Short Takes: Progress from Goofing Off, Couch Potato Overview, and more

Here are my posts for the past three weeks:

Toll Roads and Bridges

Clients of Skilled Financial Advisors

Taxes and Cashing in Points

How People Can Go Years without Saving a Dime

59.9%

Here are some short takes and some weekend reading:

Morgan Housel explains why what looks like goofing off may be the best way to make progress. All the best things I’ve ever done in my career were achieved while I looked like I was goofing off. Unfortunately, it’s impossible to tell whether someone is in important quiet reflection or whether they really are just goofing off.

Dan Bortolotti gives us a great overview of couch potato investing, including the advantages and disadvantages of different approaches. He makes a good analogy between making dinner and investing. The easiest way to invest is like eating at a restaurant. Then there’s bringing home pre-prepared food, and finally buying index ETFs is like cooking from scratch. This makes me wonder how to extend this analogy to picking your own stocks. Perhaps it’s like trying to make dinner by hunting through a rain forest looking for edible plants and animals most other people haven’t heard of before.

Tom Bradley at Steadyhand trumpets the 9.4% annual return Steadyhand investors have earned over the past 5 years. This return may not seem remarkable, but keep in mind that this is the return of Steadyhand investors, not the return of their funds. Typically, investors jump in and out of funds at the wrong times. So, funds typically make better returns when they’re small than they do when they’re big. A fund’s return is typically higher than the returns experienced by the typical investor in the fund. Actual investors making 9.4% for 5 years is a good outcome and shows that Steadyhand is aptly named. I’m firmly in the camp of DIY investors using low-cost widely-diversified index ETFs, but Steadyhand stands out among the other choices investors have.

In another very good post from Tom Bradley, he gives some perspective on the overcharging of investment fees at BMO, TD, Scotia, and CIBC. He doesn’t buy that the overcharging is due to simple systems errors because banks watch their revenues closely.

The Reformed Broker explains how financial advisor pay grids create inherent conflicts of interest between advisors and their clients.

A Wealth of Common Sense has an excellent list of the 20 rules of personal finance.

Potato makes a strong case for using winter tires.

My Own Advisor lays out his list of 2017 financial goals. There’s lots to like here. He plans to meet his goals without taking on any new debt. He is saving up for a car instead of waiting until he needs one and has to borrow. And he is building up an emergency fund.

The Blunt Bean Counter gets a lot of experience with CRA information requests, and here he tells us about the most common types of requests for 2016.

Big Cajun Man says “go away 2016,” but 2016 was a good year for me before some family health issues near the end of the year. Every year we seem to have many people who say the year ending was a bad one. That’s rarely true for me.

Robb Engen at Boomer and Echo lays out his financial goals for 2017. To achieve his goals, he needs to save 40% of his income. This sounds high, but is quite reasonable when your finances are rolling along well. He’s right not to crank up his lifestyle spending.