How we invest our own money

Long time readers may recall that my wife and I started building our dividend portfolio in 2011 after a financial epiphany. We focused on dividend stocks to provide us with some margin of safety so we could live off dividends without selling shares in the first few years of early retirement. 

Like many people, over time, our investment strategy has evolved. We went from investing in dividend stocks exclusively to a combination of dividend stocks, index ETFs, and high growth stocks.

There is a lot of investment related information out on the internet. I don’t know about you but from time to time, I find myself feeling overwhelmed by all the available information. What should my breakdown be among bonds, GICs, stocks, ETFs, and mutual funds? What about cryptocurrencies? With so many available investment options and so much information on the internet, things can get very overwhelming, especially when you’re a new investor trying to start investing.

Some readers have asked about how we invest our own money and what our portfolio breakdown is like. So I thought it’s time for some explanation on how we invest our own money. 

Note: This was also inspired by Robb’s post. 

My investing journey

I began investing when I started my first year of university at 19 years old. Back then I didn’t really know what I was doing so I was putting money into both mutual funds and high yield stocks like Superior Plus Corp based on recommendations. Being a full-time university student, I didn’t pay much attention to the performance.

When I graduated from university and started working full time, I contributed to my work RRSP and took advantage of the employer matching contribution. My work RRSP was with Manulife so I selected a few mutual funds based on my risk tolerance (we eventually moved to Sunlife). I also signed up for the employee stock purchase plan because my employer would match contributions up to a certain dollar amount. Outside of work, I started investing in mutual funds and GICs. Each year my goal was to max out my RRSP contributions by depositing a lump sum into my work RRSP. 

Around 2007 I started looking at individual stocks to add to my investment portfolio. The first company that got my interest was a company called ING Canada. ING Canada caught my interest because it was the company my parents used for their house insurance. With very little research, I bought 100 shares of ING Canada. I didn’t have any strategy at all, I just thought the name sounded good and that the stock price should go up. 

When the TFSA was announced in 2009, I first “invested” my $5,000 TFSA contribution in a short-term GIC with ING Direct (it later became Tangerine). After the GIC matured, I realized that GICs were terrible investments in terms of growth for someone in their 20s, so I transferred the money to TD Direct Investing and bought Manulife with that money.

Both ING and Manulife took a hit during the financial crisis and the aftermath. Since I didn’t need the money, I continued to hold onto these two stocks despite a sizable paper loss. 

I continued dabbling in mutual funds, GICs, and individual stocks, not really having a key focus or an investing philosophy. In my early 20s, I was more focused on not getting fired from my high-tech job, going on outdoor adventures on the weekend, and my social life.

When Mrs. T and I started dating, we didn’t talk about money. But due to how we were raised, both of us had the “spend less than you earn mentality.” We were going on cheap dates and loved cooking meals together. We didn’t start focusing on personal finance and investing until a friend of ours gave us a copy of Secret of Millionaire Mind and then attended the Millionaire Mind Intensive seminar. 

Reading Secret of Millionaire Mindset opened the floodgate. We started reading personal finance books and wanted to improve our finances and our future. When we read “The Lazy Investor” by Derek Foster, we were hooked on the idea of dividend investing. We started exiting mutual funds and GICs and started investing in individual dividend stocks.

I opened a self-directed RRSP with Questrade. Since I had a large sum of employee contributions in my work RRSP, I transferred it into my self-directed RRSP at Questrade.   

At that time, the Canadian dollar was over par, I converted over to $100k CAD to USD using Norbert’s Gambit. When the exchange rate dipped below par, I continued to convert CAD to USD. I then invested the money in US dividend stocks. 

When Mrs. T and I got married and she became a Canadian permanent resident, we then opened self-directed spousal RRSP, TFSA, and non-registered accounts with Questrade. 

2012 to 2014 were very solid years for us. Our portfolio returned +8.67%, +33.04%, and +24.08% respectively, excluding new contributions. Hungry for knowledge, I was reading a lot of personal finance books and blogs. I also started this blog to share my knowledge with others and chronicle our financial independence journey.

2015 was not as kind to us as our portfolio returned -5.97% but it was better than TSX’s annual return of -11.09%. We continued to see extremely solid performance in 2016 and 2017 with +19.62% and +12.33% annual returns. 

As I learned more about dividend stocks, we began to exit high yield dividend stocks like Just Energy, Superior Plus Corp, KEG Income Trust fund, MCAN Mortgage Corp, and Chorus Aviation. We reinvested the money into dividend all stars. 

Not wanting to limit ourselves to dividend stocks only, we carved out < less than 5% of our investment portfolio to invest in high-growth (but highly volatile) stocks like Tesla, Facebook, Amazon, Alphabet, and my employer’s stock. 

As we learned more about investing, we also learned about passive index ETFs. Given we only held several dividend stocks and highly volatile stocks, I wanted to diversify our portfolio. So we started investing in Vanguard Global All Cap ex-Canada index ETF, VXC. In 2019 we got out of VXC and opted for XAW, iShares Global All Cap ex-Canada index ETF due to a lower MER and a higher exposure to the US market. 

Over time, we started focusing more on low yield high dividend growth stocks. While dividend income is still important for us (hence for the monthly dividend updates), we want to focus on total return.

Wanting to focus more on total return, we started purchasing QQQ to focus on growth in the US market earlier this year. I was looking at investing in QQQ back in 2019 but made the mistake of not doing so then. Clearly, hindsight is 20/20. 

How we invest our own money

It has been quite a journey with a lot of ups and downs. For example, we saw our portfolio losing over $250k on paper in March 2020 at the bottom of the COVID global pandemic downturn, then saw the portfolio recover quickly and cross the $1M milestone in 2021. Since then our investments have continued to compound.

Over the years I have read a lot of books and done a lot of research. I have come to the conclusion that personal finance is personal. There’s no one single way to invest. Some people may invest all their money in the stock market, some may invest in real estate, some may invest in private equity, some may invest in GICs and bonds, some may invest in businesses, and some may invest in combinations of different assets. 

To make investment more interesting, even in each investment asset class, there are no rules on what one must invest in. For example, there’s no rule that one must invest in apartments or detached houses only when you invest in real estate. 

In addition, even when we talk about “total return” one must specify what investment assets. Is it real estate, growing a business, the stock market, private equity, or others? 

There are so many ways to invest. 

I certainly can’t tell you that our way of investing is the best way to invest. It is for us, but your circumstances may be completely different than ours.

So instead of bashing each other over stocks, ETFs, GICs, mutual funds, real estate, taxes, accounts, etc, let’s be supportive and help each other.

Here’s how we are investing our money:

Account Type	Platform	Products	% of Total Portfolio
My RRSP	WS Trade	20% Canadian stocks 80% US stocks & ETF	29%
My work RRSP	Sunlife	Low-fee mutual funds (the only option)	6%
Spousal RRSP	Questrade	80% Canadian stocks & ETF20% US stocks & ETF	11%
Mrs. T’s RRSP	WS Trade	100% Canadian stocks	1%
My TFSA	WS Trade	100% in Canadian dividend stocks	10%
Mrs. T’s TFSA	Questrade	100% in Canadian dividend stocks	7%
My non-registered	TD Direct Investing & WS Trade	100% in Canadian dividend stocks	26%
Mrs. T’s non-registered	Questrade	100% in Canadian dividend stocks	10%

Please note that I’m not disclosing the actual dollar amount for privacy reasons. 

We don’t invest in GICs to maximize our returns. We also don’t invest in high yield covered call ETFs. 

What do I mean by Canadian stocks, US stocks, and ETFs? 

Canadian stocks:

• Alimentation Couche-Tard Inc (ATD)
• Brookfield Asset Management (BAM)
• BCE (BCE)
• Brookfield Renewable Corp (BEPC)
• Bank of Montreal (BMO)
• Brookfield Corporation (BN)
• Bank of Nova Scotia (BNS)
• CIBC (CM)
• Canadian Natural Resources (CNQ)
• Canadian National Railway (CNR)
• Capital Power Corp (CPX)
• Canadian Tire (CTC.A)
• Emera (EMA)
• Enbridge (ENB)
• Fortis (FTS)
• Granite REIT (GRT.UN)
• Hydro One (H)
• Intact Financial (IFC)
• Manulife Financial (MFC)
• National Bank (NA)
• Power Corp (POW)
• Royal Bank (RY)
• SmartCentres REIT (SRU.UN)
• South Bow Corp (SOBO)
• Telus (T)
• TD (TD)
• TC Energy Corp (TRP)
• Waste Connections (WCN)

US stocks:

• Apple (APPL)
• AbbVie (ABBV)
• Amazon (AMZN)
• BlackRock (BLK)
• Costco (COST)
• Alphabet (GOOGL)
• Coca-Cola (KO)
• McDonald’s (MCD)
• Nvidia (NVDA)
• PepsiCo (PEP)
• Procter & Gamble (PG)
• Qualcomm (QCOM)
• Target (TGT)
• Tesla (TSLA)
• Visa (V)
• VICI Properties (VICI)
• Waste Management (WM)
• Walmart (WMT)

ETFs:

• iShares Core MSCI All Country World ex Canada Index ETF (XAW)
• Invesco QQQ ETF (QQQ)

In total, we hold 28 Canadian stocks, 18 US stocks, and 2 ETFs across the different accounts.

Yes, I realized that we hold A LOT of individual stocks, so we have been working to trim down that number. It’s definitely a work in progresss…

In the “play” investment bucket, we hold 2 US stocks – Amazon, Nvidia, and Tesla. The play investment portfolio makes up less than 5% of our total portfolio. Since Nvidia’s yield is so low, I don’t consider it as a dividend paying stock.

Through my employer, I also have Restricted Stock Units (RSUs). But since those don’t turn into real shares until they are vested, I don’t consider them as part of our investment portfolio. 

In case you’re wondering, this is how we invest our kids’ RESPs and their investment portfolio (a non-registered account under Mrs. T’s name)

Account Type	Platform	Product
Two Individual RESPs	Questrade	XEQT
Family RESP	TD Direct Investing	XGRO
Kids’ non-registered	WS Trade	XEQT

We should have invested in XEQT instead of XGRO in the family RESP but due to the $9.99 trade commission at TD Direct Investing, we decided to not change anything and stick with XGRO. 

I am not stating this is a “perfect” investment portfolio and everyone should follow our setup. These assets happen to be the best fit for us, at the time of the writing. As mentioned earlier, our investments have evolved over our investment journey. Things will continue to evolve and change. An essential characteristic to acknowledge with personal investing is not is it ‘personal’ but it is also dynamic.

Remember, there are many ways to invest, there’s no “one-size-fits-all” solution! Everyone needs to invest their money based on their risk tolerance, investment timeline, tax scenario, and estate plan. 

Why use three discount brokers? 

As Robb mentioned in his post, we use three investment platforms too. When I was a teenager, my parents set me up with TD and naturally I opened my self-directed investment accounts with TD when I was 18. This is where I have my TFSA, non-registered, and eventually kids’ RESP (to get the BC Training & Education Savings Grant).

We started using Questrade circa 2011 because Questrade was one of the cheapest discount brokers at the time. The $4.95 per trade was very attractive compared to the $9.99 TD Direct Investing commission fee. There was also no maintenance fee for Questrade so it was easy to start with a small amount of money with Questrade.  

For the most part, we like Questrade a lot. The free ETF trading is nice and the web interface is quite solid. 

Earlier this year we moved my TFSA and RRSP from TD Direct Investing and Qustrade to Wealthsimple Trade to get the $2,500 transfer bonus (use my refer code to get $25 sign up bonus). We wanted to use Wealthsimple Trade to take advantage of the no trading fees, fractional purchases, and fractional drips. The switching experience was extremely positive. We may move Mrs. T’s TFSA to Wealthsimple Trade when there’s an enticing transfer promotion.

Due to potential tax implications, we plan to leave the non-registered accounts with TD Direct Investing and Questrade. But again, plans could change. 

Wealthsimple Trade doesn’t offer self-directed RESP and spousal RRSP currently, so we are sticking with the current discount brokers. 

Summary – How we invest our own money

Because personal finance is personal, how we invest our money will probably be completely different than yours. And that’s totally OK. There’s no one-size-fits-all solution and we should respect people having different investment strategies.

Although it is quite easy to do DIY investing via the different self-directed accounts, there’s nothing wrong with using an advisor or a robo-advisor.

We shouldn’t argue which way is the best way to invest and overlook the most important point – invest your money so it can grow to fit your long-term needs. 

We need to remain open to other’s ideas and other investment options. If there are ways to simplify your portfolio, reduce costs, and give you more time to do things you love, I’m all for that.