Allan is a French speaking blogger from Quebec who runs two finance-related blogs: one in French (Faiscommeslesriches.com) and the other in English (QuitYourDayJob101.com). He first posted a comment here at GoGoAssets in May 2016 and has been a regular ever since. The great thing about Allan is that he always has a lot to share, and is always insightful and interesting to read. If you have a chance (especially if you can read French) be sure to check out his sites. There’s a lot of interesting information there, especially if you’re interested in making niche websites and investing.
Q: You’ve been blogging for a little over two years; what made you initially want to blog about investing and has your motive changed over time?
A: Actually, I started blogging in june 2013 on FaisCommeLesRiches. But it all started a couple of months earlier behind the scene. At that time, I was 32 and my finances were in poor condition. I had barely any savings at all and over 34k in personal debts plus a 180k mortgage on my back and a house in need of major repairs. My finances were a mess and I was, at that time, questionning myself a lot about what I really wanted in life. I had been through 2 breakups back to back… I was contractual at my job always in need to prove myself in order to make sure they would renew my contract… I was severely unhappy and my life was a total mess.
That’s when I started thinking about changing my life. There had to be something else… I was looking around me to see how people were living. I always knew I wouldn’t be a good fit in the rat race. But while I was working in finance, I realized I didn’t really know how to break free and my colleagues didn’t know either. So I started thinking about my education and about what I was taught while I was in school. I started thinking about what my parents taught me about money and how they managed their money. I also started reviewing what the media was saying about money and I realized it was mostly all crap… That’s when I started reading blogs and books and more books about financial freedom. I reread many books I had already read in the past to see if I had missed something. And indeed I had.
One day, it struck me. If I wanted to become rich or to reach an objective I had to do like those who succeed at doing it. From there comes the name “Fais Comme Les Riches”. I realized that all that was happening in my life was my fault and that I could change all of that. That’s when I landed on Jacob Lund Fisker’s blog : EarlyRetirementExtreme.com. I immediatly recognized myself in that guy. Except that he was more intelligent than me and that he had already done what I was about to start. I mean this guy was living on his own terms and like me he was more interested in sciences than in all the crap that people are talking about everyday.
I started blogging because even though it seems obvious that we have a lot of control over our own lives, I know that sometimes a tree can hide the forest. And I wanted to keep both a journal and share my journey because I thought it could benefit some and because there were barely any blogs or information on the subject in French at that time.
My motives didn’t change. While I’ve tried to blog in English to get more views and ultimately make money blogging, I realized that I wasn’t really interested in making money blogging. It is neither a good niche nor a good way to make money online nowadays. Blogging is really time consuming and the return on invested time can be very low (non-existant). So I decided that my goal was simply to have fun, reach out, make friends, keep a journal, create a community of like-minded people and slowly, we’re building it.
Q: Why did you choose long-term dividend investing over other investing methods? Are you happy with this decision?
A: When I was reviewing all the possibilities (from intraday technical analysis to fund or index investing, options investing or even real estate investing) I realized that most of these techniques were either too risky or they needed too much capital tied into one trade.
I didn’t want to bet on something everyday. I read a lot about technical analysis during my 20s and I even coded some buy/sell signals back in the day and ran numerous tests on the historical market. And what I realized is that no one can predict the future accurately and the risk of ruin is really high. That’s why technical analysis is only succesfully used by flash traders nowadays who are able to be faster (with the use of technology) than others to benefit from tiny arbitrage deals. So arbitrage wasn’t for me. I know that some still have success with technical analysis but you have to be available from 9h30 to 4pm and I’m not.
Real estate investing could have been interesting but it took too much capital for my means.
Index investing… or mutual-fund investing. Many are talking about index investing as the St-Graal. It may be for those who are “investing” in bonds or are constantly trying to do arbitrage on penny stocks or high tech stocks in the hope to hit homeruns every time… And if I had to decide between investing into a mutual fund or an index fund, I would choose the index fund for sure.
But there are three reasons why I don’t like index investing. First, index are constructed with rules that are arbitrary to some extent. They are only a way or a proxy to follow the overall market. Indexes are just a bunch of stocks and they have not been chosen by God… Second, you’ll still need to convert your capital into income once your “magic number” is reached and if you never learned about investing during your life you won’t have the knowledge to do it. Basically you’ll be stuck with 3 options : buy an annuity at the offered rates when you retire (hope that they will be high), withdraw 4% of you capital on good times and bad times and risk to deplete your capital or delay your retirement if we’re in a bearish market at the begining of your retirement or third, you’ll need to start investing in income stocks or bonds a lot of capital at the same time during a short timespan which increases the timing risk….It is less riskier to make mistakes investing with small amounts over a very long period of time when you’re young than when you hit retirement age and have to manage a lot of capital. Third, some say that investing into individual stock is too time consuming. You have to know what the corporations are doing, read their reports etc… I just don’t see how to not read the reports and not follow 500 corporations picked by an index is superior to reading the reports of 30-50 companies… but that’s another debate.
Dividend growth investing seemed like a sound technique and an integrated technique too. It forces you to invest in huge multinationals mostly, in real stuff that people buy and use everyday, in corporations making real cashflow, not just on paper, in corporations who usually have a strong moat and it also lets you focus on income instead of focusing on net worth or the value of your capital.
In real life you cover your expenses with income, not with your net worth.
Dividend growth investing also lets you put a harness on the compounded interest formula and to put it to work in real life. The cashflow forces you to think about reallocating/reinvesting money and with every trade you learn.
When you know that 90% of the stock market return has come from dividends directly or indirectly, you cannot [afford to] not think about at least introducing part of it into your investing technique I believe.
I really love that technique. But like with any technique, there are also drawbacks and nothing is guaranteed.
On a side note, the Dogs of the dow technique or one of its variants appears to be a valid technique too to me.
In the end, I strongly believe that time in the market is more important than timing the market.
Q: You mention on your blog in the “start here!” section that your parents didn’t know about investing and that this fact set you back 5-10 years. I’m curious about where you first learned about investing? When did you realize that this was something you could do?
A: My parents are all-in with guaranteed investments with Tangerine, Epargne placement Quebec and their single family house.
With that kind of investment, maintaining your wealth against inflation is already a challenge. Growing rich is almost impossible…
The stock market and real estate investing has always been taught to me as too risky. My dad is risk averse and I became risk averse too. That’s why even in my choices of life, I prefer investing in low beta stocks for the long run and also to “over” save for the future to give me room to control the risk and make sure that one day I’ll control my time. That’s also why I set for a job with a pension plan and that’s why I pay my mortgage very fast.
I realized I could become an investor after reading Marx, Carnegie and Benjamin Graham. Marx and Carnegie helped me understand capitalism while Graham with his book “The intelligent investor” made me realize that the stock market doesn’t have to be a casino. It is only a market place filled with intelligent, stupid and emotional people… exactly like any other market in the world… if you see investing in stocks as buying an entire business to make income to feed your family instead of seeing it like buying lottery tickets, the stock market makes a lot of sense.
That’s what made me realize I could invest instead of playing the lottery.
Benjamin Graham’s book and Warren Buffett’s letter to shareholders really made me realize that I could start investing too.
Q: Do you think investing is something that should be taught in public schools? What effect do you think that would have on society?
A: Investing should be taught in public schools. Period. Philosphy, rethoric and ethics should be taught in primary school from my own point of view. It is not true that kids are too young to understand such concepts. How many times can a 3 years old prove to be more intelligent than an adult with his incisive questions? Thinking outside the box should also be taught at a young age and financial planning too.
If we would have more “intelligent” and “informed” masses, people who can take their life in charge instead of relying on the governments everytime something goes bad, if we could raise an empowered generation of entrepreneurs, I think it could benefit everyone.
We live in a capitalist regime yet most people don’t know or really understand what capitalism is. They don’t know what the four ways to make money (have a job, own a job, own the production means, being an investor) are. The proof is found in lottery winners, actors, professional sports player. Many if not most end-up broke after a couple of years because of a lack of know-how and knowledge about money matters.
Ultimately I think that if we would have a population of “thinkers” of people who are constantly looking for opportunities to create businesses, to take problems in charge and find solutions to them instead of having a society of zombies doing the same thing again and again and over again without thinking about it really, it would really be beneficial to humanity.
But one of the drawbacks of capitalism is that money is power and if you have a lot of it you can change the culture and even control the politics to some extent. And the rich don’t want to lose that power so it is not in their best interest right now to raise / create more competition. What they need is a mass of workers who are willing to sell their time for cheap and by their crap on credit.
But this might be about to change with the rise of AI?? Who knows…
Q: How would you say living in Quebec has influenced your world view in terms of finances and investing? Is it more difficult to find resources in French?
A: Resources in French are scarce. There are not a lot of resources for sure. But I speak English so it wasn’t that big of a difficulty for me. Maybe it was for my parents though and that might explain in part why I haven’t been exposed to investing earlier in my life. I learned English when I was twelve and it took me years to get better and realy understand the language.
A major challenge in Quebec is found in the culture. We are born for “a small bread” like our grand mothers used to say. Do not set too high of an expectation or you might end up disapointed. Don’t go to university, it’s for snobs. Don’t teach too much to your kid or he’ll get bored in school…
I could continue like that for pages. There are still so many Quebeckers who are avoiding success. They think small. The stock market is risky, remember Nortel or Norbourg with Vincent Lacroix? You’ll lose all your money.
I come from an Hochelaga-Maisonneuve family and that’s the kind of thinking that has been circulating in my family and neighbourhood all my life.
For most people around me (family, friends, colleagues, neighbours, schoolmates), their only future has always been seen and imagined in the rat race in a job. Find a good paying job at the government or for a huge employer with a union and a formal payscale and a pension plan. That’s what we all set for… That’s where I ended up…
Overcoming the culture is an everyday battle here. Even now after three years of making progress, most people around me are sure that I’ll get wiped by a market crash and that I will finaly retire at 65 or 70 like everyone else. I don’t get any support and only weird looks when I talk about my goals instead of receiving questions about how to do the same. People in Quebec think small in aggregate. But I feel that this is changing too. Internet, social media and globalization tend to change the culture faster than anything else before.
Q: There is a lot of information about various books dealing with investing on your blog. Is there a book in particular that stands out for you? Where would you recommend a novice to the investing world start off?
A: Benjamin Graham, the intelligent investor and then to read all the free letters to shareholders written by Warren Buffett. This will give the basic logical knowledge and intelligence about why and how to invest.
You have to understand the major difference between investing and gambling before trying your hand at anything. Media, friends, colleagues and relatives usually screw up at explaining the difference and school doesn’t even talk about it.
Both are bets in the end because no one knows how things will turn out but investing is understanding your bet, why you do it based on logical facts more than just gut feelings.
When you invest you make certain assumptions. It’s an obligation. By investing in major American businesses I make the bet that these businesses will continue to dominate their market for the next century… I might be totally wrong. But that’s my bet. And to put all the chances on my side, I bet on the best horses out there, those who have made their proof and that are still able to innovate or eat the competition alive!
When the concept of investing is understood, I personnaly love “The single best investment” by Lowell Miller. That’s a good book about dividend growth investing.
Q: How long have you been investing for and what was your best investment-related choice? What was your worst investment decision?
A: I’ve only been investing since november 2013. My worst investment idea was to chase the yield with a REIT (ARCP). I knew that management had taken weird if not bad decisions at some point. They were also growing too fast which increases the risk of making bad decisions and investments but the yield was so attractive… In the end it turned out that they provided investors with wrong FFO numbers and the stock failed, the dividend was cut, the name “fraud” was mentionned more than once and the company had to restart under another name… I lost my dividend and 50% of the capital I had invested in the stock.
Don’t chase the yield. Don’t try to hit a homerun every time.
My best investment… Tim Hortons. This business was a sure shot… It was exactly the kind of businesses that Warren Buffett loves I told myself when I invested. Indeed, I was right. A couple of months after buying my shares, Warren Buffett entered in an agreement to finance a merger and tax inversion deal between Burger King and Tim Hortons which gave us Restaurant Brand intl. My capital more than doubled in 3 months and since then my shares of restaurant brand intl went up by a lot and I still get regular dividend raise. My only disappointment was that I should have bought more Tim Hortons shares back in the days haha!
Q: In 50 words or less, describe your investing strategy.
A: Dividend growth investing is simply buying stocks of huge corporations who have raised their dividend distributions faster then inflation for many many years. The expectation is that they should continue on the same path for years to come. This strategy focuses on income and income growth and the logic behind this strategy is that an asset is worth more if its cashflow increases. That’s why I often say that dividend growth is the key.
Q: How do you feel about the future, in terms of investing? Do you think we’re at the tail end of a bull market, or is there still a lot of room to grow? Does the eventual increase in interest rates keep you up at night?
A: Ah well… I knew this question would come!
Gandalf in Lord of the rings told Frodo that even the very wise cannot see all ends. I think these are wise words.
I personaly suck at making predictions… so I don’t. But I can tell you one thing about which I’m 100% positive. I want to reach financial freedom and if I don’t save and invest I’m 100% sure I won’t reach it.
One of my mentors, Warren Buffett (ok I’ve never talked to him or even met him in person but I read and listened to almost everything that’s printed or recorded from him) says that the mother lode of opportunities runs through America for the next century. He’s very positive on the fact that the per capita production will increase in America over the next century and I tend to think like him, not because he’s a god but because the US still dominates the world in most aspects and they know how to make capitalism thrive.
We are a growing human population. We have less and less resources available for that growing population with unlimited desires… when offer decreases while demand grows, basic economic tells us that prices go up. Interests rate are not my main concern. My main concern is inflation. And I personaly believe that owning the resources and owning the production means is still the future… it seems at least to be a brighter avenue than being a salaried worker.
But then again, the AI revolution could come in and change the world… we’ll see.
In the face of the unknown, I think that action is most often a better solution than inaction. At least with actions you try to control what you have control of. And if things change, you can adapt through action. If you don’t act and remain passive than you’ll let life move you all around…
Q: What are your favourite sectors to invest in and why?
A: I personnaly love consumer staples and Canadian banks. I like income and these are the best to provide me with steady and growing income. But I like to diversify and when I see a great company selling for what appears to be a discount, I might jump in. My goal is to own at least stocks in 50 companies to get a good diversification and to spread my loss of income risk. After all, my goal is to live off my dividends.
I still don’t own my fair share of Google but I love the company. I also would like to own shares of Amazon. These two don’t pay dividends but I’m positive that they eventually will. These are cashlow machines. The only problem is that they are sold at a huge premium right now and I prefer to wait for a correction for now. But I think that they will stay overvalued for a long time and sometimes just jumping in a fast moving train can prove to be a good idea.
Q: What does retirement mean to you? Are you on track in terms of achieving these goals?
A: I have a 9 to 5 job with a couple of weeks of vacation per year. I like what I do for a living but to be honest 9 days out of 10, I could find something better to do with my time. Retirement means having my expenses covered by my passive income plus a little extra cushion because expenses like property taxes, heating, medical expenses and food usually grow faster than the “official” inflation rate.
Once that threshold will be met, I’ll be able to say goodbye to my 9 to 5 job and trust me, I have so many plans and goals that I would need to live a thousand years to achieve all of the things I’d love to do during my lifetime.
I’ll probably continue to grow my income through a small part time business or other endeavours and investing. And I won’t spend the capital until late in my life. Owning my time and freedom is just a step. Being able to stop working for money and have the money work for me will open up so many opportunities that I can’t even imagine right now because I’m too busy with my job and life.
If I’m on track… Humm I’d say that so far I am but I’m getting a bit concerned about dividend growth right now, which seems to slow down. I’ll either need to allocate more money in fast dividend growers or rethink the whole strategy if things remains the same. My plan is based on a 6-8% dividend growth per year. Yet, right now, I’ve been disappointed by many of the stocks I own.
Q: You run two blogs, one in English and another in French. Have you noticed any differences in terms of readership, interest, topics, etc.. between blogging in either language. What’s the French investing/blogging community like?
Humm. Actually I run 13 websites right now and two blogs on finance. But to be honest I stopped blogging in English many months ago because I just got tired of it. Writing in English takes me twice the time and I don’t have a lot of free time with the baby and my job.
There is a very active community in the finance niche in English. But in the French / Quebeckers niche, it is still not very active.
I see it as an opportunity. Blogging in English is facing competition… a lot of competition. But in French… you’re almost alone… actually since I started actively blogging in french there have been many new blogs popping up. The community is growing and I love it.
But if you take my blog like FaisCommeLesRiches for example. I get 6000 views per month on average. Yet, I only get comments from 5 or 6 people on a regular basis. Maybe I’m not interesting and that’s fine. But my observation is that most Quebeckers interested in the niche will simply comment in English on English blogs where the community is bigger. Maybe when I’ll reach a bigger passive income or have several hundreds saved I’ll get more views. Or maybe I should be more extreme with my savings and write my real full name and put my picture but I honestly don’t care. I blog for myself to keep a journal and make friends. And if it eventually becomes a great success than great. And if it doesn’t well… too bad!
Q: Besides long-term dividend investing, do you have other ways of passively earning income? If so, what are they? How have those worked out for you?
A: Yes. As documented on my site I also create niche sites as a hobby. I didn’t spend a lot of time on them and they already provide as much passive income as my investing passive income. It’s a micro business for me but I wouldn’t mind growing it into a bigger business. My only concern here is that it’s highly dependant on Google and Amazon for now and I see that as a major risk.
Creating intellectual property is something I’m very interested in. I have a lot of ideas but I currently lack the energy/time to pursue those ventures. I’ve recently tried myself at hiring people abroad for cheap to do the job for me. I found the experiment interesting but you get what you pay for…. I might try to pay more next time and maybe I could then grow my micro business into something bigger by leveraging that opportunity.
So far, I’m heading toward making 2500$-3000$ passively from my niche sites this year.
Q: Being Canadian, do you prefer investing in CDN stocks or US stocks? How do exchange rates / foreign taxation figure into your investment strategy?
A: I currently invest more in US stocks. Usually when the Dow drops the exchange rate increases to compensate…. so I end up paying the same price in Canadian whatever happens. The system balances things very well.
Since I realized that, I have opened a US RRSP trading account to try to profit from this but I can’t tell about the results for now.
My US dividend growth stocks are held in my RRSP account for now and my Canadian dividend growth stocks and my growth stock (Google) are held in my TFSA account for tax reasons. Soon I’ll reach my cap in my RRSP account so I’ll most propably turn myself to the Canadian market to max out my TFSA.
Once I’ll be done filling those accounts, I’ll invest in a non-registered account in Canadian stocks for tax reasons mostly.
There are great opportunities in Canada and US for a dividend growth investors. Corp such as Fortis and CN and all the Canadian banks have incredible track records for paying steady and growing dividends. Some Canadian banks have paid uninterrupted dividends for more than a century!!
But one shouldn’t invest only in Canada. We’re very heavy on Financials, natural resources and telecoms. We all know that these businesses are highly dependant on government regulations. Banks, telecoms and natural resources are cyclical in nature and highly volatile…
Q: Do you have any favourite blogs that you like to follow?
A: There are so many. I don’t actually follow blogs everyday but I like to pop in and see how it goes once in a while.
That’s it for now! I want to thank Allan for taking the time to answer my questions. It was a lot of fun reading his responses and definitely interesting to learn about someone else’s investing experiences. Be sure to check out his blog(s) if you get the chance.
As always, thanks for reading!
PS: If you have your own financial independence/investing blog and would like to be interviewed, feel free to send me a message below. All requests are welcome, no blog is too small!