If you’ve ever done any research on the fees associated with investing in Canada or searched out advice online for building wealth through investments, you’ve probably come across Dale Roberts and his blog, Cut the Crap Investing.
We spoke with Dale and ask him about leaving his job to start Cut the Crap, investing in real estate, and how building a portfolio that works.
When did you start Cut the Crap Investing?
June of 2018. I had been an advisor and trainer at Tangerine Investment for 5.5 years. Previous to that, I had a 27-year career as an advertising creative.
What is your main goal with Cut the Crap Investing?
To help Canadians find the many simple ways to build greater wealth with a low fee portfolio. It’s a simple mission. Canadians pay some of the highest fees in the world. Fees are wealth destroyers. There are many ways to cut fees and increase returns. There are managed portfolios available with advice. Many will choose to self-direct (manage their own monies) to cut fees even further.
I offer help and guidance and resources for those building wealth, and for retirees.
Where do you see Cut the Crap in the future?
The future is part plan, part ‘take me where the wind blows’. I would like to see Cut the Crap Investing become an interactive hub for investors and for advisors and investment firms and ETF providers. But I’ve learned that a venture such as a blog will be shaped by the readers and those who take an interest in the product.
Also, the fintech space is evolving so quickly we don’t know what the environment will look like in 5 years and 10 years. I will have to go with the flow. I will let the doors open. I will take and enter through the doors and paths the enables more Canadians and US readers to build wealth and retire successfully.
Your background is in advertising, what made you make the jump into the investment world?
I was always an ‘investment nut’. I was always talking up investments and ETFs during my ad career. Very few gave a crap. I said if I could ever get someone to pay me to talk money all day, I’d jump at it. I did find someone. Tangerine. I took a massive pay cut and made the leap.
It was not a job. It was not work. It was a paid hobby. I am a big fan of doing something you really like as a way to earn a living. I’m a big fan of pursuing a purpose as well.
Is there one piece of advice you always give to people interested in building their own portfolio?
Don’t give away your wealth. It’s your money. You can build wealth and keep most of it. Don’t give half of it to an advisor or investment firm. You can keep your fees low and own a sensible and well-diversified portfolio. You truly can retire twice as rich.
But you do have to take some interest. Investing is not that difficult but you do need to learn just a few basics. Hit my site, MoneySense, getsmarteraboutmoney.ca, Canadian couch potato. I’m happy to help. For karma.
One of your main goals with Cut the Crap is to help Canadians deal with high fee investing, is there a story behind why this is so important to you?
Quite simply I’ve seen too many investors give most of their monies away to their advisor or investment firm. Sadly too, many are simply taken advantage of. The investment landscape in Canada – it’s a ‘crime scene’ goes the, uh, joke.
How are high fees hurting Canadians ability to invest, build portfolios that work for them, and accumulate the wealth they need to retire?
It’s just simple math. There is negative compounding. Too much money in the wrong pocket. Check out the T-Rex score tool on Larry Bates’ site. It will show you the effect of fees over time. Larry wrote the wonderful book – Beat The Bank. The Canadian Guide to Simply Successful Investing.
You often speak about how real estate has played a role in your career and success, can you tell us a bit about that?
Yes, I’d call real estate our accidental investment. We did not do anything spectacular or draconian. This is not a Sean Cooper Burn Your Mortgage kind of story. In fact, the day we paid off our final mortgage we did not even celebrate. We did not even high five. It was just ‘normal’ and expected financial behaviour.
We put down more than 20% on our first home so that we did not have to pay CHMC insurance. We paid most of it off in 5 years in a period when we were earning very modest wages. We are not spenders. We accelerated the mortgage and paid some lump sum stuff.
We had kids and wanted a bigger home, and frankly, in a better neighbourhood. It wasn’t snobby, just some of the families that our daughter was coming into contact with did not appear to offer safe and stable environments. We made a move to a bigger home and certainly a better neighbourhood.
We had such a good head start with that first home that we only took a mortgage of not much above $100,000. We had mostly paid off that first home and it appreciated by $50,000. We had a small mortgage on that second home at an incredibly low rate. We did not go hard at the mortgage on the second home. We simply did bi-weekly payments.
I thought I could earn more by way of investments, so free cash flow went to RRSP and eventually TFSA portfolios for many years. The mortgage was eventually paid off.
We are lucky because we live in Toronto. The house appreciation is silly, I get that. The house tripled in value, or more, over 17 years. That extra net worth provides a cushion, financially and emotionally. It allowed me to make the leap to blogging when my portfolio could not support a full and real retirement.
What advice would you give to young Canadians who want to get their foot in the door of the real estate world?
As Nike would say – Just do it.
Save hard for sure. Invest the monies in an ETF portfolio if you have a time horizon of 4-5 years or more. In that case, you would need a somewhat conservative Balanced Portfolio or Balanced Growth model. Here’s an option to consider – one ticket, complete, asset allocation portfolios. The fees are about 1/10th of a typical Canadian mutual fund.
Ask for help from parents if that’s possible.
You might have to start small and very modest with your first property or condo. That’s OK. Just get in. You’ve then hedged against future crazy market price increases.
Buy a property that you can truly afford in a comfortable manner. You still need to live and enjoy life and be prepared for any life and financial shocks. Then pay off the property in a speedy manner. And build wealth by way of investments as well. You might do some research on that age-old question – pay off the mortgage or invest?
The rule of thumb is basically if you can earn more after-tax by way of investments compared to your mortgage rate, then invest. That said, we don’t have to get too cute or precise.
I like to write with respect to wealth building, that we don’t have to be perfect. We just have to be great.
Do enough of the big things right.
Build wealth. Leave room to enjoy life.
