# Am I on track to reach my goal?



## scorpion_ca

I have been reading lot of blogs (Canadian Couch Potato, MoneyGeek, MoneySense, CFM, Michael James on Money, Million Dollar Journey, My Own Advisor and etc.) lately. After reading these blogs, I have decided to set a goal that is save one million dollar by the age of 40. I have only 9 years to reach my goal. 

Am I on track to reach my goal? – My gross income is around $120-125k (depends on bonus) a year and I try to save as much as possible. I did not buy a house as there is not enough job security in Canada. My monthly moving average expenses is around $1,700 though I am trying to reduce it to $1,500. My present net worth is $190K. Here is the breakdown of my asset allocation. I have started to invest in index funds and ETFs since last year. 

Bond, GIC & Cash	- 51% (Mostly in savings a/c 1.9%-2.05% interest and $17k ZAG in TFSA)
Equity - 40% (TD900, TDB902 & TDB911 in RSP)
REIT - 9% (ZRE in TFSA)
Total - 100%	

Your valuable suggestion would be highly appreciated.

Thanks!


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## Userkare

To meet this goal, by simple math, you're going to need to generate on average 90k of savings per year.... 1,000,000 - 190,000 = 810,000 / 9 yrs = 90,000.

You'll have to calculate how much of your net salary over the next 9 years that you can invest, and what the return will be on that investment. Frankly, I can't think of any legal means that might allow you to reach that goal. Maybe you should be aiming at a 15 to 20 year goal instead. 

Perhaps I'm too conservative with my investments, and someone else here may suggest some more aggressive investments with that kind of return.


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## GreatLaker

Just running some hypothetical numbers thorough Excel's Payment function (PMT)
i=5%
n=9
PV=-190,000
FV=1,000,000

Result PMT = -63,958

So at 5% rate of return, you would need to save $64,000 per year to have $1M in 9 years. Have you considered your risk tolerance in selecting an asset allocation that is 50% cash and fixed income? Depending on how much of that is cash even the 5% rate of return I used may be high.

If you go to the General Personal Finance forum on this site there is a thread called Online Calculators where you will find investment calculators that can help you determine future value for various savings rates and rates of return.


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## scorpion_ca

$90k savings is not possible unless I get huge raise that I don't foresee. I will be able to save around $55-65K per year; however, it will depend on my job.

I am conservative with my investments like you. I should have started to invest earlier but my knowledge was up to savings account and GIC. I have started to read financial books, news and blogs and trying to improve my knowledge.


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## scorpion_ca

I am investing more in equities nowadays. My plan asset allocation is 70%/30%. I did not want to invest everything in equities at once. 



GreatLaker said:


> Just running some hypothetical numbers thorough Excel's Payment function (PMT)
> i=5%
> n=9
> PV=-190,000
> FV=1,000,000
> 
> Result PMT = -63,958
> 
> So at 5% rate of return, you would need to save $64,000 per year to have $1M in 9 years. Have you considered your risk tolerance in selecting an asset allocation that is 50% cash and fixed income? Depending on how much of that is cash even the 5% rate of return I used may be high.
> 
> If you go to the General Personal Finance forum on this site there is a thread called Online Calculators where you will find investment calculators that can help you determine future value for various savings rates and rates of return.


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## Userkare

The average $90K per year that I mentioned includes the compounded interest on investments as well as new contributions. One thing that you have to figure-in is the taxes on the interest paid on those investments. The combination of RRSP and TFSA yearly contribution limits is less than half of the 64K/year as quoted by GreatLaker, so you can't shelter it all. It's not so simple a formula as compounded interest when you take into account that not all the interest earned is yours to keep. I don't know how much RRSP/TFSA unused contribution room you have, and if you even want to consider an RRSP to reduce the tax burden. I guess it depends on how fast you want to burn though the $1M, because you'll pay taxes on the money when you withdraw it from the RRSP.

Maybe if you're good at using Excel, you can modify a compounded interest spreadsheet to subtract the estimated taxes to be paid on each year's interest; then you'll have an idea of the amount you need to contribute each year, and the rate of return needed to achieve the 1M in 9 yrs.


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## scorpion_ca

I have maxed out my RSP & TFSA and I will be able to max out next year too. I also use DRIP. My contribution to the registered accounts is around $26k per year. My plan is to save $1M and use that fund in my retirement. I will try to create an excel file and find out the yearly savings/investing amount.



Userkare said:


> The average $90K per year that I mentioned includes the compounded interest on investments as well as new contributions. One thing that you have to figure-in is the taxes on the interest paid on those investments. The combination of RRSP and TFSA yearly contribution limits is less than half of the 64K/year as quoted by GreatLaker, so you can't shelter it all. It's not so simple a formula as compounded interest when you take into account that not all the interest earned is yours to keep. I don't know how much RRSP/TFSA unused contribution room you have, and if you even want to consider an RRSP to reduce the tax burden. I guess it depends on how fast you want to burn though the $1M, because you'll pay taxes on the money when you withdraw it from the RRSP.
> 
> Maybe if you're good at using Excel, you can modify a compounded interest spreadsheet to subtract the estimated taxes to be paid on each year's interest; then you'll have an idea of the amount you need to contribute each year, and the rate of return needed to achieve the 1M in 9 yrs.


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## steve41

OK..... a quick RRIFmetic run says that.... at a $20,000 yearly expense level your rotten kids will inherit $2M at your age 95. If you adjust your lifestyle to $27,000, you will (just) die broke at 95.

No matter what, you will have to stick to the domestic beer.each:


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## scorpion_ca

still single and does not have any plan for kid..... drink occasionally (less than $100 a year) 



steve41 said:


> OK..... a quick RRIFmetic run says that.... at a $20,000 yearly expense level your rotten kids will inherit $2M at your age 95. If you adjust your lifestyle to $27,000, you will (just) die broke at 95.
> 
> No matter what, you will have to stick to the domestic beer.each:


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## steve41

OK..... imported beer then. Then again.... single-no kids.... you might be able to embark on a serious alcohol addiction.


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## My Own Advisor

@scorpion - thanks for reading 

Aggressive stuff, but it sounds like you are very determined. Your goal is not out of reach but definitely is a stretch goal. 

As you already know, you will need to save at least $50k + per year, every year on average and have some kind markets (i.e., a continued bull run for the next 10 years) to help you realize this goal. 

Market returns are out of your control. Your savings rate, and what your financial products cost you (i.e., money management fees) and managing taxes (or deferring them altogether) are well within your control. Focus on what you can control and don't worry about what you can't control.

To help you reach your goal, you might need to take on more equity risk, i.e., little bonds if any. Only you can decide if you can stick to your plan if you have no bonds and equities decide to drop 20-30% in value. Then of course you buy more equities when this happens. Easy to say you can do this on paper, harder to do in practice. Been there and still working on that. People that say they can do this all the time, they are usually kidding themselves. It takes practice but once you do it a few times, it gets easier. i.e., buying in 2008-2009 when others were selling. I didn't used to do this, it was scary, but I've learned:
http://www.myownadvisor.ca/now-enbridge/

Your TD efunds will serve you will well.

You seem to have the right attitude and that's not easy to put a number on but very, very important. 
Good luck with your savings rate and goals.


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## scorpion_ca

I will be able to save more than $50k a year as long as I have a well paid job. I work for a stable, reputed company but the industry is full of uncertainty. My net worth was around $125k at the end of Dec 31, 2013 and I am forecasting to reach around $203k by Dec, 2014....depends on market. I think my savings rate is so far so good but always try to reduce the expenses.

I started to invest a year ago. So, I am learning day by day and investing more on equities. I will buy TD e-series another year. After that, I will switch to ETF to reduce cost.


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## steve41

OK..... I made some assumptions re your investment (RSP/nonreg) mix and future CPP levels as well as a 3% ror and 2% inflation guess..... but here is a rough 'die-broke at 95' plan....


http://www.fimetrics.com/on-track.pdf


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## banjopete

Scorpion, I think you're going to have to put on your brave pants and "risk" more of that cash/bond/gic balance in time. I see you want to slowly get into the market which might mean you're already going down this path though. As an exercise of goal setting it's good to have targets and I think you might surprise yourself with how easy they are to strive for once you get going.

One thing to consider also is that there is a whole world of ETF's that will cost you significantly less in MER's than even the miserly (for Mutual Fund's) TD e-series funds. I seem to remember the e-series stuff being around 0.5% MER, and there are many similar ETF's that will be in the 0.05-0.2% range pretty easily. Small change I know but it can be the difference of 7% or 7.5% returns on the flip side. 

https://personal.vanguard.com/us/insights/investingtruths/investing-truth-about-cost

Good luck.


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## scorpion_ca

Thanks everyone for your valuable suggestions....especially Steve to prepare the nice report. I will review it thoroughly soon.


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## GoldStone

What is the significance of having $1M at 40? Would you be disappointed if you have $800K at 40 and $1M at 42? Why?

The goal sounds arbitrarily aggressive to me. It may be counterproductive, because it may push you to take unnecessary risk.

You may want to review Larry Swedroe's guide to asset allocation:

http://www.cbsnews.com/news/asset-allocation-guide-how-much-risk-should-you-take/
http://www.cbsnews.com/news/asset-allocation-guide-what-is-your-risk-tolerance/
http://www.cbsnews.com/news/asset-allocation-guide-how-much-risk-do-you-need/
http://www.cbsnews.com/news/asset-allocation-guide-dealing-with-conflicting-goals/

According to Swedroe, asset allocation decisions should be based on 3 factors:

ability to take risk
willingness to take risk
need to take risk

Come up with a solid plan that matches your ability, willingness and need to take risk.

Whether your reach $1M at 40, 42 or 45 depends on the market returns. They are out of your control.


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## scorpion_ca

I will not be disappointed if I have $700/800k at 40. The reason I chose this goal is that it will help me to reduce cost, increase savings and I will be able to get around $30/40K interest/dividend as a second income. I think it will give me financial freedom. 

I would like to complete MBA in Finance and change my career once I reach my goal. I don't want to quit my job and complete MBA at this moment.



GoldStone said:


> What is the significance of having $1M at 40? Would you be disappointed if you have $800K at 40 and $1M at 42? Why?
> 
> The goal sounds arbitrarily aggressive to me. It may be counterproductive, because it may push you to take unnecessary risk.
> 
> You may want to review Larry Swedroe's guide to asset allocation:
> 
> http://www.cbsnews.com/news/asset-allocation-guide-how-much-risk-should-you-take/
> http://www.cbsnews.com/news/asset-allocation-guide-what-is-your-risk-tolerance/
> http://www.cbsnews.com/news/asset-allocation-guide-how-much-risk-do-you-need/
> http://www.cbsnews.com/news/asset-allocation-guide-dealing-with-conflicting-goals/
> 
> According to Swedroe, asset allocation decisions should be based on 3 factors:
> 
> ability to take risk
> willingness to take risk
> need to take risk
> 
> Come up with a solid plan that matches your ability, willingness and need to take risk.
> 
> Whether your reach $1M at 40, 42 or 45 depends on the market returns. They are out of your control.


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## steve41

OK then...... that plan was for an ROR of 3%. It resulted in a $27K after-tax lifestyle. At 1%, he secures a $22K lifestyle.

1% seems like a pretty risk averse goal to me.


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## scorpion_ca

It's been a good year and my net worth is around $205k at the end of 2014....target to save a million by 2024.


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## supperfly17

scorpion_ca said:


> It's been a good year and my net worth is around $205k at the end of 2014....target to save a million by 2024.


Not sure if you mentioned this, but why do you want to have a million dollars by the time you are 40?


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## scorpion_ca

The main reason is Financial Independence.


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## Michel

Interesting thread, I have basically the same goal as you but I'm 27, make less money and I'm giving myself 15-20 years to do it.

I would say investing 70/30 stocks/bonds on a 9-year period is optimistic. Markets have had bad 9 year periods before, for example someone investing in 2000 and wanting to reach a certain goal in 2009. If reaching your goal on time is very important to you then you might miss the mark by relying so heavily on market performance. Don't let the great performance of the last 3 years fool you into thinking things will be like this forever. Maybe 2015 will be a total collapse of the economy, who knows; maybe 2016 will, maybe 2023 (which would be disastrous to your objective). I would suggest a more "balanced" approach, 50/50 or maybe 60/40. If however that million is just a benchmark and you plan on keeping most of that money invested after that, then your more aggressive approach may make sense, just keep in mind the markets won't necessarily do what you want when you want.


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## My Own Advisor

Michel said:


> If however that million is just a benchmark and you plan on keeping most of that money invested after that, then your more aggressive approach may make sense, just keep in mind the markets won't necessarily do what you want when you want.


Potentially a million is a benchmark because you could live reasonably well off the dividend and/or distribution from that. I'm not sure though...just guessing...

At 3% dividend or distribution yield, that's $30k per year or $2,500 per month. If you have no debt, that's a decent income in a low-tax rate. Some of that income could be used/earned tax-free as well, (thanks TFSA 

+1 Michel - re: "Just keep in mind the markets won't necessarily do what you want when you want." 

I think for this reason, because no investor can predict their investment returns, living off the income earned from your portfolio is a more conservative strategy. The problem is, you need a very good chunk of the capital to do so.

On that note, it's certainly worth saving for. I'm sure a few CMFers are living off the dividends and/or distributions churned out by their portfolios, and are living quite comfortably because of it, not caring what the markets do or don't do. I'd like to be there some day. That's really FI. Your money is making money so you don't have to work. 

Only time will tell if I'm getting there. 

Michel and Scorpion_ca, you guys are young and thinking about this in your mid-20s. If you continue with the same mindset and focus, you'll "be there" in another 20 years which will be FAR AHEAD of most in your cohort.


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## scorpion_ca

It's important to reach my goal but I would be okay if I don't reach there on time. I don't have any plan to retire once I reach my goal. As I mentioned previously, it will give me financial freedom and I will be able to do what I like to do.

I am not only depending in investment income but also in saving more to reach my goal. I read couple of books written by William J. Bernstein and he mentioned that young people should pray everyday that market should go down and I do the same. I didn't like that market has gained last three years as I had to pay more. I am hoping that market should go down in 2015 and onward that I could buy more.


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## Michel

scorpion_ca said:


> I read couple of books written by William J. Bernstein and he mentioned that young people should pray everyday that market should go down and I do the same. I didn't like that market has gained last three years as I had to pay more. I am hoping that market should go down in 2015 and onward that I could buy more.


Amen! I dearly hope markets will crash as badly as possible this year, everything is terribly overpriced.


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## My Own Advisor

scorpion_ca said:


> I am hoping that market should go down in 2015 and onward that I could buy more.


As a young investor, this is a great attitude to have


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## RBull

GoldStone said:


> What is the significance of having $1M at 40? Would you be disappointed if you have $800K at 40 and $1M at 42? Why?
> 
> The goal sounds arbitrarily aggressive to me. It may be counterproductive, because it may push you to take unnecessary risk.
> 
> You may want to review Larry Swedroe's guide to asset allocation:
> 
> http://www.cbsnews.com/news/asset-allocation-guide-how-much-risk-should-you-take/
> http://www.cbsnews.com/news/asset-allocation-guide-what-is-your-risk-tolerance/
> http://www.cbsnews.com/news/asset-allocation-guide-how-much-risk-do-you-need/
> http://www.cbsnews.com/news/asset-allocation-guide-dealing-with-conflicting-goals/
> 
> According to Swedroe, asset allocation decisions should be based on 3 factors:
> 
> ability to take risk
> willingness to take risk
> need to take risk
> 
> Come up with a solid plan that matches your ability, willingness and need to take risk.
> 
> Whether your reach $1M at 40, 42 or 45 depends on the market returns. They are out of your control.


I just got to this thread. Thanks for posting these links. To me this is very good advice.


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## Cal

If you earn $125 per year, spend roughly 20, taxed for another 25 or so.....the remaining $ invested would get you pretty close, factoring in compound interest as well. Your biggest enemy could be the GIC/cash portion of your portfolio.


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## scorpion_ca

My expenses were around $20k and paid income tax around $29k last year though would get some refund due to RSP contribution. Income tax is a killer for a single person.

I bought some ZRE, ZPR and will buy some VCN this year.....trying to reduce my fixed income position.


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## scorpion_ca

Net Worth Update -

Q4, 2014 - $205k
Q1, 2015 - $228k (around 11% gain)

Target to reach $300k at the end of this year but doubt it....company stopped contributing group benefits and other perks.....might not get bonus and increment this year....however, glad to have a job.


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## scorpion_ca

Net Worth Update - plan was to reach $250k at the end of Q2, 2015 but could not reach there due to "Mr. Market" and additional $5.5k expenses.

Q1, 2015 - $228k
Q2, 2015 - $243k (around 7% gain)


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## scorpion_ca

Net Worth Update - plan was to reach $275k at the end of Q3, 2015 but could not reach there due to 10% salary cut, took a vacation as well as market drop.

Q1, 2015 - $228k
Q2, 2015 - $243k 
Q3, 2015 - $250k (around 3% gain)

So far, the average monthly expenses is around $1,650 in 2015. But it will increase in the next quarter because of one time auto insurance payment and boxing day shopping. Now focus is to save $10k for TFSA payment in Jan, 2016.

I have ZAG & ZRE in TFSA, ZPR & VCN in cash account and VUN, XEF, TDB900 & TDB911 in RRSP. I will sell TDB900 and TDB911 once the market is up and will buy more XEF.


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## peterk

scorpion_ca said:


> My gross income is around $120-125k
> 
> My monthly moving average expenses is around $1,700 though I am trying to reduce it to $1,500.


Holy crap! That is your TOTAL spending you are talking about? Including housing?? That is damn impressive, particularly for someone at age 32 who makes so much money. You are going to hit that 1 million dollar goal in no time!


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## scorpion_ca

Yesterday I was calculating my monthly moving average expenses for 2015 that is $1,720. Expenses include all costs including housing too. Our company has reduced our salary by 10% in Sep and they also stopped contributing 5% of our salary to group RSP at the beginning of this year. It might take little longer to reach my goal.


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## peterk

Very impressive. That includes vacations and unusual entertainment as well? Not just the core costs? I mean I could probably get my core expenses down to $1,700/month if I really tried, but throw in 10k for vacations and 2-3k in other one-off purchases each year and that blows the annual budget out of the water.

Pay cut is a minor hiccup, at least you still have a job! Myself I've had my bonuses cut by about 75% and overtime completely eliminated. About a ~$22,000 pre-tax loss


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## scorpion_ca

Yup, that also includes mini vacations and entertainment but I have another expenses around $7k yearly that I give to my parents for their monthly expenses. They don't live here. So, they are able to manage their monthly expenses with that amount. I don't take much vacation at present as I am trying to reach my goal ASAP. I am getting tired of this North American crap to worry about jobs every couple of months. I think this cannot be a healthy lifestyle as to worry about job always.


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## NewBrunswick

This thread is great motivation, thanks for sharing all your info.

Very impressive that at what your making your able to excersise such self control.

Best of luck reaching your goals!


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## scorpion_ca

My plan was to reach $300k at the end of 2015 but could not reach there; however, I'm happy with the result.

*Net Worth - *

2013 - $125k
2014 - $205k
2015 - $276k (around 35% gain)

*Expenses - *

The average monthly expenses is around $1,680 in 2015. 

*Passive Income (Dividend & Interest) - *

2013 - $805
2014 - $3,591
2015 - $4,650 (around 26% gain)

*Asset Allocation -*

Fixed Income - 25%
Equity - 64%
REIT - 11%

2016 target is to reach $350k.


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## My Own Advisor

Very well done scorpion_ca. You keep raising your passive income by 26% every year _*you'll have no problem*_ reaching your financial freedom goals.

I had a decent 2015, my passive income (from capital invested) increased to about $11,750 per year. I will be writing a post about that in another week. I should crack the $12k barrier with the upcoming TFSA contribution room this month. 

Those monthly expenses are very low. If you keep a high savings rate (for another 10 years or so), you're going to be very well off eventually.


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## scorpion_ca

Thanks MOA...

I could increase my passive income by investing more on dividend and preferred shares ETFs but I prefer 50% dividend and 50% capital gain at present as I think my income is high and I would like to pay less tax now.

Sometimes this passive income puzzles me as I received around $500 from ZPR this year but on the other hand I lost around $3,000 value of the fund though I do not have any plan to sell it in the near future.


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## scorpion_ca

Here is the Q1, 2016 net worth update. $6k savings in the first three months is way less of a saving than my expectations. 

*Net Worth - *

2015 - $276k
Q1, 2016 - $282k (around 2% gain)

*Expenses - *

The average monthly expenses is around $1,500 in Q1, 2016. But it will increase during Summer and Fall. Moreover, this expense does not include monthly expenses of $600 that I provide to my parents.

*Passive Income (Dividend & Interest) - *

2015 - $4,650
Q1, 2016 - $1,400 (Way better than Q1 of 2015)

*Asset Allocation -*

Fixed Income - 24%
Equity - 62%
REIT - 14%

I will be happy if I could reach to my net worth of $325k at the end of 2016.


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## scorpion_ca

Here is the Q2, 2016 net worth update. $28k savings/gain in between Apr-Jun, 2016. 

*Net Worth - *

2015 - $276k
Q1, 2016 - $282k
Q2, 2016 - $310k (around 9% gain)

*Expenses - *

The average monthly expenses is around $1,575 in the first half of 2016. But it will increase during Summer and Fall. Moreover, this expense does not include monthly expenses of $600 that I provide to my parents.

*Passive Income (Dividend & Interest) - *

2015 - $4,650
Q1, 2016 - $1,400
Q2, 2016 - $3,350

*Asset Allocation -*

Fixed Income - 33%
Equity - 54%
REIT - 13%

I will increase my equity position (VUN & XEF) in the near future.


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## scorpion_ca

Here is the Q3, 2016 net worth update. $20k savings/gain in between Jul-Sep, 2016. 

*Net Worth - *

2015 - $276k
Q1, 2016 - $282k
Q2, 2016 - $310k 
Q3, 2016 - $330k (around 6% gain)

*Expenses - *

So far, the average monthly expenses is around $1,978 in 2016. Hopefully it will decrease this quarter as auto insurance already been paid for a year in Sep, 2016. Moreover, this expense does not include monthly expenses of $600 that I provide to my parents.

*Passive Income (Dividend & Interest) - *

2015 - $4,650
Q1, 2016 - $1,400
Q2, 2016 - $3,350
Q3, 2016 - $4,875

*Asset Allocation -*

Fixed Income - 33%
Equity - 55%
REIT - 12%

*Since inception time-weighted rate of return - *

Cash - (1.02%) (VCN & ZPR)
TFSA - 19.79% (ZAG & ZRE)
RSP - 41.11% (VUN, XEF, TDB 900 & TDB 911)

Waiting for market downturn to add more equities in the portfolio. :chuncky:


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## scorpion_ca

Here is the 2016 net worth update. 20% or $72k savings/gain since 2015. 

*Net Worth - *

2015 - $276k
Q1, 2016 - $282k
Q2, 2016 - $310k 
Q3, 2016 - $330k 
Q4, 2016 - $348k 

*Expenses -*

The average monthly expenses were around $1,877 in 2016 that is $215 more than the previous year of 2015...we did a road trip to ON this year. Moreover, this expense does not include monthly expenses of $600 that I provide to my parents.

*Passive Income (Dividend & Interest) -*

2015 - $4,650
Q1, 2016 - $1,400
Q2, 2016 - $3,350
Q3, 2016 - $4,875
Q4, 2016 - $6,441 (27% gain since last year)

*Asset Allocation -*

Fixed Income - 35%
Equity - 54%
REIT - 11%

*Since Inception Time-Weighted Rate of Return - *

Cash - 5.83% (VCN & ZPR)
TFSA - 19.56% (ZAG & ZRE)
RRSP - 47.10% (VUN, XEF, XEC, TDB900 & TDB911)

Waiting for opportunity to add more equities in the portfolio. Our company has decided to reinstate RRSP matching contribution program from this January. It is 5% of my yearly salary....free money is always welcome!


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## redsgomarching

scorpion_ca said:


> Here is the 2016 net worth update. 20% or $72k savings/gain since 2015.
> 
> *Net Worth - *
> 
> 2015 - $276k
> Q1, 2016 - $282k
> Q2, 2016 - $310k
> Q3, 2016 - $330k
> Q4, 2016 - $348k
> 
> *Expenses -*
> 
> The average monthly expenses were around $1,877 in 2016 that is $215 more than the previous year of 2015...we did a road trip to ON this year. Moreover, this expense does not include monthly expenses of $600 that I provide to my parents.
> 
> *Passive Income (Dividend & Interest) -*
> 
> 2015 - $4,650
> Q1, 2016 - $1,400
> Q2, 2016 - $3,350
> Q3, 2016 - $4,875
> Q4, 2016 - $6,441 (27% gain since last year)
> 
> *Asset Allocation -*
> 
> Fixed Income - 35%
> Equity - 54%
> REIT - 11%
> 
> *Since Inception Time-Weighted Rate of Return - *
> 
> Cash - 5.83% (VCN & ZPR)
> TFSA - 19.56% (ZAG & ZRE)
> RRSP - 47.10% (VUN, XEF, XEC, TDB900 & TDB911)
> 
> Waiting for opportunity to add more equities in the portfolio. Our company has decided to reinstate RRSP matching contribution program from this January. It is 5% of my yearly salary....free money is always welcome!


wow that 5% is definitely a nice boost! congrats!


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## scorpion_ca

Here is the Q1, 2017 net worth update. 6% or $22k savings/gain since Jan 1, 2017. 

*Net Worth - *

2015 - $276k
2016 - $348k 
Q1, 2017 - $370k

*Expenses -*

The average monthly expenses are around $3,160 in the Q1, 2017. However, it will drop down for the remaining of the year. Moreover, this expense does not include monthly expenses of $600 that I provide to my parents.

*Passive Income (Dividend & Interest) -*

2015 - $4,650
2016 - $6,441
Q1, 2017 - $1,663 

*Asset Allocation -*

Fixed Income - 43%
Equity - 46%
REIT - 11%

*Since Inception Time-Weighted Rate of Return - *

Cash - 7.62% (VCN & ZPR)
TFSA - 23.74% (ZAG & ZRE)
RRSP - 53.54% (VUN, XEF, XEC, TDB900)

Waiting for opportunity to add more equities in the portfolio.


----------



## redsgomarching

wow just over $500 per month in passive income! what do you do with this? does this help you cover your expenses or do you reinvest/DRIP?


----------



## scorpion_ca

I didn't even include March dividend that I usually receive as DRIP in the second week of April. I have set up DRIP in all of my accounts....money makes money :semi-twins:


----------



## scorpion_ca

It's been a while since I updated my net worth. Here is the Q3, 2017 net worth update. 8% or $30k savings/gain since March 31, 2017 even though I have purchased a van for $16k. It was paid in cash. 

*Net Worth - *

2015 - $276k
2016 - $348k 
Q1, 2017 - $370k
Q3, 2017 - $400k

*Expenses -*

The average monthly expenses are around $4,636 so far in 2017. This expense also includes the price of my van that I paid in cash. I am hoping it will drop down for the remaining of the year. Moreover, this expense does not include monthly expenses of $600 that I provide to my parents.

*Passive Income (Dividend & Interest) -*

2015 - $4,650
2016 - $6,441
Q1, 2017 - $1,663 
Q3, 2017 - $6,020

*Asset Allocation -*

Fixed Income - 35%
Equity - 54%
REIT - 11%

*Since Inception Time-Weighted Rate of Return - *

Cash - 8.61% (VCN & ZPR)
TFSA - 23.62% (ZAG & ZRE)
RRSP - 54.98% (VUN, XEF & XEC)

Although I spent around $38k on above-mentioned ETFs in between April and September, 2017, I am waiting for opportunity to add more equities in my portfolio.


----------



## My Own Advisor

scorpion_ca said:


> I didn't even include March dividend that I usually receive as DRIP in the second week of April. I have set up DRIP in all of my accounts....money makes money :semi-twins:


Yes it does  Well done.


----------



## scorpion_ca

My Own Advisor said:


> Yes it does  Well done.


I am glad that I started my investing with index funds/ETFs even though I was scared/uneducated about investing in equities until the middle of 2013.


----------



## scorpion_ca

Here is the Q4, 2017 net worth update. 23.8% or $83k savings/gain since Q4, 2016. 

*Net Worth - *

2015 - $276k
2016 - $348k 
2017 - $431k

*Expenses -*

2015 - $20k
2016 - $22k 
2017 - $47k

The average monthly expenses were around $3,898 in 2017. This expense also includes the price of my Dodge van that I paid in cash. I am hoping to reduce my expenses in 2018. Moreover, this expense does not include monthly expenses of $600 that I provide to my parents.

*Passive Income (Dividend & Interest) -*

2015 - $4,650
2016 - $6,441
2017 - $6,839

I track dividend based on settlement dates. Also, I switched to all ETFs portfolio in 2017. Therefore, I will receive more dividends in January, 2018 that I used to receive in December.

*Asset Allocation -*

Fixed Income - 33%
Equity - 56%
REIT - 11%

*Since Inception Time-Weighted Rate of Returns - *

Cash – 14.28% (VCN & ZPR)
TFSA – 30.26% (ZAG & ZRE)
RRSP – 64.64% (VUN, XEF & XEC)

I hope I will be able to reach half million $$ net worth at the end of 2018.


----------



## Holland

Very impressive progress! I look forward to more updates


----------



## scorpion_ca

Here is the Q1, 2018 net worth update. Around 2.1% or $9k savings/gain since the beginning of 2018. 

*Net Worth - *

2015 - $276k
2016 - $348k 
2017 - $431k
Q1, 2018 - $440k

*Expenses -*

2015 - $20k
2016 - $22k 
2017 - $47k
Q1, 2018 - $4.5k

So far, the average monthly expense is around $1,483 in 2018. Moreover, this expense does not include monthly expenses of $600 that I provide to my parents.

*Passive Income (Dividend & Interest) -*

2015 - $4,650
2016 - $6,441
2017 - $6,839
Q1, 2018 - $1,986

*Asset Allocation -*

Fixed Income - 32%
Equity - 55%
REIT - 13%

*Since Inception Time-Weighted Rate of Returns - *

Cash – 9.50% (VCN & ZPR)
TFSA – 31.26% (ZAG & ZRE)
RRSP – 64.55% (VUN, XEF & XEC)

I have some cash in my RRSP that is waiting for market correction.


----------



## scorpion_ca

An idle mind is devil's workshop...I would really appreciate your comment/suggestion for the following NW analysis. Is it feasible to achieve around 7% ROI going forward while investing in broad based ETFs such as VCN, ZPR, VUN, XEF, XEC, ZRE and ZAG?

*If I purchase a house in 2018 -
*








*If I don't purchase a house in 2018 -
*


----------



## scorpion_ca

Here is the Q2, 2018 net worth update. Around 8.6% or $38k savings/gain since April, 2018. 

*Net Worth - *

2015 - $276k
2016 - $348k 
2017 - $431k
Q1, 2018 - $440k
Q2, 2018 - $478k

*Expenses -*

2015 - $20k
2016 - $22k 
2017 - $47k
Q1, 2018 - $4.5k
Q2, 2018 - $9.2k

So far, the average monthly expense is around $1.5k in 2018. 

*Passive Income (Dividend & Interest) -*

2015 - $4.6k
2016 - $6.4k
2017 - $6.8k
Q1, 2018 - $1.9k
Q2, 2018 - $5.3k

*Asset Allocation -*

Fixed Income - 32%
Equity - 56%
REIT - 12%

*Since Inception Time-Weighted Rate of Returns - *

Cash – 17.70% (VCN & ZPR)
TFSA – 35.99% (ZAG & ZRE)
RRSP – 73.74% (VUN, XEF & XEC)

I have some cash in my RRSP that has been waiting for market correction…


----------



## peterk

Great savings rate!

How come you are keeping your low/medium risk ETFs in your TFSA/Cash and high growth stocks in your RRSP? I believe it's the exact opposite of what you want, tax-wise, for efficient compounding, sale, and eventual removal of the money down the road, isn't it?...


----------



## scorpion_ca

When I set up my TFSA, I thought I would use some of it for down payment. That's the reason, it has medium risk ETFs. I am not planning to buy ZAG anymore or next 10 years at least. I set up DRIP for all of my accounts and it's easy to manage ZRE with DRIP in TFSA.

My understanding is that it's more tax efficient to hold US/international equities in RRSP. My goal is to reach $1 MM ASAP. After that, I may do an analysis regarding tax implications of all my accounts.


----------



## james4beach

Great results! I'm around the same age as you, with similar parameters, and we seem to be heading the same way. I think there at least 3 or 4 of us in this forum all around the same age and place in our careers & savings.

I'm still amazed by how low your expenses are, much lower than mine. Any tips on how to reduce housing costs? Did you do something special to get this low?



scorpion_ca said:


> I have set up DRIP in all of my accounts....money makes money :semi-twins:


DRIP'ing is essential, but another way to think of dividends is as a cash delivery mechanism, in that they are transferring some of your equity to you as cash. That is, the dividends do not generate new money (like bond interest does). Reinvesting the dividend _preserves_ the equity value, as opposed to letting it bleed out (taking all the dividends out = bleeding out cash from the equity value).

So I think it's a misconception that reinvesting dividends grows or compounds the dividends. What's happening is that some $ is taken out of equity, you receive it as cash, then put the cash back into equity. Nothing has really changed through this process. This is why it doesn't make any sense to seek a high dividend yielding stock and then just DRIP the dividend. There is no compounding or extra growth accomplished.

As PWL Capital states in this video, "As much as the dividend may seem like free money, the reality is that the payment of the dividend decreases the value of your stock. If a company pays $20 million to its shareholders as a dividend, the remaining value of the company has to decrease by $20 million." -- see https://www.youtube.com/watch?v=9j6DInAMMaM

Why am I saying all this... I think we're fed misconceptions about dividends and given false promises by web sites and media personalities. It's important to not get the wrong idea about what dividends do for you when living off capital. When the time comes that you stop reinvesting the dividends, and start taking out the cash, you *will* be tapping into your equity and capital. If you have 1M capital and are living off dividends, this is equivalent to selling some shares each year and depleting (to a mild degree) your capital. Of course, if equities keep performing well, the new gains can offset the depletion. But I think it's still very important to be aware that dividends deplete or tap into capital.

This is also why it's critical to reinvest all dividends unless you actually need that cash, because it is equivalent to selling or withdrawing equity. Others around here will disagree with my view on this, but you can refer to the PWL Capital video or this Moneysense series on Dividend Myths which explains it all quite well. As the article says: "a company that pays a dividend to shareholders is depleting its own capital".


----------



## peterk

james4beach said:


> That is, the dividends do not generate new money (like bond interest does).
> .
> .
> There is no compounding or extra growth accomplished.


Right, that is the key difference. Though dividends give the appearance of "compounding", it's actually just "accelerating earnings growth" that's simulating "compound interest". If the company you invest in loses its edge and barely increases earnings over the years, then the dividend will eventually follow, and suddenly it won't seem like compounding at all.


Though the math on this is easy enough to comprehend, I still have a hell of a hard time getting dividends out of my mind. How many of us were going crazy for Enbridge's 6.5% yield last month? I know I was...


----------



## james4beach

peterk said:


> Though the math on this is easy enough to comprehend, I still have a hell of a hard time getting dividends out of my mind. How many of us were going crazy for Enbridge's 6.5% yield last month? I know I was...


I've had trouble with this too. My five pack portfolio pays lots of dividends and I have to keep fighting my tendency to think of the cash as newly generated or "extra" money. Several years ago, I bought ZUT (utilities ETF) thinking that it preserved capital and just emitted fresh money. There is just something about dividends that makes them feel like _new_ money, hiding the fact that it directly comes out of equity. Even with everything I know today, I still look forward to and feel good when my five pack pays out dividends.

In reality, it makes no difference to me whether they pay out those dividends or just retain the cash and keep going on with their business. The share price declines the moment the dividend is paid out. But it doesn't feel like that, and the ex-dividend price drop happens _weeks_ before the cash payment, which helps hide the effect. When the cash shows up in your account, it feels like you just got it for free.


----------



## scorpion_ca

james4beach said:


> Great results! I'm around the same age as you, with similar parameters, and we seem to be heading the same way. I think there at least 3 or 4 of us in this forum all around the same age and place in our careers & savings.
> 
> I'm still amazed by how low your expenses are, much lower than mine. Any tips on how to reduce housing costs? Did you do something special to get this low?
> 
> 
> 
> DRIP'ing is essential, but another way to think of dividends is as a cash delivery mechanism, in that they are transferring some of your equity to you as cash. That is, the dividends do not generate new money (like bond interest does). Reinvesting the dividend _preserves_ the equity value, as opposed to letting it bleed out (taking all the dividends out = bleeding out cash from the equity value).
> 
> So I think it's a misconception that reinvesting dividends grows or compounds the dividends. What's happening is that some $ is taken out of equity, you receive it as cash, then put the cash back into equity. Nothing has really changed through this process. This is why it doesn't make any sense to seek a high dividend yielding stock and then just DRIP the dividend. There is no compounding or extra growth accomplished.
> 
> As PWL Capital states in this video, "As much as the dividend may seem like free money, the reality is that the payment of the dividend decreases the value of your stock. If a company pays $20 million to its shareholders as a dividend, the remaining value of the company has to decrease by $20 million." -- see https://www.youtube.com/watch?v=9j6DInAMMaM
> 
> Why am I saying all this... I think we're fed misconceptions about dividends and given false promises by web sites and media personalities. It's important to not get the wrong idea about what dividends do for you when living off capital. When the time comes that you stop reinvesting the dividends, and start taking out the cash, you *will* be tapping into your equity and capital. If you have 1M capital and are living off dividends, this is equivalent to selling some shares each year and depleting (to a mild degree) your capital. Of course, if equities keep performing well, the new gains can offset the depletion. But I think it's still very important to be aware that dividends deplete or tap into capital.
> 
> This is also why it's critical to reinvest all dividends unless you actually need that cash, because it is equivalent to selling or withdrawing equity. Others around here will disagree with my view on this, but you can refer to the PWL Capital video or this Moneysense series on Dividend Myths which explains it all quite well. As the article says: "a company that pays a dividend to shareholders is depleting its own capital".


Yes, there are couple of us here within the same age range. However, my income is not as high as others. Therefore, I have been trying to reduce my costs. I have been living in the same house since Nov, 2008 and my rent is around $800. It's basement in a bi-level house. The basement is so bright and there is lot of fresh air in it. The upstairs is empty most of the time as landlord doesn't find suitable tenant. So, we have the full privacy like living in a whole house. I have a very good relationship with the landlord as I have been paying my rent on time for the last 10 years. I always try to buy stuff on sale. I don't pay full price other than for milk and banana. Don't spend much money on restaurants. Cook our own food. 

I have been looking for a house for the last two months and planning to buy a house as soon as I find a suitable one. Also, planning to start MBA next year. Expenses will be very high next couple of years. I would rather complete MBA than saving $50k in my account.

I understand that dividend is not an extra money but with the DRIP, you get more dividends next time. Isn't it correct? If not then why do I get more dollars on every subsequent months? It's not significant amount. However, it has been increasing month by month. See below - 

Settle Date	Fund Amount Quantity Total Costs Avg. Costs 
6/Mar/18 ZRE	$180.29 8.0 $165.68 $20.71 
5/Apr/18 ZRE	$180.97 8.0 $167.36 $20.92 
4/May/18 ZRE	$181.65 8.0 $167.36 $20.92 
6/Jun/18 ZRE	$182.33 8.0 $173.28 $21.66 
6/Jul/18 ZRE	$183.01 8.0 $175.44 $21.93


----------



## carson

james4beach said:


> DRIP'ing is essential, but another way to think of dividends is as a cash delivery mechanism, in that they are transferring some of your equity to you as cash. That is, the dividends do not generate new money (like bond interest does).


How is a bond coupon new money? It's exactly the same as a dividend distribution from the investor's perspective.

https://www.quora.com/What-happens-to-bond-price-as-soon-as-a-coupon-is-paid


----------



## james4beach

carson said:


> How is a bond coupon new money? It's exactly the same as a dividend distribution from the investor's perspective.


A bond price does not change after a coupon is paid, which is why I'm calling it new money. The company has to come up with that money (somehow) and pay it out. With a stock however, the dividend is paid out of the company's cash reserves or in other words, the cash is removed from their current equity value. The stock price drops when the dividend is paid out to reflect that the equity has declined by the amount of cash paid out.


----------



## carson

james4beach said:


> A bond price does not change after a coupon is paid, which is why I'm calling it new money. The company has to come up with that money (somehow) and pay it out. With a stock however, the dividend is paid out of the company's cash reserves or in other words, the cash is removed from their current equity value. The stock price drops when the dividend is paid out to reflect that the equity has declined by the amount of cash paid out.


Bond market prices may not change after the coupon is paid but the value does change. If you were to sell a bond immediately after the coupon payment you would receive less than if you sold it immediately before. Just like a dividend paying stock on it's ex-dividend date. The only difference is the bond market doesn't reflect the price plus accrued interest while the stock market does in the case of the dividend value.


This site provides a very good explanation. https://thismatter.com/money/bonds/bond-pricing.htm

My point is neither bonds nor dividend stocks produce new money. They accrue interest or dividend value until the ex-dividend date or the coupon payment date. When the coupon or dividend payment is made the bond or stock's value is reduced by the payment amount.


----------



## canew90

james4beach said:


> That is, the dividends do not generate new money (like bond interest does). Reinvesting the dividend _preserves_ the equity value, as opposed to letting it bleed out (taking all the dividends out = bleeding out cash from the equity value).


Except when the company increase their dividend year after year, while bond interest remains the same and loses value due to inflation!
There is no comparison between bonds & equities. One you are buying debt the other a share of the company.


----------



## canew90

scorpion_ca said:


> An idle mind is devil's workshop...I would really appreciate your comment/suggestion for the following NW analysis. Is it feasible to achieve around 7% ROI going forward while investing in broad based ETFs such as VCN, ZPR, VUN, XEF, XEC, ZRE and ZAG?
> 
> *If I purchase a house in 2018 -
> *
> View attachment 18818
> 
> 
> *If I don't purchase a house in 2018 -
> *
> View attachment 18820


As I don't own any ETF's my opinion may not be the best, but I'd say No.
However, if one invested in a group of solid DG stocks, I'd say Yes, over time.
Here's examples:
Our TFSA: Started with a Bank, added Utility, then Pipeline and Comm stock
Mine maxed out $57,500, reinvested Dividends $18,250, Total Investment $75750, Mkt Val $91,400. Annual Div $4,625 or 6.10%(Yield on Investment)
Wife's $57,500, reinv div $19,365, Total $76,865, Mkt Val $98,600. Annual Div $4,943 or 6.43%
So as the companies increase the dividend our yield goes up and we'll probably hit the 7% within 2-3 yrs., not counting any Cap Gth.
You've done a great job saving, but looking back you might have done much better taking MyOwnAdvisor's advice and invested more in equities, rather than ETF's.


----------



## scorpion_ca

canew90 said:


> As I don't own any ETF's my opinion may not be the best, but I'd say No.
> However, if one invested in a group of solid DG stocks, I'd say Yes, over time.
> Here's examples:
> Our TFSA: Started with a Bank, added Utility, then Pipeline and Comm stock
> Mine maxed out $57,500, reinvested Dividends $18,250, Total Investment $75750, Mkt Val $91,400. Annual Div $4,625 or 6.10%(Yield on Investment)
> Wife's $57,500, reinv div $19,365, Total $76,865, Mkt Val $98,600. Annual Div $4,943 or 6.43%
> So as the companies increase the dividend our yield goes up and we'll probably hit the 7% within 2-3 yrs., not counting any Cap Gth.
> You've done a great job saving, but looking back you might have done much better taking MyOwnAdvisor's advice and invested more in equities, rather than ETF's.


I don't want to buy DG stock until I know how to analyze a suitable DG stock. The reason I started with broad based index ETF is that I can learn about investing/personal finance and my money can grow at the same time. I am planning to join with Canadian Money Saver Share Club in our area. Most of the investors in that group are DG investors. I hope I will learn about the DG investing from them.

Although I started to max out my TFSA since 2009, I left it on savings account and made around $500 until the end of Sep, 2013. Now the market value is $73.5k including DRIP of $9.7k. I have no plan to buy ZAG in future. I should have learnt about investing earlier. I cannot change my past but I can keep improving my future.


----------



## canew90

scorpion_ca said:


> I don't want to buy DG stock until I know how to analyze a suitable DG stock. The reason I started with broad based index ETF is that I can learn about investing/personal finance and my money can grow at the same time. I am planning to join with Canadian Money Saver Share Club in our area. Most of the investors in that group are DG investors. I hope I will learn about the DG investing from them.
> 
> Although I started to max out my TFSA since 2009, I left it on savings account and made around $500 until the end of Sep, 2013. Now the market value is $73.5k including DRIP of $9.7k. I have no plan to buy ZAG in future. I should have learnt about investing earlier. I cannot change my past but I can keep improving my future.


One can make evaluating DG complicated, but I use four basic rules in considering a stock:
1. Has the company paid a dividend for many years, min 10, 25 or more preferred
2. Has the company a consistent history of growing their dividend, at least 75% growth over 10 years
3. Ignore companies which have cut their dividend in the past 10 years
4. Ignore all cyclical stocks

There will only be about 30 Cdn stocks which might qualify and about the same US. I personally don't believe one needs more than 20 Cdn and 5 US (in RRSP or RRIF)
Then try to buy when prices drop, simple guide is to buy when the yield is close to or higher than its 10 yr average yield.
Re-invest the dividends, continue to add to the ones you've chosen and Hold for the rising Income. Only sell if one might cut their dividend (unlikely for at least 20 Cdn).
If you want information on DG from one who has recommended it for over 37 years, go to:
http://www.dividendgrowth.ca/dividendgrowth/


----------



## scorpion_ca

Thanks canew90. I will check the above-mentioned website.


----------



## peterk

canew90 said:


> One can make evaluating DG complicated, but I use four basic rules in considering a stock:
> 1. Has the company paid a dividend for many years, min 10, 25 or more preferred
> 2. Has the company a consistent history of growing their dividend, at least 75% growth over 10 years
> 3. Ignore companies which have cut their dividend in the past 10 years
> 4. Ignore all cyclical stocks


I fail to see how this is anything more than a very coarse way of identifying large cap stocks that have had relatively consistent profits, and some earnings growth (perhaps a lot, perhaps not) over the last 25 years. It indicates precisely nothing about the future prospects of the business, reasonableness or not of the current stock price, and may indeed say something negative about the business's cashflow if commitment to "dividend growth" comes before commitment to earnings growth and a healthy balance sheet.

It's not hard to find a large list of well known stocks that have had annual dividend increases of ~10% per year for the past 10+ years, and think "damn - in 10 more years just look at what my dividend income is going to be!"... Better double check that most of those companies have actually had impressive earnings growth though, and will likely in the future too, and that it hasn't just gone from 25% payout ratio to 75% ratio with stagnant earnings...


----------



## james4beach

Most of TSX 60's largest weights are "dividend growth" companies, so XIU is a DG portfolio. I think the danger of trying to pursue a DG strategy by stock picking is that it's hard to create a well diversified portfolio of stocks. If you are going down this route, I suggest you benchmark yourself against XIU and check in 5 and 10 years that you are actually doing better than the benchmark ETF.


----------



## canew90

james4beach said:


> Most of TSX 60's largest weights are "dividend growth" companies, so XIU is a DG portfolio. I think the danger of trying to pursue a DG strategy by stock picking is that it's hard to create a well diversified portfolio of stocks. If you are going down this route, I suggest you benchmark yourself against XIU and check in 5 and 10 years that you are actually doing better than the benchmark ETF.


I took 20 min to apply the 4 basic rules to the XIU and eliminated 34 of them. There were many that not only cut their div, but cut them several times and 3 paid no div There would probably another 5 or so I'd not buy with further review, so No most of the TSX 60 are not "dividend growth" companies.
As for diversification, from the remaining one can choose:
Consumer Discretionary
Consumer Staples
Energy
Financials
Telecommunications, and
Utilities


----------



## canew90

peterk said:


> I fail to see how this is anything more than a very coarse way of identifying large cap stocks that have had relatively consistent profits, and some earnings growth (perhaps a lot, perhaps not) over the last 25 years. It indicates precisely nothing about the future prospects of the business, reasonableness or not of the current stock price, and may indeed say something negative about the business's cashflow if commitment to "dividend growth" comes before commitment to earnings growth and a healthy balance sheet.
> 
> It's not hard to find a large list of well known stocks that have had annual dividend increases of ~10% per year for the past 10+ years, and think "damn - in 10 more years just look at what my dividend income is going to be!"... Better double check that most of those companies have actually had impressive earnings growth though, and will likely in the future too, and that it hasn't just gone from 25% payout ratio to 75% ratio with stagnant earnings...


The key words are "considering a stock". Nothing will accurately forecast the future but these rules will allow one to quickly identify companies which should be considered as DG stocks. One can then apply what other tests they wish to determine which to buy. I've followed these basic guidelines for years to compile a select group of stocks to provide a growing income annually which now exceed $100k. I don't suggest it's the best strategy or that others might not have not done better, but it's proved to be a simple and effective one for us.
I've been told many times it's Total Return that really counts, not just dividends. I don't have a problem with that, but I don't know what the market value of our holdings are or really care. I'm just happy each month or Qtr when I received the expected dividend and even happier when the dividend has grown.


----------



## james4beach

canew90 said:


> I've been told many times it's Total Return that really counts, not just dividends. I don't have a problem with that, but I don't know what the market value of our holdings are or really care. I'm just happy each month or Qtr when I received the expected dividend and even happier when the dividend has grown.


But the dividend and market value are intimately linked. You may choose to ignore the market value, but each dividend takes $ out of the market value. A dividend based method cannot work long term unless the stock also performs well. One thing DG web sites aren't telling you is that, historically, dividends have declined during strong bear markets. Dividends can not be totally separated out from market prices.


----------



## AltaRed

James, Canew really does care about DG stock price appreciation because one cannot have dividend growth longer term without stock price growth, as you have said. It is just that he professes not to pay attention to it, and that is fine if one decides to be in reactive mode when dividend growth stalls. 

I prefer to anticipate stalls in DG growth by looking at appropriate metrics suggesting that could happen. EPS growth or lack thereof, ROE, etc.


----------



## canew90

james4beach said:


> But the dividend and market value are intimately linked. You may choose to ignore the market value, but each dividend takes $ out of the market value. A dividend based method cannot work long term unless the stock also performs well. One thing DG web sites aren't telling you is that, historically, dividends have declined during strong bear markets. Dividends can not be totally separated out from market prices.


Of course they are linked, but more closely to earnings, in fact most of the stock prices have risen inline with the dividend increase over time. I don't care about market value because over the past 18yrs my income has risen through the entire period (at different rates, but never a decline). As mentioned our dividends are at the point where I doubt that any correction or even recession will affect their continued increase. Especially as we continue to reinvest about 60% of the dividends which generate more income and if prices drop we would just add more shares and more income.


----------



## Speculator

Investing in ETFs exclusively and you never benefit from stock splits. This also adds VALUE to the PF and gives the investor confirmation in plucking quality stocks out of a mindless universe of ETFs. As long as there continues to be dividend growth the price will go up as the dividend supports the price, growth and total return of your PF holdings. For me, it's about cash flow. The Yield Hog writes about this all the time as he still hangs on to losers because he gets raises through dividend increases. His total PF value grinds lower while his income/cash flow rises. Good reason to hold through any drops or a recession. Just don't listen to Derek Foster.


----------



## scorpion_ca

Here is the Q3, 2018 net worth update. Around 3.6% or $17k savings/gain since June, 2018. 

*Net Worth - 
*
2015 - $276k
2016 - $348k 
2017 - $431k
Q1, 2018 - $440k
Q2, 2018 - $478k
Q3, 2018 - $495k

*Expenses -
*
2015 - $20k
2016 - $22k 
2017 - $47k
Q1, 2018 - $4.5k
Q2, 2018 - $9.2k
Q3, 2018 - $20k

So far, the average monthly expense is around $2,223 in 2018. The expenses include around $3.5k of donations. I am happy anything below $2k of expenses per month.

*Passive Income (Dividend & Interest) -*

2015 - $4.6k
2016 - $6.4k
2017 - $6.8k
Q1, 2018 - $1.9k
Q2, 2018 - $5.3k
Q3, 2018 - $7.3k

*Asset Allocation -*

Fixed Income - 35%
Equity - 53%
REIT - 12%

*Since Inception Time-Weighted Rate of Returns - *

Cash - 16.47% (VCN & ZPR)
TFSA - 36.45% (ZAG & ZRE)
RRSP - 73.16% (VUN, XEF & XEC)

I have some cash in my RRSP that has been waiting for further market correction.


----------



## scorpion_ca

Here is the 2018 net worth update. Around 14.4% or $62k savings/gain since 2017. 

*Net Worth - *

2015 - $276k
2016 - $348k 
2017 - $431k
2018 - $493k

*Expenses -*

2015 - $20k
2016 - $22k 
2017 - $47k
2018 - $27k

The average monthly expense was around $2,219 in 2018. 

*Passive Income (Dividend & Interest) -*

2015 - $4.6k
2016 - $6.4k
2017 - $6.9k
2018 - $8.6k

*Asset Allocation -*

Fixed Income - 31%
Equity - 58%
REIT - 11%

*Since Inception Time-Weighted Rate of Returns - *

Cash – 3.18% (VCN & ZPR)
TFSA – 33.50% (ZAG & ZRE)
RRSP – 62.84% (VUN, XEF & XEC)

I have a little bit of cash in my RRSP that has been waiting for further market correction…


----------



## scorpion_ca

Here is the Q1, 2019 net worth update. Around 8.9% or $44k savings/gain since Q4, 2018. 

*Net Worth - *

2015 - $276k
2016 - $348k 
2017 - $431k
2018 - $493k
Q1, 2019 - $537k

*Expenses -*

2015 - $20k
2016 - $22k 
2017 - $47k
2018 - $27k
Q1, 2019 - $5.2k

The average monthly expense is around $1,761 so far in 2019. The expenses will increase in the next two quarters significantly.

*Passive Income (Dividend & Interest) -*

2015 - $4.6k
2016 - $6.4k
2017 - $6.9k
2018 - $8.6k
Q1, 2019 - 3.5k

*Asset Allocation -*

Fixed Income - 30%
Equity - 58%
REIT - 12%

I have some cash in my RRSP that has been waiting for further market correction…


----------



## scorpion_ca

Here is the Q2, 2019 net worth update. Around 4.4% or $23.5k savings/gain since Q1, 2019. 

*Net Worth - *

2015 - $276k
2016 - $348k 
2017 - $431k
2018 - $493k
Q1, 2019 - $537k
Q2, 2019 - $561k

*Expenses -*

2015 - $20k
2016 - $22k 
2017 - $47k
2018 - $27k
Q1, 2019 - $5.2k
Q2, 2019 - $14.8k

The average monthly expense is around $2,118 so far in 2019. The expenses will increase in the next quarter significantly.

*Passive Income (Dividend & Interest) -*

2015 - $4.6k
2016 - $6.4k
2017 - $6.9k
2018 - $8.6k
Q1, 2019 - $3.5k
Q2, 2019 - $8.6k

Surprisingly the passive income of Q2, 2019 has reached the amount of 2018. I am hoping to reach $12k at the end of this year unless I buy a house.

*Asset Allocation -*

Fixed Income - 31%
Equity - 57%
REIT - 12%

I have some cash in my RRSP that has been waiting for further market corrections…


----------



## scorpion_ca

Here is the Q3, 2019 net worth update. Around 3.4% or $19.1k savings/gain since Q2, 2019. 

*Net Worth - *

2015 - $276k
2016 - $348k 
2017 - $431k
2018 - $493k
Q1, 2019 - $537k
Q2, 2019 - $561k
Q3, 2019 - $580k

*Expenses -
*
2015 - $20k
2016 - $22k 
2017 - $47k
2018 - $27k
Q1, 2019 - $5.2k
Q2, 2019 - $14.8k
Q3, 2019 - $27.1k

The average monthly expense is around $2.7k so far in 2019. Hopefully, the expenses will decrease in the last quarter of 2019.

*Passive Income (Dividend & Interest) -*

2015 - $4.6k
2016 - $6.4k
2017 - $6.9k
2018 - $8.6k
Q1, 2019 - $3.5k
Q2, 2019 - $8.6k
Q3, 2019 - $11.1k

I am hoping to reach $12.5k of passive income at the end of this year.

*Asset Allocation -*

Fixed Income - 32%
Equity - 56%
REIT - 12%

I have some cash in my RRSP that has been waiting for market corrections…


----------



## scorpion_ca

The above-mentioned NW does not include the NW of Mrs. Scorpion that is around $100k. My plan is to max out our registered accounts at first. Therefore, my NW will not be growing as fast as it used to be.


----------



## OnlyMyOpinion

Your continued discipline and results (and assistance to parents) are impressive. Kudos.

Is the idea of a house off the table now? While it can be the right lifestyle decision there is no doubt it can be the wrong financial decision depending where you live and personal circumstances. I think your early & significant capacity to save illustrates this. Your NW could look far different over the 2014-2019 period as a mortgaged homeowner (again depending on circumstances, and not neccessarily over a ~25yr timeframe, although a lot of your NW would be tied up in the house).

I note you still report some cash waiting for a market correction. Remember that 'time in the market' is easier to execute than 'timing the market'. I'm interested, did you perceive the end of Dec 2018 to be a buying opportunity at the time?









We've had a good run with the markets. Please stick with your investments and don't become a seller if we face some scary corrections over the next year or two.:encouragement:


----------



## james4beach

OnlyMyOpinion said:


> I note you still report some cash waiting for a market correction. Remember that 'time in the market' is easier to execute than 'timing the market'.


I noticed that too. No reason to keep cash around, trying to wait for market drops. Your asset allocation will actually help take care of this as well.

If the market does tank, then you will find yourself underweight equities versus your fixed income. Then in your rebalancing, you would sell bonds, and buy more stocks. Asset allocation rebalancing accomplishes "buy low, sell high".

I suggest deploying the cash into your asset allocation. If it just feels too uncomfortable, that's a sign you should revise your asset allocation to have as much fixed income as is comfortable for you. It's far better to fully invest cash into the stock & bond mix, rather than leave it as cash while you try to time assets.

And to put that another way, it's better to remain fully invested in a more conservative asset allocation, rather than experience constant stress and doubts (resulting in cash drag) in a more aggressive asset allocation. This is a big reason why I hold 50% fixed income.


----------



## scorpion_ca

I have been looking for a house since middle of 2018 but I haven't found the suitable house yet. I have been looking for a bi-level house but those don't come to market often. My price range is $350k to $450k and I have around $80k sitting in a HISA (2.8%) for down payment. I have no plan to invest that amount in stock market.

The cash position I report usually is in my RRSP that earns 1.6% interest rate. I had around $50k in Aug, 2018 but it was only $10k at the end of the Dec, 2018. I purchased ETFs (XEF and XEC) during that downturn. Now I have $35k and will contribute another $10k by Feb, 2020. I will be buying more ETFs in the near future. 

I have no plan to sell any of my ETFs even the market drops 50%. I don't need that money for another 20 to 30 years.


----------



## scorpion_ca

Here is the 2019 net worth update. Around 23.1% or $114k savings/gain since 2018. 

*Net Worth - *

2015 - $276k
2016 - $348k 
2017 - $431k
2018 - $493k
2019 - $607k

*Expenses -*

2015 - $20k
2016 - $22k 
2017 - $47k
2018 - $27k
2019 - $36.4k

The average monthly expense was around $3k in 2019. 

*Passive Income (Dividend & Interest) -*

2015 - $4.6k
2016 - $6.4k
2017 - $6.9k
2018 - $8.6k
2019 - $12.5k

I am hoping to reach $14k to $15k of passive income in 2020.

*Asset Allocation -*

Fixed Income - 35%
Equity - 53%
REIT - 12%

I have some cash (around $36k) in my RRSP that has been waiting for opportunity. However, I have been getting around 1.6% interest rate on it…


----------



## scorpion_ca

Here is the Q1, 2020 net worth update. Around -9.4% or -$56.7k loss since 2019.

*Net Worth - *
2015 - $276k
2016 - $348k
2017 - $431k
2018 - $493k
2019 - $607k
Q1, 2020 - $550k

*Expenses -*
2015 - $20k
2016 - $22k
2017 - $47k
2018 - $27k
2019 - $36.4k
Q1, 2020 - $4.2k

The average monthly expenses were around $1.4k in the Q1, 2020.

*Passive Income (Dividend & Interest) -*
2015 - $4.6k
2016 - $6.4k
2017 - $6.9k
2018 - $8.6k
2019 - $12.5k
Q1, 2020 - $5.1k

I am hoping to receive $14k to $15k of passive income in 2020.

*Asset Allocation -*
Fixed Income - 33%
Equity – 56%
REIT - 11%

I have little bit of cash (around $15k) in my RRSP that has been waiting for opportunity. However, I have been getting around 0.25% interest rate on it.


----------



## scorpion_ca

Here is the Q2, 2020 net worth update. Around 38.2% or $210k more than the Q1 of 2020. Added spouse NW with the below amounts and also reduced the total RRSP amount by 15% for future taxes.

*Net Worth - *
2015 - $276k
2016 - $348k
2017 - $431k
2018 - $493k
2019 - $607k
Q1, 2020 - $550k
Q2, 2020 - $760k

*Expenses -*
2015 - $20k
2016 - $22k
2017 - $47k
2018 - $27k
2019 - $36.4k
Q1, 2020 - $4.2k
Q2, 2020 - $11k

The average monthly expenses are around $1.8k so far in 2020. Usually, the second half of the year is more expensive for us.

*Passive Income (Dividend & Interest) -*
2015 - $4.6k
2016 - $6.4k
2017 - $6.9k
2018 - $8.6k
2019 - $12.5k
Q1, 2020 - $5.1k
Q2, 2020 - $11.1k

I am hoping to receive $15k to $17k of passive income in 2020.

*Asset Allocation -*
Fixed Income - 47%
Equity – 45%
REIT - 7%

Fixed income is higher as this includes our down payment and emergency funds of $150k. We are earning 2% - 2.05% interest on it.


----------



## scorpion_ca

Here is the Q3, 2020 net worth update. Around 4.4% or $33.7k more than the Q2 of 2020.

*Net Worth - *
2015 - $276k
2016 - $348k
2017 - $431k
2018 - $493k
2019 - $607k
Q1, 2020 - $550k
Q2, 2020 - $760k
Q3, 2020 - $793k

*Expenses -*
2015 - $20k
2016 - $22k
2017 - $47k
2018 - $27k
2019 - $36.4k
Q1, 2020 - $4.2k
Q2, 2020 - $11k
Q3, 2020 - $20.7k

The average monthly expenses are around $2k so far in 2020. Usually, the second half of the year is more expensive for us.

*Passive Income (Dividend & Interest) -*
2015 - $4.6k
2016 - $6.4k
2017 - $6.9k
2018 - $8.6k
2019 - $12.5k
Q1, 2020 - $5.1k
Q2, 2020 - $11.1k
Q3, 2020 - $13.7k

I am hoping to receive $15k to $17k of passive income in 2020.

*Asset Allocation -*
Fixed Income - 56%
Equity – 37%
REIT - 7%

Fixed income is higher as this includes our down payment and emergency funds. Also, I sold $76k worth of VUN at the end of August. I am planning to purchase XUU with this amount by the end of December, 2020.


----------



## milhouse

What's the main idea behind swapping from VUN to XUU and the timing? Lower MER, under the hood/index tracking, scary Sept/Oct, or ??


----------



## scorpion_ca

milhouse said:


> What's the main idea behind swapping from VUN to XUU and the timing? Lower MER, under the hood/index tracking, scary Sept/Oct, or ??


The main reason was the lower MER and locked in profit too. I was hoping that the market would be volatile around the election. That's why, I sold the VUN when it reached the all time high at the end of August.


----------



## scorpion_ca

Here is the Q4, 2020 net worth update. Around 41.9% or $254k more than the 2019 net worth.

*Net Worth - *
2015 - $276k
2016 - $348k
2017 - $431k
2018 - $493k
2019 - $607k
2020 - $861k (RRSP reduced by 15% for future taxes)

*Expenses -*
2015 - $20k
2016 - $22k
2017 - $47k
2018 - $27k
2019 - $36.4k
2020 - $23.3k

The average monthly expenses are around $2k in 2020. I think the monthly expenses would be higher in 2021.

*Passive Income (Dividend & Interest) -*
2015 - $4.6k
2016 - $6.4k
2017 - $6.9k
2018 - $8.6k
2019 - $12.5k
2020 - $15.8k

I am hoping to receive $18k to $19k of passive income in 2021.

*Asset Allocation -*
Fixed Income - 57%
Equity – 35%
REIT - 8%

Fixed income is higher as this includes our down payment and emergency funds.


----------



## scorpion_ca

Here is the Q1, 2021 net worth update. Around 7.2% or $62k more than the 2020.

*Net Worth - *
2015 - $276k
2016 - $348k
2017 - $431k
2018 - $493k
2019 - $607k
2020 - $861k (RRSP reduced by 15% for future taxes)
Q1, 2021 - $923k (RRSP reduced by 15% for future taxes)

*Expenses -*
2015 - $20k
2016 - $22k
2017 - $47k
2018 - $27k
2019 - $36.4k
2020 - $23.3k
Q1, 2021 - $6.0k
The average monthly expenses are around $2k in 2021.

*Passive Income (Dividend & Interest) -*
2015 - $4.6k
2016 - $6.4k
2017 - $6.9k
2018 - $8.6k
2019 - $12.5k
2020 - $15.8k
Q1, 2021 - $5.8k
I am hoping to receive $18k to $19k of passive income in 2021.

*Asset Allocation -*
Fixed Income - 56%
Equity – 36%
REIT - 8%
Fixed income is higher as this includes our down payment and emergency funds.


----------



## My Own Advisor

XUU is a great low-cost fund. Outstanding work!!


----------



## scorpion_ca

Here is the Q2, 2021 net worth update. Around 5.4% or $49.5k more than the Q1, 2021.

*Net Worth - *
2015 - $276k
2016 - $348k
2017 - $431k
2018 - $493k
2019 - $607k
2020 - $861k (RRSP reduced by 15% for future taxes)
Q1, 2021 - $923k (RRSP reduced by 15% for future taxes)
Q2, 2021 - $972k (RRSP reduced by 15% for future taxes)

*Expenses -*
2015 - $20k
2016 - $22k
2017 - $47k
2018 - $27k
2019 - $36.4k
2020 - $23.3k
Q1, 2021 - $6.0k
Q2, 2021 - $12.7k

Monthly expenses would be little higher in the next two quarters.

*Passive Income (Dividend & Interest) -*
2015 - $4.6k
2016 - $6.4k
2017 - $6.9k
2018 - $8.6k
2019 - $12.5k
2020 - $15.8k
Q1, 2021 - $5.8k
Q2, 2021 - $10.6k

I am hoping to receive $18k to $19k of passive income in 2021.

*Asset Allocation -*
Fixed Income - 56%
Equity – 36%
REIT - 8%

Fixed income is higher as this includes our down payment and emergency funds.


----------



## scorpion_ca

Here is the Q3, 2021 net worth update. Around 2.1% or $20k more than the Q2, 2021.

*Net Worth - *
2015 - $276k
2016 - $348k
2017 - $431k
2018 - $493k
2019 - $607k
2020 - $861k (RRSP reduced by 15% for future taxes)
Q1, 2021 - $923k (RRSP reduced by 15% for future taxes)
Q2, 2021 - $972k (RRSP reduced by 15% for future taxes)
Q3, 2021 - $992k (RRSP reduced by 15% for future taxes)

*Expenses -*
2015 - $20k
2016 - $22k
2017 - $47k
2018 - $27k
2019 - $36.4k
2020 - $23.3k
Q1, 2021 - $6.0k
Q2, 2021 - $12.7k
Q3, 2021 - $22.1k

Monthly expenses would be a little higher in the next quarter. The average monthly expenses are around $2.5k in 2021.

*Passive Income (Dividend & Interest) -*
2015 - $4.6k
2016 - $6.4k
2017 - $6.9k
2018 - $8.6k
2019 - $12.5k
2020 - $15.4k
Q1, 2021 - $5.8k
Q2, 2021 - $10.6k
Q3, 2021 - $13.4k

I am hoping to receive $17k to $18k of passive income in 2021.

*Asset Allocation -*
Fixed Income - 54%
Equity – 38%
REIT - 8%

Fixed income is higher as this includes our down payment and emergency funds.


----------



## latebuyer

Its great to see your progress since 2014. Good work!


----------



## latebuyer

It seems like you are super close to your goal!


----------



## scorpion_ca

Yup, I am on track to reach my goal this year....three years ahead of my initial plan.


----------



## afulldeck

scorpion_ca said:


> Yup, I am on track to reach my goal this year....three years ahead of my initial plan.


Congratulations guessing by the last statement you passed the 1M mark?


----------



## scorpion_ca

afulldeck said:


> Congratulations guessing by the last statement you passed the 1M mark?


Thanks. We crossed the 1 MM mark earlier this year but I reduce our RRSP amount by 15% for future taxes. The percentages may not be correct but I would like to deduct something from our RRSP amount.

Now my focus is to increase my yearly dividend income and start to buy more dividends ETFs such as ZRE, ZUT and XDIV.


----------



## latebuyer

Do you have any lessons learned you'd like to share after almost reaching your goal?


----------



## scorpion_ca

latebuyer said:


> Do you have any lessons learned you'd like to share after almost reaching your goal?


I should have started learning about personal finance / investing earlier. If I can go back in time, I wouldn't buy any preferred shares and bond ETF whereas I would buy more US equities, REIT and utilities ETFs.

I maintain a keep it simple stupid portfolio. I never bought any weed stock, cryptos or hot stocks as I don't understand it. We don't spend money on unnecessary or brand name products.


----------



## latebuyer

I think most of us wish we had started earlier! I think you will be happy with your fixed income allocation if there is a crash. Do you intend to reduce your fixed income? I'm sitting at 17% but thinking of increasing it to 20-25%.


----------



## scorpion_ca

latebuyer said:


> I think most of us wish we had started earlier! I think you will be happy with your fixed income allocation if there is a crash. Do you intend to reduce your fixed income? I'm sitting at 17% but thinking of increasing it to 20-25%.


My fixed income is 54% now that includes down payment and emergency funds. If I remove the down payment, it's 38% and my plan to to make it below 15%. I am in accumulation stage and I don't need higher fixed income now.


----------



## scorpion_ca

Here is the 2021 net worth update. Around 19.1% or $164k more than the net worth of 2020. My goal was to be a millionaire by 2024 when I started this money diary in 2014. We reached the milestone in 2021 as Mr. Market was very generous in the last couple of years and also included spouse's net worth.

Our next goal is to reach $3MM by 2030.

*Net Worth - *
2015 - $276k
2016 - $348k
2017 - $431k
2018 - $493k
2019 - $607k
2020 - $861k (RRSP reduced by 15% for future taxes)
2021 - $1,025k (RRSP reduced by 15% for future taxes)

*Expenses -*
2015 - $20k
2016 - $22k
2017 - $47k
2018 - $27k
2019 - $36.4k
2020 - $23.3k
2021 - $33.0k

The average monthly expenses were $2.7k in 2021.

*Passive Income (Dividend & Interest) -*
2015 - $4.6k
2016 - $6.4k
2017 - $6.9k
2018 - $8.6k
2019 - $12.5k
2020 - $15.4k
2021 - $15.1k

I was hoping to receive $17k to $18k of passive income in 2021. Unfortunately, I didn't get it.... my guess is that companies were not allowed to increase or pay dividend. Also, some HISA rates were dropped from 1.5% to 1.1%.

*Asset Allocation -*
Fixed Income - 49%
Equity – 43%
REIT - 8%

Fixed income is higher as this includes our down payment and emergency funds.


----------



## scorpion_ca

Here is the Q1, 2022 net worth update. Around 5.6% or $57.6k more than the net worth of 2021.

The following changes have been made to the reporting–

Included worldwide passive income and expenses.
Removed 15% tax deduction from RRSP since most of the forum members don’t include tax deduction. Trying to be consistent reporting with other members.
*Net Worth - *
2015 - $276k
2016 - $348k
2017 - $431k
2018 - $493k
2019 - $607k
2020 - $861k (RRSP reduced by 15% for future taxes)
2021 - $1,025k (RRSP reduced by 15% for future taxes)
Q1, 2022 - $1,082k

*Expenses -*
2015 - $20k
2016 - $22k
2017 - $47k
2018 - $27k
2019 - $36.4k
2020 - $23.3k
2021 - $33.0k
Q1, 2022 - $11.2k

Monthly expenses would be higher this year than previous year and forecasting to spend around $42k this year.

*Passive Income (Dividend & Interest) -*
2015 - $4.6k
2016 - $6.4k
2017 - $6.9k
2018 - $8.6k
2019 - $12.5k
2020 - $15.4k
2021 - $15.1k
Q1, 2022 - $16.4k

I am forecasting to receive $28k of passive income in 2022.

*Asset Allocation -*
Fixed Income - 44%
Equity – 48%
REIT - 8%

Fixed income is greater as this includes our down payment and emergency funds.

My favorite F' You money chart -


----------



## milhouse

I like the chart.


----------



## peterk

I don't understand how your expenses are so consistently low. Don't you have rent or a mortgage? Or I think maybe perhaps you're just reporting "your half" of expenses, with your spouse having other spending of roughly an equal amount?


----------



## cainvest

peterk said:


> I don't understand how your expenses are so consistently low.


Depending on where they live it doesn't seem like the expenses (assuming frugal lifestyle) are out of line.


----------



## scorpion_ca

peterk said:


> I don't understand how your expenses are so consistently low. Don't you have rent or a mortgage? Or I think maybe perhaps you're just reporting "your half" of expenses, with your spouse having other spending of roughly an equal amount?


Yes, I pay rent and it's only $750 plus utilities ($150). I have been living in the same house for 13 years. I want to buy a house once we find a suitable house for us. The expenses I reported previous years include expenses for my wife and myself. However, it didn't include my parents expenses and out of country donations. It's around 15k. I have included those expenses with my expenses starting from this year. 

We buy most of the items when it's on sale or clearance. I have been driving a 17 years old rusty sedan. My plan is to save as much as possible early in the life that compounding works for us later in our life. This year my expenses would be around 45k.


----------



## afulldeck

scorpion_ca said:


> Yes, I pay rent and it's only $750 plus utilities ($150). I have been living in the same house for 13 years. I want to buy a house once we find a suitable house for us. The expenses I reported previous years include expenses for my wife and myself. However, it didn't include my parents expenses and out of country donations. It's around 15k. I have included those expenses with my expenses starting from this year.
> 
> We buy most of the items when it's on sale or clearance. I have been driving a 17 years old rusty sedan. My plan is to save as much as possible early in the life that compounding works for us later in our life. This year my expenses would be around 45k.


With rent that low I would never move!


----------



## scorpion_ca

afulldeck said:


> With rent that low I would never move!


We need a bigger place but I don't want to move until I buy a house. We don't have any kids and we are not going to take our money to the grave. So, we may start to enjoy a little more once I reach 50. We want to travel more once we reach the 2 MM mark.


----------



## afulldeck

scorpion_ca said:


> We need a bigger place but I don't want to move until I buy a house. We don't have any kids and we are not going to take our money to the grave. So, we may start to enjoy a little more once I reach 50. We want to travel more once we reach the 2 MM mark.


You could pay for storage ---two large units and you would still be way ahead. Continue to rent don't buy!


----------



## scorpion_ca

Here is the Q2, 2022 net worth update. Around -5.6% or -$60.7k less than the net worth of Q1, 2022.

*Net Worth - *
2015 - $276k
2016 - $348k
2017 - $431k
2018 - $493k
2019 - $607k
2020 - $861k (RRSP reduced by 15% for future taxes)
2021 - $1,025k (RRSP reduced by 15% for future taxes)
Q1, 2022 - $1,082k
Q2, 2022 - $1,021k

*Expenses -*
2015 - $20k
2016 - $22k
2017 - $47k
2018 - $27k
2019 - $36.4k
2020 - $23.3k
2021 - $33.0k
Q1, 2022 - $11.2k
Q2, 2022 - $24k

Monthly expenses would be higher this year than previous year and forecasting to spend around $44k this year. The average monthly expenses are around $4k in the first half of 2022.

*Passive Income (Dividend & Interest) -*
2015 - $4.6k
2016 - $6.4k
2017 - $6.9k
2018 - $8.6k
2019 - $12.5k
2020 - $15.4k
2021 - $15.1k
Q1, 2022 - $16.4k
Q2, 2022 - $25.4k

I am forecasting to receive $30k of passive income in 2022.

*Asset Allocation -*
Fixed Income - 43%
Equity – 49%
REIT - 8%

Fixed income is greater as this includes our down payment and emergency funds.


----------



## scorpion_ca

This month I got a promotion with 16k raise.


----------



## milhouse

scorpion_ca said:


> This month I got a promotion with 16k raise.


Congrats, that's excellent!


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## scorpion_ca

milhouse said:


> Congrats, that's excellent!


Thank you. I hope you are enjoying your retirement!


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## scorpion_ca

Here is the Q3, 2022 net worth update. Around -0.7% or -$7.4k less than the net worth of Q2, 2022.

*Net Worth - *
2015 - $276k
2016 - $348k
2017 - $431k
2018 - $493k
2019 - $607k
2020 - $861k (RRSP reduced by 15% for future taxes)
2021 - $1,025k (RRSP reduced by 15% for future taxes)
Q1, 2022 - $1,082k
Q2, 2022 - $1,021k
Q3, 2022 - $1,013k

*Expenses -*
2015 - $20k
2016 - $22k
2017 - $47k
2018 - $27k
2019 - $36.4k
2020 - $23.3k
2021 - $33.0k
Q1, 2022 - $11.2k
Q2, 2022 - $24k
Q3, 2022 - $32.3k (Cumulative)

Monthly expenses would be higher this year than previous year and forecasting to spend around $44k this year.

The average monthly expenses are around $3.5k in 2022.

*Passive Income (Dividend & Interest) -*
2015 - $4.6k
2016 - $6.4k
2017 - $6.9k
2018 - $8.6k
2019 - $12.5k
2020 - $15.4k
2021 - $15.1k
Q1, 2022 - $16.4k
Q2, 2022 - $25.4k
Q3, 2022 - $31k (Cumulative)

I am forecasting to receive $34k of passive income in 2022.

*Asset Allocation -*
Fixed Income - 45%
Equity – 47%
REIT - 8%

Fixed income is greater as this includes our down payment and emergency funds.


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## milhouse

Nice jumps in your passive income. It looks like you are continually exceeding your initial and quarterly forecasts.


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## scorpion_ca

All of our registered accounts are maxed out. I hope markets remain low until Jan, 2023 or longer that we can buy more ETFs while it's on sale....

What do you guys think about our asset allocation?


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## Gator13

^ I would go heavier on Canadian & US and less on International and Emerging Markets. JMTC


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## scorpion_ca

Gator13 said:


> ^ I would go heavier on Canadian & US and less on International and Emerging Markets. JMTC


Yes, that's my plan. I sold my US ETF at the end of 2020 and it went crazy in 2021. I started to buy only XEQT this year.


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## milhouse

Similar to Gator's comments, if you're acting on potential macro conditions, emerging markets may have a tough go with a stronger USD and rising interest rates. And Europe is going to have a problems because of their energy situation due to the war.


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## scorpion_ca

Here is the 2022 net worth update. Around 6.8% or $70k gain than the net worth of 2021.

*Net Worth - *
2015 - $276k
2016 - $348k
2017 - $431k
2018 - $493k
2019 - $607k
2020 - $861k (RRSP reduced by 15% for future taxes)
2021 - $1,025k (RRSP reduced by 15% for future taxes)
2022 - $1,095k

*Expenses -*
2015 - $20k
2016 - $22k
2017 - $47k
2018 - $27k
2019 - $36.4k
2020 - $23.3k
2021 - $33.0k
2022 - $41.9k

The average monthly expenses were $3.5k in 2022.

*Passive Income (Dividend & Interest) -*
2015 - $4.6k
2016 - $6.4k
2017 - $6.9k
2018 - $8.6k
2019 - $12.5k
2020 - $15.4k
2021 - $15.1k
2022 - $36.1k

I am forecasting to receive $36k of passive income in 2023.

*Asset Allocation -*
Fixed Income - 44%
Equity – 48%
REIT - 8%

Fixed income is greater as this includes our down payment and emergency funds.


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## Forebiz

Tough year to make any gains. Nice job. I'm sure you can't wait for that green line to get above the purple one and stay there. I had a similar trend that got me above for a couple years but dropped back below this quarter.


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## scorpion_ca

Our gains came from savings. Markets were terrible and I liked it as we are in the accumulation stage. I hope it stays low for a while so that we can buy more shares. When the passive income is greater than the expenses for five years, I may start planning to retire or reduce working hours.


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