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Month: April 2023

Optomizer vs Satisfier

Optomizer vs Satisfier


Here I am satisfying my need to consume university-priced pitchers at a local brewery last night at book club. It was a $20 night out, which never happens!

I am not an Optimizer. Granted, I LOOOOOOVE reading blogs that get into the weeds with detailed tax, investment and savings strategies but I am not that person. I enjoy a rousing debate and when personal finance keeners bring out the calculators and start fighting, I make some popcorn and watch. But I am not that person.

I don’t budget down to every penny. I don’t know the asset allocation of every ETF available on the market. I just see which ones have the average allocations that represent the markets/indexes/regions I want (and the fees I don’t) and then I push the BUY button. I know that this makes some people deeply, deeply uncomfortable.

But here is the thing: I know SO MANY PEOPLE who just walk into a bank/sign up for a salesperson to take 1% of their money (whether they are good at making YOU money or not) and then they just wipe their hands and walk away. They feel confident that a “professional” is taking care of their money when they are truly getting scammed.

Conversely, I know people who are DOING NOTHING. Scared of the stock market, they let their cash accumulate in accounts where their cash is being slowly eroded by inflation. Even sticking that into a 5% GIC would be at least doing something that would at least be stemming the hemorrhage of your buying power to inflation.

Both of these kinds of people are doing the exact same thing: they don’t trust themselves enough to learn the basics and they are scared that they will lose everything. So they make the most inefficient decisions possible because it feels comfortable.

Don’t get me wrong, I think money psychology is super important. You have to make decisions that help you sleep at night. But I feel like you can only make those decisions if you have all of the facts and oftentimes people don’t. They try and play it safe because they don’t know (or don’t want to learn) the basics of how to invest and in the process they allow themselves to fall victim to a predatory financial sales community or lose their money as it gets eroded by inflation over time. Sure, it may feel good to be stagnant and/or ignorant today but what this means is that you will lose your access to a secure or even bountiful retirement. The longer you wait, the more you lose.

People often get the impression that I know the ins-and-out of the stock market because I do enjoy discussing it, either in our Money Mondays group or with friends. But in reality I only really know how the basics work. And more controversially, I truly believe the following things:

1 – Most Financial Advisors don’t know more than you could learn on your own by reading a few books. Still scared? Get a fee-only FA. They are worth the money to help build you a plan without draining your nest egg.
2 – The average person doesn’t need to know much more than the basics of the stock market (although, I do recommend they learn as much as possible!).
3 – Inflation is like losing money every year. We tend to feel good psychologically if our $100000 stays at $100000 from one year to the next. But, realistically you can only buy $97000 worth of goods this year with that money when inflation is at 3%. That’s actually a $3000 loss that you don’t see.

Things that you do need to know:
1 – Invest regularly, preferably you can set it up to automatically fund your accounts and then forget it(ish).
2 – How ETFs/Index funds (and maybe even Robo-Advisors) work.
3 – Know what tax shelters are available to you in your country and learn how to use them (ie: retirement accounts)
4 – Only look at your accounts once a year.

Some people are on the cusp of having a coronary just reading that. But I am not an Optimizer, I am a Satisfier. I am satisfied to point myself in the right direction and then hobble down that road. I am not sprinting to some ridiculous goal of making my bajillions on stock tips, I am looking to make a decent decision (buying the index for an average return) while minimizing my losses (fees, inflation). The average return of the S&P is 11+% (1957-2021) and the average return of the TSX is 9+% between (1960-2020). So logic dictates what Jack Bogel introduced to the world: if you buy the entire thing as an index fund, your returns will follow the market.

Of course, I am simplifying things (and nothing works out 100% of the time) but that is the beauty of it: it’s that simple! You don’t need through reams of company reports and a deep knowledge of how every company you buy works. You just need to know that you are heading down a road that even when it gets winding and rocky (when the average return is down, like last year) will eventually take you to where you are going. As a satisfier, that is good enough for me. You give up huge gains for steady growth and the ability to sleep at night.

I do my budget the exact same way. I lay out all of the mandatory things (bills, savings) and set it up to come out of my account as much as I can. Whatever is leftover is mine to do with what I want. I don’t do a zero-budget where every single penny has to be allocated like an Optimizer would. Being a Satisfier, I just have to be concerned about my obligations and then the rest is mine to toss around. Of course, I am frugal in many ways (how does a green bean know that it is a generic vs name brand green bean?) and that allows me to save more in my day-to-day life on things I don’t care about. But that means I can just allocate more to my more expensive habits, like travel.

“BuT tUcKeR, aRe YoU sAyInG pEoPlE sHoUlD bUy InVeStMeNtS tHeY dOn’T uNdErStAnd?”

No. I am saying that they only need to know the basics, not become experts*. Historically, over time, the stock market always goes up**. If the bottom falls out of the entire economy, we won’t even have to worry about our investments because we will need to grab our leather thongs and fire guitars and wander out into the Mad Max desert.

If you are still worried, PLEASE, PLEASE, PLEASE read JL Collins’ book, The Simple Path to Wealth which will give you more info to change your life than any other book out there.

*I am not a Financial Planner nor do I play one on tv. Quite frankly, they’re probably acting too.
**It doesn’t mean it always will in the future but again: we’ll have bigger problems if it comes to that…

The shocking realization you’ve reached your goals

The shocking realization you’ve reached your goals

Tax season brought us a huge refund which we will use to payoff the mortgage

I realized this week that some personal finance adages are true. I suppose that I always knew this intellectually but I managed to say this out loud (and by “out loud” I really mean, “in a Signal chat”) this week and once I said it, the weight of what I had accomplished came into sharp focus.

So let’s start at the beginning.

Mr. Tucker’s work was recently acquired by another company. This required him to sign a whole new slew of legal documents, some of which were a bit unclear. Fortunately for me though, I have a friend who is an incredibly brilliant employment lawyer who is licensed to practice in Ontario AND in California. Those are two very challenging jurisdictions to get licensed in (and she has a ton of experience with tech companies) so clearly, the woman is a GD genius. Luckily for me, she is also a lovely friend who read all of Mr. Tucker’s new documents before he signed them.

When all was said and done, she asked me about how things were looking for him at work, personally…and that’s when I took stock and realized that … IT DOESN’T MATTER! We are finally at a point in our lives that while it would be shitty, a layoff wouldn’t decimate our finances.

Having her ask that question made me go through our accounts and made me realize the following:

– Our mortgage will be paid off by July (two months before schedule!). The house is currently worth high 6 figures.
– Mr. Tucker’s retirement accounts will meet our target by the end of 2023.
– Any layoff would result in a severance enough to carry us through to the end of the year.
– The kid’s RESPs are currently funded enough to get them a 4-year undergrad degree + books at a local university. We’re still funding it but even if we stopped putting money in it today, they’d still be fine!
– We are currently mostly living off my income, which is private disability insurance indexed to inflation until I am 65.
– I have a small pension + lifetime benefits (Mr. Tucker would get half of it should I die as well as half of my CPP and the kids would get an orphan’s benefit as well until they are out of school).
– On top of regular tax shelters, I also have an RDSP which gives me 100% return on investment via government grants until I am 49 (and can grow tax-free in investments until I am 59).
– Should either of us pass away, we have sufficient life insurance and investments to carry the surviving spouse and the children.
– We have a secondary property that is currently rented to a family member at-cost but that has a mortgage on it at around 1/3rd of its value.

When I wrote all of this in a message I realized quickly that even though I had spent some time worrying about the company acquisition, there really is nothing to worry about. While we wouldn’t be living high on the hog, the decisions we made have been good ones.


We do a monthly game night with friends but for Easter we decorated eggs

So, those true adages? Consistency does beat intensity AND time in the market beats market timing. Let’s look at one example, our kid’s education savings accounts:

Consistency beats intensity
I didn’t end up opening an RESP until my eldest was around 3 (12 years ago). Up until 2020 we could only afford to fund it to the tune of $80 a month ($40 each) because we had a pretty high child support payment and I stayed at home with the kids until the eldest was 4.

But what we did do when they were younger was that we asked family members to give us money for their RESPs instead of buying gifts for various holidays. So for about 5 or 6 years (until they wanted to spend their birthday & Christmas money), we were able to throw in an extra $150 twice a year for their education.

Time in the market beats timing the market
When I go back and look at what we put in vs what we actually have, we see an almost 40% increase over the last 12ish years (investments + grants – so 20% each) in the original accounts (we do still fund these with the same $80 monthly).

Conversely, we also started a new RESP in 2020 using a Robo-advisor because we wanted to play catchup on our contributions and get the grants for previous years. In those 40 months we have seen a 24.6% return in that account – 20% of which is grants, so really we have only made 4.62% on our money since 2020. Not bad (but not great) considering how awful it’s been.

So even though we have been putting more away every month the long game has paid off in spades when you look at the return. We also aren’t done yet, I will continue to put money into the account until we run out of grants available to each kid AND it will also compound for at least another 3 years.

No matter what the market does, we just continue to fund our registered accounts. Dip in the market? Fund it monthly. Market overvalued? Fund it monthly. I just cannot be bothered to think about these things and even through it may or may not be the most perfect way, dollar cost averaging has often been my long term strategy. I used this strategy because it was easier to set up our budget and make savings come out of our accounts every month like a bill rather than have to constantly think about it.


Spring chorin’ has begun

Hoisted by my own petard
I was saying to Mr. Tucker the other night that while we intellectually know that we make good money and have assets, we sometimes feel a bit like money is tight. The reality is though is that we have structured our budget to feed money into two kinds of goals. Regular goals such as putting money away to buy a car with cash every 10 years, education savings, emergency savings etc. Then we also have stretch goals, which is basically saving almost everything Mr. Tucker makes into vacations, retirement accounts and paying off our house early.

So we feel poor sometimes when I have to say, “No, sorry, we are out of pocket money this month so we can’t have take out.” Because really, we live off of a bit over what a median household income is in Canada. But we don’t actually ever have to make really hard decisions, so it’s all in our heads and is guided by our goals. The things we end up denying ourselves is junk food, more subscription services or weird baubles at the dollar store. We don’t deny ourselves the things we really enjoy, such as travel and going to concerts. The kids also have all sorts of cool lessons and activities. But this is self-restriction for a higher goal. We’re actively making choices to deny ourselves shit we don’t really need in order to reach…well, apparently we’ve pretty much reached it…OUR LONG TERM GOALS.

It’s just absolutely wild to me that we can see the finish line after years of just putting in the effort. Of course, Mr. Tucker still wants to work until the end of 2024 but it is nice to know that we have a backup plan should things go south.

It’s so funny that one little question from my friend would lead to such a heavy weight being lifted off of me. But here we are!


Another fine book club was had

The Wordle is my love language

The Wordle is my love language

I am in a group chat with some of my oldest and dearest friends. We all met in our early 20s thanks to the internet & a friend who had a 200 acre farm in eastern Ontario. I was a relatively early adopter of the internet in 1994 (with my wee 2400 baud modem), when I was 18. It wasn’t that I was particularly good at computers but that everyone else around me was. My farm-dwelling friend had a local BBS and frequented Usenet where she had met all of these other like-minded people.

In the mid-90s she decided to start something called The Freak Family Picnic where she invited all of her internet friends to descend on the farm for a weekend for camping, bonfires, games etc. People came from all over the US and Canada – and pre-9/11, a guy even flew his plane into the local airport. In the end, she hosted a summer Solstice FFP open to everyone and a winter Solstice FFP that was only open to close friends. For years, this was our twice-yearly ritual and of the core group of people, almost no one missed coming.

Sadly, all good things come to an end and the end of the FFP was abrupt and traumatizing. My friend moved away from the farm, got remarried, traveled the world and is now settled in upstate New York. Happily, the core group of people from that time still remain friends to this day even though many of us have moved states, provinces and even continents. Bless you, internet.

When I medically retired from my job in social media I started to pull back and cull my SM accounts but I still wanted to keep in touch with friends. So we all downloaded Signal and started a group chat with 3 other friends who I’ve stayed close to since the FFP days. The timing for this couldn’t have been better: soon after the group chat ramped up, the pandemic set in.

During the pandemic our group chat was a lifeline. We also had our weekly Trivial Pursuit nights and finally last year we were all able converge in Denver for an in-person visit, which is the closest we really got to the “middle” of where we all lived considering we are in Mountainview, CA; Philadelphia, PA; Denver, CO and I am up here in Canada. It was a great visit and we had all missed each other a lot.

I think that outside of my family, I speak to these three other people daily, even if it is only to share our Wordle score. I’ve slowly come to learn that our Wordle score is our love language. Some days we talk all day long, some days we don’t chat at all but almost always without fail, we always share our Wordle score. It’s become a low-stakes stand in for us to say to each other: hey, I am here. I am alive. We’re connected.

I suppose I didn’t really appreciate this connection until recently when we had a power outage. Of course, when mother nature shows you that human technology is no match for her power, it’s always an adjustment. Sitting eating dinner by lamplight I realized just how amazing it was that some of the closest people in my life could be scattered across two countries and coasts. I realized that even that small connection of doing the Wordle daily left a big hole when I didn’t have it in my life.

We’ve talked a lot about what relationships and social activities look like in a post pandemic world. As a disabled person, this has been an ongoing conversation since even before 2020. In a world that isn’t exactly accessible, our social lives can become burdens as we navigate things no one else has to think about. Having been able-bodied previously, I absolutely understand what it is like to just grab your purse and run out the door to meet up with friends. Now, it is a question of making sure that a place is accessible, that the bathrooms aren’t downstairs, that there are hand railings for me to use. It is even more effort for people who are more disabled than I am.

So in one sense, the pandemic just made us all suddenly think about how interacting with others looks like when you actually have to stop and to think about safety. On the other hand, I think we all realized just how having 100% of our social lives online really is lacking. Much of our communication as humans is non-verbal: it’s about the contagious laughter, the look of sadness in a friend’s eyes, it’s about how being around others makes us feel. While words on a screen are a great way to stay connected, it isn’t the most fulfilling way.

So yes, the Wordle is my love language: it lets my friends know that I am here and that I am available to chat about things big and small. But conversely, the Wordle is no replacement for our get together in Denver last year. Words are important but so is being in the same room with friends. It’s about the dumb jokes, the weird thing that happened at the restaurant that we’ll still laugh at 20 years from now. It’s about the connections, shared meals, ridiculous travel stories.

I don’t know what the future will hold but as we edge further away from the worst of the pandemic, I find I crave the in-person company of my friends more and more. It seems that everyone is still in varying degrees of worry about the pandemic as well. Some people believe the worst is over and have gone on with their lives normally and some people are still terrified of catching it and worry about the long term effects. I don’t think there is an easy answer here. If anything, we should all be kind and accommodating to everyone’s needs. With summer on the horizon, I plan a bunch of social events that we can hold outside to ensure that everyone can feel included. Of course, for my local friends that continues to be at least an option. Even with our horrendously cold, dark, long winters spring always comes eventually.

But for my dearest old friends further out, I’ll keep sharing my Wordle score.


Saying goodbye after defeating Blucifer

Is Deinfluencing a sign of the times?

Is Deinfluencing a sign of the times?

In the post-pandemic world as we careen towards a recession, it only makes sense that social media would pivot to a more gentle marketing. In an attempt to gain back some social credit, influencers are now turning to Deinfluencing.

Is there a “Singles Tax?”

Is there a “Singles Tax?”

How the ‘tax’ on singles has people who live alone feeling the pinch

Economies of scale are clearly cheaper to manage, so in one sense: yes, there is a singles tax.

But reading through this article, the thing that really bugs me is this idea that “someone should do something” when people aren’t helping themselves. Jenn could get a roommate to reduce her costs or even get rid of her car as she lives in an area with great transit. But instead, she’s complaining about the high cost of living in the urban core.

The thing is, to live in an urban core we need to accept smaller spaces. When I was in my 20s and early 30s I always lived with roommates. We split the bills and sometimes even split food. It never occurred to me to live alone because even when rents were way cheaper than they are now, we didn’t want all of our money being eaten up by rent.

Then when I met Mr. Tucker we moved into a 510 square foot condo with our dog. It suited us just fine and got us out of the house for walks 3x a day and we spent an hour at the dog park every night after work – rain, shine or snow. We also walked or used public transit because owning a car in the city is just ridiculous. We did consider car-sharing companies but we didn’t follow through. Unless you were leaving the city on a trip, almost everything could be found in an urban centre and if we needed something outside of that, we just took cabs.

From the article:

“The average one-bedroom is now $2,458, according to a national report from rentals.ca in February. An apartment with a little more room and some backyard space for the adopted rescue mutt she dreams of would run her closer to $3,000 — and that’s a hefty price tag for just one person.”

In that same report however, a 2 bedroom would cost $3324 – or $1662 per person AND she could get a dog – if she got a roommate (who likes dogs). It is just flabbergasting to me that she lives in 595sq ft and is whining about how hard it is even though she has clearly not considered any money saving alternatives (get rid of the car, get a roommate who likes dogs and rent a larger place for cheaper). I respect if she chooses to live alone because she doesn’t want a roommate but she needs to own that choice and not complain about it.

There is the fundamental issue that I feel people in Canada and the US haven’t come to terms with: you are not entitled to have a lot of living space at a low cost in a great area. Of course, we all want this but it isn’t feasible because…we ALL want this!  But in order to make livable, walkable cities we all need to make concessions and one of those concessions is space.

In 1910 the average square footage of a house in the US was 800sq ft and now they are 74% larger. The average size now is $2430 sq ft. Our expectations are higher now than they’ve ever been and we want these homes at a low rate. Our expectations are really entitledness at this point.

For a comparison, our last home was 1200sq ft and our kids had to share a room because Mr. Tucker works from home and he needed an office. Our current home – a midcentury modern – is 1300sq ft and has a partially finished basement with an office and a rec room, which probably brings it closer to 1900sq ft. The bonus here is that we now have a powder room and both kids have their own rooms.

While I am coming down hard on people’s expectations when it comes to housing, there is a definite truth when it comes to food. Grocers do reward multiple buys of products which could lead to people buying things they don’t need and just letting the extra go waste because it’s cheaper. I also sympathize with anyone who is raising kids or taking care of a loved one on one income. Those are definitely challenges that need myriad policy-driven approaches.

In Canada at least, the government could get back into the affordable housing business again. This is not a party-specific issue, either: multiple governments have ignored housing issues for the past 20 years and the clever solutions that all levels of government are proposing aren’t clever at all and in many ways are increasing the problem. On top of that, we are poised to let in more immigrants over the next few years without even knowing where they’ll live.  While I definitely support the move, we need to think of how the infrastructure of this country will handle the influx.

What I think we need to accept is a tempering of our own inflated expectations. We are trying to live in a Friends world on a Roseanne budget. For our finances, our cities and our resources we need to look to places like Amsterdam with its great public infrastructure and to other European cities where they’ve normalized smaller spaces and where car ownership is just so incredibly expensive that everyone is invested in public transport and public spaces. Urban sprawl is not the solution to this issue, learning to live with less, is.