Eagled the first hole at VGC this week, one of maybe two or three eagles in my entire life. Bombed a 300 yard drive into the left rough. A tree blocking a straight shot at the green but I’ve never hit it straight anyway, so I cooked a 4 iron slinger draw, landing short right in the fringe and rolled out to 1 foot with a tap in for Eagle.

Now, onto business!

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Personal Finance

I uploaded a video about the Rule of 72, the most important rule in finance.

Rather than rehash, just check out the video and see what you think.

Everyone has their own take / method to explain it.

For those that are just learning the power of “doubling” your money—it’s jaw dropping stuff.

For those well versed in the Rule of 72, perhaps this is just a good reminder of that power.

Never hurts to revisit the most basic rules in finance.

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Stock Markets

Sharing an email I received from a subscriber of the journal and student of the simply investing course.

Hello Eddie,

Just wanted to introduce myself and thank you for your wonderful ETF investing course!  My [lion] husband gifted it to me over a year ago and I finally got around to completing it a few months ago.  

After completing your course I moved $16K that was sitting in a high interest savings account and opened a TFSA through Questrade. Out of the 16K, I invested 6K into 80/20 % ETFs and bonds. Then set up a DRIP.

Since I’ve never used TFSAs I understand it’s retroactive to 2009 and I can fund more this year than 16K if I choose too?

I also ramped up the frequency of my mortgage payments (mortgage is about 400K, 14 years left) and started getting a handle on our monthly subscriptions (too many 😅 must cancel).

Your class made it really easy to understand and gave me the confidence to start with this! And looking at other ways to save. We have no debt (besides the mortgage) and we own our cars/phones etc. however have done very little in terms of investments. (Collectively 45K in RRSPs and around 30K in savings) I’m 44 and [Lion] is 35 so feeling like now or never! So thank you for your great information and I am really enjoying the Newsletter as well!

Random story followed by a question:

A couple of years ago when that whole crypto GameStop thing happened, I opened up a Wealthsimple account and bought $80 worth of crypto $40 Bitcoin $40 Ethereum. It tanked soon after and I completely forgot about it 😅 .

When ‘you know who’ got re-elected and crypto went bonkers again in the news,  I remembered about that and checked it. Today it’s worth $263.71. Seems like a pretty good return in two years?  Most of my friends seem to mock crypto but I have this test to prove some validity!  Do you think this is a good long term place to invest? Not a huge amount but some or based on my situation, better to stay safer with stocks?

Thanks again,

A Lioness.

—

My response:

Hey Lioness!

Thanks for the email and your story. You are well on your way!

To answer some of your questions...

1. You said you invested $16,000 into the TFSA, with $6,000 of that invested 80%/20% in stocks/bonds. 

• Based on your ages, this is a solid mix of assets.

• My question is, what did you do with the other $10,000? Is it still in cash? Do you need it for your emergency fund or other cash purposes? If so, buy HISA.TO (it's a high interest savings account ETF that pays 2.5% interest—better than cash). Otherwise, buy more stocks/bonds according to your asset mix.

• Great work setting up the DRIP—it's crucial. Try setting up automatic contributions from your paycheques next!

2. TFSA Contribution limit—congrats on contributing—it’s the most powerful investing account there is.

• Yes, based on your ages, both of you have likely accumulated the maximum contribution room—$102,000. 

• Since you just contributed $16,000, this means you still have $86,000 room. 

• And on January 1, 2026, you can put in another $7,000. 

• Definitely focus on max-funding TFSAs where possible. Unless you have an employer match RRSP? If so, consider taking advantage of that match program and then with any cash leftover, sock it away in the TFSA. 

• Go to mycra.com and sign up to confirm your contribution room. I wrote an email two weeks ago on how to do this: Issue #79

• Ditto for your husband. 

3. Mortgage payment payment frequency increase

• Excellent work, shifting a mortgage payment from monthly to bi-weekly saves thousands in interest costs—more money for your future and your mortgage will be gone years faster. You already know this.

4. Debt management and subscription management

• Great job here, carrying a lot of debt is a major burden—unless of course you are using 'productive debt' to invest in higher returning assets. But for many folks, the weight and stress of debt is killer. 

• Subscriptions too, are deadly. Often unused or underutilized, they stack up to many hundreds or even thousands a year that could otherwise be money to grow your net worth. 

5. Crypto

• You have participated in your first crypto cycle! Buy—disaster—bull run. Another disaster will come, so be careful. It’s par for the course 🤣.  

• I have many thoughts about Bitcoin and published a piece recently that may help: The Ultimate Bitcoin Argument

• To me it's a battle between fiat currency—which is constantly debased because of money printing—and Bitcoin. 

• For this reason, I only invest in Bitcoin because of its hard cap supply of 21 million. ALL other crypto has limitless supply or a centralized function. The key is hard cap, decentralized.

• Therefore I don't recommend gambling on other cryptos.

• I do recommend learning more about Bitcoin and once you get comfortable, a 5-10% weight of your portfolio in Bitcoin would be ok with me. 

Hopefully this helps, congratulations on completing the course and firing up your investing. And, thank you for reading and your support. 

Eddie

Real Estate

Gross Rent Multiplier. What the heck is that?

Simple tool for seeing if buying or renting makes more sense. Let’s compare a house for sale in my neck of the woods that is also up for rent at $8,500/month.

The calculation is simple:

Price ÷ Annual Rent = Gross Rent Multiplier (GRM)

In this case:

• List price: $4.5 million

• Annual rent: $102,000

$4,500,000 ÷ $102,000 = 44x.

This is insane! This means it would take 44 years to recoup the cost of the house with the rental income. You can also rework the formula and calculate a 2.2% yield. Pretty crummy.

For context, rental property in a balanced market is about 15-20x.

Back to our example, either the annual rent is grossly under market, or the property list price is outrageously high. I might even assume the broker listing the property for sale has no idea the owner is posting it for rent at $8,500/month, which raises a whole other list of questions…

Anyway, what this tells me: it’s way cheaper to rent this property than buy it. At 44x you’re paying a MASSIVE premium for ownership that’s difficult to justify, even after considering the size of the lot, the quiet neighborhood, etc.

Perhaps someone with boat loads of cash will come along and buy this thing. They may decide that long term control, possible long term appreciation and pride of ownership are key qualities they require.

Otherwise, there will need to be a price reduction in order to sell this thing. Possibly a big one.

The Gross Rent Multiplier is crude, definitely has it’s limitations, but simple enough to use and can help you spot strange things rather quickly.

1 Quote

“Give an inch, they’ll take a mile”.

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A Question

Guess what I shot?

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