2026 Update: Jim the Plumber

In 2023, after months of correspondence, I had the pleasure of finally meeting Jim.

Jim was a plumber in rural Alberta. I say was a plumber because after a couple of decades of living well below his means and plowing the difference into boring Canadian dividend stocks, he became financially independent. Retirement came soon after, with Jim finally throwing off the shackles of full-time work in 2021.

I profiled Jim and his massive $3M+ retirement portfolio back in September 2023.

And even to this day, that post continues to be the most popular thing I ever wrote. Y’all love Jim the plumber.

I’ve kept in touch with Jim over the years. We text regularly. Sometimes he visits me, other times I visit him. Or we’ll do a video call. He updates me on his portfolio and his life, and then I pass the message along to his many adoring fans.

We recently spent a couple hours on a Saturday chatting over Google Meet. I was in surprisingly warm Edmonton, while Jim called in from his “Winter Headquarters” in Puerto Vallarta. We talked about all sorts of stuff, including family, geopolitics, and, of course, stocks.

Here are a few parts of that conversation, edited with the language cleaned up a little bit. Jim… likes to swear.

Portfolio update

Jim, let’s get this out of the way first, since I know this is what everyone really wants to see. Any major changes in the portfolio over the last six months?

Nah. I’m not even sure there are any minor changes in the portfolio over the last six months. I buy a little bit when I have excess cash. I usually only sell when I’m forced to, like when Rogers took over Shaw a couple years ago. I’m selling maybe once per year.

I like your hands off attitude. Is that something that you figured out when you were working?

Yeah. I was working like 50 hours a week to try and get ahead. Then there’s all the family obligations and all the other B.S. we’ve gotta deal with. So I didn’t have huge amounts of time to dedicate to stocks, and the time I did get was spent researching new positions. I barely even read most of the quarterly earnings announcements. But I did check the portfolio most every day, mostly hoping for a big decline in one of my positions so I could buy more.

My view is as long as I buy good companies at good prices that offer good dividends then I’m good. The rest is mostly noise. Sometimes the noise works in your favour and you get the opportunity to buy shares cheap. But I’m not as hardcore as you are there, I’m happy to pay what I think is a reasonable price.

Okay, let’s share your portfolio. This is recent up until a few days ago. 

Sure, let’s give the people what they really want.

So to review, you retired at the end of 2021 with right around $3M and passive income of around $100k per year, correct?

Yeah. One day I was reviewing the portfolio, saw it hit $3M, and figured that was enough, y’know? That was the day I made the decision to retire. I ran my own business and had a few commitments, but I stopped taking new jobs. It was all over in a few weeks. My wife hung around her job a little bit beyond that, but it all happened pretty quickly after I decided.

I realize now that I was tired, sore, and burnt out, and seeing that number was just the excuse I needed. If the portfolio was $2.95M I would’ve come up with some other reason.

Look at your portfolio now. Up 50%+ in just a few years, and that’s despite taking out regular withdrawals. And your income has also increased by about 50%.

I’ve been withdrawing enough each year to live on and then reinvesting the rest. Our house was paid off years ago and with the exception of a couple big trips per year (like the current one to Mexico) we don’t do much. Friends come over or we go to their house. I play pickleball and golf to help pass the time. So we don’t spend a lot of money, maybe like $60k per year.

We started giving each of our daughters (Jim has two in their 20s) $10k each on Christmas, and our new grandchild will have his RESP covered. The balance of giving some away now so they can enjoy it versus compounding for the future is still a tough one, and I don’t want to create generational welfare. So I figure this is a good balance.

You have more than 30% of your retirement income coming from just three companies — Royal Bank, Enbridge, and Fortis. Does this worry you at all?

My view is that these are three of the best companies in Canada. Hell, I think Royal Bank is the best bank on the planet. I slowly accumulated shares in these businesses over 25 years because I think they’re excellent. The plan has paid off, and they give me massive dividends. Why would I want to sell and diversify into worse businesses?

A while ago I made a rule to limit my investment dollars into one of the top two players in an industry in a country. Like I bought Granite REIT because I think it’s the best industrial REIT in Canada. It has a fantastic balance sheet, a low payout ratio, and it’s actually growing FFO per share. Not a lot of REITs actually do that. I don’t understand how taking money out of that stock and putting it into a worse competitor is supposed to be a good thing.

Speaking of Royal Bank… did you finally just switch your banking over there?

Yep. I was a loyal CIBC customer for 25 years. Just a couple years ago switched to Royal. I mostly waited because I knew switching all the business stuff over would be a giant PITA.

What else are you looking for in a stock? And has that changed much over the years?

I’m a lot like you. I want a combination of:

• Boring

• Dividend growth

• Good balance sheets

• Something I understand

But my universe is a lot smaller than (Nelson’s) is. I’m mostly focusing on the top few companies in a sector. I don’t like most small caps, so I don’t play much in that space. I like to keep things as simple as possible.

I know you’re not a big fan of selling, but if I put a gun to your head and forced you to sell something right now, which stock would it be?

Walmart. As much as I love Walmart and think that it has done a valuable service for millions of consumers by bringing prices down, the stock is trading at what, a 50x forward P/E? That’s too high.

(Nelson’s note: as I type this, Walmart trades for a 44x forward P/E ratio)

Intermission

This week on the podcast Bob and I tackle your questions.

We talk about the sustainability of Telus’s dividend… how to invest cash you might need 12 months from now… and, the question we get the most — just how much money is in your portfolio, anyway.

As always, you can listen on Spotify:

Or on YouTube:

Or wherever else you might get your pods.

And now, back to Jim.

Jim on everything else

When you first retired you told me that you were paying “zero” taxes. Has that changed at all now that you’ve been retired for a few years?

My income consists mostly of dividends, but I’m also slowly taking assets out of my RRSP and my wife’s RRSP. This means that I’ll be paying some taxes for probably the next 10-15 years as I wind down the RRSP. I want to completely wind down the RRSP by the time I hit 65 and start collecting CPP.

The good news is the whole strategy is really tax efficient. Between the dividends and the RRSP withdrawals I’m paying less than 10% of my income towards taxes. It’s much better than what my situation was as a business owner, and even then I realize I had some tax advantages. Open a business, guys! It’s slightly extra work but it’s worth it.

When we first talked you said you were “buyback agnostic” and that you think a lot of companies screw up buybacks. Have you changed your mind there?

Sort of. I still think too many companies only repurchase shares when they’re high and then go into cash preservation mode when things are bad. That’s the exact opposite approach that they should be taking. When I research a company and see it does that, I’m usually not too interested. I’d much rather see a special dividend, but those almost never happen.

Where my thinking has changed a bit is I think a company that approaches buybacks in a consistent manner is going to be almost always underrated. If I see a company that buys back 2-3% of its shares every year like clockwork, I’m often more interested. I view it as dollar cost averaging into its own stock, basically. I like that approach, since it’s one that I used successfully.

Like you, I’m interested in anything that’ll help my dividend increase over time. Having to pay a dividend over fewer shares helps, so I tend to like that.

Do you find you’re getting bored in early retirement?

No. I still play a lot of pickleball, and I’ve started golfing more. Some buddies and I got a membership at the local course last year. We play when it’s quiet during the week. My wife and I go on a couple of extended vacations per year, including our annual trip to Puerto Vallarta. We might go someplace different next year, it’s getting pretty expensive here. But we also know that you have to be a little bit careful in Mexico. We’re also avoiding the U.S. for the same reasons most other Canadians are. Maybe southern Europe? We aren’t sure.

When we’re at home we have lots of friends come over, or we go to their place. That’s the beauty of living in a smaller town, you get to know people. It’s harder to make friends in the city. And we visit our daughters often, they live about an hour down the road so it’s easy.

A few times a year friends call me to do plumbing work, too. They pay me in food, so I’m a happy camper.

Has your mentality around money changed at all?

Oh, definitely. I used to hate spending money. Now I realize its power to make my life easier.

Right before we left for Mexico we were visiting our daughters. It started snowing and I was faced with a drive back, in the dark, with a bunch of fresh snow on the road. It was decided that we weren’t driving back that night, and the guest room was available to us.

Rather than create a bunch of extra work for (daughter), we decided to get a hotel instead. The closest one was $250, but I didn’t care. It was worth it to save her the work, y’know?

And finally, what stocks are you looking at today? You do have a bit of cash…

I liked your writeup on H&R Block a few weeks ago. I’m definitely eying up that one. It fits the consistent share buyback theme, and they dominate the assisted tax prep world. I did an informal survey of my buddies and a lot of them take their taxes to the local H&R Block. Sure, we’re older, but there are a lot of old people left.

Shame it has fallen so much, huh? (laughs)

(Ed. note: sad face)

I’m also interested in adding to a few of the names in my portfolio already, including Intact, TMX Group, or either one of the Brookfield entities. Telus seems interesting too.

I’ve been following the struggles of a lot of the quality stocks that everyone liked so much 12-24 months ago. I’m interested in a few, including S&P Global or Domino’s Pizza. But most are just generic tech stocks to me. My problem is I don’t want to reinvest my USD cash because it goes so much further when I spend it in Mexico. I just slowly accumulate those dividends and put them in a USD account.

On the other hand, the USD has fallen versus the CAD lately. That makes converting more advantageous.

I’m not sure I want too many new positions. Maybe 1-2 only. So I’m more inclined to buy more of what I already own.

Thanks as always to Jim for taking some time to give me newsletter fodder. If y’all want to ask him any questions hit up the comment section on the post (please, don’t email me, use the comments so everyone can see/benefit) and I’ll pass ‘em along.

One of the things I really like about Jim is he’s the epitome of the get rich and get off the grid meme. He lives a quiet life in a small town surrounded by people he likes. He has very offline hobbies and doesn’t participate in social media at all.

Probably the biggest lesson I learned from Jim is just tuning out the noise. Most voices don’t add much to the discussion. They come from people who have different perspectives than I do. They have different goals than me. And so they approach things in a very different way.

That doesn’t necessarily make their methods or their perspective bad. The philosophy has value to those playing a similar game — but not really anybody else. I should ignore those people more often and stick to my plan. And then, when there’s nothing else to do, get offline and live a real life. Social media approval is meaningless, and it’s doubly meaningless from folks who have different goals than I do.