Just over 1 year ago I did a deep dive into my portfolio. I looked at things like:
You can look back at last years deep dive HERE
The key takeaways from last year were:
I first started tracking my investments closely in January 2015. At the time, my total portfolio was valued at $160,314.49. It has now been 57 months since I started tracking my journey….let’s see where are now:
My early retirement portfolio now sits at $347,088.02. This means in 57 months (4.75 years) my portfolio has grown by $186,773.53 or $39,320.74 per year. To break it down even further, this means my portfolio has been growing on average by $3,276.72 per month. Obviously these numbers include new capital going into the portfolio as well. I’ll get into actual total returns later.
A few observations on portfolio’s growth:
To reiterate, the last time I did a deep dive into my portfolio there were 3 key areas I wanted to work on. They were:
When I wrote this last time my personal yield was 1.7%. This means for every $100 invested I was receiving $1.70 in dividends or distributions per year. Typically a well balanced portfolio would be around 2-4% depending on multiple factors (risk tolerance, years from retirement, etc). The main reason my yield was so low was because I had about half of my portfolio invested in 2 funds that didn’t pay any distributions. I have since moved one of the funds over into my direct investing RRSP account, and into two funds that do pay distributions. The funds I selected were Ishares XAW and RBC Canadian Equity Income. Although the year is not over yet, I expect my yield to be somewhere around 2.6%. This would still be considered on the lower side, but I am happy with the balance of lower yield, but high overall gains. I also still have about 20% of my total portfolio in a fund that pays zero distributions.
Another reason my yield has gone up slightly this year is due to multiple stocks I own increasing their dividends. Some notable increases over the last 12 months were:
So simply by swapping a couple of funds and letting dividend growth companies do their thing (consistently increase their dividends) I was able to increase my yield by almost a full percent over the last year. With continued dividend increases, I expect by next year my yield will be over 3%. Here is a quick chart of total passive income by month and year. For the most part, things are trending the right way.
Yearly dividend income since I started tracking:
2019: $9133* (on pace for)
Last year when I broke down my portfolio I noticed I had WAY too much invested in Canada. My Canadian exposure was almost 70% of my total portfolio! The reasons for this were simple:
I decided I needed to add more USA & global exposure. To do this I picked up some more of the Ishares XAW fund (which owns over 8000 stocks from countries all around the world EXCEPT Canada), and I increased contributions into my spousal RRSP which was invested in a 100% US Equity index fund.
Fast forward to today, and my Canadian exposure, although still too high has decreased from 69% to 59%. The goal is to get this down to closer to 35%. One main reason my Canadian exposure isn’t dropping as fast as I’d like it to is because each month I am dripping over $300 worth of the Canadian Equity Income fund. Obviously this is a nice problem to have, but I still need to do something to get my Canadian exposure reduced.
This was by far the one area I needed to work the most on, and admittedly the one area I had previously paid the last attention to. I had let my RRSP account for 82% of my total holdings, meaning, if I let this continue I’d be due for a big tax bill when the time comes to withdraw those funds. It doesn’t make sense to have 1 large RRSP, especially when there are (legal) ways to split it into 2 medium sized RRSPs (Spousal account). It also doesn’t make sense to have a large RRSP but not max out my TFSA. After my last deep dive, I started putting less money into my RRSP and increased the amount into my spousal RRSP. I have also since reduced both again, and started putting more into my TFSA.
Here is how the accounts looked last year vs today:
Ugh, the most important thing I wanted to focus on, and I barely made a dent. I’ve officially stopped contributing to my own RRSP, but because the account size is such a high percentage, the compounding/dripping is making it hard for my other accounts to catch up. The one bright spot here is that in just over a year, I’ve managed to grow my wife’s spousal RRSP to 7% of our total portfolio. Obviously the goal would be at retirement, these two accounts are about equal, so that we can withdraw a smaller amount from each, to reduce taxes. My TFSA has also gone up by 2%, and I expect by next year it should continue to increase, since all money I WAS putting into my RRSP in the past, is now being split between the TFSA’s and the spousal RRSP.
Well, it’s a a bit of mixed review. Some things are looking pretty good – while others clearly need a lot of work. The most important thing is that I keep looking at this, and writing about it, because it puts pressure on me to continue to improve. Hopefully at this time next year I’ll have a few more wins in the “good” and can eliminate the “bad” stuff.