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Well, 2024 is over, and now we can look back on our investments and see how they did for the year.
It was a year of extremes in the news. Wars raged on in Ukraine and the Middle East, multiple natural disasters hit the world as climate change accelerated, and oh yeah, the USA held the longest, most unpredictable election ever.
Economically, the big question on everyone’s minds were whether efforts by the world’s central banks to tame inflation would work, and whether it would cause a recession in the process or actually achieve the mythical “soft landing.”
So how did all this chaos affect the stock markets? Let’s see what happened.
To recap, our current investment portfolio is allocated with the US Stock market, Canadian Stock Market, International Stock Markets (Tracked by the EAFE Index), and Preferred Shares divided up equally like so…
US Stock Market
The US stock market, as tracked by the Vanguard Total Stock Market Index Fund (VTI) took off like a rocket this year, ending the year with a stunning 23% return.
Capital Gain/Loss | Dividend Yield | Total Return |
23.2% | 1.6% | 24.8% |
Add in a small dividend yield of 1.6% and we get a total return of 24.8%. Because the US stock market returned a similar amount last year (26%), this actually made investment history of two back-to-back years of 20%+ returns, which is a pretty rare event. The fact that this happened as interest rates were being hiked makes this even more surprising, and a pretty solid indicator that the soft landing was actually achieved. The Federal Reserve did a fantastic job, and they deserve a lot of credit for pulling off what nobody thought was even possible.
Canadian Stock Market
Up here in the frigid North, we didn’t do too badly either. For the year, the Canadian stock market, as tracked by the BMO S&P/TSX Capped Composite Index ETF (ZCN), ended the year with a gain of 18.4%.
Capital Gain/Loss | Dividend Yield | Total Return |
18.4% | 3.3% | 21.7% |
Canada’s stock market is very resource and export based, so when our biggest trading partner (the US) does well, we tend to get pulled along for the ride as well, so that seems to be what happened here. Our stock market also pays a nice dividend of about 3.3%, so add that in and we are looking at a total return of 21.7%.
TWO stock markets hitting 20%+ returns in one year? Wow. Can we make it 3 for 3? Well let’s just see…
EAFE
Capital Gain/Loss | Dividend Yield | Total Return |
0.8% | 3.5% | 4.3% |
Awww Europe! Why do you suck so bad? Must be all that gross-ass socialism.
Well, it’s not JUST Europe’s fault. The EAFE index, tracked by the iShares Core MSCI EAFE ETF (IEFA) includes Australia and Asian markets too, so they all deserve the blame for not keeping up with the US or Canada. Boo! You suck!
That being said, the point of a globally diversified portfolio is that not all regions are going to move up or down at the same time, or at the same rate. 2024 was a clicking hot year for Canada and the USA, but that may not be true in 2025. Being invested all around the world means that one negative news event can’t take it all down, but at the same time it means that a positive event won’t make all of it go up at once either. So EAFE is doing what it’s supposed to do.
Still, when you include the 3.5% dividend from the EAFE index, it still notched a gain of 4.3%. It ain’t 20%, but it’s still a gain, so I’ll take it.
Preferred Shares
Preferred shares, as tracked by the BMO Laddered Preferred Share Index (ZPR), was a market call I made in late 2022. Normally, my investment strategy is to invest in as broad and diversified way as possible. But as interest rates rose, the bond markets started behaving in a weird way. Usually, when the central bank raises interest rates, bond prices fall and yields rise, so that new money coming into the bond market earns a higher return. That didn’t happen.
Instead, the yield curve inverted and stayed that way for years, and we were looking at a bizarre situation where savings accounts were paying 4%-5%, while bonds were paying less, around 3%-3.5%. So, you want me to take on market risk for less income? Ooh goody! Where can I sign up for this deal of the century?
Preferred shares was a section of the fixed income market that was actually priced properly. By using a preferred share index like ZPR, I could lock in a 6% yield, where the companies paying it were the big, stable Canadian banks like TD, CIBC, RBC, etc. At that deal, I couldn’t afford not to buy it!
So how did our preferred shares do this year?
Uh…wow.
Preferred shares ended up shooting higher by 19.5%! That’s not supposed to happen with fixed income. The fixed income side of your portfolio is supposed to be steady and boring, not shooting up like this. Apparently, a lot of investors must have noticed the awesome deal this asset class represented and joined me in bidding the price of this fund up.
And that’s not all! Remember, I owned this fund because I wanted the yield. Here’s how much income I got for holding this…
Capital Gain/Loss | Dividend Yield | Total Return |
19.5% | 5.8% | 25.3% |
Add it all together, and we are talking about a total return of 25.3%! That makes ZPR the best performing fund in my entire portfolio! It even beat the US index!
This is very unusual for a fixed income product. I think what happened here was I happened to spot a value play before others did, and then I got pulled along when the market wised up and bought alongside me. Which is a great feeling, don’t get me wrong, but it’s not reproducible year after year. I got lucky, I’m very grateful I got lucky, but I’m not expecting this kind of outperformance going forward.
That being said, I still think there’s some upside potential going forward.
A brief recap about preferred shares: The preferred shares this fund contains are structured as rate-reset shares, which reset their payout rate every 5 years based on the 5-year bond yield at that time. This particular fund is structured as a 5-year ladder, meaning that 20% of the shares reset their dividends like this every year. This means that this year, 20% of the preferred shares will reset from the last interest rate they locked in, which was 5 years ago in 2020. And if you recall, back in 2020, interest rates were at basically zero, so when these shares reset, their rate will have nowhere to go but up. This should cause the income that this fund pays to also go up.
And while I can’t predict where a fund’s price will go in the future, if the dividends of the underlying shares increase, this is a fund I’m happy to continue holding for at least another year as that should continue to provide support at current prices, with maybe providing some tailwinds going forward to further (modest) gains.
Dividends, Sweet Dividends
Another thing I wanted to highlight was our dividend performance this year. Now that we’re retired, the income that we receive from our investments is, in some ways, even more important than its market value. Capital values can go up and down with what happens in the news, so we never liked the idea of depending too much on stock market gains to fund our day-to-day living expenses.
Instead, we’re super careful about watching our portfolio’s dividend yield. If we can keep our living expenses underneath our dividend yield, we can basically ride out any recession coming our way because we never need to sell anything.
At the beginning of the year, I looked at all the funds we had, took each fund’s dividend yield, and projected that we would be receiving dividends of $66,500 throughout the year.
At the end of the year, the actual dividends we received turned out to be…
…$70,504.
Wait, what? How did our dividends go up over the year?
It’s because of rebalancing.
We generally look at our portfolio once every quarter and see if any assets have gone out of target in our Passiv dashboard. If they did, we rebalance everything to bring our assets back on target.
In practice, what that meant was that because VTI went up the most in capital value, the math told us to keep selling off VTI shares and then putting the money into the other 3 funds, all of which pay a higher dividend yield than VTI. This had the effect of increasing our dividend yield because we were selling off units that was paying a 1.6% dividend and buying units that paid between 3% and 6%.
This wasn’t a deliberate decision on our part, that’s just what the math told us to do. That’s why we love Mathing Shit Up. It gave us a raise without even realizing it!
Put it all Together
So now that we know how our individual investments did, how did our portfolio perform overall?
Portfolio | Starting Value | Withdrawal | Ending Value | % Change |
Portfolio A | $1,410,466.00 | $33,718.00 | $1,689,904.00 | 22.7% |
Portfolio B | $560,642.00 | $0.00 | $712,437.00 | 27.1% |
Total | $1,971,108.00 | $33,718.00 | $2,402,341.00 | 24.0% |
As always, Portfolio A is the original $1M amount that we retired on while Portfolio B contains all the money we earned after retirement from our various writing-related side hustles.
Portfolio A’s 2024 performance of 22.7% is therefore most indicative of our portfolio’s performance without adding any new money, and after accounting for the withdrawal we did at the beginning of 2024. Portfolio B’s performance is a bit polluted by money we added into the account over the year. Interestingly, our post-FIRE earnings (and the gains we’ve received from investing it) is now starting to become a pretty significant amount in its own right at $712k. A few more years of this and we might be able to hit $1M from our writing careers as well, which would be pretty shocking. I thought starving artists were supposed to be poor! At least, that’s what our parents told us.
At the end of 2023, our combined net worth was sitting at $1.97M, so just shy of $2M. I figured we would cross the $2M mark at some point this year, and boy did we. In fact, we crossed it, and just kept going! By the end of 2024, our net worth hit $2.4M!
That means our overall portfolio performance this year was a stunning 24%, for a dollar gain of $465,951.
I have never made that much money in one year. Even at the peak of our engineering careers right, we topped out at about half that much, and we had to work crazy hours to get it. The effects of investing are far outstripping our ability to earn it through working.
It really does feel at this point like our portfolio is growing faster than we can spend it. Even if we restrict our spending to only the dividends, we’re still having trouble spending it all down. As FIRECracker reported last week, we didn’t even end up spending our 2023 dividends of $62,000, so we ended the year with money left over. And now our dividends have given us a raise to $70,000!
Here is how our net worth evolved over time.
While the first few years of retirement were a bit nerve-wracking, in which you’re navigating the dreaded sequence-of-return risk, once you’re out of that danger-zone, your money really does work harder than you ever could. And remember, this was all happening when inflation was going crazy, hitting a peak of 8%. We barely noticed, because our income increased at an even faster rate!
So for the year going forward, we feel comfortable keeping our allocation targets where they are. That is, Preferred Shares, the Canadian Index, the US Index, and the EAFE Index split equally into 25% each.
Our FIRE portfolio has now survived wars, recessions, a pandemic, and inflation, and emerged not just unscathed, but even larger than before.
This once again proves that being an investor is better than being an employee.
How about you? How has your portfolio done in 2024? Let’s hear it in the comments below!
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Great job! It’s great to be an investor. I don’t know why anyone complained about the economy. We were up about 25% last year. I had most of our investment in index funds. This year, I rebalanced into bonds a bit. The stock market seems too hot now, but who knows? Maybe AI will keep improving productivity.
For people like us who are able to invest a decent amount into the stock market, the economy was amazing for us. I can tell you that in Canada (and seems to be the case in Western countries in general as well as other countries like South Korea, etc.), the average income earner is really struggling to cover their basic non discretionary expenses mainly due to rising costs of housing (both renting and owning), cars (insurance, maintenance and gas) and food. They don’t really have the luxury of investing like we do. I can certainly see how much my non discretionary expenses have gone up over the post-pandemic years, however, since I have a high paying job – I don’t experience the stress that the average Canadian feels. This year I made way more money from my portfolio than my actual job (same thing happened last year). This is not what the majority of Canadians experience, to say the least.
There really are two economies going on: one for the financially well off and one for the rest of the population. Hence, income inequality continues to grow.
Completely agree with your assessment Ishan. For the middle class, the damage is sometimes self inflicted. They pour all their resources into their primary residence, while not really investing in their investment portfolio.
In globe and mail, I see a lot of financial facelift cases where at 65, folks have a paid for primary residence, but very little investment portfolio. (etc, 1.5mil house + 200k investment). I think in general Canadians put way too much resources into their primary residence. 1.5mil equity is locked up in the primary house, and they are struggling to live on 200k + CPP + OAS. One can argue about downsizing or selling and going back to renting, but realistically most aren’t willing to do that as it is a downgrade in lifestyle.
I am not against ownership. But IMO most people can live and retire better if they buy a modest house + a bigger investment portfolio. You can’t really survive on your house equity per say.
Geekaroo,
Whole heartedly agree that the obsession with home ownership in Western countries like Canada is what makes it difficult for much of the middle class to invest effectively in the market. Being of South Asian heritage, home ownership was the nonstop topic in every family get-together, wedding, rice feeding ceremony, etc. for pretty much all of my adult life. Despite all of that, I myself have never owned property (have always been a renter by choice because it didn’t make economic sense to me and I have seen, firsthand, all of the headaches my parents went through as homeowners). I’m not against home ownership either. There are non-financial benefits for sure, but I think it’s important to not treat it as an investment. It should be something you truly appreciate and enjoy for its use.
That being said, when considering my younger peers who are also fellow renters, it is really difficult to set aside a decent amount of money to invest these days. I’m a “geriatric” millennial – so the same age range as Wanderer and FIRECracker. When I look at the incomes I had at the ages of my younger peers and adjust it for inflation, it was way higher than what they are getting – I am just doing a straight comparison for the same role/profession in the exact same companies I worked for. The rents I had to pay at their ages for the same size living spaces and geographic locations were comically low in comparison to today. So this goes beyond just the whole putting all your net worth into a home problem – which is certainly a problem with a lot people in my own age group. This is difficult for young renters, even with good jobs, with “high incomes” (i.e. relatively high by today’s standards but don’t go that far) that require a high level of education and special certifications/licenses. For the average income earners and obviously lower income earners – the situation is even worse. Being a renter, most of my neighbours on my street that rent are in that situation. They are stressed beyond belief when it comes to their finances. I would never dream of telling them “oh the economy is actually not that bad – why my overall wealth grew over 28% in 12 months – so you’re obviously whining for no reason”. I would probably get my ass kicked (well deservedly). It’s not to say that there aren’t ways for average income or lower earners to reduce their expenses, however, it does mean some compromising of one’s standard of living at that point – which is kind of depressing in all honesty.
I guess what I’m trying to say is that it’s important not to just be stuck in your own bubble and have some awareness of what most of your fellow citizens are going through across different age ranges, income levels, backgrounds, etc. Empathy and awareness goes a long way especially when it comes to people like us who have more power to effect positive change and be in leadership positions.
Very well said!
Love this.
Certain job salaries have kept up, mostly the high-skill high-demand ones like computer engineering where you can compete for jobs all over the world, but not all of them. I think the explosion of digital nomadism and the ability to earn in an HCOL area while living in a LCOL area will be key to the next generation’s success in pursuing FIRE.
*per se
Well put. Totally agree.
Totally. Owning a home has this nasty tendency of giving you wealth on paper, but you can’t spend any of it until you sell, so it’s essentially useless. Canadians in particular fall for this over and over again, which is why so many of us are struggling financially despite living in such a rich country.
Economic inequality is always the state of the world at any time in any country!
Ever growing income inequality will end up backfiring on the wealthy. The growth we benefit from in publicly traded stocks comes significantly from the working middle class. Sure in the short term you can squeeze every bit out of the workers so that the lion share of the productivity gains go up to the tippy top of the companies and the shareholders – but there is eventually going to be a breaking point. Post-pandemic those signs and sentiments are starting to show.
With a capitalist economy – some income inequality is to be expected. Higher paying jobs requiring more years of schooling in competitive programs, for example, should result in higher expected incomes. I don’t think most Western people would squawk at that. When we get to a point where high performing, high achieving individuals are not reaping the rewards and most of the benefits are just going to older people who won the genetic lottery of being the right age at the right time – I think that is problematic. These problems were decades in the making and baby boomers generally ignored this as excuses until they saw their children struggle despite doing all of the right things expected out of society. Anyhoo – let’s hope things get better in this crazy ass world 🙂
Sorry, I don’t buy your story that the average earner in “western societies” is struggling to cover basic needs and therefore unable to save and invest.
It’s just a matter of priorities. People want to rob their future self to entertain their current self and live above their means. Borrow now and screw themselves tomorrow.
Don’t make enough money? Hustle and get a job that pays better. And then, don’t fall into lifestyle inflation creep.
End of story.
The US and Canada and many other developed countries provide a plethora of financial opportunities.
Your “western society” excuse is lame. Just unsubstantiated trash talk.
Sure there. Total unsubstantiated nonsense you say.
Solution: Just hustle and work 1 main job and 2 side hustles to afford the exact same lifestyle that someone only had to work 1 job and no side hustles to afford 15 to 20 years ago. Why on earth would people ever complain about that?
Apparently the rise in average salaries in Western and developed countries are completely commensurate with the rise in the cost of rents, home ownership, home utilities, car maintenance, gas, insurance, food. It’s just in people’s heads I guess.
I suppose the economic anxieties of people just renting a very basic no frills home for their family, driving a used Honda Civic or Toyota Corolla and cooking their meals at home instead of eating out are just living too bougie a life.
There’s your error.
Work 1 main job and do 2 side hustles?
That’s silly.
Everyone’s time is valuable. On that basis, you want to use your time efficiently. Get a (one) job that pays better. Don’t get multiple jobs that eats your time and your energy. That’s stupid.
Some people are efficient and get ahead. The rest, like you, seem to not be and therefore come up with silly ideas of multiple jobs to gather more money.
Here’s a better option. Work a job that pays well. Save and invest a portion of your pay. That invested money grows and becomes your second income until it surpasses your employment income.
Is this so hard to fathom?
Which is why I’ve been beating the drum of “be an investor and not an employee” for about 10 years now.
The rich people in power look out for themselves and screw over the working class. I don’t like it, but that’s the reality. If you hitch yourself to that wagon, you get pulled up along with them. But if you don’t, you get left behind.
Hi everyone! Sorry, I meant to answer these earlier, but we have been horrendously sick this week. Blegh.
Anyway, yes. Stock markets have been on a tear, and the economy under Biden has been doing awesome, so of course voters had to change who was in charge. Should be an interesting 2025. Sigh.
Awesome returns!
I’m 100% invested in equities. I am working and can take on the associated volatility (income from work more than covers my expenses and can leave my investment portfolio alone – aside from more contributions).
Overall, my combined portfolio went up 28.3% from Dec 29, 2023 to Dec 31, 2024. My TFSA, in particular, happens to have a lot more US exposure, so investments in that account went up 31.1%. I think there was way too much hype with AI so I won’t be too surprised if there will be major corrections down the road (already some corrections last week and today).
I am trying to get more globally diversified by investing in XAW (total world market except Canada). Two years ago I started to do factor tilting into US traded ETFs AVUV and AVDV that select small cap value stocks, based on the PWL Capital paper/publication on Five Factor Investing With ETFs. Consistent with the publication, I try to keep the weighting 10% AVUV and 6% AVDV. While a little home bias is good from an eligible dividends tax credit standpoint and currency stability, I prefer not to be over 15% weight in Canadian stocks (I use XIC). Long term I would like to be mostly invested in XAW. I still have a lot of VFV and VUN investments from the beginning of my index fund investment journey – but would like to slowly sell these shares and replace with XAW for global diversification.
Yeah that’s a good point. Canada being at 25% for us is probably overweight considering how our market cap relative to the global stock market.
Just a note of caution to make sure that you don’t have any US-listed ETFs in your TFSAs because you get dinged with a 15% withholding tax but none of it is recoverable as a foreign tax credit. Keep these in either your RRSP or your margin account.
Sorry, asking for clarification; “Preferred shares, as tracked by the BMO Laddered Preferred Share Index (ZPR)” are you invested in this etf or are you using it as a comparison? Are you invested in zpr or are in invested in holdings of zpr.
Silly question as the word tracking is throwing me.
I appreciate your guidance.
I am invested in ZPR. Sorry if that was confusing.
I wonder if part of the underperformance of IEFA was due to the stronger US dollar as IEFA trades in US dollars…. If you exclude the weaker US Dollar then IEFA did about 9%. Might be a good reversal if the Dollar returns to historic averages.
Oh, you mean the USD performance against the Euro? Hmm maybe…but I’m not sure how to invest in the EAFE index in euros directly, and I don’t think Questrade supports holding Euro-denominated stocks. If you have any suggestions, I’d be happy to hear it!
This is a terrific write-up. I would suggest the following as amendments:
(1) As you now have significant income streams from your new careers, for completeness, you should present a breakdown of how much you’re generating from this blog, books, etc. per month/year. You did a comprehensive overview of your spending, so why not do the same for all your incomes? I think your readers here would appreciate that.
(2) Also, for completeness, please disclose what exactly are your holdings in preferred shares. And what would be a comparable ETF for those in U.S.?
You can check out HYG in the U.S.
Also SPFF and PFFA.
How are those similar to ZPR at all??
One-year performance:
HYG +1.7%
SPFF -1.6%
PFFA +3.2%
ZPR +18%
I meant the yield only.)
SPFF is one of these “blended” preferred share ETF that have a mix of 75% fixed rate and 25% floating rate. Pick a lane, people!
And PFFA has an atrocious management fee of 2.5%. No…just no.
HYG is a high-yield corporate bond ETF that invests in bonds from lower-quality companies, so this isn’t the same as preferred shares
Great idea.
I started following you 2017 and now I have retired with over $1mm in assets. I am single and over 50% of my assets is in a paid condo to be frank. But I can still live off my liquid assets’ returns.
I am now starting a side business and hope to learn from you too!
Wow. That is awesome, I am so happy for you. Congrats!
If I can give one piece of advice on starting a side business after FIRE: Don’t risk any part of your retirement portfolio. Once you’re FIREd, your immediate cash needs are taken care of, so you can afford to let your business grow organically. Bet time, not money, and your business will eventually make it.
Since we can’t replicate the OPs’ income through books, courses, etc, I don’t need a breakdown. That would only distract from the investment story.
I reported my book/blog income in the past, and I just got attacked for not being “really” retired, so I don’t bother anymore.
The ETF we used for holding preferred shares is ZPR, but there’s no direct US equivalent. In Canada, our preferred shares (for some reason) tend to be structured as rate resets, while in the US, they tend to be either fixed-rate (like bonds) or floating-rate. If you think interest rates are going to go up, you can use a floating rate ETF like PFFV, and if you think interest rates are going to go down, you can use a fixed rate ETF like PGX.
Might there come a point where the dividend gusher gets so big that you tweak the portfolio to not pay as many dividends? How do you think about that scenario?
Canadians can earn $55k each ($110k per couple) of dividends per year tax-free, so maybe when we hit that level I’ll tweak my allocation a bit, but we’re still a ways off from that so it might take a while longer.
How does this work Wanderer? I hadn’t heard of this and I believe I pay tax on my dividends, so gave it a quick google and it seems like this only applies when you have no other income. But since you have book income, how do you then get the $55k in dividends tax free? Curious if you’re just in a really special situation here, or if I’m missing something that could benefit my taxes. Thanks!
Congrats guys! Stunning returns! I would say that your VTI was actually the strongest performer in your portfolio, because due to the decline of the CAD, once you convert it into the same currency as ZPR and VCN, you’ll see that it actually returned about 32%. That’s what happened with my portfolio. As I am heavily invested in the S&P 500, the Canadian-domiciled ETF I own (VFV) actually returned 37%, 13% more than the USD version of an S&P 500 ETF. I was lucky to have been invested in VFV before the CAD dropped. Of course, if the CAD goes back up in 2025 I will lose that money, but if it plummets further I will gain more Canadian dollars. It will be interesting to see where the loonie nets out this year, what with Trump’s tariffs and all!
That’s a great point. I believe the way I broke it out, the performance of each ETF is denominated in its own currency, but the effect of the CAD/USD currency shift is reflected in the overall change in NW in the summary.
And yes. “Interesting” to see what will happen this year. Sigh.
Congrats on adding another $1mil to your NW.
Thanks! Now we can say we’re multi-millionaires.
Congrats and happy to see your portfolios cross 2M+
Well i started following your blog and mimicking your portfolios as layman back in 2017.
which is VAB/VCN/VUN/XEC/XEF. down the road i go fedup with rebalanceing (after 500k investment), i started buying XEQT.
Now across all our registered and non registered accounts, we have 90% equity and 10%bonds (VAB).
Some how i missed you blog post while you guys were ditching VAB and bought preferred share (ZPR). I am still kicking myself of not reading that post and ended up in RED on fixed income.
Still i am happy, if its not your and your blog i would never ever imagine that i can save/invest 1M
Here are my numbers. Starting balance of 2024-Jan is $997k – ending balance $1305k – $70kcontributions –
Passive is showing that rate of returns 22.32%
Dividends = $23,954
I am not sure if its really make sense to sell 10% of VAB and buy ZPR to some divident hike as i cannot rely entirely on the current dividends unless i bump at least another 30k.
appreciate your insights.
How long did it took you to get to 997k ? I am just starting my investment journey so curious .thanks.
7 years. i did DCA,.my total contribution till today is around $750k
This is my personal opinion and not investment advice.
The Canadian bond market in general has been sucking for the past 2 years, and with Trump just around the corner and inflation probably picking back up, I don’t see that changing. ZPR’s not the deal it used to be, but right now, VAB is yielding less than 3%, while ZPR is yielding 4.8%, so you’d be getting a raise making that switch.
Alternatively, another place you can switch to is BND, which is a Vanguard total bond market ETF paying 4.6%, and that’s the entire US bond market. Note that this fund is denominated in USD, so you’ll need to do a Norbert’s Gambit to exchange CAD for USD to buy this.
https://www.millennial-revolution.com/invest/norberts-gambit-how-to-exchange-money-without-paying-fees/
Hope that helps!
Great article as always. You mention your portfolio is starting to outpace your ability to spend, I am curious as to what you plans would be if this continues to be the case.
I hear cocaine is pretty great.
Hahaha, touché
Very inspiring! Quick question, are the dividends from ZPR considered eligible Canadian dividends by the CRA?
Oh yeah. Not only is the income awesome, you can earn up to $55k tax free per person!
Europe investment returns would “suck” less if it didn’t have to deal with an ongoing war.
Europe’s stock market returns sucked for a long time even before the war broke out, so I don’t think the war is a valid argument about why European stock market returns have sucked.
True, but I also think there’s a good chance that Europe will outperform in 2025 if Trump ends up starting a trade war.
Love this, really happy for you guys. Validates the overarching strategy.
Aussie here… our market did a solid 11.44% in 2024 but sure did underperform the US (and Canada)!
Thanks so much!
Canada’s dependence on the US for trade is a double edged sword. When they do well, we do well. And when they threaten to annex your country, well, things do less well. Sigh.
The numbers from your previous post say you took out about 40K USD, but here you say you only took out 33K USD. The numbers don’t add up. Can you explain the discrepancy?
Yeah that’s a good point. I believe the numbers being reported are all in Canadian dollars – so I thought the expenses (based on FIRECracker’s earlier post) was around $55,000 CAD. Still incredibly low considering spending a lot of time in a generally high cost of living area.
Anyways, amazing job with the portfolio gains and keeping the expenses so low. I definitely try to learn from you guys on getting my fixed expenses in the Greater Toronto area lower – but you guys are next level in this department!
Yeah, sorry for the confusion.
Normally, we invest any money that we earn from book/blog income at the end of each quarter, and at the end of the year, we had some Q4 earnings that was sitting in our checking account that we were going to invest. So rather than transfer cash in and then right back out, we only transferred out the difference.
Curious about the move away from Emerging markets and REITS. I remember reading a lot about them in your past blogs. And also recall either your book or blog when you guys looked up at some building and realised you owned part of it through your REIT. When and why did you move away from these and also emerging markets?
Nowadays, I’m more of an income investor so emerging markets didn’t really fit into my overall investment strategy.
As for REITs, I got out of those during the pandemic when shopping malls and office buildings started closing down, but I’m always monitoring them to see if they become a good value play again. If I do, I will post about it!
I’m sorry if you’ve answered this before… but how do you rebalance your portfolio without triggering capital gains? Thank you.
I trigger capital gains and pay the tax.
An excellent year return at 22.48%. My portfolio balance is now at $2,046,000 so 2024 was a record year on the dollar amount as well.
Hey! Welcome to the $2M club. Your cocaine and hookers are waiting for you.
I was pleasantly surprised by receiving an annual report from a small investment that I’d forgotten about* that had increased in value. The gain is nothing to write home about—so I won’t do so!—but hey, a tiny amount of black ink is better than red ink!
Dan V
Taipei, Taiwan
*Now I need to write to that company and ask where this retirement account came from. I think it’s from a previous employer that I stayed with for about a year and change. This is a nice problem to have, though.
Forgotten investments are the best kind of investments 🙂
It was, in fact, from that very same employer. It seems like whenever I worked for someone who had a set it and forget it plan, I was the only one in my immediate workplace who set it. I took the “forget it” part to a bit of an extreme, but hey, my money’s waiting for me in cyberspace!
You write that:
“The effects of investing are far outstripping our ability to earn it through working…It really does feel at this point like our portfolio is growing faster than we can spend it. Even if we restrict our spending to only the dividends, we’re still having trouble spending it all down.”
I’ve reached the same point and this year it had me seriously questioning why I continue to work full-time. I’m going to pull the plug on full-time employment this year.
This doesn’t mean I won’t every pick up some consulting work in the future as I’m still in my 40s and interested in the work I do, but it means that I will ONLY do the work completely on my own terms. No work from the office mandate for me. No remote work from outside Canada mandate for me either.
If you still enjoy your work, then it might be good to keep Doing it etc. you can experiment as you say you’re thinking to do in a consulting fashion etc. it is good for the social aspect and you can always do volunteer stuff later etc. as well as you can afford to travel a little more during your holidays or spend more time with your parents, etc.
It feels good, doesn’t it? To be able to dictate terms to your employer rather than the other way around. What field are you in?
Can you explain more about what Passiv is and how you find it helpful? Would love to learn more about it.
Passiv is a free tool that you can attach to your Questrade account that makes monitoring and rebalancing your portfolio way easier.
Here’s how you set it up: https://www.millennial-revolution.com/investworkshop/investment-workshop-04-connecting-your-accounts/
And here’s how it works: https://www.millennial-revolution.com/investworkshop/investment-workshop-17-rebalancing-your-portfolio/
Yes, it would be helpful if you Reiterated the numbers and how you did taxes, etc. we are up around Between 600 and 700,000 for the year etc. we kept around 350,000 in cash and GICs, etc.. We have $1 million home with no mortgage Mercedes SUV, 20,000 for kids private school etc. I’m retired early but my wife does some part-time work to pay for groceries and pizza, etc. and she likes it etc. we are hovering between three and 4000,000 net worth etc. thank you so much for your continued example and journalling of your example for educational purposes for the general public Who are interested in all that stuff again thank you! I’m using the dictation app so it comes out a bit wacky sometimes! 🙂
That’s a good idea for a future article, actually. I’ll put it in our queue.
Does this blog no longer respond to the comments? ) Addressing the taxes paid on those capital gains vs. the additional dividends received seems like a topic deserving a clarification. Or the rebalancing is only done in the registered accounts?
Yeah sorry, all of us in the MR household have been battling various diseases since Christmas.
Multiple people have asked me to talk about how taxes work when you rebalance, so I think I’ll turn this into an article.
Thanks for sharing your portfolio. My portfolio is the same except I got bonds instead of preferred shares.
By the way, please don’t think you’re smart because preferred shares outperformed. That was just plain luck. If there had been a downturn in 2024, you would have had no ballast, preferred shares are too similar to stocks in terms of risk.
True, preferreds are a lot more volatile, but since we’re dividend-FIRE, I can withstand higher portfolio volatility as long as those sweet dividends keep coming in.
OK, so 2025 has to be the year I start investing. Thanks for all the details and reports, it helps a lot, especially someone who’s a complete noob in all of these.
Hey, don’t worry about it. Everyone’s a noob at some point. May I suggest heading on over to our Investment Workshop as a starting point?
https://www.millennial-revolution.com/investworkshop/
thank you
Wow…awesome
70k in dividend will make that income tax bill quite harsh come April.
Anyway, you might be paying the IRS now that US is taking over Canada. Welcome !
Hi guys! Thank you so much for sharing & best wishes for 2025 adventures.
Would you look into JEPI as a similar asset to ZPR? Wondering if it would make sense to use it to diversify BND through JEPI / PGX / PFFV?
Also any thoughts on cash savings accounts for cushions as the yields are going down? (now 4% at WF)
I’m curious to hear your thoughts.
Thanks,
Have a great day.
Do you ever pay taxes on the portfolio withdrawals? You never talk about it.
You say you spent around 55k this year but only withdrew 33k at the beginning of the year.
How is that possible?
Do you ever feel like going at this differently and not pursuing the yield shield would have served you better?
I say this after plugging in your numbers into a backtest with VT or VTI only and the 1million would have grown to anywhere between 1.8 to 2.3 million compared to the 1.6 you have now even after the 4% withdrawal each year.
Do you ever think or rethink your strategy given that it has been almost 10 years?
Hello!
Long time reader here (thanks for great content), first comment. I have always wondered whether you invest in emerging market equities or not? From what I understand the EAFE Index does not include emerging markets? And my follow-up question – isn’t the asset class of emerging markets part of a diversified equities portfolio? Why not hold the entire (investible) world in your portfolio, which according to basic finance theory should be optimal? I know you guys have travelled the world and have more experience visiting emerging markets than most of us, which makes this question even more interesting to me. Or maybe that is why you avoid these equities (if my understanding is correct)? Could you please explain this choice in a reply or even better – why not writing a full blog post about it 🙂