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Hi Milhouse, Your planning seems impeccable, I expect your transition into retirement to go well. I retire at the end of the month and have been doing the same work you have although mine has been in a much shorter time span. I read somewhere, and have taken to heart, the idea of planning income instead of Networth as the fear for some is that seeing their Networth decline is depressing so they under-spend in retirement.
I have been able to build an annual income stream using rental income, Private Real-estate REIT income and PE loans of 83K using just $1,075,000 of my investable assets. I am looking at adding 300k worth of dividend blue chip stocks to increase that to 95k. I then leave the other 1/2 of my investments in GIC's and balanced funds to grow for the future, large spends etc.. Do you ever consider more aggressive investing for your income? I just turned 56 and man am I looking forward to finally getting to do what I want every day! Good luck with your countdown!
 

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Discussion Starter · #142 ·
Congrats on your retirement! Enjoy for me, the first Monday you don't have to go to work. :D
That is a spectacular amount of income you are yielding from your investable assets with a nice chunk allocated for future growth/larger spends!
I have not considered more aggressive investing to optimize income production. It's due to a lack of awareness and knowledge beyond common income producing streams on my part though. That being said, I'd probably lean more towards trending to a less aggressive portfolio as I head into retirement.
 

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Congrats on your retirement! Enjoy for me, the first Monday you don't have to go to work. :D
That is a spectacular amount of income you are yielding from your investable assets with a nice chunk allocated for future growth/larger spends!
I have not considered more aggressive investing to optimize income production. It's due to a lack of awareness and knowledge beyond common income producing streams on my part though. That being said, I'd probably lean more towards trending to a less aggressive portfolio as I head into retirement.
Thank you, your day will arrive faster than you imagine!
Your assets qualify you an accredited investor, there are lots of alternatives now. My private apartment, retail and commercial REITS average a 6.3% yield and 12% overall return over the last 10 years. I can physically go and see the buildings, for me I see that as much less risky than the markets. It did take me awhile of dipping a toe in to get comfortable and I still will never put all my assets their (even though it's tempting at those yields) but I wouldn't leave all my assets in the markets either. Good luck on your path, and I look forward to watching your progress!
 

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Be careful with that "accredited investor" stuff. I'm sure there are some good opportunities, but also many horrible options.

Accredit investors do not necessarily run into anything better than standard, low fee investment opportunities that exist for people with less money.
 

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Discussion Starter · #145 ·
End of February 2020 Update

Savings and Investments
My investable assets: $1.606M. Down about $103.1k for the month.
Her investable assets (excluding DB pension): $474k. Down about $20.4k for the month.
Combined investable assets: $2.080M. Down about $123.5k for the month.

Thud.
That’s the sound of falling back to reality. :D
After a great last couple of months, it seems like the markets were looking for any reason to correct. And correct they did with the uncertainty of the corona virus being front and centre.
February started out amazingly with my portfolio hitting a peak of around $1.775M by mid-month. And then the bottom fell out the last week of February. Peak to current trough is about $175k which is kind of insane since that’s like over 3 years of expenses for us. Taking positives where I can, the large cap CDN dividend growers are looking cheap with a great yield.
The missus portfolio obviously took a hit too with her bond heavy RRSP taking the least damage at <-2% and her equity index ETF heavy investment account dropping a bit over 6%.


Spending
February Spend: $6450
YTD Spend: $9630

February was more expensive than expected, coming in almost $500 over the top end of my estimate of $6000. The biggest chunk was our advanced property tax installment. The rest of the hit came from travel costs and repairs as expected, though 1 repair was somewhat unexpected. Taking all these major costs out, our spend would have been about $1500.

I’m hoping our March spend will be lighter but we’ve got another repair we’re working on and some more travel. Expecting a spend of about $2500 to $3000.

Comments, Concerns, Issues
Let the panic begin as people seem to be hoarding essentials at Costco to prep for corona virus armageddon.
Trying to find some travel deals.
The load at work has lightened up a bit but problems/issues seemed to have ramped up.
Got to focus more on health, losing weight, personal wellness.

Countdown to Retirement
25.5 months to go
It’s not a huge milestone but I’m looking forward to crossing the 2 year mark soon.
 

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Savings and Investments
My investable assets: $1.606M. Down about $103.1k for the month.
Her investable assets (excluding DB pension): $474k. Down about $20.4k for the month.
Combined investable assets: $2.080M. Down about $123.5k for the month.

Thud.
That’s the sound of falling back to reality. :D
After a great last couple of months, it seems like the markets were looking for any reason to correct. And correct they did with the uncertainty of the corona virus being front and centre.
February started out amazingly with my portfolio hitting a peak of around $1.775M by mid-month. And then the bottom fell out the last week of February. Peak to current trough is about $175k which is kind of insane since that’s like over 3 years of expenses for us. Taking positives where I can, the large cap CDN dividend growers are looking cheap with a great yield.
The missus portfolio obviously took a hit too with her bond heavy RRSP taking the least damage at <-2% and her equity index ETF heavy investment account dropping a bit over 6%.


Spending
February Spend: $6450
YTD Spend: $9630

February was more expensive than expected, coming in almost $500 over the top end of my estimate of $6000. The biggest chunk was our advanced property tax installment. The rest of the hit came from travel costs and repairs as expected, though 1 repair was somewhat unexpected. Taking all these major costs out, our spend would have been about $1500.

I’m hoping our March spend will be lighter but we’ve got another repair we’re working on and some more travel. Expecting a spend of about $2500 to $3000.

Comments, Concerns, Issues
Let the panic begin as people seem to be hoarding essentials at Costco to prep for corona virus armageddon.
Trying to find some travel deals.
The load at work has lightened up a bit but problems/issues seemed to have ramped up.
Got to focus more on health, losing weight, personal wellness.

Countdown to Retirement
25.5 months to go
It’s not a huge milestone but I’m looking forward to crossing the 2 year mark soon.
I know lots of people on here are against private investments, but this month my Residential REIT increased in value by 22% while the stock market crashed. I bought stocks when they dropped Thursday and Friday and even SU today while at the same time I bought an equal amount of one of my REITS. I intend to be 50% rentals and private investments and then 50% Divy stocks and GIC's. I still have 200k to get into the market but I am buying at set prices through daily limit orders and don't care how long it takes. In the end the 50% in private investments will fund my required income though distributions, interest and rents and the other half is the backup plan. Three days into retirement and loving it keep planning Milhouse and I have no doubt you will get there.
 

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Tayls77:

For those of us in the steerage class, can you tell us how do you know your value increased by 22% (or the value at any given time)? Is the company ready to buy back your shares at that price?
 

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Discussion Starter · #148 ·
End of March 2020 Update

Savings and Investments

My investable assets: $1.478M. Down about $128.1k for the month.
Her investable assets (excluding DB pension): $439.5k. Down about $34.3k for the month.
Combined investable assets: $1.917M. Down about $162.5k for the month.

Well, it could have been worse.
With COVID-19 ramping up in North America in March and leading to businesses and commerce shutting down for the precaution of social distancing, it led to an extremely volatile market with ridiculous swings daily. And of course, my portfolio wasn’t immune to the volatility and negative sentiment. But being down “only” $128k after that wild ride isn’t too bad. From peak (in mid-Feb) to March end, I’m down only about 14% (keeping in mind that number is propped up by new savings). There were obviously much worse numbers experienced during the mid-month freefalls. However, I’m not sure if we’re out of the woods yet.

Apart from nibbling at dividend growers to add to my non-registered portfolio, it’s been pretty steady as she goes. Still hoping to hit $40k in dividends from my non-registered portfolio this year even with companies announcing cuts, suspensions, and non-increases but won't get a better view until later in the year.

The missus portfolio was similar to last month with losses everywhere except cash savings which grew. Paper losses were lightest in her bond heavy RRSP of course. We’ll see if she wants to take advantage of the “sale”.

Spending
March Spend: $3380
YTD Spend: $13010

March ran over my upper band estimate of $3000 due to: Some unexpected medical expenses for the missus, buying groceries for each of our parents a few times so they didn’t have to leave the house to shop, and some charitable donations as my company was matching donations. A positive was that the repair we were anticipating came in lighter than expected.

April is another pricey month with house and car insurance premiums due. Expecting a spend of about $5000 to $5500. We’ve been cooking a lot but might try to do a bit more takeout to support our favorite restaurants.

At the quarter pole mark, spending still seems to be on track for about a $50k spend for the year. Currently, I don’t see our spend going down even with being at home so much since our going out/entertainment spend generally isn’t high anyways and we’re ending up spending on other things (ex Groceries for parents). However, depending on how things play out, our travel spend, which is a big chunk of our annual spend, might be way under estimate depending on what travel options there are in the fall. We did fit in some small trips at the start of the year though.

Comments, Concerns, Issues
I thought January dragged on forever. After a painful March on so many levels, it feels like we should be in fall by now.
Cashflow is still in good shape as both the missus and I are still working. Even got a nice little raise. Was told about it in February before everything blew up but I’m surprised it still went through given the state of everything.
At this point, while I’m not sure if I’ll hit all my target numbers by my retirement date/in my retirement year, I’m still pretty confident that neither the market turmoil or residual effects of the pandemic will delay my retirement target date, as it fast approaches.

Countdown to Retirement
24.5 months to go.
Recently passed the 750 day mark and will cross the 2 year mark this month.
 

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Discussion Starter · #149 ·
End of April 2020 Update

Savings and Investments

My investable assets: $1.555M. Up about $77.1k for the month.
Her investable assets (excluding DB pension): $469.3k. Up about $29.8k for the month.
Combined investable assets: $2.024M. Up about $106.8k for the month.

Dead cat bounce?
After 2 of the largest down months since I’ve been keeping a monthly snapshot, my portfolio finally got a bit of a respite, jumping $77k which is that largest monthly gain I’ve experienced. Need a few more of those to get back to my original highs. I really don’t know what to expect in the months ahead as there’s a bit of hope with things opening up again but even though the markets are forward looking, it’s not opening up to the point of normalcy.

Both our portfolio grew in all categories. Apart from some small purchases, it was pretty quiet for me. April is a heavy dividend month for me but a few didn’t show up by month’s end and will add to May’s snapshot.

No changes for the missus’ portfolio. That said, it’s now only down about 3.5% YTD but keeping in mind that includes cash from income/savings and additional purchases.

Spending
April Spend: $4950
YTD Spend: $17960

Was able to keep April’s spend to the lower end of my estimate. House and car insurance were the big spends this month taking up over just under 2/3 of the total. We downgraded some of our car insurance options since we don’t drive much nowadays with both of us working at home. Once we start going into the office again, we’ll consider upgrading our coverage. Our grocery spend has been higher than expected due to us eating at home more, food inflation, and buying some groceries for our parents. We’ve been doing a bit of takeout but a few of the experiences haven’t been the greatest with some pick-up times scheduled over an hour with additional wait times after we get there and some of the dishes being subpar even after taking into consideration degradation driving the food home. Next to no spend on travel and entertainment as expected.

May should be a relatively light spend month. I expect a spend of about $2500. However, we got lazy and didn’t complete our taxes. Will try to finish them up this weekend and submit. I’m going to end up owing a few thousand. I typically don’t count that as part of our spend numbers but it will impact my cash savings numbers.

Comments, Concerns, Issues
Work has been pretty busy. However, I spoke too soon about my raise. While it showed up in my compensation profile, it got put on hold. :D
The weather is getting nicer and days getting longer in Vancouver. Looking forward to spending more time outside for walks.
Looks like a spring trip is out of the question. Trying to figure out if a trip in the fall is in the cards but it seems too soon to say still. We likely won't book anything until closer to departure even with more flexible cancellation policies.

Countdown to Retirement
23.5 months to go.
Approaching the 100 week mark in May.
 

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Hey Milhouse, congrats on passing the 2 years to go mark. Just wondering how set in stone your retirement date is with all the uncertainty that COVID-19 is bringing to the markets. Are you at all tempted to defer retirement a bit to offset some of that uncertainty?
 

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Discussion Starter · #151 ·
Hi Mookie. I'd say I'm 75% sure that I'm sticking to my retirement date. Part of the uncertainty is that while my company isn't doing too badly all things considered, I suspect there will be layoffs in the fall after the full impact of Q2 is known. If they package me out, that would be my end point as I suspect the severance would cover me to close to the cashflow I would have earned the last 16-18 months to my original target.
I am concerned about the uncertainty that COVID-19 has brought to the markets and my portfolio. However, the dividend side has been pretty resilient so far. Only 1 restaurant royalty fund that makes up a small part, suspended it's distributions while 2 others only missed/deferred their expected increases. I'm still on track to hit my dividend target this year. What would make me seriously consider delaying my retirement date is if significant (risk of) cuts to the dividends occur that would force me to head into retirement way below my dividend target. That's the biggest uncertainty I'm concerned about. OTOH, I'm not as concerned about the indexing side of my portfolio as I feel I could hold off withdrawing or draw very little from it to give it an opportunity to heal.
Lastly, I have a pretty good relationship with my manager. I would consider staying on only a few more months if he asks me to/makes it worth my while.
 

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Discussion Starter · #152 ·
End of May 2020 Update

Savings and Investments

My investable assets: $1.609M. Up about $54.5k for the month.
Her investable assets (excluding DB pension): $483.8k. Up about $14.5k for the month.
Combined investable assets: $2.093M. Up about $69.0k for the month.

Everyone’s rally caps must be working.
It was another solid rally month for our portfolios. No clue if the rally can be sustained because things are opening up now or if we’re in for another dip since the damage will continue without a vaccine or effective treatment.

Had gains across the portfolio except for cash savings since a chunk of it was used to pay income taxes. Cash savings will take another hit in June as I make my RRSP contribution, now that I know what my contribution limit is for the 2020 tax year. Will likely use it for an equity ETF purchase. Dividends in my taxable account are generally holding fairly steady.
The missus’ portfolio is recovering nicely with her bond heavy RRSP and balanced fund heavy TFSA pretty much at 2019 year end levels. Her equity heavy taxable account is only down about mid-single digit YTD.

Will do a midyear status check next month. We’ll see how June goes but all things considered, it hasn’t been too bad.

Spending
May Spend: $1980
YTD Spend: $19940

May was a relatively light spend month and came in a chunk under my $2500 estimate which was in part due to the fact there weren’t any large spends or repairs. Our grocery bill remains elevated and we’re still doing a bunch of takeout. We’re also buying stuff for our siblings and parents to save them a trip to Costco or wherever (and vice versa).

We submitted our taxes about a week in and had to pay a few thousand. I didn’t include this in our spend numbers.

I’m guessing June is likely going to follow a similar lighter spend pattern. However, they are starting to open things up in BC with the continued reasonable expectation of social distancing, masks, etc. So, we might be spending a bit more going out. Will estimate a spend of $2500 again for June.

Comments, Concerns, Issues
Pretty similar to last month.

Work is still pretty busy. But I still think there’s going to be layoffs in the fall.
The weather has been pretty nice so we’ve been enjoying nice walks in the extended neighbourhood. It kind of sucks that pretty much all the festivals and events we look forward to are cancelled this year.
Sounds like the missus is against leaving the country for a trip this year due to all the potential pitfalls: Insurance coverage, quarantine at the destination and return, how open the destination will be, potential hate for tourists, etc. Might do a road trip in the late summer.

Countdown to Retirement
22.5 months to go.
50 paychecks left if I’m lucky.
 

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Discussion Starter · #153 ·
End of June 2020 Update and Midyear Status

Savings and Investments

My investable assets: $1.598M. Down about $11.2k for the month.
Her investable assets (excluding DB pension): $496k. Up about $9.5k for the month.
Combined investable assets: $2.092M. Down about $1.7k for the month.
The month was overall, relatively flat for me. My non-registered Canadian dividend focused account took a bit of a hit this month but was offset by increases in my registered index focused portfolio (RRSP, DC Pension, and TFSA). Also, the loonie gaining some strength resulted in my overall portfolio go up slightly in USD terms. I transferred cash to my RRSP account for my 2020 tax year contribution but haven’t decided what to buy.

The missus’ portfolio had small gains across the board and is officially positive for the year (with help from additional savings and contributions.)

My Portfolio2019 Actuals2020 To End of Q22020 Full Year TargetsEnd of 2022 Retirement Goals (Rough)
Cash (soft target)24.3k19.4k20k30k
Non-Registered835k779k922k1.1M
RRSP388k394k416k450k
TFSA103k107k115k135k
DC Pension293k299k322k350k
Total1.643M1.598M1.795M2.065M
Non-Registered Account Dividends35491197594000050000

With the hit I took in February and March, combined with all the uncertainty still, I’m not hopeful that I’m going to reach most of my end of year 2020 targets. That’s not necessarily the end of the world. While my non-registered portfolio is lagging the most, it’s allowing me to pick up more shares at lower prices through small purchases here and there and DRIP’ing. Also, because of the great year in 2019 and help from the general rally the last couple of months, I feel I’m still on track to hit my overall retirement year numbers based on continued contributions and my (conservative?) growth assumptions. Point of clarification though. My Retirement Targets are for end of year 2022, not at April 2022, the month I’m hoping to retire, since I just grabbed my forecasted 2022 numbers from my spreadsheet instead of calculating what the numbers might look like at the 1/3 pole mark for the year.

With all the dividend suspensions, cuts and deferred increases, I wasn’t sure if I was going to hit my $40k non-registered dividend target this year. However, I’ve been fairly unscathed with only one suspension to a restaurant royalty and a few expected increases that didn’t happen. I think I’m in good shape to hit my year end target with help from DRIP’ing and some additional purchases.
My TFSA is also lagging a bit because I "let" some Canadian content slip in there, contrary to my original plan.

Combined Portfolio2019 Actuals2020 To End of Q22020 Full Year Targets
Combined Totals2.129M2.092M2.292M

Spending
June Spend: $1980
YTD Spend: $21920

June was a light spend month with no significant one time costs. It could have been even lighter but with things opening up in BC, we’ve started to eat out and socialize a bit but keeping distance. So our eating out/alcohol bill crept up.

July will be, as usual, a heavy spend month because of our second property tax installment. On top of it, we might end up doing some repairs/maintenance around the house. Going to guess a spend of $5500 spend for the month.
2019 Actuals2020 To End of Q22020 Full Year Trend2020 Original Forecast
Food & Eating Out1380059001180014500
Housing & Utilities1189070601337014500
Transportation4710279036704950
Personal7780235047108000
Entertainment15402404002000
Travel96503480696012000-18000
Side Business200100200200
Total49570219204111054000-60000
*Full year trend is not necessarily double the first half spend due to large single annual spends in the first half of the year factored in (like car and house insurance).

Food & Eating Out: Our food bill is under budget because we ate out less due to the shutdowns. However, out grocery spend is definitely higher. There seems to be less sales and more price spikes like for beef.

Housing and Utilities: Housing and utilities costs are trending to where we expect it. This category (utilities, property taxes, and insurance) keeps going up faster than inflation and it’s difficult to try to limit the increases by various means. There were a number of repair and maintenance items we were expecting this year but it hasn't been too pricey yet.

Transportation: Both of us are working from home so fuel costs are way down. We still go for drives though. Normally, we fill up about 2-3 times a month. We're down to once a month.

Personal: With a lot of things shut down, there wasn’t a lot of shopping we could do. With things opening up, we might be spending more in the second half of the year, particularly during Black Friday and Christmas. We might as well use dollars we were expecting to use for travel to replace some items.
The missus has spent some dollars on health related stuff like orthotics.

Entertainment: Again, there’s not a lot of events going on. And our leagues were suspended/cancelled and we didn't get a partial refund.

Travel: We fit in a couple of small trips at the beginning of the year. We’ll try to fit in a small local trip in the last summer/early fall. However, I don’t see an international trip happening this year. Even a trip to the States looks sketchy.

Comments, Concerns, and Issues
Work is pretty steady as she goes right now. I'm starting to think more seriously how the next year and a half will play out, like how and when I'd tell my manager I'd be interested in a package and when I would actually let him know I'm (likely) going to retire, researching what happens to work benefits/perks, etc.
With nothing happening around town, I’m trying to get motivated to spend time getting in shape. It'd be nice to start getting back into the habit before I hit retirement.

Countdown to Retirement
21.5 months to go.
 

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Discussion Starter · #154 ·
End of July 2020 Update

Savings and Investments

My investable assets: $1.648M. Up about $49.2k for the month.
Her investable assets (excluding DB pension): $511k. Up about $18.0k for the month.
Combined investable assets: $2.159M. Up about $67.2k for the month.

July ended up as another nice recovery month with positive numbers across the board including my Canadian dividend portfolio which was the laggard last month. It finally gets me back to positive territory for the year and it’s looking good from a USD value perspective. I was also able to grow my cash savings even with the heavy spend as it was a 3 paycheck month. I’m considering plowing some of the cash into some bank stocks for my dividend portfolio.

The missus’ portfolio also had gains across the board breaking the half mil mark for the first time. She’s rebuilt a decent cash position again after making some index etf purchases earlier in the year.

Spending
July Spend: $6130
YTD Spend: $28050

We spent a ton in July. The biggest chunk was due to property taxes. We could have deferred payment to end of September but we didn’t see much advantage in doing that so we just paid during the original early July due date. The house maintenance/repair did occur but it was fortunately only half of what we were anticipating. We overspent a bit at Costco, since they had a sale on chicken and we just freeze the stuff, and on spot prawns which we just shared with our extended families. Our eating out bill was a bit high as we started eating out more. I also pre-loaded a loyalty card to earn some travel points. And the missus did an eye exam and got new glasses which was a chunk of change. We get reimbursed from her work benefits but I still add this stuff to our spend tracker.

August’s spend will likely be slightly higher than average too but not as outrageous as July. I need some new shoes and think I might end up getting new glasses which are also covered by the missus’ benefits. Eating out will likely continue to be high as we enjoy the patios around town. Guessing a spend of $3000 for August. Hopefully no more repairs and maintenance for a while. However, looking ahead, we might be spending a chunk during Black Friday to upgrade a few of our consumer electronics and wonky appliances. Hoping the deals this year will be good.

Comments, Concerns, and Issues
  • While I think my megacorp is in good shape overall, I think departments are still under pressure and struggling to hit budget numbers (controlling the spend side). My manager says we have a ton of work through into next year. But I still think layoffs are possible in the fall. Not sure if I’d be angling for one yet but unlikely.
  • I’m starting to exercise a little bit more. We’ll see if I can keep this going to retirement where I’ll hopefully have even more time to dedicate to this. Kind of a shame that as I rebuild my fitness that the spring/summer league I’m in has cancelled the season and my winter league team is likely going to fold.
  • Feeling a bit relieved and appreciative that the covid situation in Vancouver is at a level that is allowing people to have some degree of normality and to enjoy the summer.
  • No attention given to my side business. Might start revisiting it next year.
  • Go Canucks. :D
Countdown to Retirement
20.5 months to go
 

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Discussion Starter · #155 ·
End of August 2020 Update

Savings and Investments

My investable assets: $1.695M. Up about $47.4k for the month.
Her investable assets (excluding DB pension): $523k. Up about $11.6k for the month.
Combined investable assets: $2.218M. Up about $59.0k for the month.

August was another solid month with gains in each component of my portfolio. In my taxable account, the banks shows some strength after a relatively good earnings quarter and the telecoms were doing well until a late month dip. In my registered accounts, the US markets seem to be continuing to be the main driver of gains. The strength of the loonie has also grown my portfolio faster from a USD value perspective.

The missus’ portfolio was generally positive except for her bond heavy RRSP account which dropped a bit. It's pretty steady as she goes for her portfolio but she's a bit unsure about deploying her cash.

Spending
August Spend: $3730
YTD Spend: $31780

August’s spend wasn’t too bad even though we went over my estimated spend of $3000. There was one unexpected repair of $300. And we also made a $450 purchase that we were humming and hawing about for the last couple of years and since it was on sale. As previously stated, with limited travel opportunities this year, we’re likely going redirect at least some our typical travel spend and be a little more flexible around optional household purchases that we’ve been undecided on for a while.

As such, I’m going to estimate September’s spend to be similar to August at around $3500. My new glasses have been ordered. Our dining out spend is trending back up. And we might go on a weekend local trip.

Comments, Concerns, and Issues
  • Work’s been pretty busy. My manager seemed to confirm my suspicions that layoffs are being considered but not in our department.
  • Exercising has gone well. Pants are pretty loose now. My cardio is back to a reasonable level.
  • While we have some ideas for future “big” trips, I don’t think we’re really ready to put any serious thought into any of them yet.
  • Pretty happy the Canucks made it this far. They look good for the future.
Countdown to Retirement
19.5 months to go
Broke the 600 day milestone in August.
 

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Discussion Starter · #156 ·
End of September 2020 Update

Savings and Investments

My investable assets: $1.675M. Down about $20.0k for the month.
Her investable assets (excluding DB pension): $523k. Flat, down only a couple of hundred for the month.
Combined investable assets: $2.197M. Down about $20.4k for the month.

After a great start to September, my portfolio took a small step back across all accounts. It felt pretty volatile with 1% swings putting the portfolio slightly positive or slightly negative for the month. The loonie took a dip, creating a bigger loss from USD value perspective. Hoping to see a bit of a rise in October with a number of dividends paying out. Will see how October goes overall and may allocate more money to the non-registered account. The numbers overall are looking adequate for the year at the ¾ pole mark to support hitting my key retirement targets even though it’s been such an up and down year.

The missus’ investments were slightly lower for the month but was offset a bit by an increase in her cash savings (earning next to nothing).

Spending
September Spend: $3160
YTD Spend: $34940
September’s spend was slightly below my $3500 estimate with some of our expected expenditures, like prescription glasses and home maintenance, being a bit under budget. We also did a short weekend trip that wasn’t too expensive.
October’s spend is likely going to be relatively high. We’re going to get a new mattress. Amazon Prime day is this month so we’re likely going to purchase a few items we’ve been holding off on, waiting for a sale. Going to guess a spend of about $3500 to $4000 in October depending on how crazy we go on Amazon Prime.

Comments, Concerns, and Issues
  • My manager talked to me about what he thinks I’ll be working on in 2021 and asked if I knew anyone good to join our team because we’re so busy. So, my job seems to be secure heading into the stretch run.
  • The exercising is coming along well and becoming a habit. I need to add some more variation because the routines are getting a bit repetitive. A few people have started to notice and ask if I’ve lost weight. 😁 I hope I can maintain this into retirement.

Countdown to Retirement
18.5 months to go
As I reach the year and a half mark, retirement still seems like miles away. However, the planning conversations with the missus seem to be getting more serious now whereas she previously felt the 2022 goal was pretty abstract. I’m also starting to sketch out with a little more detail my income streams and spending for 2022 to 2026, though everything is flexible and subject to modifications of course.
 

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Discussion Starter · #157 ·
End of October 2020 Update

Savings and Investments

My investable assets: $1.646M. Down about $29.0k for the month.
Her investable assets (excluding DB pension): $518k. Down about 4.8k for the month.
Combined investable assets: $2.164M. Down about $33.8k for the month.

October was another head-fake month for us which started off great and then fell apart the last week. My portfolio was nicely above the $1.7M mark again and my RRSP hit its target for 2020. And then it seems like the covid numbers sunk the markets and my portfolio. On a positive, cash savings were still up even though it was a heavy spend month. I’ve been keeping some powder dry and may deploy it if markets continue to drop. I’m curious how much impact the US elections will have on the markets in November which is part of the reason I’ve held back on deploying some of my cash.
The biggest hit in the missus’ portfolio was in her taxable investment accounts. It was offset a bit by the growth in her cash savings. She may deploy her cash also if the markets continue to sink.

Spending
October Spend: $4160
YTD Spend: $39100
We spent a bit above the upper band of my October estimate which I’ll primarily blame on the new mattress we did end up purchasing. Along with the mattress, we re-did the whole bed with new sheets, pillows, mattress pad, duvet, etc and that all added up. We’re pretty happy with the new set-up so far. In addition to the bed spends, we didn’t spend too much on Amazon Prime Day; didn’t see a lot of appealing deals. We also spent a chunk on a birthday gift.

November is likely going to be a huge spend as we’re going to potentially use Black Friday sales to replace some appliances and home electronics that have been kind of limping along. Going to guess a $4000-6000 spend in November. Big estimate range as we’re not committed for sure to buy the items we’re thinking about, haven’t finalized the models we’re targeting, and don’t know what sales we’ll see. I’ve read there’s been some supply chain issues due to covid so wondering what kind of impact that may have on the breadth and magnitude of the sales.

Comments, Concerns, and Issues
  • Big push at work to get stuff done before everyone runs away to hibernate for a few weeks in December.
  • Still exercising but it’s getting a bit repetitive. Need to add some variety to my workouts and meals.
  • Still hopeful about travel in 2021 so still doing high level research. But until things open up and normalize more and there’s some definitive timelines on a vaccine, travel options will likely stay very limited for us.
Countdown to Retirement (April 2022)
17.5 months/75 weeks to go.
Starting to more closely look at activities I need/want to do in the lead-up to my retirement date.
 

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What is your lessons learned since the beginning of this journey? What would you do differently or what is your suggestions for those who are starting the journey now?
 

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Discussion Starter · #159 ·
What is your lessons learned since the beginning of this journey? What would you do differently or what is your suggestions for those who are starting the journey now?
Thanks for the question. Sorry for the delayed response as work has been overwhelming as I mentioned in my October update with everyone trying to get things done before everyone takes off to use all their vacation time during the holidays.

I don’t think any of my lessons learned and suggestions would be considered original so likely would not provide any significant new insight. They pretty much follow themes common to most basic personal financial discussion. With that said, I’ve jotted down some of the concepts that resonate with me and tried to provide a few examples from my journey. At minimum, they might provide another data point for people to develop their own opinions and ideas.

Foundational
I’ve come to understand and appreciate that everyone walks a different financial path. As illustrated by all these money diary logs, (1) there are different means to financial success and achieving one’s financial goals. One can grab snippets of ideas to apply to their plan but (2) everyone’s journey is unique because of different personal circumstances, life experiences, values, and goals. All these things are going to impact one’s decisions and help determine what choices may be better personal fit.

Additionally, change happens: People change, circumstances change, goals change, preferences change. And, even though it’s hard to measure its impact, luck/randomness shouldn’t be underestimated; with both good and bad uncontrollable and unexpected events occurring in all aspects of life. So, while I’m a big proponent of planning and creating a roadmap, I also realize it isn’t realistic to follow your roadmap to a T over a lifetime. It’s more about doing regular status checks while being flexible and making course corrections along the way.

I’m somewhat in awe of people that retired in their 30’s and 40’s. But both the missus and I didn’t grow up with a lot of money so a higher degree of financial security is important to us and correspondingly we make many decisions with that in mind. It’s also important for us to have the means to take care of our parents as they age and close family & friends if needed. I didn’t have any interest in travelling until I got placed on some international consulting projects at work, which in itself was fairly timely and made a major impact on my life. Now that I have the travel bug, we’ve tried to balance travel as much as we can during our work lives while saving enough to ensure we have enough money to travel as much as can during retirement. When I first started giving some initial thoughts on retirement in my late 20’s, the goal was a typical 65. After having some success at work and saving, I adjusted it to “freedom 55” because of the commercials. And then after plotting out my numbers and how they would fit in my life per some of the things I mentioned, I adjusted it to 50. It’s been an iterative process figuring things out.

Asset allocation
I was 100% equities earlier on but I’ve now worked in 20-30% fixed income into parts of my portfolio in recent years. This evolution has generally worked out for me so far even with 100% equity during the dotcom bust and great recession.

Hindsight being 20/20, if I had to do it again, I would not go 100% equities but 90:10 because volatility should be expected as the norm. There are always going to be years where equities are going to get hit and fixed income shines and the limited articles I’ve read seem to indicate that a bit of fixed income would provide a better return than 100% equities.

But compared to when in accumulation mode, it’s also not necessarily enough to just stick with the program and not panic sell when markets take a hit. The problem is that volatility can dollar cost ravage your portfolio once you start taking money out of your portfolio. So as I’ve gotten closer to my retirement target, I’ve increased my fixed income to hopefully primarily make my portfolio more durable overall so that when (not if) the equity markets take a big hit, I have enough fixed income that I can sell instead of my equities, to support my desired income level and let the equities recover instead of selling low. I’m also not immune to feeling a bit in the dumps when markets and my portfolio are down. So I’m not sure how I’m going to feel when they are down AND I don’t have employment income as a safety net. The fixed income may save me some anxiety.

Investing Strategy
Currently, my investing strategy is generally a combo of Canadian dividend growers and couch potato index ETF’s. I feel it “fits my personality” and I expect it to stay that way overall with some tweaking, namely going from holding a 4 or 5 fund mix of index ETF’s so I have more control over percentages, to a single global equity index ETF and bond ETF, and eventually an all-in-one. I'll likely eventually trim my dividend portfolio and cash in some capital gains there too.

In my early days, I was pretty directionless. It was a gong show mix of everything you should be avoiding: High fee mutual funds, funds with DSC’s, individual stock picks on eTrade looking for a home run, reaching for yield, going overweight on the hot sectors, friend’s sister selling me Primerica funds… you name it. As I’ve learned more, it gave me the confidence to evolve from high fee funds with a low value advisor, to low fee funds and generic advisor support, to a self directed portfolio that had more structure and discipline. There are so many more and better investment options (ETF’s, low cost brokerages, lower fees, etc) today than when I got started and way more easier access to good information. While I’m a big believer on learning as much as you can about personal finance and investing, I also realize that it may not some people’s forte. So, solutions beyond self directed may be a better option in some cases. I would just say to try to keep fees low but also understand the value you are getting and/or need relative to the fees you pay whatever option is chosen be it robo advisor, fee only advisor, full service advisor, or flying solo.

So, even with my horrible start, I think I’ve done ok. I’ll attribute it to saving being more important returns in the early going, not panicking when markets took a dive but sticking with regular contributions/investments, and some luck (mainly job-wise). I tended to beat myself over mistakes but no one’s perfect and the most important thing is take the lesson learned and make the course corrections.

I kind of fell into dividend growth investing due to a couple of reasons and I feel it’s worked out for me. Psychologically, I think the regular dividend payments will provide me with a level of comfort similar to the regular income stream of a paycheck and lessen the second guessing of myself around whether I’m selling ETF units at a good time.

If I had to do it over, I probably would focus on index investing with ETF’s/mutual funds from the start if conditions were right, namely access to: couch potato info, a low cost trading platform, and low fee funds. This is mainly because of the simplicity. However, I don’t regret ending up with half of my portfolio focused on Canadian dividend growth. It’s just a lot off effort staying on top of the health of the companies, their dividend growth prospects, etc. I do regret chasing yield without enough attention to company fundamentals. I also wouldn’t focus too much effort on speculative stock picking and timing which I wasted financial resources on early on. I still do a bit of it but now it’s more for “fun” and with a really negligible part of my portfolio. People seem to have successes but I haven’t had a lot of success and correspondingly don’t feel I’m good enough at it to for it to be part of my core strategy.

As hinted above, I also don’t feel the need to make every decision about how to fully maximize returns. As I hit my financial targets and grow older, I’m valuing ease and simplicity more than working on squeezing every last ounce of return. And I don’t need to just focus on investment returns. I feel throwing effort instead on capitalizing on low hanging fruit with respect to saving and spending will have the same net effect in the grand scheme of things.

Spending and Saving
Spending and saving are obviously kind yin and yang. It’s really a personal decision on where the balance is with regards to living life in the present versus saving for future goals. And really, who’s to judge where you get the most enjoyment out of your spend?

For us, the big spending rocks for us are/were housing and transportation so we wanted to optimize those expenses. We paid down our mortgage asap (with the help of some really good income years) and then redirected that money to savings/investments. We did that even though mortgage rates were what were considered low at the time because we don’t like owing money and wanted the security of a paid off house. But with today’s even lower mortgage rates and higher real estate prices, it’s a more complex decision and I’m not sure if I’d go all out paying down the mortgage versus a more balanced approach. And due our work situation and lifestyle, we were able to downgrade to one car which also allowed us to redirect the operating and maintenance costs to savings/investments.

Spending is such a personal thing. Beyond the typical “living below your means” mantra, we’ve become more targeted in our spend and spending more consciously, asking ourselves if we’re going to benefit from it or get a corresponding degree of enjoyment out of it instead of automatically thinking, “That looks cool, let’s buy it.” And we’re trying to buy things “appropriate to our level of usage”. For example, we’ve stayed at some premium hotels but we rarely make use of the amenities like lounges, fitness centres, pool, etc. So instead, we stay at more basic hotels. I’ve also bought some high end gear but a lot of times it ends up that I’m not skilled enough to use/appreciate it, it requires more maintenance than I’m willing to spend on it, or it doesn’t live up to expectation. On the other spectrum, we don’t want to be penny-wise and pound foolish either.

I’m also obviously a big believer of tracking your cashflow: What’s coming in and what’s going out.
I try to track it very detailed because I like to but it doesn’t have to be. It's so foundational to get a snapshot of how things are trending, get a view of much we may need in retirement, identify where might look to optimize our spend, etc.

Miscellaneous
Just doing the basics and avoiding catastrophic mistakes took us a long way. By basics I mean: taking advantage of “free” money that my company offered (DC pension matching, stock purchase plan, optimizing health benefits, etc), (eventually) living below my means/not taking on debt for consumer goods, being committed to savings and investing, etc

I try to stay optimistic. I look back upon some of turmoil in the monthly notes I’ve taken over that last few years: Greek crisis, China worries, oil tanking, tariffs and trade wars, Brexit, and now Covid. But even with all those issues, the equity markets have continued grow and my portfolio has been fairly on track. (knock on wood)

It helps a lot to have a spouse that’s aligned with me in terms of financial values.
 

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This thread and milhouse's journey is inspirational and instructive. Thank you very much for sharing. What's been most noticeable to me since I've joined this forum is how so many contributors are in such sync with their partners. While milhouse's wife may want some control over how she invests, she is a saver and she appreciates her husband's approach and values. My husband and I, as I've detailed elsewhere, have quite different financial attitudes. Over 25 years, we've learned to respect those differences. He is more aware of his spending today than he was when we first started dating but his world view is one of plenty. Mine has always been one of a saver; I've always been careful about spending and generally frugal. My husband is not. This has worked for us in the accumulation stage of our lives as we've had separate accounts (with a joint account for house related expenses). I've managed our investments because he doesn't have much of any financial knowledge and doesn't care to. He trusts me to know what I'm doing. As we move towards full or semi-retirement, possibly as early as next July (I'll be 51; he will be 49), I've talked to him about the near necessity of thinking about our nest egg as one thing (and dropping this seperate accounts outlook). I've suggested that perhaps out of the monthly withdrawals we make, we could put a percentage in each of our individual accounts to allow for some individual spending. He's not wild about this notion but he's giving it some thought.

We love each other but our attitudes toward money are not as aligned as we would both like. Because he doesn't care to understand much of what I've been learning about retirement (VPW tables, budgeting, asset allocation changes etc.), I am struggling to engage him in substantive conversations about the reality of our retiring next year.

Thank you for providing a thoughtful and detailed picture of your retirement plan.
 
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