I have been writing about my know-nothing do-nothing approach a lot lately. I am wired this way. When I focus on something, I stay focussed for an extremely long time.
To note that I am mildly obsessive is an understatement. But this has served me well in many areas of my life. The trick is to severely limit what I get to obsess about.
Ben Felix posted an awesome video today about Warren Buffett on You Tube. I enjoy listening to Ben. He obsesses about factor investing. The main issue I have with his strategy is that I need to pay AUM to access his Dimensional Funds. [Edit- I stand corrected. See Ben’s comment below.]
If something were to happen to me and my husband needed help. I have directed him to seek folks such as Justin Bender, Dan Bortolotti or Ben Felix. They are all with the same firm PWL Capital but the fact is I value their outlook. It has helped shape my investing.
But currently, my investment plan is too brutally simple to require any financial advisor. I likely will need to consult someone when it comes time to decumulate but even that I am wrapping my mind around it for us.
I truly believe most folks can use the simple asset allocation funds. I don’t even think rebalancing and tax efficiency makes sense for most people.
I think it is a great way to make mistakes with your paper investments. I think some people can do it but for the majority, they would do better with these All-In-One ETFs offered by Vanguard, iShares and BMO.
Tax efficiency is also an area that will be a tripwire for many people. It will serve to make their investments more complicated. I believe most people do not want to fiddle with their investments. Many folks do not want to think about it all that much. I don’t even think I will continue with tax loss selling once I am fully invested in VGRO.
My argument will hold that since you have such minimal control over this stuff, why fool yourself that any of this will ultimately matter.
Here is what is a sure thing. Save more. Spend less. Keep it simple.
Whenever I see folks doing mental gymnastics in the cult of optimizing and maximizing- I always get the feeling of why don’t you just earn and save more money? Then you don’t need to worry so much about the minutiae. Just saying.
I obsess but I tend to obsess about big ideas. I dislike minutiae immensely. It is a form of mental clutter. And I dislike clutter in most forms.
It goes back to what is the point of money? Is it really to spend all your energies stressing about the minutiae? If you were extremely wealthy would you seriously try to get every single point? Would you really travel hack? Would you shop holy hell everywhere to get the best deals?
I sure would not. I would stick my investments in something that allows me to not think about it and live my life doing other things I enjoy.
Personal finance is fun. But the paper investments portion is a commodity now. There are all-in-one ETFs in Canada available to help you. To try and over complicate things on purpose seems rather silly. You may win but you also may not. The latest budget and its impact on Horizons ETFs reminds us of this. I bought HBB for one day. But my gut said that I would be rather annoyed if the government messed with this too. And sure enough they did.
I always think about things in terms of what if I am wrong? And if I am wrong about not worrying about tax efficiency for my investments, well whatever. I have enjoyed all these years/ decades of not thinking about it. That in itself is rather priceless.
And if my know- nothing, do- nothing approach will get me where I want to go. I am already living my dream life NOW.
And my loved ones will be able to seamlessly continue my plan. That brings me more peace than you can ever know. I play the long game. I plan this stuff out for generations.
And if many think they are beyond a simple strategy due to their wealth. Wait till you see how much I plan to throw down for one ETF.
I have zero idea what would work for others. I do not know their details.
But I will continue to show my strategy and we can follow it to see if it pans out. I have no other strategy I want to follow anyways. This will be good enough for me.
If you own a CCPC it may be worthwhile to think about higher level strategies such as estate freezes, trusts, whole life insurance, taking capital gains versus dividends, etc.
Your friendly neighbourhood accountant likely has more voodoo up his sleeve than you do.