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  • Financial Freedom 50 [View article]
    Since I suspect you enjoy verbal sparring and philosophical conversation as much as I do, I'll bite.

    Yes, there are nuances to the word deserving, but I still must disagree.

    Definition from
    1. qualified for or having a claim to reward, assistance, etc., because of one's actions, qualities, or situation:
    the deserving poor; a deserving applicant.
    2. meriting; worthy:
    a criminal deserving of a lifetime sentence.

    There's nothing about me that makes me feel qualified or meriting my situation both fabulous or negative. If we believe we get what we deserve then we have to accept we deserve cancer or to die in a plane crash as those people did the other day through no fault of their own, as well, as very positive things. I can't accept that. I had pneumonia for most of December. Did I deserve it? Actually yes. I had a temper tantrum and stomped off into a snow storm and where I went was where I was exposed. Totally deserved it...a direct result of my own foolishness. My husband caught a nasty infection through no fault of his own. Did he deserve it? Not at all. Are there consequences? Absolutely, and pretty far-reaching. Do I deserve to have a nice portfolio? Yes, because I carefully saved and invested the money. Do I deserve to lose money in any specific investment? portfolio's performance is based on my own buy and sell decisions. That's one of the reason people like to use advisors, they can't handle the consequences of their own decisions. Did we deserve to lose our life's savings years ago? Someone else's actions caused that...but we chose the advisor.

    If life was all that cut and dried, action/reaction it would be simple to figure out. They're not.

    I also have a negative gut reaction to being called 'good'. I know how not good I really am and how even the good things I do are corrupted with mixed motives. I'm so far from good, it's painful to consider. Good is a standard I cannot meet, though I do my best.

    But life is absolutely not just action/reaction. Life is a crazy mix of environment, genetics, circumstances, forces of nature, choices we and everyone around us and who came before us made/makes. Life has placed me here and it's up to me how to respond, cope, manage, and choose from here on in. This leaves the responsibility squarely on my very own shoulders. I choose thankfulness and joy, not pleasure and happiness, as much as I can.

    Ahhhh, even our investments are effected by our philosophy of life.
    I really like the way you make me think, Mike. I'll have lots to ponder while I walk to and am at work.

    Mar 27, 2015. 03:26 PM | 1 Like Like |Link to Comment
  • Financial Freedom 50 [View article]
    Sadly, I have a large CPG holding that I didn't part with. I expect it to get hammered if they do have to cut their dividend. Oh well, good time to buy more. I'm only down 25% (ha ha) one of very few down holdings. Sniff.
    I still hold CVX at about cost (not including the great gains in currency) and if it dips dramatically I will buy more. Lastly, I only initiated a holding in Suncor mid-October so I'm happy with that. I would like to quadruple the holding over the next few years. Too bad I didn't put that IPL money into ENB after all. That's okay though. I'm not disappointed though. The companies I own have held up extremely well considering.
    Mar 27, 2015. 02:41 PM | 1 Like Like |Link to Comment
  • Financial Freedom 50 [View article]
    Yes, very likely. Our income tends to go up with age and various life stages allow for more savings. We had only $10,000 in Jan 2011, now we're ahead of the numbers. 42 x our income /10 is not at all $10,000.

    Do some projections: For example if your income is $50,000 now and you get 5% raises for 10 years you would have: 81,444.73 for income then. (I just googled compound interest calculator to get the numbers).
    If you continued saving about 30% of your income you would have close to $500,000 in 10 years (whoooo hooooo!), with some growth and dividends....
    So back to the formula: 43*81445/10=350,213


    Creating a spreadsheet is what convinced me DGI could work. I was rather astonished at the numbers at the bottom. I haven't added the new numbers but if my husband could continue working....oh my. We currently live on about half of his income, give 15%, save 35%. It was a perfect storm of events, we lost our life savings, children moved out and expenses dropped at the same time as my husband got a new much higher paying job. We determined to save the difference. It's a lot of money to save each month, but it really did happen. One the portfolio was running smoothly I started looking for opportunities to create windfalls. Add a few good return years...and here we are, somewhere I never expected to be. My previous articles chronicle the changes how I ended up here from there.
    Mar 27, 2015. 01:00 PM | 1 Like Like |Link to Comment
  • Financial Freedom 50 [View article]
    My pleasure, Mike! If anyone is not familiar with his writing, check it out! Interesting, Entertaining and Educational!

    "Unfortunately, we don't know in advance when a "good time to buy" is."
    You sum up my entire problem in one sentence!

    "I wish you good fortune -- you deserve it!"
    Thank you for the lovely, sweet wishes, but I absolutely do not deserve it. I am only fortunate. Anytime I feel a tiny twinge of entitlement, I watch a little news. There is no reason it shouldn't be me or my family in those pictures crying. That's where the thankfulness comes in, even in difficult times. I am warm, too-well fed, have ample, valuable work to do with my head and hands, time for recreation, and am as secure as is possible to be in an incredibly uncertain world. Really, what more could one ask for?
    Mar 27, 2015. 12:34 PM | 3 Likes Like |Link to Comment
  • Financial Freedom 50 [View article]
    Matthew: "findependence" Love it! Gotta use it!

    Bazz: I am definitely looking forward to taking advantage of the Canadian Dividend Tax Credit (CDTC)! We calculate that the savings of moving from the home to the condo is about $1000/mo - post tax dollars. That adds up to a lot of time somewhere warm without changing our budget. Convert that to pre-tax dollars and it's even more staggering. Considering that taxes are our biggest expense, giving up traditional income would create another large savings.

    I've been considering moving Visa into the TFSA as well. The tax savings on the capital gain would far outshine the unrecoverable 15% withholding on the small dividend. As I do the big restructuring over the next few months, I will definitely be putting CNR in the TFSA and moving things like BCE, Telus and the banks (in RSP, as we previously had very little $ in non-registered) into the the non-registered. Asset location is important for structuring taxes in retirement and one of the benefits of self-directed investing (compared to mutual fund investing by advisors). This is the reason I asked for free trades. When I explained why I needed them, my contact (that I've developed a relationship with over the past few years) went to bat for me.

    What I really like is that CDTC can be transferred between spouses. I can have the non-reg in my name (assuming I can justify the money as mine and have reason for doing our case, half of the house money is mine) and can transfer the CDTC to my much higher income spouse and keep any cap gains taxed in my little income hands. ;)

    The people writing the tax rules generally are financially savvy investors and have higher, disparate incomes. There are lots of interesting tax rules that benefit their demographic. I'm enjoying being a beneficiary.
    Mar 27, 2015. 12:18 PM | Likes Like |Link to Comment
  • Financial Freedom 50 [View article]
    I definitely see an advantage in making multiple purchases and averaging in, especially when adding contributions to or reinvesting dividends into the portfolio. However, I don't think arbitrary annual purchases are an approach that I am interested in. I am certain I can do much better by watching and biding my time. I am certainly not going to choose the best time to buy a stock, or even the best stock to buy, but I don't see the need to waste opportunities that are sure to happen.

    Pop up a chart of UTX for example. I became interested in this stock last spring as I had a small amount of GE, but wanted another industrial for the portfolio. I bought August 8th and doubled the position on October 17th. That is now a very nice holding. I bought GIS Jan 10 and June 30 last year. Not at all perfect, but better than an average price for the whole year. My original JNJ purchase was May 16/13, then doubled Oct 3/13 and doubled again Oct 13/14. I don't really need more, but if it was to go 10% below my ACB, I would buy a chunk more. By picking careful entry points on previously selected stocks I am certain I can do better than picking a day and annually investing on that day.

    If I was already independently wealthy, and the end result wasn't as critical for us, this would be a great sleep-well-at-night approach. Instead, I choose to wrestle with these questions of valuation and timing and how to be the best steward I can of our resources. I don't need to - (ie comment about advisor in article) I just choose to.

    Thank you for commenting Rali. I appreciate it.
    Mar 27, 2015. 11:46 AM | 1 Like Like |Link to Comment
  • Financial Freedom 50 [View article]
    We do have many things in common. Being Albertan, real estate market was certainly a factor in the decision, but far down the list. When we did decide to sell for other reasons, we didn't delay though. We were 'first to market' and sold very quickly (cute little house priced attractively). 2 more houses have since been listed on our street.

    Regarding oil, I have not seen as much change in the companies (not many write downs this quarters) and I expect more pain as more layoffs and cancelled projects and dividend cuts happen. I don't think the time is right yet, but I anticipate some good buys this fall, and even next, depending.

    My first purchases will be Suncor (SU) and Whitecap (WCP.TO) and I probably will not wait long enough for them. But I have a nice shopping list in that department.

    I feel similarly about the gold stocks too. I have a very small amount of G too. It's been a wonderful trading stock for me over the years.

    "Best to do the simple and safe first, then you can work on the more ambitious." Thank you. Just that statement helps clear my head. There are many things clamouring for my attention at the moment.

    I appreciate the recommendation to buy a few shares of what I am sure of, creating a portfolio framework on which to gradually build.
    Mar 27, 2015. 11:11 AM | Likes Like |Link to Comment
  • Financial Freedom 50 [View article]
    Hello Building,
    I did consider other brokerages, and did some research. Here in Canada most of the larger brokerages do only DRIP whole shares. The clincher was going to be the fees as my broker's fees are more than I could get elsewhere, especially with opening a new account. I'm sure they are keenly aware, hence the free trades. If it hadn't been mentioned somewhere on the forum I wouldn't have been brave enough to ask. I'm glad I did. It does add up. I am considering buying some stock direct from companies instead of using the brokerage account. The only problem I foresee with that is that the estate would have to keep track of it. My father died a decade ago and my mother just recently found paperwork saying he owned shares in a particular company. I'm just starting the research to find out if he still is a shareholder on record!

    I have never used options before and this may be something I look into, but not in the next few months. Thank you for the reminder.
    Mar 27, 2015. 10:34 AM | Likes Like |Link to Comment
  • Financial Freedom 50 [View article]
    I appreciate your encouragement and your considered reply.
    I heartily agree with you, I don't want to rush into anything, but I don't want to wait forever either. Quality and value are a must. This change has definitely convinced me to move into higher quality stocks, and I have actually sold off more than I bought this quarter. I was willing to take more chances with smaller contribution amounts that seemed to go on forever into the future. This is definitely different and has been a good refocusing. I like the idea of setting up a frame-work with a small nibble of what I do want, waiting for the time to buy.

    Isn't there are saying, "It's not the hand you're dealt, it's the way you play it"? During the fall I went through a period of grief at what felt like many losses around me. Our sweet little dog even died! Though we had decided to sell the house this summer (the circumstances bumped up the timing) there was a process of giving up my cute house, gardening, my big beautiful kitchen, etc. The health issues meant giving up the future I had imagined. This has not been an easy transition that way, or with the huge amount of work that has rested on my shoulders. However, I am now at a place of thankfulness and happily settling in. The little 15yo dog would probably not have coped with this transition and I wouldn't want to put her through that. So even that was a blessing in disguise. Life isn't what I thought it would be, but that doesn't mean it can't be a great hand too! The grieving process is over and I am excited at the endless possibilities for the future.

    Thank you for being part of the discussion. I am always interested in your opinion!
    Mar 27, 2015. 10:25 AM | 2 Likes Like |Link to Comment
  • Financial Freedom 50 [View article]
    Thank you, Chips. So far I've kept all my US holdings in the RSP, but fortunately the withholding tax is simply recoverable on your tax return.

    Your post is very helpful in thinking of my portfolio as more divided by income source not just income currency. I already consider UL as an international holding, but you're right. I have CNR, ATD.B, REI.UN, and TD (and probably others) in that category.
    Thank you, great food for though.
    Mar 27, 2015. 09:54 AM | 1 Like Like |Link to Comment
  • Financial Freedom 50 [View article]
    Cwaldenj, I like your adventurous lifestyle. My husband and I were discussing foreign contracts last night. Congratulations for being able to have freedom too!
    Mar 27, 2015. 09:49 AM | 1 Like Like |Link to Comment
  • Financial Freedom 50 [View article]
    I think anyone who is saving 30% of their income is doing fantastic. However, a more objective analysis comes from The Millionaire Next Door:

    "A simple rule of thumb, however, is more than adequate
    in computing one's expected net worth.
    Multiply your age times your realized pretax annual household
    income from all sources except inheritances. Divide by ten. This, less
    any inherited wealth, is what your net worth should be."

    If your income is $50k then: 33x55,000/10=165,000
    I just picked 50k as an average American individual income and it works out to what you have.

    But really what matters is the income vs. your expenses. Fortunately someone who is willing to live well within their income now, is likely also able to live well within their income later. It's a personality and discipline thing. If you're willing to live on less, then you need less to retire. Simple. Even though we technically could retire at 46 now, I entitled the article Freedom 50, hoping that my husband will be able to continue to work for 4 more years, allowing us to have a little more wiggle room in the expense department. But one this point is reached the options become limitless.

    For example, he is much healthier in a tropical climate and relaxed atmosphere (who isn't?) and he loves snorkeling & diving. We could move somewhere tropical and inexpensive for at least part of the year where he could work part time at a dive shop and I could work part time from the computer. Then the months when we are 'back home' he could do contract work for his current job part time. Health, work, income problems solved. Or, we could cash out the last rental property and/or the condo we just moved into, make that move tropical move permanent and he could do part-time contract work remotely. Or, he could retire, I could work. As I said we are dreaming of things never though of before because the only way this doesn't work out is that we don't manage our expenses.

    It's amazing how free financial freedom really is!

    As I alluded to in the article, it is very ironic that pursuing these non-traditional options creates the situation where the worst case is even less likely. If we spent months of the year working part time in the tropics, he would much more easily be able to work back home for some remaining months likely for many more years. Also enough.

    Given options, I'd rather go back to the plan from a couple years ago, health issues were not concerning, our cute house and the gradual curve to financial freedom, but I'm so thankful for the banquet of options now in front of us.

    "Pressed, but not crushed",
    Mar 27, 2015. 09:46 AM | 2 Likes Like |Link to Comment
  • Financial Freedom 50 [View article]
    Hi Torontomom,
    So nice to have people along on the same journey. I think you have something there with "whatever you are comfortable with". It may sound too non-committal, but there is wisdom behind it. I would be overwhelmed to jump to 50 immediately, but if the portfolio slowly grows there, it would probably be fine.

    A few years ago my holdings crept up to nearly 40 but once work got busy, it became too much and I selectively trimmed.

    My hours at work will be greatly reduced as I take more seriously my caregiver role. That makes my husband sound disabled, which he is not, but his health stays much better when I am focused on making his life, meals, and environment conducive to resting, recreation and recovery from the day at work. Working odd and extended hours myself has indirectly contributed to his issues but my active mind needs new things to do (somehow housekeeping and grocery shopping doesn't cut it!). Focusing more on the portfolio will keep me occupied for a while and I will have ample time to devote to research over the summer months and will be able to manage more holdings easily, especially as I'm more experienced. I'm looking forward to the life changes this move holds as well. Splash!! (that's me jumping in the pool at the new condo!)
    Mar 26, 2015. 04:24 PM | 1 Like Like |Link to Comment
  • Financial Freedom 50 [View article]
    I have been a FAST Graphs subscriber for several years, thank you for mentioning it. It has been a fantastic tool to keep stock price in perspective for me.
    Mar 26, 2015. 04:06 PM | 1 Like Like |Link to Comment
  • Financial Freedom 50 [View article]
    Thank you Sleek,
    At a TD seminar they stated that 18 holdings was the magical number where the risk reduction loses out to diversification. In my understanding this relates to capital risk only. Once I am withdrawing income from the portfolio, I will care less about capital risk and more about income risk. This is where what would be considered over-diversification can really shine. Drastic cuts to dividends when you have a small number of holdings can really effect your income. With a larger number of holdings the income will hardly notice the blip in a 50% haircut.

    I have not decided how many holdings I will really have, (part of me says just get 42!! hee hee) nor do I think I will be legalistic about this, but when I sat down with a list of everything I would dream of owning (regardless of current valuation) the number came to 50.

    I appreciate your clear explanation of this concept, Sleek. Where are you on the continuum of accumulation and withdrawing? Do you see this changing for you as you progress? I used to think older people held more stocks just because they collected them over the years. far I've come.
    Mar 26, 2015. 03:59 PM | 2 Likes Like |Link to Comment