FI - Strategy

Well everyone knows the basic formula for financial independence because it’s extremely simple. Earn more than you spend, invest the excess. Keep doing that until you can retire.

I have been taking a somewhat blended approach with my investment strategy. I started investing approximately 17 years ago as a University student. At that time I was very focused on value investing in dividend paying blue chips ie- (TD, MMM, JNJ, PFE, TRP etc.) However, over the years I’ve expanded my approach and now also allocate some of my portfolio to contrarian type investments. I’m currently 98% invested in equities but over the long term plan on reducing my weighting to 90% equities, 10% fixed income.

My goal in retirement is to receive at least 60% of my income through dividend payments with the other 40% coming from capital gains. I have also not ruled out purchasing a rental property to diversity my passive income sources. However, real estate has appreciated much more rapidly than rental rates, so to date I haven’t been able to find anything that makes sense economically.

Since I started tracking my performance in 2010 I’ve been generating and average annual return of 12.1%. However for all my planning calculations I’m using a more modest 7% average annual return.

In future posts I'll provide some more details on my current net worth and portfolio construction.


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