# What size portfolio will I need to retire?



## doitnow! (May 28, 2011)

Assuming I need 50K gross per year from dividends to add to my retirement income and I am invested in a few solid blue chip companies how much will I need to have in my portfolio?

There is probably a easy way to make this calculation but I know very little about dividend investing.


----------



## slacker (Mar 8, 2010)

I find this program extremely useful:

http://www.fimetrics.com/


----------



## doitnow! (May 28, 2011)

slacker said:


> I find this program extremely useful:
> 
> http://www.fimetrics.com/


Thanks. Looks interesting but also with a longer learning curve that I can afford right now. Currently learning how to invest in a few dividend paying companies. 

Just need a rough estimate for now.


----------



## humble_pie (Jun 7, 2009)

roughly will do ?

roughly, about a million dollars in dividend paying blue chips will pay - roughly - 50,000 per annum.


----------



## doitnow! (May 28, 2011)

humble_pie said:


> roughly will do ?
> 
> roughly, about a million dollars in dividend paying blue chips will pay - roughly - 50,000 per annum.


Thanks. We have 450K now and will be contributing 25K per year into RRSP. How long before we have 1M assuming a realistic rate of return?


----------



## humble_pie (Jun 7, 2009)

dear Gimmenow!

as far as i can make out you are not learning to be a DIY investor at all. From the getgo you have used this forum as a substitute advisor. From what i have seen, all of your posts are demands to get your questions answered. I have never seen you offer any help to anyone else or even pay any attention to anyone else.

this is a collection of mostly non-professional investors who stumble along helping each other as best we can. Others here practice give-and-take. Might you perhaps learn to do this, just a little.


----------



## doitnow! (May 28, 2011)

humble_pie said:


> dear Gimmenow!
> 
> as far as i can make out you are not learning to be a DIY investor at all. From the getgo you have used this forum as a substitute advisor. From what i have seen, all of your posts are demands to get your questions answered. I have never seen you offer any help to anyone else or even pay any attention to anyone else.
> 
> this is a collection of mostly non-professional investors who stumble along helping each other as best we can. Others here practice give-and-take. Might you perhaps learn to do this, just a little.


Dear Humble Pie,

I can understand that it may come across as "gimmenow" however you are jumping to conclusions my friend. I wouldn't have expected it from someone called Humble Pie. 

Although I have asked many questions and solicited advice it is only because I have gone from knowing absolutely nothing to taking back close to 500K from the hands of bank financial planners and mutual fund managers and investing a good chunk in etf's all since the last week of June. It's been a quite an accomplishment for someone who has a day job.

I've just started recently to gather information on to the next step of my financial goal which is to invest the balance in a few dividend stocks. It's a lot to take in when starting from 0. I may be trying take some short cuts here and there, hence my rather basic questions. However I take exception to your accusation that I am using this site as a "substitute adviser" and that "all my posts are demands...etc. 

Despite the fact my knowledge is limited and I feel that I am not even in the same league as others on this forum I have shared a number of relevant and I hope thought provoking ideas, opinions and concerns to which others have responded in kind.

I agree that this should be a give and take forum and I look forward to doing my best in the future to help novice investors and then patiently waiting for the day that they are sufficiently confident in their understanding to participate and help others.

Perhaps you've forgotten how it felt not to know what you were doing when you first entered the world of DYI investing.


----------



## Four Pillars (Apr 5, 2009)

humble_pie said:


> dear Gimmenow!
> 
> as far as i can make out you are not learning to be a DIY investor at all. From the getgo you have used this forum as a substitute advisor. From what i have seen, all of your posts are demands to get your questions answered. I have never seen you offer any help to anyone else or even pay any attention to anyone else.
> 
> this is a collection of mostly non-professional investors who stumble along helping each other as best we can. Others here practice give-and-take. Might you perhaps learn to do this, just a little.


+1


----------



## doitnow! (May 28, 2011)

Four Pillars said:


> +1


Thanks, maybe it's time to slow down.

You know the old saying, if one person tells you...it's easy to dismiss

If a second tells you...maybe it's true.

But if a third tells you (I could be receiving a +3 anytime), believe it

Thank you and to everyone here on this forum for your help.

DIN.


----------



## leoc2 (Dec 28, 2010)

I think many DIY investors can learn from reading replies to posts from doitnow! . I hope doitnow! continues to post questions and that veterans continue to reply. We are all grateful to have found this forum and to read replies from veterans. My 2 cents!


----------



## doitnow! (May 28, 2011)

leoc2 said:


> I think many DIY investors can learn from reading replies to posts from doitnow! . I hope doitnow! continues to post questions and that veterans continue to reply. We are all grateful to have found this forum and to read replies from veterans. My 2 cents!


Ok, chalk one up for me

I went back over my 99 posts, probably too many for newbie is such a short time span, and realized that I have shared a fair number of what I thought (from a newbie's perspective) were relevant concerns and opinions but perhaps there were too many advice wanted type questions.

As for "helping others", guilty as charged, my only defense is that I don't yet feel confident after a month and a half of DYI to offer much in the way of help to members on of this forum.

I guess some of the veterans don't take too kindly to a newbie trying to take a bit of a short cut by asking for a couple of quick answers to questions that they rightfully indicated I could learn to calculate on my own.

Thanks for the support.


----------



## Dmoney (Apr 28, 2011)

Is the whole point of this forum not to help people learn? I don't understand why people are jumping at each other's throats for various reasons, including some of the previous posts. If a member has nothing but questions, is that really a bad thing? If I knew nothing on a topic and wanted to get familiarized, I'd like to think that people would be more than willing to help, not that I'd get attacked for my lack of knowledge. 

I love hearing from people with way more experience than me, who may have great ideas or cautionary advice, but I'd also be more than willing to lend a helping hand to someone who knows less.


----------



## sensfan15 (Jul 13, 2011)

the threads Doitnow creates are helpful to novice dividend investors


----------



## MoneyGal (Apr 24, 2009)

doitnow! said:


> Thanks. We have 450K now and will be contributing 25K per year into RRSP. How long before we have 1M assuming a realistic rate of return?


Google for a future value calculator. Here's one: http://www.arachnoid.com/lutusp/finance.html

With a present value of $450K, annual payments of $25K, and an interest rate of 4%, you will hit a future value of $1M in just under 12 years. 

Caution: this is not how investing actually works. The basic mathematics of the equation are correct, though.


----------



## humble_pie (Jun 7, 2009)

if the above poster wishes to perceive the world as full of attacks & people at each other's throats, that tells everything about the mindset of that particular poster but nothing about this message thread.

no one is attacking anyone. Speaking from experience, there are countless newcomers who keep on arriving here every single day. Finding a new party who says his or her knowledge & experience are zero is a common occurrence.

my point is that nearly all of these newcomers interact with those who answer them. They try out advice & they thank the parties who take the time to help them on a voluntary basis. Sometimes one can see the Qs & As following upon each other in real time in a chat format. The exchanges are nearly always well-balanced. One newcomer - in this case a highly experienced accounting professional who delivers exceptionally valuable suggestions - recently paid the forum the compliment of saying it is unbelievably civilized, in fact more civilized than some of his own family get-togethers !

but every now & then a newcomer appears who treats the forum as if it, the forum, were a paid advisor billing $200 per hour to answer said newcomer's personal questions. The questions bombard like a machine gun. The intent to exploit, to rip off, to force, to seize every advantage like a predator, is painfully obvious.

such a newcomer is rare, but there are a few. At this very moment, gimmenow! is not the only one.

i suppose i might be classed among the veterans. In my better moments in options markets, i can earn a stunning amount of $$ per hour (then there are, of course, long periods of drought or worse.) I'm a good writer & a good parent who tries, from time to time, to enlighten the offspring. A great pleasure that i have in this forum is sharing onwards, to a tiny extent, whatever knowledge i might be fortunate enough to possess.

but why would i offer voluntary services to a severely overly-demanding personnage who should be bombarding a paid advisor with her questions.

would anyone who is interested please look at the exchange above. The subject asks a question that is silly. She should be able to figure out the answer herself. She wants to know how much capital will generate 50k in dividends. I answer roughly one million. And bang !! the machine gun fires again. This time i am ordered to calculate for Her Ladyship - instantly, voluntarily & faultlessly, if you please - how long it will take Her Ladyship to reach one million dollars ... oh, please.

moving on: gimmenow! says she has 99 posts but only "a couple" ask for quick answers ... i believe that if Milady will look at her messages, she will see that nearly all are pushy & self-centred; and they all, without any exceptions, vastly overuse the words "me," "mine" & "my situation."

other newcomers may say that they benefit from gimmenow!'s questions. However, what they are benefitting from are the answers - again, supplied by experienced investors who are responding on an unpaid voluntary basis - to those questions, not the questions themselves.

there are any number of cherished & respected members of this forum who happily admit they have little financial expertise to share. But one way or another - through music, recipes, frugal tips or photographs & stories in the coffee lounge - they all have a great deal to offer. Which is why they are cherished.

btw now! there are other forum members who behave as you have been doing. What generally happens is that the senior members stop answering them. For the simple reason that the questioners are bottomless pits. No one will even take the trouble to explain to them what is going wrong.

so if you are feeling singled out or hard done by - and i imagine that you are - it is only because i recognize that, in your case, there is an awful lot on the positive side to work with.


----------



## OhGreatGuru (May 24, 2009)

doitnow! said:


> Thanks. We have 450K now and will be contributing 25K per year into RRSP. How long before we have 1M assuming a realistic rate of return?


Dear doitnow!

This discussion has lead to a lot of unfortunate carping about the quality of your questions. But I think the underlying frustration by posters is that if you can't figure out how to use the Future Value function in a spreadsheet, you probably shouldn't be trying to DIY invest.


----------



## MoneyGal (Apr 24, 2009)

Thank you, OGG.


----------



## peterk (May 16, 2010)

+1 OGG -Was about to say the same thing.
I think that particular comment, Doitnow, demonstrates that you either lack the motivation or confidence to do your own basic calculations. If you lack motivation can you see the irony expecting other people to do for you for free, what you are unwilling to do for yourself?
If you lack the confidence and knowledge to do your own math, which I suspect, then rest assured that this forum is a fantastic place to post your math/conclusions/confusions to get some instruction/insight into whatever you may having trouble with.

Also, keep in perspective that Humble Pie has a habit of calling out people that he doesn't feel are contributing in their most effective way. This results in bringing up the quality of the entire forum, and also helpsthose individuals who might be frustrated with not getting the kind or amount of reply's that they were expecting - His comments, I'm sure, are meant for your benefit, not your ridicule.

Back to the O/T - I'd be interested in knowing how you've come to the conclusion that 50k is an appropriate amount you need to retire? Why not more, why not less??


----------



## humble_pie (Jun 7, 2009)

guru i'll stick to my knitting & say it is not a lot of carping, nor is it unfortunate.

some newcomers arrive with exaggerated senses of entitlement & demand quite unreasonably to have their hands held at all times, as you know.

i for one do not believe that even paid advisors are happy with clients like this. Delay syndromes like phone-calls-not-returned-for-2-days appear. I remember a lawyer friend telling me his rule for handling difficult clients. He would serve them with a happy face. Then he would bill them an insane arm plus an absolutely insane leg.

i think that, from time to time, the issue of setting limits for new members needs to be aired. It's never an issue of number of questions. It's always an issue of attitude. It's always the sense of entitlement that rubs the wrong way.

as for this particular new member, i don't agree with OGG at all. I think it's irrelevant whether said member can work her spreadsheet or not. In fact, i think it's highly likely that said member will, in time, become an excellent DIY investor. All i'm saying is that my own days aren't long enough to spend time working up information for pushy people.


----------



## doitnow! (May 28, 2011)

Woke up to very surprising and thought provoking postings. Thank you for taking the time to weigh-in on a somewhat disturbing but revealing exchange.

Itching to respond to Humble Pie's not so humble heavy handed accusations in due time 

Enjoy the day.

DIN.


----------



## slacker (Mar 8, 2010)

@ogg: +1. The OP is either too lazy or incompetent to DIY.


----------



## doitnow! (May 28, 2011)

slacker said:


> @ogg: +1. The OP is either too lazy or incompetent to DIY.


Hey Slacker, definitely not to lazy if you took the time to read what I've managed to accomplish in 6 weeks but maybe not sufficiently competent (according to some of you) at this time for the task at hand. 

So, you are half right but I hope that you your batting average is better when it comes to your portfolio


----------



## MoneyGal (Apr 24, 2009)

doitnow! said:


> Hey Slacker, definitely not to lazy if you took the time to read what I've managed to accomplish in 6 weeks


DIN. Most of us on this forum have "day jobs" in addition to managing our own portfolios. You've alluded to your progress a couple of times and you should be happy and proud of your accomplishments for your own reasons. 

But this is not the right audience to suggest you are doing "a lot" or even anything that complicated or difficult. 

Twice in this thread alone you've said that you need help with the most basic of financial calculations - and you've also said that downloading and reading through a free software program presents a learning curve that is "too steep" for you. 

Knowing what you don't know is half the battle. But when you come here saying you can't figure out a future value and that you won't download planning software that will help you solve the problems you are posing - and then suggesting you've taken a lot of ground and made big accomplishments...it just isn't going to win you any points. 

I suspect you have people in your life who will help you with these questions and calculations. Have you approached any of them?


----------



## doitnow! (May 28, 2011)

MoneyGal said:


> DIN. Most of us on this forum have "day jobs" in addition to managing our own portfolios. You've alluded to your progress a couple of times and you should be happy and proud of your accomplishments for your own reasons.
> 
> But this is not the right audience to suggest you are doing "a lot" or even anything that complicated or difficult.
> 
> ...


Point taken, I think I was reacting defensively to the criticism. To put into perspective upon further reflection my one and only so called big accomplishment was moving my savings from mutual funds to etf's. When you've had your savings in the hands of money managers for 20 years the research required to pick a few etf's at first appears like a bigger deal than it is.

The criticism (by you and a few others) that I have tried to take a few short cuts by asking for answers to a few calculations instead of downloading the software and doing it myself (which I am perfectly capable of doing) is valid.

I was was trying to speed up my learning process in order to be ready to pick a few dividend paying stocks during this meltdown but I think it is best to slow down and focus on becoming proficient in the basics rather than alienating others on this forum with unacceptable questions and remarks.

Thanks for the feedback.


----------



## slacker (Mar 8, 2010)

I'm primarily just concerned about the OP's financial well being. There are a lot of incredibly experienced and resourceful individuals on this board. Yes, we can help give you "ball-park" figures and answers, but if the OP then take these answers without understanding the assumptions behind them, will lead to financial mishappenings.

DIY personal finance is not for everyone. Most people couldn't be bothered with taking financial responsibility for themselves. It requires research, learning, understanding, and risk taking.

I do not wish to participate in helping the OP shoot himself in the foot.

What tip me off was the OP's apparent reluctance and impatience in learning or researching any of the responses. This forum is an incredible resource, and by all means please participate. But just be careful that you are still responsible for your financial well being, and the forum is no substitute for doing your own research.


----------



## cannon_fodder (Apr 3, 2009)

doitnow! - I've not seen any of your posts before. I like your realization that if you get called out for the same thing more than once, then there is likely a grain of truth to it. Unfortunately, humble chose to criticize rather than ignore your question, or even better, post some helpful information particular to the point at hand. It's a shame because he has a long history of great insight and thoughtful answers, but also a penchant for publicly stating his quick conclusions sometimes sprinkled with baseless accusations.

As some one else said, if your questions are helpful to other lurkers, then that's a good thing especially if these questions haven't been recently asked. Perhaps you can attempt to not ask for the answer to the question directly, but where you could go to get the answer you seek. That way it alludes to a commitment of teaching yourself to be even more independent. Even better would be to do as much research as you can and only when you get stuck come back for clarification. If you provide detail of what answers you are seeking, and how you went about trying to find the answers, you could post that here. That puts you in a position to help others who have little experience with this. 

Ironically, some of the critical posts were longer than simply answering the question! But, obviously people felt that was the best use of their time - hopefully it encourages seekers of knowledge to participate and pull their own weight. I wouldn't be surprised that it will further discourage lurkers from raising their hand.

I'm guilty of measuring people by my own yardstick and unfortunately so do others in the world. Thus, what you might reasonably consider a laudable accomplishment in progress towards your ultimate goals, may not be noteworthy in their eyes. As long as you keep raising the bar you are headed in the right direction. Only you fully appreciate the challenges you've had to overcome to get here.

A quick answer to your original question could have been, "There is a rough rule of thumb which states you'd need a balanced portfolio of at least 25x your annual before tax income." Here is a Moneysense article http://www.moneysense.ca/2011/07/28/going-it-alone-retirement-for-singles/ in which they talk about the 4% withdrawal "rule". 

Too many people find this subject matter so overwhelming that they get paralyzed and don't do anything. Kudos for attempting to educate yourself and improve your situation.


----------



## doitnow! (May 28, 2011)

cannon_fodder said:


> doitnow! -
> 
> A quick answer to your original question could have been, "There is a rough rule of thumb which states you'd need a balanced portfolio of at least 25x your annual before tax income." Here is a Moneysense article http://www.moneysense.ca/2011/07/28/going-it-alone-retirement-for-singles/ in which they talk about the 4% withdrawal "rule".
> 
> Too many people find this subject matter so overwhelming that they get paralyzed and don't do anything. Kudos for attempting to educate yourself and improve your situation.


Thank you for the article and your observations.

I have carefully read and considered all responses. Bruised, licking my wounds but I will reply in due time.

Cheers.


----------



## cannon_fodder (Apr 3, 2009)

Found another article that might help those wondering how much one might need to fund different levels of retirement spending. http://www.moneysense.ca/2010/12/15/small-nest-egg-relax/


----------



## doitnow! (May 28, 2011)

cannon_fodder said:


> Found another article that might help those wondering how much one might need to fund different levels of retirement spending. http://www.moneysense.ca/2010/12/15/small-nest-egg-relax/


Thank you!

This is a timely article and one that many should read. I think most people overestimate the amount they need for retirement although the figures mentioned in the article are rather modest. Regardless of what happens with the market tomorrow, we are on track for a comfortable financially worry retirement thanks.

I would recommend an investment property(s) as a nice addition to a portfolio, it's what keeps us calm during these turbulent markets.


----------



## sensfan15 (Jul 13, 2011)

The more threads created and the more responses given = the more info I can soak up. I am very grateful for this forum and all the valuable info available. Thanks. Appreciate it


----------



## Maltese (Apr 22, 2009)

cannon_fodder said:


> A quick answer to your original question could have been, "There is a rough rule of thumb which states you'd need a balanced portfolio of at least 25x your annual before tax income." Here is a Moneysense article http://www.moneysense.ca/2011/07/28/going-it-alone-retirement-for-singles/ in which they talk about the 4% withdrawal "rule".



Cannon Fodder, thanks for the link concerning singles and retirement. Having been a single parent most of my adult life, I appreciate an article that addresses the retirement needs of those who are not part of a couple.

Maltese


----------



## GOB (Feb 15, 2011)

This forum is slow enough as it is - I don't think people should get annoyed with a few basic repeated questions. 

That said, OP should take more initiative in getting himself familiar with the basics - investing is not easy and eventually you will need to know this yourself. The best time to learn is before putting the money in. Just imagine yourself with a $1 million DIY portfolio and relying on a forum to mange it for you.


----------



## financialnoob (Feb 26, 2011)




----------



## Eclectic12 (Oct 20, 2010)

doitnow! said:


> Assuming I need 50K gross per year from dividends to add to my retirement income and I am invested in a few solid blue chip companies how much will I need to have in my portfolio?
> 
> There is probably a easy way to make this calculation but I know very little about dividend investing.


One way to get a current value estimate would be to setup a spreadsheet with a selection of dividend paying stocks, including the yearly dividends and play with the proportions until the 50K gross is achieved.

For example, 
BCE pays $2.072 per year (4 quarters x $0.518),
BNS pays $2.08 per year (4 quuarters x $0.52).


When the total ends up at a gross of $50K, this is likely the high price it assumes you are buying today and retiring tomorrow.


So some factors to consider when adjusting the model for the real world:

a) how likely are dividend growth, holds (i.e. same dividend for several years)?

b) how long before retirement (next week, twenty years)?

c) will there be opportunities for bargains? 
(ex. BNS bought in Oct 2008 cost in the range of $46 to $49 for a yearly income of $1.96 where buying between Jan 23rd to Mar 12th, 2009 cost $24 to $31 - *if* one was willing to take the risk given the fear toxic mortgages would cripple Canadian banks.)


The articles are good to figure out other factors and general trends but most investors don't work that way.


Then too - have you considered what sort of retirement you want? Most of my relatives has indicated they have been able to do more, with less money now that they don't have to commute to work, buy suits/lunches etc. etc.

As for the "how long to get there" - investigate any answers you look at to understand the assumptions. If the assumptions don't match your situation - the timeline can vary dramatically.



Cheers


----------



## Eclectic12 (Oct 20, 2010)

cannon_fodder said:


> [ ... ]
> 
> As some one else said, if your questions are helpful to other lurkers, then that's a good thing especially if these questions haven't been recently asked.
> 
> ...


It is good that the information is useful - however, I'm not sure that the novices can see the amount of variables that can impact the result. DIY investing is not as predicable as say planning how many brick are needed to build a certain size wall.

+1 on the indirect asking. 
Or another way is "here is how I'm estimating plus the firgures - does this look right and are there other sources of info"?

As for some posts being longer than answering the question - this is true. However - if it gets people thinking about how DIY, all the better. 

The danger is that blindly accepting an answer posted here, without attempting to understand the variables etc. is really no different that those who blindly do what the financial adviser/bank customer service rep/buddy at the office cooler suggests. As others have rued in their posts - the advice may not fit or worse - may be for the profit of the giver.


Cheers


----------



## MoneyGal (Apr 24, 2009)

In case this is of interest to others here, I'm posting a link to a math-y discussion of retirement income planning, including an exploration of what all those pesky rate of return estimates really mean for your retirement planning sustainability: 

http://www.qwema.ca/wordpress/wp-content/uploads/2011/08/August_NewsLetter_v4_Final.pdf

The article takes a few shots at financial advisors and conventional retirement income planning tools. It's worth a read.


----------



## Financial Cents (Jul 22, 2010)

Nice article MG. Thanks for sharing. 

Moshe and Simon did a very fine job.


----------



## steve41 (Apr 18, 2009)

MoneyGal said:


> In case this is of interest to others here, I'm posting a link to a math-y discussion of retirement income planning, including an exploration of what all those pesky rate of return estimates really mean for your retirement planning sustainability:
> 
> http://www.qwema.ca/wordpress/wp-content/uploads/2011/08/August_NewsLetter_v4_Final.pdf
> 
> The article takes a few shots at financial advisors and conventional retirement income planning tools. It's worth a read.


Do a search on that article for the single word "tax". Nada. WTF?


----------



## Financial Cents (Jul 22, 2010)

@Steve41,

Are you saying there are major implications with annuities? (re: article by Moshe?)

I'm 30 years+ from retirement, needing to convert my RRSP to something, but I'm considering an annuity for part of my retirement portfolio. Maybe 1/2 of my RRSP?


----------



## steve41 (Apr 18, 2009)

Financial Cents said:


> @Steve41,
> 
> Are you saying there are major implications with annuities? (re: article by Moshe?)
> 
> I'm 30 years+ from retirement, needing to convert my RRSP to something, but I'm considering an annuity for part of my retirement portfolio. Maybe 1/2 of my RRSP?


I am not the ideal guy to ask re annuities, but I believe prescribed annuities involve the issue of tax. My users simply take the annuity quote and drop in the taxable and nontaxable portions of the annuity income stream into RRIFmetic's DE grid along with all the other investment and non-investment stuff.

This is MG's territory.


----------

