October 18, 2025, Issue 8

The importance of savings. We hear people talk about savings all the time. How much is the right amount to save? What kind of investments do we put our savings into? What type of returns should we expect?
The truth is that there is no universal answer to any of these questions. Everything is dependent on what you want out of life. If you want to retire to a life of travel and exploration, you will need more than someone who is happily retired as a homebody. I believe it is important to know what you want and then break down your savings buckets based on those wants.
For example, we all want to retire. Beginning to save for retirement at a young age means you will need to put much less away than if you start later. This is due to the immense power of compound interest. Here are two scenarios to illustrate the point. John starts saving at age 25. He diligently puts away $5,000 a year for 10 years and then stops completely. He earns an average annual return of 7% and he never withdraws any funds until age 65. At that point he has $602,070. Now Betty only begins her savings plan when she turns 35. But in order to catch up, she puts away $5,000 for 30 straight years until 65. Betty earns the same 7% annual return every year. But guess what? Betty has amassed $540,741. So even though she put away $150,000 versus John’s $50,000, he ends up with more savings thanks to more time earning compound interest. The takeaway? Start early regardless of how much you can afford to put away.
Retirement is saving for the long term. What about our short term goals? We want to travel in 2 years. We want to buy a home in 7 years. How do we go about these shorter term savings goals? Here is where we want to take less risk. If we know we will need the funds in 2 years, we don’t want to experience a stock market correction before that. We can put away the money into guaranteed investments. Today we should be able to earn 4-5% in vehicles that carry zero risk. For a mid-term goal like a down payment on a home, we should be thinking 7-10 years, and use a combination of guaranteed investments and some with more risk to provide a better return. The length of time involved will smooth out any potential stumbles by the market.
How is your saving plan going? Please feel free to comment or reply to this email with your progress, how you feel about it or any savings questions.

Establish a Cushion

While we’re worrying about longer term savings goals, let me throw another one at you. It’s a pretty solid idea to try and have a 3-6 month cushion of savings in the bank. Calculate what you need to live on each month and then put away enough to carry you through at least 90 days. Jobs can come and go, we may want to look for a better one. Maybe we want to take time off for extended travel. Or maybe want to take a course to improve ourselves. In any case, having that buffer will make us breathe easier in the face of changes or new paths chosen.

Taking Free Money

Exploring the retirement savings road a little more, most companies that we work for today will offer us a chance to automatically invest a percentage of our paycheck into either a 401K (USA) or an RRSP (Canada). These companies will also usually offer what is called a company match. If you invest 3% of your salary, your company will likely match that amount and deposit it into your plan. These plans are the absolute best, and we should always be taking advantage of them. First of all, because the money comes straight out of our pay, we don’t even notice it. Secondly, and more importantly is the match. If I said to you hey, give me a dollar and I will immediately give you back two dollars, I wouldn’t expect too many people to refuse that deal. This is what your company is saying. ALWAYS TAKE FREE MONEY!!

Current Portfolio

With all of this talk of savings, here is a look at our current bucket of stocks with prices as of the close on Friday, October 17th. I am of the mind that 17 stocks is too many to keep proper track of, but that is where we sit for various reasons, mostly related to timing. With that in mind, stocks on the chopping block in the near future include DKNG and PENN (they have been hurt by the entrance of prediction markets into sports, but we will hold through earnings). I’m also keeping a close eye on RDDT and SNAP.

Stock	Shares	Avg. Cost	Current Price		First Purchase
RDDT	20	$143.70	$194.95		2/13/25
LEG	900	N/A	$8.87	Work related
DKNG	50	$34.00	$34.10		10/15/20
SNAP	800	$8.15	$7.65		8/5/25
AMZN	10	$135.49	$213.04		2/10/23
NVDA	20	$47.72	$183.22		1/2/24
NKE	20	$73.65	$67.37		9/11/25
SOUN	445	$4.94	$19.02		2/15/24
ARKB	45	$19.46	$35.38		5/1/24
MSFT	5	$410.38	$513.58		10/31/24
DELL	45	$102.37	$149.59		12/19/24
BA	15	$210.44	$212.94		5/20/25
PENN	60	$18.14	$16.26		6/26/25
PANW	10	$166.03	$207.89		8/7/25
JOBY	250	$14.23	$15.66		8/19/25
GOOGL	5	$238.74	$253.30	Trump Sale	10/10/25
PTON	200	$7.41	$7.50		10/14/25

Thought of the Day

As parents, we tend to look back fondly at all stages of our children’s lives. Even the early days of baby not sleeping becomes a great time of bonding and closeness, never mind that we could barely function during the day. With that in mind, I have to put in a very personal plug for my own kids. Ranging in age from 22 to 26, they are bright, driven, and very successful to this point in their respective careers. What I am truly appreciative of at this point is how much I am now learning from them, and how much they drive me. It is a lovely turn and I eagerly await their further accomplishments.
If you are a parent, what are your fondest memories of your kids? If you are a kid, what is something that your parents instilled that has paid off in your adult life? Please reply to this email or leave a comment on the dadsadvice.net site.

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