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

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Deal Addict
Jun 3, 2009
3786 posts
460 upvotes
Montreal
Germack wrote:
Aug 9th, 2016 8:46 pm
jerryhung wrote:
Aug 9th, 2016 4:26 pm
Congrats to Germack (and gf?) indeed!!
Thanks jerryhung. I love your credit card thread.

The graph does not include my gfs networth. Her networth is ~625K, or at least it was in JAN2016. She only updates it once a year. Investing stresses her out and setting up a couch potato portfolio is too complicated for her. Therefore, all her money is invested in MAW104.
Do you think her non-registered account would have been better off in MAW105 instead? Thanks.
Jr. Member
Jan 16, 2009
151 posts
67 upvotes
Hey Germack. Great job man! I've been following this thread for the last few years and admire your discipline with regards to investing and saving.

Now that you have hit the million mark what is your next goal? I know you want to pay down the mortgage but is there another number you have in your sights?

Also I understand you are foregoing bonds in your portfolio and supplementing them with your mortgage instead. I recall you developed an ulcer due to the stress caused by the downtown in 2008-2009 (as would most investors) but you stayed the course. Now that you are seasoned would observing your portfolio drop by 30-40% in another financial crisis be less stressful this time around?

Thanks again for the great thread. Fantastic information here.
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May 25, 2008
1150 posts
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Mississauga
Germack, your commitment, and perseverance are truly inspirational. Congratulations on your new home and reaching that coveted milestone. Hope you will achieve many more in your investment career.
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Feb 4, 2015
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Canada, Eh!!
Germack wrote:
Aug 14th, 2016 4:58 pm
I am quite happy about my asset allocation (20% Bonds, 10% Real Estate and 17.5% in Canadian, US, International and Emerging Market equities), so I would not change that.

I would use the following ETFS:
Bonds --> VAB
Real Estate --> I would not buy an ETF due to the high MER. Instead I would buy equal amounts of BEI, REF, HR and REI.
Canadian equity --> VCE
US Equity --> VTI (US) or VUN (CDN)
International --> XEF (CDN) or VEA (US)
Emerging markets --> VWO (US) or VEE (CDN)
Would you put the following first in RRSPs or not necessary:

US Equity --> VTI (US) or VUN (CDN)
International --> XEF (CDN) or VEA (US)
Emerging markets --> VWO (US) or VEE (CDN)

Thanks and great thread.
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Oct 1, 2006
1691 posts
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Montreal
cn_habs wrote:
Aug 14th, 2016 10:42 pm
Do you think her non-registered account would have been better off in MAW105 instead? Thanks.
You are right. MAW105 is the better option in a non-registered account. Thanks for pointing this out.
[OP]
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Oct 1, 2006
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georvu wrote:
Aug 15th, 2016 3:53 pm
Would you put the following first in RRSPs or not necessary:

US Equity --> VTI (US) or VUN (CDN)
International --> XEF (CDN) or VEA (US)
Emerging markets --> VWO (US) or VEE (CDN)

Thanks and great thread.
RRSP
US equity > International = Emerging markets

TFSA
International/Emerging markets > Us equity
Sr. Member
Jun 15, 2012
800 posts
65 upvotes
MB
Japanese "S&P 500" sort of

Nikkei 225 reached
20,434
on April 14, 2000
And as of present August 16, 2016
16,665

Apparently couch potato would not work in Japan

Dividends though
"I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful."
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Oct 1, 2006
1691 posts
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Montreal
ukrainiandude wrote:
Aug 16th, 2016 12:03 am
Japanese "S&P 500" sort of

Nikkei 225 reached
20,434
on April 14, 2000
And as of present August 16, 2016
16,665

Apparently couch potato would not work in Japan

Dividends though
A couch potato portfolio would have also worked well in Japan, because not all of his money would have been invested in Japanese equities.

His US, internal, emerging market equities would have all done well.
Newbie
Oct 28, 2008
54 posts
11 upvotes
Toronto
Germack wrote:
Aug 16th, 2016 9:26 am
ukrainiandude wrote:
Aug 16th, 2016 12:03 am
Japanese "S&P 500" sort of

Nikkei 225 reached
20,434
on April 14, 2000
And as of present August 16, 2016
16,665

Apparently couch potato would not work in Japan

Dividends though
A couch potato portfolio would have also worked well in Japan, because not all of his money would have been invested in Japanese equities.

His US, internal, emerging market equities would have all done well.
Could you provide which ETF will be accomplish this opportunity

Thanks,
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Dec 14, 2007
2258 posts
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Germack wrote:
Aug 10th, 2016 7:37 pm
chdude3 wrote:
Aug 10th, 2016 10:31 am
How exactly would one determine how much net worth is tied up in equity in a house?

I've recently started paying more attention to our finances and assets and looking towards retirement. I think we actually might be able to pull off Freedom 50 if we're careful, but I'm struggling with how to figure out whether our house can figure prominently into retirement or not. There's nothing in particular holding us where we are - not only can we downsize in 8-10 years, we can relocate to somewhere more favourable.

We (wife and I) have both been pretty diligent with RRSPs for decades, but we were kinda late to the TFSA bandwagon - only started them two years ago (but maxed). Being somewhat financially illiterate we went with Tangerine as a one-stop-shop, partly because we kept saying we'd keep researching other options but after months had made no move, and reasoned that SOMETHING would be better than no TFSA at all.

Sorry I know that's wordy, but it gets back to my original question - how do I figure out what equity we have in our house, since it can have a big impact on our savings and retirement? I know what MPAC has assessed our property at, but I also see what all the houses on our street are selling for. What number do we use?
I use purchase price - remaining mortgage amount = home equity.

For us, the price of our house has no impact on our retirement savings and retirement. We bought the house for lifestyle reason and not as an investment. Once we are dead the house will probably go to our kid(s).
A very important distinction. Money in a house is, remember, illiquid. If you don't think you can bring yourself to selling the house, you'd be wise to include it tentatively in your net worth, when calculating retirement. How many seniors do you know who want to stay in their home that's too big for them. Don't think that you won't get attached to your home either as you age.
I'd love to write history... in advance.
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[OP]
Deal Addict
Oct 1, 2006
1691 posts
655 upvotes
Montreal
hat1811 wrote:
Aug 16th, 2016 12:12 pm



Could you provide which ETF will be accomplish this opportunity

Thanks,
Canadian equity --> VCN
US Equity --> VTI (US) or VUN (CDN)
International --> XEF (CDN) or VEA (US)
Emerging markets --> VWO (US) or VEE (CDN)
Last edited by Germack on Aug 20th, 2016 11:29 am, edited 1 time in total.
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Sep 19, 2004
20461 posts
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Waterloo
hat1811 wrote:
Aug 16th, 2016 12:12 pm
Germack wrote:
Aug 16th, 2016 9:26 am
ukrainiandude wrote:
Aug 16th, 2016 12:03 am
Japanese "S&P 500" sort of

Nikkei 225 reached
20,434
on April 14, 2000
And as of present August 16, 2016
16,665

Apparently couch potato would not work in Japan

Dividends though
A couch potato portfolio would have also worked well in Japan, because not all of his money would have been invested in Japanese equities.

His US, internal, emerging market equities would have all done well.
Could you provide which ETF will be accomplish this opportunity

Thanks,
Not sure if you're asking about JAPAN ETF's, ha... we probably have no idea, as that's what Germack meant (e.g. for a Japan investor, he/she would have DOMESTIC ETF + non-Domestic ETF for a Japan CCP)
Similarly, for Canada, you can have XIC (Canada ETF) + XAW (except Canada) ...
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Dec 14, 2007
2258 posts
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ukrainiandude wrote:
Aug 16th, 2016 12:03 am
Japanese "S&P 500" sort of

Nikkei 225 reached
20,434
on April 14, 2000
And as of present August 16, 2016
16,665

Apparently couch potato would not work in Japan

Dividends though
First of all, you wouldn't be invested just in the Nikkei, in Japan. You'd diversify... just like a Canadian diversifies with US equities and Asian and European equities.

Second of all, you can't just pick two dates and say something doesn't work. Hey, let me try:

April 25th, 2003 7700
August 16th, 2016 16,597

The Nikkei tracks between the S&P and the Nasdaq, btw:
Image
ORANGE: NIKKEI
BLUE: S&P
RED: Nasdaq

As you can see, if you were buying consistently, you'd be buying lots more in the early 2000s and after 2008 than in the runups. In fact, you may even do better with the Nikkei, as you REALLY profit from swings when you dollar-cost average.

If you want to see them Individually:
Image

Image

Image

Basically, the red line indicates that the stock is on sale as that's a 52-period average. So if it's below that line, the current price is lower than the average of the previous 52 weeks.

The Nikkei is more volatile, though. The TSX is also very volatile:
Image

In any case, you can't just choose two dates and call it a day. Index-investing is all about consistent regular rebalancing. Not one-time buys back in 2000. If you want that, then you buy a house.

That's the epitomy of a one-time purchase that you can't dollar-cost average. There's greater risk, but potentially greater reward if you time it properly.
I'd love to write history... in advance.
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