Another turn of November 11th Remembrance Day where we express gratitude for fallen soldiers and all that have sacrificed for our freedom 🌺

On the point of giving thanks, here’s a list of readers that have commented, contributed and added so much value to this newsletter:

Aden, Aja, Ali, Andrew, Ashley, Ben, Benjamin, Brandon, Brian, Camilla, Candace, Carlos, Cesar, Chad, Chris, Christian, Christopher, Clara, Cletus, Colin, Connor, Craig, Crystal, Curtis, Daphne, David, Dominic, Ed, Esther, Evan, Garreth, Geoff, Harry, Harley, Hudson, Huf, Ian, Ilan, Jack, Jamie, Jordan, Kevin, Kimberley, Laura, Liam, Mac, Maria, Marlisa, Mark, Matthew, Megan, MJ, Murray, Nick E, Niko, Natalia, Praveen, Randy, Ran, Rob, Roger, Roy, Rushab, Sam, Sean, Spencer, Stephen, Tim, Victor, Waan.

Thank you, and welcome to all new readers this week. You’ve joined a great crew, +1,000 boys, girls, moms, dads, beginner investors to capital market pros and real estate magnates. Right, left, centre, you name it, we got it.

Personal Finance

Question: I am fully contributed $102,000 to my TFSA since inception after 17 years, contributing the max each year. If I now have $307k in that TFSA, how would that compare on average? Am I above or below water?

Couple ways to answer this:

1. You are doing great! Based on those numbers, I calculate you have averaged 12% compounded annually since 2009. That is above the typical long term market average of 10%. Job well done, seriously.

2. You are sucking wind…stock market has annualized at 15% since 2009 including dividends reinvested. If you just bought the ETF every Jan 1st and did nothing else, you would have $403,000 today — about $100,000 more.

Now, because you’ve underperformed the market, that means you’ve either a) picked stocks, or b) bought the market but attempted to time it, or some combination of both.

Both of those are common ways to underperform and have led to 3% annualized underperformance, which adds up. In this case $100,000, tax free.

Now that I’ve briefly rained on your parade, I will say this:

I COMMEND you for the diligent max funding of your TFSA AND managing to earning a 12% annualized return along the way.

I know only handfuls of people that have +$300,000 TFSAs. Most people either neglected to contribute, didn’t even know they could, or have farted around and lost the money they did contribute.

In fact, one report suggests the average TFSA balance in Canada is $41,510.

So to conclude, even though you shoulda woulda coulda been $100,000 richer today 😇, you are doing a stand up job compounding your wealth.

Congratulations, keep up the good work, max fund always, and consider timing the market less and/or less stock picking.

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Stock Markets

I’m more convinced than ever that one must own the index.

Some may be adept at stock picking but odds are you’re not one of them.

After listening to a interesting if very terrifying interview on AI safety, one must-must-must expose themselves in such a way that they’ll participate in the capitalist process that will unfold as AI rapidly advances through our world.

It is alarming to think that AI might be so intelligent in our lifetimes that us human beings will be the proverbial bull-dog and AI superintelligence the apex.

When you leave the house, your little shitzu can’t even comprehend what it is you’re doing once the door closes. All they know is you’ve left. Maybe to get some treats, that’s about it.

To think that we can’t even imagine how a future looks because the pace of development and invention goes from exponential to vertical, is surreal (AI building AI).

Unemployment could be as high as 99% one day and maybe there will be a universal basic income and the majority are simply happy with all the things they need but people that bolster their personal economic viability today will be far better off and in a world of relativity that’s just the simple truth (sue me for the run on sentence).

And whether you think it’s overblown nonsense, I believe is it is paramount to stack as much of your wealth into things that participate and go up with invention, or fall further behind.

A market index fund does exactly that and in the Darwinian way that excludes losers and awards points to the winners, all you have to do is buy.

I think Darwin himself would suggest the same.

And Bitcoin too, I might add.

Real Estate

For those who don’t know, my principal line of work is Value Add Real Estate.

Every year I look at dozens, maybe even hundreds, of potential commercial real estate opportunities.

It is far too time consuming to download every rent roll and model out every opportunity in detail, only to find out the numbers don’t work.

So a few years ago I built this simple one page calculator that allows me to input broad data points and see if something is worth spending more time on.

If you are someone you know might wants to use the calculator, send them this email and click here to download.

If you have any questions, please let me know.

1 Quote

“They shall grow not old, as we that are left grow old:

Age shall not weary them, nor the years condemn.

At the going down of the sun and in the morning

We will remember them.”

—Laurence Binyon, 1914

A Question