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

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• Jan 13th, 2019 2:34 pm
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Member
Sep 1, 2013
402 posts
thetipster wrote:
Jul 19th, 2016 12:13 pm
Calculations:
Opportunity costs: 500K * 0.05% = 25K
Taxes: ~5 K
Utilities/Maintenance/Insurance etc.: ~7.5K
Total: 37.5

Don't know if this has been discussed as this is where I am in the thread...
But only missing piece to this equation is the estimated appreciation of the house asset. I would say we can assume over time 3 to 5% appreciation?
This math is incorrect. If you already own another house and this is an investment property, you should rent this property out and put that cash flow in the equation. If this is your home, you should put in the savings from not paying the rent elsewhere - or what you were paying previously. Otherwise, you are including the opportunity costs from the prior scenario but not the opportunity gains.

A ~4% annual home price appreciation would have beat out investing in S&P/TSX in the last 4-5 years.
[OP]
Oct 1, 2006
1856 posts
Montreal
thetipster wrote:
Jul 19th, 2016 12:13 pm
Don't know if this has been discussed as this is where I am in the thread...
But only missing piece to this equation is the estimated appreciation of the house asset. I would say we can assume over time 3 to 5% appreciation?
Absolutely, appreciation of the house will reduce the cost of owning. The future rate of return of the stock markets and house price appreciation are unfortunately impossible to predict, so to do an exact math is impossible.
Dec 27, 2011
2703 posts
Waterloo
Ironcat wrote:
Jul 19th, 2016 7:37 pm
This math is incorrect. If you already own another house and this is an investment property, you should rent this property out and put that cash flow in the equation. If this is your home, you should put in the savings from not paying the rent elsewhere - or what you were paying previously. Otherwise, you are including the opportunity costs from the prior scenario but not the opportunity gains.

A ~4% annual home price appreciation would have beat out investing in S&P/TSX in the last 4-5 years.
Are you sure? I believe the TSX has probably been about even but the S&P 500 has been dynamite the last 4-5 years, enough that if you did 50/50 on S&P and TSX I think it'd be well over 4%.
Jul 15, 2009
1331 posts
crystallight wrote:
Jul 20th, 2016 11:32 am
Are you sure? I believe the TSX has probably been about even but the S&P 500 has been dynamite the last 4-5 years, enough that if you did 50/50 on S&P and TSX I think it'd be well over 4%.
The annualized return of the TSX in the 5 years ending June 30, 2016 was 4.47%.

The annualized return of the S&P 500 in CAD in the 5 years ending June 30, 2016 was 18.93%.
[OP]
Oct 1, 2006
1856 posts
Montreal
Very good video. Thanks for sharing. It reminds me on this quote from Warren Buffett.

The happiest people do not necessarily have the best things. They simply appreciate the things they have.
Sep 6, 2010
1653 posts
Vancouver
treva84 wrote:
Jul 28th, 2016 11:27 am
A good watch on indexing and taking a long term horizon - http://wealthtrack.com/clements-jakab-rethinking-money/
Excellent advice in this video. If people would keep it simple, life would be easy in retirement.
Jul 18, 2016
2014 posts
bubak wrote:
Jul 20th, 2016 6:44 pm
The annualized return of the TSX in the 5 years ending June 30, 2016 was 4.47%.

The annualized return of the S&P 500 in CAD in the 5 years ending June 30, 2016 was 18.93%.
Furthermore, most of the 5 year annualized 4.47% has been realized since February of 2016. This demonstrates the importance of consistency of deposits into the couch potato portfolio since you can never be certain when the growth or loss will occur.
Deal Guru
Mar 20, 2003
10099 posts
Moncton, NB
bewiseman wrote:
Jul 29th, 2016 7:45 am
Furthermore, most of the 5 year annualized 4.47% has been realized since February of 2016. This demonstrates the importance of consistency of deposits into the couch potato portfolio since you can never be certain when the growth or loss will occur.
This goes hand in hand with my biggest issue with investing in ETF's, I setup automatic fund transfer on a weekly basis but then I need to remember login to invest those funds (I am currently 1.5 months behind for example). I really wish I could set it up to auto purchase based on my deposit like banks do with mutual funds. Or at least I know Questrade doesn't do this, is there any online brokerage that will set this up with ETF's?
KitKat item collector- always looking for swag or branded items.
Member
Mar 5, 2009
369 posts
Feneant wrote:
Jul 29th, 2016 10:17 am
This goes hand in hand with my biggest issue with investing in ETF's, I setup automatic fund transfer on a weekly basis but then I need to remember login to invest those funds (I am currently 1.5 months behind for example). I really wish I could set it up to auto purchase based on my deposit like banks do with mutual funds. Or at least I know Questrade doesn't do this, is there any online brokerage that will set this up with ETF's?
You can pay a premium to robo advisors to manage it for you.

Once you max out your registered accounts, weekly transfers are not advised in a non registered account. The calculations you'll need to do will be too time consuming come tax time.
May 15, 2016
3111 posts
Can someone give me a dummies version of this thread?
Deal Expert
Sep 19, 2004
21976 posts
Waterloo
vivibaby wrote:
Jul 30th, 2016 10:14 pm
Can someone give me a dummies version of this thread?
Invest those, simplest way is couch potato (buy index funds)
and with long-enough time horizon (9 years in this case), you should catch a bull-market run-up (we've had one for last 7 years)

Those aren't secrets, but the key is discipline shown by OP to save (save a LOT) and invest (I think save & invest 50K/year in OP's case?)
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Sr. Member
Feb 1, 2012
873 posts
Thunder Bay, ON
vivibaby wrote:
Jul 30th, 2016 10:14 pm
Can someone give me a dummies version of this thread?
If You Can: How Millennials Can Get Rich Slowly.
Free ebook. The author says more in 16 pages than many authors say in hundreds.
[OP]
Oct 1, 2006
1856 posts
Montreal
1. Spend less than you earn.
2. Invest your savings in a low cost diversified portfolio
3. Stick to your plan no matter what happens
4. Profit!
Newbie
Aug 20, 2012
56 posts
1 upvote
Toronto
Germack wrote:
Jul 31st, 2016 8:32 am
1. Spend less than you earn.
2. Invest your savings in a low cost diversified portfolio
3. Stick to your plan no matter what happens
4. Profit!
Very new to investing, so bear with me. OP said its couch potato investing. From what i found in the couch potato site were portfolios like TD e-series(set of 4 funds) / Tangerine .. other index funds. The portfolio OP showed in his first post is a modified version of the suggested couch potato portfolio? What am i missing?

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