Owner: Middle Class Millionaire URL:http://middleclassmillionaire.blogspot.com/ Join Date: Wed, 16 May 2007 09:40:58 -0500 Rating:0 Site Description: I will document my journey from middle class to an early middle class retirement. I will share my financial progress, rant about the market, stocks, retirement, saving money and anything and everything related to money, investing and retiring early. Site statistics:Click here
Cash Flow 2007-05-22 08:13:00 I’ve been asked by a few readers to provide a breakdown of how much cash my portfolio generates annually. So I’ve done some rough calculations and here is the breakdown:CDN Dividends: $1210CDN Income Trust: $725.73CDN Interest Income: $685US Dividends: $370 (roughly $405 CDN)For a grand total of about $3025. This is about 10% of the annual passive income that I’d like to generate before retiring. Additionally, over time the amount of interest income will decrease and be replaced by dividend income.
Canadian vs. US Dollar 2007-05-28 06:29:00 The recent and rapid rise of the Canadian
dollar versus the US dollar has left many investors (myself included)watching the share price of their US holding appreciate while the value of those same holdings are depreciating. This has left many investors wondering what’s next for the Canadian dollar...are we at an all time high? will it continue to rise? Are we going to par? Etc... Obviously, I don’t know the future and am not employed or trained as an economist but I do have some general views of the Canada vs. US dollar situation and a prediction of where the Canadian currency is headed (please take my opinion as one of many various opinions and certainly do not base your own financial decisions on my opinion)Basically, I don’t see the CDN dollar staying at these levels for an extended period of time. I think that any significant increase above our current level will be unsustainable for the Canadian economy and here are my reasons why:•About 80% of Canada’s trade is with the Read more:Dollar
Trillion Dollar Charge - Inflation= High Postal Fees? 2007-05-31 08:57:00 I just watched this and thought it was pretty funny and worth sharing. “A Tennessee woman mistakenly received a four-trillion-dollar charge on her bank card from the U.S. Postal
Service.” I can understand that bank errors do happen...but...would it not be logical to think that there would be some sort of safeguard or verification for transactions worth over...I don’t know 1 trillion dollars!!! To watch the entire story click here. Read more:Trillion
, Dollar
, Inflation
High Yield Bond Risk 2007-05-30 06:49:00 Although I don’t plan on making fixed income part of my retirement plan I thought that I’d highlight some interesting facts from an article I read recently by Neil Reynolds on www.globeinvestor.comIn his article Mr. Reynolds makes the case for investing in a basket of high-yield non-investment grade bonds instead of investing in a single triple A rated bond. He states in his article “it is a fact that most high-risk borrowers make their mortgage payments. Therefore you can achieve - depending on the bundle of mortgages you buy - a risk not much greater than a triple-A security. A portfolio of non-investment-grade bonds offers risk-adjusted returns greater than that of an investment-grade portfolio.”Just something to think about before you buy your next AAA rated 5% government bond. Read more:Yield
Hybrid Vehicle Rebates 2007-05-29 06:28:00 For those of you looking to buy a new environmentally friendly vehicle (I personally would never buy new)...but for those of you who love that new car smell (which they have found is a carcinogen) here is a summary list of environmentally friendly hybrid vehicles and the amount of money you’ll be eligible to receive as a rebate from the federal government.Toyota Prius hybrid 4dr hatchback $2,000Honda Civic hybrid 4dr sedan $2,000Toyota Camry hybrid 4dr sedan $1,500Nissan Altima hybrid 4dr FWD sedan $1,500Toyota Yaris 2dr hatchback CE $1,000Toyota Yaris 2dr hatchback RS $1,000Toyota Yaris 4dr hatchback LE $1,000Toyota Yaris 4dr hatchback RS $1,000Toyota Yaris 4dr sedan $1,000Toyota Corolla 4dr sedan CE $1,000Toyota Corolla 4dr sedan sport $1,000Ford Escape hybrid 4dr FWD $2,000Ford Escape hybrid 4dr 4x4 $2,000Toyota Lexus RX 400h hybrid 4dr AWD $1,500Toyota Highlander hybrid 4dr AWD base $1,000Toyota Highlander hybrid 4dr AWD 7-passenger limited $1,000Chrysler Jeep Compass 4dr FWD spo Read more:Hybrid
, Vehicle
, Rebates
Retirement Nest Egg - June 1, 2007 2007-06-01 07:04:00 Retirement Nest Egg at the close of May 31, 2007.$112,229.80-Up $1902.3 from last month-Up $11,871.44 in 2007TRP - 4.20%ABX - 3.60%CSH.UN - 3.59%GWO - 4.70%PFE - 4.19%POW - 4.26%BA.UN - 0.39%L - 4.01%UNS - 2.79%GZ - 2.95%TD - 13.68%EIT.UN - 3.02%JNJ - 5.73%MMM - 4.03%ZED - 0.78%GO.A - 3.09%O'Shaughnessy’s Global Fund - 3.97%American Growth Fund - 1.02%Canadian Value Fund - 3.80%Small Cap Growth Fund - 4.24%Chou Associates Fund - 10.45%Health Science Fund - 0.88%Bond (9% yield) - 5.35%Money Market Fund - 5.29%There were no major changes to my portfolio this month. The 1.7% monthly gain was a result of dividends, distributions, and share appreciation as no new money was added to my portfolio this month.
Toronto Star Article 2007-06-06 09:58:00 I was doing my daily read over at Canadian Capitalist and just discovered that my blog was recently mentioned in a personal finance article for the Toronto
Star. Other blogs mentioned were The Money Diva, Canadian Capitalist and Financial Jungle.I want to take today’s post to welcome any new readers that have discovered this site through Ellen Rosemans column and to also thank my existing readers who have read, commented and supported this blog over the months. I'll keep writing if you keep reading!Cheers,MCM Read more:Article
Geographic Allocation 2007-06-05 06:25:00 Yesterday I talked about allocation amongst the asset classes and today I’m going to talk about the second allocation of concern, allocation amongst countries. Before I being I just wanted to reiterate that there are many different views and beliefs on this subject. What I’m going to attempt to do is simply state what I believe is the best country allocation for my unique situation. Yours may be the same but will probably be different based on your unique investment objectives, time frame and risk tolerance.Contrary to popular opinion I believe that the majority of my retirement portfolio should be in CDN dollars. I am aware of the argument that Canada is only 2.5% of the worlds markets so we should be diversifying as much as possible to take advantage of opportunities globally. Although I agree with that in principle I believe that the majority of my holdings should be in the currency of the country that I will ultimately be retiring in. Once my dividend cash flow is established I Read more:Geographic
Asset Allocation I 2007-06-04 06:30:00 There are many different views and beliefs on the ideal asset allocation. What I’m going to attempt to do is simply state what I believe is the best asset allocation for my unique situation. Your personal allocation may be the same however, it will probably be different based on your own unique investment objectives, time frame and risk tolerance.I’m going to deal with 2 elements of asset allocation: 1. Allocation amongst the asset classes2. Allocation amongst countries (currencies)I’ll begin with asset allocation amongst the classes. The most common rule of thumb is that ideally you should subtract your age from 100 and that is the maximum percent of your portfolio that should be in equities, with the remainder of your portfolio being in some form of fixed income (basically your age is the percent of your portfolio that should be in fixed income). So according to this rule I should be 27% invested in fixed income. For some this may be true, however in my personal situation I wo Read more:Asset
Questrade - Comparison Follow Up 2007-06-08 06:38:00 Last month I posted a review of Questrade’s WebTrader platform based on my experiences using it compared to the trading account of the big banks. In response to this review I received a number of comments on this post including some from Emil Vojkollari who is the Client Acquisitions Supervisor for Questrade. In the comments section I invited him to write up a comparison of Questrade versus some of his competitors... and that's exactly what he did!Emil has sent me a .PDF file however, blogger does not have the ability to host them so I’ve uploaded the file to a 3rd party location. Please follow the below link and then click on the large organge "Download" button to view the file sent from Emil at Questrade.http://www.savefile.com/files/768369
Nine Most Likely DOW Stocks to Raise their Dividend 2007-06-07 06:31:00 Well here’s a post for all you insatiable yield seekers out there. Over at http://www.stockpickr.com/ they’ve compiled a list of the nine DOW stocks that are most likely to increase their dividends. Here are the stocks along with their current yield:1. MO - 4.8%2. PFE - 4.3%3. C - 3.9%4. GE - 3.1%5. KO - 2.6%6. JNJ - 2.6%7. MMM - 2.2%8. PG - 2.2%9. WMT - 1.9%If you want to view the full article please follow this link. Read more:Stocks
, Dividend
No Post Today or Tommorow 2007-06-11 11:47:00 Sorry all but there will be no posts either today or tomorrow as I recently had a new edition to my family and will be tied up for the next couple of days. Read more:Today
Chou Funds 2007-06-15 08:25:00 I just thought I’d point readers to a recent article in globeinvestor about my favorite Canadian mutual fund manager Francis Chou. I like his disciplined, methodical and deep-value approach to investing and although I’m personally not a big fan of mutual funds I own, and like the Chou Associates Fund for the following reasons:•I think Francis Chou is a seasoned pro at finding deep value before the market•He invests in markets that I do not have the time to follow•15yr return 15.5%•He invests for the long term and is not concerned with quarter to quarter fluctuations•Very methodical investing style•MER of 1.74% (in my opinion it is worth every penny)(Disclaimer: I’m not your boss or your spouse so do you own research and make your opinions on when to buy or sell. Nothing I say should be bastardized or construed in any way to be advice) Read more:Funds
Dividend Growing Stocks – IV 2007-06-14 08:08:00 Enbridge (ENB) is an energy distribution, transportation and services company. Core businesses include distribution of natural gas and transportation of liquid hydrocarbons.-paid a dividend for over 50 years-dividend has grown an average of 10% yearly-currently yielding 3.40%-65% payout ratio-95% of their business is regulated-PE 19X-Stable credit rating (A-, Baa1, A) -click here for a complete dividend history 1953 – 2006 I don't currently own ENB however it is one I would eventually like to add to my portfolio. Read more:Dividend
, Growing
, Stocks
Big Canadian Banks 2007-06-19 06:34:00 As promised here are the yields, payout ratios, current PE and forward PE for the big Canadian
banks. Tomorrow I’ll do the same for the big US banks.TD Yield: 2.9%Payout Ratio: 46%PE: 15.7Projected 2007 PE: 13.1RY Yield: 3.2%Payout Ratio: 45%PE: 14.1Projected 2007 PE: 13.5BNSYield: 3.4%Payout Ratio: 46%PE: 13.6Projected 2007 PE: 13.2CMYield: 3.1%Payout Ratio: 36%PE: 11.4Projected 2007 PE: 12.3BMOYield: 4%Payout Ratio: 57%PE: 14.4Projected 2007 PE: 12.3NAYield: 3.9%Payout Ratio:43%PE: 11.3Projected 2007 PE:11.1
Banks Dividend Yields & Payout Ratios 2007-06-18 06:29:00 I have seen a number of posts recently comparing the yields of various banks to one another in an attempt to determine the “best buy”. Although, I think that the yield is important I don’t think that the yield by itself is a useful number even for those looking exclusively for dividend income. In my opinion you also need to compare the payout ratio of the banks in order to ascertain if:1. The dividend is sustainable2. The dividend has room to grow3. The business has sufficient excess capital to growThe payout ratio is a simple ratio that investors can easily calculate.DIVIDEND PAYOUT RATIO = DIVIDENDS PER SHARE/EARNINGS PER SHAREIn tomorrows post I’ll compile both the yields, payout ratios, current PE and forward PE for the big Canadian banks and on Wednesday I’ll do the same for the big US banks. Read more:Dividend
, Ratios
Payback for Hybrid Cars 2007-06-22 06:26:00 This is a follow up post to my May 29th post, “Hybrid
Vehicle Rebates”.I was recently reading an article at MoneyCentral entitled “The Costly Secrets of Hybrid Cars
”. This article questions the cost effectiveness of buying a hybrid vehicle and provides the cost difference between the hybrid and gas versions of a few different vehicles. More detail is provided in the article however, a basic summary is that although hybrid vehicles do save you money on gas they are not yet cost effective in the long run due to the higher initial sticker price. To read the entire article please click here.
Big US Banks 2007-06-20 06:22:00 For those of you considering taking a position in a large US bank here are the yields, payout ratios, current PE and forward PE of some of America’s biggest banks.CYield: 4%Payout Ratio:48%PE: 13Projected 2007 PE: 12BACYield: 4.47%Payout Ratio:46%PE: 10.65Projected 2007 PE:10.38JPMYield: 3%Payout Ratio:31.5%PE: 11.7Projected 2007 PE: 11.3USBYield: 4.7%Payout Ratio:55%PE: 13.1Projected 2007 PE: 12.76WBYield: 4.14%Payout Ratio:46%PE: 11.5Projected 2007 PE: 10.9WFCYield: 3.1%Payout Ratio:43%PE: 14.1Projected 2007 PE: 13.3
Networth April 1 – 2007 2007-04-03 06:38:00 Networth at the close of April
1, 2007 (no change from last month)TRP - 4.23%ABX - 3.94%CSH.UN - 3.27%GWO - 4.80%PFE - 4.28%POW - 4.10%BA.UN - 0.38%L - 3.80%UNS - 2.85%GZ - 2.93%TD - 13.28%EIT.UN - 2.83%JNJ - 3.45%MMM - 3.89%O'Shaughnessy’s Global Fund - 4.06%American Growth Fund - 1.07%CDN Value Fund - 3.78%Small Cap Growth Fund - 3.96%Deep Value Fund - 11.03%Health Science Fund - 0.92%Bond (9% yield) - 5.54%Money Market Fund - 11.60%As you can see my networth is the same as last month. However, I did make a few purchases EIT.UN and JNJ that I plan to hold for the long term.
Retirement Nest Egg March 1 - 2007 2007-03-02 11:44:00 Networth at the close of March
1, 2007 (up 6.8% from last month)TRP - 4.18%ABX - 4.09%CSH.UN - 3.80%GWO - 4.94%PFE - 4.30%POW - 4.18%BA.UN - 0.38%L - 3.78%UNS - 2.80%GZ - 2.87%TD - 13.26%MMM - 3.80%O'Shaughnessy’s Global Fund - 4.02%American Growth Fund - 1.08%CDN Value Fund - 3.77%Small Cap Growth Fund - 3.85%Deep Value Fund - 10.89%Health Science Fund - 0.92%Bond (9% yield) - 5.53%Money Market Fund - 17.57%You may have noticed that my networth increased by a large percentage this month. Although this looks good it's not, because all of the percentage gain was a result of contributions and not investment returns.
Retirement Nest Egg Feb 1 - 2007 2007-02-01 07:14:00 Networth at the close on Jan 31th, 2007 (up 1.8% since Jan 18th )TRP - 4.59%ABX - 4.43%CSH.UN - 3.96%GWO - 5.06%PFE - 4.86%POW - 4.19%BA.UN - 0.40%L - 4.53%UNS - 2.91%GZ - 3.26%TD - 14.23%American Growth Fund - 1.17%CDN Value Fund - 4.06%Small Cap Growth Fund - 3.94%Deep Value Fund - 11.53%Health Science Fund - 1.00%Bond (9% yield) - 5.91%Money Market Fund - 19.96%You might have noticed the big cash position (don't worry I'll have something to say about that when I get a chance to post)
Jan 18 - 2007 Retirement Nest Egg 2007-01-19 13:14:00 Retirement Nestegg as of the close on Jan 18th, 2007.Here is the breakdownTRP 4.63%ABX 4.31%CSH.UN 3.75%GWO 5.43%PFE 5.06%POW 4.19%BA.UN 0.40%L 4.60%TLM 4.05%UNS 2.90%GZ 3.03%TD 14.27%American Growth Fund 1.20%CDN Value Fund 4.13%Small Cap Growth Fund 3.97%Deep Value Fund 11.70%Health Science Fund 1.01%Bond (9% yield)6.02%Money Market Fund 15.34%From now on I'll probably only update the networth at the end of each month.
Home Renovations 2007-06-26 06:42:00 I’ve recently been doing some renovations to my home in an attempt to increase its value before I sell later this year. I’ve budgeted $2000 to complete my “home makeover” and I’ll be doing all the work myself. I’ve done some reading on which areas of the house provide the most bang for your buck and as the literature suggests I’ll be concentrating most of my efforts on the kitchen and bathrooms but will be spending some time and money on the rest of the house as well. Here is a list of what I plan on doing:1. Paint dated cabinets in the kitchen2. Move and replace handles in kitchen3. Remove wallpaper in kitchen4. Replace kitchen counter tops5. Tile a kitchen backsplash6. Replace damaged trim around door in 3 rooms(dog scratched up) 7. Replace bathroom vanity, sink, faucet, mirror and 8. Stain back deck9. Clean garage10. Re-insulate garage door11. Paint from deck12. Paint entire interior of the house Read more:Renovations
What Do You Want to Read About? 2007-06-25 06:33:00 I thought I would take today’s post to ask you, the readers, what you want to read about? If you have anything you’re interested in or anything you’d like to see me post about please leave me a comment and I’ll add them to my idea pile.Cheers,MCM
Lottery Tickets, Risk vs Reward – A Middle Class Rant VI 2007-06-28 06:51:00 Human psychology is both tremendously fascinating, and mind numbingly scary. Although, there are probably a million different examples that would illustrate the fascinating delusions of the human psyche there is one in particular that I’d like to talk about…the risk vs. reward calculation that goes on (consciously or unconsciously) in the human mind when they purchase a lottery ticket. Ok… let me set the scene; the average lotto 6/49 payout is about 3 million dollars, a single ticket costs $2 and the odds of winning are 1 in 14 million. Just to put this into perspective your chances of being hit by lightening in Canada are 1 in 2.5 million. So, if you believe you’re going to win the lottery than you must also be darn sure that you’re going to be struck by lightening at least five times in your life. However, the human psyche doesn’t work like that and despite the overwhelming odds 3 million dollars is a lot of money to most people, and because the tickets are only $2 peopl Read more:Lottery
, Tickets
Retirement Nest Egg at the close of June 30, 2007. 2007-07-03 08:54:00 -Down 2.5% from last month.-Up 9.1% in 2007.TRP – 3.96%ABX – 3.72%CSH.UN – 3.41%GWO – 4.72%PFE – 3.97%POW – 3.41%BA.UN – 0.4%L – 4.27%UNS – 2.8%GZ – 2.82%TD – 13.77%EIT.UN – 3.05%JNJ – 5.66%MMM -4.16%ZED - 0.74%GO.A – 3.21%O'Shaughnessy’s Global Fund – 4.01%American Growth Fund – 1.02%Canadian Value Fund – 3.88%Small Cap Growth Fund – 4.28%Chou Associates Fund – 10.68%Health Science Fund – 0.88%Money Market Fund – 10.29%Well this has been one of my worst months so far as my portfolio is down 2.5% from last month. This is mainly due to currency appreciation and a general decline in the market. I am going to continue to hold all my positions and will begin to look at accumulating more shares if the market declines further.
Inter Pipeline Fund - IPL.UN 2007-07-06 08:17:00 I’ve put in a limit buy for IPL.UN at $9 per unit. For those of you unfamiliar with the company here is a little blurb about them: “Created in 1997, InterPipeline
Fund is a major petroleum transportation, storage and natural gas liquids extraction business based in Calgary, Alberta, Canada. Inter Pipeline is a publicly traded limited partnership that owns and operates a diversified combination of energy infrastructure assets in western Canada, the United Kingdom, Germany and Ireland. This asset portfolio generates long-term and predictable cash flows, thereby providing unitholders with a growing and stable source of monthly cash distributions.”I’ve decided to put a limit price in for IPL.UN for many of the same reasons outlined by Moneygardener in his May 18th post. If my order is filled I will be buying these units with a portion of the proceeds from a bond that matured in June. I am not expecting a large increase in either the share price or distributions from IPL.UN however
Home Renovation Update 2007-07-05 07:00:00 Last week I wrote about some home renovations that I plan on doing prior to selling, here’s the update:•Stained the deck (approx cost $15)•Removed kitchen cabinet doors and filled in holes (approx cost $0)•Replaced bathroom vanity, sink, faucet and moved plumbing (approx cost $400)This week I plan on:•Filling some holes in the bathroom drywall that were created as a result of removing porcelain inlayed toilet paper rolls and towel holders. •Painting the removed kitchen cabinetsTotal spent on the renovation so far:$415. This leaves me with $1585 remaining in my budget. Read more:Renovation
, Update
Questrade - Promotion 2007-07-04 07:28:00 Hi All,I just got some more news from Emil over at Questrade. "I came across some news recently that I'm not sure if you know about, and thought you and your readers might be interested in. As of June 26th, Scotiabank has bought out TradeFreedom Securities. This makes Questrade the last independent brokerage in Canada, and with Canada Day just around the corner, we decided to celebrate. Please feel free to check out our site for the independence celebration promotion. It’s quite humorous. I hope it will spark a new conversation in your website."Here's a link to their July promotion here.
Dividend Growing Stocks - V 2007-07-09 06:47:00 TransCanada Corp - TRP"TransCanada is a leader in the responsible development and reliable operation of North American energy infrastructure. Our network of more than 59,000 kilometres (36,500 miles) of pipeline taps into virtually all major gas supply basins in North America. TransCanada is one of the continent’s largest providers of gas storage and related services with approximately 360 billion cubic feet of storage capacity. A growing independent power producer, TransCanada also owns, or has interests in, approximately 7,700 megawatts of power generation."-Has paid a dividend for the last 42 years-Long history of increasing dividends (with the exception of 1999 where they cut it from $1.12 to $0.8)-The purpose of the dividend cut was "to strengthen its financial flexibility and capture North American energy growth opportunities."-Current P/E 17X-Estimated 2007 P/E 18X-Estimated 2008 P/E 16.7X-Current yield 3.7%-TD target price of $4415 year Dividend
HistoryYear Annualized Dividen Read more:Growing
, Stocks
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