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

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Deal Guru
Mar 20, 2003
10476 posts
656 upvotes
New-Brunswick
Looks like you had a great year, hopefully the same will happen in 2017.

I've been investing heavily, a part of that because I read this thread, but I'm starting to ask myself if that's not a bad thing. I've been considering cutting my investments to instead start taking 2-3 months off a year to escape Winter (to which both my wife and financial planner gave me the politically correct version of 'are you high?') . I understand their position in that we're groomed to save save save to one day retire, but don't sometimes worry that you're doing all this and then you might get struck down by cancer or a heart attack before you get a chance to enjoy it?
Member
Sep 9, 2012
372 posts
120 upvotes
TORONTO
Germack wrote: Year End Update

Networth 31.12.2015: $884,494 (Family: $1,464,754)
Networth 31.12.2016: $1,039,083 (Family: $1,666,701)
Increase: $154,589 (Family: $201,946)
Congrats on hitting the 7 figure club (a club I'm aiming to join too)!

Just to confirm - those rates of return, are they including your deposits too, or are they only the gains on your deposits/investments?
Deal Addict
Oct 1, 2006
3249 posts
4472 upvotes
Montreal
TorontoDavid wrote:
Just to confirm - those rates of return, are they including your deposits too, or are they only the gains on your deposits/investments?
Those rate of returns are only the gains on my deposits/investments.
Deal Addict
User avatar
May 25, 2008
1615 posts
945 upvotes
Toronto
Congrats Germack. You have reached the point to what I call runaway compound returns. To quote Einstien: “Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it.”

I've maintained this focus since my mid-twenties and took years before realizing the results through discipline and hard work.

I have no doubt that by the time you are 50, you will be a multi-multi millionaire.

Most people start way too late in life to reach this point.
Newbie
Nov 9, 2014
41 posts
18 upvotes
Alberta
Hi,

I'm 29 and just started getting into this whole couch potato investing methodology more and got really inspired by Germack's post here.

I just recently switched to TD bank from RBC. However, I still need to move my TFSA over to TD from RBC. With that said though, what is the correct way to properly setup this TD e-series investing account within my TFSA through TD?

I will be maxing out my TFSA after my money has moved from RBC, so it should have about 52k in it. I also have another 40k that I don't know what to do with at this time. I am still fairly new to the whole investing stuff, but would like to delve into it more as part of my 2017 goals this year.

I am also unsure what it necessarily means by "rebalancing" whenever I have read the term online or in random RFD posts lol. Could someone explain this to me?

Thanks my fellow RFDs :)
Sr. Member
User avatar
Mar 27, 2011
954 posts
775 upvotes
Toronto
GucciCharms wrote: Hi,

I'm 29 and just started getting into this whole couch potato investing methodology more and got really inspired by Germack's post here.

I just recently switched to TD bank from RBC. However, I still need to move my TFSA over to TD from RBC. With that said though, what is the correct way to properly setup this TD e-series investing account within my TFSA through TD?

I will be maxing out my TFSA after my money has moved from RBC, so it should have about 52k in it. I also have another 40k that I don't know what to do with at this time. I am still fairly new to the whole investing stuff, but would like to delve into it more as part of my 2017 goals this year.

I am also unsure what it necessarily means by "rebalancing" whenever I have read the term online or in random RFD posts lol. Could someone explain this to me?

Thanks my fellow RFDs :)
What Is Rebalancing?
Rebalancing is the process of buying and selling portions of your portfolio in order to set the weight of each asset class back to its original state. In addition, if an investor's investment strategy or tolerance for risk has changed, he or she can use rebalancing to readjust the weightings of each security or asset class in the portfolio to fulfill a newly devised asset allocation.
Good read: http://www.investopedia.com/articles/pf/05/051105.asp
Deal Addict
Oct 1, 2006
3249 posts
4472 upvotes
Montreal
Feneant wrote: Looks like you had a great year, hopefully the same will happen in 2017.

I've been investing heavily, a part of that because I read this thread, but I'm starting to ask myself if that's not a bad thing. I've been considering cutting my investments to instead start taking 2-3 months off a year to escape Winter (to which both my wife and financial planner gave me the politically correct version of 'are you high?') . I understand their position in that we're groomed to save save save to one day retire, but don't sometimes worry that you're doing all this and then you might get struck down by cancer or a heart attack before you get a chance to enjoy it?
Hi Feneant,

Good question. We all have limited time on this planet therefore we should enjoy it as much as possible. So what makes us happy? On the surface it all seems so obvious. We make money and spend the money to buy stuff that makes us happy. We lust after a BMW/Audi and a 4,000 square foot house , only to find out that they quickly lose their allure, and that maintaining them takes a lot of time and money. Using money to buy plenty of stuff just does not make me happy. Instead my money buys me time, autonomy and experiences. These things make me happy. I do not feel like that I am sacrificing my quality of live. I just don't need to drive a new BMW/Audi or own a MCMansion to make me happy.

William Bernstein said it well, "Money can buy happiness, but only if you first saved like mad, then spend those savings with care".
Last edited by Germack on Jan 6th, 2017 9:52 am, edited 1 time in total.
Deal Addict
User avatar
May 25, 2008
1615 posts
945 upvotes
Toronto
Germack wrote: Hi Feneant,

Good question. We all have limited time on this planet therefore we should enjoy it as much as possible. So what makes us happy? On the surface it all seems so obvious. We make money and spend the money to buy stuff that makes us happy. We lust after a BMW/Audi and a 4,000 square foot house , only to find out that they quickly lose their allure, and that maintaining takes a lot of time and money. Using money to buy plenty of stuff just does not make me happy. Instead my money buys me time, autonomy and experiences. These things make me happy. I do not feel like that I am sacrificing my quality of live. I just don't need to drive a new BMW/Audi or own a MCMansion to make me happy.

William Bernstein said it well, "Money can buy happiness, but only if you first saved like mad, then spend those savings with care".
Well said. I invest with the goal of reaching financial independence: to develop a stream of income that can replace my working income and not have to worry about retirement - and to have enough FU money to not care if I get fired....
Member
May 27, 2007
423 posts
36 upvotes
Congrats on reaching a million bucks in net worth! Just a question, and I'm sorry if you already answered this in this thread, but do you have some point where you will stop saving? I ask cause I'm putting a good chunk of my investments strictly into VSP, but due to the low dividend payout, I would not be able to live off of it. Instead, I figure I would have to liquidate as I go to help smooth out the price fluctuations. If I did just want to strictly live off the dividends, I would either have to save a lot of money or lower my living standard to achieve this through something like VSP alone.
Member
Jan 4, 2017
366 posts
277 upvotes
Congratulations on your success Germack! I really have to thank you and others (Rod comes to mind) for being a part of what has helped opened my eyes big time.

I will finally catch up on my RRSP contribution space this year, and I decided to put those contributions in the Tangerine investment fund to start with. The effort / risk / fees / portoflio looks attractive to me as a good place to start. For my TFSA space, which I will hopefully catch up on in the next couple of years, I've opted to go with TD. I have a TDW account and have started TDB900 for the time being, planning on adding one or two others to that as soon as I can. My plan is to DCA the Tangerine to use up my RRSP space moving forward, and to lump sum the TD as there will be a couple of times per year that I will have some extra cash to invest beyond that RRSP allowance. I'm looking forward to adding other things to this as time goes on, based on what I've been learning in this thread and others like it.

Your story has been an inspiration. I'd like to believe that I too have what it takes to stick to my plan no matter what, time will tell!

I would like to ask though, and I apologize if it was already answered, I've read through the thread twice now and maybe I'm just going crosseyed. What's your preferred method for tracking everything? As in... do you keep a document of some sort that details how each investment is doing from month to month, year to year, what kind of returns/losses you have etc? I guess it's not that important for me at this stage, but I'd like to figure out an ideal solution for keeping tabs on it all and being able to eventually display data in some interesting manner once enough time has elapsed. Total noob on that front here.
Penalty Box
Dec 27, 2013
8003 posts
4050 upvotes
Toronto
Germack wrote: Hi Feneant,

Good question. We all have limited time on this planet therefore we should enjoy it as much as possible. So what makes us happy? On the surface it all seems so obvious. We make money and spend the money to buy stuff that makes us happy. We lust after a BMW/Audi and a 4,000 square foot house , only to find out that they quickly lose their allure, and that maintaining them takes a lot of time and money. Using money to buy plenty of stuff just does not make me happy. Instead my money buys me time, autonomy and experiences. These things make me happy. I do not feel like that I am sacrificing my quality of live. I just don't need to drive a new BMW/Audi or own a MCMansion to make me happy.

William Bernstein said it well, "Money can buy happiness, but only if you first saved like mad, then spend those savings with care".
shed some light on your stock options.
Deal Addict
Oct 1, 2006
3249 posts
4472 upvotes
Montreal
ghost416 wrote: Congrats on reaching a million bucks in net worth! Just a question, and I'm sorry if you already answered this in this thread, but do you have some point where you will stop saving? I ask cause I'm putting a good chunk of my investments strictly into VSP, but due to the low dividend payout, I would not be able to live off of it. Instead, I figure I would have to liquidate as I go to help smooth out the price fluctuations. If I did just want to strictly live off the dividends, I would either have to save a lot of money or lower my living standard to achieve this through something like VSP alone.
Hi ghost,

Yes, that's the plan. One day I will stop saving and live from my investments. When this will happen I have no idea.

There is nothing wrong with liquidating your portfolio once you are retired. As a rule of thumb you will be able to withdraw around 4% each year without running out of money for the next 30 years.
Deal Addict
Oct 1, 2006
3249 posts
4472 upvotes
Montreal
zcypher wrote:
I would like to ask though, and I apologize if it was already answered, I've read through the thread twice now and maybe I'm just going crosseyed. What's your preferred method for tracking everything? As in... do you keep a document of some sort that details how each investment is doing from month to month, year to year, what kind of returns/losses you have etc? I guess it's not that important for me at this stage, but I'd like to figure out an ideal solution for keeping tabs on it all and being able to eventually display data in some interesting manner once enough time has elapsed. .
Hi zcypher,

It makes me very happy to hear that this thread inspired people to invest their money using a couch potato strategy.

- I use Excel to track my networth bi-monthly.
- I use MInt/Quicken to track my spending and my adjusted cost base for my non-registered stocks.
- I use the TD Waterhouse "Performance" tool to determine my rate of return at the end of each year.
Last edited by Germack on Jan 8th, 2017 10:23 pm, edited 1 time in total.
Deal Fanatic
User avatar
Jul 19, 2003
8137 posts
770 upvotes
Germack wrote: Hi ghost,

Yes, that's the plan. One day I will stop saving and live from my investments. When this will happen I have no idea.

There is nothing wrong with liquidating your portfolio once you are retired. As a rule of thumb you will be able to withdraw around 4% each year without running out of money for the next 30 years.
When you begin doing this, will you be still holding dividend stocks and taking the dividends each year instead of just withdrawing from cash ?

If you for example just put it in high interest savings accounts you're going to get way more than 30 years off cash. If you set aside at least 1/4 of the portfolio into dividend stocks, likely longer.
hi!
Jr. Member
Nov 3, 2010
101 posts
Hey Germack,

Congrats on reaching a huge milestone.

Two quick questions.

1. How much of the total investments accounts for your contribution

2. During the financial crisis, how did you manage deal with the crisis emotionally and what was your thought process. How hard were you hit during the crisis.

Thanks,
Sr. Member
User avatar
Jun 12, 2010
844 posts
182 upvotes
Vancouver
In tune with everyone elses' sentiments, congratulations Germack on surpassing 1 mil in net worth! Have been following this thread for the better part of the last year and have received so much good advice from the individuals that frequent it - incredibly happy to see your continued success. Your mentality towards saving is certainly an inspiration.

While you hit the big 1 mil milestone, I just hit my own milestone recently and maxed out my TFSA (20% in Tangerine, 80% in QT ETFs) for the first time after my $5500 investment this past week to utilize my contribution room for '17! Incredibly excited, and proud of myself for sticking to my savings plan for the last year and a half. Moving forward, I'm a bit confused as to what to do and would love some advice from everyone here.

I don't believe I'm at my max income potential as of yet as I'm hoping to return to grad school in '17 with higher potential earnings aftewards. Correct me if I'm wrong but it's not a great idea for me to start investing in an RRSP right now as the gains would be minimal, right? It would be best to save RRSP contribution room to when I'm in a higher earning capacity? If that statement rings true, how should I move forward with my investments?

I assume that the main answer will just be to continue my investment pattern with the same allocation and ETF makeup but just in a non-registered account. If that is the case, what would be the best way to maximize tax-efficiency with respect to withholding tax? My ETF portfolio consists of (all of which are currently in the TFSA): VAB, VCN, VUN, XEF, XEC and XRE. Should I begin a slow transition to put certain ETFs in certain accounts (reg vs. nonreg); or keep the same allocation and buying pattern in both accounts?

Cheers.
Member
Jul 22, 2013
306 posts
158 upvotes
frankc92 wrote: In tune with everyone elses' sentiments, congratulations Germack on surpassing 1 mil in net worth! Have been following this thread for the better part of the last year and have received so much good advice from the individuals that frequent it - incredibly happy to see your continued success. Your mentality towards saving is certainly an inspiration.

While you hit the big 1 mil milestone, I just hit my own milestone recently and maxed out my TFSA (20% in Tangerine, 80% in QT ETFs) for the first time after my $5500 investment this past week to utilize my contribution room for '17! Incredibly excited, and proud of myself for sticking to my savings plan for the last year and a half. Moving forward, I'm a bit confused as to what to do and would love some advice from everyone here.

I don't believe I'm at my max income potential as of yet as I'm hoping to return to grad school in '17 with higher potential earnings aftewards. Correct me if I'm wrong but it's not a great idea for me to start investing in an RRSP right now as the gains would be minimal, right? It would be best to save RRSP contribution room to when I'm in a higher earning capacity? If that statement rings true, how should I move forward with my investments?

I assume that the main answer will just be to continue my investment pattern with the same allocation and ETF makeup but just in a non-registered account. If that is the case, what would be the best way to maximize tax-efficiency with respect to withholding tax? My ETF portfolio consists of (all of which are currently in the TFSA): VAB, VCN, VUN, XEF, XEC and XRE. Should I begin a slow transition to put certain ETFs in certain accounts (reg vs. nonreg); or keep the same allocation and buying pattern in both accounts?

Cheers.
Well you can always contribute to rrsp and let it grow interest free, but take the deduction in later years. If everything is maxed , maybe move onto dividends in non registered account?
Member
Dec 11, 2008
355 posts
81 upvotes
Ottawa
frankc92 wrote: I don't believe I'm at my max income potential as of yet as I'm hoping to return to grad school in '17 with higher potential earnings aftewards. Correct me if I'm wrong but it's not a great idea for me to start investing in an RRSP right now as the gains would be minimal, right? It would be best to save RRSP contribution room to when I'm in a higher earning capacity? If that statement rings true, how should I move forward with my investments?
As aaappping mentioned, you can always contribute--with an option to delay actually applying the deduction until later. HOWEVER: unless you are VERY sure of a huge salary jump in the very near (pretty much immediate) future, don't bother waiting. If you get the nice big tax refund right away and invest it, you will almost certainly get a higher return on your money than if you wait a few years. In your case, you only have a vague expectation of higher earning several years into the future (depending on how long it takes you to finish grad school) so it doesn't sound like it will be worth it. You can always run a few scenarios and do the math based on your current salary vs expected future salary "n" number of years in the future though.

But yeah, in general I only think it's a good idea to wait to claim the RRSP deduction in very few cases. E.g. you spent half the year in school this year so your salary is only half your usual and will certainly double the next year; you took maternity/parental leave which again, means that the next year will you for sure will have a drastically higher salary; or you know for certain that you are switching jobs with a significantly higher salary/getting a REALLY big promotion & pay raise. (Note that it really has to be a quite significant pay raise in the third case, don't just do it for any regular promotion.)
I assume that the main answer will just be to continue my investment pattern with the same allocation and ETF makeup but just in a non-registered account. If that is the case, what would be the best way to maximize tax-efficiency with respect to withholding tax? My ETF portfolio consists of (all of which are currently in the TFSA): VAB, VCN, VUN, XEF, XEC and XRE. Should I begin a slow transition to put certain ETFs in certain accounts (reg vs. nonreg); or keep the same allocation and buying pattern in both accounts?
There are a lot of finer points that can be discussed when it comes to asset allocation in various accounts, but generally: keep only Canadian equities in non-registered (until you really run out of room in non-registered; this is due to the favourable dividend tax credit for Canadian stocks). Keep U.S. equities in RRSP (save on withholding tax)--however the caveat is that if you are holding a Canadian ETF "container" that holds US stocks (e.g. VUN) you don't get the benefit, so it doesn't matter. I also like to keep bonds in RRSP because they are taxed highly and have low yield (I would rather my TFSA have high yield since it will not be taxed in the future).

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