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The Get Rich Investment Plan

Formalizing our investment plan and process has been a long time in the making. While we have generally been clear about what we invest in, this document will serve as a one-stop guide in terms of how we, the Get Rich Brothers, invest our money.

General Theory

The portfolio is to consist primarily of cash flowing assets which increase the amount of income they produce over time. These investments are preferred because they offer the potential to outpace inflation over long periods of time; this protects the purchasing power of the investor.

Investments which do not produce cash flow are always speculative in nature and are to be purchased only with great caution. Investments which do not produce income tend to rely on the Bigger Idiot Theory which states there must be a bigger idiot out there than you who is willing to buy the investment at a higher price than you paid.

Since there is an opportunity cost when choosing one investment over another, the steady returns of cash flowing assets must win in cases where all else is equal over those investments which produce no income.

Paper Assets

  • Common Stocks
    • Dividend Growth Stocks
      • We identify as Dividend Growth Investors (DGI). This means we purchase common stocks which pay rising dividends over time. These are our favourite paper assets. The dividend growth alone can beat inflation before even factoring in the compounding power of reinvested dividends.
      • A track record of dividend growth is what we call our Profitability Litmus Test since rising dividends over the course of a few decades can ultimately not be faked. This matter has become increasingly more important over the year as accounting departments at public companies have become craftier with how they report their earnings figures.
      • Take The Coca-Cola Company (KO), for instance, which has increased dividends every year consecutively for 53-years in a row. With that sort of a track record, it is pretty safe to say the company has demonstrated true staying power. Longevity requires a durable business model which can succeed through thick and thin. As a result, dividend growth is an excellent metric on which to conduct further research on the stock of a company.
    • Non-Dividend Stocks
      • We would never commit more than 10% of our entire stock portfolio to this area of stock investing. Even 5% would be pushing it for us. These investments are speculative in nature regardless of the maturity level of the company since there is no regular income to buffer the downside.
      • The fact is that financial freedom is best funded through consistent cash flows and every dollar sitting in a spot like this does not contribute to our end goals.
    • Index Funds
      • We do not currently invest in index funds though the possibility is not ruled out. While there are some low-cost options, we take issue with being bled by fees. We prefer a one-time commission with individual stocks after which the dividends can flow unimpeded.
    • Preferred Stocks
      • We do not hold preferred stocks for reasons similar to those below for Bonds.
  • Bonds
    • We do not hold bonds.
    • Bonds do not increase the amount of cash flow to investors over time.
    • Bonds underperform common stocks over extended periods of time (see Siegel’s Stocks For The Long Run).
    • If an investor is concerned about the pecking order in the event of bankruptcy for a company, we believe it is best to not invest at all. There are enough good investments out there that scrounging for the scraps following company failure isn’t necessary.

Hard Assets

  • Precious Metals
    • A small allocation to precious metals in the form of bullion/coins is acceptable if the position can be achieved at fair prices (again, if there’s no cash flow, it is difficult to determine what is fair). Precious metals are typically owned for their value as “hedges against inflation”, but we feel we already get that adequately from our ownership of dividend growth stocks.
    • However, precious metals also offer some significance in economic apocalypse scenarios. Bullion is our preferred method of ownership since precious metals act as a form of currency in the event of an economic collapse for the fiat currency system in place.
    • We do not hold ETFs or Certificates as these overlook the doomsday attractiveness of precious metals holdings. ETFs/Certificates could very well be useless in the situations that precious metals would be most lucrative to hold.
    • In any event, we are not “Gold Bugs” and see this area as simply one additional way to diversify our overall investment portfolios. Less than a 5% representation here is all we would commit.
  • Collector Items
    • We do have a number of collector items spread across a various domains. From coins to other trinkets still in their boxes and wrapping, we have in the past spent money on those items in the elusive category of it’ll be worth something someday.
    • Having spent enough time trying to figure out what half of it is all worth, our ultimate judgment here is that it isn’t worth it. The people who make actual money from these items are the middle-men who facilitate the transactions such as eBay and other marketplaces. Most hobbyist collectors lose money.
    • From a minimalist perspective, all these items do is collect dust and use up valuable brain space that could be better spent with other activities.
  • Real Estate
    • Rental Real Estate
      • The best form of real estate ownership as an investment is to collect rent from tenants. This allows an investor to turn hard assets into passive income.
      • Rather than collect rent ourselves, we prefer to own Real Estate Investment Trusts (REITs) through stock exchanges. This allows us to take a stake in real estate investments without going out and dealing directly with landlord issues. One REIT we have owned since the financial crisis through 2009 is RioCan Real Estate Investment Trust (REI.UN) which has served us incredibly well over the years. This investment pays us monthly distributions and has expanded its considerable reach over the past years.
    • Flipping Properties
      • Property flipping makes for incredibly entertaining television programs but is not something we would do. This is a hugely speculative enterprise. While some people can apparently do this effectively, this is an area where a lot needs to go right in order not to lose one’s shirt.
      • To each their own.

Excess Cash

  • An Emergency Fund must always be in place.
  • Enough to allow for comfortable sleeping at night to be held in a high-interest savings account to accumulate interest.
  • The cash in the Emergency Fund is to sit in place. It is not to be used for opportunistic investments no matter how enticing.
  • While there may seem to be better ways to put this money to use, there is no greater value for money than providing its owner peace of mind.
  • One year’s annual net salary is the target goal for an Emergency Fund.

Investment Accounts

  • In Canada we have two main types of accounts which allow citizens to shelter their investment gains from the tax-man.
  • Tax-Free Savings Account (TFSA)
    • This is our plan-of-choice which has been available since 2009. The government has recently proposed an increase to a $10,000 annual contribution limit as part of its budget.
    • Money that goes into a TFSA does not receive a tax break but all gains which are taken from the plan are untaxed. Considering our relatively young ages and the span of time over which we plan to stay invested, this is a very attractive option or us.
    • One of the great things about investments within a TFSA is that money taken from the plan does not claw back against other income-tested benefits. In other words, it is quite possible when looking down the road thirty years to be receiving government benefits intended for those earning poverty-level wages while actually receiving a healthy income from one’s TFSA (this assumes, of course, that the government does not change the rules in a decade or two). Leaving moral arguments aside, if this is how the system is set up, taking advantage only makes sense.
    • We prefer the TFSA to the RRSP because while we do not know what tax rates will be in the future, history has demonstrated that they can oscillate to quite high levels. We would rather deal with a known tax burden now and reap our rewards tax free down the road.
  • Registered Retirement Savings Plan (RRSP)
    • The RRSP has been around since 1957.
    • With this plan, there is a tax deduction applicable to contributions while withdrawals are taxable. It functions ultimately in reverse order of the TFSA noted above which offers no deduction for contributions but does not tax withdrawals.
    • One of the major drawbacks of the RRSP is that it is difficult to predict what one’s income might be in retirement. While financial planners often tout the notion that one’s income will be less in retirement, anyone who would like to Get Rich should not be planning on this. We certainly do not intend to live a life of less after working for decades of our lives.
    • The problem is that assuming someone has maxed out their RRSP contributions over the decades and then goes to withdraw their returns which have grown over the years, they may actually wind up in a higher tax bracket and/or lose some of their government benefits as a result of the claw back effect. Further, many people are not entirely retiring but actually “semi-retiring”, meaning their incomes may actually increase if they begin drawing down their investments and also earning a sizeable income from their investment nest egg.
  • Non-Registered
    • In cases where we run out of TFSA room, we would leave our qualifying Canadian dividend paying stocks in a non-registered account. We would rather receive the dividends with the dividend tax credit in a non-registered account instead of putting the money into an RRSP which will later be taxed as income when removed.


  • It goes without saying, really, but we do not use consumer debt to fuel our spending. The best life is one lived without debt despite what many “financial gurus” try to push on people. There are cases where debt can be used intelligently, but erring on the side of caution never lead to bankruptcy either.
  • By not having to service debt payments, it frees up cash flow to invest.

The Get Rich Brothers

What is in your investment plan? How has it changed over the years?

Full Disclosure: Long KO, REI.UN, Silver Bullion

Please note that this document may be updated from time to time to reflect updates to our philosophy.

3 thoughts on “The Get Rich Investment Plan

  1. Alexander Miller & Associates says:

    Thanks, awesome read! You should post more on financial matters. So many insights!

  2. Allan says:

    Hi Ryan,
    My investment plan looks a lot like yours on some exceptions maybe. All my US dividend growth stocks are held in my RRSP account. Since they are not tax advantaged, holding them in a TFSA account made no sense and when my contributions will be maxed out I’ll keep the new ones in a non registered account.

    Except for one exception (jean coutu because my plan was not set back then), all my canadian dividend growth stocks will be held in a TFSA or a non-registered account. I’ll try to hold the biggest dividend payers in my TFSA to maximize the tax free cash flow.

    I don’t intend to hold any sorts of metal or bullions and I don’t keep a huge emergency fund… I keep a month of expenses at most. If an emergency arises, I have a mortgage credit margin that could help and my portfolio could also act as an emergency fund. When I talk about emergency I talk about being unable to work without receiving any benefits. I have an extensive salary insurance with my job, we have public plans etc… I prefer to see my cash work for me and I don’t feel unsafe that way. This might change when I’ll be a father but for now it suits me well.

    I don’t intend to hold a lot of non dividend paying stocks. I’ll probably buy some Google shares again and Berkshire’s shares eventually but I won’t buy too much of these non dividend paying stocks.

    I own an index fund but… I’ll see. I prefer the cash flow. I’m not a big fan of funds.

    I also have a private defined benefits pension plan in which I contribute 10k per year plus my employer’s contribution. Hopefully I’ll retire before 60-65 so I guess I’ll need to convert this into a CRI (french appelation) and invest it on my own eventually but I’ll see when I’ll get there.

    My plan also involves clearing my mortgage within 2020 to live a debt free life and creating passive online sources of income (websites, maybe eventually a book or other products).

    Take care
    Allan recently posted…Rich man quote : John D RockefellerMy Profile

    1. Allan,

      Nice investment plan. U.S. companies within the RRSP make sense to avoid the withholding tax.

      Will the TFSA contribution limit moving to $10,000, supposing it does, change your plan at all?

      BRK.B is also a company I would make an exception for as it is a non-dividend payer. It’s basically like holding the best mutual fund in the world without an MER.

      – Ryan

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