Middle Class Millionaire

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Questrade - Comparison Follow Up
2007-06-08 13:38:00
Last month I posted a review of Questrade?s WebTrader platform based on my experiences using it compared to the trading account of the big banks. In response to this review I received a number of comments on this post including some from Emil Vojkollari who is the Client Acquisitions Supervisor for Questrade. In the comments section I invited him to write up a comparison of Questrade versus some of his competitors... and that's exactly what he did!Emil has sent me a .PDF file however, blogger does not have the ability to host them so I?ve uploaded the file to a 3rd party location. Please follow the below link and then click on the large organge "Download" button to view the file sent from Emil at Questrade.http://www.savefile.com/files/7 68369
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Nine Most Likely DOW Stocks to Raise their Dividend
2007-06-07 13:31:00
Well here?s a post for all you insatiable yield seekers out there. Over at http://www.stockpickr.com/ they?ve compiled a list of the nine DOW stocks that are most likely to increase their dividends. Here are the stocks along with their current yield:1. MO - 4.8%2. PFE - 4.3%3. C - 3.9%4. GE - 3.1%5. KO - 2.6%6. JNJ - 2.6%7. MMM - 2.2%8. PG - 2.2%9. WMT - 1.9%If you want to view the full article please follow this link.
More About: Stocks , Like , Dividend

Toronto Star Article
2007-06-06 16:58:00
I was doing my daily read over at Canadian Capitalist and just discovered that my blog was recently mentioned in a personal finance article for the Toronto Star . Other blogs mentioned were The Money Diva, Canadian Capitalist and Financial Jungle.I want to take today?s post to welcome any new readers that have discovered this site through Ellen Rosemans column and to also thank my existing readers who have read, commented and supported this blog over the months. I'll keep writing if you keep reading!Cheers,MCM
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Geographic Allocation
2007-06-05 13:25:00
Yesterday I talked about allocation amongst the asset classes and today I?m going to talk about the second allocation of concern, allocation amongst countries. Before I being I just wanted to reiterate that there are many different views and beliefs on this subject. What I?m going to attempt to do is simply state what I believe is the best country allocation for my unique situation. Yours may be the same but will probably be different based on your unique investment objectives, time frame and risk tolerance.Contrary to popular opinion I believe that the majority of my retirement portfolio should be in CDN dollars. I am aware of the argument that Canada is only 2.5% of the worlds markets so we should be diversifying as much as possible to take advantage of opportunities globally. Although I agree with that in principle I believe that the majority of my holdings should be in the currency of the country that I will ultimately be retiring in. Once my dividend cash flow is established I ...
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Asset Allocation I
2007-06-04 13:30:00
There are many different views and beliefs on the ideal asset allocation. What I?m going to attempt to do is simply state what I believe is the best asset allocation for my unique situation. Your personal allocation may be the same however, it will probably be different based on your own unique investment objectives, time frame and risk tolerance.I?m going to deal with 2 elements of asset allocation: 1. Allo cation amongst the asset classes2. Allocation amongst countries (currencies)I?ll begin with asset allocation amongst the classes. The most common rule of thumb is that ideally you should subtract your age from 100 and that is the maximum percent of your portfolio that should be in equities, with the remainder of your portfolio being in some form of fixed income (basically your age is the percent of your portfolio that should be in fixed income). So according to this rule I should be 27% invested in fixed income. For some this may be true, however in my personal situation I would...
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Retirement Nest Egg - June 1, 2007
2007-06-01 14:04:00
Retirement Nest Egg at the close of May 31, 2007.$112,229.80-Up $1902.3 from last month-Up $11,871.44 in 2007TRP - 4.20%ABX - 3.60%CSH.UN - 3.59%GWO - 4.70%PFE - 4.19%POW - 4.26%BA.UN - 0.39%L - 4.01%UNS - 2.79%GZ - 2.95%TD - 13.68%EIT.UN - 3.02%JNJ - 5.73%MMM - 4.03%ZED - 0.78%GO.A - 3.09%O'Shaughnessy?s Global Fund - 3.97%American Growth Fund - 1.02%Canadian Value Fund - 3.80%Small Cap Growth Fund - 4.24%Chou Associates Fund - 10.45%Health Science Fund - 0.88%Bond (9% yield) - 5.35%Money Market Fund - 5.29%There were no major changes to my portfolio this month. The 1.7% monthly gain was a result of dividends, distributions, and share appreciation as no new money was added to my portfolio this month.
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Trillion Dollar Charge - Inflation= High Postal Fees?
2007-05-31 15:57:00
I just watched this and thought it was pretty funny and worth sharing. ?A Tennessee woman mistakenly received a four-trillion-dollar charge on her bank card from the U.S. Postal Service.? I can understand that bank errors do happen...but...would it not be logical to think that there would be some sort of safeguard or verification for transactions worth over...I don?t know 1 trillion dollars!!! To watch the entire story click here.
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High Yield Bond Risk
2007-05-30 13:49:00
Although I don?t plan on making fixed income part of my retirement plan I thought that I?d highlight some interesting facts from an article I read recently by Neil Reynolds on www.globeinvestor.comIn his article Mr. Reynolds makes the case for investing in a basket of high-yield non-investment grade bonds instead of investing in a single triple A rated bond. He states in his article ?it is a fact that most high-risk borrowers make their mortgage payments. Therefore you can achieve - depending on the bundle of mortgages you buy - a risk not much greater than a triple-A security. A portfolio of non-investment-grade bonds offers risk-adjusted returns greater than that of an investment-grade portfolio.?Just something to think about before you buy your next AAA rated 5% government bond.
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Hybrid Vehicle Rebates
2007-05-29 13:28:00
For those of you looking to buy a new environmentally friendly vehicle (I personally would never buy new)...but for those of you who love that new car smell (which they have found is a carcinogen) here is a summary list of environmentally friendly hybrid vehicles and the amount of money you?ll be eligible to receive as a rebate from the federal government.Toyota Prius hybrid 4dr hatchback $2,000Honda Civic hybrid 4dr sedan $2,000Toyota Camry hybrid 4dr sedan $1,500Nissan Altima hybrid 4dr FWD sedan $1,500Toyota Yaris 2dr hatchback CE $1,000Toyota Yaris 2dr hatchback RS $1,000Toyota Yaris 4dr hatchback LE $1,000Toyota Yaris 4dr hatchback RS $1,000Toyota Yaris 4dr sedan $1,000Toyota Corolla 4dr sedan CE $1,000Toyota Corolla 4dr sedan sport $1,000Ford Escape hybrid 4dr FWD $2,000Ford Escape hybrid 4dr 4x4 $2,000Toyota Lexus RX 400h hybrid 4dr AWD $1,500Toyota Highlander hybrid 4dr AWD base $1,000Toyota Highlander hybrid 4dr AWD 7-passenger limited $1,000Chrysler Jeep Compass 4dr FWD sp...
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Canadian vs. US Dollar
2007-05-28 13:29:00
The recent and rapid rise of the Canadian dollar versus the US dollar has left many investors (myself included)watching the share price of their US holding appreciate while the value of those same holdings are depreciating. This has left many investors wondering what?s next for the Canadian dollar...are we at an all time high? will it continue to rise? Are we going to par? Etc... Obviously, I don?t know the future and am not employed or trained as an economist but I do have some general views of the Canada vs. US dollar situation and a prediction of where the Canadian currency is headed (please take my opinion as one of many various opinions and certainly do not base your own financial decisions on my opinion)Basically, I don?t see the CDN dollar staying at these levels for an extended period of time. I think that any significant increase above our current level will be unsustainable for the Canadian economy and here are my reasons why:?About 80% of Canada?s trade is with the US.?We...
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JNJ (again)
2007-05-25 15:34:00
With the CDN pushing against 30 year highs I decided to increase my position in JNJ. I?ve posted these reasons before but here they are again:-44 years of consistent dividend growth.-Dividends issued to shareowners every quarter since 1944. -Dividend raised each year for 44 consecutive years. -Sales have increased each year for 73 consecutive years.-Double digit Earnings increases for 21 consecutive years.-Current yield of 2.50%-44% of sales outside of North America-ROE levels of above 21% for the past 10 years-Current P/E ? 16.18-Projected 2007 P/E ? 15.3-Projected 2008 P/E ? 13.44-4 Star rating from S&P - $74 one year target-Argus rates it a buy with a $76 one year targetI like their diversified holdings within the healthcare sector particularly their consumer products.(Disclaimer: I?m not your boss or your spouse so do you own research and make your opinions on when to buy or sell. Nothing I say should be bastardized or construed in any way to be advice)

Stock Splits
2007-05-24 15:05:00
I?ve got a great deal for you?..you give me a one 100 dollar bill and I?ll give you ten 10 dollar bills. Sound like a good deal? Interested? Of course your not interested...it?s not a good deal. Well this is exactly what happens when a stock splits. Essentially, you?re left with the exact same amount of pie?it?s just cut into more pieces.So if stock splits don?t effect the overall valuation of a company why do they bother to split their stock?? Make shares seem more affordable to small investors (although the intrinsic value of the company remains the same)? Could increase the liquidity of the stock as there are more shares available on the market (thus making it easier to trade) ? Could split as a signal to the market that the company's share price has been increasing (the resulting attention could increase demand for the name)I know many of you that read this blog completely understand what happens when a stock splits, but I just thought that I should go over it for those of you ...
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Garage Sale Follow Up & Lessons Learned
2007-05-23 15:15:00
Well I held my garage sale this weekend from 8am to 2pm and after advertising and beer expense I made a total of ...80 bucks. Certainly not a fortune but a lot better than nothing.Other than getting rid of some extra junk I actually learned a few lessons from my first garage sale experience.1. Your garbage is truly another man?s treasure.2. Active selling works.3. People will usually pay more than you think something?s worth (I ended up taking my price tags off half way through)4. Tax free money sure is sweet.
More About: Garage , Sale , Learn , Less , Sons

Cash Flow
2007-05-22 15:13:00
I?ve been asked by a few readers to provide a breakdown of how much cash my portfolio generates annually. So I?ve done some rough calculations and here is the breakdown:CDN Dividends: $1210CDN Income Trust: $725.73CDN Interest Income: $685US Dividends: $370 (roughly $405 CDN)For a grand total of about $3025. This is about 10% of the annual passive income that I?d like to generate before retiring. Additionally, over time the amount of interest income will decrease and be replaced by dividend income.
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GO.A ? Galleon Energy
2007-05-18 17:14:00
I purchased Galleon Energy (GO.A - TSX) yesterday and here are the reasons why:-It is primarily a play on natural gas and as a result has dropped dramatically along with the price of gas.-Have a very large land base 8 million acres.-Assuming 7.32 Alberta spot prices-Have a history of exploration success.-Have the potential for good production growth-They had some production delays in the past however (according my favorite energy analyst Joseph Schachter) they are expecting increased production by the end of the year.-Current P/E 63.2-Projected 2007 P/E 26.19-Projected 2008 P/E 11-Located in politically stable environment(Disclaimer: I?m not your boss or your spouse so do you own research and make your opinions on when to buy or sell. Nothing I say should be bastardized or construed in any way to be advice.)
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Don?t Retire Early? ? My View on the Subject
2007-05-17 15:01:00
Before I begin I have to admit I?m envious of anyone who ?loves? their job so much they?d do for free. Now don?t get me wrong I do like my job, but I don?t love it. However, even if I did love it I still wouldn?t want to do it for 40hrs a week, every week for the next 30 years. Actually, I don?t think there is a single thing that I?d ?love? to do every day for the next 30 years. I love doing lot?s of things, fishing, reading, investing, watching movies etc... but like working I wouldn?t want to ?have? to do them for 40 hours a week for the next 30 years.Earl y retirement is a risk to your future earnings - what if you retire at 45 then decide 5 years into your retirement hiatus that you want to work? Will you be happy with that Wal-Mart greeter job? ;) You greatly risk your future earnings potential.I disagree that the only jobs available to young early retirees out of the work force for 5 years is Wal-Mart greeter type jobs. Using the same logic the only jobs available to profession...
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Don?t Retire Early?
2007-05-16 15:32:00
I was recently reading a post on Savings Journey?s website entitled ?Don?t Retire Earl y ?. I was going to leave a comment on his blog but instead I?m going to dedicate today?s and tomorrows entire posts to respond to the questions posed by Savings Journey in his post. Before I do I just wanted to let you know that I have contacted Savings Journey and he welcomes my responses and has given me permission to post his original entry.ORIGINAL POST BY SAVINGS JOURNEY?A lot of people aspire to retire early - age 40, 45, 50, whatever it may be. In the blogosphere, the phenomenon is pervasive - the dream of so many people! Everyone has their own justifications for their obsession with wanting to retire early - "write a book", "do things that I want to do that I can't now", yada yada.Personally, I find that my work is enthralling and rewarding. I am very passionate about what I do and I keep very abreast in my industry. I participate in conferences, and I basically look forward to the work th...
More About: Tire

Pay Down the Mortgage or Invest?
2007-05-15 15:14:00
What should you do with your extra cash? Pay down the mortgage or invest? This is a common dilemma that many people have and I think the right answer depends on the individual and their unique situation, lifestyle, investing strategy etc... So I?m not going to say one is better than the other?instead I?ve gone over my own situation and here is what works for me.Personally, I pay the minimum amount on my mortgage and take all of my extra money and invest it in the market. I?ve chosen to do this because I currently have a low 5 year fixed interest rate (5%) and believe that over time I?ll be able to do better in the market. Part of my strategy is to pay the same in mortgage, maintenance and taxes as I would if I chose to rent. That has been my strategy since I bought my house and as such pay a few hundred dollars less a month than a friend who rents a similar sized house in a similar neighborhood. As rents go up in my city I intend to increase the amount that I?m contributing to my ...
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Useless Junk = Garage Sale
2007-05-14 13:55:00
Spring has sprung across most of country, the birds are chirping, the flowers are opening, the trees are starting to bud, and the piles and piles of useless crap stored in my basement is really getting on my nerves.Being frugal by nature my first instinct when offered anything free has always been ?sure I?ll take it, I know I?ll be able to find a use for it sometime?. Well...from years of experience (and encouraging from my wife) I?ve come to the realization that actually NO I probably won?t be finding a use for most of the antiquated junk in my basement (you never know when you?ll need 2 extra toasters and 6 extra soap holders...).Over the weekend I?ve come to the conclusion that even if an opportunity did arise that required one of the items I?ve accumulated over the years I wouldn?t be able to find it in a timely manner amongst all the other boxed ?treasures?. So... as an ex-pack rat trying to reclaim some shelf space in the basement I basically have 3 options:1.Take few trips to...
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Dividend Growing Stocks ? III
2007-05-11 12:31:00
JNJ"Johnson & Johnson, through its operating companies, is the world's most comprehensive and broadly based manufacturer of health care products, as well as a provider of related services, for the consumer, pharmaceutical, and medical devices and diagnostics markets. The more than 250 Johnson & Johnson operating companies employ approximately 121,000 men and women in 57 countries and sell products throughout the world."- Dividends issued to shareowners every quarter since 1944. - Dividend raised each year for 44 consecutive years. - Sales have increased each year for 73 consecutive years.- Double digit Earnings increases for 21 consecutive years.- Current yield of 2.65%- Estimated 2007 P/E of 15.4- 44% of sales outside of North AmericaFor more information on the company please follow the link to their website.
More About: Stocks , Wing , Growing , Rowing , Grow

Compensation of Financial Advisors ? A Middle Class Rant V
2007-05-07 15:35:00
Here is my submissions for the Canadian Tour of Personal Finance Blogs:There are many posts out there on the high commissions/fees charged by both financial advisors and mutual fund companies. Almost all of these posts slam the high fees charged with no mention of the benefits that financial advisors do offer for some. Personally, I have mixed feelings on the compensation of financial advisors. For knowledgeable amateur investors like you and me their fees do seem ridiculous. Many amateur investors (myself included) shudder at the thought of paying 2% annually to a financial advisor or mutual fund manager. However, I would argue that isn?t the case for the majority of society. We shudder at the 2% fees in the same way a plumber would shudder at paying $80 an hour for someone to replace his faucets. There are many, many people out there who have absolutely no interest in finance or investing and as a result don?t find 2% to be an unreasonable fee to pay for advice on a subject that ...
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Canadian Tour of Personal Finance Blogs
2007-05-04 13:15:00
I?ll be participating in the second Canadian Tour of Personal Finance Blogs on Monday May 7th. This time around the event has been generously hosted by The Money Diva. If you have a moment you might want to check out her blog as well as the other participants.For this tour I?ll be ranting about the compensation of Financial Advisors. However, it?s not your usual "fees are too high" rant...it?s a rant with a twist...tune in Monday to find out.Have a great weekend.
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Retirement Nest Egg May 1 - 2007
2007-05-03 13:52:00
Retirement Nest Egg at the close of May 1, 2007.$110,327.50-Up $1617.53 from last month-Up $9969.14 in 2007TRP - 4.32%ABX - 3.65%CSH.UN - 3.56%GWO - 4.77%PFE - 4.28%POW - 4.12%BA.UN - 0.40%L ? 4.12%UNS - 2.77%GZ - 2.89%TD ? 12.65%EIT.UN - 2.99%JNJ - 3.58%MMM ? 4.04%O'Shaughnessy?s Global Fund - 4.03%American Growth Fund - 1.06%CDN Value Fund - 3.85%Small Cap Growth Fund ? 4.09%Chou Associates Fund - 10.84%Health Science Fund - 0.91%Bond (9% yield) - 5.45%Money Market Fund - 11.64%Basically there were no major changes in my portfolio composition this month. The 1.5% increase in my networth was due to dividends and share appreciation as no contributions were made this month.
More About: Retirement , Retire , Tire

Reader Question
2007-05-02 13:51:00
I was recently asked a few questions by a reader and thought I?d post my answers on the main page.What do you plan to do with the rest of your life?Well I think that in order to properly answer your question I should probably define what retirement means to me. When I say I want to retire at 40 basically all I want is to NOT HAVE TO WORK but still live the middle class lifestyle (thus my handle Middle Class Millionaire). In retirement I?m not interested in keeping up with the Jones, traveling the world, buying a vacation property etc? I just want to live the typical middle class lifestyle without having to work. I want working to be an option and not a necessity---basically I don?t want to be a slave to my job (or any job). At this point in my life I have to work whether I feel like it or not. I currently enjoy my job but would enjoy it more if I was part time. Here is a link to my basic retirement philosophy. Is the plan to be a full-time investor once you reach your "million doll...
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Stolen Luxury Cars
2007-04-30 13:27:00
Thinking of buying a luxury car? Maybe you like to ride around in style or perhaps you?re hoping a brand new luxury car will guide you through a mid-life crisis. Either way here?s something to consider when buying a new luxury car.?Every 25.5 seconds, a vehicle is stolen in the U.S., according to the National Insurance Crime Bureau. Vehicle theft is the costliest property crime in America, costing consumers more than US$8.6 billion annually.?Here is a list of the 7 luxury cars with the highest probability of being stolen. (all prices in US Dollars)1. Cadillac - Escalade SUV - Base price: $55,0452. BMW - 7 Series Sedan - Base price: $78,9003. Land Rover ? Range Rover SUV - Base price: $77,250 (tie)3. Lincoln Navigator 4-wheel-drive SUV - Base price: $46,575 (tie)4. Lexus ? GS Sedan - Base price: $44,1505. Mercedes Benz S-Class long-wheelbase sedan - Base price: $86,5256. Mercedes Benz SL-Class convertible - Base price: $95,575So basically if your going to drop a lot of cash on a lux...
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Taxes
2007-04-27 17:13:00
I love investing, I love stocks, and I love retirement planning but man do I hate taxes!This post is just a reminder that for those of you (like me) that often leave things to the last minute --- the deadline is quickly approaching?so unless your 100% sure you?re going to get a refund make sure you have them in by midnight Monday, April 30.If you haven?t filed your taxes yet you?ll probably have to file electronically so here is a list of the software packages and web applications that are certified by the government of Canada for the 2006 tax year.Have a good weekend and happy filing!
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Follow Up To ?Calculating Networth? Post
2007-04-26 15:07:00
I just wanted to take this post to respond to some questions asked by silverm in the comments section of a recent post. Due to the length of my response I chose to respond here instead of in the comments section. Additionally, I respect silverm?s opinion as I often read his posts on various investing forums and wanted to give his questions a proper response. I also want to thank those of you who commented on my networth postings and correctly pointed out that I should change the title of my monthly ?Networth? updates to ?Retirement Nest Egg? updates. Despite the title change my method of calculating this number will remain the same and I believe the logic behind it is sound based on my personal situation. My Response to Comments:Your network calculation looks arbitrary. For example:You have a $200,000 home with a $100,000 mortgage. You also have a $50,000 portfolio. Then your retirement nest egg is $50,000?In my situation - yes my retirement nest egg would be $50,000. I would just ...
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Stocks That Trade At Book Value
2007-04-25 12:22:00
Here is a link to an article by Norm Rothery - ?Investing by the book? In his article Norm makes a case for buying companies at their book values and outlines 5 Canadian companies that are trading at approximately their book value. It should be no surprise that all of the companies identified by Norm are currently out of favour and will definitely only suit investors with a long time horizon as it may take the market a while to realize the value of the company.
More About: Stocks , Book , Trade , That , Value

Credit Card Debt ? A Middle Class Rant IV
2007-04-24 15:07:00
Well it?s about time for another one of my rants...credit card debt. There are a number of shows out there now ie - ?Till Debt Do Us Part? that profile a couple or family with debt issues and provide them with debt counseling, if they listen to the counselor they receive some cash to put towards their debts. I?ve painfully watched a few shows, not because they were so good, but because it was so pathetic that I just couldn?t look away?In each show a middle class couple with decent jobs ended up racking up so much credit card debt that they had trouble paying the interest each month. The stupidity of this blows my mind. If people are using their credit card to buy food, shelter, emergency medical treatment etc... than that would be just sad?but if it?s being used to buy consumer items (wants instead of needs) than that?s just stupid. Although I don?t personally know anyone who?s gone bankrupt (except the person I bought my house from) I do have lots of friends and co-workers who a...
More About: Credit Card Debt , Card , Credit , Rant , Middle

I?ve Been Tagged
2007-04-20 15:12:00
Yesterday I was ?tagged? for the first time by Frugal Trader over at Million Dollar Journey, so now I have to reveal my most obsessive thoughts.So here they are in order, starting from clinically obsessed to slightly unhealthy obsessed.1.The Stockmarket - (big surprise here eh?). I spend a lot of time thinking about the market, individual stocks, and equity strategies. Since I?ve started blogging the obsession has gotten a little worse?but I really do enjoy it.2.Fishing ? I love to fish and go every opportunity that I have, summer, winter, spring, fall it doesn?t matter I?ll fish for whatever is in season.3.Retirement Planning ? This is linked to my stockmarket obsession. I?m actually spending a lot less time thinking about retirement planning now as I?ve finally developed a strategy that I can stick to and works for me. While developing my retirement strategy this would have probably been my #1 obsessive thought but now I simply execute the strategy instead of constantly thinking a...
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