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Couch potato investing for the last 12 years - tracking my progress

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  • Sep 23rd, 2017 2:07 pm
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[OP]
Deal Addict
Oct 1, 2006
1635 posts
568 upvotes
Montreal

Couch potato investing for the last 12 years - tracking my progress

Hi RFD,

After reading several articles, forums, blogs and academic studies, I came to the conclusion that the best way to invest my money is in a low cost diversified portfolio.

I have been applying this investment strategy for the last 12 years and would like to share my progress with you. With this post I hope to inspire others who are thinking about following a similar approach.

I graduated from university 12 years ago and found a job shortly after graduation. My starting salary was around 60K. A bit more than half of my take home pay was invested each month in a low cost diversified portfolio using TD e-series index funds and ETFs.

My portfolio is a modified Couch Potato Portfolio with the following asset allocation:
- Around 20% of my money is invested in Bonds (Ing Direct)
- Around 10% is invested in Real Estate (XRE)
- Around 17.5% is invested in Canadian equities (XIC, CDZ)
- Around 17.5% is invested in US equities (TD US IND e-series, VTI)
- Around 17.5% is invested in Emerging Market equities (VWO, XEM)
- Around 17.5% is invested in European equities (TD Euro IND e-series, VGK)

I have been sticking to this investing plan for the last 12 years and never attempted to time the market.

I have been tracking my net-worth on a bi-monthly basis for the last 12 years. My net-worth progress is shown in the image below.
NW AUG2017.png
Last edited by Germack on Jun 6th, 2014 4:19 pm, edited 8 times in total.
1862 replies
Newbie
May 2, 2010
17 posts
Impressive! Thanks for sharing.
You can send this to Money Sense and see what the experts say.
Deal Addict
Jun 6, 2007
1025 posts
134 upvotes
KINGSTON, Ontario
Wow, way to weather the financial crisis.
Banned
User avatar
Jun 22, 2012
4737 posts
664 upvotes
Shhanada
It should be noted this is account size, not returns. You've contributed $250,000 - 400,000 of your income to arrive at the $750,000 net worth.

There's also the unspoken element that you've found some way to have near zero living expenses. (Live with parents, inherit a house, spouse pays for everything, etc)
Deal Addict
Sep 1, 2007
1151 posts
52 upvotes
100k from 2005-2007. That is like 83% of your income assuming you were in the 60k region in 2005 and 2007. What did you invest in the first two years? I am interested.

Also what is your salary range now?

Reading the graph again, it looks like you are adding 100k almost every 2 years. What job do you do ? Live with your parents?
[OP]
Deal Addict
Oct 1, 2006
1635 posts
568 upvotes
Montreal
SurplusPlus wrote:
Jun 6th, 2014 4:52 pm
It should be noted this is account size, not returns. You've contributed $250,000 - 400,000 of your income to arrive at the $750,000 net worth.

There's also the unspoken element that you've found some way to have near zero living expenses. (Live with parents, inherit a house, spouse pays for everything, etc)
My living expenses were quite low (~18K/year) for the first 2 years. I continued to life the live of a poor student. Rent was around $450 a month (everything included),cell phone $25 a month and internet $29 and bus pass $50, leaving plenty for travelling and entertainment. Six years ago I moved into a new place with my gf. She did not contribute much to the household for the first 6 years because she was a poor student. No inheriting of a house, we are still renting. Rent is very cheap in Montreal. My living expenses increased slowly over time to around 40k/year now.
Banned
User avatar
Jun 22, 2012
4737 posts
664 upvotes
Shhanada
Germack wrote:
Jun 6th, 2014 7:44 pm
My living expenses were quite low (~18K/year) for the first 2 years. I continued to life the live of a poor student. Rent was around $450 a month (everything included),cell phone $25 a month and internet $29 and bus pass $50, leaving plenty for travelling and entertainment. Six years ago I moved into a new place with my gf. She did not contribute much to the household for the first 6 years because she was a poor student. No inheriting of a house, we are still renting. Rent is very cheap in Montreal. My living expenses increased slowly over time to around 40k/year now.
Yes, I'm not knocking you by the way, you are the living example of what I've always told people is possible. Live frugally and invest hard, and anyone can be a millionaire.

99% of charts people see are for asset prices or returns, so the casual person looking at yours would not realize your ROR chart would be much less steep.

And at $450/month, yes that is practically living for free! For many Canadians $450 would be their property tax bill or their utilities.
[OP]
Deal Addict
Oct 1, 2006
1635 posts
568 upvotes
Montreal
dealstime wrote:
Jun 6th, 2014 4:57 pm

Reading the graph again, it looks like you are adding 100k almost every 2 years. What job do you do ? Live with your parents?
My after tax income is now around 100K/year. Around 85K from salary and 15K from investments (dividends, interest). My net-worth increased significantly over the last 2 years thx to the booming stock market. I moved out of my parents place 13 years ago.

Between 2005 and 2007 my money was invested using the portfolio shown above.
Banned
User avatar
Jun 22, 2012
4737 posts
664 upvotes
Shhanada
Your case illustrate a funny (sad?) reality.

Suppose I told someone that I am psychic, and I have the lottery numbers that will guarantee them a million dollar prize within 10 years. The conditions of this are that they must buy a certain amount of tickets, every week, as per my strict direction. They must buy specific numbered tickets, at an exact place and time that I will specify. They must not deviate from my instructions. They may not skip any weeks, nor may they different modifying my numbers or methods.

And if they abide by this, I promise they will have a million dollar jackpot in 10 years. Would they do it? No.

However that's exactly what you've done. You've allocated a certain amount of weekly cash into a strictly defined method, and it should be (worth more or less) a million dollars in about 10 years.

Certainly you've made some sacrifices along the way. You've poured a lot of disposable income into your plan instead of into trips, cars, etc.
[OP]
Deal Addict
Oct 1, 2006
1635 posts
568 upvotes
Montreal
Very well said Surplus. I always spent a lot of money on traveling (45K/last 4 years), dining (15K/4 years) and entertainment (10K/4 years), but I always made sure that my monthly fixed costs are very low (housing/cars). I haven't owned a car for the last 13 years and my rent is only $850 a month. This is where I saved a lot of money/made the sacrifices.

Most people save little when they are young and increase their savings rate significantly only once they are close to retirement. My plan is to do the opposite. Save a lot when I am young and save less and less the older I get.
Deal Addict
Feb 15, 2013
2445 posts
545 upvotes
Congrats OP! That's fantastic! Very impressive. Stay the course!
Deal Addict
User avatar
Apr 30, 2012
2685 posts
1315 upvotes
Montreal
Brilliant!! You are my hero. Congratulations!!!

virtuman1980 wrote:
Feb 21st, 2013 8:56 am
Haha...pretty interesting fellow indeed...but it was this persistence/stubbornness of his that got him the positive result in the end.
datako wrote:
Feb 19th, 2013 12:35 am
... Although, I'm a little surprised you went against what everyone advised ,op. You've got balls and absolutely crazy at the same time to do this.
Sr. Member
Nov 28, 2010
979 posts
157 upvotes
Toronto
Right, devote yourself to investing. Don't make kids, they are a big expense! Not to mention house!
Die alone with lots of money in your estate. What a wonderful life!
You guys are a bunch of clowns...
Deal Addict
User avatar
Apr 30, 2012
2685 posts
1315 upvotes
Montreal
yp_1 wrote:
Jun 6th, 2014 8:46 pm
Right, devote yourself to investing. Don't make kids, they are a big expense! Not to mention house!
Die alone with lots of money in your estate. What a wonderful life!
You guys are a bunch of clowns...
Haha, you don't have to choose one or the other. You can do both at the same time.

virtuman1980 wrote:
Feb 21st, 2013 8:56 am
Haha...pretty interesting fellow indeed...but it was this persistence/stubbornness of his that got him the positive result in the end.
datako wrote:
Feb 19th, 2013 12:35 am
... Although, I'm a little surprised you went against what everyone advised ,op. You've got balls and absolutely crazy at the same time to do this.
Deal Addict
Feb 15, 2013
2445 posts
545 upvotes
yp_1 wrote:
Jun 6th, 2014 8:46 pm
Right, devote yourself to investing. Don't make kids, they are a big expense! Not to mention house!
Die alone with lots of money in your estate. What a wonderful life!
You guys are a bunch of clowns...
Somebody sounds unhappy ;)

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