My 20 Year Old Is A Better Investor Than I

I believe my kids will become better investors then we will be. I am beginning to see that. My 20-year-old son is a better investor than I am. There is likely a few reasons why this might be so.

He Has Less Money

I’m sure this comes from the fact that he has only four years of TFSA room to invest. I held back nine years of cash and had to throw in a large amount into equities last year. It was a high market but since this was funds for a very long term, I had no problem with doing that.

Many bloggers had a small amount of money during the 2008 financial crisis. They didn’t have that much money to worry about. It will be interesting how they will react when their much larger pile drops 30-50%. Some could watch 7 figures vanish on their balance sheets.

My children can learn a lot from this generation before them. The Internet has allowed us to learn from one another.

They Have The Proper Vehicles

My children also benefit from investment vehicles since Vanguard has come to Canada. In fact I opened my son’s TFSA account in December 2017 and VGRO came onboard in January 2018. This was perfect timing and had nothing to do with me.

I knew about Vanguard index funds when I was 25 years old. But there was no way for us to invest with these in Canada. Or so I thought. I guess I could have just bought VTI. But I was not aware that I could.

Having Vanguard in Canada now has made everything easier. There’s no denying that.

If these products were available when I was 25 years old, I would have invested in these right off the bat. And I would have never looked back.

They Have Seen Our Mistakes

My children has heard me recount that I could have just bought an index fund and have been done with it. They are going to learn from my mistakes. We haven’t done poorly by any stretch but we could’ve done it easier. And I love easy.

I want my children to have an easier time with investing. With all the financial literacy and education that I am providing for them, it should prove that way.

I feel strongly that my children can use equities to build growth. But they need to figure out what to use for building an income floor. I would prefer they not just rely on the equities market for their retirement.

My children are at the age where they need to find something that will allow them to contribute to the world. Whether that is with a profession or a business, that will be their choice.

But the plans for retirement start now. It starts when they begin their TFSA accounts. I will give them advice for consumption and advise them not to limit their options.

Both of my children have already started thinking along these lines. If they make mistakes, they will make the mistakes with their eyes wide open.

Unlike the rest of us who made mistakes without thinking. Many of us did not even realize there was another option. That is not the case nowadays as these young people realize there are plenty of options out there.

With the advent of the internet, everyone is able to see what many others are doing. And I think that has been proven to be very healthy.


2019 FI Checklist- January

The following are the tasks that I perform in January. There are certain tasks specific to this time of the year.

Networth Updates

I track things that I care about. The beginning of the year involves more tracking as we close out the previous calendar year. Most people who are interested in financial independence understand the concept of front loading your savings. Many of us would prefer investing at the beginning of the year to allow the market to work on our investments earlier.

The beginning of the year is when I work on my networth updates. I usually update two sets- one for December 31st. This one allows me to round out the year.

I also use one for January 1st when the real estate assessments are updated by the city. I reset the real estate values for the current calendar year. The assessments only update once a year. This keeps it simple and allows me to see the cash flow that’s coming through the accounts throughout the year.

I noticed rockstar finance keeps track of bloggers’ networth. I would take networth with a grain of salt.

It is like most things in life and in finances. It is a partial truth. There are folks who state that networth does not matter and only cash flow does.

But I think It is your net worth AND your cash flow that makes one feel wealthy. A personal home is a consumer item. Many people in high cost of living areas have a higher networth but this has a serious impact on their cash flow. The saying “house rich and cash poor” can be a very real thing.

Expense Updates

I keep track of my yearly expenses. One metric is to make sure that it doesn’t deviate greater than 20% year over year. That is the government tax department metric according to my accountants.

For my personal expenses, I rarely deviate 5 to 10% per year. In fact my expenses have essentially stayed the same for many years. Whenever it goes up I can see the one or two large expenses that raised it.

I have never had the discipline to budget. It has made no difference in the outcome of my finances. If anything is a hassle, I tend not to do it. Budgeting tends to take more bandwidth than I can spare.

Furthermore I am a big ticket item person. The thought of trying to save a few pennies but knowing that thousands are leaking somewhere else never made much sense.

Invest TFSA

This is the most important account to get organized in January. TFSA room opens up each January 1st. The contribution limit increased to $6000 in 2019.

This will be the year that my youngest daughter can open an investment account. She needs to turn 19 years old first.

The TFSA forms our estate portfolio. I am investing as if I was a 20-year-old in these accounts. Therefore I can buy VGRO which is an 80/20 asset allocation ETF from Vanguard.

I recently set up a DRIP for my VGRO ETFs. It will be rebalanced by Vanguard and the dividends will be automatically reinvested. Since it is in a tax free account, there is no adjusted cost base or tax loss selling to concern myself with.

Truly a set-it and forget-it account.

Invest RRSP

The majority of my funds in the RRSP reside in five year laddered GICs. I take 20% of the funds in each of our RRSP accounts and buy a five-year GIC. This is unbelievably simple.

The only goal is to make sure it stays below the 100K CDIC insurance. Currently the ladders I am building are 55K in mine and my husband’s are about 45K. We are well below the CDIC insurance level. Thus nothing fancy required here.

Rebalance CCPC

I started my CPCC ETF investing in May 2018. I have mainly bought high therefore I have been able to participate in a few tax loss selling opportunities. I’m not sure what I think of those just yet but time will tell.

My investing is very simple with a 3 fund ETF portfolio. I am using Justin Bender of Canadian Portfolio Manager taxable account portfolio. I have found that Justin and Dan Bortolotti of Canadian Couch Potato invaluable during my ETF foray.

I rebalance my accounts in mid January. I had to buy more bonds. Otherwise there was nothing else to rebalance.

This is what I have done in January.

Due to the TFSA and RRSP, it is a busier month. The rest of the year is much simpler.

I have moved my investment purchases to coincide with quarterly dividend distributions of ETFs that I own. Most companies operate on the quarterly distribution schedule.

This will make my life easier and that is the whole point of what I am trying to achieve.


2019 Portfolios

2019 Portfolios

I have decided to build a few portfolios to help solidify our financial plans.

Retirement Portfolio

The retirement portfolio would consist of funds to cover our basic living expenses. I have tracked my expenses for over 30 years. I am well aware of what my spending habits are. Budgeting was never my cup of tea but I have always tracked.

I track most things that I care about.

My husband and I plan to continue working part time and drawing a salary to max our CPP contributions until we are 65 years of age. This would barely take a couple of months of work per year. With the kids growing up, we can see that working part time would still give us ample opportunity to do many other things.

Thus our retirement portfolio will consist of our CPP which we plan to delay until 70 years old and our OAS. In addition, we plan on keeping mainly laddered GICs in our RRSP.

Between the CPP, OAS and fixed Income RRSP/ RRIF, this will provide stable income. And this should cover our regular living expenses. The reason I planned our retirement portfolio in this manner is to mitigate market, longevity and inflation risks.

Both the CPP and OAS are indexed to inflation and will continue paying us as long as we live.

CCPC- My Risk Portfolio (Our Holdco)

Before I started this blog, I had planned on simply withdrawing about 40K dividends/ person yearly paying minimal taxes when we retired. I had not even thought of the government benefits. With the retirement portfolio ticking along now, I can allow this portfolio to be subjected to market risk.

Initially we had planned to use this account for buying apartment buildings. But after much thought, we believe a paper portfolio would be simpler. With a 60/40 asset allocation, we could weather market volatility. Furthermore, I haven’t fully invested so hopefully more buying opportunities will present itself.

I decided against dividend growth investing since I felt it would limit my diversification to a smaller handful of companies. The plan is that I can live off the dividends from a total return balanced ETF portfolio. This would be zero difference than being a dividend investor if I do not need to touch the principal.

Estate Portfolio

My lovely estate portfolio. I plan on using my TFSA to gift to my children in time. That is why I prefer to hold VGRO which is an 80/20 asset allocation fund. I am basically investing for a twenty year old.

I also planned well in advance with my multiplexes. The benefit of happily living in our smaller spaces has allows us to share our units now and into the future.

My children understand the plan. They regularly tell us how much they appreciate how we live. I am surprised that they recognize it. It could be from hearing their friends tell them how lucky they are to have such a set up.

The biggest ticket item is to allow use of the estate portfolio while we are still ALIVE. If the TFSA grows large enough for a 3% or less safe withdrawal, than this would enable my children to FI as well. That would be lovely.

Either way, it never hurts to have a million or so growing in this portfolio if it turns out my kids do not need it.

I have been a witness to how families argue over inheritances lately while the senior is still alive. I realized I had best make plans with my kids so everyone is on the same page.

I am happy to share wealth if our plans work out. But we also prefer to maintain control. This will serve to decrease risk for our children when they have future relationships.

I am perfectly happy to have my future son or daughter in law live in our multiplex units. I would encourage them to save up and buy investment real estate or save up for their own home. All options would be positive. It would be best for them to build something together. Then whatever happens with their relationship, they would divide assets they had built up as a couple.

This is particularly important. I have personally known two women who married men whose families had passed the family home to their husbands. Upon divorce, these woman walked away with half the house. This is shocking since these women barely contributed to these fully paid off homes. And I live in a very high cost area.

I am a woman who has worked diligently with my husband to achieve our homes. I am surprised that women still get away with this sort of thing.

I recall one of the women in question stating that her husband didn’t work for his house and had simply got it from his parents. I guess that was why she felt it was okay to take half of it. Of course I reminded her that her own parents didn’t give her anything.

Her ex-husband‘s parents were very frugal hard-working immigrants. No wonder the ex husband waited till his parents died before he divorced. I’m sure he didn’t want his parents to see what happened with all their sacrifice.

What folks will explain to themselves when it comes to money never surprises me any longer.

Personal Taxable Portfolio

I have been building this up lately. I think we will leave this one as cash for now. The “everything” bubble of the past decade is showing signs of cracking. It is always nice to have some cash available to see what opportunities arise.

I am not someone who believes one has to be “fully invested”. That would likely freak me out rather than offer me solace like these 100% equities cowboys.

I told my kids that 80/20 is good enough. At least they would have something to rip money with when the crapper hits. That is the point of the 20% bonds. It still amazes me that you really don’t have to know anything to “invest” with an index portfolio. Thank goodness for that.

Real estate took a lot of skill. This is a nice balance.

This has been a summary of my portfolios thus far. It shall be interesting to see how or if these change with time.


2018 Year Review

I Started A Blog Then Stopped A Blog

I started my blog and stopped it the same year. Interestingly my love of writing has increased since stopping that blog. I am somewhat lukewarm about the whole blogging platform. The only constant positive outcome has been interacting with other bloggers whom I have a common interest with. Otherwise I do not seek fame, fortune or notoriety.

I am happy being relatively unknown and undiscovered. I write this blog mainly for myself and to clear my thoughts on subject matters that interest me. It is similar to my running. I have ran for four decades but have no desire to enter any races. And no desire to start running marathons.

I am someone who simply lives this way. That is why social media would be lost on me. I have zero desire to be known. In fact if there is any risk of being found, I would stop this blog as well.

Gained 10 pounds When I Wanted To Lose 3 Pounds

I’m only 5‘2“. I would prefer to be closer to 125 lbs. My goal was to stay below 130 lbs.

I had been teetering around 127 pounds on my 49th birthday. I gave myself the goal to lose 2 pounds to be closer to my ideal of 125 pounds.

Instead, I gained 10 pounds the past year.

What the bleepity bleep!!

What was this from? Well I eat a lot of junk food. I think I have a mild food addiction. I eat when I’m upset. I eat when I’m stressed. I eat when I am happy and want to celebrate.

So back to the drawing board of attempting to get my weight under 130 pounds. I need to adopt sustainable healthy eating habits. No more black-and-white thinking. I would just do my best and go from there. No judgement.

I am definitely a “see food” eater. If I bring the junk food into the house, I will most certainly eat it. I have proven that time and time again. So I need to stop bringing in junk food. Duh!

Started Index Investing And The Market Ends Its Decade Long Bull Run

I started index investing seriously in May 2018. Everyone knows how the market has ended in 2018. Thankfully I did not throw everything in. I do not trust any system that much. I believe in diversification.

I have been an investor long enough to be aware that you make money when you buy. I’m pretty sure stocks are similar to real estate investing in this matter.

Your greatest positive expectancy of return would be from buying low. That is why Warren Buffett tells people to buy index equities with dollar cost averaging. But when the market goes down, go buy MORE.

The words “time the market” is lost on me since I never plan to put everything into the stock market. It depends on how you wanted to calculate your metrics and what you want to reach for.

I have enough already. I would have enough even if I never invested in anything. My enough is a combination of needing very little plus we have earned healthy incomes.

We did not need anything more complicated than that. It really can be that simple.

My Youngest Child Started University

My youngest child started University in September. This is a new chapter in my life. It is time to allow my children to make their own mistakes. It is easier to make mistakes when you are young. You do not want to wait until one is given immense responsibility and then make your first mistake.

I have to step back as a parent and allow them to make these mistakes. I also have to treat them as adults. I will know my children as adults for much longer then I will know them as young children. That is an important point.

I have to respect their opinions. I need to listen more. I am beginning to learn that they will see things that I will never see based on their vantage point. I need to keep an open mind.

Returned To Regular Running

I started running again this year and had logged in 144 runs. I logged in 9 runs in 2017. So a large jump. The plan is to increase the number of runs in 2019.

I am also enjoying my walks. This is something I am starting to appreciate by listening to audiobooks. Plus I get to walk my little doggie. I love my dog…

But I will not forget that my health is based mainly on my eating habits. Because I can not outrun a poor diet.

I Turned 50- Hooray!!

What kickstarted all of this was my realization that this was the year I turn 50 years old. I never made much notice of turning 30 or 40 years old but this year was very special to me. Perhaps it was a confluence of the fact that my youngest was also heading off to university.

There are plenty of changes for my husband and I. We are excited about the present and the future. We are more at peace with our past missteps.

We plan to be conscious and to start living our lives closer to our ideals. That is the whole point of all of it for us. To start envisioning what we want. And hope to get somewhat closer to it.

That is why I constantly talk about your ideal life. What does that look like for you? If you cannot see it, it will be hard to reach it. It will be hard to plan around it.

But when you are clear about your focus, you tend to reach it quickly. At least that is what I found time and again.


My Quest To Simplify

Simplify Finances

I am on a quest to simplify my life. My Visa just arrived with a new expiry date. This is often an opportune moment to review what bills are even necessary.

Be ruthless when reviewing these bills. Do not take it for granted that you have to renew them. Take the time to remove that constant funnel of money out of your pocket.

Aside from simplifying the practicalities with respect to my finances, one can also simplify their investments.

I’ve come to believe that being able to simplify shows an understanding over your finances. I no longer chase many things. If I cannot see how it fits into the whole matrix I will not pursue it.

For instance the simplest habit with respect to finances is the ability to save money. If you cannot save money you are unable to progress any further. No amount of fancy investments will save you. Not consistently at least. You might get lucky but the odds are against you.

Simplify Health & Fitness

Once again if you can not simplify something you will not be able to sustain it. This certainly rings true for health and fitness habits. I would recommend most people start with one habit at a time. New Year’s resolutions consist of people wanting to start a dozen habits at a time. They are doomed from the start.

I would generally attempt one new habit a month. See how that goes. If successful, then I will start another one the following month. Do you want to win the long game? It is not a veritable checklist.

One good habit usually builds upon another. But it takes time and enough repetition for these habits to become ingrained. I found with habits it is not the amount of time that it takes. It is not about 30 days or 60 days. But it is the number of repetitions before it becomes a subconscious habit. And it is different for each habit.

I think it’s worthwhile looking at yourself as the “N” of one. Experiment with yourself with respect to your energies and with your moods. You will start to recognize your own patterns and proclivities.

Simplify Hobbies

My favourite hobbies are still reading and going for walks. And yeah, they are all blessedly free.

I use the public library regularly. There is a branch about three blocks from my home. But I want to divert most of my reading to ebooks and audiobooks. This takes away another errand of having to return library books. I find that my need to reserve a physical book has diminished dramatically. There is too much information. No one has enough time to read everything.

It is like receiving a surprise gift when the titles that I have reserved from the library appear. Folks should give it a try. It is better than simply buying the item.

That is what many do not understand. I received way more enjoyment from NOT having to purchase an item. No organizing, no cleaning, no storing, no insuring….nice isn’t it?

When it comes to hobbies, you do not want to be someone who buys all the equipment but never finds the time to do the actual hobby. I would suggest that you start simple. Are you noticing my default pattern? Try not to buy any equipment until you have shown that you will engage in this hobby for the long term. This would avoid hobby clutter which many families’ are predisposed to.

My quest to simplify has begun for 2019. May I gain momentum as the year progresses.


How To Lose 475K In One Day

My homes have lost almost a half million dollars with the new assessment. There was the assessment total on Dec 31st and when the new assessments came in on Jan 1st, the numbers were down 475K.

This goes to show that all these numbers are just a proxy to reality. They can move all over the place. In a sense it’s hard to take them seriously. Don’t get me started about the stock market. What does all this even mean?

It goes to show how little control you have over any of it. That is why at the end of the day you have control over your expenses and probably your income. To an extent.

The rest of it is likely a wash.

This is the time when I concede that net worth must be taken with a grain of salt. Cash flow is probably more significant. But as one travels down the rabbit hole I start to see that it’s not so black-and-white.

Cash flows can dry out. You might be unable to rent out a place. Dividend income can dry out. I agree a total return approach for equities makes more sense. It is all a numbers game after all.

That is why the more I review these topics I see that it is worthwhile to get some guaranteed income. If that even becomes retracted than the general populace has a larger problem. I think I will be fine however.

It’s probably like most things in life. It is the sum total of all the parts. The truth lies somewhere within the boundaries.

Diversification means many different things to me now. It is much more than stocks, bonds and real estate.

It means government benefits and working part time. It means being grateful that we will be able to collect government benefits without ever requiring a job. We could attain the benefits while maintaining our autonomy. That is a powerful combination.

It means having our children attend local universities. It means sharing our homes and enjoying our small space living.

It means enjoying our careers and helping our children plan for theirs.

It means living in an area with excellent public transit and services close by. This will allow us to age in place more easily.

I really think about mitigating risks nowadays. This is more important to me than the rate of return on investments. Returns are not guaranteed.

Folks have to plan for life changes. Divorce can happen. I read somewhere that there are more grey divorces occurring. Kids can launch and then return home with your grandchildren,

I see the benefits of setting aside some guaranteed income and leaving the rest for growth. There are a myriad of ways to do it.

I like the idea of having two portfolios. One portfolio to cover one’s regular living expenses. And another portfolio is set for growth.

That way your fixed expenses can be covered with your guarantee portfolio. If you have anything left over, you can leave that for growth. It is sort of the best of both worlds. Most people should plan their finances that way.

It is all related. Try to maintain your basic living expenses at a reasonable level. Then you can choose to use the other portfolio to grow for charity or for your heirs.

There probably is no free lunch in any of this. All we can do is plan and review.


This Is Exactly Why I Cancelled My First Blog

I Abhor Pipelines In My Pocket

My web host had an auto renewal feature. This is similar to most businesses. It seems to charge you even after you cancel it at times.

I had cancelled my web host in late November. I took the time to call them and they assured me that it was all cancelled, even all auto renewals. Sure enough this morning my credit card payment pinged with an auto renewal for the web host.

I had to contact them again to reverse the charge which was a waste of time.

The Right Hand Never Knows What The Left Hand Is Doing

In my younger years I used to get quite frustrated with this whole process. But by now, I know that the right hand does not know what the left hand is doing. There is zero benefit from getting angry with who you’re speaking to. No one knows what the other is doing. And I do not think they even care to.

I just save my energy nowadays since I know that getting angry would be wasted. Plus it sends bad karma which I have zero desire to introduce. The businesses are set up to act this way. The poor workers are just trying to keep the peace.

It Is Too Easy To Lose Track

The problem with having pipelines in your pocket is that it quietly leaks the money out. In fact it is very easy to forget about these accounts. I’ve noticed that most people are actually way too busy in their lives. When one is busy it is very easy to have something slip away from view.

I do my best to decouple these accounts any chance that I can get. Even when one recognizes it, they say to themselves that it’s too much trouble to cancel. I believe that the companies’ intricate phone lines are designed to frustrate you. Many folks simply give up.

So the confluence of people being too busy and exhausted and these companies easily divert the money into their coffers. These kinds of systems can stay active for a very long time. Business automation have a lot more energy than you do.

No Bandwidth

I recognize that I have no bandwidth for anymore of this nonsense. I have gotten to the stage in my life where it’s more important to keep the vital things in full view. It is time to detach from all these others distractions.

And I can be a very thorough individual. If I am unable to have the bandwidth to take care of these things, good luck for my husband. And my children.

That is why in 2019 my plan was to simplify things even further. There is no need for them to worry about such things. And I do not want to either.

Constant Vigilance

As many of you are aware, there are so many things to be vigilant for. I am hoping that this year if I can delete all these nefarious projects and bills, I will be able to see all that I care about.

Something turned for me this past year. I think turning 50 changed my outlook somewhat. It has been a long time coming.

But as I head into the last half of my life if I am so fortunate, it is incumbent upon me to identify those things I truly want. And let the rest go.

All of this takes conscious effort. I hope that I will be up for this process.