Comments on: Book Review: The Lazy Investor http://www.milliondollarjourney.com/book-review-the-lazy-investor.htm Building Wealth through Saving and Investing Fri, 19 Mar 2010 03:14:59 -0400 http://wordpress.org/?v=abc hourly 1 By: canabiz http://www.milliondollarjourney.com/book-review-the-lazy-investor.htm/comment-page-1#comment-73559 canabiz Sun, 15 Mar 2009 21:03:01 +0000 http://www.milliondollarjourney.com/book-review-the-lazy-investor.htm#comment-73559 Thanks for the advice FT, there are more discussions on Derek's discussion over at the Canadian Business and Financial Webring forums, should you or other readers are interested. Some of the stuff discussed is way over my head and I like to stick to the K.I.S.S principle but it makes for good reading. We will have to approach the SM with caution, we would like to clean up some outstanding debts and reduce our mortgage principle first before making the leap. It has certainly been an enjoyable learning curve so far. Thanks again and keep up the great job! Thanks for the advice FT, there are more discussions on Derek’s discussion over at the Canadian Business and Financial Webring forums, should you or other readers are interested. Some of the stuff discussed is way over my head and I like to stick to the K.I.S.S principle but it makes for good reading.

We will have to approach the SM with caution, we would like to clean up some outstanding debts and reduce our mortgage principle first before making the leap. It has certainly been an enjoyable learning curve so far. Thanks again and keep up the great job!

]]> By: Ray http://www.milliondollarjourney.com/book-review-the-lazy-investor.htm/comment-page-1#comment-73549 Ray Sun, 15 Mar 2009 19:17:59 +0000 http://www.milliondollarjourney.com/book-review-the-lazy-investor.htm#comment-73549 I think his no bond allocation has also caused him more looses than a more diversified portfolio would have. a 100% stock portfolio a very risky. I think his no bond allocation has also caused him more looses than a more diversified portfolio would have. a 100% stock portfolio a very risky.

]]> By: FrugalTrader http://www.milliondollarjourney.com/book-review-the-lazy-investor.htm/comment-page-1#comment-73532 FrugalTrader Sun, 15 Mar 2009 15:53:32 +0000 http://www.milliondollarjourney.com/book-review-the-lazy-investor.htm#comment-73532 Canabiz, yes I read that story as well and it's very interesting that a die hard buy and hold investor has sold all of his holdings based on market timing. However, I guess you can see that for someone who lives off their portfolio they have a lot riding on market/dividend performance. I guess his research on current market conditions has spooked him and couldn't' stomach the risk of holding any longer. Also note that the SM is a leveraged investment strategy. If you arent' comfortable with the risk of current market conditions, then perhaps you should re-evaluate your investment strategy going forward. Canabiz, yes I read that story as well and it’s very interesting that a die hard buy and hold investor has sold all of his holdings based on market timing.

However, I guess you can see that for someone who lives off their portfolio they have a lot riding on market/dividend performance. I guess his research on current market conditions has spooked him and couldn’t’ stomach the risk of holding any longer.

Also note that the SM is a leveraged investment strategy. If you arent’ comfortable with the risk of current market conditions, then perhaps you should re-evaluate your investment strategy going forward.

]]> By: canabiz http://www.milliondollarjourney.com/book-review-the-lazy-investor.htm/comment-page-1#comment-73526 canabiz Sun, 15 Mar 2009 14:14:51 +0000 http://www.milliondollarjourney.com/book-review-the-lazy-investor.htm#comment-73526 FT, Derek Foster has sold everything he owns in his brokerage account, as per this article from the Star http://www.thestar.com/business/article/600754 I would love to see you dissect this decision, from a man who is an average Joe like the rest of us but who has made it big and now apparently hit some rough patches, just like everyone else I might add. I believe this story will have some significant impact. We recently got our first HELOC and my wife was tempting to take some money out and buy dividends-paying stocks, as a form of simplified Smith Manoeuvre, but we are not so sure about that at this point. Derek's story certainly doesn't help matters. Looking forward to your (and others' thoughts) on this. Cheers! FT, Derek Foster has sold everything he owns in his brokerage account, as per this article from the Star

http://www.thestar.com/business/article/600754

I would love to see you dissect this decision, from a man who is an average Joe like the rest of us but who has made it big and now apparently hit some rough patches, just like everyone else I might add.

I believe this story will have some significant impact. We recently got our first HELOC and my wife was tempting to take some money out and buy dividends-paying stocks, as a form of simplified Smith Manoeuvre, but we are not so sure about that at this point. Derek’s story certainly doesn’t help matters.

Looking forward to your (and others’ thoughts) on this.

Cheers!

]]> By: Book Review: The Lazy Investor http://www.milliondollarjourney.com/book-review-the-lazy-investor.htm/comment-page-1#comment-69157 Book Review: The Lazy Investor Thu, 05 Feb 2009 13:09:06 +0000 http://www.milliondollarjourney.com/book-review-the-lazy-investor.htm#comment-69157 [...] Other reviews: Michael James on Money, Four Pillars, Canadian Dream and Million Dollar Journey. [...]

[...] Other reviews: Michael James on Money, Four Pillars, Canadian Dream and Million Dollar Journey. [...]

]]> By: Bill http://www.milliondollarjourney.com/book-review-the-lazy-investor.htm/comment-page-1#comment-63715 Bill Tue, 09 Dec 2008 20:23:49 +0000 http://www.milliondollarjourney.com/book-review-the-lazy-investor.htm#comment-63715 Works very well in the states, alot of companies pay high dividends. Works very well in the states, alot of companies pay high dividends.

]]> By: This and That http://www.milliondollarjourney.com/book-review-the-lazy-investor.htm/comment-page-1#comment-22295 This and That Fri, 11 Jan 2008 00:28:22 +0000 http://www.milliondollarjourney.com/book-review-the-lazy-investor.htm#comment-22295 [...] Million Dollar Journey reviews Derek Foster’s new book - The Lazy Investor. [...]

[...] Million Dollar Journey reviews Derek Foster’s new book – The Lazy Investor. [...]

]]> By: Telly http://www.milliondollarjourney.com/book-review-the-lazy-investor.htm/comment-page-1#comment-22264 Telly Thu, 10 Jan 2008 17:26:56 +0000 http://www.milliondollarjourney.com/book-review-the-lazy-investor.htm#comment-22264 TMW, the only issue is that dividends are actually taxed more preferably in Canada than the US, especially if your regular income is so low such that Canadian dividends are taxed at zero. This is what makes Foster's strategy unique. Mike, you've got me all figured out. ;) Now, if I could just get a little of that book money.... TMW, the only issue is that dividends are actually taxed more preferably in Canada than the US, especially if your regular income is so low such that Canadian dividends are taxed at zero. This is what makes Foster’s strategy unique.

Mike, you’ve got me all figured out. ;) Now, if I could just get a little of that book money….

]]> By: thickenmywallet http://www.milliondollarjourney.com/book-review-the-lazy-investor.htm/comment-page-1#comment-22217 thickenmywallet Wed, 09 Jan 2008 23:51:59 +0000 http://www.milliondollarjourney.com/book-review-the-lazy-investor.htm#comment-22217 As you mentioned Foster's strategy may work better if you are a US resident than Canadian in that most of the good dividend paying stocks in Canada are in the financial sector while in the U.S. you can spread your eggs out a little better in terms of industries and sectors. As you mentioned Foster’s strategy may work better if you are a US resident than Canadian in that most of the good dividend paying stocks in Canada are in the financial sector while in the U.S. you can spread your eggs out a little better in terms of industries and sectors.

]]> By: FourPillars http://www.milliondollarjourney.com/book-review-the-lazy-investor.htm/comment-page-1#comment-22201 FourPillars Wed, 09 Jan 2008 21:15:55 +0000 http://www.milliondollarjourney.com/book-review-the-lazy-investor.htm#comment-22201 FT - thanks for the link. Now I can just make a few minor changes and then post on my blog :) Seriously, if I do the post I'll make sure it's a different angle (and you'll get a link of course). Mike p.s. - I heard that Telly IS Derek Foster :) FT – thanks for the link. Now I can just make a few minor changes and then post on my blog :)

Seriously, if I do the post I’ll make sure it’s a different angle (and you’ll get a link of course).

Mike

p.s. – I heard that Telly IS Derek Foster :)

]]> By: Telly http://www.milliondollarjourney.com/book-review-the-lazy-investor.htm/comment-page-1#comment-22197 Telly Wed, 09 Jan 2008 20:08:09 +0000 http://www.milliondollarjourney.com/book-review-the-lazy-investor.htm#comment-22197 Actually, I don't have a problem with Derek. I think he's done a really great job for himself, has brought dividend investing (and the subsequent tax advantages) to many people's attention, and is pretty open & honest about his finances. As I mentioned, what he chose NOT to write about in his books was a smart move imo. Now, as far as how I got all that info, I've followed most (if not all) the posts on the Canadian Business forums dedicated to his books. He's been both praised and burned at the stake there but he's been very good about responding to virtually every post. I find that admirable. Also, and where I learned about his SBUX purchase, I subscribe to Canadian Money Saver, for which he is a contributor. Actually, I don’t have a problem with Derek. I think he’s done a really great job for himself, has brought dividend investing (and the subsequent tax advantages) to many people’s attention, and is pretty open & honest about his finances. As I mentioned, what he chose NOT to write about in his books was a smart move imo.

Now, as far as how I got all that info, I’ve followed most (if not all) the posts on the Canadian Business forums dedicated to his books. He’s been both praised and burned at the stake there but he’s been very good about responding to virtually every post. I find that admirable.

Also, and where I learned about his SBUX purchase, I subscribe to Canadian Money Saver, for which he is a contributor.

]]> By: FrugalTrader http://www.milliondollarjourney.com/book-review-the-lazy-investor.htm/comment-page-1#comment-22196 FrugalTrader Wed, 09 Jan 2008 19:57:45 +0000 http://www.milliondollarjourney.com/book-review-the-lazy-investor.htm#comment-22196 Telly, how do you get all the info on Derek's financial plans? You must be a really big fan. ;) Telly, how do you get all the info on Derek’s financial plans? You must be a really big fan. ;)

]]> By: Telly http://www.milliondollarjourney.com/book-review-the-lazy-investor.htm/comment-page-1#comment-22195 Telly Wed, 09 Jan 2008 19:53:54 +0000 http://www.milliondollarjourney.com/book-review-the-lazy-investor.htm#comment-22195 I wonder if Derek has changed his tune on RRSPs now that he is earning more than he was when he retired (his dividends have increased at a rate greater than inflation and his book sales have gone really well)? I know he's buying more US stocks these days, including non-dividend payers (SBUX recently) so it sounds like, while his strategy worked for him when he was earning very little, he has changed his approach lately. I think the lesson is, telling people about your unique strategy can be rewarding, just don't forget to change it when an opportunity presents itself. ;) I wonder if Derek has changed his tune on RRSPs now that he is earning more than he was when he retired (his dividends have increased at a rate greater than inflation and his book sales have gone really well)?

I know he’s buying more US stocks these days, including non-dividend payers (SBUX recently) so it sounds like, while his strategy worked for him when he was earning very little, he has changed his approach lately.

I think the lesson is, telling people about your unique strategy can be rewarding, just don’t forget to change it when an opportunity presents itself. ;)

]]> By: FrugalTrader http://www.milliondollarjourney.com/book-review-the-lazy-investor.htm/comment-page-1#comment-22188 FrugalTrader Wed, 09 Jan 2008 18:46:19 +0000 http://www.milliondollarjourney.com/book-review-the-lazy-investor.htm#comment-22188 FP, i've written a bit on the subject of dividends and how much you can make without paying tax on them. You can check it out here: http://www.milliondollarjourney.com/how-to-optimize-dividend-income-tax.htm FP, i’ve written a bit on the subject of dividends and how much you can make without paying tax on them. You can check it out here:
http://www.milliondollarjourney.com/how-to-optimize-dividend-income-tax.htm

]]> By: FourPillars http://www.milliondollarjourney.com/book-review-the-lazy-investor.htm/comment-page-1#comment-22186 FourPillars Wed, 09 Jan 2008 18:30:39 +0000 http://www.milliondollarjourney.com/book-review-the-lazy-investor.htm#comment-22186 Telly - he doesn't mention the leveraging in the second book either. His advice for not using RRSPs is perfectly valid if you don't make much money because if your regular salary is about $35k or less then any dividend income won't be taxed (in Ont at least) - I'm planning a post on this soon. As Telly said - most of the ideas in the first book are pretty good regarding dividend investing and savings but like pretty much all PF books you have to be able to figure out which parts are useful to you and which parts to ignore. Mike Telly – he doesn’t mention the leveraging in the second book either.

His advice for not using RRSPs is perfectly valid if you don’t make much money because if your regular salary is about $35k or less then any dividend income won’t be taxed (in Ont at least) – I’m planning a post on this soon.

As Telly said – most of the ideas in the first book are pretty good regarding dividend investing and savings but like pretty much all PF books you have to be able to figure out which parts are useful to you and which parts to ignore.

Mike

]]> By: Telly http://www.milliondollarjourney.com/book-review-the-lazy-investor.htm/comment-page-1#comment-22161 Telly Wed, 09 Jan 2008 14:16:31 +0000 http://www.milliondollarjourney.com/book-review-the-lazy-investor.htm#comment-22161 In so many ways, Derek is an exceptional case. He offers some great advice but readers need to realize that, as Mike mentioned, 99% of people earning what Derek earned, and saving what Derek saved, will NOT come close to being able to retire at 34. That being said, Derek's books have been an eye opener and have probably created many a dividend investor over the last few years. He has created an awareness of the tax advantage of dividend income that many people wouldn't have considered. However, one thing he neglects to mention in either of his books (that I am aware of - I've not read the 2nd) is his big gamble on PhilipMorris / Altria (oddly enough, a US stock and his gains were mostly capital and not dividend) using a substantial amount of margin. I can't say I blame him for keeping that info out of the book, he'd probably catch even more flack as it was a gamble and not sound investment advice. Derek's books should be read for his advice on tax efficient investing and not as a 'get rich quick' manual. But the fact that he ignores RRSPs makes his tax efficient plan lacking imo. In so many ways, Derek is an exceptional case. He offers some great advice but readers need to realize that, as Mike mentioned, 99% of people earning what Derek earned, and saving what Derek saved, will NOT come close to being able to retire at 34.

That being said, Derek’s books have been an eye opener and have probably created many a dividend investor over the last few years. He has created an awareness of the tax advantage of dividend income that many people wouldn’t have considered. However, one thing he neglects to mention in either of his books (that I am aware of – I’ve not read the 2nd) is his big gamble on PhilipMorris / Altria (oddly enough, a US stock and his gains were mostly capital and not dividend) using a substantial amount of margin. I can’t say I blame him for keeping that info out of the book, he’d probably catch even more flack as it was a gamble and not sound investment advice.

Derek’s books should be read for his advice on tax efficient investing and not as a ‘get rich quick’ manual. But the fact that he ignores RRSPs makes his tax efficient plan lacking imo.

]]> By: FrugalTrader http://www.milliondollarjourney.com/book-review-the-lazy-investor.htm/comment-page-1#comment-22155 FrugalTrader Wed, 09 Jan 2008 13:44:37 +0000 http://www.milliondollarjourney.com/book-review-the-lazy-investor.htm#comment-22155 Thanks for the info Telly. Those e-funds are much cheaper than other bank sponsored index funds. Others, like CIBC, charge around 1% MER for smaller balances, and a discounted MER for bigger balances. Thanks for the info Telly. Those e-funds are much cheaper than other bank sponsored index funds. Others, like CIBC, charge around 1% MER for smaller balances, and a discounted MER for bigger balances.

]]> By: Telly http://www.milliondollarjourney.com/book-review-the-lazy-investor.htm/comment-page-1#comment-22153 Telly Wed, 09 Jan 2008 13:24:44 +0000 http://www.milliondollarjourney.com/book-review-the-lazy-investor.htm#comment-22153 FT, My husband and I use TD e-funds in both of our RRSP accounts. There are no fees charged for purchasing the funds and MER's range from 0.31 to 0.50%. An initial investment of $100 is required and PPPs can be as low as $25. We've considered moving to ETFs with lower MERs but based on my overzealous excitment for trading in my 401k account :( , we've decided it's best to keep with the e-funds and continue making bi-weekly contributions to the TD account. FT, My husband and I use TD e-funds in both of our RRSP accounts. There are no fees charged for purchasing the funds and MER’s range from 0.31 to 0.50%. An initial investment of $100 is required and PPPs can be as low as $25.

We’ve considered moving to ETFs with lower MERs but based on my overzealous excitment for trading in my 401k account :( , we’ve decided it’s best to keep with the e-funds and continue making bi-weekly contributions to the TD account.

]]> By: FinancialJungle.com http://www.milliondollarjourney.com/book-review-the-lazy-investor.htm/comment-page-1#comment-22117 FinancialJungle.com Wed, 09 Jan 2008 02:52:44 +0000 http://www.milliondollarjourney.com/book-review-the-lazy-investor.htm#comment-22117 Despite earning an above average salary, I won't retire by 34 even though I'm a dividend-investing nerd. So, yes, I think his books are misleading from that perspective. Having said that, 80% of his book is worth a reading, because of all those noble principles such as saving within your means, eliminating non-life-enhancing expenses, etc. Derek also preaches the buy-and-hold mentality as you can do a lot worse by over trading. I think Derek's strategy is more diversified that most people think and definitely more recession proof. If you go with an index ETF, ~85% of your annual gains come in the form of capital gains. So, you're reward by the market, which, as we all know, is notoriously moody and speculative in the short run. However, with dividend investing, ~40% of the cashflow comes from the businesses' operations. As a result, your annual cashflow is far more stable and less sensitive to market volatility. I won't declare myself being Derek Foster's number one fan, but without him, I wouldn't be the dividend investor I am today. Despite earning an above average salary, I won’t retire by 34 even though I’m a dividend-investing nerd. So, yes, I think his books are misleading from that perspective. Having said that, 80% of his book is worth a reading, because of all those noble principles such as saving within your means, eliminating non-life-enhancing expenses, etc. Derek also preaches the buy-and-hold mentality as you can do a lot worse by over trading.

I think Derek’s strategy is more diversified that most people think and definitely more recession proof. If you go with an index ETF, ~85% of your annual gains come in the form of capital gains. So, you’re reward by the market, which, as we all know, is notoriously moody and speculative in the short run. However, with dividend investing, ~40% of the cashflow comes from the businesses’ operations. As a result, your annual cashflow is far more stable and less sensitive to market volatility.

I won’t declare myself being Derek Foster’s number one fan, but without him, I wouldn’t be the dividend investor I am today.

]]> By: White Eagle http://www.milliondollarjourney.com/book-review-the-lazy-investor.htm/comment-page-1#comment-22086 White Eagle Tue, 08 Jan 2008 23:24:36 +0000 http://www.milliondollarjourney.com/book-review-the-lazy-investor.htm#comment-22086 The Ottawa Public Library will be hosting the Lazy Investor at four branches this month. It would be a great opportunity for those of you in the area with questions to get them answered by the author himself. The Ottawa Public Library will be hosting the Lazy Investor at four branches this month. It would be a great opportunity for those of you in the area with questions to get them answered by the author himself.

]]>