# If you have won the game stop playing



## robfordlives (Sep 18, 2014)

I don't recall where I read this but somewhere in my research a well noted researcher made this comment. In essence if you have reached or are close to reaching your financial goals there is no need to take anymore risk than is necessary. I am wondering if I am getting close to that point.

I am early 40's with paid for house and $1.3Million in savings and about a 70/30 equity to bond split. I likely cost my self several hundred thousand dollars in being too Canada/dividend focused in the past decade and I have made great strides in rectifying that. 

Our annual spending is $40,000 per year and to be honest that could easily be cut back to the 30-35K range but using the 40K would mean a 3% withdrawal rate if we retired. Yes that includes auto replenishment/home repairs/travel, etc. Only thing I don't know much about is medical and I have thrown a token $3k per year into that 40k annual spend. Possibly too low but I don't want this thread to be about that kind of thing.

I plan to retire in 7 more years and typically I can save 100K per year at my job. With growth I should be in the $2 - $2.5Million range at that time, however I am cognisant of the nearly decade long bull run.

So to get to my question, have I won the game here? If so, should I seriously be looking to move to a 40% or even 50% bond allocation? I don't want to retire so young and I think 50 is a good target retirement age.


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## james4beach (Nov 15, 2012)

I think along the same lines, that if you've already achieved the financial goal, I don't see the point in taking additional risk. Warren Buffett said: "It's insane to risk what you have to obtain what you don't need."

In your case, yes, I don't think you need any higher rate of return. I think you need to make sure you don't lose what you have today (in real terms).

Even with no growth you're still looking at ~ 2M at retirement, more than enough to accommodate 40K annual withdrawals. Also it seems unlikely you would just "retire" at 50 and never work again. More likely, you'd take a lot of time off, but then eventually encounter some other opportunity to work in your field and earn more income.

I don't know your other particulars, but I think it would be prudent to switch to a very conservative asset allocation. Perhaps something like 50/50 or even 70% fixed income, and start doing a 5 year GIC ladder if you don't already have one.


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## OnlyMyOpinion (Sep 1, 2013)

I'd say your trajectory looks solid.
And given that it is something you are considering, it is probably prudent to dial your AA back (the 'sleep at night' factor). Maybe 60/40 initially, then 50/50 when you retire?

You mention $1.3MM at 3% as $40k, but aren't you saying you will have $2MM in another 7 years? 
Starting with $2MM at age 50 at 3% is a $60k w/d the first year. 
This ignores any CPP/OAS/pension you might get, so you might w/d less than 3%?
You should probably assume increasing your w/d dollars by 2%/yr for inflation.
A 50/50 portolio should return about 3.4% on avg?

Added: Not sure how much you have looked at withdrawl methods. There is oodles out there. VPW (variable percentage withdrawl) has been mentioned in CMF threads if you search for it. There are other approaches such as Waring & Siegel's ARVA, and PWL's depletion paper (I'd start with the examples on pg.22), and so on. Lots to boggle the mind.


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## kcowan (Jul 1, 2010)

james4beach said:


> Warren Buffett said: "It's insane to risk what you have to obtain what you don't need."...


That is a case of do as I say, not as I do. If you get good at investing in the next 10 years, there is no reason why you can't keep at it in your spare time. That is what I did for the first 5 years of retirement. After creating a substantial buffer, I went to a more passive approach.


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## tdiddy (Jan 7, 2015)

If one dials down the equity too much (not suggesting 60/40 or 50/50 is, but 30/70?) with a 40+ year time horizon are they not conversely increasing longevity/inflationary risks?


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## Big Kahuna (Apr 30, 2018)

robfordlives said:


> I don't recall where I read this but somewhere in my research a well noted researcher made this comment. In essence if you have reached or are close to reaching your financial goals there is no need to take anymore risk than is necessary. I am wondering if I am getting close to that point.
> 
> I am early 40's with paid for house and $1.3Million in savings and about a 70/30 equity to bond split. I likely cost my self several hundred thousand dollars in being too Canada/dividend focused in the past decade and I have made great strides in rectifying that.
> 
> ...


Yes if you can actually live on 30 grand a year you can retire today-spending 30 grand a year how could you possibly run out of money with your balance sheet? Not easy to do at all.


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## james4beach (Nov 15, 2012)

tdiddy said:


> If one dials down the equity too much (not suggesting 60/40 or 50/50 is, but 30/70?) with a 40+ year time horizon are they not conversely increasing longevity/inflationary risks?


Even GIC rates are higher than the inflation rate today. And looking at 15 year performance, a very conservative 20% XIU 80% XBB returned 5.3% annualized, well above inflation.

Obviously one can't sit entirely in fixed income for multiple decades, but as little as 20% or 30% equities might be enough to get positive real returns.

Personally I think the investment industry pushes excessive equity allocations on people. There's just more money to be made (for them) than when people buy GICs or boring fixed income.


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## Beaver101 (Nov 14, 2011)

james4beach said:


> ...
> 
> Personally I think the investment industry pushes excessive equity allocations on people.* There's just more money to be made (for them) than when people buy GICs or boring fixed income.*


 ... +1. And this goes for the longevity risk that's currently being hailed by the industry-interest experts. It would be a miracle-in-the-making if we all (or most of us) live beyond our 80s ...

And I wonder just what percentage of the population will be deferring taking their CPP after age 65 and/or OAS beyond age 70.


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## james4beach (Nov 15, 2012)

I forgot to mention another important point. It's true that lower equity allocations will give lower performance over long periods (say 40+ years), but when you're in a withdrawal mode, drawing cashflow out of a portfolio, the added stability of high fixed income is necessary to avoid sequence of return risk.



Beaver101 said:


> ... +1. And this goes for the longevity risk that's currently being hailed by the industry-interest experts. It would be a miracle-in-the-making if we all (or most of us) live beyond our 80s ...


Part of their whole schtick is scaring investors into high stock allocations out of fear of inflation. You'll see it all over their advertising material. Basically: be afraid of inflation, fixed income won't return enough, and (new twist) bonds are actually more dangerous than stocks! Apparently


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## Just a Guy (Mar 27, 2012)

Don't forget about "rebalancing" which basically means sell your winners and buy new stuff which you don't know how it'll perform while we collect trading fees every quarter.

Not sure why one would want to quit. Having been in a live changing event and losing everything makes you realize it could happen to anyone and it could also happen again. 

I also enjoy the game though. Playing monopoly with real houses, making money on the market and seeing your strategy actually working...as long as you aren't gambling money you don't have, it's great mental exercise.

Let's also not forget about inflation. How much is your income going to be worth in real dollars 20 years down the line.


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## Koogie (Dec 15, 2014)

OnlyMyOpinion said:


> There are other approaches such as Waring & Siegel's ARVA, and PWL's depletion paper (I'd start with the examples on pg.22), and so on. Lots to boggle the mind.


Thanks, I hadn't read the PWL one before. I found their math very suspect but agreed with their approach (it is just a modified bucket approach).


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## Eder (Feb 16, 2011)

My bonds scare me more than my stocks...anything under 2.5% is losing money right now. I have many dividend payers bought more than 5 years ago that are paying almost 10% yield on cost tax advantaged income...they make me sleep good at nite.


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## james4beach (Nov 15, 2012)

What scares you about the bonds, Eder? Assuming you're going with highly rated, high grade bonds, they have a guaranteed positive rate of return (as shown in this illustration) and as interest rates rise, the rate of guaranteed positive return only goes higher -- that's true for both GICs and bond funds. Higher interest rates will be great news for bond fund investors.

Getting back to the original post, I think any way you cut the numbers, robfordlives is on solid footing with enough assets to fund retirement using a variety of potential withdrawal strategies. If I were in that position, I'd go heavy into fixed income to reduce my exposure to the stock market tanking in these critical 7 years before retirement. I would then keep the conservative (high fixed income) allocation for a while into retirement, until I'm comfortable and in a groove of retirement cashflow.

One can even increase equity exposure later on, once you're already into retirement. But I think the risk vs benefit evaluation of what to do right now ... at T-7 years ... heavily favours being light in equities and heavy in fixed income.

I'm in a very similar boat myself, actually. I may take a pause from working within 1-2 years. Currently I am on track to be in great financial shape by then, so I don't need risk. I'm only 25% in equities because the one thing I don't want to do is compromise my current capital when I'm so close to a milestone. I _do_ plan to increase my equity risk down the road, but not until I've reached my imminent milestone.


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## tdiddy (Jan 7, 2015)

I don't follow this logic James. Wouldn't the 7 years just after retirement be even more critical? 

I can see wanting achieve a certain absolute threshold of fixed income for retirement as conservative sensible approach, but not sure about then taking on more risk as one ages? Are you talking about surplus money after your basic needs are satisfied with fixed income?


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## james4beach (Nov 15, 2012)

tdiddy said:


> I don't follow this logic James. Wouldn't the 7 years just after retirement be even more critical?
> 
> I can see wanting achieve a certain absolute threshold of fixed income for retirement as conservative sensible approach, but not sure about then taking on more risk as one ages? Are you talking about surplus money after your basic needs are satisfied with fixed income?


I'm just thinking in terms of uncertainty. By going more heavily into fixed income, the OP gains more certainty that he can/will hit the $ threshold he believes he needs for retirement. We probably agree on that part. Then after you experience retirement for a couple years, your financial situation starts falling into place as questions are answered: what is my tax situation? how can I generate cashflow? how do I *feel* when living off capital? am I comfortable sleeping at night with my new financial arrangement?

It seems to me that once you're in the groove of retirement and start answering those questions, you could start taking a bit more risk (not much more) and accepting a bit more uncertainty.

But then I think back to the studies that show that the first 10 years after retirement are most critical, from a sequence of returns risk perspective, so you're probably right that someone should not dial up the risk until at least T+10 years after retirement.


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## Just a Guy (Mar 27, 2012)

I'd take a solid bank stock paying a better dividend over a bond or GIC. Probably less risk and way more potential gains.


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## milhouse (Nov 16, 2016)

At the risk of suggesting market timing, how about adjusting your asset allocation based on your own financial situation and macro economic trends? 
If you're trending to beyond your target numbers, why not increase your bond by about 10-20% to around 40-50%? And if inflation starts to rear its ugly head for an extended period, then maybe consider lowering the bond allocation by 10-20% to the 30-40% range?


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## peterk (May 16, 2010)

Counting on the interest from bonds/GICs/cash for "income" is problematic, especially if retiring young at 50. You only get ~2% to start, then only take home 1.2% after tax, and then have to put ~half of that back into more bonds/GICs/Cash to keep up with inflation. So if you have 600k in bonds that's likely <$4,000 in net spending money/year. Vs. withdrawing capital / dividends at 4% from stocks, which would give you ~$19,000 in net income/year.

The bonds are just there for volatility reduction, emergency fund, and potential market timing. Not much income to be had.


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## Thal81 (Sep 5, 2017)

peterk said:


> Counting on the interest from bonds/GICs/cash for "income" is problematic, especially if retiring young at 50. You only get ~2% to start, then only take home 1.2% after tax...


Just to point out that you won't pay any tax on that 2% interest on 600k, even if they are non-registered. There's just no tax at such low income. Same with your 4% of capital gains/dividends from stocks, you should easily walk away with your full 24k (depending on province) because of tax advantages, assuming that's the only income you have during early retirement.


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## Big Kahuna (Apr 30, 2018)

IMO the big thing here is how easy it is for anyone to not work if you are like this guy and able to live happily on 30 grand a year-IMO most people miss that side of the equation-having enough money is just as much about how much you need as opposed to how much you have.


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## robfordlives (Sep 18, 2014)

Thanks for all the replies. The consensus seems to be to take some off the table. I have not done so because when I think about asset allocations I come at it from a maximum tolerable loss perspective.

Let's say at 70% equity exposure, a 40% drop in markets would yield a $364,000 loss which at $40K per year spend would leave me in the ballpark of a 4% withdrawal rate and still be OK with x number of years of work ahead of me to recover.

At a 55% equity exposure, a 40% drop would yield a $286,000 loss

The difference is about $100,000 which would take a year extra at work to recuperate from (assuming it is not made up in the markets). This has been my thinking but looking at this on paper versus actually experiencing these losses are two totally different things.


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## robfordlives (Sep 18, 2014)

Big Kahuna said:


> IMO the big thing here is how easy it is for anyone to not work if you are like this guy and able to live happily on 30 grand a year-IMO most people miss that side of the equation-having enough money is just as much about how much you need as opposed to how much you have.


I know I can do it because have been doing it for about 15 years and do not feel deprived at all. We take 2 vacations per year, drive newer cars, etc. Things I don't care about are fancy clothes (Goodwill works for me!), electronics, $100+ cell phone plans, etc. We make it work.

I'm aiming for $40K....$30K is the bare bones pull back in a depression type of scenario but I'd probably just go work at a McJob to bridge that gap


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## james4beach (Nov 15, 2012)

robfordlives said:


> Thanks for all the replies. The consensus seems to be to take some off the table. I have not done so because when I think about asset allocations I come at it from a maximum tolerable loss perspective.


Personally I use -60% as my stock risk scenario. The -50% drops have happened twice in the last few years.

Also, you may want to consider that economic conditions that lead to stocks crashing could also impact your employment. In my case, there has been a strong correlation. My small business income practically went to $0 right around the 2008 crisis.


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## Big Kahuna (Apr 30, 2018)

robfordlives said:


> I know I can do it because have been doing it for about 15 years and do not feel deprived at all. We take 2 vacations per year, drive newer cars, etc. Things I don't care about are fancy clothes (Goodwill works for me!), electronics, $100+ cell phone plans, etc. We make it work.
> 
> I'm aiming for $40K....$30K is the bare bones pull back in a depression type of scenario but I'd probably just go work at a McJob to bridge that gap


My guess would be most people on this forum would need about 80 a year so you only need 50% as much capital-big advantage for you.


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## My Own Advisor (Sep 24, 2012)

Yes, I believe, you have won  Well done.

If you already have a 70/30 split, I think that's sufficient to ride out bad markets with some FI. There are some investors I know who are into their 70s and remain 100% equities. 

Personally, I couldn't do that so I'm inclined to have a good cash wedge, i.e., 1-2 years in cash savings to ride out any major market storm....but otherwise - back to you - you are absolutely "solid" in another 7 years given your planned expenses with 70/30.

I would see no reason to continue working when eventually you have $2M in the bank, a paid off home, 1-2 years in cash for emergencies when your expenses are only $40k or so per year. If you want to work, fine. But, you are trending to be easily set for the rest of your life. 

Inflation shouldn't really affect you given what your expenses are vs. your assets. Anyone that can largely live off dividends/distributions and not touch their capital at all shouldn't have to worry about inflation since 3-4% real returns could be expected from the portfolio to cover inflation and another 3-4% could be used to live off dividends. Worse case, you start eating into your $2M in capital.

Boohoo!


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## AltaRed (Jun 8, 2009)

All good stuff BUT I would challenge anyone who says they are perfectly 'okay' living off $40k (real) in retirement. There are many hours to fill during retirement. What do you do with them?

When I first retired in 2006, my expenses were about $40-45k for the first few years until I dealt with a divorce and established a pattern for myself, both financially and from a 'living' perspective. Finances became very good notwithstanding the financial crisis, and the portfolio has allowed me to ramp up spending into the $120-150k range. Trust me: If withdrawal plans* allow one to spend more, spend more. Remaining life gets shorter every year.

* Plan initially was in the range of a 60/40 equity/FI split BUT the driving factor was much like MOA. Keep enough in fixed income to manage cash flow needs through the crises without having to sell equity prematurely. Keep the rest in equities. 12 years after retirement (69 years of age), I am now about 85/15 equity/fixed income BECAUSE equity markets have been exceptional and that portion of the portfolio has grown while I keep my FI reserve constant. If markets keep going up, the 85% will continue to grow (and also vice versa). IOW, my focus is on keeping my FI lifeline in place, and the rest takes care of itself. P.S. I use a variant of VPW methodology.


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## Big Kahuna (Apr 30, 2018)

AltaRed said:


> All good stuff BUT I would challenge anyone who says they are perfectly 'okay' living off $40k (real) in retirement. There are many hours to fill during retirement. What do you do with them?
> 
> When I first retired in 2006, my expenses were about $40-45k for the first few years until I dealt with a divorce and established a pattern for myself, both financially and from a 'living' perspective. Finances became very good notwithstanding the financial crisis, and the portfolio has allowed me to ramp up spending into the $120-150k range. Trust me: If withdrawal plans* allow one to spend more, spend more. Remaining life gets shorter every year.
> 
> * Plan initially was in the range of a 60/40 equity/FI split BUT the driving factor was much like MOA. Keep enough in fixed income to manage cash flow needs through the crises without having to sell equity prematurely. Keep the rest in equities. 12 years after retirement (69 years of age), I am now about 85/15 equity/fixed income BECAUSE equity markets have been exceptional and that portion of the portfolio has grown while I keep my FI reserve constant. If markets keep going up, the 85% will continue to grow (and also vice versa). IOW, my focus is on keeping my FI lifeline in place, and the rest takes care of itself. P.S. I use a variant of VPW methodology.


I have met these people-they are not like you-as for this guy being "okay" with his frugal lifestyle, he is probably happier than you are-he isn't the one attacking other people's lifestyles.


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## Pluto (Sep 12, 2013)

I don't really know why bonds are considered safe. I had bonds and when rates went up, the bonds fell. In the meantime the pittance I got in income was lower than inflation after tax. So I sold them at a loss, and bought all stocks. My income went up and my taxes went down. I'm not really concerned about bear markets. They are buying opportunities, not permament losses. 

Too, I don't see investing as playing a game, so I don't see a reason to stop. Its risky to stop.


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## AltaRed (Jun 8, 2009)

When one is in withdrawal phase, having a safety net of fixed income is critical to avoid tapping into equities in a bear market to supplement one's cash flow needs. It can be done with a GIC ladder or a bond ladder (I am not fond of bond funds). Investment grade bonds will return their par value when they mature. The key is not to sell before maturity.


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## Longtimeago (Aug 8, 2018)

When I retired in my early 40s robfordlives, it was the best day of my life up to that point. Every day since has been a better day. From my perspective, the sooner the better.

People writing about your 40s being too soon or asking, 'what will you do with yourself' etc. are simply 'conjecturing'. That's a good word which actually means, 'to form an opinion or supposition on the basis of incomplete information.' The only people that have any knowledge of retiring in your 40s, are those who have done it. When someone is a member of the 'working class' meaning (no disrespect intended) anyone who needs to work to eat, they cannot see what it is like to be a member of the 'leisure class' meaning anyone who does not need to work to eat. As the saying I like goes, 'you can't see here from there.' I'm here, they're there. If anything, the only thing I wish I had done differently is found a way to retire sooner.

The real elephant in the room whenever anyone asks about 'am I ready' or 'should I pull the plug now' etc. is the fear of failing. That is, 'will I end up a pauper living in a ward bed in a government care home?' The fact is that no one can guarantee that won't happen and I don't care what investment advice someone follows to try and avoid it. So you either accept whatever risk you perceive your plan has or you keep working till you no longer physically can and then have the decision forced on you.

My own response to 'what if' is that what matters is not where I end up but what I *did* on the way there. What I have had the opportunity to do between my first day of retirement and now is what matters to me and nothing else. While someone was continuing to work that 'one more year', I was hiking in the Swiss Alps and living life. No matter how much money someone earns in 'one more year', they cannot have the year of living life that I had in that same year. You can't bank time.


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## Eder (Feb 16, 2011)

I have several friends in their mid 60's that would still rather grind out more work days than come on a sailing vacation for the price of a plane ticket. I also have one friend that just sold his house last year in Richmond for 2.5 mill...downsized to Westbank,BC and now flies to Cuba when he runs out of cigars.


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## milhouse (Nov 16, 2016)

robfordlives said:


> I'm aiming for $40K....$30K is the bare bones pull back in a depression type of scenario but I'd probably just go work at a McJob to bridge that gap


IMO, I do not doubt that most early retirees will be able to make their retirement work even with bumps in the road because of their ability to mange their cashflow. 
However, I would caution however, that if things really go to hell that it would be easy to get a job as a backup plan. There would likely be significant competition for low skilled jobs due to high unemployment and for skilled jobs, you would have needed to keep your certs and skills up to date.


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## milhouse (Nov 16, 2016)

Eder said:


> I have several friends in their mid 60's that would still rather grind out more work days than come on a sailing vacation for the price of a plane ticket. I also have one friend that just sold his house last year in Richmond for 2.5 mill...downsized to Westbank,BC and now flies to Cuba when he runs out of cigars.


We can debate retire earlier versus one more day ad nauseam because it's so personalized. 
What if you already love your current job? What if you like your job and have a good work environment but have other interests that you are more passionate about? What if you hate your job? What if the majority of things that fulfill you don't cost a lot of money? What if a high degree of financial security is most paramount to you so you don't have to worry about returns and yields? What if genetically, you have a high risk of illnesses?


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## canew90 (Jul 13, 2016)

We're fully retired in our 70's, actually now closer to 80 and our portfolio is fixed at 12 DG stocks. Those stocks generate over $100k of dividends and they continue to increase their dividend each year. Certainly nothing is guaranteed but their history suggests they will continue to pay and raise the div. Why would we change our holdings if they continue as they have just because we don't need more income? We do hold $100k in cash and spend between $55k to $65k/yr. We don't worry about market corrections and would never consider bonds, gic's or any other fixed income as it would seem like taking a pay cut.


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## james4beach (Nov 15, 2012)

Wow! In many provinces, eligible dividends will be minimally taxed as well.

But I'd imagine you have a huge amount of capital to be able to spin off 100K of dividends. With that amount of capital, you could use pretty much _any_ withdrawal method 

Make sure you reinvest any dividends you don't use, as taking the dividends as cash is equivalent to selling equity.


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## agent99 (Sep 11, 2013)

james4beach said:


> Wow! In many provinces, eligible dividends will be minimally taxed as well.


It depends on whether those dividends are earned in registered or unregistered accounts. If like many retirees, Canew90 has part of their holdings in RRIFs, required withdrawals are taxed as regular income. Perhaps that is why spending is only $55-$65k vs $100k earned?


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## canew90 (Jul 13, 2016)

agent99 said:


> It depends on whether those dividends are earned in registered or unregistered accounts. If like many retirees, Canew90 has part of their holdings in RRIFs, required withdrawals are taxed as regular income. Perhaps that is why spending is only $55-$65k vs $100k earned?


We hold DG stocks in all our accounts. CPP/OAS provide $31k so we only need a portion of our dividends to cover other expenses. We draw $15k of dividends from Non-reg during the year and a portion of RRIF withdrawal if needed to keep our cash balance up. Rest goes to TFSA and Non Reg In Kind. Under 2Mil to generate over $100k, as the div increases, re-investments and lucky buys during 2009/2010 increased our yield.


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## Mukhang pera (Feb 26, 2016)

MY NEXT LIFE by George Carlin

I want to live my next life backwards:

You start out dead and get that out of the way.

Then you wake up in a nursing home feeling better every day

Then you get kicked out for being too healthy, enjoy your
retirement and collect your pension.

Then when you start work, you get a gold watch on your first day.

You work 40 years until you're too young to work.

You get ready for High School: drink alcohol, party, and you're
generally promiscuous.

Then you go to primary school, you become a kid, you play, and
you have no responsibilities.

Then you become a baby, and then... you spend your last 9 months
floating peacefully in spa-like conditions - central heating, room service
on tap, and then... you finish off as an orgasm.

I rest my case.


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## Dilbert (Nov 20, 2016)

Hilarious MP!


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## ian (Jun 18, 2016)

Simply because we are retired and financially secure is not a reason for us to stop increasing or protecting our equity.

Apart from protecting our resources from inflation we want to pass some of them off to others. We are conservative investors however we are certainly nott stuck in the 100 percent fixed income route. Short term bonds have been very good to us, as have foreign equities. We know enough to know what we don't know so we have engaged a fee for service FA. So far we have been very satisfies with the results, net of fees.


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## AltaRed (Jun 8, 2009)

The bottom line though is you have to be accepting of perhaps a 30% decline in your investable assets during an angry bear market. Take a look at this image https://postimg.cc/image/i0fq66hkd/ posted by Irwin in FWF. Is everyone ready for that at age 75 or so?


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## Longtimeago (Aug 8, 2018)

ian said:


> Simply because we are retired and financially secure is not a reason for us to stop increasing or protecting our equity.
> 
> Apart from protecting our resources from inflation we want to pass some of them off to others. We are conservative investors however we are certainly nott stuck in the 100 percent fixed income route. Short term bonds have been very good to us, as have foreign equities. We know enough to know what we don't know so we have engaged a fee for service FA. So far we have been very satisfies with the results, net of fees.


We all have our own ways of seeing things. I have not gambled on the stock market since October 19, 1987 which you may recall was a Monday and became known as 'Black Monday' because on that day the market had it's single biggest drop in history, 22% in one day. I lost 6 figures on that day and it took me an extra year of working to make it up. A year lost that cannot be gained back. That's when I decided that gambling was not for me and that I needed to find a way to provide the income I wanted that was safe (capital as near as risk free as posssible), inflation proof and did not require any day to day attention from me. I chose bricks and mortar.

When I retired, I gave my children their inheritance then and told them not to expect anything else on my death. My ambition is to spend my last dollar on my last day if I can figure out a way to do so. I'm still working on that idea. I sure as heck don't want to leave anything to anyone if I can help it.

I do not believe in any kind of 'draw down' plan, I believe in 'Never touch the capital'. My other mantra if you will is 'Always pay cash'. ie. never have any debt. I haven't had any including a mortgage or car loan since I was 35. If I don't have the cash to buy something, I don't buy it. Paying interest is just not something I want to do, I want to earn interest. I find it hard to understand why something like 25% of Canadians go into retirement and still have a mortgage and/or are paying off their children's education they funded or their down payment on their first house the parents paid for them. 

I agree there is no reason to stop increasing your income or capital if you can do so without risking your existing income and capital. But the question is what will you do with the increase? I would like to increase it in order to spend it. ie. fly First Class instead of Business Class to Europe, etc.


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## crgf1k (Aug 8, 2015)

I retired over a year ago at 43, on a fraction of $40k/year and I love my life now. I almost have to pinch myself now that I can go out on the patio and drink coffee and read the news for 3 hours to start my day. It totally depends on your personality. Free time makes me happy. To some, free time makes them crazy. At my last job I worked with a few guys in their 60s who retired with $100k pensions, then came back to work on contract a few weeks later. That's mind boggling to me, just as my retirement would be to them. 

When it comes to asset allocation and withdrawal rates, wouldn't it make sense that you could offset a more aggressive asset allocation by using a more conservative SWR? The OP will only be spending 2% if he has $2M and is living on $40k/year.


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## ian (Jun 18, 2016)

We are at a point where a 30 percent drop in equity would not impact our lifestyle. We hopefully have another 20 years or more to go so a down market is not a concern. Our equity position is in for the longer term. We rode out the last two quite nicely to the point of buying equities at a low point and lowering our fixed income percentage. No different that what we do with the RESP fund that we have for our grandchildren.

It has taken us time to get used to spending more. This past winter we flew business to Singapore. First time that we had considered it but it was a 17 hr flight and well worth the extra cost to us. We plan to do more of it.


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## OnlyMyOpinion (Sep 1, 2013)

As you said LTA, we all have our own ways of seeing things. I don't equate share ownership in solid companies as gambling on the stock market, nor do I consider RE to be necessarily safer (having both ourselves).

I'd be interested what plan you come up with to 'have the last cheque bounce'. If you own bricks and mortar (i.e. not leveraged with mortgages) and 'never touch the capital', ISTM you are bound to die with assets to pass on, unless you plan to unwind them sometime before?

We've recently sold our RE (except PR) and like you are passing onto the kids now while they can better use it, rather than at our demise. In 8-9 yrs we should have passed on everything but our RRSP/RRIF accs which will be sufficient to see us to the end of the movie.


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## agent99 (Sep 11, 2013)

AltaRed said:


> The bottom line though is you have to be accepting of perhaps a 30% decline in your investable assets during an angry bear market. Take a look at this image https://postimg.cc/image/i0fq66hkd/ posted by Irwin in FWF. Is everyone ready for that at age 75 or so?


I was about 70 when that happened. Never got excited because CPP/OAS and dividends were not affected. Portfolio balance looks better now, but that doesn't change our standard or way of living.


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## agent99 (Sep 11, 2013)

canew90 said:


> We hold DG stocks in all our accounts. CPP/OAS provide $31k so we only need a portion of our dividends to cover other expenses. We draw $15k of dividends from Non-reg during the year and a portion of RRIF withdrawal if needed to keep our cash balance up. Rest goes to TFSA and Non Reg In Kind. Under 2Mil to generate over $100k, as the div increases, re-investments and lucky buys during 2009/2010 increased our yield.


We are pretty well in same ballpark. Except we have about 40% fixed income and pfds that on average yield as much as some of the DG stocks. That FI provides a nice cushion when things go South as in chart Alta posted.


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## peterk (May 16, 2010)

canew90 said:


> We hold DG stocks in all our accounts. *CPP/OAS provide $31k* so we only need a portion of our dividends to cover other expenses.
> .
> .
> .
> *Under 2Mil to generate over $100k*


Great example of our lovely OAS system :rolleyes2:

Perhaps you're providing your kids/grandkids/charity with a nice tax refund each year?


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## Mukhang pera (Feb 26, 2016)

Longtimeago said:


> We all have our own ways of seeing things.
> 
> ...
> 
> I find it hard to understand why something like 25% of Canadians go into retirement and still have a mortgage and/or are paying off their children's education they funded or their down payment on their first house the parents paid for them.


Agreed. We all have our own way of seeing things. That realization leaves me with no need to understand why anyone carries a mortgage in retirement or why they manage their affairs in marked departure from how I manage my own. They have their own way.

Take the mortgage thing. Some here own rental properties. Some believe those properties are worth more if "levered" (read "mortgaged") to buy more. A paid off rental property in the eyes of some is a waste. At least a wasted opportunity. Then there are some who see a paid off investment property as a blessing. On another forum I recently posted a page from a blogger whose thinking accords with my own. He wrote in one entry (back in 2014):

_Over the past few days, I attended a conference for wealth managers. I won’t lie: My intention was to meet the people tasked with managing assets for affluent investors, with the idea of convincing some of them to steer their clients my way. Turned out to be the wrong decision; these guys can get sued to kingdom-come for putting clients into private deals that go bad, so they’re very reluctant referrers.

But just because the conference wasn’t right for me doesn’t mean it wasn’t interesting. One of the things that kept coming up was the fear that many investors have of outliving their assets in retirement. This got me thinking about how income producing real estate fits into a retirement plan.

The cool thing about income producing real estate purchased with a mortgage is that it is effectively a tax-efficient vehicle for forced retirement savings. What do I mean? Consider the situation of someone who buys a small apartment building in her thirties:

• Say she puts down $200k on an $800k property with rents of $73k and net operating income of $45k (a 5.6% CAP).

• To finance the deal, she takes out a $600k mortgage with a standard 30 year amortization and a fixed interest rate.

• Say further than she does a reasonable, but not spectacular job managing the building. Each month, before she pays out any cashflow to herself, she makes the mortgage payment, reducing what she owes the bank. The interest on the payment is tax deductible. And the principal portion of the payment, which is taxable, is more than offset by the depreciationIn addition to retiring the mortgage little by little, the building spits out some cash each year.

Here’s what happens to our investor as she is hitting retirement age in her 60s:

• The building pays off its own mortgage 30 years after the acquisition.

• The investor now owns an asset which is worth whatever 2044’s equivalent of $800k is (assuming it increases in value along with inflation; she should do better if the property is well-chosen) – whatever else she did with her money during her life, she has a big asset free and clear.

• Assuming rent and expenses grew at the same rate as inflation, once the mortgage is repaid, she’ll have an income of 2044’s equivalent of $45k/year.

Whatever else our investor did with her finances during her life, she’s going into retirement with an income of $45k / year and an asset worth $800k. That doesn’t make her rich, by any means, but it does make her self-sufficient, particularly coupled with her government-provided healthcare (Medicare) and income support (Social Security). Can you rely on just one apartment building to see you through retirement? That’s probably a bad idea. But, if you manage to get 1-2 of these deals done in your thirties plus behave reasonably responsibly over-all, you’re going to end up just fine.
_

No one on that forum commented on that post and I expect the same here. The kind of thinking reflected in the above comment about a 30-something real estate investor is not at all common and few would agree with it. On cmf, I would expect that 30-something investor to be advised to put her $200k into dividend-producing stocks and by age 65 she'll have a portfolio worth millions paying dividends in an amount impossible to spend. Nothing wrong with that, I am sure, but for for me. It would not suit my temperament. As Longtimeago observes, we all have our own ways of seeing things. 

Getting back to LTA's observation about carrying mortgages into retirement, I too care not to do so. But I can understand those who do. I am not referring to some who have not managed their finances well and who have no choice. But one fellow I know almost brags about being age 70 with a mortgage of about $300,000 at 3.5% or thereabouts. His comment? "If the day comes when I cannot invest that money for a far greater rate of return than 3.5%, then I'll pay it off." Hard to argue with that. Similarly, hard to argue with those who choose to keep rental properties "leveraged" even after the owner is in retirement. If they have all the cash they want coming in, why care about an outstanding mortgage?


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## AltaRed (Jun 8, 2009)

I agree everyone has their own way of doing things. That said, those with investment/business complexities do leave a mess for their POA to manage and/or ultimately their Executor. If I ever became a POA or Executor of those kinds of investment interests, I'd hire it all out to have all of it unwound.


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## canew90 (Jul 13, 2016)

peterk said:


> Great example of our lovely OAS system :rolleyes2:
> 
> Perhaps you're providing your kids/grandkids/charity with a nice tax refund each year?


Both grandkids have DRIP accounts and we add to their shares. For the kids we provide TFSA funds to buy shares of their choice.


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## james4beach (Nov 15, 2012)

What if stocks drop 30% and then stay low for 10 or 15 years? Is everyone OK with that? We could have 15 years with 0% real return in stocks.


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## Mukhang pera (Feb 26, 2016)

james4beach said:


> What if stocks drop 30% and then stay low for 10 or 15 years? Is everyone OK with that? We could have 15 years with 0% real return in stocks.


Okay by me.


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## AltaRed (Jun 8, 2009)

james4beach said:


> What if stocks drop 30% and then stay low for 10 or 15 years? Is everyone OK with that? We could have 15 years with 0% real return in stocks.


That is indeed a risk, but for some investors, it is important to put this in context.... For those who have really won the game, there are 2 ways to look at this: Do you stop playing when you have won the game? Or do you keep playing because a 30% slash and burn may not actually affect one's proposed lifestyle going forward?

I am 85% equities at the current time. I could handle a 25% whack (30% of 85%) to my investable net worth and not really change my lifestyle much... on the assumption my investment income dividends don't also get whacked by 30% (highly unlikely).


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## ian (Jun 18, 2016)

There is another issue. You cannot stop being 'you'. 

I am certain that like others on this forum, I enjoy numbers. I liked hitting them and exceeding them in my business life and in my personal life. That lifetime of goals, business and personal, make it very different to hang it all up and walk away. It becomes part of you. That is not to say that you cannot and should not take less risk exposure and spend more but it does not mean that you walk away.

Always good to keep your hand in so to speak and focus on the numbers. Even if they are all good. We are in our mid sixties sitting today at about 58 percent equity. I expect that that ratio will always be between 40 and 60 over the next ten years. Does not mean that we are not prudent, that we do not understand the downside risk. In fact we acknowledge it and act accordingly. It is one reason why we have a very capable fee for service financial adviser. We value his opinion and we listen to him.

It is one thing to be a prudent steward of your family resources but really, one cannot live one's life by envisioning an infinite number of 'what ifs'. You have to get on with living your life. Besides, it is a challenge to pass up an opportunity when it passes through your line of sight.


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## Big Kahuna (Apr 30, 2018)

james4beach said:


> What if stocks drop 30% and then stay low for 10 or 15 years? Is everyone OK with that? We could have 15 years with 0% real return in stocks.


What if the equity markets triple over the next 15 years? IMO a conservative approach is to look at your investments and assume 0% real capital gains going forward-if you are OK with that scenario then IMO likely you will be OK-you can't be set up for every worst case scenario (what if you get hit by a bus tomorrow?).


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## canew90 (Jul 13, 2016)

james4beach said:


> What if stocks drop 30% and then stay low for 10 or 15 years? Is everyone OK with that? We could have 15 years with 0% real return in stocks.


As long as our dividends hold I'd not complain. My re-investments would purchase more shares and further increase our income.


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## agent99 (Sep 11, 2013)

james4beach said:


> What if stocks drop 30% and then stay low for 10 or 15 years? Is everyone OK with that? We could have 15 years with 0% real return in stocks.


You could just as easily get run over by a bus tomorrow. 

If there was no growth in equities, then there would possibly also be zero inflation. So where is the problem then? Growth in stocks is not a requirement. Providing investors return in form of dividends is.


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## james4beach (Nov 15, 2012)

I think the scenario I described is (historically) pretty likely. Some of you are making it sound like I'm describing an outlandishly unlikely scenario. But take a look at stock returns from the 1999/2000 peak onwards. I believe that until about 2012, maybe even 2014, performance was about 0% real return. Now that we're so far into a bull market it's easy to forget how badly stocks had performed.

In that time period, Canadian dividends remained steady, whereas US dividends declined somewhat at the worst times of the bear.


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## Just a Guy (Mar 27, 2012)

As long as governments continue to overspend, then legislate income increases, you'll never get zero inflation in reality. Math and economics don't work that way. You spend more than you owe, your "value" becomes lower, you're riskier than people who can pay their debts and aren't in debt. 

As for "retirement" it doesn't have to be an "all or nothing" decision. I've been "retired" for a long time, but I continue to own companies, invest once in a while (usually when something bad happens) and buy real estate. I probably "work" only a couple hours a week, but it's still work. The rest is basically more of a hobby these days and some oversight. 

My net worth and cash flow continues to increase every year, but most of it is automated processes. You can do what you want and still "work" to some extent. As I said before, I like the game of investing, so that's why I do it, I don't have to and could stop at any time.

There are also many other ways to make money...timber sales, owning a franchise, etc. It's not all stock market.


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## AltaRed (Jun 8, 2009)

james4beach said:


> I think the scenario I described is (historically) pretty likely. Some of you are making it sound like I'm describing an outlandishly unlikely scenario.


I don't see any strong responses that are poo-pooing the possibility of what you suggest. What you are hearing from some of us is we don't see any material impact on our lifestyles should such an event occur. That is because we have more than enough, not having stopped playing the game when we first won (or looked at another way, not stopping until we won big). Those of us with large equity allocations are not necessarily reckless at all.


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## Just a Guy (Mar 27, 2012)

I think there are also those of us who are truly diversified. Not just diversified in stocks. Also, some of us plan for the correction to come, that's part of what made us successful. 

You can get rich by throwing darts at a list of stocks, it's been proven but that doesn't make it a good strategy. Strategy is about a plan for the future as well as the present.

For example, I stayed out of the .com bull because I worked in the industry and thought the valuations stupid. I missed out on making a lot of money with my more traditional, companies who actually make money value investing strategy. Of course I also didn't lose my shirt in the dot bomb which hit when other people figured out reality. I just made steady profits through the entire time while people said I was stupid.

Many people thought I was foolish buying real estate because of all the horror stories. I think buying $400k properties which don't cash flow to be foolish as I expect a correction in real estate some day (don't ask me when, but the math doesn't support these prices, eventually it should correct). I've been told I don't know what I'm talking about because real estate has been on a 20+ year bull. 

Corrections aren't new, or unexpected. Many today haven't lived through a real bear...those of us who have, or at least read about them plan for them I think.


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## Longtimeago (Aug 8, 2018)

Mukhang pera said:


> Agreed. We all have our own way of seeing things. That realization leaves me with no need to understand why anyone carries a mortgage in retirement or why they manage their affairs in marked departure from how I manage my own. They have their own way.
> 
> Take the mortgage thing. Some here own rental properties. Some believe those properties are worth more if "levered" (read "mortgaged") to buy more. A paid off rental property in the eyes of some is a waste. At least a wasted opportunity. Then there are some who see a paid off investment property as a blessing. On another forum I recently posted a page from a blogger whose thinking accords with my own. He wrote in one entry (back in 2014):
> 
> ...


A couple of comments. First, I differentiate between a mortgage on your principal residence and 'leverage' in investment properties. I think I also may not have made it clear that when I say, 'never touch the capital', that means capital acquired from an investment, not other people's money (the bank's) that is invested for my benefit and leveraged. I guess I need to clarify that.

I'll use your example Mukhang pera since it is quite close actually. I began 'investing' in bricks and mortar in my 30s, as in your example. The difference is, I did not invest in residential property and I did not put up any capital at all. 

Not everyone has the same opportunities as everyone else, that's just an unfortunate fact of life. I was fortunate to have an 'in' that gave me access to joining a group of international investors who bought and sold large commercial and industrial properties. So for example, a building is bought for $100 million and a week, a month or a year later, 'flipped' for $120 million. So in simple terms, a 20% profit within a year.

The key of course is that someone must find an undervalued property with that potential to flip it and someone must be prepared to invest in buying that property and assuming the possible risk of not managing to flip it at a profit. There is always some risk but not necessarily a lot of risk. It all depends on finding the right property. Like anything else, there are people/companies that specialize in finding them. That is where I happened to have an 'in'.

So a property is identified and bought by a group of investors for $100M. I used a personal line of credit (no security) to buy $1M of that property with a $250k investment (but not my money, it's the bank's money). I made interest only payments on that $250k from my 'normal job' income until the building was sold and then paid the balance off. The building sells for $120M within a year and so my share is $200k cash in hand. From that I need to deduct the interest paid on the LOC and that determines my net profit. 

The first couple of times, I did not take any 'profit' for myself but instead used the cash as 'seed money' for the next property until I no longer needed to use any LOC funds to buy in on a property. Once I had 'investment funds' of around $500k after the first couple of years, I began taking profit from each transaction and adding them to my capital. The only risk I ever had was having to pay on the LOC if the first few properties didn't sell. I did not see myself as 'risking' the money I put in as I did not see that money as being MY money. Yes I know we could argue that perception.

Not all properties were bought with the intention of selling. Some were bought based on location etc. as long term investments. On those properties, the money I put in came from the first 'flipped' properties. Again, I did not consider that as 'my capital' although I know we could argue that point. I considered it 'investment funds' that came from 'other people's (the bank) money.' I was setting aside 25% of my profits from flipped properties, that was my capital never to be touched. The long term properties returned the more or less standard 4% ROI. When that gave me enough income to retire on, that's what I did.

Eventually, all the properties I bought into were sold, my 1 or 2% did not give me a voice in those decisions obviously. I just took my share after each sale and dumped it in the bank (simplified). I no longer have a share in any bricks and mortar other than my home (bought for cash). But bricks and mortar is how I financed my retirement. When I bought in to the first property using my LOC, I was renting an apartment in the city, had only a few thousand cash in the bank and no other assets. From little seeds, big things grow. In my case, I didn't even own the seed, the bank did. LOL


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## Longtimeago (Aug 8, 2018)

For those who are perhaps wondering how likely it is for a property to be bought and flipped for a significant percentage profit, I can assure you it happens every day and perhaps in about the same percentage of cases as it does with simple house flips. I certainly saw dozens of buildings being flipped while I was involved.

I'm sure we are all aware of people who buy and flip houses and do quite well from it. The only difference is in being in a position to buy and flip $100 million properties instead of $500k properties. You just need enough 'seed' money.


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## sags (May 15, 2010)

What I am wondering is that you said you were renting an apartment, had a couple thousand dollars in the bank, and no other assets......and the bank gave you a $250,000 unsecured credit line ?


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## Just a Guy (Mar 27, 2012)

Longtimeago, 

Don't keep banging your head against the wall...I've been having this same arguement with the same people for years. They can't even comprehend the strategy you're using (very similar to the one I employ to buy residential properties all the time). Since they never did it themselves, they think it can't be done. I'm surprised they haven't accused you of being me with an alternative login ID by now. They'll certainly think you're a liar, just trying to get "respect" on an anonymous message forum (as if that makes any sense). 

Everything you've done, I've seen done by others. I know people who've flipped residential properties for over double what they paid for them in less than a year, I personally buy undervalued properties and rent them out for huge (relatively speaking and in this current market) cash flow with none of my own money involved. There are a couple of others here doing the same thing, but they keep their heads down because otherwise they get flamed. 

If you want to talk seriously, I'd suggest figuring out the ones who are real investors with real knowledge can PM them. It'll avoid all the attack postings.

P.S. Never use any "generalities" or words like "never" around mukhang. He's a lawyer and will pounce on words like that to prove your whole comcept wrong even though anyone else would know your intention wasn't meant to be that literal. He also doesn't believe your strategy is even possible since he hasn't done it himself.


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## AltaRed (Jun 8, 2009)

Maybe it is time to stop talking RE in mostly a stock forum? It is the same repetitive stuff over and over again. 

Few people would margin their investment accounts like RE investors leverage RE to begin with. RE speculators can flame out just as easy in a RE crisis. There are well known 'big' RE developers who flamed out time and time again when the market went against the highly leveraged. Small time flippers and speculators too in places like Calgary, Toronto, Vancouver.


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## Just a Guy (Mar 27, 2012)

Funny, the title of the forum is Canadian money forum, not Canadian stock forum. 

I would think people giving advice on other ways to make money would be encouraged. Especially when people who invest in stocks generally thing "diversification" in stocks means buying different kinds of stocks.

To me, diversification means owning businesses, stocks, real estate, bonds, and other sources of income which take up the slack when one market (like the stock market) goes south. 

Just because you don't like one form of investing doesn't mean it's bad. I know more people who get wiped out in the stock market than I do in real estate, but that's because few people jump into real estate "at any price". It does take some thought. Most stock investors I know either give their money to someone else to manage (and then pat themselves on the back for being an investor until things go south) or they gamble on things they don't understand (bitcoin anyone, how about marijuana stocks, maybe that latest internet stock that has less than expected losses). 

As for being repetitive, I don't see much variation in any stock conversation either. 

The other day, however, our mukhang brought up the idea of timber sales on the other forum. It came up in one of his usual flaming attacks on real estate, and he quickly tried to dismiss it as no one else would be interested in the subject...turns out he was wrong about that. 

Not only was someone else interested, but I even passed on the idea to a couple of other people I know. He just showed several people how to make tens of thousands of dollars on something they hadn't thought about. All becaus of a real estate discussion. Something new, done differently and not sticks. People were sitting on assets they didn't know how to tap.


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## Beaver101 (Nov 14, 2011)

Just a Guy said:


> Longtimeago,
> 
> Don't keep banging your head against the wall...I've been having this same arguement with the same people for years. They can't even comprehend the strategy you're using (very similar to the one I employ to buy residential properties all the time). Since they never did it themselves, they think it can't be done. I'm surprised they haven't accused you of being me with an alternative login ID by now. They'll certainly think you're a liar, just trying to get "respect" on an anonymous message forum (as if that makes any sense).
> 
> ...


 ... if it was so easy, every Dick, Harry and Joe in this country will be at it. Just like the stock market. 

Btw, lushing/flipping for those profits $$$$, don't forget about the tax authorities wanting their fair share, eventually.


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## sags (May 15, 2010)

Yea........just put me down in the same line of skeptics as Mukhang.


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## Just a Guy (Mar 27, 2012)

No one said it was easy, I just said it's possible and that many people who don't do it seem to think no one else can either. 

Oh, and real estate is really good at tax deferral. Meaning you can use all the money you earn to make even more money. Yes, your tax bill will be huge when you sell...but you also don't need to sell. Leverage and tax deferrals are very powerful tools to increase your net worth. People happy with single digit returns can stick to stocks and bonds and market volatility.

If you do real estate investing correctly, you tend to have a lot more control over your success. 

Personally I don't like flipping houses, it doesn't mean I don't know people who do it well and successfully. Same with day traders, angel investors, franchise owners, etc. Just because I don't do it, doesn't mean other aren't doing it successfully.


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## Beaver101 (Nov 14, 2011)

^ You made it sound like it's easy, just like playing the stocks market now adays. And making easy money is what people is looking for these days. I think playing the RE is a trend past unless you know buying where to buy a dollar property (that you probably know) guarantees a future profit. You're an exception and how many of us are not of the norm? 

Re your second pointer - how does RE being a good tax deferral mechanism morp into leveraging? The first one eventually have to pay the piper unless you can take them with you. And with leveraging, don't disagree it can be a great tool - using OPM to make more money until you can't pay or don't know precisely what you're doing - this is a double-edged sword.

I don't disagree that others can't make money successfully in whatever they excel (like a friend who kept flipping condos until the taxman came calling- game over) but don't make it sound like playing the RE market so easy just as the stock markets. You take your chances.


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## AltaRed (Jun 8, 2009)

Just a Guy said:


> Funny, the title of the forum is Canadian money forum, not Canadian stock forum.
> 
> I would think people giving advice on other ways to make money would be encouraged. Especially when people who invest in stocks generally thing "diversification" in stocks means buying different kinds of stocks.


Yes, but I was responding to your complaints. If the majority of CMF are not agreeing or responding favorably to your RE posts and you don't like it, you are free to leave. I am sure there are blogs/forums that cater primarily to RE investors.

Added: RE is a very illiquid business. Few people have the inclination or the time to pursue it, and contrary to what you might think, I suspect a larger percentage of folk flame out in RE investing than they do in capital markets generally (that being stocks, bonds, and other financial instruments). I know many people who have an investment property or two, but it is more of a side game to their primary focus. If I want RE, I will own a CAR.UN or similar..


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## Just a Guy (Mar 27, 2012)

I'm not here for the people who fear alternative investments, I generally post for the silent majority who are reading but not posting to show that there are other ways to make money...even if people who've never tried any other way think it's impossible, mainly because they were too afraid to try. As I said, may people use PM because they are afraid of being flamed...I'm willing to take the heat because I think it's important for people to build their own wealth instead of relying on others.


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## Longtimeago (Aug 8, 2018)

sags said:


> What I am wondering is that you said you were renting an apartment, had a couple thousand dollars in the bank, and no other assets......and the bank gave you a $250,000 unsecured credit line ?


What is hard to understand about that sags. Like many people, I was spending as much as I earned. I also happened to be earning an above average amount. In other words, I was living 'high on the hog'. I wasn't saving, I wasn't investing, I was spending it all. The bank looked at my income vs. my debts of which I had none at all other than my living costs. That left a considerable disposable income of which I was 'disposing'. LOL.


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## Just a Guy (Mar 27, 2012)

Beaver101 said:


> ^ You made it sound like it's easy, just like playing the stocks market now adays. And making easy money is what people is looking for these days. I think playing the RE is a trend past unless you know buying where to buy a dollar property (that you probably know) guarantees a future profit. You're an exception and how many of us are not of the norm?
> 
> Re your second pointer - how does RE being a good tax deferral mechanism morp into leveraging? The first one eventually have to pay the piper unless you can take them with you. And with leveraging, don't disagree it can be a great tool - using OPM to make more money until you can't pay or don't know precisely what you're doing - this is a double-edged sword.
> 
> I don't disagree that others can't make money successfully in whatever they excel (like a friend who kept flipping condos until the taxman came calling- game over) but don't make it sound like playing the RE market so easy just as the stock markets. You take your chances.


I don't think, if you ever actually read my postings, that I've said it was easy. I've talked against may posting where people propose buying a $500k place and renting it for $2000/month for example. I've often said there aren't many places available which make financial sense in this market, but that doesn't mean there are none.

I've often spoken of the dangers of overpaying, of the coming downturn in the market (when I don't know, but as interest rates rise it'll happen eventually). 

In some ways however, it is easy for me, but I've been doing it a long time, I have a system (something which I've said is important over and over, I've also referred people to a good beginner book on how they could do it...I know it's good advice because it's similar to what I do, what mr. Matt does and what this latest poster (sorry longtimeago I had to look up your username) has done). I'm sure we're not the only 4 people in Canada doing something similar...there is no secret to get rich scam going on, it's a process that works. Buy an undervalued property, rent it, don't blow the money on toys, save it for the rainy days and make sure it'll cash flow in a down economy. I'm willing to put the work in to find those kinds of places. 

You can't do that with the stock market. I can't find someone going through a divorce and buy heir apple stock today for $100, they'll just go online and sell it for $217 with a click of a button.

As for how tax deferrals lead into leverage...you clearly don't understand real estate or investment tools. It's not one thing leading into another, they are two different tools available to you as a real estate investor. Same as in stocks, you can use an RRSP to defer your taxes (we can talk about how this is quite the government scam in a different thread) and you can leverage money to put into the RRSP if you wanted. 

The same can be done with real estate, but with less restrictions and better ways to pass on inheritance so you get better returns. There are also a lot of tax deductions available which benefit you personally which you can't get with stocks. 

As for your double edged sword, the debt, leverage, etc. is just a tool like a sword, if you know how to use it, you don't get hurt...you come into a room swinging away blindly and someone is likely to get hurt. You don't blame the tool, it's the idiot swinging it. 

I don't advocate gambling in any form of investing, the problem that I see is too many "investors" think they're investors, but, in reality, have no clue as to what they are doing and are really gamblers. The problem with gamblers is, if they have a little success, they then start thinking their "experts". In a rising market (and we've had almost two decades of a rising market in both stocks and real estate) it's easy to make money. People like me however, still remember the recessions as well...that's always in the back of my mind on every investment I make. I don't gamble, I don't get into being over leveraged, and I probably have missed out on many money making opportunities because I'm very conservative about my investments.

There is a big difference between buying a $500k property which makes $2000/month and a $65k property which makes $1200/month. The first is easy to lose money with, the second is much harder.


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## Longtimeago (Aug 8, 2018)

AltaRed said:


> Maybe it is time to stop talking RE in mostly a stock forum? It is the same repetitive stuff over and over again.
> 
> Few people would margin their investment accounts like RE investors leverage RE to begin with. RE speculators can flame out just as easy in a RE crisis. There are well known 'big' RE developers who flamed out time and time again when the market went against the highly leveraged. Small time flippers and speculators too in places like Calgary, Toronto, Vancouver.


There are no guarantees in this world AltaRed other than death and taxes as they say. Maybe you missed the large number of posts in forums such as this one and retirement forums where people were lamenting the crash of their 'portfolio' and having to go back to working for a living because their income from their portfolio of stocks would no longer support them and their only alternative would be to 'draw down' from their capital at an increase from their supposed 4% SWR (safe withdrawal rate). They wrote about it as if somehow it was anyone but themselves who was to blame. That was during and following the 2007-8 Great Recession.

You write as if there being risk in RE is an argument in favour of gambling on stocks. So what if someone could 'flame out' with an RE strategy? There is little point in saying that really unless you happen to believe there is less risk in buying stocks. Otherwise why bring it up? Regarding 'speculators' and 'flippers', do they not exist in the stock market as well? Do those who make bad choices not suffer the same in either? Even the so called 'Blue Chip' stocks tanked after 2007. I love some of the descriptions in the following link as to what their stocks would buy you. 

1 Citigroup stock = less than an item at the Dollar Store.
1 General Motors stock = less than a gallon of gas.
1 General Electric stock = less than 2 of their compact lightbulbs.
1 Office Depot stock = less than a box of paper clips.

https://www.nytimes.com/2009/03/06/business/economy/06shares.html

The assumption people make in times like those, is that they will be able to ride out the bad times but if someone is retired, it is a whole other story. This thread is not about stocks, it is about, 'if you have won the game stop playing', which makes it a thread about retiring and retirement strategies. There are more ways than 1 of getting there, real estate is just one way as is investing in stocks. 

There is no reason to suggest the forum is about stocks only, it isn't, it is the Canadian Money Forum. The word 'stock' is not in that name and this thread is posted under, 'General Personal Finance Talk'.


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## Longtimeago (Aug 8, 2018)

Just a Guy said:


> No one said it was easy, I just said it's possible and that many people who don't do it seem to think no one else can either.
> 
> Oh, and real estate is really good at tax deferral. Meaning you can use all the money you earn to make even more money. Yes, your tax bill will be huge when you sell...but you also don't need to sell. Leverage and tax deferrals are very powerful tools to increase your net worth. People happy with single digit returns can stick to stocks and bonds and market volatility.
> 
> ...


Should I take it that not many people here understand offshore banking and the advantages of being a 'non-resident for tax purposes'? Or how about simply registering a business and having all property held in the name of the business while you simply draw a minimal salary from that business. I started that way before eventually moving abroad and becoming 'non-resident'. At one point I actually managed to not be 'resident' in any country at all for a period of some years.


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## Longtimeago (Aug 8, 2018)

I do want to say that I differentiate between how to get to 'stop playing the game' as per this thread and what to do after you 'stop playing'. However you get to the point of being able to quit differs from what you may want to do after you have quit.

I find most people tend to continue to use the same strategy for both and I consider that a mistake. If you have made your FU money (look it up if you aren't familiar with the term) in stocks, real estate or baby diapers, doesn't matter. You got to the goal. But when you retire, the goal changes. The goal becomes to continue to have enough income regardless of any fluctuations in how you got there.

In other words, those people who used the stock market to get to the point where they figured they had enough capital invested to give them an income in retirement with perhaps a SWR also employed, then found themselves in trouble after the 2007 Recession, did not change the goal and relied in how they got there to continue in the future. When that no longer provided enough income, they had to go back to work to eat.

I managed to retire thanks to real estate but with about 4-5 years after retiring, I no longer had any connection to real estate other than my own home bought for cash. My strategy changed. I live on roughly 75% of my income and bank (simplified) the other 25%. So my capital continues to grow and my income continues to exceed my needs. Inflation is not an issue given that I continue to increase capital at a higher rate and even currency fluctuations which I have to think about, don't affect my needed income, only my 25% of bankable excess. In other words, my goal now is to keep my money as safe as possible and try to eliminate as much risk as possible. About the only thing that could force me to have to go out and earn bread money again would be a total collapse of the banking system world wide.


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## AltaRed (Jun 8, 2009)

Longtimeago said:


> There is no reason to suggest the forum is about stocks only, it isn't, it is the Canadian Money Forum. The word 'stock' is not in that name and this thread is posted under, 'General Personal Finance Talk'.


I agree that it is not. I am just suggesting certain folk stop complaining about why there is not a strong RE following. 

P.S. No "investor" would have flamed out in any stock market crisis if: 1) they were not leveraged with margin, 2) if they didn't panic and sell their investments, 3) if they were sufficiently diversified with a suitable asset allocation. Note that I used the term 'investor'. I have no sympathy for traders, flippers, or speculators in anything, including stocks. If they don't know what the risks are, and don't manage their leverage, they deserve to have their heads handed to them.

Added: I do agree with JAG that many people 'invest' their money in stocks or RE that have no business doing so without understanding what they are actually doing. Too many people look for product without understanding the basics of investment, i.e. a financial plan for whatever asset group they are interested in.


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## sags (May 15, 2010)

There are way too many holes in these real estate schemes. They all contain the same keywords.

Undervalued properties, appraise and remortgage, put cash in your pocket, positive cash flow...........etc.

These schemes are revived every time real estate prices rise and disappear when real estate prices go flat or fall.


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## Just a Guy (Mar 27, 2012)

Depends on how far you take them. If you abuse them, you'll get burned. Happens with everything. Doesn't mean you have to overextend yourself. Real estate, leverage, stocks, bonds, tax deferrals are just tools. They can enable you to do things or they can kill you. If you learn how to use a tool properly you have little to fear. Do you drive a car? Are you scared to? I know people who are, should we all avoid cars because some people won't learn to drive properly because they can die in a car?

There are ways to have very little risk. I don't buy properties over $100k in this market and my rents start at $1000/month in this market. That's hardly the same risk as people buying $500k properties and renting them for $1500-2k. Those people are likely to lose their shirts, I'm not. It's about choices, intelligent decisions and strategy.

Your strategy of working for a paycheque left you behind those of us who had a different strategy. You are now, typical of you paycheque people, complaining about how unfair life is...the rich got the money, they took the risks you were afraid of.

Why are you complaining about your lot in live if it's so successful? Why are you demanding money from people like me? You talk about scam and keywords, but you're spewing all the smart ones we hear from the poor and middle class all the time. Too risky, scam, can't be done, etc. The real problem is you we're too afraid and to lazy to do the work required to change. No one held you back except yourself. There is only one person who ever repressed you. 

By the way, I've been investing in real estate for decades, I'm still here, making money on each one I own. So they don't all disappear.


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## kcowan (Jul 1, 2010)

Sags, I think your wording of schemes seems to imply that there is a third party involved. That is not required just like a portfolio manager is optional. By using such words, you are attempting to strawman the topic. That is the lowest form of argument.


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## sags (May 15, 2010)

A unit listed in our city...........$59,000

This is one point of critical failure for the scheme. Cheap units don't rent for market rents and they don't cover the costs.

_Third floor, 1 bedroom unit. Tenant paying *674 per month *plus hydro. Includes heat and water. *Taxes are $476.16/yr and the condo fee is $288.85/month* which includes hot water, baseboard heating and water. _

After doing the math, there would be $16 left to pay for all the maintenance, repairs and bug infestations. Skipped tenants and police contact would be extra freebies.


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## Longtimeago (Aug 8, 2018)

sags said:


> There are way too many holes in these real estate schemes. They all contain the same keywords.
> 
> Undervalued properties, appraise and remortgage, put cash in your pocket, positive cash flow...........etc.
> 
> These schemes are revived every time real estate prices rise and disappear when real estate prices go flat or fall.


And those things don't happen with stocks? Did you miss the 2007 Recession?

Sags, you are quick to say what you don't like about real estate and that's fine, to each his own. But while I am quite willing to say different answers will work for different people, you and some others seem to be reluctant to agree that that is possible. You seem to want and think there is a 'right' or 'best' answer when in fact there isn't one. There is only what is right and works best for the individual.

Let me tell you a true story, not a fairy tale. About 30 years ago I was hiking and climbing in the Swiss Alps with a Swiss acquaintance of mine. As we were sitting taking a rest after having struggled up a long scree (loose gravel) stretch, we watched a guy going down who had a pair of what were obviously old ski poles with the bottom baskets removed. He was pretty much loping down the scree with complete confidence. It was obvious that the poles were allowing him to keep his balance without having to go slowly. My acquaintance (let's call him John) and I were quite impressed. 

It happened that John, was a manager in one of the largest Swiss banks. Finances and investing therefore were something he was well versed in and he earned a well above average living from it. A couple of years later I was hiking with him again in Switzerland and he was using 2 modified ski poles. He told me that he had researched the major ski pole manufacturers in Europe and invested almost his entire capital into one of them. His thinking was that like many new things in the hiking/backpacking/climbing world going on in those days, that this idea of using poles when hiking would take off. Think of fleece jackets or Goretex which revolutionized outdoor wear as an example. Well John was right and today, the vast majority of serious hikers use hiking/trekking poles. 

Now this was a Swiss banker, you don't normally expect to get much more conservative or risk adverse than that I'd say. But he did not perceive a risk, he perceived an opportunity and perhaps more importantly for those who invest in stocks, he did not buy 'stock', he bought into a product he believed in. It made him rich. When you decide to buy a stock, what product is it that you believe in?

My point sags is that there is no one way to 'win the game' and no right answer. Some people will never 'win the game' obviously but of those who do, just following the herd is not likely to be the way they do it. Anyone who earns an above average income can fund a retirement in conventional ways. That isn't 'winning the game' to me. Winning the game is done by being non-conventional at least to some degree and 'winning the game' long before you reach age 65.


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## Just a Guy (Mar 27, 2012)

Sags, who ever implied that there are mountains of properties available in this current market? So you looked up one property and, without doing any research to see if he’s charging below market rents or any price negotiations) you found one property that doesn’t cash flow. 

News flash, there aren’t many in an overpriced real estate boom. I happened to i I up two $65k two bedroom (over 1000 sq. Ft. Places) which rent for $1100 and $1200/month respectively. Of course I cast my net a lot wider than you do and I found them. On average I probably look at over 100 places a year, after scanning through thousands of listing. It requires a little more effort than you put in. 

Just because you didn’t find anything with your 5 minutes of effort doesn’t mean they don’t exist. In adown market, you’ll have your pick of properties, just like when stocks tank. I wouldn’t buy Apple today, I wouldn’t have bought Apple when it was $100, I did tell people to buy Apple when most people talked about them going bust. 

You really should read the parable of sour grapes, you’re he living embodiment of the fox.


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## sags (May 15, 2010)

kcowan said:


> Sags, I think your wording of schemes seems to imply that there is a third party involved. That is not required just like a portfolio manager is optional. By using such words, you are attempting to strawman the topic. That is the lowest form of argument.


I respect your wisdom, so I will ask what word would better describe perpetrating a real estate investment "plan" that has been proven faulty over the years many times over.


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## Just a Guy (Mar 27, 2012)

In order to have any chance at winning the game, you have to actually play the game. No one ever won a game by watching. Of course, those on the sidelines are always he “experts”. The are also the ones who try to pull down those who do win.

Sags, you didn’t even qualify for a nice participant ribbon.


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## sags (May 15, 2010)

Young hopeful home buyers have been driven out of the usual neighborhoods and are buying and upgrading any "poor areas" of housing they can find.

There are lineups of cars for every open house for a small home that needs extensive work in these areas. They sell very quickly for full asking price or higher.

Please inform us all.............where these places are located that sell for $65,000 and rent for $1200 a month as claimed.


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## Just a Guy (Mar 27, 2012)

sags said:


> I respect your wisdom, so I will ask what word would better describe perpetrating a real estate investment "plan" that has been proven faulty over the years many times over.


How about acknowledging that real estate investing isn’t just one scheme. There are literally limitless ways to make money in real estate, stocks, bonds, business, etc. 

You way of classifying investing is like saying everyone who is an employee is the same. The “welcome to Walmart” greater isn’t the same as a doctor or rocket scientist any more than being a house flipper is the same as a landlord or a day trader is the same as a value investor. 

Face it, your just feeding your fears instead of increasing our knowledge. If none of the “schemes” make money, especially compared to paycheques, how come no one gets rich from paycheques and many investors seem to have money, even in the down times when the paycheques are unemployed?


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## Just a Guy (Mar 27, 2012)

sags said:


> Young hopeful home buyers have been driven out of the usual neighborhoods and are buying and upgrading any "poor areas" of housing they can find.
> 
> There are lineups of cars for every open house for a small home that needs extensive work in these areas. They sell very quickly for full asking price or higher.
> 
> Please inform us all.............where these places are located that sell for $65,000 and rent for $1200 a month as claimed.


Actually I just went over this exercise on the other forum as kcowan can attest. I went though mls and found over 50 potential properties listed across every province, in a major city, all the way to Ottawa (I got tired of doing the legwork for others and I didn’t even get to the stuff outneast where the oil development is going on. There are potential places everywhere if you are patient and keep looking. When they appear, they tend to sell quickly, they don’t sit around waiting for sags to come buy them. True I didn’t analyze each property to establish their cash flow or market rents for each area, but these aren’t trailers and I’d already done more work than anyone else on that forum. It’s up to individuals todo their own analysis, I pointed out 50 possibilities, maybe none of the will turn out, maybe they’re all good. 

You did read the part where I said I look at 1000’s of properties each year and maybe find 100 to look at. I’ve been buying 3-5 a year lately. It’s not like they’re just sitting around all over. 

Sorry sags, I’ll point you to a solution, but I’m not going to do all the work for you, pay for it and hand it over to you while managing the property so you can just collect the money. Life doesn’t work that way. Either get in the game and change your life or continue to live your lifestyle. The choice is yours. Again no one is repressing you except yourself. No one said there are places just waiting to hand you free cash.


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## Mukhang pera (Feb 26, 2016)

Just a Guy said:


> Longtimeago,
> 
> P.S. Never use any "generalities" or words like "never" around mukhang. He's a lawyer and will pounce on words like that to prove your whole comcept wrong even though anyone else would know your intention wasn't meant to be that literal. He also doesn't believe your strategy is even possible since he hasn't done it himself.


Geez, JAG, carry a grudge or what?

Let's examine my literalist tendency to "pounce" for a moment. You are referring, I am sure, to my comments on another forum in response to a member who wrote:

_"we have rented because owning has never made sense in Vancouver. It is great for speculators but not for owners."_

I wrote, saying I disagreed with the idea that owning has never made sense in Vancouver. The OP did not say anything in reply to me, apart from offering that he should have been more clear, and that he intended to say that owning did not make sense_ for him_ over a defined 20-year period. But you, JAG, saw fit to take up the cudgel for the OP, remonstrating that I was too literal, that any reader would know the OP's meaning was that it made no sense for him, and that i was just being a jerk. Of course, that still leaves me to wonder, if the comment was uniquely personal to the OP, why he would have added the words "_It is great for speculators but not for owners._". Perhaps I am being silly or obtuse, but the addition of those words suggested to me that the OP was suggesting that owning Vancouver real estate has never made sense for a much broader group than just the OP himself. He appeared to suggest that it might be okay for speculators, but not others. But you, on his behalf (as though he were unable to speak for himself) howled that such meaning was never intended.

JAG, you then went on to protest that I posted a _"ridiculous, long winded, diatribe on how the word "never" (originally used in a personal opinion) didn't really apply if you went back to 1970's Vancouver." _ Actually, I was even more long-winded I suppose. I went back to 1945 when my parents first purchased in West Vancouver and gave considerable detail about the market, with its ups and downs, from that day to the present. I included a number of specific transactions, locations, prices, etc. to support my position. You did not there, but perhaps you will now, show how any of what I said was in error.

Something else you have never done is to provide any serious response to the essence of my posts about RE in Vancouver and elsewhere. You are on record as saying a crash (or maybe just a RE fender bender) is coming, albeit you can't say when. Hence you buy your properties at post-crash prices, with the hit already taken. You have gone on and on about the prolonged bull market and dirt cheap interest, like the rest of us were born yesterday. You seem to suggest that history will repeat itself, that rates will rise, prices will fall, etc. I think no one doubts that. RE in Vancouver (and a lot of other places) has long been a cyclical thing. You like to remind me that any Vancouver real estate dealing I had in the 70s is not the type of thing that will be seen again. But you have never said why not. I have pointed out, more than once, that RE prices rose dramatically in the 70s, through the 80s, despite the prime rate reaching 22.75%. I have given my own example of an ordinary house purchased in 1979 for $110,000, which probably hit $275,000 within a few years, then was cut _in half_ with the crazy interest rate rise, yet recovered to let me sell in 1989 for $525,000 when interest rates were still above 10%. If I understand your position, interest rates will rise to a measly 8% or so, yet that will hold the market back in perpetuity. The bull market days will not be seen again. How so?

I will continue to say, that while I might not buy Vancouver (or GTA) real estate at today's prices, since some "correction" is likely, I believe in 20 or 25 years, today's prices will look cheap. I think even you have said that RE should be seen as a long-term investment. Meet me back here in 2040 and let's compare notes. 

Rather than address anything I said on the merits, you said:

_"But, then being a lawyer, you probably didn't even see what [op] was actually trying to say. I often find lawyers too literal and only see things their way. They tend to mock, or ignore other opinions or even reality...part of the profession I imagine. Probably why few people listen to, or respect lawyers." 
_

You added:

_"For what it's worth, I respect your posts where you cite legal cases, however 1-2 are usually sufficient, I don't need every case listed."_ Well, perhaps you don't _need_ every case cited. But this is not a forum designed to supply _you_ with what _you _need. Others might find the added references useful. All are free to ignore them.

As for the notion that I "mock" anyone, you did not provide any examples of my having done so. I invite you to do so here, for all to see. You, on the other hand, showed your true colours in that same thread, choosing to mock a fellow poster who dared make a simple inquiry in response to your boast about having just purchased a 2-BR condo for $65K. He asked: "JAG would you mind sharing which city you found that rental in?" And what did you do, ye who professes to dwell on these forums to be a great teacher? You said:

_"There are several other provinces out there for those who want to look. Each one has at least one major city in it. I'll let you in on a little secret, there are cities coast to coast...the east is cheaper than the west as far as the coast goes and the prairies are having a downturn in their real estate market. Canada is a much bigger place than GTA and GTA, and that doesn't mean hick towns in Ontario or BC."_ [Emphasis added]

To that bit of tripe, I responded:

"What kind of answer was that to a simple, innocuous, question? If it's your practice or policy, perhaps a desire to preserve trade secrets that causes you to refuse to provide any detail about your investments, why not just tell in inquiring poster that you prefer not to say in what city you found the rental. But no, you launched into a snotty diatribe, in mocking tone, saying "I'll let you in on a little secret...". How insulting!"

My view has not changed.



Just a Guy said:


> Longtimeago,
> He also doesn't believe your strategy is even possible since he hasn't done it himself.


Please do not speak for me as to what I believe. I have absolutely no reason to disbelieve LTA. He speaks of making money on much larger transactions than any here ever mention. Well, _someone _ must be making money on all the muti-million-dollar commercial properties out there. Our cities are full of office towers, large apartment complexes, shopping malls, factories, warehouses and a variety of commercial premises. I doubt they are all owned by the tooth fairy.

Here's the building in Vancouver in which, with a few other lawyers, I first rented office space:

https://www.bcassessment.ca/Property/Info/QTAwMDAwM1FUUQ==

The 2017 assessment is $426 million. We probably should have bought the building. Perhaps not too late. JAG, maybe you and I and LTA can buy and flip it. Maybe we can get it for $350 million and sell for $550 million. Maybe?

JAG, you have also dragged in from the other forum a reference to forestry, _viz_.



Just a Guy said:


> The other day, however, our mukhang brought up the idea of timber sales on the other forum. It came up in one of his usual flaming attacks on real estate, and he quickly tried to dismiss it as no one else would be interested in the subject...turns out he was wrong about that.


A couple of comments, if I may. First, please provide examples of my "usual flaming attacks on real estate". 

As for my "quick dismissal" of information about timber sales, here is what happened. One poster (and one only) purported to show interest by saying:

"_Post how much you've made and what you know about forest lots

Personally I would like to learn more"_

To that I replied, in part:

_Is there a legitimate reason why I should post how much I have made from forestry? But, I'll offer that I obtained my first registered timber mark in 1994 and sold $68,000 worth of logs in that year. Should I post my BC logging Tax Act returns for each year 1994-2018?

Similarly, how should I respond to a request for what i know about forest lots? I could write at length, but to what end? I detect an element of insincerity in the "I would like to learn more" comment._

So JAG, do you seriously question how I handled that? You refuse to reveal in what city even a single one of your investment properties is located, yet when I decline to open up my finances to some other poster I am guilty of a haughty "dismissal".

Thus endeth another diatribe. 

What I am willing to do is this. To go head-to-head with JAG in the conduct of a straw poll. It can be conducted here, on CMF, with the results to be binding both here and on FWF. Members here can vote for who goes, never to darken the door of either forum again. I'll be content to live with the result.


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## OnlyMyOpinion (Sep 1, 2013)

Longtimeago said:


> ... there is no one way to 'win the game' and no right answer.
> ... Anyone who earns an above average income can fund a retirement in conventional ways. *That isn't 'winning the game*' to me. *Winning the game is done by being non-conventional* at least to some degree and 'winning the game' long before you reach age 65.


Seems to be a contradictory comment and an uneccessary constraint to me.

The OP, RFL summarized their financial position and asked if they 'have won the game' in the sense of having reached financial independence and the ability to retire in 7 years. They also wondered if they should be modifiying the equity portion of their AA. 

RFL didn't say how they got to their present position although they note they are working at a 'job'. I appreciate that much of the recent discussion in this thread has been about reaching FI through RE rather than necessarily saving in a conventional Eq/FI portfolio.

I don't think how someone arrives at FI is relevant _to this thread_.

Added: _to this thread_


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## Just a Guy (Mar 27, 2012)

Muk, it was not my intention to drag the argument which we dropped in the other forum over here to rehash it. I think, in general, we probably agree more than you think we do, but your selective reading style and bias doesn't let you see that. 

I’m not the only one buying properties like I do, you can doubt it all you want, it doesn’t make it untrue because I don’t post the address and leases of my holdings so you can track down my personal information. I don’t need to prove anything to you, as it doesn’t affect my stuff. You seem unusually interested in trying to find my real identity in a way that makes me uncomfortable. Mr. Matt, on the other hand, for example chooses to post videos of his properties in Hamilton which follow the same basic strategy as I use (he pays a bit more than I do, but is not that much higher) but you probably think he lies too. I get it, there’s no way to change your mind. 

We live in a democratic country. You have your right to be wrong in this case. Regardless, I’m not going to be sucked into this again.


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## Mukhang pera (Feb 26, 2016)

Just a Guy said:


> Muk, it was not my intention to drag the argument which we dropped in the other forum over here to rehash it. I think, in general, we probably agree more than you think we do, but I’m not going to be sucked into this again.
> 
> I’m not the only one buying properties like I do, you can doubt it all you want, it doesn’t make it untrue because I don’t post the address and leases of my holdings so you can track down my personal information. I don’t need to prove anything to you, as it doesn’t affect my stuff. You seem unusually interested in trying to find my real identity in a way that makes me uncomfortable. Mr. Matt, on the other hand, for example chooses to post videos of his properties in Hamilton which follow the same basic strategy as I use (he pays a bit more than I do, but is not that much higher) but you probably think he lies too. I get it, there’s no way to change your mind.


Then why were you the one to first drag the argument from elsewhere here? In your posts #66 and #68 upthread _you_ chose to castigate me for my misdeeds on another forum. Matters wholly irrelevant to anything being discussed here. I am simply responding, lest anyone here think that I am meekly accepting what you have said against me. 

And why so defensive about buying properties as you do? Where have I said I do not believe that you do so? What I _have_ said is that for one who professes to have the matter down to a science, you are very economical with what you are willing to share. And what's with "unusually interested in trying to find my real identity in a way that makes me uncomfortable"? How has that alleged "unusual interest" manifested itself? Why should I care a whit about your identity, much less wish to be your stalker, which your expressed discomfort suggests your perception of me?

Again, I am game for the poll. Why won't you support it? I obviously have so many undesirable traits compared to yourself (bordering on criminal as per your most recent suggestion) that my banishment should be a slam dunk.

Moreover, I am sure that most members here find exchanges such as this an unpleasant distraction and a bit of an unseemly spectacle and my proposal offers the prospect of a timely and effective end to it.


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## Longtimeago (Aug 8, 2018)

Mukhang pera said:


> Geez, JAG, carry a grudge or what? ...................................
> 
> 
> Thus endeth another diatribe. ........................................


Well, that's enlightening. I always thought (and have been told) that I wrote lengthy comments in forums but you've got me beat by a long shot Mukhang pera. I don't know about your argument with Just a Guy and frankly I'm not interested. I didn't read every word of your comments above, so if it was in there I apologize for asking but if it wasn't, I am curious to know at what age you retired having 'won the game'? If you haven't yet retired, may I ask at what age are you hoping to do so?

I always find, that the proof is in the pudding, not in the verbosity of the proponent of anything. So how quickly did your method work for you vs. someone else's way of 'winning the game'. Are you willing to go head-to-head with my own 7 years from first idea to retirement date? Loser never 'darkens the door' again?


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## Longtimeago (Aug 8, 2018)

OnlyMyOpinion said:


> Seems to be a contradictory comment and an uneccessary constraint to me.
> 
> The OP, RFL summarized their financial position and asked if they 'have won the game' in the sense of having reached financial independence and the ability to retire in 7 years. They also wondered if they should be modifiying the equity portion of their AA.
> 
> ...


Yes, fair enough OnlyMyOpinion. I got a bit carried away I guess. I'm human. I'll consider my wrist slapped.

By the way, in the case of the OP, I consider they have no need to wait 7 years to retire. If it were me, I'd be retired already with the numbers given.


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## Just a Guy (Mar 27, 2012)

Muk, first off I didn’t rehash the argument here, I used the argument as an example to support my point. 

Second, are you so insecure and afraid of other people’s opinions that you are calling for supper to ban a user because
You don’t agree with them and think they are liars? Maybe I’m giving you too much credit for deserving some respect. 

You’re starting to sound more like humble. Drive away anyone who doesn’t agree for the betterment of society.


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## Mukhang pera (Feb 26, 2016)

Longtimeago said:


> Well, that's enlightening. I always thought (and have been told) that I wrote lengthy comments in forums but you've got me beat by a long shot Mukhang pera. I don't know about your argument with Just a Guy and frankly I'm not interested. I didn't read every word of your comments above, so if it was in there I apologize for asking but if it wasn't, I am curious to know at what age you retired having 'won the game'? If you haven't yet retired, may I ask at what age are you hoping to do so?
> 
> I always find, that the proof is in the pudding, not in the verbosity of the proponent of anything. So how quickly did your method work for you vs. someone else's way of 'winning the game'. Are you willing to go head-to-head with my own 7 years from first idea to retirement date? Loser never 'darkens the door' again?


LTA, you appear to be operating on the premise that forms an underpinning of this forum and others like it. That premise is that "work" is the enemy, "retirement" is the goal and that work to achieve retirement is a hopeless proposition. Therefore one must find a way to "invest" to enhance one's prospect of getting to retirement with sufficient wherewithal to make it live up to some kind of objective. Reading on forums like this can be a bit depressing. We see numbers of the disaffected. They are not happy with their daily lives and focus on "retirement" with an urgency. A bit sad. They are not enjoying the journey.

It is oft said in these circles that we are not all the same. Seems like an unassailable proposition. I have long been blessed with parlaying my law ticket into a series of reasonably remunerative and enjoyable activities. I say "activities" even though some would meet the definition of "jobs" or "work", I suppose. I have worked for myself from time to time over the years; in partnership with others; as a salaried employee, etc. I have always enjoyed above-average income from my activities, but not enough to get rich. But always quite comfortable. I never had any kind of "job" where i had a real "boss" or any supervision. I was a professional paid for results, not for being seen in my office from 9 to 5 every day.

For me, "work" has been rewarding well beyond a paycheque. Lawyers tend to find comfortable niches in which they like to stay. That's why you see octogenarian lawyers still going to their offices. Certainly not for the money. But because it's fun. By that stage they are not looking to bring in new clients. They have a small group of clients who are friends and almost like family. They take on only files that are genuinely interesting, not files that will simply pay the overhead. The distinction between work and pleasure becomes blurred. The once or twice i had work i did not like, I changed it. Not everyone can alter their situation so readily.

So, I too, have done a bit of investing. That has taken a variety of forms over the years. Very little (but some) in the stock market. My best time in the stock market was forming private companies and taking them public. That gave me more control than buying shares in someone else's store. I have always owned rental real estate and I did my share of flipping way back. I always made money, but, to be honest, generally more due to a rising market than anything else. 

So, LTA, you appear to be asking me if I have arrived at that retirement nirvana and when i did so, so you can determine by your own standard if "the proof is in the pudding". I was living in California in the late 90s, and about age 40, when I moved to SE Asia, where I stayed for 3 years. I had planned the move as "retirement". But I ended up back in Canada after 3 years, on what I intended to be a 3-month visit. That plan did not last. For 2 years I had no real work and was not looking. In 2004 an old contact called and I accepted a consulting job for 6 months on, 6 months off. It paid sufficient in 6 months to amount to what many would consider a very good annual salary. I quit in 2008 to move here, a remote, off-grid island. We have a sizeable oceanfront acreage, with a 3,000 square-foot main house. I think most looking at us and our lifestyle would think we have "won the game". But then, what does that mean? An elastic concept, I dare say. Let's take JAG for a moment, he calls himself a "one percenter", which, I take to mean his annual income is over $500,000 and his net worth is far in excess of $10 million. I am some ways back of that. I know a few with net worth in the range of $100 million. They probably consider that they have won, while folks like me are basket cases, trying to scrape by on $10k or so a month.

I have not much thought about it, but I suppose winning the game means being happy with your lot in life throughout. One cannot win if enjoyment comes only with "retirement", unless you retired at age 16. Winning has a lot to do with your own perception of your own lot. If your are truly content, what does it matter that your annual income is only $40,000 and your net worth is less than 6 figures? I have long been in that contented zone. I have more than many, less than many others, but what I have is contentment. I see no one doing or having anything that makes me envious. We do what we want. Some of that takes money, but not millions. Importantly, for sure, I have been fortunate with good health. When I see the fate of some, I feel that I have truly "won". Never had a sick day in nigh on 60 years. I recognize that can change, literally, in a heartbeat. I am grateful for what i have been given thus far. I am blessed with good family around me. A win. 



Longtimeago said:


> I always find, that the proof is in the pudding, not in the verbosity of the proponent of anything. So how quickly did your method work for you vs. someone else's way of 'winning the game'. Are you willing to go head-to-head with my own 7 years from first idea to retirement date? Loser never 'darkens the door' again?


In the head-to-head you propose, I guess you have me beat. I am unable to identify a specific retirement date. I was there for awhile, but relapsed. Now, I still take on some work for pay, so I guess that means I am not retired. I do some legal research and writing. I can do as much or as little as I like and I can work online, from anywhere in the world. I do it not so much for money now (but we do spend the money) as for the fact that I enjoy it. I like the bit of challenge it presents, the appreciation of those to whom I sell my services and, as important to me as anything, the mental discipline. I am forced to think in a very focussed way. I firmly believe what I am doing is valuable brain exercise that will help stave off brain atrophy. My plan is to do some for as long as I am able. Maybe no more than an hour or so a day, but always some. So, LTA, I reckon you have the upper hand. But when it comes to long-winded, prolix posts, I rule. You said you did not bother to read all of the the last one, so I have no reason to believe this one will command any greater attention.


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## Mukhang pera (Feb 26, 2016)

Just a Guy said:


> Muk, first off I didn’t rehash the argument here, I used the argument as an example to support my point.
> 
> Second, are you so insecure and afraid of other people’s opinions that you are calling for supper to ban a user because
> You don’t agree with them and think they are liars? Maybe I’m giving you too much credit for deserving some respect.
> ...


Nope, not afeared at all. I am not calling for anyone to impose a ban. I am proposing a self-ban. I am saying I will be content to respect and accept the judgment of my peers. I am proposing we hold a tribal council and, if the tribe votes me out, I'll extinguish my torch.


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## Just a Guy (Mar 27, 2012)

Sounds like you want to silence someone. Seems to be trying to control discussion. Sounds like a ban to me, but then I’m not a lawyer.


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## AltaRed (Jun 8, 2009)

Trying for the last word or just being argumentative? I suspect CMFers may have moved on.....


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## kcowan (Jul 1, 2010)

Mukhang pera said:


> What I am willing to do is this. To go head-to-head with JAG in the conduct of a straw poll. It can be conducted here, on CMF, with the results to be binding both here and on FWF. Members here can vote for who goes, never to darken the door of either forum again. I'll be content to live with the result.


As I mentioned in the other forum, I get some value out of MP and JAGs contributions. Both forums would suffer if one of them left.

And I am the guilty one for leaving out "for me" in my post on Vancouver real estate. I thought it was implied. After all, I don't expect other forum members to consider me an RE expert. I have never owned RE in Vancouver (Alberta 2 and Ontario 3).

In the same line of thinking, MP had made money in timber and JAG has made money owning property. Everyone should realize that these are examples "for them" and do not represent any overriding investing principals.


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## kcowan (Jul 1, 2010)

In a rare departure from the current thread, let me respond to OP. I was able to retire at age 49 with a golden handshake. I had made money in RE investments and an above average earning career by taking chances and winning.

But I was not emotionally ready to "hang up the skates" so I embraced a consulting career that lead to two CEO positions. After ten years, I was ready. But I still call myself a private portfolio manager because that is the only thing I do to make extra money now. I call it a hobby.

So when the numbers work for you, and you are prepared to tough out the dips, then take the plunge.


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## Longtimeago (Aug 8, 2018)

Mukhang pera said:


> LTA, you appear to be operating on the premise that forms an underpinning of this forum and others like it. That premise is that "work" is the enemy, "retirement" is the goal and that work to achieve retirement is a hopeless proposition. Therefore one must find a way to "invest" to enhance one's prospect of getting to retirement with sufficient wherewithal to make it live up to some kind of objective. Reading on forums like this can be a bit depressing. We see numbers of the disaffected. They are not happy with their daily lives and focus on "retirement" with an urgency. A bit sad. They are not enjoying the journey.
> 
> It is oft said in these circles that we are not all the same. Seems like an unassailable proposition. I have long been blessed with parlaying my law ticket into a series of reasonably remunerative and enjoyable activities. I say "activities" even though some would meet the definition of "jobs" or "work", I suppose. I have worked for myself from time to time over the years; in partnership with others; as a salaried employee, etc. I have always enjoyed above-average income from my activities, but not enough to get rich. But always quite comfortable. I never had any kind of "job" where i had a real "boss" or any supervision. I was a professional paid for results, not for being seen in my office from 9 to 5 every day.
> 
> ...


First, I'll respond to your last sentence. I always read all of what is addressed to me personally. Common decency requires that I do. However, I an not required to read all of what is addressed to someone else, so I don't see why you would *assume* one has anything to do with the other.

Moving on to your first paragraph addressed to me, I agree with the premise you describe. But then what alternative premise would you suggest exists in this forum and in this thread in particular. It is clear what the OP is referring to and in my world, the person raising a subject defines the subject. In this case, 'winning' refers to having enough money to retire and so that is the goal being discussed. Surely you are not trying to tell the OP that he should have a different goal, more in line with your own thinking. 

You write that, "They are not happy with their daily lives and focus on "retirement" with an urgency. A bit sad. They are not enjoying the journey.", again, you are suggesting that because you enjoy your journey, someone else cannot look at your journey and say, 'that's not the path for me'. Their path is 'sad' while your path is not. Really?

Here is how I looked at it. One day in my mid-30s I had what some might call an epiphany. Or in simpler words, 'the light bulb went on'. I realized that while I was not unhappy (surprise, surprise) and got enjoyment from my work at which I was very good, that I did not want to continue working till age 65, then retire and play golf for 2 years before dropping dead of a heart attack on the golf course.

We live in a world that requires us to have money unfortunately. On the plus side, we do not have to hunt, fish and grow our own food with backbreaking labour to survive. We can go to the supermarket. We don't have to build our own house with our own hands, we can buy one. Etc. A world that works on money has it's pluses and minuses obviously just like everything else.

So to me, the simple question but with a difficult answer, was how to have money without working. If I could do that, I could continue my journey through life doing whatever I wanted to do. That is what FU money is and if you don't know the term, look it up. People use the word retirement in many ways. Some see it as an end, others see it as a beginning. Some see it as a good thing, some as a bad thing. For me, the goal was to move from the working class to the leisure class. Retired is how other people refer to it and I simply use that term rather than try to explain that you don't get to retire from life until the end. I would rather say I moved to the leisure class, that is, not *having* to work if you don't want to. It does not preclude work of some kind if you *choose* to do so. It is the removing of the *necessity* of having to work to eat. Money is not an issue any more in life, that's been dealt with and is in the past. From their, the journey can go anywhere you want it to go, in any way you want it to be. 

It is the individual who must decide what path they want to follow, whether you or I agree with their path or not is irrelevant. I would not presume to call the path you have chosen 'sad'. I suggest that perhaps you should consider whether you should refer to my chosen path of 'retire as quickly as possible' as being 'sad'.


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## Mukhang pera (Feb 26, 2016)

Longtimeago said:


> You write that, "They are not happy with their daily lives and focus on "retirement" with an urgency. A bit sad. They are not enjoying the journey.", again, you are suggesting that because you enjoy your journey, someone else cannot look at your journey and say, 'that's not the path for me'. Their path is 'sad' while your path is not. Really?
> 
> ...
> It is the individual who must decide what path they want to follow, whether you or I agree with their path or not is irrelevant. I would not presume to call the path you have chosen 'sad'. I suggest that perhaps you should consider whether you should refer to my chosen path of 'retire as quickly as possible' as being 'sad'.


Perhaps, LTA, you missed my point. The "sad" ones of whom I speak are those who are unhappy with what they are doing today to make money. They say so. It's not some inference erroneously drawn by me. They complain of being trapped in the "rat race". They are unhappy with their bosses, with working alongside colleagues who are aholes, with attending endless meetings that lead nowhere. They are unhappy with city commuting; with wearing business clothes; with working for 'the man'. They state expressly that they very much dislike their working lives. You are a newcomer to this forum, where there exists many posts along those lines (if you have not seen them...go look them up!). THAT, to me is sad. That some folks cannot fully enjoy the here and now. They are betting on "retirement" to bring the peace, joy and contentment they do not now have. 

So, LTA, I do not think it's the case that I happen to "disagree" with the path followed by those who are miserable, in varying degrees, not being retired. I rather suspect that for most of those, it's not at all a path they have "chosen". It's the one on which they found themselves. Probably some could, with some effort or smart thinking, have ended up on a more satisfactory path. Some probably had less choice. Born less fortunate and with less opportunity in many cases. I feel sorry for them. I do not purport to "disagree" with their choices, which for most, were limited.

In another thread, a member here wrote:



CPA Candidate said:


> Just a comment, if universal basic income became policy in Canada, my brother-in-law would never work again, I'm sure of it. He is about 40 and has never had anything resembling a career, just low level jobs for short periods of time. No education or training of any kind beyond high school. He has virtually no ambition or pride and is happy to survive rather than prosper.


I have met a few like that. They are quite content with very little. That "very little" comes from government handouts. So they feel confident the supply will be endless. They have their FU money (a puerile term I cannot imagine anyone actually needing to look up) and they are happily ensconced in the leisure class. For them, there is no work 'necessity'. But for many, $1,000 a month would not be enough. For many, $10,000 a month would be seen as poverty. That is why I spoke of attaining a level of "contentment". That concept transcends finances, but money is a component. For me, I have sufficient wherewithal to be content. Some would see it as rich, some not so much. Some one percenters would pity me. Part of being content means being beyond caring what others think. I am in a place that pleases me. I am not depressed by the fact that I could not afford the 200-foot yacht that just cruised past our house a few minutes ago. Someone else can afford it and good for him. As I alluded to before, contentment is a multi-factorial concept. Apart from financial contentment, it includes (for me) having good health, a happy family situation, some good friends, enjoyment with where one lives and one's physical surroundings. For me, as I get older, it includes looking back on life and having no regrets; having stick handled through any adversity with aplomb; having hurt no one and benefitted many; being proud of what one accomplished in one's working life; to list a few factors. 

In my own situation, I see myself fitting in with an old Sinatra song that ended with the words:

But now the days grow short
I'm in the autumn of the year
And now I think of my life as vintage wine
from fine old kegs
from the brim to the dregs
it poured sweet and clear
It was a very good year

I look back with contentment and satisfaction. It's been a good ride. I can ask for no more. Whatever comes now, no one can take from me what I have had. It's been a good life. I feel truly blessed.

In keeping with my pestilential tendency to be long-winded (and this is addressed to no one, so it can be left unread, I offer the following (with which many will be familiar), which I find somewhat apropos to the discussion:

THE STATION

“…It isn’t the burdens of today that drive men mad. It is the regrets over yesterday and the fear of tomorrow. Regret and fear are twin thieves who rob us of today…” A Poem about creating a life focused on the journey, not the destination.

Tucked away in our subconscious is an idyllic vision. We see ourselves on a long trip that spans the continent. We are traveling by train. Out the window we drink in the passing scene of cars on nearby highways, of children waving at a crossing, of cattle grazing on a distant hillside, of smoke pouring from a power plant, of row upon row of corn and wheat, of flatlands and valleys, of mountains and rolling hillsides, or city skylines and village halls.

But uppermost in our minds is the final destination. On a certain day at a certain hour we will pull into the station. Bands will be playing and flags waving. Once we get there so many wonderful dreams will come true and the pieces of our lives will fit together like a completed jigsaw puzzle. How restlessly we pace the aisles, damning the minutes for loitering – waiting, waiting, waiting for the station.

“When we reach the station, that will be it!”, we cry. “When I’m 18.” “When I buy a new SL Mercedes Benz!” “When I put the last kid through college.” “When I have paid off the mortgage!” “When I get a promotion.” “When I reach the age of retirement, I shall live happily ever after!”

Sooner or later, we must realize there is no station, no one place to arrive at once and for all. The true joy of life is the trip. The station is only a dream. It constantly outdistances us.

“Relish in the moment” is a good motto especially when coupled with Psalm 118:24: “This is the day which the Lord hath made; we will rejoice and be glad in it.” It isn’t the burdens of today that drive men mad. It is the regrets over yesterday and the fear of tomorrow. Regret and fear are twin thieves who rob us of today.

So stop pacing the aisles and counting the miles. Instead, climb more mountains, eat more ice cream, go barefoot more often, swim more rivers, watch more sunsets, laugh more, cry less. Life must be lived as we go along. The station will come soon enough.

Robert Hastings


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## Eder (Feb 16, 2011)

I enjoy being in the leisure class but I hate having to wear these leisure suits....itchy


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## Longtimeago (Aug 8, 2018)

Mukhang pera said:


> Perhaps, LTA, you missed my point. The "sad" ones of whom I speak are those who are unhappy with what they are doing today to make money. They say so. It's not some inference erroneously drawn by me. They complain of being trapped in the "rat race". They are unhappy with their bosses, with working alongside colleagues who are aholes, with attending endless meetings that lead nowhere. They are unhappy with city commuting; with wearing business clothes; with working for 'the man'. They state expressly that they very much dislike their working lives. You are a newcomer to this forum, where there exists many posts along those lines (if you have not seen them...go look them up!). THAT, to me is sad. That some folks cannot fully enjoy the here and now. They are betting on "retirement" to bring the peace, joy and contentment they do not now have.
> 
> So, LTA, I do not think it's the case that I happen to "disagree" with the path followed by those who are miserable, in varying degrees, not being retired. I rather suspect that for most of those, it's not at all a path they have "chosen". It's the one on which they found themselves. Probably some could, with some effort or smart thinking, have ended up on a more satisfactory path. Some probably had less choice. Born less fortunate and with less opportunity in many cases. I feel sorry for them. I do not purport to "disagree" with their choices, which for most, were limited.
> 
> ...


The topic of this thread is 'if you have won the game stop playing', with the game being defined by the OP as getting to the point of being able to retire, *whatever* the reason was for someone wanting to get to that point. You seem to want to talk about anything other than the topic the OP started with. 

I don't care if someone is unhappy with their life and I certainly don't find it sad if they do find it so but choose to do something about it. My response to them would be 'good for you'. For those who are unhappy and do nothing about it, I don't find that sad either, I see that as 'they make their bed'. As for those content to live off government hand outs, that is a totally irrelevant subject on this thread which you have brought in from another thread. Perhaps it is the lawyer in you that seeks to obfuscate and is used to getting paid by the number of billable hours rather than simply on results. Being clear and *concise* in communications is not a lawyer's strong point. 

I recall as a salesperson once calling on a government employee in a management position. I wanted to get him to include something in a government tender for bids. I managed to get in to see him by saying, 'I just need 2 minutes of your time'. He liked the sound of that and said, 'OK', and started a stop watch function on his watch and then said, 'you have 2 minutes'. I kid you not. I did manage to convey my message in those 2 minutes and he did make the change in the tender. But I imagine you would have failed miserably under those circumstances Mukhang pera. Why you felt a need to bring in content from another thread or post a long quote that add nothing to the topic of the thread is somewhat baffling. Again, I can only think it is force of habit, 'make it longer whenever you can'.

The OP wrote what was a quite clear post asking about a very specific topic and giving very clear background. My advice to the OP is quit now, you have enough, there is no need to wait 7 years. That's 13 words.

What in 26 words or less is your advice to the OP? That will allow you twice as many words as I used. You can retain your title as the 'king of verbosity'.


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## Longtimeago (Aug 8, 2018)

Eder said:


> I enjoy being in the leisure class but I hate having to wear these leisure suits....itchy


Ah, but Eder, when you are in the leisure class, there is no need to even get out of bed and get dressed in anything at all if you don't want to. That's the whole point of being in the leisure class. :excitement:


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## Mukhang pera (Feb 26, 2016)

Longtimeago said:


> What in 26 words or less is your advice to the OP? That will allow you twice as many words as I used. You can retain your title as the 'king of verbosity'.


My advice to the OP is to hang on your every word and pay no attention to me. You are the new wunderkind of cmf. I shall join the ranks of nos disparus. 

A few days ago, I happened upon a thread from 2014. I was somewhat startled by the number of "lost" posters - cmf members with hundreds and, more often, thousands of posts to their credit - engaged in polite and intelligent discourse. Now they are gone. Many of those appeared to be smart, sensible, sensitive and engaged individuals who were net contributors here. What force brought about their extinction? Was it newbies who blow in like a cold draft out of a slaughterhouse, motivating some of the more genteel types, who have no appetite for exchanging insults, to quietly withdraw? They seldom say much. They leave with no drama. They display no rancour. They just disappear. They have handed over the reins to a handful of stalwarts of have provided yeoman service and remained faithful, often in the face of considerable adversity. Members such as hp and, in this thread, AltaRed and kcowan. I admire them - and a cadre of others here - greatly. Not only for their personal attributes but for the continuity they have provided. Continuity is necessary to the success and longevity of a forum such as this. 

As for me and my house, time otherwise lost here will be diverted to climbing more mountains, eating more ice cream, going barefoot more often, swimming more rivers, watching more sunsets, laughing more, crying less.


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## Just a Guy (Mar 27, 2012)

I think you forgot about the Royal Mail moderator days. That cost a lot of contributors from what I remember...also attacks from some of your "admiral" people are well documented in at least one famous long time contributors leaving (not that he was the only one to go from that person).


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## humble_pie (Jun 7, 2009)

Mukhang pera said:


> A few days ago, I happened upon a thread from 2014. I was somewhat startled by the number of "lost" posters - cmf members with hundreds and, more often, thousands of posts to their credit - engaged in polite and intelligent discourse. Now they are gone. Many of those appeared to be smart, sensible, sensitive and engaged individuals who were net contributors here. What force brought about their extinction?





you got it. Once upon a time, long long ago, some cmffers even referred to the forum as a "family."

the last time the family ever sat down together in one living room was to watch the 2014 olympics in sochi. I won't forget canada winning olympic gold in hockey while sags & others opened our eyes with cheers & commentary. It seems they knew the life histories & ice styles of their hockey players better than some folks might know their own siblings.

but all good things do come to an end & right after Sochi the bombs started to fall. Russia invaded crimea, the russia trolls appeared in cmf forum & the russia insults got underway. 

next came the 2014 gaza war, so that was the end for all the middle eastern & south asian members we used to enjoy here. Muslim-haters proliiferated in cmf forum. Never mind that the founder himself had come from south asia; for many in the forum by 2014, the mere mention of brown skin was enough to spark verbal abuse.

sometime before the anti-refugee trolls of 2015, most of the talented women investors in this forum walked out, led by pension expert moneyGal, who said she could no longer think to write amidst the disturbing shouts of the women-are-jailbait troll & his pals.

more trolls arrived & the younger members began stealing away in the night. Nowadays, there are almost no independent members left. There is a coterie of visibly bitter, old, old, old men who insist on counting up/re-counting/bragging about their wealth in endless series of the most boring posts a body could ever hope to see. No wonder youth, women & minorities have fled!

there are still some amazingly talented writers left here who continue to listen attentively to new arrivals & to help them out with unique & original suggestions. For examply, mukhang pera is one of a tiny group of lawyers - as small as a troika i believe - who proffer outrageously valuable hand-tailored suggestions about the law & how it could affect an individual emffer with a special problem. Also still surviving here are a few chartered accountants with exceptional advanced skills, both in their fields & in communicating with their online "clients."

there is a tiny handful of wise elders with advanced financial knowledge, who know how to help youth & fnancial newcomers as they start their life's journey in this new financial era, which is so much more challenging & unstable than the one faced by our ancestors only a generation ago. I call them - the wise elders - the "silver knights."

but still, the pool of trolls keeps enlarging, like the out-of-control forest fires in BC. The internet is at play here, in ways we do not yet fully understand, although sociologists, psychologists & police forces keep working on this dark new side of life.

some of the trolls in cmf forum openly admit they have alcohol problems. Insobriety becomes visible when their speech slurs & their ideation breaks down into cursing, frank paranoia & frenzied verbal abuse. These persons are directly encouraging the alek minassians & the alexandre bissonnettes of our times. No wonder police forces in canada - certainly in quebec - are augmenting social media surveillance.

the future has a grim aspect. No just for cmf forum, but for canada, for the US, for europe, for the entire planet. An overload of 8-chan is enveloping the linked e-planet these days, much like heavy smoke is enveloping BC & western canada.



.


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## Just a Guy (Mar 27, 2012)

It never ceases to amaze me how the "old" days were always so good, and the "current" days are always so bleak...also amazing how people can reach around and pat themselves on the back. Funny how some of the existing "family" remains also actively drove away members...but I guess troll is in the eye of the beholder...since others are obviously the monsters. No self examination required or wanted. Back then I don't remember as much effort at thought control, at least until RM got power, but maybe my memory fails me.

Maybe the "new" and "different" is always bad like some people like to imply.


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## Eder (Feb 16, 2011)

I remember Toronto Gal...most likely one of the best financial posters to grace this forum, she among others left after being harassed by a long time poster here.


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## Big Kahuna (Apr 30, 2018)

Eder said:


> I remember Toronto Gal...most likely one of the best financial posters to grace this forum, she among others left after being harassed by a long time poster here.


You are being very discreet but I would guess (just a guess) it was Humble Pie who drove her away? I can understand how her constant negativity would do that.


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## new dog (Jun 21, 2016)

A lot of people get bored of covering the same ground over and over again and also leave. However I think a lot of people need to grow some thicker skin when it comes to some of the negative stuff that goes on. I think it is healthy to try and see your way through counter opinions or negativity. 

Of course if just turns to ugly name calling and swearing then I can see a person leaving. Still that is what the mods are for and I think they do a good job on this front and it really hasn't gone off the rails as much as some think it has.


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## Big Kahuna (Apr 30, 2018)

new dog said:


> A lot of people get bored of covering the same ground over and over again and also leave. However I think a lot of people need to grow some thicker skin when it comes to some of the negative stuff that goes on. I think it is healthy to try and see your way through counter opinions or negativity.
> 
> Of course if just turns to ugly name calling and swearing then I can see a person leaving. Still that is what the mods are for and I think they do a good job on this front and it really hasn't gone off the rails as much as some think it has.


If you get a chance check out this Maniscalco guy-funny stuff https://www.youtube.com/watch?v=DDmxTmwC9F8


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## Beaver101 (Nov 14, 2011)

Eder said:


> I remember Toronto Gal...most likely one of the best financial posters to grace this forum, she among others left after being harassed by a long time poster here.


 ... I can attest to that as she (a friend and still is) was the one who recommended me to this forum. She left in disgust with the unfair lies and unwarranted bullying also (not just on her but with other contributors). 

Eder, do you want me to tell her you missed her? Might convince her to return.


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## new dog (Jun 21, 2016)

Thanks kahuna and Beaver tell Toronto.Gal for me as well, I would also like to see her back.


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## Eder (Feb 16, 2011)

Beaver101 said:


> Eder, do you want me to tell her you missed her? Might convince her to return.


I made some money following up on her posts so ya I miss her lol.


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## Longtimeago (Aug 8, 2018)

Mukhang pera said:


> My advice to the OP is to hang on your every word and pay no attention to me. You are the new wunderkind of cmf. I shall join the ranks of nos disparus.
> 
> A few days ago, I happened upon a thread from 2014. I was somewhat startled by the number of "lost" posters - cmf members with hundreds and, more often, thousands of posts to their credit - engaged in polite and intelligent discourse. Now they are gone. Many of those appeared to be smart, sensible, sensitive and engaged individuals who were net contributors here. What force brought about their extinction? Was it newbies who blow in like a cold draft out of a slaughterhouse, motivating some of the more genteel types, who have no appetite for exchanging insults, to quietly withdraw? They seldom say much. They leave with no drama. They display no rancour. They just disappear. They have handed over the reins to a handful of stalwarts of have provided yeoman service and remained faithful, often in the face of considerable adversity. Members such as hp and, in this thread, AltaRed and kcowan. I admire them - and a cadre of others here - greatly. Not only for their personal attributes but for the continuity they have provided. Continuity is necessary to the success and longevity of a forum such as this.
> 
> As for me and my house, time otherwise lost here will be diverted to climbing more mountains, eating more ice cream, going barefoot more often, swimming more rivers, watching more sunsets, laughing more, crying less.


Congrats on introducing yet another way to avoid the topic of the thread and sidetrack it. That's a tactic that Trump seems to be equally as adept at doing. You're running with the big dogs Mukhang pera. LOL


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## Beaver101 (Nov 14, 2011)

new dog said:


> Thanks kahuna and Beaver tell Toronto.Gal for me as well, I would also like to see her back.





> *Eder:* I made some money following up on her posts so ya I miss her lol.


 .... I told her that ... sorry she ain't returning.


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## Pluto (Sep 12, 2013)

Longtimeago said:


> Congrats on introducing yet another way to avoid the topic of the thread and sidetrack it. That's a tactic that Trump seems to be equally as adept at doing. You're running with the big dogs Mukhang pera. LOL


I think that Mukhang pera drew out some implications of the origional post that are not obvious to most. I didn't find his comments on those implcations to be as horrid as you make them out to be. he is a thoughtful person who, like everyone else, has a right to his views.


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## lonewolf :) (Sep 13, 2016)

If you have won the game by gambling stop playing. 

If you have won the game & are using proper money management as well as a method that you follow that gives you an edge no problem to keep playing unless the pain of the stress is greater then the reward of winning.

If all ready have enough money to promote long term happiness with the current stardard of the value of the money you have. The moral thing to do is protect long term happiness by risking 1% - 2% of your account with appropriate risk/reward ratio & a high enough win ratio to give you an edge I think is a great way to reduce risk by putting the winnings into gold/silver not only held in Canada but Switzerland as well, Maybe also purchasing a second pass port as well as property in another country that is safe to live.


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## Longtimeago (Aug 8, 2018)

Pluto said:


> I think that Mukhang pera drew out some implications of the origional post that are not obvious to most. I didn't find his comments on those implcations to be as horrid as you make them out to be. he is a thoughtful person who, like everyone else, has a right to his views.


That's fine Pluto but in direct response to my question as to what his advice for the OP was given the question the OP asked, his response was, "the OP is to hang on your every word and pay no attention to me. You are the new wunderkind of cmf. I shall join the ranks of nos disparus."

That is not 'drawing out' an implication of anything, that is purposely attempting to be insulting. Or do you see that comment otherwise? 

You may wish to defend someone's right to having an opinion or their right to suggest taking a discussion down side paths, do you also defend someone's right to attempt to be insulting when the discussion is not going as they might wish it to go? I would say if you are going to defend someone, then you will have to defend *all* of what that person says or does, not just 'cherry pick' what you wish to defend while ignoring the rest of their behaviour.

Trump supporters defend him because for example, he tells them he will re-open the coal mines so they can go back to work. At the same time, they ignore his despicable behavior when it comes to his treatment of women. Do you wish to emulate such people?


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## lonewolf :) (Sep 13, 2016)

Longtimeago said:


> Trump supporters defend him because for example, he tells them he will re-open the coal mines so they can go back to work. At the same time, they ignore his despicable behavior when it comes to his treatment of women. Do you wish to emulate such people?


 Trump is not like Trudeau. Instead Trump protects women from migrants that have a backwards beliefs in regards to women. Trudeau invites migrants into the country. Maybe he can give them enough handouts so more will come. Canada can be like Sweden & have a rape problem. 24/7 CNN hates Trump more then they value Women?


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## Longtimeago (Aug 8, 2018)

lonewolf :) said:


> Trump is not like Trudeau. Instead Trump protects women from migrants that have a backwards beliefs in regards to women. Trudeau invites migrants into the country. Maybe he can give them enough handouts so more will come. Canada can be like Sweden & have a rape problem. 24/7 CNN hates Trump more then they value Women?


Lonewolf, your personal views on immigration have no place in this thread. If you want to discuss immigration, go to an immigration forum and see how you fare. Your comment is trolling in the most obvious definition of the word.


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## Big Kahuna (Apr 30, 2018)

Longtimeago said:


> Lonewolf, your personal views on immigration have no place in this thread. If you want to discuss immigration, go to an immigration forum and see how you fare. Your comment is trolling in the most obvious definition of the word.


Quit causing trouble-you are the one who brought up Trump on a thread called stop playing the game.


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## Pluto (Sep 12, 2013)

Longtimeago said:


> That's fine Pluto but in direct response to my question as to what his advice for the OP was given the question the OP asked,


I think he pretty much agrees with you: bricks and mortar, no stocks. 

But as you mentioned, everyone has thier own perspective. The op has stocks & bonds and is wondering if he should cut back on his stock allocation. Your answer and Mukhang pera's is, as far as I can tell, bricks and mortar. Additionally, Mukhang pera finds it sad that people work at occupations they don't like just for the money, and can't wait to retire. their life would be more meaningful if they worked at something they enjoyed and found meaningful in addition to what money was made. Nothing wrong with that observation.


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## ian (Jun 18, 2016)

We certainly are not going to switch to 100 percent laddered TD's simply because we are financially independent.


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## AltaRed (Jun 8, 2009)

ian said:


> We certainly are not going to switch to 100 percent laddered TD's simply because we are financially independent.


Neither am I.....but the next 2008/2009 type crisis will cause a lot of currently 'bold' stock investors to run for the exits. We have had almost 10 years of a bull market and there is a significant cadre of investors who have never experienced 2008/2009. Those who are now pulling back on an aggressive equity position may be the sharpest knives in the drawer in the not too distant future. We are closer to a major pull back than we are to a continued bull run, but of course that IS the dilemma. Do we have months? or years? before the parade ends? The content in the pages of CMF will change dramatically when the 'event' happens.

Probably best to be at an allocation where one can sleep at night/weather the storm. I am maintaining a certain reserve of HISA cash equivalent to the side despite my built-in impulse to put it to work in 3-5% eligible dividend investments.


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## canew90 (Jul 13, 2016)

AltaRed said:


> Neither am I.....but the next 2008/2009 type crisis will cause a lot of currently 'bold' stock investors to run for the exits. We have had almost 10 years of a bull market and there is a significant cadre of investors who have never experienced 2008/2009. Those who are now pulling back on an aggressive equity position may be the sharpest knives in the drawer in the not too distant future. We are closer to a major pull back than we are to a continued bull run, but of course that IS the dilemma. Do we have months? or years? before the parade ends? The content in the pages of CMF will change dramatically when the 'event' happens.
> 
> Probably best to be at an allocation where one can sleep at night/weather the storm. I am maintaining a certain reserve of HISA cash equivalent to the side despite my built-in impulse to put it to work in 3-5% eligible dividend investments.


During the Fin Crisis we added to many of our positions. That won't happen during the next one as we are fully invested but I don't plan to sell, just ride it through. Still expect our div's to hold even if it's a severe correction or extended one.


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## AltaRed (Jun 8, 2009)

canew90 said:


> During the Fin Crisis we added to many of our positions. That won't happen during the next one as we are fully invested but I don't plan to sell, just ride it through. Still expect our div's to hold even if it's a severe correction or extended one.


Yeah, but it doesn't matter what you did at the time, or will do in the future. My comments were focused on those who have never experienced a 2008 type crisis and probable reactions when it does occur.


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## canew90 (Jul 13, 2016)

AltaRed said:


> Probably best to be at an allocation where one can sleep at night/weather the storm. I am maintaining a certain reserve of HISA cash equivalent to the side despite my built-in impulse to put it to work in 3-5% eligible dividend investments.


So I assume the same applies to what you plan to do. Or was there specific advice for those who never experienced a crash, other than getting out of their equity positions?


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## AltaRed (Jun 8, 2009)

canew90 said:


> So I assume the same applies to what you plan to do. Or was there specific advice for those who never experienced a crash, other than getting out of their equity positions?


I am suggesting investors, especially those who didn't experience the 2008/2009 crash, temper their equity allocation percentage by having enough in fixed income and cash equivalents to: a) avoid a panic sell in an equity market crisis, and b) temper the collapse in net worth with a solid foundation of value (safety net) under them. 

Retirees have already weathered at least two crises in the form of the dotcom bubble and the 2008 financial crisis. They already (should) know what they are doing. I maintain enough in cash equivalents to see me through X years of equity bear markets, even if I have to sell an equity yielding 3-5% now to put into an HISA at 2%. 

And yes, I will be doing some of that in the next 30 days or so, i.e. selling PWF after the ex-dividend date to pay for an upcoming trip and to top up my HISA reserve.

Added: This article was linked on another forum. It is a bit self-serving but there is merit in taking the metrics somewhat seriously. https://www.forbes.com/sites/jessec...iencing-an-unsustainable-bubble/#29f827cc6b93


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## canew90 (Jul 13, 2016)

AltaRed said:


> I am suggesting investors, especially those who didn't experience the 2008/2009 crash, temper their equity allocation percentage by having enough in fixed income and cash equivalents to: a) avoid a panic sell in an equity market crisis, and b) temper the collapse in net worth with a solid foundation of value (safety net) under them.
> 
> Retirees have already weathered at least two crises in the form of the dotcom bubble and the 2008 financial crisis. They already (should) know what they are doing. I maintain enough in cash equivalents to see me through X years of equity bear markets, even if I have to sell an equity yielding 3-5% now to put into an HISA at 2%.
> 
> ...


Agree, avoid panic selling, but why worry about FI if they are not needing their investments to meet expenses? Certainly they may wish to consider selling speculative holdings or ones they'd like to get rid of and hold cash to buy during a correction, if and when it occurs. Thought the common advice, if one is a long-term investor, was to stay in the market rather than trying to time it.
Yet for retirees the common theme seems to be hold FI based on ones age or the 60/40 or even 80/20.


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## kcowan (Jul 1, 2010)

canew90 said:


> Yet for retirees the common theme seems to be hold FI based on ones age or the 60/40 or even 80/20.


Yes but fixed needs to be in context. If my spending plan is 50% covered by CPP/OAS/Pensions, then the other 50% can be equities as a hedge against inflation. IOW my portfolio could be 100% equities. If the dividends thrown off cover another 35% then only 15% is at risk. Then an 85% equity portfolio is a no brainer.


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## AltaRed (Jun 8, 2009)

canew90 said:


> Agree, avoid panic selling, but why worry about FI if they are not needing their investments to meet expenses? Certainly they may wish to consider selling speculative holdings or ones they'd like to get rid of and hold cash to buy during a correction, if and when it occurs. Thought the common advice, if one is a long-term investor, was to stay in the market rather than trying to time it.
> Yet for retirees the common theme seems to be hold FI based on ones age or the 60/40 or even 80/20.


Sleep at night factor is the major one.... with some allocation to fixed income to reduce portfolio volatility. That is Investing 101. It is up to each individual to determine how well they'd weather a 30-40% equity correction, especially one that may take years to recover. There is no right answer. Nor am I suggesting timing the market, or getting out of the market. I am suggesting that those who have never experienced an equity bear such as 2008/2009 really don't know their risk tolerance and they may want to keep some of their assets out of equities, especially if they are currently at a very high equity allocation.

What retirees do will vary as much as the range of personalities, their specific circumstances, and the size of their portfolio.


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## canew90 (Jul 13, 2016)

AltaRed said:


> Sleep at night factor is the major one.... with some allocation to fixed income to reduce portfolio volatility. That is Investing 101. It is up to each individual to determine how well they'd weather a 30-40% equity correction, especially one that may take years to recover. There is no right answer. Nor am I suggesting timing the market, or getting out of the market. I am suggesting that those who have never experienced an equity bear such as 2008/2009 really don't know their risk tolerance and they may want to keep some of their assets out of equities, especially if they are currently at a very high equity allocation.
> 
> What retirees do will vary as much as the range of personalities, their specific circumstances, and the size of their portfolio.


I missed the basic 101 course, guess that's why it took me so long to learn the little I know (which seems in conflict with Investing 101).


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## Eder (Feb 16, 2011)

Heres why I like to stay invested regardless what the current panic is (oldie but goodie)


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## AltaRed (Jun 8, 2009)

I agree staying invested is critical to success. The question is at what equity/fixed allocation.... which is different for each investor.


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## My Own Advisor (Sep 24, 2012)

Mukhang pera said:


> Okay by me.


When has the stock market, in North America, returned 0% for 15 consecutive years? 

"As long as our dividends hold I'd not complain." I would feel the same. Look at Canadian banks, U.S. telcos and other payers. Tell me in that scenario whereby it doesn't pay to be an owner and see how those dividends pretty much doubled in that timeframe, if not more for some stocks


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## like_to_retire (Oct 9, 2016)

canew90 said:


> Agree, avoid panic selling, but why worry about FI if they are not needing their investments to meet expenses?


Great point. I ask myself that very question quite often since I require 0% of my portfolio for expenses. My indexed pension plus CPP covers all my expenses and more, so why wouldn't I have 100% equities. I guess the answer is psychological rather than technical. I admire your confidence to go 100% equities, but I feel a need to reduce volatility in my portfolio with bonds and GIC's and protect my capital. In your mind I suppose that may not make much sense. I suppose I look at it as why would I take too much unnecessary risk when I don't need to.

ltr


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## canew90 (Jul 13, 2016)

like_to_retire said:


> "so why wouldn't I have 100% equities."
> 
> ltr


I'll probably get jumped on, but here goes: If you were investing to generate Income rather than growth and if that income grew each year till it reaches a certain level than suddenly price no longer matters. Even more so in your case as you have a pension. Yea, dividends can be cut and companies can go broke, but with a portfolio of quality DG stocks the likely hood of 1 in 20 cutting their dividend ls small. Avoid cyclicals, energy, high yield and those a short history of paying and growing their div. How many quality DG stocks cut their div in 2008/2009? We had Manulife and that was it. Some continued to grow them while others stopped raising even though shares fell by at least 30%. I sleep fine and don't worry a bit about when the next crash will occur.


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## agent99 (Sep 11, 2013)

*If you have won the game stop playing*

My wife says that all I am doing with our investments is playing a game. Probably right! She is just as frugal as I am, but still thinks we should spend more. But on what?? 

First, I wanted to beat the plan that a FSB had prepared for us (that caused me to go to DIY investing). (That was easy to do.)
Secondly, my DIY goal was to double our portfolio value while withdrawing ~3-4% pa to live off (plus CPP/OAS, no pension). (Just got there!)

Not sure if I have won the game?? I think I need to get well by the finish line before declaring victory. Or perhaps come up with a new goal!


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## Just a Guy (Mar 27, 2012)

I think people confuse playing the game with gambling. When it comes to playing games, if you know the rules you can be very good at the game and win more often than you lose. In fact, you can become so good at games that you rarely lose (think of grand masters of chess for example). They can easily beat people who don't play the game often. 

This, of course, is a far cry from going to vegas and putting all your money on 13 at the roulette wheel. Sure, you might hit and even make money, but that doesn't mean you've got a solid plan. 

The other thing people seem to be doing is lumping all stocks together as if they all represent the same levels of risk. There is a big difference between aurora canabis and one of the big banks. If you can't see that, you really shouldn't t be an investor. 

Finally, I see a lot of fear statements that are typical of people who haven't really ever done any investing. I find they need to do this to justify their lack of involvement in the markets (or any type of investing). Everything seems "too risky", despite the fact that those who learn the rules, don't gamble, and don't overextend themselves seem to consistently do well. I'm not talking about those who abdicate responsibility by handing over their money to someone else to manage either. Those who DIY tend to take things more seriously because it's their money on the line and no one cares more about it than they do...the broker cares about his commissions your money later, besides they can usually talk you into making them more commissions...um I mean contributions to wait out their mistakes.


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## fireseeker (Jul 24, 2017)

canew90 said:


> I'll probably get jumped on, but here goes: If you were investing to generate Income rather than growth and if that income grew each year till it reaches a certain level than suddenly price no longer matters. Even more so in your case as you have a pension. Yea, dividends can be cut and companies can go broke, but with a portfolio of quality DG stocks the likely hood of 1 in 20 cutting their dividend ls small. Avoid cyclicals, energy, high yield and those a short history of paying and growing their div. How many quality DG stocks cut their div in 2008/2009? We had Manulife and that was it. Some continued to grow them while others stopped raising even though shares fell by at least 30%. I sleep fine and don't worry a bit about when the next crash will occur.


The number of posts I've read recently extolling the power and resiliency of DG investing in all market conditions -- while eschewing cyclicals and energy -- makes me suspect very strongly that this era is nearing its end.


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## lonewolf :) (Sep 13, 2016)

My Own Advisor said:


> When has the stock market, in North America, returned 0% for 15 consecutive years?


 Take a look @ the long term Dow transports chart there was a time when it took something like 70 years to get back to old highs.


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## james4beach (Nov 15, 2012)

My Own Advisor said:


> When has the stock market, in North America, returned 0% for 15 consecutive years?


1969 - 1982 was a pretty bad period. The Dow Jones average returned about 3.5% annually over those 13 years, total return including dividends. Inflation was running around 7% so that was something like -3% real return over 13 years in stocks. It's also worth noting that dividends did not keep up with inflation during this period.

Bonds returned considerably more, something around 8% and just about zero real return. And yes, that's despite interest rates going way up.

Those years were a big disappointment to stock and dividend investors, and it went contrary to the popular belief that stocks -- not bonds -- do well during inflationary periods. Unsurprisingly, stocks were very *unpopular* by the time 1982 rolled around.

I would not rule out the possibility that going forward, we could once again have a period where stocks do quite poorly. We have very high stock valuations today and stocks are incredibly popular.

Regarding long term stock performance --

I think it's also important to note that North America (i.e. the USA) was in the growth stages of its empire over the last few hundred years. This is one of the strongest economic expansions in world history, and the markets have done well.

The USA is no longer growing like it previously was. Most people extrapolate heavily based on historical US performance, but I think this idea is fundamentally flawed. If you look at world markets more broadly, they frequently have long stretches of poor stock market performance. I don't have the figures handy but countries like UK, France, Italy have had multiple decades of very disappointing stock performance.


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## lonewolf :) (Sep 13, 2016)

Just a Guy said:


> I think people confuse playing the game with gambling. When it comes to playing games, if you know the rules you can be very good at the game and win more often than you lose. In fact, you can become so good at games that you rarely lose (think of grand masters of chess for example). They can easily beat people who don't play the game often.
> 
> This, of course, is a far cry from going to vegas and putting all your money on 13 at the roulette wheel. Sure, you might hit and even make money, but that doesn't mean you've got a solid plan.


 It takes a lot of money to keep Vegas & the stock market well oiled. If Vegas was not making money their would be no Vegas. If the average player was not losing money their would be no incentive to have a Vegas or a stock market. 

Its just like a poker game the average player can not win the money on the stock table. Just like all the money will be taken off a poker table @ the end of a poker game. The same is true for stocks the number of stocks that have gone to zero over the years is very large & the average player lost to the strong player. All stocks eventually go to zero any way you slice the money will flow to only the strong players & most will lose money.


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## lightcycle (Mar 24, 2012)

Eder said:


> Heres why I like to stay invested regardless what the current panic is (oldie but goodie)
> 
> View attachment 18944


But what that chart describes are dead cat bounces in a declining market and pullbacks due to profit-taking in a rising market.

Unless you are day-trading, these "best" and "worst" trading days are just blips in the overall trend.

Your strategy of staying invested won't take advantage of these best and worst trading days at all. If anything, your main argument should be pointing to a chart on the steady growth of the indices since the inception of the stock market.


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## Just a Guy (Mar 27, 2012)

lonewolf :) said:


> Its just like a poker game the average player can not win the money on the stock table. Just like all the money will be taken off a poker table @ the end of a poker game. The same is true for stocks the number of stocks that have gone to zero over the years is very large & the average player lost to the strong player. All stocks eventually go to zero any way you slice the money will flow to only the strong players & most will lose money.


In poker, especially tournaments, there may only be one "winner", usually one of the "big names", but that doesn't mean that hundreds of others didn't end up "in the money". If you're stupid enough to leave the table while the game is going on, or just ride out the antes then you're going to wind up broke. If you play the game, you've got a good chance of getting "into the money". The only way to lose money if a company goes to zero is to ride it to zero and not cash out in advance. True there are "investors" who do this all the time (BreX, worldcom, Enron, Nortel, etc.) but real investors never did. I remember speaking out about all those companies to other people who thought I was stupid not to get in on the "temporary correction". They didn't care about the crooked dealing I was pointing out...they didn't want to hear it. I was a fool missing out on "the opportunity of a lifetime". They didn't want to read balance sheets, they were reading sound bytes. As I said before, there were plenty of signs of their "imminent" collapse, but people didn't want to see it.

Personally, I think the stock market is heavily manipulated short term, that's why I'm a buy and hold investor. While the big players can manipulate the markets short term, over the long haul good companies will rise despite the manipulation. I don't play in the speculative stocks, nor the fad stocks...I probably miss out on a lot of opportunities, but my strategy has done well enough for me over the long term. I buy companies I know and understand, usually after a crash or correction, that have a clear way of making money and produce products or services that I've actually used. Not really a "genius" strategy by any means, one any average person could implement.


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## Dilbert (Nov 20, 2016)

^JAG, your last paragraph nicely describes my philosophy to a T.


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## Pluto (Sep 12, 2013)

james4beach said:


> 1969 - 1982 was a pretty bad period. The Dow Jones average returned about 3.5% annually over those 13 years, total return including dividends. Inflation was running around 7% so that was something like -3% real return over 13 years in stocks. It's also worth noting that dividends did not keep up with inflation during this period.
> 
> Bonds returned considerably more, something around 8% and just about zero real return. And yes, that's despite interest rates going way up.
> 
> ...


this is a good arguement for stock picking vs indexing. However, even BRK made no progress 1968 - 1976, so that stock picker was stumped for a few years as well. 

I think the poor performance of indexes during some periods is more scary for a young person vs an older one who has acquired a satisfactory pile of stocks who primarily cares about the dividends.


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## Big Kahuna (Apr 30, 2018)

Pluto said:


> this is a good arguement for stock picking vs indexing. However, even BRK made no progress 1968 - 1976, so that stock picker was stumped for a few years as well.
> 
> I think the poor performance of indexes during some periods is more scary for a young person vs an older one who has acquired a satisfactory pile of stocks who primarily cares about the dividends.


The problem with looking at historical records is that we are in a totally different era now-the central banks are huge players/influencers of the markets-it wasn't like that in 1968. IMO on a macro level nobody knows where global markets are going unless you are really connected and then maybe you might have a better idea (or not).


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## lonewolf :) (Sep 13, 2016)

There is a lot of smoke & mirrors in this game those selling stocks to the retail investor love to promote how well stocks have done over the years something like 8% a year. Yet this not the case since the inception of the Dow the number of stocks that make up the DJI went from 12 to 30. 

If someone had bought the DJI stocks & reinvested the dividends & purchased more shares how much money would they have now? None of the original stocks that made up the Dow are in the Dow now. Not sure if any of them are still trading. If the stocks have gone to zero that would be 100% loss no where close to 8% gain over the years. The mantra of buy & hold stocks for ever just does not work the longer stocks are held the greater the chance of losing 100% of your money.


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## Just a Guy (Mar 27, 2012)

It’s buy and hold, not buy and ignore. They’re is a difference. If you don’t understand that, don’t invest you’re not qualified.


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## lonewolf :) (Sep 13, 2016)

Your method needs to fit your personality it should give black & white parameters of when to buy & sell, have an edge so it extracts more money out of the market then the liquidity it adds. Of course then need to follow your method


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## Just a Guy (Mar 27, 2012)

Yeah, unfortunately it's not very scientific. Since I invest in companies I know, as long as I'm happy with the company and it's products, I don't worry about them. If however they change and produce stuff I don't like, or have bad service, it's probably time to change. I don't really follow the stock prices, I follow the companies and what they do.


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## james4beach (Nov 15, 2012)

Big Kahuna said:


> The problem with looking at historical records is that we are in a totally different era now-the central banks are huge players/influencers of the markets-it wasn't like that in 1968.


This becomes the age old question of whether "it's different this time". Yes, the central banks power the markets today. But do you believe that the central banks can continue operating this way for the next 30 to 50 years? They now control not only govt bonds, but also corporate bonds and even public stocks. The central banks are key players in risk assets and stock markets.

IMO, an investor with a heavy stock allocation must believe that central banks will continue to control markets for decades to come. Someone with say an 80% stock allocation absolutely _needs_ central banks to continue propping up stock markets, and must pray that the central banks don't reverse course, or don't lose their powers due to political factors.

I have doubts they will keep this up (and have doubts they will act in my best interest), and that's reflected in my 25% to 30% stock allocation.


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## Big Kahuna (Apr 30, 2018)

james4beach said:


> This becomes the age old question of whether "it's different this time". Yes, the central banks power the markets today. But do you believe that the central banks can continue operating this way for the next 30 to 50 years? They now control not only govt bonds, but also corporate bonds and even public stocks. The central banks are key players in risk assets and stock markets.
> 
> IMO, an investor with a heavy stock allocation must believe that central banks will continue to control markets for decades to come. Someone with say an 80% stock allocation absolutely _needs_ central banks to continue propping up stock markets, and must pray that the central banks don't reverse course, or don't lose their powers due to political factors.
> 
> I have doubts they will keep this up (and have doubts they will act in my best interest), and that's reflected in my 25% to 30% stock allocation.


You read my first sentence but you didn't read my second sentence-and nowhere did I state that central banks will work in your best interest. Read carefully and then point out flaws in the argument, but first actually read and understand the argument presented.


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## agent99 (Sep 11, 2013)

Just a Guy said:


> The other thing people seem to be doing is lumping all stocks together as if they all represent the same levels of risk. There is a big difference between aurora canabis and one of the big banks. If you can't see that, you really shouldn't t be an investor.


I don't know if people do that. Maybe those investing in indexes or etfs that follow them?

Not much now, but earlier on I would have about 10% of our equity in higher risk or high yield stocks (income trusts too). This was not really gambling, but it had higher risk than rest of portfolio. This increased our portfolio yield and added a little more fun to investing. These choices needed careful watching! 

I still have the dregs of some bad choices, but overall we did just fine on the higher risk part of portfolio. That part of our investing was, I guess, more of a game!


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## My Own Advisor (Sep 24, 2012)

Just a Guy said:


> It’s buy and hold, not buy and ignore. They’re is a difference. If you don’t understand that, don’t invest you’re not qualified.


I would agree with that. I mean, if your basket of stocks stopping paying dividends altogether, well, it's probably time to wake up and be more conservative.

That isn't going to happen.

The global economy is totally different than in "1969 - 1982"....that "was a pretty bad period."

If the TSX, Dow Jones average returns about 3% annually for a decade or more in the future, I'll eat my shoe. 

If you look back at Canadian banks and utilities companies I'll bet they paid dividends in that era.

Sure, so they couldn't increase their dividends by 7% or more every year but if inflation does run wild then the formula is easy 1) don't spend as much and 2) keep some cash.


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## milhouse (Nov 16, 2016)

This G&M article has skewed my view that Central Banks are actually losing influence due to how freely investment dollars from around the world now flow across borders.


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## james4beach (Nov 15, 2012)

My Own Advisor said:


> If the TSX, Dow Jones average returns about 3% annually for a decade or more in the future, I'll eat my shoe.


This could happen. A 3% CAGR is within the normal returns of the stock market for a decade.

A global study of historical stock performance shows plenty of precedent for long stretches of poor returns, as explained here.


 American stocks have gone as long as 17 years with zero real return
 There were several long stretches of _negative_ real returns
 UK stocks have gone as long as 23 years with zero real return
 Italian stocks have gone as long as 74 years with zero real return

All of this seems to be forgotten in today's environment where stocks are ultra popular. There is simply no assurance that stocks will perform well over 10 or even 20 years. You could in fact go an entire lifetime with poor stock returns. Investors should keep in mind that we are dealing with recency bias and hindsight bias when it comes to US and Canadian stocks. Yes, they did very well in our lifetimes. This is not a predictor of them continuing to do well.

The "risk" of stock investment isn't simply the danger of temporary declines. It's also the risk that they don't *ever* bounce back within your timeframe.


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## Just a Guy (Mar 27, 2012)

What you're missing is not every American stock went 17 years with zero return. There were never long stretches where every stock had long stretches of negative returns...same with every other nation. Heck, if you study the Great Depression, there were stocks that did well during that time too. Investing takes work, not just throwing money at a market. 

There is more to stocks than the industrial average. 

Do you also believe in "rebalancing your portfolio"? Translation, sell the stocks that are doing very well and buy ones that aren't so you have less exposure to money...um I mean risk. We won't even talk about how selling your stock triggers capital gain taxes, giving you less to reinvest, because selling winners seems stupid enough to me. 

Of course, I also believe most stocks are overvalued...used to be a p/e of 10 was considered good...today the "investors" seem to think 140+ is safe. Of course I'm just too old school, a crank who thinks interest rates are important, that you shouldn't buy a house for more than 3x your income, etc. that houses are overpriced like the stock market (there are, of course exceptions in both), that cash flow on a rental is important...that there are opportunities outside of GTA and GVA...

Yep, I'm just a fossil...not up to date on the "new" rules of investing. Just like during the dot com days...everything always goes up, up, up.


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## sags (May 15, 2010)

We have pensions which provide financial certainty. People can achieve the same certainty buying annuities, but they usually don't want to.

What they want is to earn a substantial income from a growing investment that will be left to their heirs some day. Most people have no hope of ever achieving that goal.


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## Just a Guy (Mar 27, 2012)

Most people wouldn't even attempt to achieve that goal. They may have the dream, but they can't get over their fears and start investing because it's "too risky". Just look at some of the above posts, stock "barely" make returns, in other threads, real estate costs too much, you can't find anything cheap (and those who claim otherwise are liars). Running a business is too much work and most fail within 3 years. Yet somehow, despite all this "expertise" on how markets and business work, and the risks they bear, people still seem to make a lot of money, in every market up or down. 

It's easier to sit back and ask the government to redistribute the wealth...unfortunately we're now redistributing the wealth of our grandkids while pretending we're taking it from "the rich". 

it easier to convince yourself to do nothing and pretend it's the best solution. Investing, after all, is work especially if you want to succeed. People don't like work, they just want the rewards. I gave my money to someone else and I didn't get any returns...in fact I lost money. The guy's name was Guido and he promised double digit returns...I don't know what happened.


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## Eclectic12 (Oct 20, 2010)

agent99 said:


> Just a Guy said:
> 
> 
> > ... The other thing people seem to be doing is lumping all stocks together as if they all represent the same levels of risk. There is a big difference between aurora canabis and one of the big banks. If you can't see that, you really shouldn't t be an investor ...
> ...


Interesting question ... OOH, I have spoken with many over the years who go 100% GICs etc. because the loss of a friend of a friend (typically 100% in one stock, possibly their employers stock) has them convinced all stocks are big risks. They aren't in the equities market beyond any employer provided ones that they don't control.

OTOH, a smaller number I have run into are in the market where the same risk was assigned to all stocks. A co-worker used an investing strategy of "buy the first TSE stock in the alphabet, wait for a 15% gain, sell then re-invest in the next stock down the alphabet". It worked for my co-worker for a while when the market was rising but not so much when the market fell.




agent99 said:


> ... Maybe those investing in indexes or etfs that follow them?


Not sure ... most index/etf investors I have interacted with are concerned about the combination of bad stocks and bad investor decisions. Nortel or BreX get mentioned as example of what indexing/etfs are to minimise the impact of.

Some don't like it much when I point out that the index/etf held Nortel plus that I made money buying for about $3 then selling for $11 and $8. Of course there was other Nortel in my pension that I didn't control (and possibly CPP) but what I could control, I made money from.


Cheers


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## Longtimeago (Aug 8, 2018)

Why don't you guys, 'get a room' as the saying goes. You are so far off the OP's original question it is an entirely different subject. Thread divergence and side-tracking is one thing, total takeover is another. LOL

I keep checking this thread as it is on my 'subscribed' list but it hasn't had a relevant comment added for perhaps a dozen pages.


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## ian (Jun 18, 2016)

One challenge, more significant in the past, is that many people who did invest did so via their bank offerings, enriched the bank more than themselves over time. They just went to the bank and took 'advice' from their so called investment advisor. Little did they know how that person was goaled or paid.

For many years banks charged as much 3 percent MER, many still do, on investments. Great deal for the bank...they got their 3 percent rain or shine and on someone else's money. Some of the back end load mutuals peddled by brokers or Investors Group were the same. So, if the average return over time was 5 percent the client ended up with 2 and the bank or investment firm got 3-4, sometimes even more.

Fortunately people are becoming a little wise to this and the market is responding with lower cost alternatives.


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## Big Kahuna (Apr 30, 2018)

Longtimeago said:


> Why don't you guys, 'get a room' as the saying goes. You are so far off the OP's original question it is an entirely different subject. Thread divergence and side-tracking is one thing, total takeover is another. LOL
> 
> I keep checking this thread as it is on my 'subscribed' list but it hasn't had a relevant comment added for perhaps a dozen pages.


Nobody has mentioned or even blamed anything on Donald Trump yet in this thread-give it time.


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## peterk (May 16, 2010)

Longtimeago said:


> Why don't you guys, 'get a room' as the saying goes. You are so far off the OP's original question it is an entirely different subject. Thread divergence and side-tracking is one thing, total takeover is another. LOL
> 
> I keep checking this thread as it is on my 'subscribed' list but it hasn't had a relevant comment added for perhaps a dozen pages.





Big Kahuna said:


> Nobody has mentioned or even blamed anything on Donald Trump yet in this thread-give it time.


Good lord. Given the lack of good money conversation these days, I'll be inclined to read it in whatever thread it ends up falling in, off topic from the OP or not. Let's not antagonize the few remaining threads and posters who aren't interested in political rageings about who's fake news is the fakest...


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## AltaRed (Jun 8, 2009)

Longtimeago said:


> Why don't you guys, 'get a room' as the saying goes. You are so far off the OP's original question it is an entirely different subject. Thread divergence and side-tracking is one thing, total takeover is another. LOL
> 
> I keep checking this thread as it is on my 'subscribed' list but it hasn't had a relevant comment added for perhaps a dozen pages.


You are welcome to leave.


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## Longtimeago (Aug 8, 2018)

AltaRed said:


> You are welcome to leave.


As are you AltaRed. Or did you think that shoe only fits on one person's foot?

Most forums have a requirement that posters at least try to stay on topic.


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## AltaRed (Jun 8, 2009)

I have not been complaining (much) about going off-topic on threads in CMF, so I have no reason to leave. The current free-for-all on this forum is just part of this forum's personality and we can either put up with it...or leave. Telling people to stay on topic won't give you any kudos.


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## Just a Guy (Mar 27, 2012)

I'd have to agree, many threads go off topic for a while, often leading to interesting discussions, then they eventually either Peter out or wander back on topic. I don't see a big issue with it.


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## Pluto (Sep 12, 2013)

Longtimeago said:


> As are you AltaRed. Or did you think that shoe only fits on one person's foot?
> 
> Most forums have a requirement that posters at least try to stay on topic.


by the time the OP stops posting, in this case #22, the original topic is exhausted. After that it is a free for all, if not before. In this forum, history shows you just have to live with it.


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## lonewolf :) (Sep 13, 2016)

Man needs truth for survival. If someone posts something that someone else thinks is false it is good to debate weather true or false, good or evil then the reader can do their own thinking as to that which is true.This can often lead to going off topic. 

Those that do not know how to think I did a thread on how the mind must use logic & the principals of thought to identify truth.


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## robfordlives (Sep 18, 2014)

I'm the OP. Call it timing the market or whatever but I moved the equity portion of my work fund to a bond fund. That is about 5% of my total portfolio. Looking at it's holdings it is mainly big tech and had a good run this year. Anyways that moved me to 40% FI (36% bonds 4% Pref). My pref holdings are ZPR and comfortingly enough they are essentially flat the last five days. 

All year I've been thinking I should get a wee bit more defensive and I did that today and already feel better and that is worth something. Honestly either way I am still on track for my early retirement barring some kind of calamity so why not do something that lets me sleep marginally better.


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## james4beach (Nov 15, 2012)

I'm a believer in sticking with an asset allocation plan, some proportion that you believe you will be comfortable with through all market conditions. It's OK to adjust but you probably want to get to the point where your allocation is fixed and constant.

robfordlives: with your current allocation, do you think you will be able to stomach even sharp market declines? If stocks fall 30% or something, you wouldn't want to start selling and locking in losses at those lows.

Preferreds are equities so it sounds like your allocation is 64% equities, 36% fixed income which, in the big scheme of things, is a pretty aggressive allocation. ( Illustration of how ZPR generally moves the same way as the TSX: http://schrts.co/DhB2zM )

My perspective, as I wrote early in this thread, is that if you already have enough money and if you don't need to take big risks, I don't see why you'd want to expose yourself to the risk of a bear market within the next 7 years. Fixed income/GIC rates are looking quite solid now. You could run a calculation with your current net worth + next few years of savings, with low returns. Where does that land you? If it's more than enough, then frankly I don't see why you'd want to be any more aggressive than something like 30% stocks 70% fixed income.

Direct question for you: *why not 30% equities 70% fixed income*? That would be expected to perform at around 5% CAGR or _2% to 3% real return_.


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## agent99 (Sep 11, 2013)

james4beach said:


> Direct question for you: *why not 30% equities 70% fixed income*? That would be expected to perform at around 5% CAGR or _2% to 3% real return_.


James, why would you use CAGR (Compounded growth) when the investor would have to be drawing the income for living expenses?


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## robfordlives (Sep 18, 2014)

james4beach said:


> I'm a believer in sticking with an asset allocation plan, some proportion that you believe you will be comfortable with through all market conditions. It's OK to adjust but you probably want to get to the point where your allocation is fixed and constant.
> 
> robfordlives: with your current allocation, do you think you will be able to stomach even sharp market declines? If stocks fall 30% or something, you wouldn't want to start selling and locking in losses at those lows.
> 
> ...


Let's say I go 50/50 and we experience a 50% decline. That would mean about a $100K drop in value saved versus the baseline ($1.25Mil X 15% X 50%). Generally I am able to save that from work in about 12 - 15 months. Now yes is we have such a drop then my employment might be in jeopardy but I skew optimistic for the most part.

I have essentially won the game for a middling existence lol. As I've gotten older I've realised that perhaps I want 3 vacations a year instead of 2, slightly nicer cars, etc and so my FIRE $ goals have increased over time. 

Going to 50/50 or higher FI means I would be making a bet that we will not see equity growth at all over the next 30-40 years. Sure that is possible but unlikely in my mind. For whatever reason I always had 60/40 in my mind as my ultimate retirement allocation based on my research.

Yes ZPR tracked tsx during the downturn however that was with lowering interest rates. Given it's rate reset preferred nature I don't see that happening in this cycle. I have seen others classify this as fixed income.


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## james4beach (Nov 15, 2012)

robfordlives said:


> Let's say I go 50/50 and we experience a 50% decline. That would mean about a $100K drop in value saved versus the baseline ($1.25Mil X 15% X 50%). Generally I am able to save that from work in about 12 - 15 months.


Maybe I'm missing something, but at 50% equity exposure, I thought the loss in this situation would be 1250K x 50% x 50% = 312 K loss. Maybe I missed something? At your current 60% equity exposure, the loss potential is 375K, I think.


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## fireseeker (Jul 24, 2017)

James, I think the OP is only calculating the loss based on the _change_ in his AA -- i.e. from roughly 65% stocks to 50% stocks.


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## like_to_retire (Oct 9, 2016)

james4beach said:


> Direct question for you: *why not 30% equities 70% fixed income*?


Taxes. Too much tax on all that fixed income if outside registered accounts.

ltr


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## Pluto (Sep 12, 2013)

^ Yes. Taxes. When I got rid of my bond etf a while back, and bought dividend paying stocks, my taxes went down, and my income went up. Plus due to rising rates, I had a net loss on the bond etf. Not just dividend stocks that are pressured with rising rates, bonds too.


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## Koogie (Dec 15, 2014)

Pluto said:


> ^ Yes. Taxes. When I got rid of my bond etf a while back, and bought dividend paying stocks, my taxes went down, and my income went up. Plus due to rising rates, I had a net loss on the bond etf. Not just dividend stocks that are pressured with rising rates, bonds too.


Fine but then you had to change your asset allocation at the same time ? Divvy stocks =/= fixed income.


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