Personal

Five Things You Don’t Know About Me

January 10, 2007

2 comments

I thought I would avoid the bug that is going around the Blogosphere, but Nick of Bring the Cash Flow has tagged me into revealing five things you may not know about me. So, here we go:

  1. I am one of those prototypical immigrants who arrive in Canada with $50 in their pocket. I came to Canada to study over ten years ago and have lived here ever since.
  2. I have worked at four different companies in my nine-year career. Two of them have been start-ups.
  3. I am a big P. G. Wodehouse fan. I think the old Jeeves and Wooster series on PBS, while very good, did little justice to his books.
  4. I am fascinated by ancient Egyptian civilization and visiting the monuments in the Nile Valley is one of things on my to-do list.
  5. My favourite possession is a pocket watch that my grandfather gave me. It was his father’s watch, doesn’t work anymore and is probably worth $5. Still, I wouldn’t part it for anything in the world.

It is now my turn to tag other bloggers and I’m going to tag Frugal Canadian, Growth in Value and The Dividend Guy.

Taking Stock of 2006

January 1, 2007

3 comments

As we bid adieu to 2006, it is time to take a look at how we performed against the goals we set for ourselves. I strongly encourage you to write down your financial goals; it is a great motivator to help you succeed.

  1. Fully Funded our Retirement Plans: I have to admit that it was a bit easier this year because my spouse’s earned income in 2005 was much lower than normal.
  2. Paid Down Consumer Debt: We fully paid down our auto loan and now have no consumer debt. Of course, we continue to pay off our credit cards in full every month.
  3. Reduce Mortgage Debt: We made a few extra pre-payments on our mortgage using extra cash we were not counting on such as bonuses and profits from selling ESPP shares.
  4. Invest Wisely: According to MS Money, our combined portfolios gained 9.5% over the year, compared to a 14% gain for the TSX and a 14% gain for the S&P 500 in C$ and a 14.6% gain for the Sleepy Portfolio. We continued our progress towards becoming mostly indexed in our retirement portfolios.
  5. Contribute to RESPs: We continued to contribute to RESPs and collect the Canada Education Savings Grant for our boys.
  6. Increase Net Worth by 15%: We blew past this goal posting a 28% increase in our net worth. Going forward, I am going to discontinue setting this goal because our net worth increases are now mostly driven by market returns and to a much lesser extent by our personal savings.
  7. Spend Less than We Earn: Our expenses for the year increased compared to the last due to a variety of personal reasons, but we still spend less than we earn.

Our financial goals for 2007 are largely the same as last year though my first priority is getting our wills done.

Wishing you all a very happy and prosperous New Year!

A Mutual Fund Investor

November 17, 2006

5 comments

I have railed against mutual funds so many times that you would find it surprising (perhaps hypocritical) to find that a mutual fund is one of the top ten holdings in our combined portfolios. The mutual fund I hold is Leith Wheeler Canadian Equity Fund and I have some very good reasons for breaking the cardinal rule of avoiding mutual funds:

  1. I hold the fund in the Group RRSP offered by my employer. The rules allow us to only invest in one or more of the eighty odd funds offered by the plan. I am allowed to contribute a certain percentage of my salary, 50% of which is matched by my employer and I am not allowed to withdraw these funds from the account.
  2. The plan does offer some index funds but the fee differential between the index fund and the actively managed fund is only 15 basis points. In other words, the fees for the index funds are fairly high.
  3. Leith Wheeler has an outstanding long-term record with a 10-year record of 15.2% compared to 10.2% for the TSX Composite Index. While this only reflects past performance, I am very comfortable with Leith Wheeler’s value style and contrarian bent that I am confident I will stick with the fund even through a rough patch.
  4. The fund is fairly small at just under $500 million. This is an important consideration as I feel that it is difficult to outperform the index the larger a fund gets. In contrast, Canada’s largest mutual fund has total assets of more than $12 billion.

I realize that I might still be wrong and Leith Wheeler might turn out to be a dog of a mutual fund, but the damage will be limited as it is only 5% of our total holdings.