Well, hey there, Financial Uproar. I haven’t seen you in a while. Hold on, let me clean up the dust. You’re looking worse than that time the media caught Hillary Clinton without her Spanx. OH, HE’S STILL GOT IT, BABY!
Should I do an update on my financial life? Or would you kids rather see me hit some dingers? I can totally hit dingers.
Let’s start the update.
We’ve still been aggressively shoveling wheelbarrows full of cash towards
buying loaves of bread in 1921 Germany our mortgage, getting the balance down to approximately $78,000. I don’t know what’s more exciting — knowing we’re easily on pace to erase the debt by the beginning of 2019 or a Weimar Germany hyperinflation joke finally appearing on Financial Uproar. Let’s go with the latter.
With markets bumping up against new highs seemingly daily, I think this continues to be a prudent use of my excess cash. There are some interesting stocks out there, but nothing that terribly excites me.
Remember when I posted that financial independence made me lose my ambition? Fortunately for me, those feelings quickly went away. Imagine doing the same thing for 20 years without ever getting promoted or doing anything more exciting. I can’t think of a worse version of hell. Okay, maybe I can. I’ve watched a cirque du soleil play, after all.
Anyhoo, I’ve made it clear to my company’s management that I’d like to get promoted. This would likely involve a move to a different store in a new community, which I’m quite okay with. I like small towns, but I’m kinda over the one I’m in.
We’d likely rent if my job took us anywhere else, for a few reasons. While the risk doesn’t really bother me, my wife doesn’t like the idea of being responsible for a new furnace or shingling a roof. Real estate prices are not as reasonable in other parts of the province, which makes the rent vs. buy debate lean towards renting. And the places where we’d like to go have a much greater supply of nice rentals than where we are currently. And hopefully a Wendy’s. God I love Wendy’s.
While I continue to hold and like most of my portfolio positions, I have sold a few things into strength.
In the latter part of 2015, the Canadian preferred share market got whacked. Taking advantage of the carnage, I picked up a medium-sized position in Shaw Communications’ preferred shares (among others), paying approximately $13 each. I exited last week at $17 per share. Including dividends, the total return was about 20% a year.
To minimize the tax impact of that sale, I finally punted Winnipeg Free Press from the portfolio and took the tax loss. Let that be a lesson to you kids. Never look at anything associated with Winnipeg in a positive light.
I also tendered my Dream Office REIT shares at $21 per share, netting a succulent return of 40% (plus dividends of approximately 12%) in just over 18 months. That position was in my TFSA, so there’s no tax implications there.
I invested some spare cash into an ETF, specifically the BMO Canadian Dividend ETF (TSX:ZDV). While the MER is a little high at 0.39%, I like the fact the ETF gives me access to an index of dividend payers that isn’t dominated by Canada’s five largest banks. I’d also be reluctant to buy an ETF that tracks the TSX Composite because of the large energy/materials weighting. And with a beta of 0.57 (according to Google Finance), I sort of view it as a way to participate in some of the market’s upside while minimizing the downside.
Will I invest more in ETFs in the future? I dunno, but I kinda like the hands-off approach ZDV offers, and the 4.4% yield ain’t bad either.
We’ll probably buy a second (used) car in the next few weeks, since sharing a vehicle has become hella annoying now that both of us have jobs. That’ll temporarily delay the ol’ mortgage payoff plan, but that’s okay. What’s the point of money if you can’t use it to make your life easier?
One of my Lending Loop loans is currently delinquent, and LL has employed a collection agency to help get the maximum amount of principal back. The rest of the portfolio is performing well, however. This is why something like peer-to-peer lending should only be a small portion of your portfolio, kids.
And that’s about it. Maybe I’ll write about actual stuff next time.