Couch potato investing for the last 18 years - tracking my progress
- Last Updated:
- Mar 16th, 2024 8:36 pm
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- SCORE+211
- gwplant
- Deal Addict
- Sep 6, 2010
- 2029 posts
- 804 upvotes
- Vancouver
- Harps
- Newbie
- Feb 24, 2010
- 71 posts
- 2 upvotes
- Toronto
Easily. I started in late 2011 with nothing and made small contributions over the first few years. Only recently have I been able to increase my contributions significantly. The bulk of my contributions were made over the past year.
- Undefin3
- Newbie
- Sep 3, 2008
- 72 posts
- 12 upvotes
+1, would also like to know how your assets are allocated among your accounts, thanks!narbajaj wrote: ↑Just curious, do you use RRSP/TFSA tax shelter account to invest as it has benefit but also has few drawback if you make a loss. Do you use Questrade for your investment or do you use big banks for brokerage. How much money do you think you pay for buying/selling transactions? Is your dividends are tax deducted from the source before you get it or do you report it in your tax returns. How often do you sell your shares to make up your losses?
- Germack [OP]
- Deal Addict
- Oct 1, 2006
- 3244 posts
- 4452 upvotes
- Montreal
Yes, I do hold some REITs in my non-registered account although most of them are in my RRSP. Taxation is a mixed bag. REITs distribute other income, capital gains, foreign non-business income and return of capital. Return of capital and capital gains are taxed favorable while other income and non-business income are not. Therefore, taxation is worse than capital gains or Canadian dividends, but better than e.g international dividends or interest income.
- Germack [OP]
- Deal Addict
- Oct 1, 2006
- 3244 posts
- 4452 upvotes
- Montreal
- Yes, I do. My RRSP and TFSA are both maxed. I invest for the long-term (>30 years). Losses are therefore very unlikely.narbajaj wrote: ↑Just curious, do you use RRSP/TFSA tax shelter account to invest as it has benefit but also has few drawback if you make a loss. Do you use Questrade for your investment or do you use big banks for brokerage. How much money do you think you pay for buying/selling transactions? Is your dividends are tax deducted from the source before you get it or do you report it in your tax returns. How often do you sell your shares to make up your losses?
- When I started investing I used Questrade because of the cheap commissions. After I reached a net-worth of around 250k I moved my investments to TD. I pay 9.95 per transaction.
- I report my dividends on my tax return.
- I do not sell shares. I am a long term buy and hold investor.
- Germack [OP]
- Deal Addict
- Oct 1, 2006
- 3244 posts
- 4452 upvotes
- Montreal
I got a bit scared about my money, because users on this forum reported a lot of issue with Questrade, so I moved to TD. Personally, I never had an issue with Questrade and I think it is a great brokerage especially if you do make a lot of trades. Their fees are among the lowest.
- aprofetto
- Deal Addict
- Nov 29, 2011
- 1079 posts
- 446 upvotes
- Grimsby
OP, sorry if it's been asked before, as I've only skimmed through most of the posts on here.
How much of your post-tax income were you contributing to your investments? Looks like you are investing close to 50% of your post-tax income?
How much of your post-tax income were you contributing to your investments? Looks like you are investing close to 50% of your post-tax income?
- Germack [OP]
- Deal Addict
- Oct 1, 2006
- 3244 posts
- 4452 upvotes
- Montreal
Yes, I save/invest around 50% of my post-tax income.
- biakos
- Newbie
- Oct 22, 2014
- 10 posts
- Hamilton, ON
Thanks for the information . I am actively seeking knowledge on how to invest in etfs as a third way to invest my money . If you could pm me any readings u felt were beneficial along the way I would appreciate it. Thank you
- aprofetto
- Deal Addict
- Nov 29, 2011
- 1079 posts
- 446 upvotes
- Grimsby
Wow, that's amazing! Given the interest your investments are earning, sounds like you can retire.
Goes to show how powerful it is to save more as opposed to banking on earning more interest in the markets to swell your portfolio. While a combination of both is nice, you've managed to really, really up your savings game. Well done good sir.
- Germack [OP]
- Deal Addict
- Oct 1, 2006
- 3244 posts
- 4452 upvotes
- Montreal
A Random Walk Down Wall Street was an eye opening book for me. It changed how I invested my money.
I like all books from William J. Bernstein, and I learned a lot from http://canadiancouchpotato.com/ and http://www.financialwisdomforum.org/
The Moneysense Guide to the Perfect Portfolio is also very good and teaches you everything you need to know about investing.
- Little Tim
- Deal Addict
- May 24, 2008
- 3477 posts
- 1524 upvotes
- Toronto
Very few people actually recognized the market as cheap in 2009. It was the end of the world and most actually thought it was going to get worse. Hindsight is great, but you need to have actually lived through one of these downturns with skin in the game to truly appreciate what it does to the psyche of the masses.Harps wrote: ↑Great work, OP. I've been indexing for almost 3.5 years. My overall return has been about 25%. I wish I finished school sooner, so I could have been investing in 2009-2010 when everything was cheap and benefitted from the full bull market. I finally got my TFSA and RRSP maxed last year and just started a non-registered account. I'm way behind you, but it's definitely encouraging to hear about your success.
One question: Do you hold any Real Estate in your non-registered account and, if so, how bad is the tax hit on it?
- narbajaj
- Member
- Mar 25, 2005
- 295 posts
- 80 upvotes
- windsor
Investment in Stocks which pays you dividend/bonus shares is much better than share price movement only. Unless you sell that share, you won't realize the returns. Till then, it is paper money valued in paper only.
Happy Canada Day
- ksgill
- Deal Fanatic
- Mar 24, 2008
- 6278 posts
- 2753 upvotes
- Toronto
Let's assume that company A and company B have the exact same return in a year. Company A pays you dividends but B doesn't. You'll see something like this:
Company A: 5% dividend + 5% price increase
Company B: 0% dividend + 10% price increase
These two scenarios are exactly the same and the only difference is the one you point out i.e. you'll need to sell 5% of Company B shares to realise your "income". I don't quite get why people think of dividend income differently.
- zobi123
- Deal Addict
- Apr 12, 2012
- 2899 posts
- 2574 upvotes
- Toronto
When index investing using the couch potato strategy, do you prefer a lump sum contribution or dollar cost averaging?
- ksgill
- Deal Fanatic
- Mar 24, 2008
- 6278 posts
- 2753 upvotes
- Toronto
- zobi123
- Deal Addict
- Apr 12, 2012
- 2899 posts
- 2574 upvotes
- Toronto
- ksgill
- Deal Fanatic
- Mar 24, 2008
- 6278 posts
- 2753 upvotes
- Toronto
I typically add new money a couple times per year and at that time I add to lower positions to rebalance. I follow the same strategy when the quarterly dividends come in since buying new ETF units doesn't cost anything at Questrade.
- narbajaj
- Member
- Mar 25, 2005
- 295 posts
- 80 upvotes
- windsor
But if you are long term investor then you will not want to do lot of buy and sell. Then it is worth while to keep those stocks which give small return than spikes like a gambling. We never know when to enter the market and when to exit if you are novice investor.ksgill wrote: ↑Let's assume that company A and company B have the exact same return in a year. Company A pays you dividends but B doesn't. You'll see something like this:
Company A: 5% dividend + 5% price increase
Company B: 0% dividend + 10% price increase
These two scenarios are exactly the same and the only difference is the one you point out i.e. you'll need to sell 5% of Company B shares to realise your "income". I don't quite get why people think of dividend income differently.
Happy Canada Day
- Germack [OP]
- Deal Addict
- Oct 1, 2006
- 3244 posts
- 4452 upvotes
- Montreal
Yes, academic research has shown that lump sum beats DCA most times. I invest new savings on a monthly basis. No rebalancing. I just buy the asset class furthest away from its target allocation.
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