Investing
I'll be adding my approach to investing soon.
Introduction to Financial Literacy
Post on Financial Literacy:
- What is money
- Five major concepts: Income, Expense, Assets, Liabilities, Cash Flow
- Power of Compounding
- Buy Assets not Liabilities
- Dollar cost-averaging
Income Sources
Working a job is not your only option for a source of income:
- Level 1: [Employee] A Factory Worker - low-skill/high-skill job - trade time for money (majority do this)
- Level 2: [Sole Proprietorship] Be the Factory - self-employed - trade time for money or make a product and sell it
- Level 3: [Business Owner] Factory Owner - manage the factory, others do the work
- Level 4: [Investor] Invest capital in factories - deploy capital for a return on investment (minority do this)
The majority of the population are factory workers. Whether it's assembling cars, designing a web site or doing payroll, they all involve trading time for money. High-skill jobs, such accountants or engineers, do pay higher than low-skills job, however they are still hourly wage earners.
Stock Investing
Post on Stock Investing:
- What is the stock market
- Trading vs Investing
- Tools
- Strategies
- Psychology
Balance Portfolio
The following portfolio is what I personally use for long-term investing. By long-term, I mean five or
more years.
The portfolio consists of fixed income and equities ETFs. The percentage between fixed income and equities can be adjusted
to match your risk tolerance. While fixed income is less riskier than equities, hence the lower rate of return, they are
also subject to market volatility. If you want risk-free investing, there is always cash, however you lose purchasing
power because of inflation.
| Ticker | Description | Allocation | Category | Yield | MER |
|---|---|---|---|---|---|
| XEF | iShares Core MSCI EAFE IMI Index ETF | 10% | Equities - Global | 2.08% | 0.22% |
| VFV | Vanguard S&P 500 Index ETF | 50% | Equities - US | 1.49% | 0.09% |
| XIC | iShares Core S&P/TSX Capped Composite Index ETF | 10% | Equities - Canada | 3.01% | 0.06% |
| FIE | iShares Canadian Financial Monthly Income ETF | 5% | Fixed Income | 7.03% | 0.96% |
| CPD | iShares S&P/TSX Canadian Preferred Share Index ETF | 5% | Fixed Income | 5.00% | 0.50% |
| XBB | iShares Core Canadian Universe Bond Index ETF | 20% | Fixed Income | 2.53% | 0.10% |