Cedric Liem

This is an article I published several years ago and I’ve reviewed and updated it to ensure it’s current.

A few days ago I did a search on “couch potato portfolio” on Google. I saw a few really good blogs on the topic. I went to one of them where the website was completely devoted to the topic and it had so much information. It had lots of good content. The focus was on ETFs and couch potato investing.

If I remember correctly, the term came about from the Toronto Star when they wanted to profile investment portfolios from several experts in the industry specifically several different mutual fund managers vs a professor in finance vs dart board.

It was basically those in practice vs theory vs randomness.

The randomness was the Toronto Star throwing darts against a wall with a list of TSE 300. They picked their stocks based on the dart throwing. According to the Star, they had a difficult time getting any mutual fund manager to participate.

When you’re looking for investment advice, think about it, mutual fund managers would be afraid to go up against randomness. They’ve got everything to lose.

Let me say upfront, I’ve had all the educational requirements to become a portfolio manager or investment manager, at least back in 2008. And I can understand why they wouldn’t want to participate. Think about it, you’ve done all this studying and received these credentials, and then you happen to lose against randomness. And there’s pretty good change of losing! Whereas “randomness” is just a concept / process that has got nothing to lose.

In the end, they were able to find some mutual fund managers who made their picks.

The professor of finance (Eric Kirzner) created his couch potato portfolio consisting of 60% stocks, 35% bonds, and 5% cash. The stocks was actually the TSX/60 ETF and the bonds was the Canadian Universe Bond Index ETF. The Toronto Star picked their stocks by throwing darts.

What happened next was a nightmare for the fund managers, and the professor in the short term. The darts went up by huge amounts in the first 2 years and the mutual fund managers and professor’s portfolio’s did not do great. Some picks may have even gone down, but, I don’t recall.

The professor did note upfront though that in the short term, you just can’t predict accurately what can happen with the stock market. After a number of years, if I recall correctly, the professor’s simple portfolio came out on top. And this was no surprise as over the long term, few people beat the market.

Since then, ETFs has become mainstream news. There are so many ETFs coming out, my guess is that they will become like the next mutual fund industry. It will boom like crazy that there will be more ETFs than there are stocks to choose from, the way mutual funds did at least a decade ago, if not long before that.

This is great and it’s not so great. What was originally a simple portfolio has turned into an industry topic. There is so much information on it now, it’s not appearing simple anymore, especially when I see the multitude of different versions of couch potato portfolios.

When I first wrote this article on another website I owned, I thought I was going to have a website like some of the blogs I saw in my search results for couch potato portfolio. But, then I realized, what’s really to talk about? And how much can you write about something so simple?

1. It’s 3 investments
2. Re-balance once a year

That’s it! To any of you reading this, remember these two points! Don’t get overloaded with all the financial information out there which I once read was called financial pornography! If you start trying this country index with that specialty index, and switching between commodity and / or country and then adding inverse ETFs, a hedge fund ETF, maybe a style index ETF, you’re doing no different than trying “stock picking” or mutual fund picking. STOP right now, understand the concept of couch potato in the name, “couch potato portfolio” and go back to the original concept:

1. It’s 3 investments
2. Re-balance once a year

 

MoneySense came out with their own version of the portfolio and it’s just as simple as the professor’s except that it consists of equal portions of 3 ETFs. And how has this (MoneySense) portfolio fared over the years? According to their magazine, between 1976 and 2014, it had an average annual return of just over 10%!

In response, many financial planners and Investment Advisors will tell you, “Past performance is not a guarantee of future returns.” They are required by law in written material, at least for the Investment Advisors.

But, tell me this, you need to hire between 2 people: Person 1 has a track record of excelling in 5 different jobs he/she has had in the past 10 years. Person 2 in the past 10 years can’t tell you anything he/she has accomplished in the 5 jobs he/she has had. Who are you going to hire assuming both tell you that they can do the job?

And what are these 3 investments. First, let me say in caps, I CANNOT ENDORSE OR RECOMMEND THESE INVESTMENTS. ONLY A LICENSED INVESTMENT ADVISOR FOR YOUR PROVINCE CAN. This is another legal requirement by the Ontario Securities Commission. The three investments are:

XIU – Canadian TSX/60 ETF

XSP – S&P500 ETF – Canadian Hedged

XBB – Canadian Universe Bond Index ETF

 

I know, some are thinking, just because someone excelled for years, doesn’t mean it will happen forever.

I realize that. I’ve had conversations where people bring up the “student excelled in high school and flopped in university” line. Heard it.

And if you want to go with that logic, by all means. Go ahead and buy that stock with no history or earnings and is supposed to make a million bucks real soon.

It’s your money, not mine. I can’t recommend stocks anyways!

One of the most important things to do as a consultant / freelancer / contractor is to have a job in hand. This article will provide a list of websites that you can use to find contracts. You may find with Workopolis and Monster is that you’ll get contacted by recruiters instead of the actual company you want to work for. That’s fine, but, know that they will take a cut from your salary or more often, give you a set salary, let’s say $60,000, but, they are being paid by the employer, $75,000.

I’ve categorized the work into Large (Traditional) Businesses and Alternate. When I say large, I’m talking Rogers, Royal Bank, TD, Bell and similar companies. I say they are traditional because most of the jobs require you to come in to the office, most of the time. Everything else is alternate and they allow working from home. They may be project based, adventure travel, volunteer, or traditional in that they need a regular full-time or part-time employee, but, still allow you to work from home.

Large Businesses

Workopolis

Workopolis was probably the first job site I used for finding jobs. It’s been around a long time and focuses on Canadian jobs.

Website: http://www.workopolis.com/

Monster

Monster is an international job site and has specific country jobs sites. This is my second “go-to” job site and you will find that companies post here a lot, similar to Workopolis. It’s a good site to use if you’re looking for international contracts.

Website: http://www.monster.ca/

indeed

Indeed is the latest job website I go to. It collects jobs from different sources and lists them on their site. It’s fast and has an app as well.

Website: http://ca.indeed.com/

Eluta

Eluta is like indeed. I found out about this after using Indeed. I can’t say whether one is better than the other. But, I prefer using the app on Indeed, which Eluta does not have. Their website says it’s the official website for the Top 100 Employers project.

Website: http://www.eluta.ca/

LinkedIn and their Job Search App

Find jobs on LinkedIn using their Android or iOS app.

iOS URL: https://itunes.apple.com/ca/app/linkedin-job-search/id886051313?mt=8

Android URL: https://play.google.com/store/apps/details?id=com.linkedin.android.jobs.jobseeker&hl=en

Alternate Jobs – Projects, Short Term Contracts, Online, and Adventure

Freelancer

Although I’ve known about this job site for years, I’ve never used it. It’s more for finding short-term contracts compared to the above sites. And it’s more geared towards small businesses employers and are almost all project based and work from home. I don’t think you’ll find jobs from the Big 5 Banks, for example, listed on Freelancer. They may have bought scriptlance.com since that domain redirects traffic here.

Website: https://www.freelancer.ca

Upwork

This site seems to have bought odesk.com and elance.com since these sites redirect traffic to Upwork. They take up to a 20% cut on job you find.

Website: https://www.upwork.com

Flexjobs

I just recently found this employment site that is geared towards work from home or telecommuting. Looks like it’s US based but it lists jobs in Canada. Job seekers have to pay to apply and use the important features of the site. Seems worth it if you’re a US job seeker who wants to work from home as the selection looks good. Job listings not as good for Canadians.

Website: https://www.flexjobs.com/international/Canada-telecommuting-jobs

AirTasker

Airtasker is a trusted community platform that connects people who need to outsource tasks and find local services, with people who are looking to earn money and ready to work.

Website: https://www.airtasker.com

Ratracerebellion

“Real Work from Home Jobs by Rat Race Cerebellion” is their slogan.

Website: http://ratracerebellion.com/

My Job Helper

This job board is more for the “revolving” or high turnover jobs such as restaurants, cashiers, sales, retail, clerical, warehouse, and other similar jobs.

Website: http://ca.myjobhelper.com/

Back Door Jobs

Pegged as “Short Term Job Adventures”, this site focuses on fun, creative jobs that are often outdoors and can involve travelling to a new country and teaching fun classes such as wilderness therapy. This isn’t a Canadian job focused site, but, it’s so cool, I wish I knew about this when I was in university.

Website: http://www.backdoorjobs.com/

Let me know if you have a favourite job site that you think should be included in the list. Maybe if you’re a photographer or writer, there might be other specialty sites you use.

One of the tools needed by individual contractors is a way to collect money from your clients. Invoicing software has come a long way since I started consulting. The choices are vast. But, don’t forget that a simple Word document template you can download for free is still probably the simplest way. If your recruiting company doesn’t manage the invoicing and billing for you, then software is your next step. Here is a list of software you can use to invoice clients.

Desktop Invoice Tools

Microsoft Word

This is probably the simplest way to invoice your client. You can download free templates off the internet.

Microsoft Excel

Using Excel is probably better than using Word since the calculations would be easier to manage than the table cells in Word.

LibreOffice Writer

If you don’t have Microsoft Word, you can download LibreOffice for free. This is a fully functional word processor that rivals Microsoft Word. I haven’t used Word at home, ever. I just use LibreOffice. It can read Word documents and save as Word documents as well. So you don’t have to worry about compatibility, except when there are macros involved.

LibreOffice Calc

This is the free alternative to Microsoft Excel. Like Word, I haven’t used Excel at home, either.

NCH Software Express Invoice

I’ve seen this software often at Staples and formerly Business Depot. I haven’t used it, but, their software looks good and I would try it if I wasn’t using LibreOffice or Freshbooks already.

Online Invoice Software

Wave

Wave offers free online invoicing and charges a percentage fee if you want to accept payments online. I would prefer Freshbooks since you can integrate your payments with their bookkeeping. Wave doesn’t offer the bookkeeping services.

Website: https://www.waveapps.com/invoice/

Invoicely

Invoicely offers free online invoicing and charges a flat rate for accepting payments online. I prefer this kind of payment than the percentage fee that Wave uses.

Website: https://invoicely.com/

Zoho Invoice

Zoho Invoice offers flat rate plans like Invoicely. They also offer Accounting, Expense, and Subscription management software that can be integrated with their invoice software.

Website: https://www.zoho.com/ca/invoice/

 

All the major accounting software also offers invoicing such as Intuit and Sage50 (formerly Simply Accounting). But, their costs are higher, except for Freshbooks which offers free online invoicing. There are a multitude of other invoicing software, but, they are for larger businesses or enterprise. I don’t cover them in this article.

If there is a software you think should be included, feel free to post a comment below.

What is PMP Certification?

PMP stands for Project Management Professional. It’s the industry and globally recognized designation for Project Managers who have completed the PMP exam accorded by the Project Management Institute (PMI). Individuals who have completed the exam

Project management is a professional field of discipline that aims to achieve project goals within given constraints. Project managers are the key individuals who lead in this field and are responsible for managing projects from planning to execution.

Project manager jobs lends itself to contracting work and freelancing.

Benefits of PMP Certification

Some key benefits of getting the PMP Certification include:

• Certified project managers make more money than non-certified ones. According to the PMI website, certified PMs earn 20% more than non-certified ones.
• Improves your job opportunities: All other things equal, during a job application, your certification will improve your chances of getting hired.
• Can improve your experience: You may be awarded more or better projects than competing co-workers in your organization.
• Globally recognized: The certification is globally recognized and not limited to a particular country.

Prerequisites

Below are the prerequisites to take the PMP exam. You can visit their website to ensure the latest requirements before taking the exam.

• Secondary degree (high school diploma or equivalent education)
• 7500 hours leading and directing projects
• 35 hours of project management education

OR

• 4 year degree
• 4500 hours leading and directing projects
• 35 hours of project management education

The exam costs $555 for non-members and $405 for members.

After completing the exam, you can apply for certification through PMI.

Available Training

You could take a university or college preparation courses, however, I reached out to the co-founder of Brain Sensei, Chris Stafford, who created a unique online PMP exam preparation website. He told me, you’ll get a much better experience from learning through Brain Sensei than traditional methods because we’ve made it interactive, fun, and interesting with an engaging story behind the learning process.

And if that’s not enough to attract you to choose our course, we have a 100% PMP Pass Guarantee.

If you use their online course and fail the PMP exam within 1 year of taking our course, they’ll offer the course to you again for 90-days. If after the second time you take their course and fail the exam, you can take our course a third time. If you fail the exam a third time, they’ll offer you a full refund of your purchase.

Some conditions apply, see their website for full details.

PMP Course Modules

• Project Management Overview
• Initiating a Project
• Planning a Project
• Executing a Project
• Monitoring and Controlling a Project
• Closing a Project

These courses correspond to the Project Management Book of Knowledge topics. You can sign up for the whole exam preparation course or take individual courses listed above. The whole course counts for 35 PDUs / contact hours. The bundled course is discounted to $399 from $680 if you took the individual courses separately. Each course counts for certain PDUs or hours. See their website for details.

Brain Sensei