Here are my posts for the past two weeks: How Much of Your CPP Contributions are Really a Tax? Playing with FIRE Here are some short takes and some weekend reading: Ranjan Roy explains a pizza arbitrage scheme when a food delivery startup scrapes a restaurant’s website. Big Caun Man is predicting the death of the open-concept office space.  Organizations love the cost savings of open office spaces.  These savings are very easy to measure.  Much harder to measure is the loss of worker productivity.  Concern about spreading viruses will fade, but workers who need to think deeply, like software developers, can’t get their work done efficiently in open offices.  The constant distractions make it impossible to solve a problem that requires 15 minutes of uninterrupted thought.  One of the touted advantages of open offices, that workers will collaborate better, turns out to be false.  Research at Harvard found that face-to-face interactions droppe...

By now, most people have heard of the FIRE (Financial Independence Retire Early) movement. Those who embrace FIRE can be evangelical about it, and critics can be very harsh. To give people a better idea of what FIRE is, Scott Rieckens wrote the book Playing with FIRE: Financial Independence Retire Early , the story of his family’s journey to better align their spending with what they believe is important in life. It’s easy to criticize FIRE if you see it as a bunch of young white males who have (or had) high-paying jobs and prefer to laze around all day. But FIRE looks very different to different people. Some seek complete financial independence and true retirement, while others just want enough cushion to quit the job they hate and do something they love that might pay less. The common element in FIRE is striving for financial independence to make it possible to spend your time in a way that makes you happy. However, this requires deep examination of the way you spend your m...

A simple view of the Canada Pension Plan (CPP) is that it takes contributions from your paycheque, invests your money until you retire, and then pays the money back to you as a pension. However, reality is more complicated. CPP rules result in some people getting more out of CPP than they put in, and some get less. This splits your contributions into part savings plan and part tax. Your first thought might be that the amount we get from CPP depends on how long we live. However, this is actually a good thing. I’m happy to have an income stream that reduces my longevity risk. I benefit today from the fact that once I start collecting CPP, it will last as long as I live. So, when I say we don’t all get out what we put in, I’m not talking about how long we live. To get an idea of what I do mean, it helps to look at the short summary in CPP’s 2018 annual report . CPP paid benefits of $44.5 billion, but only $34.6 billion of this went to CPP retirement pensioners. The remaining ...

Here are my posts for the past two weeks: Another Emotional Reason to Take CPP Early Portfolio Rebalancing Based on Expected Profit and Trading Costs (Redux) Calculating My Retirement Glidepath Here are some short takes and some weekend reading: Boomer and Echo has a sensible discussion about using the recent market crash to learn about your risk tolerance. I made the following comment: “I’m all for people using real experience with losing money in markets to learn about their true risk tolerance. The tricky part is when to change allocation percentages. I’d like a rule something like, you can only reduce stock exposure when stocks are within 5% of making a new high, and you can only increase stock exposure when stocks are at least 20% below the most recent high. The waves of people wanting to do the opposite are predictable.” Jamie Golombek discusses some tax proposals to help investors in these difficult times. To the best of my knowledge none of these proposals have ...

While some people are busier than ever during the pandemic, like health care workers, many of us have extra time on our hands. I’ve used this time to clean up my plan for retirement investing and spending. Here I describe this plan. Top Level I’m an index investor with a portfolio invested in stock ETFs and bonds. By “bonds” I mean any type of safe fixed-income investment, including cash savings, GICs, and short-term government bonds; I have no interest in corporate bonds or long-term government bonds. At a broad level, I maintain chosen percentages of stocks and bonds. Currently, my portfolio is about 80% stocks and 20% bonds. However, I plan to increase the bond percentage over time. When we adjust asset allocation percentages as we age, it’s called a retirement glidepath. The idea of a glidepath is far from new, but most recommended glidepath percentages seem to be just made up numbers, such as bond percentage equal to your age. I prefer to run my portfolio with a smal...