Investing - Millionaire on the Prairie

Going Out Always Costs Me Money

It’s expensive out there. Staying at home with a cup of homemade coffee, snuggled under my favourite throw, and reading a long-anticipated book is a cheaper use of my time. And it’s just as satisfying to me as anything I pay for outside my home.

I don’t know about you but it’s expensive to leave my house. Yesterday, it was gassing up my vehicle. Today, it was groceries. Tomorrow, it’s Halloween so there might be last minute run to the grocery store for candy. Later on this week, it’s dinner with a dear friend. Next weekend… sigh… I think you catch my drift.

In terms of problems, this one really doesn’t count. Over the years, I’ve built up some very good habits for my money. I use automatic transfers to fund my emergency accounts and to invest for retirement. Several years ago, I established sinking funds for annual, un-sexy expenses like insurance premiums and property taxes. And lest you think that I don’t have any fun, there’s even a sinking account for travel, gardening, birthday presents, and theatre subscriptions.

So when I say that leaving my house is synonymous with money leaving my wallet, please know that I’m taking care of my priorities before spending on the day-to-day stuff that crops up.

You see, I think it’s the same for everyone. Leaving the house usually means spending money. The world is literally designed for us to spend money everywhere. Vending machines. Coffee shops. Grocery stores. Restaurants. Drive-through windows. Retailers of every stripe. Parking lots & parking meters. It’s hard to get through the day outside of the home without spending a little something somewhere.

Priorities First

Based on my own observation, the trick is to do your saving and investing first. It’s the timeless principle to pay yourself first. You may have heard of it as living below your means. When you get paid, transfer some of your net income – ideally 20% or more – into your saving/emergency/investing account. Once that money is tucked away, you can spend the remaining amount however you want so long as you don’t go into debt.

At the tender age of 16, I got my first part-time job as a cashier in a grocery store. Every two weeks, I took home just over $130. I picked $50 as my “savings amount” and transferred it into a separate account. By the time I bought my first car 5 years later, I had socked away $8,000. (Living with parents who paid for everything helped tremendously.)

If I knew then what I know now, I would’ve embraced public transit sooner and that money would’ve gone into equity investments in the stock market. Oh, well… too late smart.

Bottom line is that I started my first habit – saving a chunk of my paycheque every time I was paid – at a tender age. When I bought my first condo, I really had to figure out where my money was going. It was the first time I realized how badly I needed an emergency fund. If I had to pay for a condo assessment, then I needed to have money set aside or else I would have to go into further debt to cover my portion of the assessment. And when I moved from a condo to a house, I learned that furnaces and hot water tanks and roofs are exactly cheap. Again, my emergency fund got some loving attention.

Tune Up Your Finances

Speaking of your emergency fund, how’s it doing? Do you have atleast 3 months of expenses in there yet? If not, get to work. If yes, then consider beefing it up. Inflation is still something of a concern. I don’t know what’s happening in your corner of the world, but things aren’t getting any less expensive as far as I can tell.

Once your emergency fund is nice and fat, focus on filing your TFSA and your RRSP. Ideally, you’ll max out your contributions every single year. Realistically, that’s not likely to happen. Do what you can to put in as much as you can. Invest your money for long-term growth. When you’re too old to send your body out to work, your TFSA and RRSP will provide the cash you need to live.

And if you’re fortunate enough to be able to max out those two accounts, then open a non-registered account and invest your money. Unlike the TFSA and the RRSP, there is no limit to how much you can invest in your non-registered account. Take advantage of that to earn dividends and capital gains, two forms of income that are taxed less lightly than your paycheque.

I speak from personal experience. It took me years to fine-tune my system, but it’s now running like a well-oiled machine. Between my automatic transfers and my sinking funds, I’m able to fill my TFSA and my RRSP every year. I’m able to send money to my non-registered account from each paycheque. And my emergency fund is nearly fully funded because it takes a very long time to save up a year’s worth of expenses. (Yes – in my view, a fully funded emergency fund is one that will keep me going for a year. You may feel otherwise.)

You Can Do This

So long as you’re investing 20% of your income, or whatever you can realistically afford, then it doesn’t really matter that you spend money every time you leave your home. Just don’t go into debt! If you’re going into debt, then you need to stop. Debt is corrosive to your ability to secure your future. Money that’s going to your creditors is money that it not going towards your financial future.

And I know that 20% is a big chunk of money. You may not be able to save that much right away. Guess what? I don’t care. You start where you are and you work your way up. Ruthlessly cut out whatever you don’t need so that you can save and invest for Future You. No one else is responsible for ensuring that you have the kind of retirement you want for yourself.

So, yes – going out is going to be a hit to your wallet, more often than not. However, if you take care of yourself by investing off the top and by keeping your emergency fund healthy, then those hits won’t matter. The money that’s working for Future You will keep doing its job, regardless of the day to day expenditures.

Increasing my Passive Income in a Few Clicks

This week, I gave myself a $600 annual raise. No, I didn’t get a promotion or take a different job. Instead, I simply increased my passive income by buying some bank stock. As I’ve said before, salary and income need not be the same thing. There are always ways to increase your income even if your salary isn’t going up as fast as you want it to.

Normally, I’m not a stock-picker. I love my exchange-traded funds because they pay me dividends every month and I get the benefit of diversification. Another way of saying this is as follows. My ETFs generate passive income, which is my very favourite kind of income.

Allow me to be extremely clear. I bought shares in this bank solely because I’d received a stock tip from my sibling who is very wise and very methodical about certain things. Stock tips that come my way are generally disregarded instantly. Like I said, I’m a believer in ETFs and that’s where I’ve been investing my bi-weekly contributions to my investment portfolio since 2011. So why did I listen to my sibling this time around? Why did I act on this particular stock tip?

First, I understand what banks do. They make money, hand over fist, year-in-year-out. Some of that money is paid out to shareholders in the form of dividends. Given that I’m looking to retire within the next 10 years, I want to build a steady stream of reliable cash flow to fund my retirement. Dividends fit the bill. They also receive preferential tax treatment, which is a nice cherry on top of this tasty sundae!

Secondly, the bank I bought pays over $1/share in dividends 4 times each year. For every share I own, I’ll be making $4 per year. An extra $4/year? Big whoop! Remember that it’s an extra $4 per year per share. The more shares I have, the more dividends I earn. And I’m a huge believer in the dividend re-investment plan, which leads to my third point.

Thirdly, my brokerage will allow me to DRIP the quarterly dividends from this stock. I’ll “only” acquire 2-3 new shares every 90 days from this initial purchase, but each of those DRIP-stocks will also earn over $1 per quarter and will also lead to the purchase of even more bank stock. I’ll be benefiting from exponential growth in the number of shares that I’ll own, which means that my passive income will also be growing exponentially the longer I hold this stock.

Fourthly, the dividend payout of these shares is likely to go up. The bank stock I purchased this week has increased its dividend for the past 5 years, so it is considered a Canadian dividend aristocrat in some quarters. (Check out this article from Million about dividend aristocrats if you’re interested in learning more.) Increases in dividend payout are also known as organic dividend growth, a feature of dividends that I like very, very much.

Fifthly, I can keep earning these ever-increasing dividend amounts forever. I’ve created a beautiful money-making cycle that will continue as long as I’m alive. Unless I shuffle off quickly, this stock purchase should soon be paying me $1000 per year, then $2000, and so on and so on and so on. It’s the beauty of the DRIP meeting compound growth.

Finally, if there comes a time when I need to stop my DRIP and live off these dividends, then I can do so. While I’m always thinking of ways to increase my retirement income, I assure you that I don’t plan to live on the entirety of that income unless I have to. For my whole life, I’ve lived below my means. Presently, I don’t see any reason to stop doing so when I retire. The dividend income from my ETFs and my pension should be enough to cover my expenses when my employer and I part ways. If I don’t need the passive income from my bank stock to live, then I see no reason to stop the DRIP.

To recap, dividends generate passive income. Ergo, dividends are my favourite kind of income. This week, I had the opportunity to increase my passive income so I took it. The benefit is that I’ve increased my annual income and I’ve bought myself a little bit of insurance that I’ll have enough money to pay for things when I’m too old to return to the workforce. In the meantime, I’ll sit back and let the magic of compound growth do its thing via my DRIP. It’s all good!

30 Years of DIY-Investing Has Paid Off

When you know better, you do better.
Maya Angelou

This past weekend, I celebrated a rather significant birthday. It was also the 30-year anniversary of when I started my investing journey. As I’m wont to do on my birthday, I considered where I was when I started investing my money and just how far I’ve come on my own. I’m pretty proud of what I’ve accomplished. My parents were smart, but they weren’t rich and they couldn’t teach me what they didn’t know. I learned a lot from books and magazines, then from websites and blogs. As I graduated and earned more, I paid off my debt and invested in the stock market. I was even a landlord up until recently.

Did I do everything perfectly? Hell, no!

To be very clear, I am an amateur investor. That means I don’t have any kind of certification to underpin the choices I’ve made. My financial wisdom comes from lived experience and personal observations. I haven’t been qualified by any governing authority to hold myself out as an expert. I’m an amateur who is going to spout a few words at you.

Take what you need and leave the rest.

Best Moves I Ever Made!

One of the things that I did right was to rely on automation. When my paycheque hit my chequing account, my automatic transfer kicked in to whisk atleast $50 away and into my investment account. From there, I bought mutual funds. When I learned better, I started buying exchange traded funds. First, my contributions all went into filling my Registered Retirement Savings Plan. Then the government introduced the Tax Free Savings Account so my priority each year was to fill up my RRSP and my TFSA. Once I was in a position to fill those registered accounts each year, I turned my attention to investing in a non-registered investment account.

Each year, my employer gave me a slight raise. As my income increased, so did my contribution amount. What’s that old saying? Earn $3, invest $2? Maybe that’s just something I say to myself. In any event, my contribution amount increased each year. In other words, I continued to live below my means even as my means got smaller.

I also used automation to build my emergency fund. Even today, I still send a couple of hundred bucks to my Rainy Day Fund. When I was younger, I’d been told that $10,000 was enough. And then I learned that I should have 3-6 months of expenses tucked away. Today, I’m aiming for a year’s worth of expenses. If anything goes seriously wrong, I can live off my emergency fund for a full year before I have to stop my dividend re-investment plan in order to live off my dividends.

The second smartest thing I did after harnessing the power of automation was to get out of debt. I had about $15K in student loans when I graduated. By saying “No” to myself, a lot, I was able to knock that out in 2 years. Then I turned my attention to paying off my car loan within 3 years. I drove my little navy blue car for 8 years then bought my first SUV. I took out another loan, but sacrificed and lived very small so that I could pay that loan off in 6 months. It wasn’t fun, but it was short term pain for long-term gain.

For those keeping track, the third smart thing I did was to live most of my adult life without a car payment. In my circumstances, a vehicle is a means of transporting my body and my stuff from A to B. It’s only transportation and I see no reason to pay a loan to do so. When I had loans, I figured out ways to pay them off as fast as I could. My vehicles seem to ride better when they’re not weighing me down with debt.

By paying off my SUV in 6 months instead of 5 years, I have 13.5 years of living without a car payment. Yeah… I kept that SUV for 14 years. I would’ve kept it longer but it was a 5-speed manual and my left knee was starting to give me trouble. At the point when I felt I couldn’t safely drive my own SUV, I sold it and bought another one with cold, hard cash.

The fourth smartest move I’ve made is to buy-and-hold. Some of my stocks are the ones that my parents bought for me as a baby. I’ve had those for over half a century. They still pay me dividends every quarter. Maybe $500 per year? Again, my parents weren’t wealthy. The dividend payments aren’t enough to buy more shares, so I re-invest the money rather than spend it.

My other holdings are ones I’ve had for 10+ years. What used to be in a mutual fund with a management expense ratio of 1.76% is now in an ETF with an MER of 0.22%. After all, why would I pay the investment company 1.54% more than I have to for the same product?

In terms of category of investment, I’ve had some for 30 years. Like I said above, my dividend stream is finally enough to support me. That’s the result of my buy-and-hold philosophy.

My fifth best move was to hire an accountant. I’ve owned a few rental properties over the years. She knows tax stuff much better than I do. My accountant has made sure that I don’t get in trouble with Canada Revenue Agency. For that, she is worth every penny. She also answers questions about the tax implications of some of my investing ideas. That information has also saved me from making some big mistakes!

Mistakes? Yeah… I’ve Made A Few!

In terms of mistakes, I made a doozy. Early on, I fell in love with the idea of creating a cashflow of dividends to supplement my pension. Sears went into receivership early in my career and I heard the stories of retirees having their pensions cut. The mess at Nortel also shone a light on how pensioners are at the mercy of their employers’ continued corporate success. I wanted to minimize the chances of my retirement income being disturbed if my pension was cut. So I chose to invest in dividend-paying mutual funds and ETFs.

The smarter play would’ve been to invest in equity-based investment products. Between 2009 and 2022, the stock market was on a tear. That means it was growing and growing, year over year. My dividend products were growing too, but not at the rate of the growth products. I would’ve been far better off investing in equity-products. I finally got smart in October of 2020 and have been investing in VXC ever since.

I didn’t sell my dividend-payers!!! After 12 solid years of investing in dividend products, I’ve got a nice secondary cash flow and it’s growing nicely year over year thanks to my DRIP. It would make no sense to sell those investments just to start from scratch in VXC.

God-willing, I’ve got another 30+ years ahead of me. I’ll continue to invest in equity-based products until I don’t need to invest anymore. Presently, I’m considering the wisdom of using my monthly dividends to bolster my monthly contributions to VXC. I would have to give up the DRIP in order to do so but maybe that’s the smart thing to do since the market is currently low and starting to move back up. Buy low – hold forever. That’s kind of been my plan throughout this self-taught investing journey of mine.

My second biggest mistake with money was being too rigid. I know how that sounds. Sticking to my plan and investing consistently is what has helped me reach the Double Comma Club. That said, I was recently asked if I had any regrets about how I’ve handled money to date. For the most part, I’m good with the choices I’ve made. However, you can’t get to my age and not have atleast one or two regreats.

Looking back, I do miss that I didn’t go to a second cousin’s wedding in Paris. Truthfully, I’m not certain how I got invited since we hadn’t grown up together nor had spent much time together as adults. That said, I had just gotten home from Europe when the invitation arrived. I consulted my budget and there was no way to afford to travel to her wedding without going into debt, so I declined the invitation … (big sigh goes here) … Looking back now, I should’ve gone into debt and gone to the wedding. The debt would’ve been paid off within a few months and I would’ve met some interesting people at the wedding. Did I mention the wedding was in Paris? The City of Lights?

Since then, I’ve been thinking more about what I want my money to do for me today. My portfolio is humming along nicely. My total DRIP almost exceeds what I contribute from my paycheque. I can afford to indulge myself a little bit more when unexpected money shows up. I’m correcting the mistake of being too tight-fisted with my money. In the words of Ramit Sethi, I am learning to craft and build the rich life that I want for myself.

My third biggest mistake is thinking I know better. It’s the sin of hubris. I haven’t always listened when I should, and I certainly haven’t always applied all of the lessons correctly. However, I know this is one of my flaws and I’m working to correct it. No one makes the right choices every single time. That said, I can make better choices for myself if I’m willing to be a little more open-minded and consider viewpoints that are different from my own.

I should have spent less time on Netflix and more time learning from people who’ve done exceedingly well with their portfolios:

Anonymous Dividend Guy (credit to Tawcan for the interview)
The Dividend Dream
Gen Ex Dividend Investor

This is an error that has cost me dearly, but I’m aware of it now. I choose to do better.

My fourth biggest mistake was paying off my house early. When I sold my first two rental properties, I should have lump-sum invested the money into the market via ETFs. Instead, I chose to pay off my mortgage because I wanted to be debt-free as soon as possible.

I realize now that my mortgage would’ve been paid in due course. I got my first mortgage in 2001, and history instructs that mortgage rates continued to fall until 2022. Looking back, I should’ve renewed my mortgage every 5 years. I would’ve gotten a lower rate each time. I could’ve been paying a mortgage while investing, even though my contributions would’ve been smaller due to having to pay for my house.

Shoulda – coulda – woulda… Too late smart and all that jazz. I still did okay. Those former mortgage payments were re-directed to investing for my future. I had to choose between two sacks of gold, so I shouldn’t complain.

Finally, one of my biggest mistakes is thinking that I knew enough to be a successful landlord. If I had to do it all over again, I would’ve learned to crunch the numbers better before buying my rental properties. The first two properties were a cinch to sell – due to the market, not due to my acumen – and they netted me enough money to pay off the mortgage on my home. The third property was not a good investment for me, despite what I thought at the time. I relied on hope… and hope is not a plan. When I finally sold my last property, I did not make money. It wasn’t ideal, but it also wasn’t the end of the world.

And That’s It.

That’s my list of great moves and big mistakes which have gotten me to this point. If I could go back, I would invest in equity-based ETFs from the get-go. Further, I would’ve gone to see a fee-only financial adviser way sooner to set me up on a plan for my money. Having an objective voice and someone to check my progress along the way would’ve been a good idea. In terms of rental property, I would’ve done a lot more research and learned how to crunch the numbers.

Mistakes? Yes – I’ve made a few. They weren’t the end of the world, and my smart choices have balanced them out. Despite a few missteps here and there, I think I’m going to be just fine. Not bad for 30 years of DIY-investing.

Best Time to Invest in the Stock Market

Most investors are interested in a definitive answer to question of when is the best time to invest in the stock market. And for good reason. After all, no one – and I mean no one – ever wants to lose money. We work very hard for our paycheques. It stands to reason that you would want to buy at the very best time in order to ensure that your investment realizes the maximum return.

For my part, I’ve been investing in the stock market since I was 21. My method isn’t perfect, and I’m sure that there are other ways to do things. However, I’m going to share my 3-question strategy with you and let you decide for yourself if it will work.

Question 1 – Is the stock market heading down or dropping?

If the answer is yes, then I invest.

Here’s my reasoning. When the stock market is dropping, that means stocks are on sale. My exchange-traded funds are comprised of stocks, so my the price of each unit in my ETF is lower too. In other words, I can buy more units in my ETFs when the market is down than I can when the stock market is up.

It’s akin when my favourite coffee is on sale at the grocery store for $4.99 instead of its regular price of $8.49. I stock up when the price is lower because I know the price is going to go back up! I need my coffee and it’s best to buy it a lower price.

The same principle can be applied to investing in the stock market. I need the capital gains and dividends that my investments generate each year. Those returns are consistently re-invested for compound growth. When I retire, my portfolio will continue to generate capital gains and dividends. At that point, I can stop re-investing them and use the money to fund my retirement.

To re-cap, if the stock market is down, I invest and take advantage of the sale on stocks.

Question 2 – Is the stock market going up?

If the answer is yes, then I invest.

Let me explain why. Bear markets are when stock markets are going down. Bull markets are when stock markets are going up. If we’re entering a bull market, that means the value of my ETFs unit will be going up and it also means that the value of my overall portfolio is going up. Companies within my ETFs might decide to increase their dividend and capital gain payments, which means my ETFs will pay me more money each month.

In order for me to benefit from those increased dividend and capital gain payments, I will need to own as many units as I can in my ETFs. One of the only ways to own more is to buy more. The other way to own more is allow my dividend re-investment plan to buy more units each month. However, I think you’ll agree that buying more with my monthly contribution + relying on the DRIP-purchase means that I’ll acquire more units more quickly than by relying on the DRIP-purchase alone.

So when the market is on its way up, I want to invest so that the value of my portfolio also benefits from the increase in the stock market value.

Question 3 – Is the market going to go up or is it going to go down?

This is just a trick question. Whether the answer is “yes” or “no”, I invest.

See, I’m not a professional stock trader. I don’t spend my days staring at the stock market screens or doing in-depth stock analysis. I’m just a Blue Lobster who likes spending time in my flower garden, cooking tasty things, playing with my littlest family members, going to theatre & dinner with friends, traveling at home and abroad, reading good books, and getting enough sleep.

I have no inclination to learn about stock market fluctuations, nor to track them day-to-day. I would rather invest monthly into an equity-based, broadly diversified ETF and let time do the rest. (For the record, I still have my dividend ETFs, but I’ve been investing my monthly contributions into VXC since October of 2020.)

My strategy for finding the best time to invest in the stock market is very, very simple. I invest in the stock market every 4 weeks, which works out to 13 transactions in a year. My next step is not sell what I buy. It’s what’s called the buy-and-hold strategy. I buy – I hold – I re-invest – I repeat. This is how my strategy has resulted in very nice, very passive cash-flow that’s equivalent to an entry-level, full-time job. My dividend ETFs continue to pay me a 4-figure amount every single month, and that amount is continuously increasing. My equity-based ETF pays me a 4-figure amount each quarter. All of my ETFs pay me capital gains at the end of the year.

The way I see it, the best time to invest in the stock market is when I have the money in my bank account to do so. Up, down, or sideways – my portfolio is paying me cold, hard cash on a regular basis. When I automatically re-invest that cash and add it to my monthly purchases, I’m effectively giving myself a licence to print money. Each month, I earn a few more dollars in dividends than I earned the month before. It’s a wonderfully passive way to grow my portfolio, without having to worry about picking the “best time to invest”.

There You Have It

This is my 3-step strategy for picking the best time to invest in the stock market. Your mileage may vary. I’m humble enough to admit that there may be better ways than mine to decide when to invest. What I can tell you from personal experience is that my method works. I’m a self-taught amateur investor who has managed to create a portfolio that will comfortably support Future Blue Lobster. I continue to read and learn. Some tips I like. Some, I don’t. The one constant theme in everything that I learn about investing is that you have to invest your money. It’s the absolutely most important step you simply must make to successfully grow your investments.

When someone asks if this is best time to invest in the stock market, the answer is “Yes!”

Retirement Is Not An Age. It’s A Bank Balance.

Truth be told, retirement is a bank balance. People commonly think that of retirement in terms of an age. Traditionally, it’s been age 65 and lately it’s been cropping up to age 70. For a little while in the 90s, age 55 was the catchy second half of a very successful marketing campaign called Freedom 55.

I’m here to tell you that age doesn’t determine when you retire. Your bank balance does that. Think about it for a minute? If you hit age 55, 65 or 70 with $17.89 to your name, can you really consider yourself retired? Is there even the slightest possibility that you’ll have to keep working because you won’t have enough money to live?

On the other hand, if you have $23,000,000 in your bank account by the time you’re 30, 35 or 42, then it’s quite like that you have the option to retire. Whether or not you do so is entirely up to you. The fact is that it is the amount of money in your bank account that determines when you’re financially able to retire.

Age has little to do with when you can retire. The more you invest, and the sooner you invest, the faster your net worth will hit an amount that will allow you to retire. This is the premise behind the hard-core-retire-as-soon-as-humanly-possible articles from FIRE people who are willing to live on the absolutely least amount of money. Some people are willing to save 70%, or more, of their incomes so that they can live off their dividends and capital gains without working for someone else. More power to them!

Myself, I choose not to save quite that much. Make no mistake. I do want to retire early, but I don’t want my life’s journey to be miserable. Living on 30% or less of my take-home pay would make me miserable. You might be able to do it with ease, but maybe not. You’re the only one who can make that call.

But back to my main point…

Spending Every Penny

If you spend every penny throughout your life, and borrow to spend more, then you get to retire never. It’s a harsh truth. You need to have extra money available to divert from today’s spending.***

That money has to be invested for long-term growth. This is why I repeatedly suggest that you invest a portion of every paycheque into equities and to re-invest whatever dividends and capital gains your investments generate. Unless you’re saving huge amounts of money, it’s going to take a long time to build the cash cushion that will fund your retirement.

Again, there’s no magic to the age 45 or 50 or 65 or 70. You can retire as soon as your portfolio generates enough money to replace the money from your paycheque. You’re also going to want your portolio’s annual growth to outpace inflation. No one aims to dust off their resume at age 90! You need your money to grow faster than inflation so that your purchasing power isn’t eroded over time.

In other words, retirement is a bank balance. Once you have enough money in the bank, you can retire. Live below your means so that you always have money for investing. Stay of out debt too. Money spent on repaying your creditors is money that cannot be invested for your desired retirement.

Semi-Retirement

If you need more motivation to save and invest for your future, always remember the following. Employment options widen considerably once your portfolio generates enough to cover the living expenses that won’t be covered by a potentially lower salary. Happiness – and semi-retirement – might be just one employment move away if you have enough money stacked to pay your bills.

The principles of saving for retirement apply equally as well to semi-retirement. Maybe you hate your current job with an unholy passion, but all the jobs you truly want to be doing will pay you less. You earn $75,000, your annual expenses are $60,000 and you invest $15,000. The job you really want to do only pays a salary of $40,000 and your portfolio generates $30,000 per year. (These are net income numbers, not gross.)

Since your portfolio covers half of your $60,000 expenses, then you can take the lower paid, but soul-enriching job. And in this example, you will still have $10,000 each year to invest into your portfolio (= $40,000 – $30,000), so your portfolio would still be growing. Admittedly, you’re saving $5000 less per year and you may have to work longer. Yet, you wouldn’t hate your job and you wouldn’t be miserable while working. Only you can decide if you hate your job enough to take a pay-cut.

No Downside to Saving & Investing

If there’s even the slightest chance that you don’t want to work until the last breath leaves your body, you should be saving and investing as much as you can.

Absolutely spend on what brings you joy, but ruthlessly cut out everything else. When you spend your money, I want you to be getting maximum utility and joy out of that purchase. Your money shouldn’t be wasted on that which adds nothing to your lived experience. What sense does it make to spend your money on things that don’t bring you joy?

Again, retirement is a bank balance. It is not an age. If you start today, then you can reduce the risk of having to work into your dotage. If you’re still working at age 70, 80, or 9 0, then make sure that doing so is a choice and not a requirement.

Do what you need to do to increase the odds of having the retirement you want when you want it.

*** Our economic system is designed so that people at its bottom live hand-to-mouth for their entire lives. These are the folks who legitimately have nothing to save because they are just barely surviving from one paycheque to the next. This article – and most retirement advice – is not for them. People in financially-precarious situations are forgiven for focusing all of their energy on surviving from one day to the next. Everyone else has no excuse. If you’ve got some fat to trim in your budget, then you’ve got the money for saving and investing. You’re simply choosing not to.

Buy and Hold – This Strategy Works Exceedingly Well

***** First off, I am not a licensed financial advisor. I don’t hold any of the designations and I’m not an expert in telling people which investments are best for their particular situations. This post is about what has worked for me. It is in no way a guarantee, warranty, or promise that my chosen investment products will work just as well for you.

Now, with that out of the way, let’s get to it…

I’ve used the buy and hold strategy for my entire investing life. This strategy is far less risky than trying to time the market. Market timing as an investing strategy is too intense for my tastes, so I don’t do it. I have little faith in my ability to buy the perfect stock at the perfect time and to also sell it at the optimum moment. In hindsight, I can confidently state that the buy and hold strategy has worked exceedingly well for me. This is most likely due to the fact that I’m something of a passive investor and this method required very few decisions from me. These were the 4 main questions that I asked myself when I started oh-so-many-moons ago.

How much would I commit to investing from every paycheque?
When would I set up my automatic savings plan?
Which exchange traded funds did I want to buy with my automatic savings?
Would I be willing to increase the savings amount each time I paid off a debt or got a raise?

That’s it. Those were the questions that helped me to put my buy and hold investing strategy into action.

Question 1 – How much?

I started my investment journey with $50 from each paycheque. It was easy at the time. I was living at home, so my parents paid for the majority of my life. I had to cover my entertainment with money earned at a part-time job. Everything else was paid for by my folks. That $50 was roughly a third of my bi-weekly paycheque, but I’ve never been a big spender so it wasn’t a hardship.

As I finished school and moved into my career, that savings amount went up. Since I’m a person who drives my vehicles for a very long time, I have years and years between car loans. I kept my Oldsmobile Alero for 8 years, and the loan lasted for 5 of those years. The Alero was eventually replaced by an SUV, whose loan was paid off in 6 months. I kept my SUV for 14 years, and would still be driving it but for knee problems that make it kind of unsafe for me to be working a clutch in traffic. (I still love my SUV and made sure that it went to a good home when I sold it.) Last fall, I purchased my current vehicle in cash. It was a big sum and I didn’t particularly enjoy handing it over, but I really, really, really hate car payments.

Once they were eliminated, former car payments were directed towards my investment accounts. They became RRSP and TFSA contributions. Within a few years of ridding myself of car payments, I was able to make the maximum annual contributions to both my RRSP and my TFSA. No more big rollover balances for this Blue Lobster!

The same thing happened after I paid off my mortgage – my savings amount shot up again! Think about how much you pay for your mortgage or rent. If you didn’t have to pay that every month, don’t you think it would be easier to find the money to invest?

Today, I’m at a very comfortable bi-weekly savings rate, many times higher than the one I started with so long ago.

Question 2 – when to start the automatic savings program?

“Right now.”

In my case, that’s not exactly true. When I was saving my $50 every two weeks, I would actually go to a bank machine and to the transfer myself. (Yes – I’m older than online banking.) I would punch in my numbers and manually transfer the money from my chequing account to my savings account. At the time, I was in high school so I didn’t know about exchange traded funds or mutual funds, or other kinds of investment products. All I knew about were savings account so that’s where my money went.

When online banking became a reality in my life, one of the first things I did was set up an automatic transfer. The money from each paycheque was sent where it needed to go. I’ve had the benefit of using automatic transfers for more than half my life. This means that I don’t have to face the choice of whether to save & invest my money every time I get paid. That question was asked and answered decades ago. No need to ask it again.

As the years passed and I learned more, I put more automatic transfers in place so that each of my priorities and goals could be funded. My RRSP and TFSA contributions were invested in the securities I had chosen. My buy and hold strategy went into action, and I didn’t look back.

Question 3 – What did I buy?

Ah… now we come to one of my biggest investing mistakes. I invested in dividend-paying mutual funds… then, later on, I switched to dividend-paying exchange traded funds (ETFs). The switch occurred because ETFs have management expense ratios that are so much lower than those that come with mutual funds. The management expense ratio (MER) is the on-going cost paid for owning mutual funds and ETFs.

Words to the wise – the MERs on mutual funds are almost always higher than the MERs on ETFs.

I thought of my dividend-paying securities like anything else. Why pay more for the same thing? If I can buy the same 2L carton of milk for two different prices, then I’m going to buy the one that costs less. The same logic applied to my investment products. When I learned about ETFs, I made the switch and didn’t look back.

For decades, I invested my money each month into dividend-payers. My thought was to ensure that I had a steady stream of income in retirements. Dividends receive favourable tax-treatment, i.e. they’re taxed must lower than interest earned on GICs or employment income. Secondly, I could participate in dividend re-investment programs (DRIPs). This meant that all of my dividends were automatically re-invested into buying even more dividend-payers. Compound growth for the win!

Sounds like a great plan, right? Well, I should have been investing into straight equity products. The stock market’s return outpaced what I earned from my dividend-payers. Even with the volatility of a regular stock market, and the crashes that happened in 2001, 2008 and 2020, I would have been so much farther ahead if I had just invested in straight equity ETFs.

Ah well… coulda, woulda, shoulda…

My saving grace lies in the fact that I was using the buy and hold strategy.

Was I buying the wrong thing? In hindsight, yes.
Did I hang onto my investments once purchased, and thereby benefit from compound growth? Again, also yes.
Has the buy and hold strategy worked wonders for me despite my big mistake? Yes!

Question 4 – did I increase my savings amount over time?

You bet your sweet patootie I did!

When I was younger, I had a lot more debt. I graduated with student loans, and I’ve taken out 2 car loans in my life. On top of that, I had a mortgage. My employer has given me raises over the years, but none of those matched inflation.

The “extra” money for my buy and hold strategy always came from not replacing one debt with new debt. Once my student loans were gone, that money was available to be invested. As my car loans and my mortgage were paid off, that money was also re-directed towards my investments.

Now, I’m going to admit that I used part of each former payment to bolster my day-to-day living too. I think I was paying $650 or $750 every two weeks for my mortgage way back in 2006. (And I realize that those numbers are downright paltry compared to the mortgage payments some people are paying today.) However, at the time, they were a big chunk of my paycheque so I was glad to see them go.

At the time, I chose to send $500 of each former payment to my investments and the remainder – whether $150 or $250 – stayed in my chequing account for the little extras. In short, each time I paid off a debt, I re-directed the majority of that former payment to my wants while the bulk of the payment went to my investments. No one is promised tomorrow, but that’s no excuse not to save for it.

The buy and hold strategy has worked exceedingly well for me. I have no reason to believe that it won’t work for you so long as you have a little bit of money to invest. You need not be an expert to start investing. It’s okay if you learn along the way. I did. I had to make tweaks here and there, as I grew more knowledgeable. They key was to start and to never stop. If you have a few bucks to invest each month, you should do so.

I’m not an expert but….

I am not certified by any governing body to tell you how to spend your money. My words of advice were earned at the School of Life, a place where all of us are students. I’m telling you this so that you realize that I’m not an expert, but I’ve still learned a thing or two. If you do what I did, you’ll do fairly well with your money over a lifetime. Here are my tips to acquiring a heavy wallet.

Don’t spend every penny you earn.

First off, I’ve yet to meet anyone who’s been harmed by living below their means. Spending less than your take-home income has no downsides, as far as I can tell. The difference between your net income and your expenses is called “savings” and savings can always be stashed away for various things.

Emergency Funds are not optional.

Secondly, life without an emergency fund is an invitation for financial trouble. There’s an emergency in your future. You simply have no way of knowing when it will show up. I promise you this though. No one in the history of the world has ever lamented about having too much money set aside to deal with the inevitable emergency. If you don’t have an emergency fund, start one immediately and set up an automatic transfer from your paycheque to fund it.

It’s going to take a bit of time to build up a decent emergency fund. That doesn’t matter – just start building it. When the emergency hits you smack in the face, you’ll be quite grateful that you won’t have to worry about the financial side of dealing with it.

Investing for Tomorrow You isn’t optional either.

Thirdly, start investing your savings. Yes – some of your saving will go to building an emergency fund. The rest of your savings should be split between your short-term, medium-term, and long-term goals.

One your most important long-term goals is how to feed, shelter, clothe, and entertain yourself when you’re too old to work. Tomorrow You still needs money to survive until the very last day of your life. The steps you take today to invest your savings will increase Tomorrow You’s chances of having a financially comfortable life once employment is over.

You need to start funding your retirement accounts – namely the Tax Free Savings Account and the Registered Retirement Savings Plan.

If you have to choose between filling the TFSA or the RRSP, my recommendation is to fill up the TFSA first. The TFSA contributions do not generate a tax refund, but the money invested inside the TFSA will grow tax-free and can be withdrawn tax-free.

Should you be so fortunate as to have sufficient money to fill both your TFSA and your RRSP, then do so.

If you still have savings After you’ve filled your retirement accounts, then open a non-registered account with an online brokerage. Invest your remaining savings to earn capital gains and dividends. The money earned in your non-registered account will be taxed every year. The upside is that the taxable rate on your capital gains and dividends will be less than the taxable rate on your earned income.

Inflation isn’t going away anytime soon.

Fourthly, inflation is running high. No one knows when it’s going to go down, so assume that things will be increasingly expensive for the foreseeable future. There are no simply answers to this problem, so my advice to you is to cook more of your own food. I love socializing over food as much as the next person. And I do sometimes yield to the incessant call of the fast food window or the food delivery app. However, inflation running at 7%-8% has forced me to be a lot more disciplined. I’m heading to the grocery store instead of tapping out an order on an app. I’m slicing and dicing, mincing and sautéing, frying and baking in my own kitchen. One of these days, I’ll even master the art of meal planning for the week instead of simply for the next 3-4 days.

My advice to you is learn to grocery shop then spend more time in the kitchen. If there’s something you want to learn to make, there’s someone on the Internet who has a recipe and a video to show you how. I can promise you that $60-$80 spent at the grocery store will yield you a ton more food than the same amount spent at a restaurant, fast food outlet, or food delivery service.

Stay out of debt

For whatever reason, our society has decided that it’s a good idea to put people into debt. The scope and manner in which any one person is able to go into debt is truly breathtaking: student loans, vehicle loans, mortgages, credit card debt, etc…

There’s no legal limit either. It’s not like there’s a law which says “No person is permitted to carry more than $650,000 of debt at any one time.”

So long as there is a creditor who is willing to extend you credit, you can dig a deep a hole as you choose. Even after a creditor stops extending you new credit, the hole still gets deeper thanks to the power of compound interest and the piling on of fees.

Do yourself a favor. Don’t go into debt. If you’re already in debt, then work very hard to get out of it.

You know those savings that I was talking about at the start of this post? Take 25% of them and throw them at your debt. You can use the snowball method or the avalanche method to make extra debt payments over and above your minimum payment.

I really don’t care, which method you choose. Just start making those extra debt payments and get yourself out of debt as soon as possible.

Again, I’m not an expert.

I’m just a person who has learned a few things about money from my own experience. I’ve also observed the financial choices and outcomes of others. Getting out and staying out of debt has done wonder for my financial life. Spending less than my net income has allowed me to set aside money for my retirement while also fulfilling most of my short-term and medium-term goals. Cooking at home has definitely contributed to a heavy wallet. My emergency fund helps me sleep well at night.

Even though I’m not an expert, some of these tips might help you too. Take what you need – leave the rest.

Money Should Work Harder Than You Do

One of things that I’ve always understood about investing is that money works harder than people are able to. Money never gets tired, sick, distracted, or unmotivated. It literally works around the clock once it has been invested. People can’t do that. People need food, rejuvenation, sleep and time with loved ones. Those items are vitally important to being a healthy person and to living a good life. They also take people away from doing their jobs.

The trick to being healthy, living a good life and earning lots of money is to send your money out to work. Go back to the title of this post and believe what it says. Money should work harder than you do.

There are a few ways around this particular fact, but most of us have to do the initial work to get money. We exchange our labour (aka: life energy) for a paycheque. The paycheque may be from an employer, from our clients, or from our own business. It doesn’t really matter. We give away our life energy and receive money for our efforts.

The purpose of this post is to remind you that you can work towards a situation where you still earn an income to support your lifestyle without having to earn a paycheque. I’ve written before about how your income and your salary are not the same thing. Your salary is part of your income, but it’s not the only element. There are ways to fund your lifestyle without having to earn a paycheque. One of the ways to do this is by increasing your dividend and capital gains income. Dividend income and capital gains income are what I like to call passive income. As far as I’m concerned, passive income is wonderful.

Dividends and capital gains are monies paid to shareholders when companies make a profit. Your goal, should you wish to increase your income, is to invest in companies that pay dividends and capital gains. There are a number of ways to do so, but I strongly recommend exchange-traded funds and index funds. If you want to do individual stock-picking, then more power to you. That’s not my cup of tea because I don’t know how to do it.

Sadly, there is no way around the fact that you likely won’t earn life-changing amounts of dividends and capital gains at the start of your investment journey. Let me be clear. Your invested money will earn passive income. However, it will take some time before your passive income is enough for you to live on. This is one of the reasons why it’s important that you consistently invest each and every time you get paid. Secondly, you should aim to increase the amount you invest. Start with whatever amount you can commit and increase that amount over time.

You have to invest your money in order for it to work for you. The simple idea of investing has never generated a single nickel for anyone. Ask me how I know this. One of my biggest money mistakes was to not start investing my former mortgage payments as soon as that particular debt was gone. Instead, I spent years thinking about starting a dividend-heavy portfolio. I earned nothing while I was, in effect, procrastinating. The month after I stopped thinking and actually started doing, I earned my first dividend. I haven’t looked back since.

Remember how I said that your money should work around the clock? I wasn’t kidding. I set up a dividend re-investment plan, often called a DRIP. This way, my dividends are automatically re-invested into more units of my chosen ETFs and index funds. The dividends don’t sit in my bank account, and I’m not tempted to spend them. They are immediately put to work for the sole purpose of making even more passive income for me. It’s a highly lucrative feedback loop.

If you wanted, you could do the same thing.

Now, even though I’m a big fan of the Financial Independence Retire Early (F.I.R.E.) movement, I’m a super-huge fan of the FI part. I firmly believe that everyone who earns a paycheque should be working towards financial independence. If you part ways from your employer, or are otherwise unable to earn your keep, having a cushion of cash that’s funded by passive income is your safety net. The passive income can replace your earned income, if you choose to go back to work, or it can fund your retirement if you decide that working for a living no longer turns your crank.

Early retirement is not everyone’s goal. Some people love their jobs. There is no reason why they should stop doing what they love. The same cannot be said for financial independence. The best of both worlds is loving what you do and having financial independence. Most of us won’t have the former but all of us can work towards achieving the latter.

However, the money won’t start working for you, nor be there when you need it, unless you start investing part of your paycheque today. So start today – stay consistent – increase the amount you invest as you’re able to – achieve financial independence – live life & be happy!

Time to Take a Breath

Welcome back! How are you doing? What’s been troubling you financially? Maybe it’s time to take a breath?

It’s been kind of a crazy time for the past few months, hasn’t it? All the headlines and media platforms are screaming about inflation and debt and financial turmoil. No fun for anyone, right? They’ve amped up the financial fear to the next level, and it’s normal to be troubled by that.

I want you to take a breath, maybe even take two breaths. Turn off the media and news reports for 24 hours. Trust me. The bad news will still be there tomorrow. If you miss one day of it, you’ll be helping yourself and no harm will come to the one delivering the bad news to you. Take a breath – relax.

Get Back to Basics

You cannot change the interest rates, and you’re not going to single-handedly bring down the rate of inflation. Those things are out of your control. However, you do hold the power to pay attention to your own financial situation. Focus on your sphere of influence.

Start by ensuring that you’re still living below your means. If you’re not tracking your expenses, start. And if you’re already tracking them, keep doing so. It’s the only way to know where your money is going. Make sure that you’re not spending every nickel. Whatever you don’t spend should split between your emergency fund, debt repayment, and investing for long-term growth.

Inflation is problematic for all of us. What can you do to limit its impact on your life? If you have the space, try bulk buying of staples. Switch to a cheaper grocery store. Try the generic products and see if they’ll do. Cut back on the number of streaming services.

One of the best ways I’ve found to save money is to stay at home. And I know this one might be tough, considering that we’ve just emerged from 2-years of pandemic-related lockdowns and limitations. However, the reality is that staying at home helps me to not spend money. I’ve got the entire library available to me on my tablet, so I can read to my heart’s content. I watch movies on my streaming services. My neighbours are friendly so I get a chance to chat with them while tending my garden. And my garden is a delight since everything is in bloom.

Obviously, I don’t know where you live or what your circumstances are. However, I’m still going to suggest that you consider staying home a tiny bit more than you already do and assess whether this step will keep a touch more money in your wallet. And if doing so doesn’t work for you, then go out. (Please wear a mask though – as of today’s post, the pandemic isn’t over!)

Get Out of Debt

Like I said above, you can’t control the interest rates. Banks are quick to raise rates in line with increases from the central bank. This means that you’re paying more for your variable rate loans – things like your line of credit and variable rate mortgages. I haven’t yet heard of credit card companies jacking their interest rates, but it wouldn’t surprise me if they did.

Again, take a breath. Relax.

Go back to what I said about tracking your expenses. Find the extra money, and apply a portion of it to your debts. You’ll have to make your minimum monthly payments, just like you were doing previously. The extra money will become an extra debt payment.

Very importantly, don’t take on any new debt. This might not always be possible, but you’d be doing yourself a very huge favor if you moved Heaven and Earth to avoid acquiring any new debt.

Whether you use the debt snowball or the debt avalanche is up to you. Both of them will get you out of debt. Once you’re out, stay out.

Build Your Emergency Fund

Your emergency fund probably needs to be bigger.

Relax – take a breath. You can do this too. It won’t happen overnight but it will happen in less time than you think.

Take a portion of that extra money and automatically send it to your emergency fund. I really don’t care how much you contribute. I’d suggest $50 per week, but start with what you can and work your way up. There is an emergency in your future and the odds are very, very good that it will have some kind of financial component.

The time to prepare for it is now. So take a breath. Review your automatic transfer to your emergency fund. Can you increase that amount? Even by $1? The more you can save today, the more grateful you will be tomorrow when you need the money.

As your debts are paid off, use a quarter of those former debt payments to fund your emergency fund. (The other three quarters will be re-directed towards the other outstanding debts, as per the debt snowball or debt avalanche method.) Your debts will eventually disappear, and your emergency fund will be growing at the same time. This is a very good thing.

Invest for Long-Term Growth

The third part of that extra money you found is going to be invested in the stock market for long-term growth.

You’re going to ignore the media. Over the long term, the stock market goes up. Full stop.

You’re investing for decades, not for weeks or months. What happens in the short-term is almost irrelevant. Again, you’re investing for decades. So set up your automatic contribution to your investment portfolio, re-balance it every year, and go on about the rest of your life. Compound interest works best with a long time horizon and steady, consistent monetary contributions.

In the interests of transparency, I can say that I started to focus on my investment portfolio in 2011. I chose to invest in dividend-paying exchange-traded funds. I’m happy to share that I’m on track to earn $30,000 in dividends this year, barring dividend cuts. I’ve learned to ignore the Talking Heads of the Media and to focus on ensuring that I did my part, i.e. using automatic contributions to fund my investment portfolio. Had I known then what I know now, I would’ve invested in well-diversified equity-based ETFs and I would’ve benefitted from even higher returns.

I’m strongly urging you to set up your investment portfolio. If you’ve already done so, then continue to make consistent contributions. So long as you don’t add new ones, your debts will go away. There will come a point when your emergency fund holds 6-12 months’ worth of expenses. At the point, you can use re-direct two-thirds of the former debt payment & emergency fund contributions to investing. The other one third can be used to pay for the nice-to-have’s.

Take a Breath.

Step back from the news for a day, maybe two. The chin-wag of the media isn’t tailored to your personal finances, so you ought not give it too, too much attention. You have a plan for surviving today’s turbulent times. Focus on what’s within your power to control.

Relax.

The Other Side of BRRRR.

There’s a subset of FIRE adherents who religiously follow the BRRRR method that has been made famous by the good folks at Bigger Pockets. BRRRR is an acronym which stands for Buy Renovate Rent Refinance Repeat. Essentially, an investor buys a property, renovates it, and puts a renter in it. Renovations increase the value of the property. The investor withdraw the new equity by refinancing the property with the bank then goes on to find another property in order to repeat this process.

When the BRRRR method works, real estate investors make very good money. The investor only undertakes renovations in the belief that they will increase the value of the property and extract equity. If they don’t believe they can do that, then they have no motivation to buy the property in the first place. New tenants are generally found to pay the new, higher monthly rental and that should be enough to pay off the mortgage over time. Good cash flow also puts profits into the investor’s pocket. Refinancing the property at the higher assessed value means the investor can withdraw money to fund the purchase of the next property and start this process all over again.

Great plan for the investor! Great plan for the bank!

Not so great a plan for the people who lived in the property before it was renovated. The previous tenants may not be able to afford the new rental prices. It stands to reason that the investor would not have bought the property and poured money into renovations if she didn’t believe that higher rents could be charged to offset the costs. In other words, the goal is to acquire higher-paying tenants in each unit.

What happens to the renters who cannot pay the new, higher rents?

This is the other side of BRRRR… and proponents of this method never discuss the issue of what happens to the poor people. Some people in society simply cannot afford to pay more for their accommodation. What happens to them?

Again, under the BRRRR method, rents increase after the renovations are done. Existing tenants are always welcome to stay in their units if they can afford the new, higher rental rates. Even those who moved out during the renovations are welcome to return… if they can afford the new, higher rental rates.

Adherents to the BRRRR method don’t talk about what happens to the poor people, or those who have otherwise lost access to a rental unit within their budget. (Maybe the adherents do talk about this privately, but never publicly?) When implemented as designed, the BRRRR method necessarily pushes the poorest renters to the margins. They lose their homes because they don’t have enough money to pay the higher rents. Perhaps it’s naive of me to wish that proponents of the BRRRR method acknowledged this, and maybe consider taking slightly less profit by letting a few of the poor tenants live in the renovated units at their former rental rates.

I don’t have any easy answers for the people profiled in the attached CBC article. The bottom line is that the renters profiled in that story need money to pay higher rents. Hopefully, they get it from someone. Rents are not going down any time soon. It’s difficult to build a nest egg when every penny of income has to be spent on the daily costs of living.

And the solution is…

Presently, I do not have any solutions for people who are already caught in poverty’s trap. Most of my suggestions are aimed at people who have some disposable income, aka: fat to cut from their current spending habits. It’s trite but true – you need money to make money. You might not need a lot to get started, but you do need a little something. You cannot invest $0 because $0 is not enough to buy anything.

For my part, I encourage people to have emergency funds and passive income so that they have a buffer of sorts. Passive income bolsters any money earned through the sweat of your own brow. And if you have enough passive income, then it’s the equivalent of a second salary. Should you choose to rent your accommodation, having passive income increases your odds of always being able to pay for the inevitable rental increases.

Ideally, your regular job pays for your all of your expenses before retirement, while your passive income builds a cushion for you. To be extremely clear, you should also view investing for Future You as an expense to be paid from current income. If your investments do very, very well, then your passive income will continue to grow while also paying for the expenses of your retirement. This will allow you to absorb the increased costs of living after your working years are over. Inflation won’t stop just because your employment income has.

For myself, I love receiving income from dividends and capital gains. Money from my day-job buys me shares in dividend-producing companies. Every month, a little bit of dividend money is automatically re-invested to buy more shares in dividend-producing companies. At the end of the year, I receive capital gains. I’ve been doing this for a very long time. So far, my passive income is almost equivalent to a full-time job at minimum income in my province. It’s not enough to live on, but it’s certainly a good amount to re-invest every year.

The past cannot be changed.

I was fortunate enough to read the book, The Wealthy Barber by David Chilton, when I was a newly-minted adult. That book set me on the path of learning about personal finance. (I think you can still get this book from the library.)

Unfortunately, no one can go back in time and make different choices with their money. The renters in the article need help today. Regretting past decisions won’t help them with their current problems. The impact of the BRRRR method is forcing them to seek new shelter now. The limitations of their funds are preventing them from acquiring a new home that they will like as much as the one they had to vacate. Wondering what could have been done 20 or 30 years ago does not help them today. They are facing the very real risk of losing their homes as a result of the BRRRR method.

My question to you is this. Do the investors following the BRRRR method owe anything to the people that they displace?