduction limits. But once retired, the SBD will not matter and I will sell Berkshire.

The only addition that was made in 2020 was to start the AMEX Bonvoy card. This was my husband’s idea.

It was also my husband’s idea to start dividend investing with VDY. I plan to sell VDY once it recovers to my initial book value. Thankfully, my son’s VDY has already been sold.

We do not have much in VDY. But my husband seriously needs to listen to me about keeping things simple.

That is why I often chuckle when I read about usually husbands who want to be “aggressive” with their investments. Many of them think that their wives are onboard with the whole idea. I have a feeling most of these investment aficionados will leave their wives with unmanageable portfolios.

A few guys make sense such as Gasem. He clearly states that he uses a well respected advisor whom he has given clear instructions to.

Try not to leave your spouse with complicated DIY portfolios.

I am simplifying everything because I recognize that my so-called “helpers” love complexity. My accountant and lawyer do not dislike legislative changes.

I will gladly accept complexity when there is a lopsided benefit. Otherwise I plan to keep it simple.

I performed an estate freeze for our corporation and started another family trust. I can not make these things simpler. I need help with these things. The rest I can do myself.

Other “helpers” are telling us to start another permanent life insurance policy. No thanks. I am not interested in maximizing money for my heirs. I insist that we maintain full liquidity of our investable assets during our lifetimes.

That’s another rule that I have had to implement. I tend to be overly supportive and will make poor financial decisions because of that.

So my first rule now is to make sure that whatever I do, it has to be easy and enjoyable for me. I shall do no harm to myself, first and foremost.

I have seen family members generously giving away what they could barely afford. And then resentment reigned supreme when they watched their gifts spent frivolously. Money just isn’t worth ensuing drama for.

Thus we decided to support the children’s education. We encouraged them to stay locally for their undergraduate degree.

We will support their housing by encouraging them to stay in our current units. I do not plan to give them large down payments for their future home purchase. Homes are too expensive in our area anyhow.

And do not get me started on weddings. We paid for our own and it was great. They can certainly do the same. I have zero need for these displays of largesse.

Now our finances are more manageable. My investments are really simple. I barely look at them anymore.

But it has been a process. I started with ETF investing in early 2018. Even though VGRO was around at that time I was concerned that it was not optimal for my CCPC.

Then Dec 2018 hit with the drawdown and I tried my hand at tax loss selling on Christmas Eve. That did not go well. Not only was it stressful, I think I lost money as I used market orders. The MD website is terrible for DIY trading urgently. Plus I likely just stunk at it.

There is all this talk about increasing tax rates, etc. Thus if they are planning to take my profits away, I plan on not working too hard for it. That is one of the reasons that I decided against more investment real estate. It would have been too much work for us.

Risk is not just about losing money. Risk is also about damage to one’s psyche. I just buy the global market with an index fund.

If it does not work, I haven’t spent much bandwidth being clever either. Furthermore I have no idea how to rescue the plan except to hold more fixed income. And maybe we could keep working and spend less. Otherwise I have nothing else up my sleeve.

There is a lot of peace that comes from knowing that there is only so much that I am able and willing to do for my finances.

Now that I have simplified things, dealing with my finances is a more enjoyable process. Whatever happens will happen without my meddling.

2020-06 Mailbox Money

Mailbox Money- June 2020

“Life is really simple, but men insist on making it complicated.” Confucius (BC 551-BC 479) Chinese philosopher.

My investment philosophy is simple.

I have zero alpha.

I want “know nothing, do nothing” mailbox money.

June 2020 Mailbox Money

Asset

Ticker

$$$

% Total

Aggregate Bond

VAB

664

28.0%

Canadian Dividend

VDY

788

33.2%

Interest

922

38.8%

Total

2,374

100%

Cumulative Mailbox Money

Month

2019

2020

January

10,329

17,295

February

26,294

29,166

March

32,239

44,380

April

49,742

56,975

May

55,856

61,936

June

64,013

64,310

July

71,546

August

73,229

September

81,357

October

95,968

November

101,828

December

107,264

My June 2020 passive income was 2,374. It was truly passive. I simply added it up. That is my idea of passive income.

My 12-month trailing passive income is 107,562.

I have locked my cash into bank terms that vary between 30 days to 1 year. I do not get the interest until I cash them out. I keep the money guaranteed with my provincial credit union deposit insurance.

I also use CDIC insurance. I figure that I will have enough assets that do not have any insurance whatsoever.

When I say that I am a “know nothing, do nothing” investor, I am not joking. I do not bother reading forecasts. I barely read the news except to keep track of local events.

I am back to obsessing about my running. I am bingeing Modern Family on Netflix. I am still doing telehealth. I love telehealth.

Oddly everything seems simpler.

It has been much easier to invest with my Vanguard asset allocation funds. They are not perfect. But I am too old to believe in perfection at this point.

They are simply good enough.

That is the thing. I know now that I only need to get “enough” of my life correct. Especially when it pertains to finances. There will always be someone who games the system. There will always be a so-called “better” way. There will always be someone who is more clever/ smarter/ faster…who really cares?

That is why I tend to just keep track. And to keep simplifying it all.

There will be no great financial insights from me.

2020-05 Mailbox Money

Mailbox Money- May 2020

My investment philosophy is simple.

I have zero alpha.

I want “know nothing, do nothing” mailbox money.

May 2020 Mailbox Money

Asset

Ticker

$$$

% Total

Aggregate Bond

VAB

700

14.1%

Canadian Dividend

VDY

130

2.6%

Interest

4,131

83.3%

Total

4,961

100%

Cumulative Mailbox Money

Month

2019

2020

January

10,329

17,295

February

26,294

29,166

March

32,239

44,380

April

49,742

56,975

May

55,856

61,936

June

64,013

July

71,546

August

73,229

September

81,357

October

95,968

November

101,828

December

107,264

My May 2020 passive income was 4,961. It was truly passive. I simply added it up. That is my idea of passive income.

My 12 month trailing passive income is 113,346. Cool.

I have locked my cash into bank terms that vary between 30 days to 1 year. I do not get the interest until I cash them out. I keep the money guaranteed with my provincial credit union deposit insurance.

I tend to use the CDIC insurance as well. I figure that I will have more than enough assets that do not have any insurance.

Due to Covid our summer travel plans have been curtailed. It is no big deal since I just wanted to camp anyways. The local weather has been lovely so I am fine with staying close to home.

I have been thinking lately about how little guaranteed, indexed to inflation income we get as physicians. Very few of us get any pensions. In fact, your current work is governed by policy making government employees who are going to collect generous pensions. Good grief.

I plan to combat this by delaying my CPP and maybe even my OAS. I will maintain a bond tent in my RRSP. But mainly, I intend to live a simple, low upkeep life. Plus we are a family of sharers. I expect we will all lower our expenses by helping one another out.

But what the heck will all those doctors who spend multiple six figures per year do? How the heck can anyone make the numbers work with safe withdrawal rates, passive income etc?

What is apparent with safe withdrawal rates is that one is using such small percentages of one’s wealth. Think of the eye popping wealth that needs to be accumulated to allow six figure spending.

I now understand why so many doctors keep saying that they will keep working. Perhaps some of them realize they can not afford to retire.

Retiring without a pension and high living expenses probably does not work well in real life.

2020-06 Portfolio Update

“Don’t tell me what you think, tell me what you have in your portfolio.”

― Nassim Nicholas Taleb, Skin in the Game: Hidden Asymmetries in Daily Life

My Philosophy

  1. Put money in its place. Otherwise you will NEVER have enough.
  2. Live within your means.
  3. Avoid debt. Period.
  4. Keep it simple.
  5. Keep costs low.
  6. Automate
  7. Diversify – invest globally.
  8. Develop social indifference – limit social media.
  9. Love subtractive knowledge. Ignore forecasts and “experts”. None of it helps much.
  10. Do not treat the unlikely as impossible. Nor treat the likely as certain.

Networth%

Fixed Income

34%

Equities

26%

Personal Residence

25%

Extra Unit

7%

Commercial Unit

5%

Other

2%

Our Portfolio

I treat all the accounts as one portfolio.

Here is the portfolio broken down by account into overall percentages. I find it more useful to get an overall view of it.

This is just the way I am doing it. I have different goals, traits and triggers than others.

Taking anyone else’s plan off the internet must be one of the silliest things one can do to their financial health.

Everyone has to do the heavy lifting required to define exactly what you want your portfolio to do for you. Thinking and making decisions is hard. I get that.

Account

Ticker

Asset

Portfolio %

Corporate

BRK.B

Berkshire Hathaway

3.9

Corporate

VGRO

80/20 Asset Allocation ETF

44.2

RRSP1

VAB

Aggregate Bond

1.8

RRSP1

VGRO

80/20 Asset Allocation ETF

1.6

RRSP2

VAB

Aggregate Bond

3.9

TFSA1

VGRO

80/20 Asset Allocation ETF

1.3

TFSA2

VGRO

80/20 Asset Allocation ETF

1.3

Taxable

VDY

Canadian High Dividend

0.7

GIC

12

Cash

29

Total

100%

Asset Allocation

43.4%

Our Portfolio 2020 Change ($)

2020

Month/Month$

YTD$

January

37,361

37,361

February

-111,757

-74,396

March

-208,404

-282,800

April

272,159

-10,641

May

139,468

128,827

June

81,265

210,092

Kids’ Portfolios

VEQT 4% SWR/ month

Son, 21 years old

565

Daughter, 19 years old

57

VEQT = Vanguard All-Equity ETF Portfolio

Jun 8, 2020

As you can see, it has been a rather wild ride so far this year. It does not matter what I think about any of this. I will continue to strive for a simple portfolio that will allow me to achieve my plans.

One begins to realize that most of my time is spent unravelling prior decisions. Because guess what I have been doing last week? Selling VDY (high dividend ETF) in my son’s account. And we plan to sell our portion of VDY as well. I kept telling my husband that we needed to limit the amount of the high dividend ETF. That spelled the death knell for that ETF.

I have learned from past investments to cut the cord quickly. I do not hang onto equities once I decide to sell them. I make a very simple plan and then I follow it through as soon as possible.

And I have to learn to move into my next plan right away. But alas I am still a bit of a market timer. At least now I build a 60/40 portfolio instead of keeping the whole amount out of the market. I have been caught on the wrong side of that enough times to know better.

So as it stands, my husband and I will hold VGRO, the 80/20 portfolio. But my children will hold the 100% equity ETF, VEQT. I also plan to set them up for dividend reinvestment plans in all their accounts. This ETF distributes once a year so this could be an almost set and forget portfolio.

Now wouldn’t that be lovely?

Jun 12, 2020

Why do I continue to write this? I do this to review my thoughts as I transition to my investment plan. It may also be a way to track how this strategy works in the long term.

There is something rather tiring to read all this stuff online and then have zero idea how to implement.

The majority of what I do is to build something my family can take over eventually. I want to simplify so that they do not have to rely on a middle man which I feel is not needed nowadays.

If they want more security, just keep more fixed income or cash around. I don’t think there is any financial security that one can buy with a financial product.

The best security is likely to delay your government benefits. Guaranteed and indexed to inflation, what can you buy that would be better than this?

Furthermore we live in a country with free healthcare. What more security does anyone need? You do not have to look very far but at our American neighbours and see how good we have it.

Plus I’m beginning to realize that those who need bulletproof security will never achieve it. Their fears are too great. People have to realize that there is no security. It is all about trade offs.

The best thing about the market is that it does not discriminate. It does not care about your age, sex or ethnicity. Everyone has a chance at the table. We live in an age where we have access to portfolios that only the wealthy and well connected could have had access to in the past. Investing has become democratized for sure.

Now the biggest enemy is likely your own behavior. That is why my plan is to find something that I can stick with over the long run.

Investment risk does not only come from lost money. It can also come from losing one’s peace of mind. I am careful to make sure that no amount of money should ever come at that expense.

I could care less about being right. I would rather not be haunted from being really wrong.

Jun 19, 2020

Make Life Easier

I started using PC Insiders. It is great. I have not held back how much I detest shopping. I shop online with an app now. The whole family shops for themselves and one person picks the order up. It.Is.Fantastic.

I also started cutting my husband and son’s hair during Covid. I find it rather relaxing. I am grateful that they are not fussy with their haircuts. They would rather avoid the hassle of waiting in line at the barber.

Funny thing about haircuts. Aside from paying for gyms after university, my haircut was one area that I tried to systematize. I have had very cheap haircuts, free haircuts by my mom and very expensive haircuts. The overwhelming fact remains that it never looked different after a couple of weeks. Perhaps it is because I don’t even own a hair dryer and could not style it like the professionals.

So I have now just grown it to shoulder length and I think I’ll let my husband cut it next month. Because my haircut simply does not matter.

People With Excel Portfolios

The reason I simplify everything is because I believe in automation. I like excel but I would not have my husband and children rely on them.

I read about people who build excel sheets for their optimized portfolios. But what if you die and the spreadsheet stops working? What the heck is your spouse and children supposed to do then?

Unfortunately I think about stuff like this. Everyone thinks things work until they don’t.

I was reminded of this because my google sheets just stopped updating my Berkshire price today.

All I know is that I am not clever. I can not predict taxes blah blah blah. I can barely predict my own behaviour sometimes.

I doubt if there is even “optimal” after witnessing the changes to our corporate accounts made by the government. You can make plans but it might not work out. But you still pay for the complexity to accountants and lawyers.

So here is what I rely on. Whatever happens, I am going to make it easy. So easy that anyone else can maintain it.

Unless the entire capital markets stop functioning, I have a chance to achieve growth as much as the next person. And if the markets stop functioning then I have a stash of cash, keep working and live a simple life I can afford.

I’d rather spend my time planning our Father’s day get together this weekend.

June 28, 2020

I am beginning to think about my life in terms of quarters. If I am lucky, I may be in the third of four quarters. This period of my life is the one that I want to cherish. The time between 50 – 75 years old is the time I can be active with my husband.

The children are young adults now. I tell them that all they should need from us at this point is money for university. They can stay in the home units as needed but daddy and I are going to do our own things now.

The past twenty five years have been busy. We started our careers, raised our family, bought homes and cars. Started and flamed out on multiple businesses and investments. We have the battle scars. It is what it is.

I have made solid plans for my parents, my siblings and my children. It is time to spend more effort on my own dreams again. I remind my husband that this is the time to be selfish. It is time to down-age.

I remind him that if we are lucky, we will only get older. This may also bring illness and disability. Now is the time to do whatever else one had planned to do.

My husband has started to cull aspects of his work he does not want to do. He is ramping his hobbies back up. I regularly find him exercising and playing his guitar. He has even taken over the bread baking.

Our rhythm has changed.

I have zero bucket lists however.

I have a serious case of *uck-it lists.

What professional woman has not experienced the fact that you do all your career tasks and then you get to be the one to do EVERYTHING else?

  1. Living:
    1. The household shopping.
    2. The cleaning.
    3. The cooking.
    4. The laundry.
    5. The family health maintenance schedules.
    6. You have to know where everything is. Mom is always the one to call.
  2. Money:
    1. The household finances.
    2. The taxes.
    3. The investments.
  3. Family:
    1. Organize your husband.
    2. Organize the children.
    3. Organized the extended family issues.
    4. Organize the social activities.
    5. You get to be the one who is supposed to manoeuvre the unspoken issues amongst all the family members including the extended family. Yikes.
    6. You get to plan all the vacations. And for all the husbands who think they plan, I bet most wives take care of the buttoning down the house and the packing.
    7. Organize the dog.
  4. Stuff:
    1. The home(s).
    2. The car(s).
    3. And all the kids’ and husband’s stuff.
  5. Career:
    1. CME
    2. Manage the office
    3. Manage the billings

And practically every list has multiple sub lists.

Eventually the career ends and you get to just spend time on your hobbies. Eventually your children grow up and they manage their own stuff.

As a middle aged woman, I have to stop helping everyone else. It is the season to relish that my children are grown up and to stop doing things for my husband. If we are to enjoy our retirement together, he needs to be self sufficient.

That is why I have this intense drive to simplify. Life has veered too far off from how I wanted to live when I was younger.

I want to take care of a minimal amount of stuff. I want my home and to eventually own one car. My daughter can take the second car.

I want my investments and financial structures to be simple and efficient.

I want to have shorter to-do lists.

I want my to-do lists to be things I do for myself. For too long, my to-do list has been filled with things for everyone else.

I once asked my husband for his to-do list. And he was honest and said “honey, I don’t have one”. OMG already.

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