Tag Archives: finance

How to write an Investment Policy

Learn how to write a great investment policy to take care of all your investment requirement.

When you are investing, you should always have an investment policy to respect. This will help you to make the wisest financial decisions for yourself while keeping you from making potentially costly impulse investments.

Why an investment policy?

Every decision you will make will be made with something you’ve written and this will help you to make a decision without emotion. We all know that emotion is the enemy of good investment and since we are human, emotion is difficult to take out of the equation. Your investment policy will ensure that you choose the right stock or investment vehicle.

What should be included in your investment policy?

Your investment policy should define:

  • How much money you will add to your account and when will you add it
  • Your allocation
  • when will you rebalance your account
  • Buying criteria
  • Selling criteria

You can personalize your investment policy to represent you. Imagine this policy as a contract with a financial manager who will use it to base his investment decisions on your behalf. Be clear and precise.

How much money will you add to your account and when will you add it

This section should explain when you will add money to your investment and how much money. I would recommend that you set automatic percentage savings from your paycheck and you should schedule it every paycheck. That way you will pay yourself first.

Your allocation

Your allocation will describe in what percentage you will invest in a specific market sector or geographical market. It could be 10% bonds, 25% Canada, 25% US, 10% REITS, 20% international market, 10% cash. This is only an example and this must represent your risk tolerance and your situation.

When will you rebalance your account

In this section, you will describe when you will rebalance your investment account. You can do it every month, year, or every time you add some cash.  This will prevent you from rebalancing every time the market moves from your allocation. From one scheduled rebalance to the next, it’s normal for there to be some market fluctuation.

Buying criteria

This should define a stock, EFT, funds that have to be bought by you. It can be a sector, a price drop, a low MER, etc. You can define this however you want.

Selling criteria

In this section, you can describe when you will sell your investment. For example, if the value is up by 10%. You can also add some criteria like that you need to hold it for at least 1 years or more. You can also add other rules for yourself, such as a time limit. One year, retirement, etc…

Finally, it’s easy to write an investment policy but the must important thing is that it represents your vision of what you want for your investment. It’s really important to remove emotion out of your investment equation since the market will not have any emotion for you.

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Weekend Reading – Lunch hour, Life Dividends, Patience

Another weekend that starts so here’s this weekend readings.

This week, my only post explain why I’m blogging.

Dividend Diplomats wrote about on how Making the Most of Your “Lunch Hour” Each and Every Day

It Pays Dividends wrote about a different kind of dividend the Life Dividends

My Compounding Money Strategy  is the the strategy use by More Dividends

Briget Casey wrote about Taking Charge of Your Investment Portfolio

My Own Advisor wrote an interesting post about Compare your household expenses here using stats from Statcan

A guest post on Distilled Dollar talk about How to Teach Yourself Patience as a New Investor

Have a nice weekend everybody.

Weekend reading – Drip, Missteps, Continuous investment, Snowball

This is my first 2017 weekend reading edition. Here’s my favorite articles from the last week that I had the time to read :

Readers : Have I missed a good article this week ?

Net Worth Jan 2017 Update : $16,856.53 (+$3,635.14 +27.49%)

Assets Nov-16 Jan-17 Monthly Change
Checking $185.62 $1,124.48 505.80%
Saving $943.55 $8.35 -99.12%
TSFA Investment $503.28 $590.00 17.23%
RRSP Investment $0.00 $0.00 0.00%
House $215,000.00 $215,000.00 0.00%
Car $15,000.00 $15,000.00 0.00%
Mortgage $203,839.93 $202,819.97 -0.50%
Car loan at 0% $12,328.66 $11,671.36 -5.33%
Credit Card $2,242.47 $374.97 -83.28%
NET WORTH $13,221.39 $16,856.53 27.49%

One of my goal for 2017 is to do monthly update of my net worth so let’s start with this one.

My net worth is going up again but next month it look like it will go down a little bit. Some big expense are coming like buying the small business Turbotax, which is around 100$ and paying my municipal tax, which are 600$ and the car license, which are around 200$. On the plus side my wife will make a little bit more next month since she found one new client (kid). We’ve made the choice that she will stay home for our baby since we think it’s the best for him, but this choice will bring home less money than before.

In January, I paid my credit card before the end of the month since I had the money and to start back budgeting. I found that was easier to start with 0$ on my credit card.

In January, our expense were  4059.62$ and our income were 5177.67$. Which make a surplus of 1118.05$. I had a boost in my income since my job pay my 10 sick day in the beginning of the year. Also, I invested in some washable diaper for my kid to save on the long term. This will be a subject of a post when I will finish crunching some number.

It look like I don’t have any saving at all, but since I’m using Tangerine for my account, I got all my money out of my saving account to my check account and I’m waiting until they have a new promotion with new deposit.

Readers : How was your January month ?

Goals for 2017

Goals 2017First post of this new year so happy New Year everybody. To start the New Year, it’s time to set some goals that can be measurable and are not out of my hand. Last year, I had some goals that weren’t measurable and some were too big to keep me motivate to reach them.

1. Trip to Disneyworld

We are going to Disneyworld this year. We have budgeted some money for that since last year and we already bought our ticket for the park. We took the 25% rebate for Canadian customer. So now we are looking for flight and a hotel on Disney site. If anybody have any tip on saving on flight, I will take it.

2. Budget all my money

I need to stick budgeting with YNAB. Since I have my kid, I was tracking my expense but not budgeting any of my money I had. Now my budget is up to date, so it will be easier to give a job to my money every week than trying to do it every month with a not up to date budget.

3. Make monthly net worth post

I will start again to update my net worth monthly since it motivating to see it grow by month. I’ve made sporadic post about it last year but 2017 will be different with a monthly post the first day of every month. In that way, I can keep a history from where I started.

4. Write a minimum of one article by month

I will try to write at least a post every month about personal finance or my life in general, so that the blog will have more activity in 2017. To make it happen, I will make time in my schedule to write some articles and I will use the schedule function of WordPress to publish them. In this way, I could write all my post in a month and have my 12 month post scheduled, so I will not have to worry if I can’t write for a month.

5. Buy a 2 in 1 laptop

I am looking to buy a little 2 in 1 laptop like the Asus transformer or HP 2 in 1 at low cost since it will be used for writing post and surf the web when I don’t want to go to my full pc in my office in the basement. With a baby of 13 months, it’s easier to get something portable and small to be use when I have couples minutes.

6. Saving 5% of my paycheck

I am looking to start again saving for investment so this goal it’s a small percentage but it possible to make it happen every paycheck. That’s going to be around 25$ weekly. Once this goal is reach, it will be easier to grow that amount in the future than starting from 0%.

Readers: Have you set your 2017 goal? If yes what are they?

Net Worth Nov 2016 Update : $13,221.39 (-$370.04 -2.72%)

Assets Jul-16 Nov-16 Monthly Change
Checking $1,033.58 $185.62 -82.04%
Saving $653.58 $943.55 44.37%
TSFA Investment $1,280.99 $503.28 -60.71%
RRSP Investment $0.00 $0.00 0.00%
House $215,000.00 $215,000.00 0.00%
Car $17,000.00 $15,000.00 -11.76%
Mortgage $205,866.04 $203,839.93 -0.98%
Car loan at 0% $13,643.26 $12,328.66 -9.64%
Credit Card $1,867.42 $2,242.47 20.08%
NETWORTH $13,591.43 $13,221.39 -2.72%

First I will have to say that I am sorry for being away from the blog in the last couple months. Life with a baby and all our project were a little bit overwhelming.

I invested a lot of time in a side buisiness website that doesn’t seems to start selling. I can do a nice profit on the stock I’m selling but it’s maybe a too small niche.

For my net worth, as you can see I’ve lost money in the last couple months. My wife was at 50% of her salary since it’s the end of her parental leave and we had to invest some money on the house.

This is a quick update on my net worth and I will try to keep you updated more often. Next update gonna be my portfolio.

Net Worth April 2016 Update : $12,325.72 (+$388.71 +3.26%)

Assets Mar-16 Apr-16 Monthly Change
Checking $3,607.78 $1,263.86 -64.97%
Saving $51.25 $2,130.73 4057.52%
TSFA Investment $980.57 $1,324.36 35.06%
RRSP Investment $0.00 $0.00 0.00%
House $215,000.00 $215,000.00 0.00%
Car $17,000.00 $17,000.00 0.00%
Mortgage $207,873.85 $207,373.59 -0.24%
Car loan at 0% $14,957.86 $14,629.21 -2.20%
Credit Card $1,870.88 $2,390.43 27.77%
NET WORTH $11,937.01 $12,325.72 3.26%

This is my third net worth post. The mortgage and the house is owned by me and my wife. The others entry are only my numbers and do not count my wife net worth.

This month is not as high as expected. I was looking to be around 13000$ of net worth. My wife had trouble to get her  parental leave so I had to pay a little more at the end of the month.

Also, my side hustle did not sold for 100$ of stuff since my stock arrive at the end of the month and sold for around 20$.

For the next month, I am not looking to improve my net worth since I have to work on the outside of the house and I need some tools like a lawn mower. I would like to put more money in my TSFA but I am not sure it will be possible.

Readers : Did your net worth grow last month ?

Have you thought about everything before buying your first house ?

Before stopping renting your place, have you thought about everything before buying your first house? We all know the closing fee of becoming an owner, the insurance cost that will be higher and the mortgage payment.  But they are not the only expenses of your first house.

First, you have to think that you need to keep your house in shape. You need to work on it and that cost some money. If you do it yourself you will need new tools to do it and parts or if you don’t do it you will pay someone to do it. Depending on the size of the house you need to do each room every couple year.

Second, you will need some basic utility like lawn mower, shovel for winter and summer.

Third, the emergency funds need to be bigger since a problem can happen in the house and you need to repair it NOW.

Fourth, don’t think you have seen everything at the visit and the inspection. There are some kinds of stuff like the floor you though was OK, but it‘s scratched. You will see all the little problems and big one once you own it. Some will bother you, but nobody will see them.

These are some of the things I thought before buying my house, but I didn’t thought they will be so high expense. For some person, the mortgage payment, will be the same as the rent, but the other fee will not permit them to live in a house. So sometime, renting is not throwing away your money. It can permit you to continue to live well and save some money.

Readers : have you had some unexpected expenses you didn’t think with your first home ?

Dividends review – March 2016

DividendsHello readers, this is my dividends review for march. Something is new this month and I’ve choose to review the one that pay in march and not the one with a record date of march. It’s more easy to keep track like that.
Dividends from ETF Holdings:
  • ZRE have pay 0.088$ per share on 4 march 2016. I will receive 0.70$ from ZRE.
  • VDY have paid 0.126995$ per share on 7 march 2016. I will receive 2.03$ from VDY.
  • VDY have paid 0.060698$ per share on 24 march 2016. I will receive 0.97$ from VDY.
  • VXC have paid 0.112089$ per share on 24 march 2016. I will receive 0.56$ from VXC.
So I’ve receive 4.26$ of dividends in march 2016
Readers: how was your dividends last month ?

Pay yourself first

You want to growth your saving fast ? You need to pay yourself first before paying others !Here’s my little experience on why you should pay yourself first. Couples months ago I thought I was paying myself first, but instead, I was budgeting everything at first and kept what left to add to my saving or investment account.

This is the wrong way to do it. With this method, I was over budgeting in a lot of fun category like dining out and was not limiting myself to only what I needed. After couples month, I finished with nothing left to save and I though that would be impossible to cut anything.

Pay yourself first

After seeing that, I started paying myself first and budgeting everything else with what I was left with. This way I lowered my dining out category and my fun money category. These categories became so big that I thought I had the minimum in it, but I had like three times what I really needed. This is one of the reasons why you should pay yourself first and budget after. If you budget before, you only keep growing your spending category and you will be left with nothing to save after couple. It’s easier to budget once the saving is done.

Start slowly

To start paying myself first, I started with a 10$ saving by week and now I am saving between 50$ to 100$ by week. I started with a small amount to be able to do it since I thought I couldn’t cut anything more. And every couple week, I put more than what I’ve put couple weeks ago and lowered my spending slowly. Going slow made myself be comfortable with the fact that I lower my spending and I didn’t really see the difference with the week before. In this way, I didn’t stop to save after a couples weeks like all my past years.

These are my trick I used to save more. Readers, are you paying yourself first?