A Lifelong Investment Plan for the Reluctant Investor

"Everything should be made as simple as possible, but not simpler." - Albert Einstein

This idea started as a 30 May 2014 post proposing a portfolio for a reluctant investor that can be carried through an entire lifetime from working and saving to retirement and spending. We updated it slightly on June 6^th 2025, after finding that it worked fine during the ensuing eleven years! After doing a little more investigating, I've found an even simpler version that requires even less time and effort to manage yet should work just as well in terms of overall returns and stability.
................................................................................................................
Drum roll ... the new improved Reluctant Investor's Lifelong Portfolio and Investing Plan

1) Portfolio structure: The portfolio will consist of one fund -

• iShares Core Balanced ETF Portfolio  (trading under TSX symbol XBAL)

XBAL is a fund that contains several other funds to achieve wide diversification in a classic 60/40 equity/fixed income mix, with an acceptably low MER of 0.20%

2) Account setup: Start with a TFSA. Open a TFSA account at a discount broker. Make it easy to contribute or withdraw money by using the broker offered by your bank. If you have less in total to invest than $102,000, which is the cumulative maximum contribution limit up to and including to 2025 that can be invested in a TFSA, put it all in the TFSA. When there is more than $102k to invest put the excess into an RRSP (another account that will need to be opened at a discount broker), up to the cumulative unused contribution limit shown on tax assessment letter from the Canada Revenue Agency that it sends out after you have filed your taxes every year. It you have more than the total limits of TFSA plus RRSP to invest (happy days!), open a taxable account.

3) Automate investing: Set up automatic transfers to contribute from your bank account to the TFSA/RRSP/taxable account if in savings mode, of course keeping in mind the contribution limits. Leave the transferred money in cash until there is at least $1000 to invest. Less than a $1000 for a trade and the commissions start to add up too much and hurt investment returns. Sign up for the automatic dividend reinvestment plan (DRIP) with the broker. This will have all of XBAL's interest and dividend distributions automatically used to buy more XBAL without any commission to pay. All of your money is thus constantly invested and not sitting as idle cash.

During retirement, you will have to sell enough XBAL for the amount you want to withdraw.

............................................................................................
Historical Estimated Performance - To see what kind of performance the Reluctant Investor Portfolio would have provided, we again turn to the Stingy Investor Asset Mixer tool. We have approximated XBAL's holdings using Stingy's available assets. The biggest discrepancy is in the fixed income part of the portfolio, especially the US bond holdings. But the Stingy tool gives us a pretty good idea.

From 1988 to 2024 inclusive, 37 years in total, XBAL would have performed quite well.

An investor in the saving phase who deposited $1000 in a TFSA in 1988, whose returns are not subject to taxes, would have about $19,000 at the end of 2024, a compound annual return of 8.3%. The real, after inflation end value was about $6,200, a solid real return of 5.9%.

For a retiree withdrawing 4% of the year-end portfolio value every year, XBAL still gained and grew. $1000 of XBAL at the start of retirement would have grown to $1800 despite annual withdrawals. It is also quite interesting that only in one year - 1990, the 3^rd year of withdrawals - did the real after-inflation withdrawal dip below the first year withdrawal.

Unfortunately the Stingy Investor tool does not include inflation data before 1980, so the period of high inflation, and its effects on real after-inflation returns, which is something that really matters, cannot be examined.

Such a portfolio has value. Not everyone can, or should be, an investor who spends time and effort on investing. That's why our post's title says the portfolio is both inspired by, and intended for, someone like Albert Einstein. After all, could anyone think that Einstein, or the world, would have been better off, if he had applied his time to investing at the expense of physics?

Disclaimer: This post is my opinion only and should not be construed as investment advice. Readers should be aware that the above comparisons are not an investment recommendation. They rest on other sources, whose accuracy is not guaranteed and the article may not interpret such results correctly. Do your homework before making any decisions and consider consulting a professional advisor.

This post is dedicated to my daughters, accomplished professionals who are plenty smart enough but whose time is better spent on their other endeavours instead of investing.