Tag Archives: Investment Plan

How I plan for financial independence!

Ar you planning for Financial Independence? Here's how I am planning for it after a chat with my that about money and financial independenceDo you have an idea for how long you are willing to work before retiring? Are you willing to sell your time for money for most of your life?  Have you thought when you will reach financial independence? This topic came up last week when I was having a chat with my dad. I admitted to my old man that I enjoy my job but it is stressful and I deal with a lot of traffic during my commute. I can’t see myself doing this for another 40 years before being able to slow my life down enough to spend time with my family.

Because of my stressful career, I’m not able to focus on hobbies that I enjoy. These are mainly blogging and tinkering with small electronic projects. There just isn’t enough time to wind down, relax, spend time with my family, and enjoy my hobbies. My dad, now in his early fifties, completely agreed, saying that he doesn’t want to work for another fifteen years either. He’s actively trying to bank money to retire early so that he can quit his job might work better here and focus on the projects that he enjoys doing.

Are you planning to slow down before 65?

In my opinion, we live in a world that moves too fast. We work hard, constantly on the go, and so we should be retiring earlier than the member(s) of previous generations. Where I’m from, most of those people had industrial jobs. There were no emails or cell phones. They got up every morning, did their job, and went home. There was a limited amount of worrying about work. You punched the clock and checked your work issues at the door and went home to relax with your family. Those days are long gone. With modern technological advancements, your employer can and does contact you after you’ve left work for the day. Emails, text messages, phone calls. There are half a dozen ways for your boss to contact you and make you feel obligated to reply or answer immediately. I want and need that after work relaxation. I don’t want to talk to my boss during dinner. And you know what? I shouldn’t have to.

I work in IT tech. Everything that I do while at work has to be done quickly and I’m constantly having to update my skillset and even retrain myself on a monthly basis. I enjoy learning new things but eventually, I’m going to reach the age where I’m going to be overwhelmed to the point where I won’t be able to maintain my current speed of learning and training. On top of that, my pension plan frequently changes. As of the last negotiation, I need to work until 58 before retiring. It’s four more years than what I was supposed to work. I feel like the constant changes to my pension make for an unstable retirement plan. I want and need stability. This is why I’m investing. My goal is to invest to the point where a substantial part of my income is coming from dividends. I want to wake up in the morning and be there for my kid as opposed to worrying about packing a lunch, getting dressed, and dealing with an hour commute.

Here’s is my investment plan for financial independence!

I’m looking to put 50% in ZSP, 25% ZDV, 15% FIE and 10% ZRE. I’m looking to invest 10% of my money into a non-North American ETF but still doing some research. This will bring FIE and ZDV down by 5% each. This is for my core long-term investment plan.

Buying and selling stocks is addicting and a portion of my portfolio will continue to have stocks in it. Sure, it’s pretty much the same as buying a weekly lotto ticket, but I have intentionally allocated some cash into a “fun stock money” section of my portfolio. I personally do not recommend this idea and in my mind, most of it has been written off as a loss. Buying risky stocks is part of the fun of investing and I know that if I don’t allow myself at least a little bit of fun, I’ll never stick to my ETF plan.

Why buying ETF?

Also, since my ETF are free to buy, I can buy regularly without my profits being eaten by the fees. Personally, I feel safer in long term with them. These investments are my plan to generate monthly revenue. Working is exchanging your time for money and my investment will give me money without having to exchange my time for the same money. This is the best way I could see to slow down a bit and make my choice base on my wants and not my money needs.

In the end, my hope is that these investments will bring me to financial independence and I can start making decisions based on what I want to do with my life and how I want to live it. I can live off of $3000 a month after tax. Once I’m able to live the way I want, I would like to travel, focus on writing for my blog, and maybe even starting my own business.

Readers: Are you looking for a path to financial independence?

By the way, you know that you could get your own blog with Bluehost? For $3.95/month, you will have everything you need to start sharing your own experience on your own blog. If you need help to get started, you can look at my How to host your own blog post.

Warning: This post contains affiliate links


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.

By the way, you know that you could get your own blog with Bluehost? For $3.95/month, you will have everything you need to start sharing your own experience on your own blog. If you need help to get started, you can look at my How to host your own blog post.

Warning: This post may contain affiliate post.