The theme of this week’s Sunday Reads is courtesy of The Maple Money podcast and Mark Seed of the My Own Advisor blog. In this episode of Maple Money podcast Mark offers his thoughts and framing on FIRE – financial independence and retire early. Mark prefers the more honest and representative (of reality) FIWOOT – financial independence retire on own terms. Again, that is a more sincere interpretation of FIRE. Mark focuses on finding purpose in retirement. And that is perhaps the most important aspect of retirement or FIWOOT success.
In any form of retirement, the life plan is as (or more) important than the financial plan. Without purpose, and with the absence of many ‘things to do’ retirement could be a surprising failure. In that podcast, our host Tom Drake offers that on many occasions he has seen early retirees quickly head back to the workforce.
No plan = no good.
Soon after I left my full time “job” at Tangerine I posted this article on LinkedIn.
Mark also touched on this same theme that I offered in that LinkedIn article …
If you’re at work and you don’t like being at work, quit. Now don’t walk over to your boss and hand in that resignation just yet, start developing a plan to create the job you want at your current company, or develop an exit plan.Dale on LinkedIn
Mark called that the transition stage.
Adding more work that I love.
I started a landscaping job two weeks ago. Yes, I really enjoy cutting grass and digging in the dirt. I now have 6 part time “jobs”.
- My Cut The Crap Investing blog.
- I write a weekly for MoneySense.
- I write for MillionDollarJourney.
- I volunteer with Feed Scarborough.
- Caregiver/son/son in law.
At times I cut my neighour’s lawn. She asked me if I’d consider taking on her business property – not the first time she has asked me. I finally said yes. It’s a beautiful property as it’s a converted home in our neighbourhood that is zoned for business. It’s a 200′ x 180′ lot that is well-treed. There are beautiful gardens as well. I’m loving it. I feel like it’s my own property, and I treat it that way.
I have another advertising gig on offer as well. So my part time job list will likely become a Lucky 7. So much for a quiet and not so busy semi retirement.
The weeks are busy. The weeks are full of purpose. And yet I still have the freedom to take a break. I have the freedom to say no to work.
Thinking about retirement? Start designing your life.
And on purpose in retirement Fritz of The Retirement Manifesto gives us a wonderful video tour of his workshop. That is the hub for two of Fritz’s retirement passions, woodworking and writing.
That is a wonderful video and what an inspiring setting to sit and think and write. You should follow Fritz in retirement.
On the subject, Mike The Dividend Guy offers, Retirement Vs FIRE: You Got It All Wrong and Both Your Ideas Suck. 🙂
And I really like how Jonathan Chevreau (writes about) and frames it with Findependence. He wrote the book on it.
On the retirement funding front, here’s a very good post courtesy of fiPhysician – are stocks less risky over time?
And yet there’s more to the chart than meets the eye. Dr. Graham offers ..
The risk year-to-year of a market drop is the same, and as your assets grow, so does the risk of a major loss. The long-term uncertainty from year-to-year volatility doesn’t change over time!
Simply said, you actually have MORE risk the longer you are invested in equities along your expected time horizon of investment.
The goal: understand the risk to your portfolio over time. When you are young, volatility is actually not a risk. Only when close to retirement does volatility matter. Thus, risk in equities actually increases over time, not decreases.
Remember, stocks are always risky investments, even over the long haul. They don’t get safer the longer you hold them.
And within that post there is a link to de-risking your portfolio before retirement. Here’s a related post on that topic …
From fiPhysician on ‘the how’ …
You can do this all at once: selling equities and buying fixed income. Or, you can do this over time through rebalancing. Or, stop re-investing dividends (or never do them in the first place in your taxable accounts!) and instead re-balance into fixed income.
Another way to de-risk your portfolio over time is to change the investments with your new money. Although one should almost always dollar cost average new money into equities, during your transition phase, buy fixed income assets rather than stocks.
There are many ways to skin this cat, and substance beats form when de-risking the portfolio before retirement.
That is a very good post, and fiPhysician is a great follow.
More Weekend Reads.
The topic of the week was the inflation warning shot offered by some numbers in the U.S. That was the lead topic in my MoneySense weekly (linked to above my ‘job’s list). I also covered more of that on this site with the inflation watch for investors.
For more great reads check out the weekend reads on My Own Advisor.
On Savvy New Canadians, the best gold ETFs in Canada. I also use KILO from Purpose that holds physical gold.
On the dividend watch let’s check in with Mathew at All About the Dividends for his April dividend update. You’ll see the portfolio holdings for Tom’s TFSA and RRSP accounts, and you’ll also find the dividend income reports. I see Tom also holds some Canadian retail stocks and that is likely an underappreciated sector for Canadian investors. It is much more robust than one would think even though the TSX Composite Index has such a small weighting to the sector.
Once again that low retail weighting demonstrates the weakness of a cap weighted index. Too many great Canadian companies and sub sectors are not getting their due in the index.
Is cap weighting a bad idea?
On Findependence Hub – Mutual Fund Deferred Sales Charges designed to hide bad news.
On a Wealth of Common Sense some very interesting thoughts on the recessions and stock market corrections of the future. Government agencies can and do bring out their tool kit to try and ‘fix’ everything. What does the mean for the future of markets?
Also on that same site, a new theory on forward looking stock market returns. Yes, US stocks are EXPENSIVE!
And on how that affects the underlying earnings yield (how much are your companies making for you in percentage terms?) …
Here’s the current figure and chart for the CAPE ratio …
Yikes. I’ve seen this movie before. Dot-com crash sequel? Or it’s different this time?
Thanks for reading. We’ll see you in the comment section.
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