2019-11 Portfolio Update – Sold Amgen

My Current Portfolio

ETF/ Stock

Shares Added

Shares Total

BRK.B

0

950

VAB

1,979

4,907

VGRO

2,251

15,577

XAW

0

13,531

XIC

0

6,050

ZDB

4000

18,937

  • Brk.B: Berkshire Hathaway Class B
  • VAB: Vanguard Canadian Aggregate Bond Index ETF
  • VGRO: Vanguard Growth ETF Portfolio
  • XAW: iShares Core MSCI All Country World ex Canada Index ETF
  • XIC: iShares Core S&P/TSX Capped Composite Index ETF
  • ZDB: BMO Discount Bond Index ETF

The name of the game currently is to buy consistently. And when the price goes down, just buy more. It is very annoying to time the market. I do not get it right very often.

It is imperative that I understand what I own and why I own it. It is too easy to treat this like a junk drawer. There is no magic product. It is likely a process instead.

Equities are used in a portion of my plan. I do not use them as blunt instruments of force. Equities make no sense for certain parts of my financial plan. The volatility of the market forces me to develop a safety plan.

Sold Amgen

I am pleased to declutter my portfolio of all individual company stocks. I never followed this company and thus I am better off getting rid of it. I owned it for over twenty years.

It feels great to declutter.

I will hold Berkshire until we are working significantly less. The current small business deduction limits me from selling this right now. If I sold it, we would lose all the favorable business tax room for the year.

The Markets

The markets could care less about me. So I do not waste much time worrying about it. The market will likely not solve all my financial problems. It really should play just a part of my plan.

The market does not care if I reach my life goals. Thus I think deeply about what I want and try to get it with or without the market.

I look to unlevered real estate and work as underpinnings in our overall plan.

Everyone talks about diversification. I am aware that I diversify because the strategies that require concentration and leverage I am not particularly good at. A good example is cash flow positive real estate investing. Dr. Networth is able to do this.

I do not dislike investment real estate. But I know that I would not be able to maintain anything larger than a residential multiplex. I lack the knowledge and networks to make it run efficiently. That insight routed me to invest in equities. So it was more of a last resort.

For the right individual, positive cash flow real estate and businesses would work smashingly better. I am not one of them however.

True wealth is built with concentration and leverage. Buying VGRO is not meant to shoot the lights out. It is the opposite. I only use equities to hopefully keep up with inflation. If I could time it right, I would be rich. But alas I can not do that either.

There is a reason I use an asset allocation ETF. I know that I am the risk. Having insight can be rather unpleasant at times.

One of my best friends is married to a teacher. She will not have to worry about the markets. His pension will more than take care of them.

For the rest of us. Why subject your entire wealth to the financial markets if you do not have to?

For some it seems like a badge of honour. If you possess 50 times your expenses and you are 65 years old, you probably can increase your asset allocation aggressively. But can you handle the volatility? This is not something I want to find out after the fact.

Are equities safe? Who knows. I have learned to keep a hand in all the pots and be flexible. I do not tie myself completely to one approach. No path is 100% safe. I truly believe in the concepts of resilience, optionality and agility.

If the markets don’t get you, the government and regulators will. Save some energy to appreciate what you already have. There is limited upside from striving and then having more than half taken away.

That is why I believe in decluttering and simplifying. Simplifying is always better for me. I win right now. No matter what happens in the future.

Those are the odds that I like.

2019-10 Passive Income

2019-10

YTD

CCPC

12,206

73,535

Personal

1,681

19,281

Total

13,887

92,816

True passive income is what I am seeking. Like zero hour work week income. I am beginning to enjoy this new financial focus.

I dislike busyness for its own sake. The concept of doing nothing works well for my personality. With my recent trip, it highlighted the benefits of a passive portfolio. I use public wifi while traveling and had no interest in signing into my financial accounts.

The travel was a distraction. But I seriously have just as much fun closer to home. Honestly EVERYONE travels now. It is quite unpopular to state that one finds travel rather meh.

I realize that I am not seeking anything. Thus it is much harder for travel to deliver anything to me. I also have a great lifestyle already. We don’t even need the relaxation. I am already quite relaxed normally.

I have enough.

I am not seeking more or different experiences.

What I value does not even require money. Such as limiting waste and limiting further global warming by flying. Good grief my lifestyle is going to become even more affordable.

Travel hack? Like I really want another credit card? I have an aeroplan credit card and can barely use the silly points that accumulate. There is so much tail wagging the proverbial dog with all this stuff.

Maybe the better approach is to not want any of it. That has always been the simpler, easier and saner approach.

No one can entice you with free travel and applying for umpteen credit cards. If you don’t care about traveling so gawd awful much you won’t jump through all the hoops to attain more points.

I can no longer be tempted with luxury, status, popularity, power or influence.

I have none and I want none.

I enjoy a simple life with my family and friends. I enjoy simple hobbies like reading and walks. I have no idea what everyone is running around searching for. It does not appear as if anyone is finding it.

Once they reach one level, it is a slingshot onward to the next. It all appears rather tiring.

I also do not waste much energy naval gazing. I know what I like and it works for me. I do not bother justifying it. Simply because no one would care.

That’s why owning some passive ETFs work well. I do not need to do anything and it’s actually better if I don’t.

It’s probably like iatrogenesis in Medicine. I try to follow the oath of “do no harm”. I see many going out of their way to do harm to themselves via their finances.

A dear friend once asked me, “How do you avoid the urge of wanting things?”

She could not understand that someone could simply not want it. She thought I was expending effort and willpower to that end. She could not comprehend my aversion to most things. I have often recognized owning more and doing more just came with it’s own inherent hassles.

All it took for me was to pay attention since I was a child. My parents did not take care of everything for me. I was often left dealing with whatever I brought into my life.

One of the best things I can do for my children is to allow them to experience the consequences of making their own decisions. If you allow your children to deal with their own stuff it would be unlikely they keep adding to it. So no helicopter parenting from me thanks.

I do not have any goals for our passive income per se. I am more of a process oriented person versus goals based.

But passive income is great. My husband is still adjusting to the fact that “investing” could be this dead simple.

The more nuanced stages come when one starts to decummulate. That stage is more interesting to me.

I need assurances that the funds will be there when we need to use it. All the tips and tricks won’t matter if one does not accomplish that.

The point of personal finance is the ability to define your personal objectives. Then optimize one’s assets whether financial or human capital to achieve those ends.

One must properly insulate oneself against the whims of the financial markets.

That is my main objective now.

2019-10 Vacation

We are in Southeast Asia for a couple of weeks. I notice that I am unable to eat as much. Plus I detest shopping and that is what is all currently around me.

I enjoy seeing some sights but what I notice is that it is all the same wherever one goes. I think I enjoy the light packing more than my actual destination.

Traveling is similar to hosting dinner parties. It forces one to re-evaluate ones stuff and routines. I make sure to walk a lot and eat a healthy diet.

Rest is more difficult with the jet lag but one copes. The more I travel, the more I see that the world is similar all over.

Everyone around the world works diligently with the hopes of providing a better future for themselves and their family. People are not different in other countries.

The wealthy are similar in many countries while poverty appears similar as well.

Travel is a welcome break from routine but do not kid oneself that there is a lot to be learned. The internet has solved that eons ago. If one knows what questions to ask, one need not even leave their home.

In any case I left some orders for my monthly ETF buys if the market dropped while I was away. However it appears that the market has gone up instead. My husband was amused to see that investments do their own thing without management from us. This is still a relatively novel concept for him.

Traveling is simply consumption much as I had imagined it would be. There is nothing about it that takes skill. Thanks to the internet, there are barely any surprises.

Perhaps the better ideal is to sculpt a life one loves daily. I value travel to see family and friends who live afar. But simply for sight seeing, I think I have seen it and done it. I can not pretend to being all that enriched by any of it.

Society is beginning to see that maintaining stuff is a hassle. Now the race is on for “experiences”. I still believe this is code for “give me your money”.

Some youth are starting to understand that ongoing air travel is likely unsustainable. I tend to agree. My husband and I have decided that we will limit overseas travel. The world does not need us to stare at their tourist attractions. We shall leave that for those who care about such things.

I will try to do my part to limit my carbon foot print. I already walk as my main mode of transportation. Plus we eat a mainly vegetarian diet and hopefully that will help as well.

There is no point in having money if our earth is uninhabitable. Furthermore I feel that I have been blessed with enough and I feel zero desire to continue taking more than I need.

In my ongoing quest to simplify it is time to drop the air travel significantly. This is the fifth overseas travel in my life. For a physician that is NOT a lot. Most of my friends’ toddlers have traveled that amount.

But I can not pretend that this is meaningful for me. The assault on the planet is likely not good. I have never been one to tells lies to benefit myself.

It’s all good since I enjoy camping and the outdoors much more. I can enjoy most of that close to home.

The best part is that my investments require zero input from me. This is the ultimate point of passive income after all.

2019-10 Month Review

My daughter and husband were both very ill with flu symptoms earlier this month. Their symptoms lasted a long time. And my daughter had to write midterms during her illness. Oh yay. Whatever doesn’t kill you makes you stronger. Maybe.

We also had a friend who lives overseas visit us this month. His son wants to attend an Ivy League university. Thank goodness our family doesn’t care about such things. It sounds like it costs a mint and it is only for an undergraduate degree. No thanks.

We pay if we think the degree may help our kids get a career. Not some name brand university. I do not believe that any of this stuff is a guarantee.

Simplify – Finances

  1. Decided to only keep two accounts for my son. Just use the TFSA and RRSP. Forget about taxable accounts for now. Avoid tax complexity if possible.
  2. I have auto payments in our numerous bank and credit card accounts. I made an excel spreadsheet which showed the days of the week that the payments were coming out as well as the associated account. And I left these with the kids while we’re on vacation.
  3. I also made a binder which had all our bills and financial accounts in it. Having everything online is useful for the person who is managing the accounts regularly. But if something were to happen to the main person it would be very difficult to locate these accounts. In the past people have statements laying all around their home office which made it easier.
  4. I also set buy orders for VGRO in case the market moves while I am on vacation. Very handy. This allows me to ignore my accounts while I am on vacation and using public wifi. That is the point of what I am trying to accomplish. I want to be able to walk away and it is all managed with minimal/zero input from me.

Insight

I think my financial superpower is that I have insight into what makes me happy. And I have insight into my abilities and definitive lack thereof.

Over the years I have come to realize these things about myself.

  • I am not an amazing investor.
  • I do not want to start a side hustle.
  • I do not want to start a business.
  • I do not enjoy managing real estate. I like renting to our own practice in the commercial unit and allowing family to live in the residential units instead.
  • I do not like relying on networks. I can barely get my accountant and lawyer to manage my accounts on time. I am merely one of their many clients.
  • I enjoy my privacy.
  • I really enjoy having good relationships and good health.
  • Almost every additional thing one brings into one’s life is a hassle in time and energy. I am at the age where I just have zero interest in any of this now.

And on that note, I am off to Asia for a couple of weeks for funsies with my hubby.

My pack weight is 8 lbs including my backpack. Let’s see how this holds up for my travels.

2019-10 Plan Review

Life is all about the plan. One can not guarantee outcomes but one can try to plan.

Networth %

Investable Assets

71.1

Personal Residence

27.4

Estate

1.5

Investable Assets – 71.1% Networth

  1. Real Estate – 18.5%
    1. Office unit – 37%
    2. Another unit- 63%
  2. Paper Investments – 80.8%
    1. Equities – 23%
    2. Bonds & GICs – 77%
  3. Commodities – 0.7%

I continue to buy VGRO monthly and that is good enough at this time. We have likely over saved and my husband has no plans to decrease his work.

I equate risk with not having the money ready when we need it. Volatility by itself is not risk.

Personal Residence – 27.4% Networth

I plan for this percentage to decrease with time. It is not a great idea to keep so much in one asset. But Canadian real estate has been mildly euphoric. Plus I love my home.

Goals Based Plans

Short Term

  1. Enjoy my current standard of living easily.
  2. Use:
    1. My home
    2. Salaries from our corporation

Medium Term

  1. Education for our children
  2. Earlier retirement for hubby if wants
  3. Use:
    1. CCPC – ZDB
    2. Office unit rental

Long Term

  1. Retirement
  2. Use:
    1. CPP + OAS – government benefits (Plan 50% of living expenses)
    2. RRSP – VAB
    3. CCPC – VGRO + ZDB

Estate

  1. TFSA – VGRO
  2. Personal residence exemption
  3. Universal life insurance

VGRO – 80/20 asset allocation ETF

ZDB + VAB – bond ETFs

As one can see, my short term and medium term plans do not involve any equities. I save VGRO for my long term and estate plans.

That is the only way that I can think about all this.

After all my essentials are taken care of, I would use the market to attain loftier goals. But none of it is promised. However I have no better vehicle to attain investment growth.

Here is how I am looking at retirement risks and how to use the products at my disposal.

Risks

SWP

CPP + OAS

Longevity

+

Inflation

+

+

SORR

+

Liquidity

+

Behavioral

+

Legacy

+

SORR – Sequence of return risk

SWP – Systematic Withdrawal Plan (equities, bonds)

Give With Warm Hands and a Warm Heart

Multiplex

I have been witness to many generational conflicts when it comes to money. That is what happens when patients get to know you well enough to divulge family matters.

I have seen families where the younger generation required a helping hand. But the senior family members would not assist. What a shame those situations were.

It’s reasonable when one does not have the ability to assist to lend a helping hand. But these families have significant wealth. Unfortunately it often served as a means of controlling one another.

Good grief. That is the last thing I want money to do.

It made sense for us to assist our children but strategically. I bought our multiplex when my daughter was one years old. I bought it close to the university. I figure that that would be one of our largest expenses. It certainly was my largest expense as a young adult.

Having the kids live at home while they pursue their education has been helpful. We would not have rented the unit so there is no lost income. It serves as a home base for them as they figure out this part of their lives.

TFSA

That is also why I am using the TFSA.

The TFSA will not amount to much during our lifetime. However, for our children, it can become valuable. They will have the decades required for these modest sums to grow. The benefit for us is that we can contribute modest amounts and there is no tax when we transfer the assets.

The rules may change but currently we make certain to have our children named as the beneficiaries. My husband and I are the successor holders.

The point of money is to make life easier for those I care about. But it is also about making life easier for my hubby and I.

That is why there will be no massive money gifts for the children. They will have to learn to share with the multiplex and waiting with the TFSA.

I love the saying “values are caught, not taught”. How true that is.

These are the values I plan to impart. Much can be accomplished with sharing and patience.

2019- 09 Passive Income

2019-09

YTD

CCPC

7,312

61,329

Personal

816

17,600

Total

8,128

78,929

Time to celebrate passive income once again. I am transitioning out of my GICs. That will take another four years. Yay.

I am starting to get the hang of this dividend income. I see the allure of dividend growth investors who increase the yields so that they do not have to sell principal for living expenses.

I am too rational for that. I have zero desire to delve into individual stocks because I stop closely watching the investments after awhile. I just stop looking at them because I know I will not do anything differently.

I am aware that there is no free ride in life. When one spends the juiced up dividends during a down market, you are still eating into your capital. The only difference is that the company made the decision and not yourself.

I am planning to build dividend income from our broad based index fund. I may plan to spend 2% during down and flat markets and 3% otherwise. I haven’t etched this in stone since I am far from having to think about income from our investments.

Goals Based Investing. AKA What Do You Want?

I think I review this often but I need to remind myself.

I do not ascribe to this treatment of one’s savings as “one big portfolio”. I think it makes it easier for an advisor but that is not how my brain works.

That is why our TFSAs will be used in our estate portfolio. That is also why I have this invested with an asset allocation of 80/20. I do not even count this money in our passive income.

My husband is planning to work part time for at least another five years. We will re-evaluate at that time.

The biggest goal that requires funding is the post secondary education of our two children. They may even attend trade school if that will secure work for them.

Either way, we plan to support our children with whatever education or training is required. I want them to find something they enjoy enough to keep doing for a good long while.

They need to find something they enjoy that earns a living and that they are good at. Those are the main stipulations.

I want to give with warm hands and a warm heart.

I plan to help my kids. They are not spoiled. I just take care of the basics plus some fun spending.

There are moments in most young adults’ lives where the bills come quickly. It is often when they are just starting their career, meeting partners and having to rent/ buy their home. They might even be starting families. That is when I will be glad to help out.

I do not understand this belief that the kids need to “have skin in the game”. That’s a bunch of hooey. Who doesn’t remember when times were tough?

It would have been wonderful to have a helping hand. I see my sister do this with her kids. They think they are “teaching” their kids good money management by never helping them when they run out. Instead they have electrified money. It is all her kids think about. I just send them some money to help them out. Good grief already.

Money is simply a way station. It is not the destination. Money can make your life simpler, easier and foster well-being. That’s my ultimate journey.

2019-10 Portfolio Update

My Current Portfolio

ETF/ Stock

Shares Added

Shares Total

AMGN

0

390

BRK.B

0

950

VAB

DRIP

2,928

VGRO

1500

13,826

XAW

0

13,531

XIC

0

6,050

ZDB

0

14,937

  1. Plan to sell when husband not working full time:
    1. Amgen
    2. Brk.B
  2. Plan to tax loss sell prn and switch to VGRO:
    1. XAW
    2. XIC
  3. Keep:
    1. VGRO – (80/20 asset allocation ETF)
    2. ZDB – discount bond ETF in CCPC
    3. VAB – intermediate bond ETF in RRSP

Current AA – 23%

The Ultimate Plan:

  1. CCPC – VGRO + ZDB
  2. RRSP – VAB (dripped)
  3. TFSA – VGRO (dripped)
  4. Taxable – VGRO + High Interest Savings Account

Plan is to eventually move all assets to VGRO and ZDB. This will involve some tax loss selling when the opportunity arises.

It’s not like I invested when the markets were low. Trust me it will happen.

The market has been volatile the past week. I snagged some more VGRO. Yay.

I buy my usual tranche on the set time each month. However, as the market takes a dive, I tend to add a bit more.

My asset allocation is quite low so I have zero issue with dumping in more. We are also in accumulation mode thus whatever happens will not impact us all that much.

I have been listening to various experts and their asset allocation percentages. John Bogle’s was 50/ 50. Various folks mentioned that he used his social security as part of his bond.

Larry Swedroe once mentioned that he used a lower AA since he relied on factor investing to give his equities a bigger return. I think he mentioned that he had about 30% at the time.

However, I have NO idea what is a great asset allocation to be honest. My husband says 60/40 forever. We will see about that shall we?

I can live on our funds with a GIC. I would not recommend that but I probably could. That was what I originally thought we would do. Pay less taxes while saving in the corporation and then dribble it out.

It is wise to keep the stash in a lower equity allocation as one approaches retirement. That is when one has the largest stash so it makes sense not to risk the whole pile.

I see many of these bloggers with 80+ asset allocations. I would use that for my children. Not for us thanks. Maybe if we could live on the dividends alone as I have stated in my dream scenario post.

Checking Your Accounts

I have been reading about folks not wanting to check their accounts. And they are also DIY investors.

I check my accounts regularly. The difference is that I feel nothing when I do. I simply record it for my personal tracking and move on.

You have to know yourself. If you freak out when you check your account, I suppose you should not check it. However, if you tend to be emotional about the numerical changes then perhaps you should NOT DIY.

I have a feeling that some folks will find out that they are not suited for DIY investing when the crap hits the fan next time.

That is not a great plan but it will be a lesson that only they can learn. It seems you can never really warn people about most things.

Owning Other Assets

I have stopped posting networth updates online. Thanks hubby.

But I recognize that my paper portfolio is only part of the whole picture. I would prefer to have other assets around since the world can be unpredictable.

Assets I can sell or generate cash flow:

  1. Residential unit
  2. Commercial unit
  3. Commodities

Guaranteed inflation adjusted income:

  1. CPP
  2. OAS
  3. Plan to cover 50% of income/ year after 70 yrs old

You can guess from my planning that I do not rely on any one thing. I believe in diversifying across all assets and all tax structures.

I did this even with our careers. My husband chose to have a career tied to hospitals and all its inherent admin headaches. Thus even though I trained in a hospital based specialty, I chose general practice instead.

No one was ever going to tell me when I needed to work. I tolerated this during residency but I was having none of that when I came out to practice.

I think that’s why many women don’t try for all those careers with loads of titles. It’s not that we can’t do it. It’s because some of us don’t want it.

I wanted to be available for my own family. My husband’s work was already going to be unpredictable.

Now it has zero to do with sexism. When my husband was in general practice, he took care of our babies and let me work whenever I wanted. Women GPs are more in demand. We clearly swung both ways.

I am grateful my husband was happy to do that. I have met many of my girlfriends’ husbands who can not generate the income of their wives. But they also feel they are beyond household duties even when they are a stay at home parent.

I simply roll my eyes. And people are often shocked when they have problems.

Burnt Out Docs

It’s in the Canadian news today about burnt out doctors.

I recall a women doctor once telling me with clear resignation. “Medicine is a career where you have to leave your own sick child but get to take care of other peoples’ sick children.” She seemed to have plenty of regrets.

I don’t believe any of us do not want to care for other people’s sick children. Or else why choose medicine? But it is not talked about how many of us get ZERO support ourselves.

I saw a whole day of patients while having a miscarriage. I quietly went to the ER after my shift.

And the scary thing is that I would do that today. It’s like so many of us are just built this way.

So what would I tell others even when I would not follow the advice?

Take care of yourself first. You will be of no use to anyone else otherwise. Or worse, you take care of everyone else at work but shortchange those you love.

Because those who love you will be the ones who will put up with the worst of your behaviour.

Oh yeah and the silliest reason to run like hell is because you went and spent it all on shiny baubles. Trust me, you will make plenty of mistakes even when you try to “do the right things financially”.

The federal government will change the goal posts. Think of our small business deductions.

The local governments will impact your real estate. Think about all the weird real estate taxes popping up.

That is my reason for making things simple. If all these external processes will be moving the goalposts, why twist oneself into a pretzel?

So no matter what happens, I did not expend much energy over it. That makes me super happy.

It is all about risk management. Avoiding regret is a serious form of risk management.

2019-09 Month Review

2019 is going quickly. Our fall weather has certainly started. It changed very quickly this year. Once the kids started school, the rain started as well.

I have two university aged children living in one unit in our multiplex. This has been working smashingly. They have a lot of privacy. I also have a lot more privacy. Do not discount that as a parent.

Live At Home During Undergrad

I have outfitted the children’s level with a good washer, dryer and a Roomba. Then all that is left is to send down some prepped meals occasionally.

I plan to install a dishwasher next Spring. They will be so pleased.

There has been multiple benefits to owning a multiplex. This has allowed my children to stay home during university. The public university is a 10 minute drive from our home. It has allowed us to share one family car. But usually my children take public transit.

I have many friends whose children are living away from home during their undergraduate university years. They say it is approximately an extra $15,000 beyond tuition.

And this is after-tax dollars. This 15,000 is only for eight months of living.

The only reason I went into debt after university was because I had to live away from home. I did not want this for my children.

I figure that they may not have the ability to stay locally for postgraduate studies. I am under no delusion that the savings will be perpetual. But this allows us to have a buffer in case their education becomes prolonged.

Retirement Risk Mitigation

My outlook on retirement finances are becoming clearer. I will not juice my dividends and end up lacking diversification. I believe there is no free lunch so why trick oneself unnecessarily.

I think it is very important to develop some inflation adjusted guaranteed income stream. I have reviewed many approaches and none of them have an easy solution.

There is all this talk about buffer assets. All this means is having more money around. One could use cashflow real estate or higher paying dividend income assets. This all comes with some risk. There’s definitely no one-size-fits-all.

Retirement will be tricky to say the least. Thankfully we live in Canada and have a solid healthcare system. It might be very difficult to get super wealthy in Canada but we have a good social system.

One of the best things in retirement is to have a large portfolio with some fixed income or bonds. And delay your government benefits which will be better than any annuity you can purchase.

I plan to keep our living expenses close to what our government benefits will pay out. Here are some resources I plan to use.

  1. CPP/ OAS
  2. RMD – required minimum distributions of the RRIF
  3. Dividends & Interest
  4. Commercial Real Estate Unit

That should do it overall. I am confident that I can live on the government benefits alone. I have zero issue with frugality.

I doubt that I would liquidate during a market downturn.

But that is because my buffers are built in. I do not invest with need for massive growth. I assume that some growth will happen but I do not plan with that in mind.

My husband says that perhaps the government benefits may be cut. I remind him that the government benefits impact everyone. If the government cuts one part they will have to supplement it with another.

I trust the government benefits more than I trust my own investment acumen. Good gracious yes!

Many personal finance folks are quite vigilant. But I find that I often take my eyes off the ball. That is why these asset allocation funds will be perfect for me. I will stop watching this after a while. I know what I am like.

Stop Electrifying Money

I recently listened to a podcast about kids and money. The guy has a laundry list of things to do. I admit that my kids have NEVER asked me for anything. Seriously.

Perhaps it was because I never electrified money. Their cousins talk about money all the time. But they simply regurgitate the values of their parents.

I think my children have watched me closer than I cared to think. They have always seen my relative disinterest in material things. They have watched me sculpt a wonderful life which is extremely affordable. I do not tell them one thing while pining for something else.

They have observed how there is almost zero correlation between my happiness and how much I spend. They have witnessed my allergy to luxury. They have certainly heard me call out bull crap about things that do not make sense.

That is the most powerful message that I have always conveyed. You get to decide what you want. You are not an automaton.

And if you want something, just own it. Don’t make excuses. Seriously that is all I ever expected of them. Just be conscious.

Okay that was my rant after watching this dad’s talk trying to teach a course about kids and money. Good luck with that. Kids do not learn via PowerPoint presentations.

How about this. Teach yourself about money first. Hem in your needs and wants. Figure out a life where money is just something whirling in the background.

Many parents who are anxious about how their kids will turn out with money. The more worried or afraid one is of something, the more the subconscious will make that very thing appear in your life.

The subconscious is a veritable magnet for one’s deepest fears.

All parents want the best for their children. I would rather focus on the things I can control.

I can control allowing them to live in the unit of our multiplex. I can control owning a home in a convenient location so they are not forced to buy cars. I can control locating a home close to a University so that they are not forced to move away during undergraduate years.

But I tell them that this is what I want to do. If they want something else, they can plan for it themselves.

My parents did not have to do back flips for me and my siblings. We all did just fine.

I want to make sure that when we help them, we do not over stretch ourselves. That would not benefit either of us.

Just think about that Operation Varsity Blues scandal. That should remind parents of the harm that can occur from trying too hard for your kids.

2019- 09 Do Nothing

I am a female physician.

I am interested in building long term wealth.

I am also extremely lazy and do not believe that I am clever like. at. all.

If there is an easier way to get something done, I usually find it.

I rarely care about more, better or different.

I have often found that less is more. In many beneficial ways.

As a physician, one earns much more than the average.

Save on the big three- house, cars and food. It seriously is that easy.

There are three main ways to build wealth.

  1. Real estate
  2. Start a business
  3. Equity investments (paper)

My thinking has evolved.

I always knew that I had zero desire to start a business short of our medical practice. That was enough.

We dabbled in real estate investments. The best investments were our multiplexes and our office unit.

We ended up using both of them ourselves. It was very efficient and effective.

Aside from holding our office unit and another two rentable doors, that’s enough real estate for me.

All my real estate is paid off. The cash flow from those paid off units can support our living expenses alone.

Real estate on a bigger scale is very doable but I am too lazy for that.

There must be others out there who are truly as lazy/ disinterested as I am.

I do the least amount for “travel hacking”. Since even after collecting the points I have to waste energy trying to get the best deal on how to optimize the spending. Ick.

I limit my energies on things that I do not care about. I avoid luxury travel. I am one of those folks who would literally say no even if you gave it to me for “free”.

I realize that I cringe at any thoughts of side hustles. If I need more money I would simply work more.

It took me a long time to realize that “there is always a price”. Nothing comes for free. That is a fallacy.

I am very careful of the price that I am willing to pay nowadays. The payment comes from many unsuspecting places.

I am unwilling to pay the price of wasted mental bandwidth. There is a reason I buy these asset allocation funds.

I know that there are more tax efficient ways to invest. But I frankly don’t give a darn anymore. It’s good enough for me.

Furthermore my accountant has more tax minimizing voodoo up his sleeve than I could ever dream up. So hire a dang good accountant. Pay up for good financial advice.

My accountant can promise me the tax refund. Your financial advisor can not promise you a return on your investment. So I pay for real advice not woo woo.

Building wealth for us comes down to earning a good enough income. And avoid/ limit the top three big expenses. Then invest in a low cost broad index fund.

That is the building block.

Know thyself. If you are as lazy as I am, do not start a side hustle. Do not leverage real estate too aggressively. Just keep things simple.

I agree with spend on what you truly value and limit spending on the rest.

I value my home.

Here is a sprinkling of how I built wealth.

  1. I had a lower cost lifestyle.
  2. My kids went to public school.
  3. They currently attend public university and live at home.
  4. My kids take public transit or carpool.
  5. Almost all our entertainment expenses are low or free.

Our biggest expense.

  1. We dine out a lot. We are improving.

It is fine to make occasional large purchases. Just don’t make a habit of it. Do not chronically elevate your lifestyle. It is the recurring expenses that really eat away at wealth.

Whenever you think that you could have done better. Realize on the flipside, you could have also done a lot worse. Hope that helps you feel better because it certainly does for me. Be grateful.

My favourite hobbies are all free or low cost.

  1. Reading
  2. Writing
  3. Walking
  4. Running
  5. Weight lifting
  6. Bingeing Netflix
  7. Listening to music, audiobooks and podcasts.
  8. Knitting
  9. Meal prepping

And I have had almost the same hobbies since I was a kid. Life is not complicated. People really do so much badness to themselves.

And I can say that because I certainly did badness early on during our marriage.

I learned in time that all the things that made me happy, I already knew as a child.

Adults over complicate everything. And many of them are very unhappy. Maybe strip away all pretense and examine what actually makes you happy. The problem is folks keep adding more complexity and busyness.

I just tell the truth when friends ask me what I’m up to. I just say “not much”.

My good friends already know that that’s closer to the truth. So why bullshort each other?

So you can build wealth by avoiding things.

  1. Avoid luxury.
  2. Avoid clever investment strategies. It’s only clever for the folks selling it to you. You will likely be taken. I need to follow the simplest of strategies.
  3. Avoid busyness. Most things are not worth even striving for. Figure out the few you actually care about.
  4. As a woman investor I avoid anything which requires networking. I realized that I could never build those networks reliably. Major insight when I figured that one out. That’s why I stick with super duper simple ETFs now.
  5. I avoid “exclusive”. Any high end exclusive strategy scares the hell out of me. I am often the patsy during these exchanges.
  6. I avoid “exclusive” education. I have minimal ability to not call out BS. I would have never kept a straight face for the silly private school applications. What 5 year old has references? Are you kidding me?
  7. I think most things can be learned for free off the internet.
  8. Every time I learn from a mistake. It is always from another lame brain idea I followed AGAIN.

The only passive income I have seen is from interest and dividends.

Real estate is not passive.

Side hustles are NOT passive. Good grief.

If I were super wealthy, I would just live off my interest and dividend income. Period.

I would buy VGRO (80/20 asset allocation fund) and live off the dividends. That’s it.

I would not try to juice the returns with dividend strategies which limit my investment diversification.

I would not care about sequence of return risk. Since I would not need to touch the principle. Ever.

I would not care about “spending efficiency”. If there is money left over, I have kids and other family who can use it.

I do not believe in organized charity. I just give money away to people I know. I do not need or want the tax break.

I think there are plenty of women who would like this. Most women I meet don’t give a darn about investing. But many of them leave it to their husbands who fritter it away.

I just went out to dinner with my male plastic surgeon friend who trades naked put options. He’s likely picking up pennies in front of a steam roller.

It took us decades to learn this in our marriage. But I kept track.

Every time my husband managed the money, we lost more. And every time I managed the money at least I didn’t lose it. Trust me, neither of us grew it.

Insight again.

So the easiest way to build wealth is to avoid all the baubles almost everyone tries to sell you.

Avoid luxury, exclusivity, being clever and aggressive leverage. There is nothing more, better or different out there.

And the best thing I learned in all my years is this.

Even if it works for someone else. It still might not work for me.

Because my strengths and weaknesses are very particular to me. Da dum!

2019-08 Passive Income

2019-08

YTD

CCPC

915

54,017

Personal

768

16,999

Total

1,683

71,017

Well this certainly has been a month of low passive income. However, it is because I have stuck most of our cash into 1 year GICs in our local credit union. Those will not show income until I cash them out.

I will have a better idea of what my true passive income will look like once I streamline my investments.

All of this writing and documenting is really for my own benefit. I need to write this down to make myself accountable. Each week I am forced to review the clutter in my finances. That changes how one behaves.

I used to just glance at it superficially. But I have to explain my own reasoning now. It does help to keep me on track.

There are many ways to FI. There are many ways to define FI. The most important aspect of it all is to be able to define it for yourself and those you love.

I know the real wealth from equities do not come from the buying and selling. I know it is from just owning and waiting for it to grow. But as you can see, when you have a large amount to throw down, it is behaviorally very difficult.

I find it extremely easy to buy the investments for my kids’ accounts. Once they have the money, I just go and buy the ETF. I barely even register what price I bought it for. And I simply do not care. They have decades and decades for it to marinate.

That is the best way to buy your investments. Buy it when you have the money.

I have decided to stop posting networth numbers. I can continue reporting the passive income. Plus I can start to build my kids portfolios. That will be fun.

Now anyone can relate to that. Furthermore it is much simpler to start with a blank slate.

I would advise my kids to keep it very simple. I will warn them against collecting accounts. It is very annoying.

One will not get clever here. Because I am not clever. I need simple since I find it very hard to keep things straight otherwise.

That was my insight with respect to real estate investing. I could see the benefits of leverage and the inherent power of it. However, I realize that I was likely average as a manager. I could do it but I was never trying to optimize this.

What I know how to do is to leave things alone when bad things happen. I enjoy not being called into action. That is why I love these asset allocation funds.

Are they the most efficient tax- wise? Nope. Are they the best strategy out there? Probably not. But the strength is that I can do this easily.

The whole point of wealth in this stage of my life is for simplicity and ease. If I have to vault massive hurdles for a higher reward, I would not bother.

I am like most women. I have to manage the money but it is simply another thing on the to do list.

And I am planning to shorten my to do lists.

That is my laser focus now. All women can relate to that.

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