By Sheryl Smolkin
As part of the SaveWithSPP.com continuing series of podcasts with personal finance bloggers, today I’m talking to Mark Seed, author of the popular blog My Own Advisor.
Mark’s day job is Senior Designer of Quality Management Processes at Canadian Blood Services in Ottawa, but he is passionate about personal finance and investing. He started investing in his early twenties after reading David Chilton’s, The Wealthy Barber.
For the last five years, Mark has blogged about a broad range of topics ranging from asset allocation, to investor behavior, to retirement, to travel.
Thanks for the opportunity, Sheryl. It’s great to talk to you.
Q: You have a demanding day job. You enjoy golfing, biking, hiking, and travel. When do you have the time? Why did you start a personal finance blog?
A: Good question. I try to find the time. I started off blogging because I wanted to share my story about saving and investing towards financial freedom. I figure running my own blog and sharing my own story could help people that are both new to investing and saving and those who are more experienced.
Q: How frequently do you post?
A: Probably two to three articles a week. I have a demanding but also very exciting day job, so in the evenings I write and then I post the next day.
Q: Do you have kids?
A: No, we don’t.
Q: So, how do you decide what you’re going to write about from week to week?
A: I get inspiration from quite a few sources, Sheryl. Sometimes it may be a workplace conversation, or it could be a chat with family and friends outside work. Often there’s a news headline I can play off and add my own perspective.
Q: That feeds well into the next question which is: what subjects do you like writing about the most?
A: Fixed and dividend investing — I practice that approach as you know. Taxation and insurance are also subjects I like to write about. And of course the travel stuff and investor behavior are fun subjects.
Q: There’s probably over a dozen well-known personal finance bloggers in Canada. What’s different about your blog and why do you think it’s a must-read?
A: I think it’s a must-read because I believe I am taking a holistic, DIY approach to investing and saving. I think people can relate to that quite well. I certainly don’t pretend to be an expert in every single field but I’m learning as I go.
Q: How many hits do you typically get for each blog?
A: I’m getting about 1,000 to 2,000 hits per article, which is great. So in some months that translates to maybe 50,000 hits a month.
Q: That’s fantastic! How long did it take for it to build?
A: Early on – I would say the first couple of years – it was really slow. There has been an upward trend in the third, fourth and fifth year and now there is an income stream from the site.
Q: You have to be patient though
A: You have to be patient, absolutely. It takes time.
Q: Tell me about some of the more popular blogs you’ve posted.
A: I think my article earlier this year about driving a fourteen year old car got a lot of hits and comments. The essence of the story was I don’t need a new car so why should I buy one? It works fine and it’s not costing me money. Why spend money on a nicer ride when I can put it in my RRSP or TFSA?
I also got a lot of attention when I wrote about why I’m no longer investing in costly mutual funds and paying fees I don’t understand for underperformance. There have also been well-received blogs about my passive investment strategy and some mistakes I’ve made, like when I paid the wrong bill.
It happens, right? And I think if you publicize those things people go, “Everyone is fallible, nobody’s perfect” and it’s funny to read these things.
Q: Right. So you’ve focused on dividend investing – why do you embrace this strategy and how does it work?
A: I’ll try to keep it fairly short and sweet. One reason is I like having an income stream is because as a shareholder of an established company with a track record of paying dividends, I basically get paid to be an owner of that business. And that dividend payment is very real, because I see the cash coming into my brokerage account every month or every quarter.
The second main reason is that some of these established companies have paid dividends for many years – decades upon decades, in fact, maybe even a generation or more – so they tend to increase their dividends every year as their net earnings go up. So the amount I receive tends to grow over time which is a pretty good inflation-fighting strategy.
The global financial crisis from 2008-2009 was very bad for many people. But most of the companies I owned or started owning and buying at that time paid their dividends even when their stock prices went down 30, 40 or 50%. So there’s value sticking with those companies through thick and thin.
And even though I’ve adopted both indexing and dividend investing, I think it’s the blend that’s important. I’m getting the best of both worlds.
Q: What’s a DRIP account and what are some of the pros and cons?
A: A DRIP account stands for a dividend reinvestment plan, and really it’s an approach to reinvesting dividends paid by the companies that you own free of charge. Not paying transaction fees is huge in my opinion.
There are really two types of those dividend reinvestment plans. One is called “a full DRIP” and the other is called “a synthetic drip.” You can read about how they work in more detail on my blog.
Q: Many investors have multiple accounts: RRSPs, TFSAs, unregistered investment accounts. As a rule of thumb, what kind of securities should they hold in each account and why?
A: Very good question, actually. I do follow some of those rules of thumb. In the RRSP accounts we hold both Canadian and U.S. ETFs but we also own a few U.S. stocks.
The reason why is that we escape withholding taxes applied to some U.S. listed securities. So putting U.S. stocks or U.S. ETFs in an RRSP, a locked-in retirement account or a RRIF is tax effective.
Because there is a 15% withholding tax if U.S. stocks are held in TFSAs (and also RESPs), in our TFSAs we hold basically Canadian content, including Real Estate Investment Trusts, ETFs and some blue chip stocks.
And in our non-registered account we only hold Canadian dividend-paying stocks because those stocks are eligible for a Canadian dividend tax credit if they’re not in registered accounts.
Q: Do you have a favorite personal finance blogger that you read religiously?
A: I have a few, actually. Million Dollar Journey is one guy that really inspired me to create my own blog. I’m a big fan of Dan Bortolotti’s site, Canadian Couch Potato. I think he’s a very gifted writer and certainly one of the strongest advocates I’ve met in terms of the interests of the retail investor. And I also like a Canadian living in the U.S., Mr. Money Moustache.
Q: What, if any, money-making opportunities or spinoffs have there been as a result of your blogging career?
A: You know, there have been a few, which has been great. I think the blog has certainly opened doors to meet some great people, folks I would probably have normally not met. In recent years I’ve managed to develop excellent partnerships with folks in the insurance industry and the mortgage industry as well.
Rob Carrick at the Globe and Mail has very kindly referenced me in a number of articles. I’ve also been interviewed on the radio and I’ve been quoted in MoneySense Magazine,
What does the future hold? Who knows? I’ll keep writing. I’ll keep sharing my stories. I’m certainly passionate about personal finance and investing and I enjoy interacting with others who feel the same.
Q: If you had only one piece of advice to readers about getting their finances in order what would it be?
A: Spend less than you make. It may sound utterly boring. But I think when it comes to finance and investing, boring works because you can’t invest what you don’t save and if you’re not saving then you’re obviously spending every dime you make. So spending less than you make and having money for your future is a pretty good plan.
Q: Thank you very much Mark, it was a pleasure to talk to you.
A: Thanks again, Sheryl, this was a lot of fun. I appreciate it.
This is an edited transcript of a podcast you can listen to by clicking on the link above. You can find the blog My Own Advisor here.