How much do you know about financial independence?

Posted by: switch

Posted by: [email protected]

I was raised with a few simple rules for money, one of them being: if you want something but don't have enough money, you save up for it.

That's a foreign concept to North Americans.  Why save for something when you can enjoy that thing now by putting yourself into a debt you're not worried about paying back.

If I had decided to save up for my truck I would be making less than half what I make now so I'm not sure this classic wisdom applies in my case.

https://pwlcapital.com/investments-go-rrsp-tfsa/

https://www.finiki.org/wiki/TFSAs_versus_RRSPs

Posted by: Fast-Orange

If I had decided to save up for my truck I would be making less than half what I make now so I'm not sure this classic wisdom applies in my case.

That sounds like a business expense tax write-off.

PS - I am also not a tax accountant.

Posted by: heckler

Posted by: Fast-Orange

If I had decided to save up for my truck I would be making less than half what I make now so I'm not sure this classic wisdom applies in my case.

That sounds like a business expense tax write-off.

I like my accountant. She's not gonna let me do anything too shady but she's good about making sure I'm claiming everything I can. 

I guess some could argue that I should have gotten a cheap old van or something but then I'd be shelling out a grand every couple months fixing this that and the other thing. At the rate I'm using it there will less than 100k on the taco by the time I'm done paying for it.

So do the math cuz it depends, sometimes an old pile of shit can cost the same as a new car also do you wana spend time behind the wind shield of a POS ?

At some point according to the cocktail napkin I was spending so much $$$$ to keep a 7 yr old 4-runer on the road ( they do break in spite of the rhetoric) for my job it made sense to buy a new Golf TDi cuz it sipped fuel & didnt break so the new car was the net same monthly cost.

1 year later the TDi needs 1500$ tires/ 96000 Major OR I could trade for a new TDi which i did cuz the interest rates had dropped big time so the new car payment was only going to be 10$ a month higher

So none of this ^^ sounds plausible but the cocktail napkin does not lie

I was getting about 6K a year back on income tax with which I would invest

just some FUD thoughts I've been having... 

Is anyone else worried about a long slow downturn? I know the ETFs are diversified and have smart people managing them and they constanly replace poorly performing stocks with better ones but is everyone confident line will steadily creep up over the years as it always has been? 

I guess I'm just skeptical of the concept of endless growth. It seems like global population has pretty much peaked. Is anyone else concerned that the entire market could just slowly grind downwards over the next decade depending how much Trump screws up trade what with all the tarrifs and deportations? Is there no chance our investments won't get slowly eroded away faster than inflation? 

I hate being sick. When I'm not busy building shit I just sit around endlessly what-ifing. The drink used to drown that out but that solution became unsustainable.

If you mean VOO or even VTI, no, the S&P500 will certainly not only creep up in value. In 2007-2008 it went down significantly and it will do so again, maybe soon, since it looks a lot like a 1999 dotcom era to me, with AI and the Magnificent 7 top fanboy stocks of today.

https://en.m.wikipedia.org/wiki/2007%E2%80%932008_financial_crisis

https://en.m.wikipedia.org/wiki/Dot-com_bubble

That is why diversifying asset classes and geographies globally is important to me. My US equity is only 25%, the rest in cash, Bonds, Canada, Europe, Far East and Emerging Markets.

https://www.finiki.org/wiki/Asset_class

Through equity ETFs you are buying partial ownership in companies and their dividends, instead of buying the shit they sell.

Through Fixed Income or Bond ETFs you are loaning the government or Corporation your capital in exchange for interest payments and a promise to return your capital.

Through cash or GIC, you are guaranteeing short term funds are available when you need them (1-5 years out).

Gold, Silver, Real Estate, Bitcoin, Beenie Babies can all add to your diversification. The point is, don’t buy only Beenie Babies, they’ll never beat inflation.

41 years of Risk vs Return 

https://www.finiki.org/wiki/Risk_and_return

The idea is to accept that we don't know anything and just take whatever the market will give us.

My stocks are globally diversified (in a single ETF, VEQT). I have a bonds allocation that lets me sleep at night. I have a cash buffer. I have skills & experience to generate income. I'm not worried.

Best to minimize your news intake, avoid social media, and go on with your life.

Posted by: heckler

If you mean VOO or even VTI, no, the S&P500 will certainly not only creep up in value. In 2007-2008 it went down significantly and it will do so again, maybe soon, since it looks a lot like a 1999 dotcom era to me, with AI and the Magnificent 7 top fanboy stocks of today.

https://en.m.wikipedia.org/wiki/2007%E2%80%932008_financial_crisis

https://en.m.wikipedia.org/wiki/Dot-com_bubble

That is why diversifying asset classes and geographies globally is important to me. My US equity is only 25%, the rest in cash, Bonds, Canada, Europe, Far East and Emerging Markets.

https://www.finiki.org/wiki/Asset_class

Through equity ETFs you are buying partial ownership in companies and their dividends, instead of buying the shit they sell.

Through Fixed Income or Bond ETFs you are loaning the government or Corporation your capital in exchange for interest payments and a promise to return your capital.

Through cash or GIC, you are guaranteeing short term funds are available when you need them (1-5 years out).

Gold, Silver, Real Estate, Bitcoin, Beenie Babies can all add to your diversification. The point is, don’t buy only Beenie Babies, they’ll never beat inflation.

That's pretty overwhelming haha I feel like I just figured out how TFSAs and RRSPs work but still pretty clueless about bonds. I guess one can still purchase bonds through the TFSA? I'll try and find the time to read the links this weekend.

One big takeaway I'm gonna keep from your reply will be allocating a portion into international ETFs. Also looking into slow growth but high yield funds. Am I wrong in thinking slow years are good times to aggressively accumulate if one is thinking long term or is that just crypto brain? Lol 

Also I figured everyone in this thread would find this amusing:

https://vm.tiktok.com/ZMkFQkWbY/

Don't overcomplicate things. You can do a questionnaire to choose your stocks/bonds allocation and then buy an all-in-one ETF like, for example, VGRO (80% stocks 20% bonds).

https://canadianportfoliomanagerblog.com/model-etf-portfolios/

That's all you need.

I would stay away from "high yield" funds, they will likely underperform the index in the long run.

Focus on savings rate, keep fees low, and let time and compounding returns do the work.

What Niels said. There is a lot of diversity in the simplicity of VEQT, VGRO or VBAL, depending on your time horizon.

https://www.finiki.org/wiki/Asset_allocation_ETF

The best time to accumulate is regularly and long term, in as automated a fashion that is available to you.   Make a plan and stick to it, regardless of the news or latest trend.

yup watching investments  go up and down sucks, just do a monthly PAC, I went with 10%, pretty soon I didn't notice it