Monday, November 21, 2016

Strategy for Cashing In on the Next Stock Crisis Blip

Stock investors as a whole are a curious group. There is the general tendency for investors to panic with each financial, economic, or socio-political event that causes uncertainty either nationally or internationally, resulting in a temporary drop in stock prices.  Sometimes even just the anticipation of a situation can trigger a sell-off.  Be it the falling price of oil, the American fiscal cliff, the threat of Grexit, the economic slowdown in China, or the vote for Brexit, news of each of these events have induced an adverse reaction from the stock market.  Often an across-the-board dip does not last more than a few days and sometimes recovery happens even within the same stock trading day.  There seems to be no shortage of candidates for the next crisis including the long-term fallout from the Trump presidential win in November, the upcoming Italian referendum on Senate reform in December and the proposed Brexit trigger of Article 50 in March. 

With so many potential opportunities to pick up stocks on a temporary decline, it is a good time to build up excess cash in order to take advantage of the next mini-dip.  Unfortunately since we are retired and only earn income through our investment portfolio, there is limited opportunity for us to accumulate cash.  Our options are either to save up excess dividends or to sell stock shares in order to general a cash pool.  With this in mind, a while ago I decided to stop reinvesting my excess stock dividends via the Dividend Reinvestment Program (DRIP).  I also sold the shares of a stock in a registered account that hadn't increased much in value since purchase and didn't regularly increase its dividend.  This provided me with a modest sum of cash to play with.

Yet predicting exactly when the next stock dip will occur is not as easy as it sounds, given that we are not monitoring the stock market every day, let alone every hour of each day.  As well, stock prices do not always react as expected. After Donald Trump won the US Presidential election, we expected a fire sale in the worldwide stock markets.  A temporary panic did occur overseas while the North American markets were closed, but stock prices rallied and even rose by the time the Canadian and US markets opened. It was not until several days later that the TSX experienced a mini decline.

In order not to totally miss the chance to "buy low" on the next stock decline, my husband and I use the following strategy when we have some extra cash to invest.  First we decide which stocks we might be interested in buying, using target price, analyst recommendations, and other factors to guide us.  In many cases, we look to just add more shares to stocks we already hold.  Next we guess at a "low" price relative to the current share price and the predicted target price. I usually look at the performance of the stock over the last 3-6 months and pick a lower price somewhere along that spectrum.  Finally I submit a "limit buy" order for the stock at my selected price, choosing the longest allowable term (up to 90 days for my discount broker, Scotia iTrade).  Then we sit back and wait to see if the price hits.  Note that my chosen price is a total guess and the stock may never fall that far, or may fall significantly more.  But at very least, if the buy order executes, I will have purchased stock at a price much lower than when I placed the order and if all goes well, the price will eventually revert to that original level once the market re-stabilizes.

This strategy worked extremely well recently. I put a $60 limit buy order for Premium Brand Holdings (PBH-T) when the share price was just over $64.  I did not fully expect my price to hit but one day for no reason that I could ascertain, it did.  The dip only lasted for a couple of hours and by the end of the day, the price had risen back to its original level and beyond.  To this day, I still don't know what caused the stock to fall so dramatically for such a short period of time without any predictable event to point to as the cause.  I'm glad that I had my bid in to take advantage of it or I would have missed it.

In preparation for the results of the US election, I put in a couple of limit bids in the various accounts were I was able to accumulate cash.  When the stock prices surprisingly rose after the election, I just left my bids in place awaiting the next event.  A few days later, my $40.40 limit buy order for Fortis (FTS-T) executed.  The stock had fallen from almost $44 down to $39.58 before recovering a few days later at just over $40. As a result of the Trump victory and his intended inflationary policies, bond prices have fallen, driving up bond yields relative to stock yields.  The Fortis stock succumbed to this pressure, falling over 5%.  This time I did not successfully predict the "low", but I still picked up the stock at a relatively good price since the long term target price remains over $46.

My limit buy bids in a couple of other stocks have not executed so far because these stocks have not fallen to my desired price.  I will just leave the buy orders in play until they expire, in hopes of catching a price drop with the next event, or unless I happen notice a better opportunity.  It is too bad that Scotia iTrade does not provide the term option to leave my order open until I decide to cancel it.  So if I want my bid to continue beyond the 90 days, I need to remember to update my order to extend the date before it expires.

The other issue I need to worry about on a limit buy bid is the partial fill of an order that is not completed by the end of the trading day. This occurs when there are not enough shares offered at my limit price to complete my order.  For example, I recently tried to buy 102 shares of a stock but only 100 shares were available, leaving two shares unfilled.  The next day, the final 2 shares were filled but because the trades occurred on two separate business days, I was charged the $9.99 commission on each day!  This was pure carelessness on my part. I usually remember to cancel the remaining part of the order at the end of the day in order to avoid paying an extra commission on such a small purchase. This was a reminder to me to be more careful next time.

Thursday, November 10, 2016

EQ Bank and free Interac Email Transfers

As part of our banking strategy, we use President's Choice Financial (PCF) as our primary bank, since there are no service charges for deposits, withdrawals, writing or cashing cheques, bill payments and most other regular banking transactions, as well as no requirement to maintain a minimum balance in order to have fees waived.  My one beef with PCF is that it still charges $1.50 for each Interac Email transfer, even though many other banks have reduced their fees to $1.00 or less.

But looking closer at the chequing account offerings at each major bank, it became obvious that the lower (or free) Interac fees were more than offset by monthly fees or the need to maintain minimum balances.  For example, Royal Bank advertised unlimited free Interac e-transfers on chequing accounts, but the cheapest account that I could find had monthly fees of $4.95 per month without any option to have the fees waived with a minimum balance.  This fee negates the whole advantage of having free e-Transfers (which I don't use that often).  It was a similar story with the other major banks.

I noticed the advertising blitz for EQ Bank in the subway system and decided to check it out. EQ Bank is a CDIC-protected online bank with no physical branches that offers a Savings Plus account that provides free deposits, bill payments and electronic transfer to linked chequing accounts at other banks.  In addition, the first five Interac e-Transfers per month are free ($1.50 after that).  This more than satisfies my Interac needs.  To sweeten the deal, the currently offered savings interest rate is 2%, calculated daily and paid monthly, one of the highest rates offered by any financial institution.  Now I am not naive enough to think that this rate will be available forever.  It is obviously a teaser rate meant to attract new members.  But as long as EQ Bank maintains this rate, or at least one that is comparable to other institutions offering "high interest savings accounts", then I would be more than happy to use it as my new emergency fund savings repository.  I have since opened an EQ Bank Savings Plus account and linked it to my PCF chequing account.  I moved most of our emergency fund savings from my previous high interest savings account at Canadian Tire Bank (currently paying 1.3%) to EQ Bank.  If EQ Bank eventually does significantly lower its interest rate, I can transfer surplus money back to Canadian Tire Bank, but I would still keep some in EQ Bank to take advantage of the 5 free Interac transactions per month.

Wednesday, February 24, 2016

The Ins and Outs of Home Swapping

Given that accommodations make up one of the largest components of our travel expenses, we use home swapping as a means to reduce these costs, listing our condo on several home swap websites.  We first dabbled in home swapping while we were still working, but could not take advantage of the full potential of this strategy until we retired and had the flexibility of time and schedule to devote to this.  While we still had work obligations, we were extremely restricted in when and how long we could travel for.  In spite of that, we were still able to arrange a 5 day exchange for an apartment across from Grant Park in Chicago, and a 10 day stay in a quaint flat with a small garden in the Montparnasse district of Paris.

Since retiring, we have taken our home swapping vacations to a whole new level.  We now have both the flexibility to swap any time without interference of work obligations, and we can swap for longer durations.  In 2014, we traveled for 7 weeks around the Loire Valley and the southeast part of France, including five and a half weeks living in a renovated home that was built into a 9th century city wall.  Our 6 week vacation in 2015 included a 2 week exchange for a flat in Amsterdam followed by a 4 week stay in the outskirts of Dublin, which we used as our home base from which we toured both Southern and Northern Ireland.  I blog extensively about our vacations which you can read about or look at more photos at my travel blog

Having successfully completed 5 exchanges with plans for a 6th one this coming spring–an 11 day stay in a Venice apartment with a stunning view overlooking the Lagoona, we feel that we are now seasoned home swappers and can share some of our experiences.

Home Swap Services
There are a growing number of home swap services out there, varying in price, features and depth of customer base. Just about all of them provide the same basic functions including the ability to set up home profiles with photos and descriptions of the home and the owners, a search facility to find potential homes to swap with, and a mechanism to communicate with prospective swap opportunities.  Picking a home swap service seems akin to selecting a dating service–your potential matches are limited by the volume and quality of the candidates in the pool.  And as with most things, you get what you pay for. The higher priced sites try to offer unique features to justify their additional costs. 

Some of the common criteria to look for and compare between various home swap services include:
  • Price
  • Customer Base
    • Number of homes listed
    • Quality of homes listed
    • Number of countries represented
  • Map of the neighbourhood and general location of the home
  • Swappers' reviews and ranking of homes
  • Ranking of members' rate and speed of response to swap requests
  • Search and filter options
    • Location - search by country? province/state/county? city?  neighbourhood within a city? 
    • Number of bedrooms, max number of travelers allowed
    • Type of accommodations - e.g. urban, rural, beach, mountains, vacation property available for non-simultaneous swap
    • Type of exchange - e.g. simultaneous, non-simultaneous, rental, hospitality
    • Kid friendly or not?
    • Pet friendly or not?
    • Smokers allowed or not?
    • Available amenities - e.g. WIFI, air conditioning, garden, balcony, parking
    • Reverse search - who wants to come to my location
  • Specify home availability dates
We first decided to try home swapping by joining a free service called Geenee.  While the price was certainly right, we found that most people who signed up were not serious about swapping and did not even bother to answer a swap request.  At the time that we retired in 2012, Love Home Swap was just getting started and offered a 30 day trial for $1.  We ended up signing up with them and paid between $150-$170 CDN annually for the next 3 years.  In the interim, Love Home Swap was growing through mergers and adding more features.  Unfortunately as a result, their rates also increased dramatically.  When it came time to renew at the end of 2015, we were shocked to find out that the fee for the next year would be $276 USD which came to $367 CDN.  This is more than double the cost of the next most expensive site on our radar, which is Home Exchange at $170 CDN annually. This was also before the value of the Canadian dollar tanked, so the price differential would be even more now. So we are doing some evaluation this year to decide whether we should stay with Love Home Swap (where we have had much success) or switch to one of the less expensive services.

If we do decide to switch, we have come to the conclusion that the best time to sign up for a new home swap service is at the beginning of the year and not at the end.  Experience has taught us that most people do not start thinking about their annual vacations until the start of a new year, so why pay for a membership sooner than this.  Most of the sites offer a free trial period of 2-4 weeks so we may try out a new exchange service prior to officially switching. Another tip is to design your home listing prior to signing up for the paid service or even for the trial period.  You want to have your listed up and available for swaps as soon as possible so as not to waste time on your membership period.  Most sites allow you to browse listings for free, so you can get some ideas of what an effective and appealing home listing looks like.

Our Home Listing
We thought about which details are important to us when we are looking for home swap possibilities and tried to apply them to our own listing.  These included:
  • Plenty of flattering photos of our home, taken from wide angles to show as much of each room as possible.  Highlight potential selling points like a king-sized bed, sunken bathtub, walk-in shower or large outdoor terrace
  • Clearly introducing ourselves including a recent photo and descriptions of who we are, our family composition, what we do professionally and some personal interests
  • Explanation of where our home is relative to tourist attractions and ease of access via walking or transit
  • Dates that our home would be open to offers, available for a non-simultaneous swap (because we are vacationing somewhere else) or definitely not available 
  • After successful swaps, we have asked our swap mates to review our place while we do the same for them.  Good reviews instill confidence with future swappers who are considering our home 
This is a sample of some of the details from our listing on Love Home Swap.
Choosing and Vetting a Potential Swap
When evaluating home swap options, we have learned to confirm the exact location of the home, as opposed to the location advertised in the listing.  Otherwise we might end up in some suburbs far from the core of the city where we actually wanted to be.  This is like saying we are in Toronto when we actually live in Mississauga or Burlington.  We try to choose homes that are within a 25 minute walk or 20 minute transit to the tourist areas that we want to visit, with the transit itself being within a 5 minute walk from the home.

By the same token, when deciding whether to join a home swap service, you need to realistically consider how appealing your location might be to a potential tourist. Generally downtown locations are preferred over suburban ones.  If you do live in the boonies but also own a vacation property such as a lake-side cottage or a ski lodge, that could be a good swap option and would be even easier to get a match, since you could do non-simultaneous trades.

Allowing someone to come stay in your home requires a degree of mutual trust.  I think that there is a greater feeling of responsibility and consideration in a home swap than a rental.  You always remember that while you are in someone's home, they are also in yours and you try to treat their home with the care and respect that you would like them to treat yours.  Some services offer "contracts" that can be filled by both parties.  I doubt that these are legally binding but at least they provide a common understanding of what is expected in the exchange.  Security deposits or trip insurance are also offered for sale by some sites.  So far, we have not found the need to adopt any of these extra measures.

Instead we try to vet swap potentials based on their personal profiles, photos and descriptions of their home, as well as positive swap reviews.  Being on a service that charges a non-nominal fee is itself an effective initial screening criteria. Once we agree on an exchange via email, we try to arrange a video Skype chat with our swap partners.  This gives both parties an extra level of confidence since we can actually talk to each other "face to face", as well as getting a chance to "tour" each others' homes.  By the time we actually swap with the other party, we usually no longer feel like we are interacting with strangers.

It takes time and persistence to find a swap match in terms of desired location and timing. We have received many rejections (or no response) to our requests and have rejected our share of requests as well.  Some tactics that we have used to try to increase our chances of a match include:
  • Sending out requests to multiple potential homes in our desired location
  • Being flexible as to which dates we can swap
  • Performing a "reverse search" to isolate people who have indicated that they want to come to our location
  • Looking for non-simultaneous swap opportunities, especially with listings that are secondary vacation homes
 Preparing Our Home for the Swap
One of the main details to sort out is how we will get and return the home key(s).  It is easy on our end since we live in a condo building with a 7/24 concierge service.  We simply leave with the concierge an envelope addressed to our guests which contains our keys plus a return envelope addressed to me.  On the other end, we have received the keys in multiple ways including having them mailed to us, having a neighbour waiting in the home to let us in, or picking the keys up at the concierge or some other administrative office.  Some of the steps we take each time we prepare for a swap include:
  • Giving our place a thorough cleaning
  • Clearing out space in our closets and dressers for our guests
  • Putting freshly laundered sheets on the bed
  • Leaving freshly laundered towels, new bars of soap, shampoo
  • Clearing our fridge of all perishables
  • Locking up or putting away valuables or breakable items
  • Leaving a welcome gift such as wine, cheese, chocolate, etc.
  • Canceling our newspaper delivery
 Before our first swap, we prepared a "House Book" which explained how appliances and electronics worked, where to find things in our home and around the neighbourhood.  Some of the major components in this book included:
  • Our address, phone number, email contact
  • How to get to our home from the airport (via taxi or transit)
  • Emergency Phone Numbers (doctor, dentist, concierge, neighbours)
  • Services (taxi, car rental, dry cleaner)
  • Neighbourhood (groceries, bank/ATM, restaurants, coffee shops, pharmacies, post office)
  • How things work
    • Appliances (oven, stove, microwave, dishwasher, washer/dryer, vaccuum, etc.)
    • TV, stereo
    • WIFI password/access 
    • Smoke alarm
    • Garbage disposal
    • Fuse box
  • Where to find things
    • extra linens, towels, blankets, place mats, napkins, coasters
    • ironing board, iron
    • hair dryer, bandaids, flashlight, tools
    • kitchen utensils, pots & pans
    • mops, brooms, cleaning supplies
    • sundries: laundry supplies, toilet paper, garbage bags
    • fire extinguisher
    • condiments available for use (spices, sugar, butter, oil, etc.)
  • Requests for our guests to perform minor tasks during their stay like picking up the mail or watering plants
I also created a "Toronto Book" that describes the various places and events that might interest a tourist in Toronto including restaurants, shopping, art galleries, museums, farmers markets, parks, hiking trails, live theatre, sporting events, tourist attractions and annual festivals.  For each attraction or event, I list the hours of operation, costs if any, address and how to walk or use transit to get there from our home.

The house book and Toronto book were a lot of work to set up for our first swap, but once they were done, only minor tweaks have since been needed to keep the information up to date.

Leaving a Home Swap
Before leaving a home swap, we try to give it a good cleaning and tidying including doing all the dishes, tossing any perishables that we had purchased, tossing out the garbage and recycling, stripping the sheets off the bed and putting them into a laundry hamper along with the used towels, and putting new sheets on the bed if they have been provided for us.  The same has been done by the people staying in our home and we occasionally come back to find our place cleaner than when we left it and wondering how they got our floors so shiny?

Home swapping is not for everyone and it comes down to a matter of outlook.  If your first thought is concern that strangers will be in your home, sleeping in your bed and touching your stuff, then home swapping is probably not for you.  If instead you feel this is a chance to save money on travel, make new friends from around the world and have the opportunity to live like locals in a foreign location, then you are well suited for this endeavour.

Saturday, February 6, 2016

Canadian National Railway - A Case Study for Dividend Growth

Following our retirement income generating strategy that I describe in my book Retired At 48 - One Couple's Journey to a Pensionless Retirement, our goal has been to pick solid Canadian companies that are paying a dividend of at least 3% or more at the time of our purchase.  Obviously that yield will rise or fall as the share price decreases or increases respectively, especially if the company does not raise (or lower) its dividend payout.

We made a major exception to this rule when we purchased shares of Canadian National Railway (CNR) in January 2012.   (Note: due to a 2 for 1 stock split that occurred in 4th quarter 2013, all share prices and dividend yields prior to this have been halved so that we can have an apples to apples comparison).  At the time of our purchase, the yield on this stock was around 1.92%, which was below our 3% threshold.  But this was such a solid, blue chip stock in a different industry from our many Financial sector holdings, so we wanted to add it to our portfolio nevertheless.

Looking back at what has happened to our CNR shares entering our fifth year of holding this stock, we can easily see that we have been vindicated with this purchase.  Every year since our purchase, and for many years prior to that, Canadian National Railway has been raising its dividend every January, in time for their first quarter payout in March.  These increases have not been token 1-2% raises like some other companies have offered (just so that they can say they raised their dividend), but good healthy double-digit raises of 15-25%.  Considering that the dividends from our stocks represent our retirement income which replaces the employment income that we used to earn while we were still working, you could say that CNR is one of the best employers that we have ever had.

Since our 2012 purchase, not only has the dividend per share risen steadily, but the share price has risen as well.  As a result, the dividend yield relative to market price has remained more or less the same over the years–hovering between 1.7-2%.  Yet look at the dividend yield relative to our initial purchase price.  By 2015, it had exceeded our old 3% threshold and continues to climb each time CNR raises its dividend again.  The 20% raise in dividend announced January 2016 (despite overall rocky market conditions in 2015) bumps our yield to 3.85% relative to our original purchase price.  And had we had the forethought to buy this stock back in 2009, our relative yield would be almost 7% by now.

Canadian National Railway has turned out to be a perfect buy and hold stock for our portfolio.  It was good that we did not allow ourselves to be turned off by the initial impression of a "low yield", but instead, bought for the long term.  If CNR keeps increasing its dividend at this rate, the sky's the limit for the future.  This is a lesson that we need to keep in mind for any further stock picks.

 We are not even taking into consideration the enormous rise in the value of our stock since we bought it, since the share price has almost doubled over the past four years. Given how the share price is transient and could fall at any time, we don't want to put too much weight on its current value.  Still it is good to know that if we ever were forced to sell these shares, unless the price really tanks, we could make a tidy profit.  Hopefully we never get to that point though, because then we would literally be selling the goose that lays the golden egg.

Saturday, January 9, 2016

Year End Review 2015 - After 3 Years of Retirement - Surviving the Economic Downturn

The conclusion of 2015 marks the end of our third full year of retirement.  It is time once again to review how my husband Rich and I did in the year and to track our progress against the retirement plan that we created as a benchmark when we retired in May 2012.  I described our process for this annual review in significant detail in the previous years so I won't repeat it now.  If you are interested, I have included links to the earlier blogs at the end of this one.

2015 was a brutal year for the value of stocks as share prices tanked across the board.  For the first time since we retired, after taking out our annual income requirements, the year-end total of our portfolio was lower than it was at the beginning of the year.

Before removing dividends and RRIF payments to use as income, we just about broke even with an increase in value of less than 1%.  This is compared to almost 15% increases in our portfolio totals at the end of the previous two years.  After removing our annual income, our 2015 year-end balance was 2.2% lower than our total was at the start of the year.  This result is actually not so bad when compared to the TSX as a whole, which was down 11% for the year.  We were buffered from the worst of the carnage because we have limited exposure to the oil and gas industry, which comprises of only 6% of our holdings.

 As documented in our book Retired at 48 - One Couple's Journey to a Pensionless Retirement, our portfolio is primarily made up of Canadian dividend stocks since our strategy is to live off the dividends while preserving the capital for as long as we can.  Being retired with almost no fixed income goes against most conventional wisdom,  although the old rules of increasing the amount of fixed income as you age has been softened by most experts given the dismal rates of return over the past few years.  Since we mostly care about the dividends and not the transient value of the stock, this lessens the risk significantly, but holding only equities is still a relatively risky prospect.

Accordingly, as additional contingency we purposely chose very conservative parameters for our retirement plan.  We picked a relatively low annual investment rate of return while specifying a higher retirement spending than what we initially planned to spend.  This would allow us to grow faster than plan during the good bull market years, building up excess value that would be used to buffer the bear market years that were sure to come, as historical trends show. 

This is exactly what happened over the past three years.  By the end of 2013, we were 12.4% ahead of our original plan and by the end of 2014, this value had climbed to 25%.  The dismal results of 2015 ate slightly into this significant cushion so that we ended the year at 22.5% above the original plan.  So we can absorb a few more bear market years and still stay on track or even be ahead of the game relative to our retirement plan.  Based on how the start of 2016 has been going, we may need to use more of this cushion before the year is done.

Much more important than the value of our portfolio is the amount and the reliability of the dividends that we receive, since we count on these dividends for our annual income.  Surprisingly, despite the weak performance of the stock market in 2015, our total dividend payout still increased, abet by less than in previous years–by 8% as opposed to 14 and 17%.  Imagine the chance of getting an 8% raise from your employer at all, let alone in a poor performing year?

Out of our 35 different stocks, 27 raised their dividend this year (which is actually more than last year), with 10 of them increasing their dividends more than once. The sizes of the dividend raises must have been smaller to account for the lower rate of dividend increase overall.  Also, many of the companies raised their dividends early in the year, before the apex of the stock crash was reached.  So unless the markets improve, it is possible that dividend growth will continue to be reduced in 2016.

Luckily, none of our stocks have cut or eliminated their dividend payments so far, unlike several of the smaller oil and gas stocks that we don't own.  The closest we have come to a dividend reduction is with Husky Energy (HSE), who has announced that for the next dividend payout, to preserve capital, it will pay dividends in shares as opposed to cash–in other words, a forced DRIP.  This decision will be reevaluated at each quarter depending on how things go for the company.  As an aside, many companies are reducing or eliminating the discount that they offer on DRIPs as a further cost cutting measure.

I hold Husky Energy in my RRIF where I need to maintain sufficient cash flow to support my monthly RRIF payments, so losing the quarterly HSE dividend will be a slight blow.  Luckily the average yield from the stocks in my RRIF is over 5% while my minimum RRIF withdrawal last year was 2.5%, so my remaining dividends should still cover the monthly withdrawal requirements.  One side effect of having the value of my RRIF account decrease is that the new minimum withdrawal for 2016 decreased as well.  At the beginning of each new year, the new amount is calculated by  "1 / (90-age) * value of account at the end of Dec. 31 of previous year)".  The expectation of this formula is that the RRIF withdrawal amount should increase each year to account for inflation, but this year the value of my account decreased so much that the RRIF withdrawal amount is actually a few dollars less than last year.

Just in case any other stock decides to cut its dividend, we plan to carry a larger amount of excess cash within our RRIF accounts.  While it is tempting to use the cash to buy more "bargains" while stock prices are so low, common sense dictates that we should build up our emergency cash reserves instead.  We can then use this cash as contingency in case we encounter more unexpected expenses like we did last year when we found out that we had to replace defective Kitec pipes in our condo.  Last year, we each took out an extra RRIF withdrawal from some of the excess cash that was building up in our RRIF accounts and allocated the money to our long-term expense "kitty" where we are saving up money for the pipe repairs that will occur towards the end of 2016.

Overall, our spending for 2015 came in about the same as 2014, despite non-discretionary expenses like our condo fees, electricity bill and property taxes continuing to rise.  Considering that we planned for 2% inflation increases each year, we're doing well in keeping the expenses down.  We were lucky last year that our 2005 Toyota Matrix still ran smoothly with no major repairs required, but it will only be a matter of time before that changes.  Our appliances are all over 10 years old now so we are keeping an eye on them as well.  Our discretionary expenses (vacations, dining entertainment) came in about the same as the previous year as well, and there is plenty of room there to cut back if we need to tighten our belts for 2016.

So after three full years of retirement, we are still doing well financially, and due to a solid retirement plan that included good contingency strategies for bad market years, we were able to roll with the punches to survive 2015.  Let's see what new challenges 2016 brings us.

2014 Year End Review
2013 Year End Review
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