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Couch potato investing for the last 18 years - tracking my progress

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  • Mar 16th, 2024 8:36 pm
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Deal Addict
Sep 6, 2010
2029 posts
804 upvotes
Vancouver
techcrium wrote: If you have been indexing for 3.5 years...aka started in 2010-2011...how are you only up 24%?
Here we go again....
Newbie
Feb 24, 2010
71 posts
2 upvotes
Toronto
techcrium wrote: If you have been indexing for 3.5 years...aka started in 2010-2011...how are you only up 24%?
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.
Newbie
Sep 3, 2008
72 posts
12 upvotes
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?
+1, would also like to know how your assets are allocated among your accounts, thanks!
Deal Addict
Oct 1, 2006
3244 posts
4452 upvotes
Montreal
Harps wrote:
One question: Do you hold any Real Estate in your non-registered account and, if so, how bad is the tax hit on it?
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.
Deal Addict
Oct 1, 2006
3244 posts
4452 upvotes
Montreal
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?
- Yes, I do. My RRSP and TFSA are both maxed. I invest for the long-term (>30 years). Losses are therefore very unlikely.
- 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.
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.
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User avatar
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?
The worst part about prison was the Dementors. - Michael Scott

My Basement Reno Project
Deal Addict
Oct 1, 2006
3244 posts
4452 upvotes
Montreal
Yes, I save/invest around 50% of my post-tax income.
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
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Nov 29, 2011
1079 posts
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Grimsby
Germack wrote: Yes, I save/invest around 50% of my post-tax income.
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.
The worst part about prison was the Dementors. - Michael Scott

My Basement Reno Project
Deal Addict
Oct 1, 2006
3244 posts
4452 upvotes
Montreal
biakos wrote: 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
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.
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User avatar
May 24, 2008
3477 posts
1524 upvotes
Toronto
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?
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.
Member
User avatar
Mar 25, 2005
295 posts
80 upvotes
windsor
Germack wrote: Yes, I save/invest around 50% of my post-tax income.
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
Deal Fanatic
Mar 24, 2008
6278 posts
2753 upvotes
Toronto
narbajaj wrote: 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.
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.
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Apr 12, 2012
2899 posts
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Toronto
When index investing using the couch potato strategy, do you prefer a lump sum contribution or dollar cost averaging?
Deal Fanatic
Mar 24, 2008
6278 posts
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Toronto
zobi123 wrote: When index investing using the couch potato strategy, do you prefer a lump sum contribution or dollar cost averaging?
Lump sum beats DCA in 2 out of 3 scenarios according to a recent study. I have personally used lump sum strategy for the last 6 years and it has worked out great.
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Apr 12, 2012
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ksgill wrote: Lump sum beats DCA in 2 out of 3 scenarios according to a recent study. I have personally used lump sum strategy for the last 6 years and it has worked out great.
What is your strategy like? Investing a lump sum once a year? Do you re-balance at times?
Deal Fanatic
Mar 24, 2008
6278 posts
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Toronto
zobi123 wrote: What is your strategy like? Investing a lump sum once a year? Do you re-balance at times?
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.
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User avatar
Mar 25, 2005
295 posts
80 upvotes
windsor
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.
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.
Happy Canada Day
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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