Finance

2019-05 CCPC Portfolio & Purchase Update

Security Name

Symbol

May_2019

Total Shares

Couch Potato Portfolio (77/23)

iShares Core MSCI All Country World ex Canada Index ETF

XAW

0

13531

iShares Core S&P/TSX Capped Composite Index ETF

XIC

0

6050

BMO Discount Bond Index ETF

ZDB

0

9902

Vanguard Canada Asset Allocation ETF

Vanguard Growth ETF Portfolio (80/20)

VGRO

1350

2535

CCPC Portfolio- Total

$749,403

Here we are at purchase time for another month. Is it me or are these months arriving faster and faster?

I realize that in time, my CCPC portfolio will be very simple. The table will consist of one ETF.

I am leaving my Couch Potato portfolio intact until a tax loss selling opportunity occurs. Then I will transition the entire portfolio to VGRO.

My current plan is to buy monthly and just buy more when the price goes down. I can only follow the simplest of strategies.

I bought VGRO close to its all time high price. I am unable to consistently time the best times to buy so I will need to follow a methodical process. Although I certainly do not like or want to buy when the price is so high, what are my other alternatives?

I am helping myself behaviorally with buying numerous tranches of this ETF. My purchase prices will blurr with time to my conscious mind. Whatever helps me get the funds invested, the better. When I set a specific purchase date on my calendar, it forces me to follow the schedule. I do not allow myself to reset the date.

I have done the research and spent some time thinking about the plan. All that is left is to move forward with the purchases. It is easier said than done. One needs to be slightly detached from the process to not begin to second guess yourself.

I tend to buy at the current ETF price. I do not try to wait and get it at a lower price during the day. Not only does this waste vast amounts of bandwidth worrying or caring about the price movements. But it does not help since the moves appear quite random.

I set the following rules for my purchase now:

  1. Avoid buying at the beginning or the end of the trading day. The large price moves scare me during these times.
  2. Make sure the ETF has only 1-2 cents spread between the bid and the ask.
  3. Set my limit order 1-2 cents above the ask price since I want my order to get filled.

Following these steps has allowed me to buy my ETFs more robotically. I can see why folks would want an advisor taking care of this for them. At times the large amounts I invest makes me pause. I keep thinking that maybe I can buy more shares when the price comes down.

But that is a dangerous way to think since then you start to believe that one can time this stuff. Or have any control whatsoever. Sadly, I know that I do not.

I only started thinking about investing in equities again in 2018. I can see that it truly is a bit of a crap shoot. That is why I just try to find the simplest approach and stick with it. I seriously see no utility in diving too deep into this stuff.

I truly believe you could know nothing and do nothing and likely have the same or better result than someone who learns about this stuff daily.

Where else in life would that be possible? Try that as a physician. Good luck with that.

But this also makes things easier since I discount all forecasts and opinions. I just do not care what anyone thinks will happen. It will be what it will be. I have zero control anyways over the market. And no one else seems to either.

This saves one serious time and energy. In this age of too much information, the ability to delete large swaths of noise makes life simply divine.

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Finance

2019-04 Month Review

Blogging has become a wonderful hobby. It has helped to streamline my thinking about my finances. Anyone who discounts that has certainly not tried it.

I recognize that my opinions on investing are irrelevant as I am a novice in many respects. There is more than enough internet ink and real ink spilled about these topics.

How anyone wants to manage their money is their business. The benefit of the internet might be to allow some of us to show what we do.

Then take any useful nuggets for yourself. That’s the best any of us can do.

Relationships

April has been a fantastic month as my daughter finished exams for her first year of university. Finishing the final exam is always a relief on multiple dimensions. Plus the weather is gorgeous so Spring exams are often hard to stay focused.

She will be taking a course during the summer so only a couple of weeks break for now.

My son is working at a local cafe. It is a few minutes walk from home. He has started to follow my advice of working close to where you live. That’s because commuting sucks big time. I concur.

I am readying for family and friend visits. These are a regular occurrence during the year.

First up is a visit by my niece and nephew. They are young adults and my nephew is about to graduate university.

I have been blogging consistently for over a year now. I have settled into a rhythm that makes sense to me. I will post numbers. Less woo woo. Dr. MB’s woo woo can tend to be rather frightening. I am NOT a politically correct person.

My opinions do not really matter. It is not like I “know” the correct way to do anything per se. This is just how I do it. Simple as that. Your mileage may vary.

Nutrition and Training

I started limiting junk food on Apr 19th. Aside from accidentally taking a sample of chocolate at Costco, I am avoiding this stuff.

I started eating prepared salads from Costco. We have actually been eating lots of vegetables. It costs more but whatever. It will always be cheaper than eating out. And way healthier.

I also settled on a shorter running route. I cut my running route in half. I am using my principle of making things simpler until I am able to fire consistently.

It is more important to build and enjoy the habit. I am too old for building non sustainable and unenjoyable habits into my life.

My home gym is in the basement. There is minimal issue with getting ‘er done. I have switched to a 5 x 3 workout, three times a week. This seems to be the sweet spot for me. For now.

When I tally up, I use three lifts- back squat, dumbbell bench press and deadlift. No other lifts count in the volume totals.

April 2019 Stats

2018

Apr_2019

YTD/ (Goal)

Average Weight (lb)

135.2

133.9

(<130)

Runs

144

8

13

Weights Lifting Volume (lb)

217,115

29,100

96,975

Dining Out

Too many to count

4

21

Tracking fun stats keeps me entertained. That is likely why I do not get bored since I always have little experiments or projects to work on.

Financial Stuff

Ben Felix from PWL Capital lit up the internet with his take on dividend investing. I have no real opinion on this matter. I am simply too lazy to bother trying to pick a good dividend growth stock. Furthermore I do not think I can do this consistently so why bother?

And as I keep saying, if I want to be active, I would buy some cash flow positive real estate instead. Dr. Networth’s burgeoning RE investments are pretty neat. Very impressive indeed.

That is one of the best parts of getting older. If you can be honest with yourself and review your own investment results, it can be rather humbling. After a while, I simply had to be honest that my greatest strength is from NOT doing things. I rarely hit anything out of the park investment wise. And even when I did, I did not have the good sense to hold them. (Amazon anyone?)

Such is life folks.

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Finance

2019-03 Expenses

Mar_2019

YTD

Fixed

Accountant

551

551

Cellular

220

660

Healthcare

483

1080

Insurance- Auto

0

0

Insurance- Home

0

0

Internet (Wifi, Netflix, Spotify)

122

360

Maintenance- Home

0

383

Property Tax

0

4654

Transportation (Fuel, Bus)

131

230

Utilities

0

452

Total- Fixed

1508

8371

Discretionary

Children

74

221

Clothing

0

595

Dog

39

182

Food

1165

3287

Haircuts

0

43

Hobbies

306

341

Misc

0

0

Travel

0

867

Total- Discretionary

1583

5536

Expenses- Total

3091

13906

  • Personal Residence: paid off
  • My Auto: 2008 Honda Civic- paid off
  • Husband’s Auto: 2016 Subaru Outback- paid off (used in CCPC)
  • Vacation Home- 0
  • Boats- 0
  • Kayak- 1
  • Bikes- 7

Tracking expenses is a basic tenet of personal finance. I have rarely had a budget but I have always tracked my expenses.

Nowadays tracking is extremely easy with Mint. I tend to only budget the category we tend to have the most difficulty with. For us, that would be food and in particular dining out.

Interestingly I am enjoying it less. Maybe it was my telling the children to think about dining out as either for socializing versus being a meal replacement.

We had been unconsciously using dining out as a family meal replacement. The past month, I opted to buy Costco garlic roasted chicken wings and fully prepared bagged salads. We have been eating at home a lot more now.

What a difference a small change makes.

Costco makes a great sous chef. It probably doesn’t change our food expenses all that much but the food is healthier. We are eating way more vegetables.

I encourage the kids to use dining out to spend time with their friends.

I have also made them resolve their own Visa expenses monthly. This is always a good habit.

The excel only tracks our fixed and discretionary recurring expenses. I do not include the kids’ tuitions. I also do not include the contingency fund expenses. Every year, it is the unexpected expenses such as home repair and renovations, auto purchases and vacation expenses which spiralled out of control.

It is these harder to budget expenses which I see is the danger area for many folks. I have always kept a large cash reserve so this has not been an issue. But I see how easily it can be to incur debt to fund these large expenses.

I read somewhere that anything you own which is greater than 60 lbs will cost you a lot to maintain. I think they are referring to homes, cars, boats, vacation homes, pets and other loved ones. There is plenty of truth in that statement.

That is likely why some folks are able to retire early when they either do not own a home or limit the size of it. They also tend not to own cars and seem to have a paucity of children and pets.

I limit what I own because I find taking care of things a hassle. I also find managing others to take care of things a hassle as well. Thus I rarely outsource to other people whom I need to manage. I prefer machines and systems. Delegation is NOT something I enjoy.

I am grateful my husband decided to gravel our front and side yards last summer. Now our yard work is minimal. Minimizing the lawn is a win for the environment, finances and our time.

The simplest solutions are often the best.

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Finance

2019-03 Networth

2018

Feb_2019

Mar_2019

M/M $

M/M %

YTD

Assets

Corporate Acct

3,847,322

3,972,870

4,062,794

89,924

2.3%

4.9%

RRSP

717,438

724,517

727,700

3,183

0.4%

2.0%

TFSA

113,366

135,030

137,005

1,975

1.5%

20.9%

Personal Acct

310,466

293,602

296,030

2,428

0.8%

2.1%

Commodities

44,776

44,776

44,776

0

0.0%

0.0%

Personal Residence

3,030,000

2,607,000

2,607,000

0

0.0%

0.0%

Property- Other

852,450

800,350

800,350

0

0.0%

0.0%

Property- Office

448,000

473,000

473,000

0

0.0%

0.0%

Total

9,363,818

9,051,145

9,148,655

97,510

1.1%

2.6%

Liabilities

0

0

0

0

0

0

Totals

9,363,818

9,051,145

9,148,655

97,510

1.1%

2.6%

It is that time of the month when I update my Networth. I track what I care about and this is a useful metric to see how we are progressing. All this tracking really amped up when I noticed that I had so many different bank accounts, investment accounts and corporate entities.

I needed an excel spreadsheet just to keep track of it all.

I have made significant headway in cleaning up the accounts. But my original excel format has proven to be very helpful.

Getting things back to simple takes a lot of work. That is probably why most people would rather ignore it.

The benefit of updating my balance sheet is the discipline needed to review all accounts on a monthly basis. It forces me to do this in a methodical manner.

Furthermore there is a lot of opinions and best practices. If you want information there is plenty out there. I would rather show my process. I have zero expertise in any particular arena.

I can show the repetitiveness of my routine. And how one can start to enjoy the simple process. My mantra is just keep tracking what you care about. That’s it.

I do not have any issue with displaying our networth since I plan to stay anonymous.

I can never speak of what is the best way for anyone else. I can only show what we are doing. If I am wrong, only my family shall bear the brunt of it.

The “Property- Other” is the house my parents currently live in. We leave our capital in the house for them to use.

Technically this should be a Balance Sheet with Income and Expenses as well as Assets and Liabilities.

But we have zero liabilities. I pay for my cars with cash. I rarely carry any debt that I personally pay for.

I even paid for my first house with cash. Plus we rented out our current home for almost a decade before we moved into it.

That was why it was such an easy investment for me to make. I distinctly recall thinking that even if the investment performed poorly, I would live there. And my husband wonders why it took me five minutes to make the offer on the house…

Homes are your largest expense. It will also be the anchor which impacts every other expense in your life. Choose wisely.

That is how my kids ended up being very grounded. I never had to lecture them about money. They grew up in a working class neighbourhood and they have seen how tough it is for some of their friends.

So I guess even in my own life, “tawk” is cheap. Just show them instead. There was zero harm with living in a working class neighbourhood. My kids have benefited from it.

That is why you will also see less investing how-tos. I always say finances is like dieting. Everyone knows what to do. The problem is that it is really hard to do the correct things.

Thus I will continue honing my plan to adhere to my principles of simplicity and ease. It is very important that this is all easy or else I would not stick with it.

There is minimal willpower with what I do. It is about following a process and that’s it. I enjoy the process. I enjoy a streamlined process even more.

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Finance

2019-04 Financial Checklist

I will review my financial “to-do” lists regularly. The whole point of blogging is to hold myself accountable and maintain my end goal of keeping only the essentials for my finances.

There is a reason I chose to have a free WordPress site. I have no desire to make any income from this blog. I am not sure where I would even slot it in. Plus as physicians, we already make enough.

It is often the outgoing/ spending problems which hurt many of our colleagues. And just to make you feel really bad, many folks make a fraction of we earn and they do very well financially.

Anyhow, I made a promise to myself that I would strive to simplify my finances. Reviewing checklists show me where my “fluff” lies.

Apr 2019 Checklist

  1. Opco Bank Account:
    1. Transfer excess cash to Holdco
    2. Review account for prior month transactions.
  2. Holdco Bank Account– invest extra cash in short term vehicles (90 days, 1 year GIC)
  3. CCPC Investment Account:
    1. Buy monthly VGRO ETF
  4. Personal Bank Account:
    1. Transfer extra cash to Tangerine High Interest Savings account. It is currently 2.75% and completely liquid so why not?
    2. Review account for prior month transactions.
  5. Pay any bills not automated.
  6. Bank deposits:
    1. Cheques can now be deposited on my iPhone. This is amazing.
  7. Resolve credit cards.
    1. Visa- Corporate
    2. Mastercard- Corporate for Costco
    3. Visa- Personal

Things have gotten simpler. I closed a Corporate entity which only held our office unit. It was easy to make the decision since I was focussed on making things easier for myself.

Note that there is zero activity for my RRSP or TFSA accounts. I invest in these accounts during January so I need to review them minimally. I also set the TFSA VGRO ETF on a dividend reinvestment plan at Questrade. I automate wherever I can.

In 2018, I had wanted to buy my TFSA and RRSP investments each month. Forget about it. If I can front load these, I will. Plus the thought of holding 60 GIC strips instead of 5 strips just makes me shudder now. I can’t control interest rates, it will be what it will be.

I bank with a credit union and Tangerine.

I limit us to one corporate and one personal bank account which has 99% of the transactions. This way I only need to review two accounts which have the autopayments.

I have an MD account for my investments. I started the kids with Questrade. They might as well begin with it set up for them long term.

I also started making my kids resolve their own credit card usage. They might as well get used to resolving accounts as it is a valuable habit.

My monthly checklist also became easier when I stopped shopping for better rates at the local banks. My credit union already offers good rates for savings. Furthermore, I notice they do not seem to have an issue if I break a GIC before the term maturity. This is great since I can roll the funds into a competitive term until a better investment comes along.

I needed to develop checklists after a while. If you are not careful, you will start “collecting” accounts and investments. That was what was happening to us. The current checklist is a fraction of what I used to have to contend with.

It was only from listing all the accounts could I begin to see the redundancies and illogical nightmare I had allowed to occur. It takes energy and vigilance to NOT allow this to happen.

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Finance

2019 Know-Nothing Do-Nothing

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.

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Finance

2019-04 Financial Ease- Investments

This will be my foray into thinking about ways to develop financial ease. That is a fun topic for me so I will write about that.

Everyone wants to write about investments. I write about it as well. But I know that this is one of the easiest parts of one’s financial plan. Anyone who can fog a mirror can now buy an all-in-one ETF from Vanguard and be done with it. If one only invests in tax deferred or tax free accounts, it would be supremely simple.

The problem most anyone reads about is what is the best investments to use. People drill down deep about which products to buy. They really think about it all too much.

The palpable agnst can be too much to bear.

You will note that I take a slightly different approach. I just go with good enough. Especially when it comes to paper investments. We are all PASSIVE investors no matter how much time we want to spend on it. The market will never care what we think about pretty much all of it. We have zero influence or control.

But it is a good thing since we do not actually need to do anything. That is why I grab a low cost, globally diversified ETF from a reputable company and then I am done.

I will be ridding my CCPC of the 3 fund Couch Potato portfolio during the next tax loss selling opportunity. I plan to hold one ETF.

And it is not because I have limited investments. But when it comes to paper investments, I have learned to respect that it is limited what one can do. Most of it is luck. None of it is due to investor prowess.

The same can not be said for buying cash flow positive real estate or starting your own business. Those require skill.

But it also takes more work and hassle. There is a trade off.

But when it comes to paper investments, save your time and energy. At best everyone is playing around the edges and I doubt that it will amount to much difference.

You can make it more complicated by wasting oodles of your own bandwidth and you might still be wrong. Or you can spend 100 basis points and pay an advisor who makes it complicated. And lo and behold, he could be wrong as well.

Thus for my own financial ease, I deem none of this activity worthwhile. I have decided to hold all fixed income in my RRSP because I want GICs in that tax deferred account. I want this to form my income floor when we retire. It is an additional benefit that this is a good place to stick interest bearing investments.

I plan to keep my paper investments simple by using one ETF (VGRO). I will not delude myself that I have any control over the markets. I will take what it gives me and I would rather ignore the whole thing.

What else in life improves when you ignore it? Not your relationships or career or health.

Okay absolutely nothing else.

Accept that being “smart” and “hardworking” will not give you an upper hand in the market. You chose this route so you could do nothing.

I have read enough financial commentary to sense that when the markets hit the proverbial fan- all these folks who know lots will all be sitting there experiencing the same things as know nothing moi.

So whatever. I had listened to what they say but it is all trending towards woo woo to me now.

What makes sense?

You can’t time the market so just keep buying on a consistent basis.

There is no perfect investment so go with low cost, globally based funds.

Fees matter and trade less as well.

Set as much as I can on autopilot since the less I deal with it the better I will do.

I chose this investment vehicle so I could do nothing and know nothing.

I will follow my simple adage. Buy regularly and when it goes on sale, just buy more. So simple indeed.

You can not control the markets but you can control how much you save. And you can control how you enjoy all this new found time and energy with this do nothing investment vehicle.

You may be someone who needs talking off the cliff when the markets decline. You best question how much you want to play this game. And you likely need the handholding of an advisor. The market will eat those with weak stomachs for lunch.

The market does NOT care about you and your financial needs.

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