Explore every episode of the podcast Build Wealth Canada Podcast
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Title
Pub. Date
Duration
Protecting Your Net Worth (For Canadians): What Insurance Do You Need?
02 Oct 2024
00:51:17
We all spend decades accumulating and growing our net worth, along with many hours of research and studying to optimize our investments and minimize our taxes as Canadians. But what if a single incident wipes all that out? or even just a large portion of it out? Wouldn't it be completely irrational to not eliminate that risk?
The best solution that I can think of for accomplishing this is insurance, so I thought it would be helpful to come up with a checklist that you can use of the different types of insurance available for us Canadians, so that you can go through it, one by one, and decide which types make sense for you, to protect your net worth.
After that, we do a minor pivot to talk about dental insurance and medical insurance for us Canadians. I have been spending an obscene amount on dental care with our two kids. It's super expensive, it stresses me out, and so I wanted to learn more about what the options are for us Canadians when it comes to dental coverage, along with getting medical coverage for things that aren't covered by the government, here in Canada.
Today’s Guests:
To help me with this, I brought back one of our popular returning guests, Laura MacKay. Laura is the co-founder and COO of policyme.com, Canada's fastest-growing digital insurance company.
In 2021, she was named one of the Women of the Year by Bay Street Bull. She has a Bachelor of Mathematics from the University of Waterloo, and her degree focused on Actuarial Science, which included learning about mortality risk, the basis of life insurance pricing and valuation.
Laura is also joined by her colleague Natalie Dupley, who comes from the not-for-profit sector. Natalie is now a licensed insurance advisor that works with Laura, and specializes in life, accident, and sickness insurance.
To kick things off, can you take us through what insurance us Canadians typically need, so that we don’t miss out on any critical coverage that we should have?
One type of coverage that I think isn’t always thought about for us Canadians is health and dental insurance, particularly since we’re used to having most of our medical expenses covered by the government. Can you take us through some common misconceptions about health and dental insurance, as well as who it would be most useful for?
When I think of cases where I need insurance, it’s typically for very sudden and time sensitive events like a car crash, or dental procedure that I need done as soon as possible. But what about having insurance for things that are less sudden like therapy and mental health, or things like braces or corrective eye procedures like LASIK surgery? How does having private insurance work in those cases?
When it comes to this type of insurance, how do we determine if it’s more financially sensible to pay-out-of-pocket for these healthcare costs vs purchasing a Health & Dental Insurance plan?
Before we continue with more educational questions, I wanted to give you a chance to speak about PolicyMe, what you do, and I realise that you also specialise in health and dental insurance so perhaps you could speak about that?
What are the key components to look for when evaluating this type of insurance?
When it comes to health and dental insurance plans, is this something that also covers you when travelling? Or would that be separate?
Of all the things covered under a Health & Dental plan, what areas of coverage do most Canadians prioritise or care about? and what are some areas of coverage that you think are underutilised (or that Canadians can stand to benefit from more)?
What are some of the most common questions that Canadians ask when it comes to health and dental insurance?
Can you tell us more about PolicyMe, how you differentiate yourselves, and what you offer?
Financial Lessons Learned After 10 Years of Interviews on the Build Wealth Canada Podcast
21 Aug 2024
00:50:57
This interview will be a bit different as I was recently interviewed by Financial Journalist, Ellen Roseman from Canadian MoneySaver Magazine where she asked me some great questions, and so I thought it would be great to also publish that interview, here on the Build Wealth Canada Show.
In the interview, we cover what lessons for Canadians I have learned after doing close to two hundred interviews with financial experts, over the past 10 years.
My wife and I have also been either fully or semi-retired for the past 8 years, and so Ellen asked me if I have any advice for those who are also planning to retire in their 30s like us, or just retire early in general, and she asks what kind of financial changes or challenges were we surprised by that you should know about to help you with your own journey towards financial independence and early retirement.
Ellen has also been teaching investing at the University of Toronto for the past 20 years, so in the interview, she also shares some of her lessons learned over that time.
Enjoy the episode, and if you’d like to hear more interviews done by Ellen, you can check them out on the Canadian MoneySaver Podcast which you can find in your favourite podcast player.
Thanks for tuning in, and you can get all the show notes and free resources over at BuildWealthCanada.ca.
How to Live Off Your Investments in Canada - Kyle Prevost
15 Nov 2023
00:52:55
In this episode, you’re going to learn:
How to deal with the volatility of the stock market, once you are financially independent and are living off your investments: There are many schools of thought and structures when it comes to dealing with this challenge here in Canada. Retirement expert, Kyle Prevost takes us through his research on the top recommended and respected structures that he has uncovered for us Canadians.
We also go through Kyle’s research on the optimum location for the fixed income portion of your portfolio. Traditionally the advice has been to keep fixed income like bonds in our RRSP. But does that still apply considering these higher interest rates that we are now experiencing here in Canada? And what about GICs? How do they fit into all of this? Should we be using those instead?
Last but not least, after taking into account all the research that he’s done on investing and financial planning for over a decade, Kyle shares what types of investments he buys for his own investment portfolio, and what accounts he puts his own investments in for the greatest tax savings and efficiency.
Questions in this Episode:
Once someone has hit their financial independence number here in Canada and wants to start living off their portfolio, what have you found to be the top recommended structures to deal with the volatility of the market? For example, having a rule for how big the cash cushion should be, using GIC ladders, etc.
What investments do you buy for your own portfolio, and what accounts do you put your own investments in?
From your research, what have you found to be the optimum location for the fixed income portion of our portfolio? Traditionally the advice is to keep fixed income like bond ETFs in our RRSP. Does that still apply considering these higher rates? What about GICs?
If you liked the episode sign up for free to receive all new episodes as they get released, news on giveaways, and the free guide on the Top 5 Personal Finance and Productivity Tools.
Is Your Financial Advisor Ripping You Off?
21 Mar 2016
00:18:21
This episode covers how to protect yourself from overpaying in hidden investment fees, and how to ensure that you are getting unbiased advice from your financial professionals.
Did you know that there is a lot of conflict-of-interest that exists with many of the financial advisors here in Canada. We also have one of the highest investment fees in the world.
While there are ways to bypass these fees, you need to know what to look for so that you can spot if your advisor is recommending a poor investment that is primarily designed to maximize their firm’s profits, instead of growing your net worth.
Join me as we cover some of the most dangerous traps that exist for us Canadians in the investing and financial services industry.
Links and Resources
Top Tools and Resources for Financial Independence (for Canadians): Sign up anywhere on www.BuildWealthCanada.ca for a free guide on all the top tools and sites that I’ve personally used to help us achieve financial independence in our early 30s. They’re also what we use now to optimize and manage our finances, and ensure that we’re paying the lowest fees while getting solid returns on our investments.
How to Make a Full Time Income Freelancing from Home (10 Year Pro Shares Top Tips)
13 Mar 2016
01:03:53
My guest today is Miranda Marquit who is at the top of the heap when it comes to being a freelance writer and professional blogger. She is the author of her book called Confessions of a Professional Blogger, and has basically achieved what many freelancers just starting off are hoping to achieve.
I thought it would be great to get her on the show to give some advice to aspiring freelancers and bloggers. Miranda is also very honest, so it’s really great to hear someone tell it like it is, instead of hearing some fairy-tale advice that doesn't coincide with reality.
Miranda also talks about the importance of having a website to build your brand (whether you’re a freelancer or someone who is trying to have their own business).
You can check out my free step-by-step video course on how to build your own website here: Buildwealthcanada.ca/build or if you want to learn what is involved in started a side-business in Canada you can learn it all here: BuildWealthCanada.ca/business.
Dragon’s Den Winner Shares Top Tips on Having Your Own Business On-the-Side
11 Oct 2015
01:31:41
Today I have Dragon’s Den winner Lee Renshaw on the show, and we’re going to talk all about tips and strategies that you can implement if you want to start your own business on-the-side here in Canada.
One of the things I noticed based on the emails I received from listeners of the show, is that a lot of Build Wealth Canada listeners would actually like to start their own business on-the-side here in Canada but aren’t exactly sure how to do it and how to set it all up since a lot of the information out there is specifically for the US, and there isn’t a good step-by-step guide out there specifically for Canadians.
Because of this, I decided to built a free step-by-step video guide for you about everything you need to know about setting up your own side business here in Canada. You can check out the full video guide over at BuildWealthCanada.ca/business.
In addition to that, it’s a good idea to have your own website for your new business on-the-side, so I’ve created a 2nd free video guide showing you step-by-step on how you can easily build your own website whether you’re looking to start a blog, provide a service, or sell a product.
What’s also neat is that in the guide, I’m actually building a real-life website for a real business, and I recorded step-by-step how I do it so that you can follow along, and build your own website.
Top Tools and Resources for Financial Independence (for Canadians): Sign up anywhere on www.BuildWealthCanada.ca for a free guide on all the top tools and sites that I’ve personally used to help us achieve financial independence in our early 30s. They’re also what we use now to optimize and manage our finances, and ensure that we’re paying the lowest fees while getting solid returns on our investments.
Tell us your story and how did you end up dominating Dragons’ Den?
Let’s fast forward. What kind of an impact did being on Dragons’ Den have? How is your business doing now?
For those wanting to have a business-on-the-side, or eventually their own full-time business, what are some tips you have for them when they’re just getting started.
What specifically did you have to do to start your own business here in Canada?
What are some top mistakes you made, and how would you have done things differently knowing what you know now?
What are your key success factors that got you to where you are today?
When it comes to marketing and promoting your business, what is working well for you now? (marketing channels, specific tactics, etc.)
If you had to start over completely from scratch where your business didn’t exist, and all you had was $500 saved up, where would you invest your time and money to start your business
Where can we learn more about you and Rise Gear?
How to Avoid Money Problems with Friends, Family & Co-workers
07 Sep 2015
01:16:48
Today I have author Valerie Rind on the show and we’re going to talk all about how to avoid getting into difficult financial situations when it comes to friends and family.
Valerie has interviewed a ton of people who have actually gone through these types of problems in their lives, and is going to share with us how we can avoid some of these catastrophic financial issues that can creep up when we’re dealing with friends, family and co-workers.
Links and Resources
Top Tools and Resources for Financial Independence (for Canadians): Sign up anywhere on www.BuildWealthCanada.ca for a free guide on all the top tools and sites that I’ve personally used to help us achieve financial independence in our early 30s. They’re also what we use now to optimize and manage our finances, and ensure that we’re paying the lowest fees while getting solid returns on our investments.
Part 2 – Lessons Learned from Investing $1 Billion (Stock vs ETF vs Mutual Fund Investing)
16 Aug 2015
00:31:16
This is part 2 of the interview with Peter. If you missed part 1, it's the episode right before this one.
Episode Description: Today I’m thrilled to have Peter Hodson on the show who is the owner of 5i Research, the Canadian MoneySaver Magazine, and in his investment career, has managed over $1-billion dollars in assets.
I’ve always wanted to have Peter on the show to pick his brain about investing best practices here in Canada, and see what he learned over his decades of professional investing.
Peter and his team have also been generous in providing Build Wealth Canada listeners with a special offer where you can get your investment questions answered, and learn more investment best practices by getting a free trial membership over at www.buildwealthcanada.ca/trial. As a "thank you" for taking a look at their research, you'll also receive a free 1 year digital subscription to Canadian MoneySaver magazine (Canada's largest personal finance magazine).
Top Tools and Resources for Financial Independence (for Canadians): Sign up anywhere on www.BuildWealthCanada.ca for a free guide on all the top tools and sites that I’ve personally used to help us achieve financial independence in our early 30s. They’re also what we use now to optimize and manage our finances, and ensure that we’re paying the lowest fees while getting solid returns on our investments.
Can you start by telling us your background, and your story from your days on Bay Street, to now running 5i Research and owning Canadian MoneySaver magazine?
In Canada it seems that investors fall into one of 5 main categories. They either:
Buy mutual funds
Buy indexes
Buy individual stocks for growth
Buy individual stocks for dividends
Buy a combination of the above.
Can you walk us through these options and how do we decide what type of investing is right for us?
Before we dive into more detail and talk about 5i, what are some key investing lessons that you’ve learned over the years that we can apply to our own investing lives?
Let’s talk about 5i Research. For those Canadians that haven’t heard of 5i, can you tell us more about what it is that you do, and how is 5i different?
You have a model portfolio for growth, and another for income on 5i. Can you explain the difference between the two and how do we know which one to follow based on our situation?
How do we choose between a growth vs a balanced portfolio?
How have these portfolios been performing compared to the index?
Why don’t I just invest in indexes instead of following the 5i portfolio? Is it just because of the potential for higher returns or are there some other advantages or disadvantages? (ex. greater diversification among different industries)
What if I don’t want to be researching and analyzing individual companies. Is 5i still a good fit for me? (i.e. can I just model your portfolio and not do anything else other than re-balance?). Or, do I need to be actively researching the companies you suggest after your initial recommendation to ensure that they are still a good fit?
Is your portfolio just for Canadian companies? If so, what sort of asset allocation do you suggest outside of Canada for diversification purposes?
Would you recommend using the 5i portfolio completely for the Canadian portion of our portfolio, and then use ETFs for international exposure?
ETFs that model a broad market index can now be purchased for free from certain discount brokerages here in Canada. If we are to follow the 5i portfolio, then we now have to deal with paying transaction costs every time that we purchase a stock. If somebody would like to invest a set percentage of their salary every month, what’s the step-by-step process that they should take to do it most efficiently and to minimize fees while still being diversified (which is hard to do if you’re only buying one company or two at a time)?
Would this workflow/strategy change depending on how much someone has to invest every month? What if we have a lump sum to invest?
Should I use my TFSA or RRSP for the 5i portfolio? What about using an unregistered account? Should I ever be using that instead? (i.e. preferential tax treatment on dividends). Does this vary based on whether I follow your income portfolio vs your growth portfolio?
Your portfolio has done really well. What if we’re concerned that we’ve missed the boat and are now buying these companies when their prices are already at their peak (especially for those companies that have done really well)?
What are your thoughts on asset allocation between stocks and bonds? Do you recommend bonds? If not, what do you suggest?
You assign a letter grade to the stocks in your portfolio too. Is that more if we aren’t following your portfolio and are just picking and choosing stocks?
For our ETF portion of the portfolio, what are your thoughts on more targeted ETFs like small cap ETFs vs just going for the broad market index? The more targeted ones can have higher fees so is it worth it since now your return has to try to offset those?
Lessons Learned from Investing $1 Billion (Stock vs ETF vs Mutual Fund Investing)
16 Aug 2015
00:50:55
Today I’m thrilled to have Peter Hodson on the show who is the owner of 5i Research, the Canadian MoneySaver Magazine, and in his investment career, has managed over $1-billion dollars in assets. He's also been called "The Warren Buffett of Canada" by the Globe and Mail.
I’ve always wanted to have Peter on the show to pick his brain about investing best practices here in Canada, and see what he learned over his decades of professional investing.
Peter and his team have also been generous in providing Build Wealth Canada listeners with a special offer where you can get your investment questions answered, and learn more investment best practices by getting a free trial membership over at www.buildwealthcanada.ca/trial. As a "thank you" for taking a look at their research, you'll also receive a free 1 year digital subscription to Canadian MoneySaver magazine (Canada's largest personal finance magazine).
Top Tools and Resources for Financial Independence (for Canadians): Sign up anywhere on www.BuildWealthCanada.ca for a free guide on all the top tools and sites that I’ve personally used to help us achieve financial independence in our early 30s. They’re also what we use now to optimize and manage our finances, and ensure that we’re paying the lowest fees while getting solid returns on our investments.
Can you start by telling us your background, and your story from your days on Bay Street, to now running 5i Research and owning Canadian MoneySaver magazine?
In Canada it seems that investors fall into one of 5 main categories. They either:
Buy mutual funds
Buy indexes
Buy individual stocks for growth
Buy individual stocks for dividends
Buy a combination of the above.
Can you walk us through these options and how do we decide what type of investing is right for us?
Before we dive into more detail and talk about 5i, what are some key investing lessons that you’ve learned over the years that we can apply to our own investing lives?
Let’s talk about 5i Research. For those Canadians that haven’t heard of 5i, can you tell us more about what it is that you do, and how is 5i different?
You have a model portfolio for growth, and another for income on 5i. Can you explain the difference between the two and how do we know which one to follow based on our situation?
How do we choose between a growth vs a balanced portfolio?
How have these portfolios been performing compared to the index?
Why don’t I just invest in indexes instead of following the 5i portfolio? Is it just because of the potential for higher returns or are there some other advantages or disadvantages? (ex. greater diversification among different industries)
What if I don’t want to be researching and analyzing individual companies. Is 5i still a good fit for me? (i.e. can I just model your portfolio and not do anything else other than re-balance?). Or, do I need to be actively researching the companies you suggest after your initial recommendation to ensure that they are still a good fit?
Is your portfolio just for Canadian companies? If so, what sort of asset allocation do you suggest outside of Canada for diversification purposes?
Would you recommend using the 5i portfolio completely for the Canadian portion of our portfolio, and then use ETFs for international exposure?
ETFs that model a broad market index can now be purchased for free from certain discount brokerages here in Canada. If we are to follow the 5i portfolio, then we now have to deal with paying transaction costs every time that we purchase a stock. If somebody would like to invest a set percentage of their salary every month, what’s the step-by-step process that they should take to do it most efficiently and to minimize fees while still being diversified (which is hard to do if you’re only buying one company or two at a time)?
Would this workflow/strategy change depending on how much someone has to invest every month? What if we have a lump sum to invest?
Should I use my TFSA or RRSP for the 5i portfolio? What about using an unregistered account? Should I ever be using that instead? (i.e. preferential tax treatment on dividends). Does this vary based on whether I follow your income portfolio vs your growth portfolio?
Your portfolio has done really well. What if we’re concerned that we’ve missed the boat and are now buying these companies when their prices are already at their peak (especially for those companies that have done really well)?
What are your thoughts on asset allocation between stocks and bonds? Do you recommend bonds? If not, what do you suggest?
You assign a letter grade to the stocks in your portfolio too. Is that more if we aren’t following your portfolio and are just picking and choosing stocks?
For our ETF portion of the portfolio, what are your thoughts on more targeted ETFs like small cap ETFs vs just going for the broad market index? The more targeted ones can have higher fees so is it worth it since now your return has to try to offset those?
How to Achieve Debt Freedom with Alan Steinborn
06 Aug 2015
01:09:59
Questions Covered:
You’re very involved in helping others get out of debt. Can you tell us a little bit more about yourself, and how you started helping others in this area?
Getting out of debt has a very large psychological component. What are some of the psychological barriers that you found keep people in debt?
Can you tell us more about the methodology that you follow in your life and your program to help others get out of debt?
Links and Resources
Top Tools and Resources for Financial Independence (for Canadians): Sign up anywhere on www.BuildWealthCanada.ca for a free guide on all the top tools and sites that I’ve personally used to help us achieve financial independence in our early 30s. They’re also what we use now to optimize and manage our finances, and ensure that we’re paying the lowest fees while getting solid returns on our investments.
RRSP vs TFSA vs Mortgage – Where Should You Put your Money?
18 Jul 2015
00:52:59
Today I’m really excited to have Rob Carrick on the show, who is the main Personal Finance Columnist at the Globe and Mail.
Rob is also the author of five personal finance books for Canadians, and all in all is easily one of the most respected and well known personal finance experts here in Canada.
Today we’ll cover whether you should be putting your savings in an RRSP, a TFSA, or use it to pay down your mortgage quicker (if you have one).
We also cover:
Where you should be investing your money?
Where to keep your money safe if for example, you’re saving for a downpayment on a house?
What should your priorities be when it comes to debt?
What asset allocation should you go with? (ex. stocks vs bonds mix)
Links & Resources Covered:
Top Tools and Resources for Financial Independence (for Canadians): Sign up anywhere on www.BuildWealthCanada.ca for a free guide on all the top tools and sites that I’ve personally used to help us achieve financial independence in our early 30s. They’re also what we use now to optimize and manage our finances, and ensure that we’re paying the lowest fees while getting solid returns on our investments.
Part 2: The Student’s Guide to Personal Finance and Post-Secondary Education
08 Jun 2015
00:27:17
This is part 2 of the interview on The Student’s Guide to Personal Finance and Post-Secondary Education with Kyle Prevost. If you missed part 1, it's the episode right before this one.
Today we have arguably the #1 expert in Canada when it comes to personal finance for students. Whether it’s about saving money as a student, or setting yourself up for success with your post-secondary education, we cover it all in this in-depth two part series.
My guest Kyle Prevost is not only a teacher, but has also been featured in the Financial Post, The Globe and Mail, The Toronto, Star, MoneySense Magazine, and many many more.
He is also the co-author of the book “More Money for Beer and Textbooks” where he teaches students who are about to enter post-secondary education (and those already there) how to:
Make the right decisions so that you can have a successful career after graduating
Make your dollars stretch further while you are in school
Set yourself up for financial success both during school, and when you graduate
Links and Resources
Top Tools and Resources for Financial Independence (for Canadians): Sign up anywhere on www.BuildWealthCanada.ca for a free guide on all the top tools and sites that I’ve personally used to help us achieve financial independence in our early 30s. They’re also what we use now to optimize and manage our finances, and ensure that we’re paying the lowest fees while getting solid returns on our investments.
The Student’s Guide to Personal Finance and Post-Secondary Education
08 Jun 2015
00:26:49
Today we have arguably the #1 expert in Canada when it comes to personal finance for students. Whether it’s about saving money as a student, or setting yourself up for success with your post-secondary education, we cover it all in this in-depth two part series.
My guest Kyle Prevost is not only a teacher, but has also been featured in the Financial Post, The Globe and Mail, The Toronto, Star, MoneySense Magazine, and many many more.
He is also the co-author of the book “More Money for Beer and Textbooks” where he teaches students who are about to enter post-secondary education (and those already there) how to:
Make the right decisions so that you can have a successful career after graduating
Make your dollars stretch further while you are in school
Set yourself up for financial success both during school, and when you graduate
Links and Resources
Top Tools and Resources for Financial Independence (for Canadians): Sign up anywhere on www.BuildWealthCanada.ca for a free guide on all the top tools and sites that I’ve personally used to help us achieve financial independence in our early 30s. They’re also what we use now to optimize and manage our finances, and ensure that we’re paying the lowest fees while getting solid returns on our investments.
4 Steps to a Worry-Free Retirement in Canada - Kyle Prevost
10 Oct 2023
00:48:43
In this episode, our guest Kyle Prevost is going to take us through how much we need to retire, as Canadians, and how much can we sustainably withdraw from our portfolio to not run out of money once we retire.
If you are a long-time listener of the show, then by now you would have definitely heard of the 4% rule, which helps answer these two questions. But, the 4% rule was created by Americans, for Americans, so how do all those findings and statistics apply to us Canadians?
(If you are new to the show, then don’t worry, we’ll go through what the 4% rule is, and the many caveats that exist with it, that we should keep in mind as Canadians.)
You’re also going to learn:
By how much can you increase the amount that you withdraw from your portfolio when you retire, so that you can keep up with inflation.
For those (like myself) who don’t like how rigid the 4% Rule is and would rather adjust their spending year-to-year depending on how the markets perform (i.e. taking out more during the good times, and less when the markets are down), Kyle discusses what sort of structures he has found to work well for that.
About Our Guest:
Kyle is founder of the Canadian Financial Summit and he and I have been co-hosting the summit together for the past 2 years. He is also a longtime personal finance columnist and you’ve probably seen a lot of his work over at MoneySense, and he’s been in the National Post, CBC News, The Globe and Mail, and many others. Most recently he is also the creator of 4 Steps to a Worry-Free Retirement - the first online course for Canadian retirement planning.
Questions Covered:
When it comes to figuring out how much we need to retire, we often hear about the 4% Rule. Yet, a lot of the research out there on the 4% Rule was created by Americans, for Americans. In the research and interviews that you’ve done, how well have you found the 4% Rule to apply to Canadians? (and please briefly define the 4% Rule for anybody that is new to all this).
Follow-up question: Are there any caveats that you’ve found in your research that are different for Canadians using the 4% Rule vs the Americans using it?
If somebody decides to use the 4% Rule, one of the rules/guides that they are supposed to follow is to increase the amount of money that they withdraw every year by inflation. For us Canadians, where have you found to be the best place to get that number?
For those that don’t like how rigid the 4% Rule is and would rather adjust their spending year-to-year depending on how the markets perform, what sort of structures have you found to work well for that? (ex. variable percentage withdrawal rules)
Best Credit Cards in Canada (and how to use them)
27 May 2015
00:52:31
Today I’m excited to have one of the top personal finance bloggers in Canada on the show.
Tom Drake is the president of Drake Media Inc. and the owner and manager of dozens of personal finance sites, including his primary site: MapleMoney where you can learn more about the best credit cards in Canada, as well as other personal finance best practices.
He has been called the godfather of personal finance, and today I’m thrilled to have him on the show to talk all about the best practices when it comes to using credit cards, as well as the top credit cards that he recommends.
Links and Resources
Top Tools and Resources for Financial Independence (for Canadians): Sign up anywhere on www.BuildWealthCanada.ca for a free guide on all the top tools and sites that I’ve personally used to help us achieve financial independence in our early 30s. They’re also what we use now to optimize and manage our finances, and ensure that we’re paying the lowest fees while getting solid returns on our investments.
What are some best practices when it comes to credit card use?
Some credit cards have perks like extended warranty on purchases or travel insurance. How do you take advantage of these benefits? Is it a hassle to claim them?
Many credit cards are free while others have a fee but have better rewards. Is there an easy way of determining whether it’s worth to get the paid option?
What if you can’t pay off your entire balance at the end of the month? What are some options you’d recommend if you actually need to borrow some money (i.e. HELOC, secured loan, unsecured loan).
Your thoughts on saving for an emergency fund vs paying off credit card debt.
What are the advantages and disadvantages of having credit cards?
Should we be concerned about credit limit utilization? (ex. keeping credit limit utilization under 30%)
What are the top credit cards in Canada that you’d recommend?
Guide to Rockin’ Your RRSP
11 May 2015
00:41:48
Today I’m really excited to have Bruce Sellery on the show from MoneySense Magazine and Moolala.ca, to tell you all about how to save and invest for your retirement.
Bruce is a bestselling author, and you might have seen him on TV as he’s been on CTV, CNN, BNN, MSNBC, as well as the Lang & O’Leary Exchange with Kevin O’Leary from Dragon’s Den and Shark Tank.
In it, he actually does a great job of inspiring you to take action when it comes to planning and saving for your retirement (which is great if you know this is something you should be doing but just aren’t feeling motivated to do it). He also provides a great step-by-step guide that you can actually implement to pull it all off.
Links and Resources
Top Tools and Resources for Financial Independence (for Canadians): Sign up anywhere on www.BuildWealthCanada.ca for a free guide on all the top tools and sites that I’ve personally used to help us achieve financial independence in our early 30s. They’re also what we use now to optimize and manage our finances, and ensure that we’re paying the lowest fees while getting solid returns on our investments.
1. Why should Canadians even care about saving for retirement through their RRSPs and TFSAs?.
2. What are the top mistakes Canadians make when it comes to their RRSPs, and retirement planning in general?
3. Tell us about the 5 steps in your book that listeners can use to retire early.
4. For someone that is looking to buy their first home: They may want to save money for a down payment inside their RRSP since they can withdraw it when they’re ready to buy using the Home Buyers Plan.
In this case, what should they put their money into? (i.e. bonds, bond ETFs, GICs?) Especially considering interest rates are low and Canadians are worried about getting hurt on bonds if rates go up.
GIC rates are very low too so it doesn’t seem very appealing for most.
What about those Canadians that are getting very close to retirement? Is the strategy different for them?
In other words, what are the best safe options in the current low interest rate environment?
5. RRSP loans: What are they and when is it a good option?
6. How to factor in inflation when doing retirement planning calculations? (i.e. Would you just use the anticipated rate of return and subtract out inflation? Or use some other method?)
7. Is there a way to be able to take some of your spouse’s RRSP contribution room if you’re in a higher tax bracket?
8. Your thoughts on using annuities for retirement? (please define annuities first)
9. Your thoughts on using broad market index funds or ETFs vs buying smaller indexes like small cap stocks or different bond ETFs?
How to Retire Early (Part 2)
05 May 2015
00:32:20
This is part 2 of the interview on How to Retire Early, with MoneySense Senior Editor Julie Cazzin.
In Part 1 we covered the beginner level questions. In part 2, we take it up a notch and get into the more intermediate and advanced level questions.
If you missed part 1, it's the episode right before this one.
Links and Resources
Top Tools and Resources for Financial Independence (for Canadians): Sign up anywhere on www.BuildWealthCanada.ca for a free guide on all the top tools and sites that I’ve personally used to help us achieve financial independence in our early 30s. They’re also what we use now to optimize and manage our finances, and ensure that we’re paying the lowest fees while getting solid returns on our investments.
What are some top tips you can give to Canadians that want to retire early?
How can we figure out if we have enough to retire early?
What are some top mistakes someone can make if they want to retire early?
What are some top mistakes someone can do if they are already retired? (whether it was early retirement or not)
While saving for an early retirement, would you recommend index investing by purchasing broad market ETFs or funds, or do you recommend a different strategy? (ex. dividend investing)
While saving for an early retirement, would your asset allocation be different compared to someone that is planning on retiring early?
What are some of the unique challenges that we have to worry about if we are planning to retire early vs doing the more traditional retirement at age 65. (i.e. Impact of CPP, OAS, and pensions come to mind).
Once we manage to retire early, what suggestions can you make in terms of asset allocation?
Your thoughts on a safe withdraw rate?
How would you suggest using TFSA, RRSP, and unregistered accounts while saving?
How would you suggest using TFSA, RRSP, and unregistered accounts while retired early?
What are annuities and is it possible to purchase annuities here in Canada if we are a young retiree?
How to Retire Early (Part 1)
04 May 2015
00:29:51
Today I am REALLY excited to have none other than Julie Cazzin on the show, who is going to tell us all about how we can retire early.
Julie is a national award winning business and personal finance journalist. She is a founding member and Senior Editor at MoneySense.
While she consistently writes some of the most popular columns for MoneySense, she’s also written for Readers Digest, Canadian Business, Maclean’s, and many others.
Julie has also appeared as a television guest on CityTV, Rogers and CTV as well as several radio shows throughout the years, speaking on a wide range of personal finance topics.
Links and Resources
Top Tools and Resources for Financial Independence (for Canadians): Sign up anywhere on www.BuildWealthCanada.ca for a free guide on all the top tools and sites that I’ve personally used to help us achieve financial independence in our early 30s. They’re also what we use now to optimize and manage our finances, and ensure that we’re paying the lowest fees while getting solid returns on our investments.
What are some top tips you can give to Canadians that want to retire early?
How can we figure out if we have enough to retire early?
What are some top mistakes someone can make if they want to retire early?
What are some top mistakes someone can do if they are already retired? (whether it was early retirement or not)
While saving for an early retirement, would you recommend index investing by purchasing broad market ETFs or funds, or do you recommend a different strategy? (ex. dividend investing)
While saving for an early retirement, would your asset allocation be different compared to someone that is planning on retiring early?
What are some of the unique challenges that we have to worry about if we are planning to retire early vs doing the more traditional retirement at age 65. (i.e. Impact of CPP, OAS, and pensions come to mind).
Once we manage to retire early, what suggestions can you make in terms of asset allocation?
Your thoughts on a safe withdraw rate?
How would you suggest using TFSA, RRSP, and unregistered accounts while saving?
How would you suggest using TFSA, RRSP, and unregistered accounts while retired early?
What are annuities and is it possible to purchase annuities here in Canada if we are a young retiree?
How to Invest in Canada (Part 2)
28 Apr 2015
00:46:19
This is part 2 of the interview on How to Invest in Canada, with author and investor Dr. John Robertson.
In Part 1 we covered the beginner to intermediate level questions. These were perfect for those just getting started on their investing journey.
In part 2, we take it up a notch and get into the more advanced level questions.
If you missed part 1, it's the episode right before this one.
Links and Resources
Top Tools and Resources for Financial Independence (for Canadians): Sign up anywhere on www.BuildWealthCanada.ca for a free guide on all the top tools and sites that I’ve personally used to help us achieve financial independence in our early 30s. They’re also what we use now to optimize and manage our finances, and ensure that we’re paying the lowest fees while getting solid returns on our investments.
Tell us your story and what prompted you to write your book.
What are the most common mistakes you see beginner investors make when they’re just starting out?
What about those in their 40-50s that have been investing for a while?
In your book, you make a really strong case for investing in broad market indexes. For our listeners who are just starting off in investing, can you tell them what this means, and why this is a good way to invest?
What is an “asset allocation” and how would you change the asset allocation for someone fresh out of school vs someone nearing retirement?
You thoughts on investing in stocks versus bonds and on creating an all stock portfolio.
In a low interest rate environment like we are in right now, what are your thoughts on investing in bonds? Especially considering rates are bound to go up eventually which would hurt the existing bond prices.
How are you investing now?
If you could go back to when you made your first investment, what advice would you give yourself.
Over the years in your investment journey, what’s worked for you, and what hasn’t worked so well?
Was there ever a point that you didn’t feel confident about what you’re investing in, and the investment choices you made?
Your thoughts on investing in other indexes like small cap companies instead of just broad market? (many argue that they generate higher returns at the cost of higher volatility)
Thoughts on dividend investing vs broad market index investing.
What is the 4% rule and what are your thoughts on it? Do you prefer a variation of it?
How to Invest in Canada (Part 1)
23 Apr 2015
00:46:01
Today we are going to learn all about how to invest if you’re living here in Canada.
For all our non-Canadian listeners, we’re also going to cover best practices when it comes to investing so you can definitely start applying those too and get a lot out of the show.
To make this series beneficial to everyone, we’re going to start with answering beginner level questions intended for those just starting out in their investing journey. As the interview goes on, we’re going to progress into more advanced level questions.
This way if you are already investing you’ll still get a LOT out of the show by learning some best practices, and how to optimize your portfolio and save money by eliminating unnecessary fees.
To help me with this, I’m very excited to have Dr. John Robertson on the show. John is a is a PhD scientist, a writer, investor, and he teaches newbie investors on how they can actually start investing.
Links and Resources
Top Tools and Resources for Financial Independence (for Canadians): Sign up anywhere on www.BuildWealthCanada.ca for a free guide on all the top tools and sites that I’ve personally used to help us achieve financial independence in our early 30s. They’re also what we use now to optimize and manage our finances, and ensure that we’re paying the lowest fees while getting solid returns on our investments.
Tell us your story and what prompted you to write your book.
What are the most common mistakes you see beginner investors make when they’re just starting out?
What about those in their 40-50s that have been investing for a while?
In your book, you make a really strong case for investing in broad market indexes. For our listeners who are just starting off in investing, can you tell them what this means, and why this is a good way to invest?
What is an “asset allocation” and how would you change the asset allocation for someone fresh out of school vs someone nearing retirement?
You thoughts on investing in stocks versus bonds and on creating an all stock portfolio.
In a low interest rate environment like we are in right now, what are your thoughts on investing in bonds? Especially considering rates are bound to go up eventually which would hurt the existing bond prices.
How are you investing now?
If you could go back to when you made your first investment, what advice would you give yourself.
Over the years in your investment journey, what’s worked for you, and what hasn’t worked so well?
Was there ever a point that you didn’t feel confident about what you’re investing in, and the investment choices you made?
Your thoughts on investing in other indexes like small cap companies instead of just broad market? (many argue that they generate higher returns at the cost of higher volatility)
Thoughts on dividend investing vs broad market index investing.
What is the 4% rule and what are your thoughts on it? Do you prefer a variation of it?
How to Retire at 33 Part 2
05 Apr 2015
00:42:36
This is part 2 of the interview with Justin on how he retired at the age of 33.
In case you missed it, part 1 is the episode right before this one.
In the interview, we talk about everything from how Justin was able to retire at 33, to what he invests in, and we even cover other subjects like how to save money on vacations and how he manages his money so that he never has to work again.
Lastly, Justin gives us some great tips that you can start applying today to retire early.
Links and Resources
Top Tools and Resources for Financial Independence (for Canadians): Sign up anywhere on www.BuildWealthCanada.ca for a free guide on all the top tools and sites that I’ve personally used to help us achieve financial independence in our early 30s. They’re also what we use now to optimize and manage our finances, and ensure that we’re paying the lowest fees while getting solid returns on our investments.
Justin has a great blog at RootofGood.com where he talks more about how he was able to retire early, and gives more details on the strategies he uses.
How to Retire at 33
05 Apr 2015
00:52:55
Today I’m excited to have Justin on the show who actually retired at the age of 33!
This is a huge 2 part interview where we talk about everything from how he was able to retire at 33, to what he invests in, and we even cover other subjects like how to save money on vacations and how he manages his money so that he never has to work again.
Lastly, Justin gives us some great tips that you can start applying today to retire early.
Links and Resources
Top Tools and Resources for Financial Independence (for Canadians): Sign up anywhere on www.BuildWealthCanada.ca for a free guide on all the top tools and sites that I’ve personally used to help us achieve financial independence in our early 30s. They’re also what we use now to optimize and manage our finances, and ensure that we’re paying the lowest fees while getting solid returns on our investments.
Justin has a great blog at RootofGood.com where he talks more about how he was able to retire early, and gives more details on the strategies he uses.
Questions Covered:
Tell us your story and how were you able to retire at 33?
How much do you need to make per year to retire?
What did you do during the 2008 crash? How did that affect you?
You bought a lot of equities during and after the crash, how did you know that it was the right time to buy?
What was your asset allocation like before retirement and after retirement?
How are you withdrawing your money during retirement so that you don’t run out?
If you could go back to when you made your first investment, what advice would you give yourself?
Are you an index investor, a dividend investor, or do you use another strategy?
What would you do differently knowing what you know now?
You earned 11 scholarships when you were in school, do you have any tips for students looking to get scholarships?
On your blog you also talk about cost saving vacation strategies. Can you give us some tips on that?
Is there any other wisdom that you can share so we can all retire earlier?
The One-Page Financial Plan. Interview with Carl Richards.
29 Mar 2015
00:19:42
Today I’m excited to have financial planning expert Carl Richards on the show. Carl has been in the financial planning industry for over 20 years, has a column in the New York Times, the Morningstar Advisor, and he’s even been featured on Forbes.com and Oprah.com.
I thought it would be nice to pick his brain a little bit and pick-up some of that knowledge that he’s gathered over the years. In the interview, Carl shares much of his 20 years of experience, and takes us through the financial planning process that he does with his private clients.
Links and Resources
Top Tools and Resources for Financial Independence (for Canadians): Sign up anywhere on www.BuildWealthCanada.ca for a free guide on all the top tools and sites that I’ve personally used to help us achieve financial independence in our early 30s. They’re also what we use now to optimize and manage our finances, and ensure that we’re paying the lowest fees while getting solid returns on our investments.
Top Tools and Resources for Financial Independence (for Canadians): Sign up anywhere on www.BuildWealthCanada.ca for a free guide on all the top tools and sites that I’ve personally used to help us achieve financial independence in our early 30s. They’re also what we use now to optimize and manage our finances, and ensure that we’re paying the lowest fees while getting solid returns on our investments.
Paying Less in Interest, Getting the Right Mortgage (New or Renewal), Handling the Higher Interest Rates in Canada
06 Sep 2023
00:58:28
With the multiple interest rate hikes that we’ve been experiencing here in Canada, many Canadians have seen their monthly cashflow take a hit, whether it’s because you have a variable rate mortgage, a line of credit, or other forms of debt.
So what are your options if you’re paying more than you’d like on your interest payments, or maybe you have that mortgage coming up for renewal and you’re going to have to make that multi-thousand dollar decision on how you’re going to proceed?
Should you go with a fixed or variable rate mortgage when interest rates are high like they are right now?
Keep in mind too that if you have a mortgage coming up for renewal, then you won’t be able to get as good of an interest rate upon renewal, as you did when you first got that mortgage years ago, due to all these massive interest rate hikes that we’ve been experiencing.
To tackle all of this, I’ve brought on an expert that deals with these types of interest and mortgage related questions every day, and that is the show’s resident mortgage expert, Sean Cooper.
Sean is who I go to and who I send friends and family to for any mortgage related questions. He is the bestselling author of the book Burn Your Mortgage, and he is an independent mortgage broker so he’s not tied to any one particular lender which gives him access to the top mortgages available in Canada.
Sean has also been kind enough to answer for free, any questions that you, the Build Wealth Canada listeners have. I’ve set up a special page for him so all you have to do is go to buildwealthcanada.ca/sean, and there you can send him a message with your questions, or, if you prefer, you can even pick a time on his calendar on that page for a phone or video call to get your questions answered with him live, for free.
Sean is a licensed mortgage broker too, so I definitely also encourage you to reach out to him if you’re looking to get a new mortgage or if your mortgage is coming up for renewal, as at the very least he’ll be able to provide you with a short list of the best mortgages that he’s been able to find across all of Canada from the 60+ lenders that he monitors.
None of this costs you anything, and there’s no obligation to get your mortgage through him or use any of those suggested mortgages.
That link again to get in touch with Sean to get your questions answered, and get his research on the best mortgages that he’s been able to find in Canada is over at buildwealthcanada.ca/sean.
Enjoy the episode. :)
Questions Covered:
After pausing rate hikes since January, the Bank of Canada shocked many by starting to raise interest rates again in June. What was behind this? What does the future hold?
Some homeowners in Canada are facing a doubling or more of their mortgage rates at renewal. What options do homeowners have?
For those in that situation where they’ll be dealing with deciding between a fixed vs variable mortgage, how should they be approaching this dilemma, factoring in the current interest rate environment?
When you and I spoke offline, you mentioned that there is a really big missconception that some people have when it comes to mortgages, that could really be causing them to overpay on their mortgages. Can you speak to that?
With higher interest rates, it’s not all doom and gloom since tools like high interest savings accounts and GICs are now paying out more to us consumers compared to what they were offering when we had those rock bottom interest rates. Are there any tools or strategies that you are using yourself or are fond of, when it comes to taking advantage of these higher interest rates and how are you investing these days when it comes to the fixed income portion of your portfolio? (ex. HISA vs GIC vs Bonds).
Are you buying more shorter-term or longer-term investments? (ex. short term vs longer term bonds/GICs etc.)
If any of the listeners have some form of debt, and they suspect that maybe they aren’t paying the absolute lowest amount that they could be paying on that debt (it doesn’t have to be some kind of really high credit card debt, just any debt that they think seems high), what are the tools or options available to them, here in Canada, in terms of taking that higher interest debt and turning it into the lower interest debt?
For anybody listening that has questions for you, or would potentially like to work with you or see your research on the top mortgages that you’ve been able to find here in Canada as a mortgage broker, can you tell us more what the process is for Build Wealth Canada listeners to get a free call with you?
Earning Money-on-the-side With Freelancing (Interview with Matt Inglot) Part 1
31 Oct 2014
00:42:13
I’m really excited today as we have a very special Canadian entrepreneur on the show who is an expert on earning money-on-the-side with freelancing.
In this interview Matt will tell us:
How he was able to pay for his university by freelancing on the side and how he turned his company into a high end web development company
The top mistakes to avoid when freelancing
How to structure your freelance business so that you can work anywhere in the world, setting your own hours
What to do if you don’t think you have any skills that you can freelance
The number one mistake freelancers make when getting started
The best steps to take when you’re just starting out
Top Tools and Resources for Financial Independence (for Canadians): Sign up anywhere on www.BuildWealthCanada.ca for a free guide on all the top tools and sites that I’ve personally used to help us achieve financial independence in our early 30s. They’re also what we use now to optimize and manage our finances, and ensure that we’re paying the lowest fees while getting solid returns on our investments.
The True Costs of Owning a Home (a comprehensive guide)
17 Oct 2014
00:33:40
This is the comprehensive guide to all the ongoing costs you need to know about before purchasing a home. This guide will help you prepare for and budget for all these ongoing expenses.
In the guide, I also give you some actual cost figures so that you at least have a ballpark figure on what the different items can cost.
Links and Resources
Top Tools and Resources for Financial Independence (for Canadians): Sign up anywhere on www.BuildWealthCanada.ca for a free guide on all the top tools and sites that I’ve personally used to help us achieve financial independence in our early 30s. They’re also what we use now to optimize and manage our finances, and ensure that we’re paying the lowest fees while getting solid returns on our investments.
As mentioned in the episode, there is a fantastic guide written by Romana King from MoneySense that breaks down all the maintenance expenses that you’re likely to incur in your home. You can view the full article here: Ultimate Home Maintenance Guide. This should give you a great idea of all the different items that you should maintain, which ones to maintain yourself, and which ones to save up for (such as a roof replacement, furnace replacement, etc.).
How Much are Closing Costs for a Home? (a comprehensive guide)
22 Sep 2014
00:56:58
This is a comprehensive guide to all the costs you need to know about before purchasing a home. This guide will help ensure you don’t get caught off guard by surprise expenses, or get tricked into paying any unnecessary extra fees.
Links and Resources
Top Tools and Resources for Financial Independence (for Canadians): Sign up anywhere on www.BuildWealthCanada.ca for a free guide on all the top tools and sites that I’ve personally used to help us achieve financial independence in our early 30s. They’re also what we use now to optimize and manage our finances, and ensure that we’re paying the lowest fees while getting solid returns on our investments.
As mentioned in the episode, having a downpayment of less than 20% will require you to obtain mortgage insurance through the CMHC (the Canada Mortgage and Housing Corporation). The amount will vary depending on how small your downpayment is. You can get the current rates directly from the source here: CMHC Mortgage Insurance
When getting your mortgage ready, you can also get the exact amounts that you’ll need to pay by speaking with your potential mortgage provider or mortgage broker. Since publishing this episode, we now have a resident mortgage expert on the show. If you have mortgage questions, you can get them answered for free at www.buildwealthcanada.ca/sean
Rent vs Buy – Should You Rent or Buy a House? (a comprehensive guide)
03 Sep 2014
00:59:26
In this session, you’ll learn everything you need to know before deciding to rent or buy a home. Nothing is left out as we dive into the financial and lifestyle factors that you need consider before making the big decision.
Links and Resources
Top Tools and Resources for Financial Independence (for Canadians): Sign up anywhere on www.BuildWealthCanada.ca for a free guide on all the top tools and sites that I’ve personally used to help us achieve financial independence in our early 30s. They’re also what we use now to optimize and manage our finances, and ensure that we’re paying the lowest fees while getting solid returns on our investments.
UPDATE: We now have a resident mortgage expert that can help you with your mortgage questions for free. You can book a free call at www.buildwealthcanada.ca/sean
This is the audio version of an article that got published on us on how my wife and I became mortgage free just after I turned 29. In it, I share some practical tips that have helped my wife and I achieve debt freedom at such a young age and they’re tips that you can start applying right away in your life too.
As this podcast and blog continues, I’m going to share more and more tips and guides to how we did it as well as some best practices from other experts but in the meantime, think of this as the first few steps that you can start applying immediately.
Links and Resources
Top Tools and Resources for Financial Independence (for Canadians): Sign up anywhere on www.BuildWealthCanada.ca for a free guide on all the top tools and sites that I’ve personally used to help us achieve financial independence in our early 30s. They’re also what we use now to optimize and manage our finances, and ensure that we’re paying the lowest fees while getting solid returns on our investments.
Becoming Debt Free, Investing, and Earning Money-on-the-side
04 Aug 2014
00:43:55
Welcome to the very first episode of the Build Wealth Canada Podcast!
This episode is all about what you’ll get out of this podcast series and what you can expect in future episodes.
More specifically, the podcast series will focus on:
How to become debt free in the quickest time possible (and how I did it becoming mortgage free at 29).
How to master money management without spending hours entering receipts, cutting coupons, while still taking vacations, going out and enjoying life.
How to invest so you can retire early (or have the freedom to do what you want, when you want).
How to use your favorite hobby to make money on-the-side for guilt-free spending (restaurants, vacations, etc.), to pay-off debt, or save for an early retirement.
Links and Resources
Top Tools and Resources for Financial Independence (for Canadians): Sign up anywhere on www.BuildWealthCanada.ca for a free guide on all the top tools and sites that I’ve personally used to help us achieve financial independence in our early 30s. They’re also what we use now to optimize and manage our finances, and ensure that we’re paying the lowest fees while getting solid returns on our investments.
Lessons on Mastering Money in Canada - Featuring Fred Masters
01 Aug 2023
01:01:37
Today we have Canadian author and speaker Fred Masters on the show. Fred has been a professional financial educator for decades here in Canada. He speaks at different universities to students and alumni, teaching financial wellness. In this episode, he’s going to share his findings on:
What he’s found to be the main problem areas that tend to prevent us Canadians from reaching financial independence years earlier.
What type of investing he has found to be the most effective in helping us achieve early retirement as quickly as possible here in Canada.
Fred is also the author of the book “Lessons on Mastering Money” where he identifies six key pillars that can really move the needle for us, when it comes to our finances. We cover those, and much more in the interview. Enjoy!
How to Optimize Your Investments to Pay the Least in Tax (for Canadians)
21 Jun 2023
00:41:10
Today, you’re going to learn how you can save money on your investments, by having the right investments, in the right accounts so that you pay as little tax as possible here in Canada.
For example, if you hold Canadian stocks, or ETFs that hold Canadian stocks, should you put those in your RRSP? Your TFSA? Or your taxable account? Which one of those is the most tax efficient?
What about your US and other international ETFs and stocks? What accounts should they go into so that you pay the least foreign tax on those investments?
For us Canadians, different investments are taxed differently depending on what those investments include, and what investment accounts you put them in.
It’s essentially an optimization puzzle that you can solve, by putting the right investments in the right accounts to pay the least Canadian and foreign tax, on those investments.
If you choose to optimize to this extent like I do, you can essentially reap the benefits of these tax savings for the rest of your life, since those savings will compound over your investment lifetime, and can accelerate your net worth, since every dollar saved in taxes on your investments, is a dollar that stays invested, and continues to grow and compound for you.
How Much Should You Optimize Your Investment Portfolio? The Pros and Cons of Each Approach
14 Jun 2023
00:51:32
Today, you are going to learn about how much you can save in fees and taxes on your investments, depending on how much time you want to spend optimizing your investment portfolio.
In Canada, there are inexpensive options that make things extremely easy and automated for you, but they are slightly more expensive and slightly less tax efficient.
On the other end of the spectrum, there are other investments available to Canadians that are as optimized as you can get in terms of keeping your fees low, and saving you money on both Canadian and international taxes. The trade-off though, is that these optimizations take a fair bit of work on your end to learn and implement.
So how big are these optimization benefits to you?
How much are you really saving by going with a fully optimized approach vs. a semi-optimized approach?
How big should your investment portfolio be before you start optimizing? or should you start optimizing right away?
We also cover where to go to check what fees you’re currently paying on your investments, so that you can have a nice apples-to-apples comparison when you are debating what fund or ETF to buy, or to check whether you are currently overpaying on your investments.
We cover all this and more on this episode.
This week’s episode is a little different since I optimize my investments to this highest level (in terms of paying the lowest fees and lowest taxes), and my guest also does the same. And so, in this episode, instead of the guest doing 90% of the talking, we instead each talk about how we both tackle these questions and I figure this way you are getting two educated perspectives, from two different people, in Canada, who have already been doing this for years.
I think ultimately this approach to the episode will help you make an educated decision on what level of optimization you want to pursue in your own portfolio.
Enjoy the episode. :)
Kornel
Ask Kornel: Should I Switch My Investments? Should I Be Worried? Are My Investments Falling Behind?
07 Jun 2023
00:55:52
Today I’m going to be answering your questions, to help you out as much as I can in the world of personal finance and investing, here in Canada.
We’re going to focus on actionable, practical advice, specifically for Canadians while taking into account the investment options that we have here in Canada, factoring in our Canadian taxes to make sure that we’re not overpaying, and much more.
In today’s Q&A session, I’m going to be answering questions around:
1. How to determine if you should sell a particular investment that you own.
2. How to evaluate whether your investment returns should be higher.
3. What rate of return should you expect on your investments?
4. Where can you go to check your “total return” on your investments (growth + dividends) and not just the increase in price.
5. And much more.
If you would like to submit a question, the easiest way is to sign up anywhere for free over at buildwealthcanada.ca. When you do that you’ll get taken to a page where you can leave a comment with your question. Also, when you do that, I’ll email you my guide on the “Top Personal Finance and Investing Tools” that I personally use. Enjoy the episode :)
How to Raise Money Smart Kids, Teens and Young Adults
31 May 2023
01:10:06
It’s graduation season here in Canada, so we thought it would be good to focus this episode on parents with kids, those with nieces and nephews, as well as those that are students or fresh out of school. This week, we cover the topic of how to best set up young Canadians and young adults for success, when it comes to money.
Sadly, if you’re my generation or older then you probably got zero education about money when you were in school or fresh out of school. Yet, those are the crucial years where you either establish good or bad money habits, and there are so many things that can lead a young person astray.
Heck, knowing how to keep your investment fees low can literally save you hundreds of thousands of dollars over your investment lifetime, so why wouldn’t you want to know about these things as a student or upon graduation so that you can set yourself up for financial success?
To help me with this topic, I have Canadian author, Douglas Price on the show. Douglas has written the book “Seventeen to Millionaire” a personal finance book for teens and young adults, specifically here in Canada, aimed to help them become financially literate and establish that strong financial foundation to set them up for success.
Enjoy the interview. :)
Questions
To kick things off, can you tell us about your book and why you decided to write it?
Whether we’re a child, teenager or adult, learning to manage our cashflows is a critical skill that we have to employ our entire lives. What process do you recommend to ensure that we are managing our income and expenses appropriately and not overspending?
When someone is entering the world of investing in the markets for the first time (whether it’s someone that just turned 18, or an established adult that is now learning how to navigate the world of investing), where do you stand on using something like a robo advisor vs a single asset allocation ETF vs buying multiple individual ETFs vs other options (ex. mutual funds, using an advisor at a bank, etc.).
Follow up question: Do you have any advice on how to prevent overwhelm when teaching someone this for the first time?
Your book focuses on helping teenagers learn about money and how it works so that they can have that strong foundation for the rest of their lives, but what are your thoughts about how parents of younger children can best educate them and set them up for success when they are still in elementary school, or early high school?
When it comes to kids or teenagers learning about money, what have you found that they struggle with the most, where us parents or educators need to spend some extra time on?
What would you say are your top ‘best practices’ that us parents can do to ensure that our kids are set up for success when it comes to their financial lives?
The world is obviously a lot different now than it was when you and I were kids. Are there any areas that have changed a lot when it comes to money that us parents need to be cognizant of when trying to set our kids up with that strong foundation when it comes to financial literacy?
One of the things that I found impressive in your book, is that you hired high school students to test out your book to ensure that the lessons were communicated in a way that is engaging and digestible for them. Did you learn anything from those feedback sessions when it comes to how to best teach your kids or teenagers about anything, as a parent or educator?
I’d really like to thank you for clearly putting in a significant effort to help educate young Canadians when it comes to financial literacy. Can you tell us again where we can get your book and where we should go to learn more?
Active vs. Passive Investing: Interview with S&P (S&P 500, Dow Jones) & How to Choose the Right ETFs
25 May 2023
01:10:35
In this episode, I interview S&P, the creator of the S&P 500, Dow Jones, and many other popular indices used around the world by millions of investors.
On today’s interview, we’re going to be covering the SPIVA scorecards which are semiannual reports published by S&P that compare the performance of active funds (i.e. active investing) vs taking the passive index investing approach.
In other words, when you hear the debate of whether you should be a passive index investor, or an active investor, the SPIVA scorecards actually look at how well the active managers have done compared to if you just invested in the index.
Our guests today are Joe Nelesen from S&P, and Erin Allen from BMO ETFs. Joe is the Senior Director of Index Investment Strategy over at S&P, and Erin is the Vice President over at BMO ETFs, which is the largest Canadian provider of ETFs.
I thought we could have both Joe and Erin on the show, as that way we can learn more about the insights and discoveries learned from the SPIVA reports when it comes to the active vs passive debate. And, since Erin and her team actually create these ETFs for Canadians, we discuss how to actually practically apply these SPIVA findings and insights, when constructing or optimizing our own investments portfolio, here in Canada.
In other words, what to look for and things to watch out for when we are actually building, optimizing, and deciding which ETFs to use for our own portfolio.
Questions Covered:
Joe, to make this friendly to anybody new to the world of investing, can you start by telling us a bit about S&P, as well as the SPIVA reports and why they are important for us everyday investors?
The SPIVA analysis has over 20 years of data at this point. Can you speak to what these decades of analysis have taught you and individual investors about passive and active management around the world?
Erin, for those like myself who are totally on-board with what the SPIVA findings suggest and are looking to just have an easy-to-manage investment portfolio where they’re just looking to buy the total market index; what are the options available to them in Canada, and can you take us through the pros and cons of these different approaches?
Joe, one of the reports that I’ve always found fascinating is the persistence scorecard that you publish. Can you speak to what it is, where can listeners find it, and what is the role of ‘persistence’ when measuring active outperformance?
Erin, when it comes to the core ETFs and asset allocation ETFs that try to mimic the index, one of the critical metrics that individual investors need to be aware of is the tracking error, especially when trying to choose a comparable ETF from one provider to another.
Can you take us through:
What ‘tracking error’ is?
Why is it important?
How can we check it ourselves?
Is some tracking error normal, and how do fees (MER) factor into the tracking error number that we see published?
At what point would a tracking error be considered high? And does that number vary depending on which index we’re looking at? (ex. S&P TSX vs something like an MSCI emerging markets index)
Joe, it seems like with the thousands of investment products out there, the definition of the word “passive” can really vary quite a bit, not just amongst individual investors but amongst companies offering these products as well.
I’ve even heard arguments about the S&P 500 not actually being 100% passive as there is still a committee that chooses which stocks are included in the S&P 500 index. Can you speak to that a bit and also, how do you think individual investors should define “passive” vs “active”?
Erin, when a DIY investor is purchasing total market index ETFs, do those literally include all publicly traded companies on any exchange that fit that region? (ex. S&P TSX for Canada), or is it more of a representative sample of that region?
Also, I think it would be good for investors to know about what the difference and implications are of a capped index, vs an uncapped index. Can you explain these?
Usually, we see the Canadian index (S&P/TSX) being capped when it comes to ETFs like with your ETF, ZCN. What about core index ETFs for other countries like the US, and beyond. Are those typically capped as well?
Joe, in the past, you mentioned how indexes help us manage our own human behavioral biases and overcome market hurdles that can otherwise derail our investing success. Can you elaborate on this?
Thank you to both of you for coming on. Erin, can you tell us where we can learn more on your end, and perhaps let everyone know about the ETF Market Insights sessions that you run every week where listeners of the show can submit their questions and have them answered live.
Joe, thank you very much for coming on as well. Can you tell us more about where we can learn more from you and your team, and where we can find the SPIVA reports and any other resources that Canadian investors may find helpful.
Financial Independence Case Study and How You Can Retire Early
19 May 2023
00:53:24
Today we have a great case study of somebody that I really respect, and who has been able to achieve financial independence, at a really early age.
I wanted this episode to be relevant to you no matter where you are on your financial independence journey, so I thought we could approach it from two angles:
If you are in the asset accumulation phase and working towards financial independence, we get into how you can get there quicker AND also enjoy the process and not get burned out as you're working your way towards it.
If you are already financially independent or are getting close to it, we tackle how to live a happy, fulfilling and meaningful life once you transition to the financially independent stage of your life.
Questions Covered:
One of my favourite things to do on the show is interview those that have achieved financial independence early, where they can retire if they choose. Then, I like to dissect and take lessons from that journey, that we can all learn from and apply to our own lives to help us get to financial independence quicker, and to actually be happy with the journey before and after achieving financial independence, where we can retire if we choose.
There are lots of different paths to get there. For anybody hearing about you for the first time, can you tell us about your journey and how you got to early financial independence?
I’ve been following your work for a long time, and it’s clear that you definitely don’t need to be working at all anymore, and definitely don’t need to be taking on any new income producing projects in your semi-retirement. Yet, it seems like you keep taking on significantly large projects, like the YouTube channel that you launched and worked a lot on to get to where it is today, and of course you have your giant book launch today that took you three years.
All this takes up a good amount of time obviously, and I imagine it’s really not about the money anymore for you. So what keeps you going? Why not just relax, or at least scale things back a bit?
How many years have you been financially independent now? What were some of the most critical lessons that you learned about financial independence? Was there anything that surprised you?
You’ve interviewed over 450 entrepreneurs on your My Wife Quit Her Job Podcast. Some were incredibly successful where they are most certainly financially independent and could just close up the business or sell it, and just live off the proceeds from their investments. Have you found commonalities in regards to what keeps them going? Why do they keep working?
What are your sources of fulfilment in semi-retirement? and what have you found to generate the most meaning in your life after hitting financial independence?
From those that you interviewed, have you noticed any patterns in terms of what tends to add the most to that feeling of fulfilment, purpose, and happiness once money is no longer the priority?
Steve is a highly recognized influencer and speaker in the e-commerce space. His blog, MyWifeQuitHerJob.com has been featured in Forbes, Inc, The New York Times, Entrepreneur and MSNBC.
His podcast, My Wife Quit Her Job, is one of the top 25 marketing shows on all of Apple Podcasts, and he and his wife run a 7 figure e-commerce store called BumblebeeLinens.com
The Top Money Blind Spots and Questions Canadians Have
30 Jul 2024
01:17:28
In this episode, I interview two professional financial planners to discover what are the most common questions that they receive when working with Canadians.
Our two guests are also going to cover what the most important and frequently occurring blind spots are that we Canadians tend to make in our own finances.
We also cover how to know if you are on-track to reach financial independence and retire early, or if you have enough to retire comfortably.
We cover all this and more, as we tackle the top questions that Canadians have, here in Canada.
Our guests today are Hannah McVean and Thuy Lam from Objective Financial Partners. They are both fee-for-service financial planners, are both Certified Financial Planners (CFP), and they and their firm don’t sell any investments and instead focus on providing unbiased, conflict-free financial planning advice.
Hannah was actually a guest on our January episode with Jason Heath and that was our most popular episode this year. So, it’s great to have her back, along with Thuy to get multiple perspectives on these most popular questions that Canadians have.
Resources & Links Mentioned:
You can book a free introductory meeting with Hannah, Thuy and their team at buildwealthcanada.ca/plan. As a Build Wealth Canada listener, you’ll get 10% off if you end up working with them. The discount is for a limited time, and you can sign up for free here. A big thanks to Hannah and Thuy for offering this to Build Wealth Canada listeners.
How to Maximize Your Inheritance in Canada (and minimize your fees)
10 May 2023
00:44:13
One critical topic that can have a substantial financial impact on both us and our loved ones, is the subject of inheritance, and how to ensure that you and your loved ones don’t end up overpaying in both taxes and fees, once the whole inheritance process starts taking place.
To help me with this subject, I’d like to welcome back Selene Soo on the show. We learned a lot from her last time in the interview on annuities, and this time, we’re going to focus on some best practices, when it comes to inheritance.
Selene is the Director of Wealth Products at RBC Insurance. She has been in the wealth management industry for over two decades, so she definitely has a really large wealth of experience and knowledge when it comes to different retirement planning solutions, whether it’s annuities, segregated funds, and much more.
Enjoy the episode, I hope you learn a lot from the session, thanks for tuning in, and now, let’s get into the interview.
Questions:
Why is it important to have an estate plan here in Canada?
Selene, I was told that you and your team did a new survey when it comes to how prepared Canadians are when it comes to inheritance. Can you take us through the insights and lessons learned from those results, that we can then apply to our own lives?
One component that I think is a bit of an unknown for those of us that haven’t gone through the process, is the subject of probate and probate fees. Can you speak to this, and what are the options available to us for minimizing probate fees?
Are there any other fees or taxes that we should be aware of when thinking of inheritance and estate planning?
I suspect that the word “will” is often used interchangeably with “estate planning”. Can you speak to what the differences are between the two, in particular, so that we can all be aware of the different components of estate planning here in Canada, and plan accordingly.
To tie everything together, can you give us a synopsis as well as anything else that you’d like to add in regard to best practices that we Canadians can do to ensure that we have this critical part of our financial planning taken care of?
When it comes to inheritance and estate planning, I suspect that I common challenge most Canadians experience, is bringing up the subject with their loved ones, and then carefully navigating some of the really sensitive and emotion triggering questions that inevitably come up. How do you think it’s best to bring this subject up? and what are some good questions to ask, and “next actions” to do, to actually get the ball rolling on this project?
Can you tell us more about what you and your team do, and direct us to any educational resources that we may find helpful when we start working on optimizing our inheritance and estate planning?
A DIY Investor's Guide to Determining Your Financial Independence Number and Sustainable Withdrawal Strategy
11 Apr 2023
01:05:07
Today’s guest is Jason Heath, one of Canada’s best known fee-only financial planners that you’ve probably seen in all sorts of media here in Canada over the years. He’s a Certified Financial Planner (CFP), has been providing financial planning for over 20 years, and is currently a personal finance columnist for the Financial Post, MoneySense, and is also a regular contributor to RetireHappy.ca.
I’ve been reading his insightful financial planning articles for years, so it’s really great to have him on again, and in this episode, we get his perspectives on:
How much do you actually need to be financially independent here in Canada and have the option of retiring? What is the process that should be undertaken to figure this out?
Next, we get his take on how to live off your investment portfolio by withdrawing a sustainable amount every year, along with some alternatives to the 4% rule (which as you likely already know, has some limitations).
We actually go through the process and calculations that he does annually with clients to ensure that they are withdrawing a sustainable amount from their portfolio every year, and we discuss how you can do it yourself in case you’re purely DIY and want to do it all yourself, and not have to meet with a financial planner every year.
Also, since Jason has been doing fee-only financial planning for over 20 years, we talk about the patterns that he’s noticed between those that are successful financially in and in life, long term, vs those that are not. From those, we hone in specifically on the things that you and I can actually control and do in our own lives, to help get us there too.
Enjoy the episode, it’s great having you here, thanks for tuning in, I hope you leave the show a rating on Apple Podcasts or Spotify, and now let’s get into the interview.
Questions Asked:
When somebody is trying to determine how much they need to be financially independent and have the option of retiring, what is the process that should be undertaken to figure this out?
One strategy that has really peaked my interest and that I think can be highly relevant for those that have hit their financial independence number, is doing some sort of variable withdrawal strategy with a spending ceiling and floor.
When a client comes to you and says that they don't just want to use a fixed withdrawal strategy like the traditional 4% rule, and instead would like to be able to take out more when the markets are doing well, and are okay withdrawing less when the markets are not performing well, is there a certain variable percentage withdrawal strategy that you have found to work well, along with any particular rules for a spending ceiling and floor? or is there maybe something else entirely that you prefer recommending to clients?
What is the process and calculations that you do annually with clients to ensure that they are withdrawing a sustainable amount from their portfolio every year?
My understanding is that the ideal way to tackle this, is to work with a fee-for-service financial planner like yourself or somebody at your firm, where every year the numbers get updated in the financial planning software for that person's particular situation. Then the expertise and analysis of the Financial Planner is used to determine what the withdrawal rate should be for that year. Is that the ideal way you'd recommend that it’s done?
For those that are more on the DIY side and do not want to meet with someone annually, what approach or process do you recommend for them? For instance, maybe they just want to meet with a Financial Planner when there are significant life changes or financial events like an inheritance, the birth of a child, getting married, etc.
You have been a Financial Planner for decades at this point and I'm sure with that level of experience you've noticed certain patterns when it comes to clients that are successful financially and in life, versus those that are not. Can you give us any insights in terms of the best practices or patterns that you've noticed from those that are financially successful and also appear to be happy and fulfilled in their day-to-day life?
On the flip side, are there any common and/or major mistakes or regrets that you have seen clients have over the years that we can all learn from so that we do not repeat those mistakes in our own lives?
In your practice, I'm sure you've helped clients of all different net worth sizes; from those struggling to very high net worth individuals. What have you noticed that the wealthy do that the poor or middle class do not?
You have been in this industry for multiple decades. Would you be able to recommend some resources online that you find to be reliable and reputable sources of information, for those that like to continue to educate themselves when it comes to financial planning, retirement planning, and investing in Canada?
Tell us more about where we can see your work and tell us more about your practice.
Rising Interest Rates, New Mortgage Rules, and Variable vs Fixed Mortgages in Canada for 2023
08 Mar 2023
01:13:40
With the significant increase in interest rates over the past year, and with home buying and selling season right around the corner, I thought it would be great to have our resident mortgage expert on the show, to go over the implications of this higher interest rate environment that we're in.
Whether you’re getting a new mortgage, or are considering refinancing, we tackle whether you should go with a variable rate or fixed rate mortgage in this current interest rate environment.
There could also be some new mortgage rules coming out this spring as well, so we cover what those are so that you can be better prepared.
You might have also been experiencing quite a bit of a payment shock if you hold a variable rate mortgage, with a drastic increase in your monthly mortgage payments. And, if you’re a fixed rate mortgage holder, then you’re not out of the woods either, as when your mortgage inevitably comes up for renewal, you might very well be forced into a much higher rate on your new mortgage than what you’ve been used to over the past few years. We’re going to cover this new challenge that you may be facing, with these higher rates, along with some things you can do to lower your monthly mortgage payments, despite these increases in rates.
Our Guest:
Our guest today is the show’s resident mortgage expert, Sean Cooper. He's who I go to and who I send friends and family to for any mortgage related questions.
Sean is the bestselling author of the book, "Burn Your Mortgage". He bought his first house when he was only 27 in Toronto and paid off his mortgage in just 3 years by age 30.
Sean has offered to answer for free, any questions that you, the Build Wealth Canada listeners have. I’ve set up a special page for him so all you have to do is go to buildwealthcanada.ca/sean, and there you can send him a message with your questions.
Or, if you prefer, you can even pick a time on his calendar for a phone or video call to get your questions answered with him live, for free.
Sean is a licensed mortgage broker too so I definitely also encourage you to reach out to him if you’re looking to get a new mortgage or if your mortgage is coming up for renewal, as at the very least he’ll be able to provide you with a short list of the best mortgages that he’s been able to find across all of Canada from the 60+ lenders that he monitors.
None of this costs you anything, and there’s no obligation to get your mortgage through him or use any of those suggested mortgages.
At the very least, you’ll get some good education and research on the top mortgages available in Canada right now, you’ll learn what to look for when choosing your next mortgage, and you can always decide later whether you’d like him to help you with the process, or if you want to do it all yourself. It doesn’t cost you anything regardless.
Questions from the Episode:
In 2022, the Bank of Canada raised interest rates 8 times. The prime rate went up a whopping 4%. So far we have already seen one increase of the prime rate in 2023. As someone that’s in the industry, what are you hearing and what do you think is in store for mortgage rates in 2023, 2024 and beyond?
With all these mortgage rate changes that we’ve seen in the recent past, what are some considerations when choosing between a fixed rate and a variable rate mortgage?
What’s happening in the real estate market right now (so the first quarter of 2023 which is when we’re recording this episode)? And is now a good time to buy a home?
I heard there could be some new mortgage rules coming out in the spring. Can you tell us about those and how they may affect buyers?
For anybody new to working with a mortgage broker, can you speak to how it works, and whether you have to pay for the services of a mortgage broker?
What are some ways to qualify for a higher home purchase price, despite the new pending mortgage rules?
A lot of people are facing “payment shocks” right now. If your mortgage is coming up for renewal in the next few months and you currently are locked into a low fixed rate, you can expect your payment to jump at renewal. What are some things you can do to lower your payment back down?
Finding Your Financial Independence Number and How to Live Off Your Portfolio
15 Feb 2023
01:20:03
It's RRSP season here in Canada. Remember that March 1 is the deadline for contributing to an RRSP, and have it count towards your 2022 tax year.
Also while we’re on the subject, remember that your TFSA contribution room grows every year, and for the 2023 calendar year, you now have an extra $6,500 that you and your partner can contribute each. That's $13,000 total if you both max it out.
Last year the limit was $6,000 per person so the government did increase that by $500 per person for this year.
I find that these are things that are easy to forget as life gets buys, but I always have reminders set up for these things as, especially in the case of the TFSA, it’s always nice to put in the effort to max that out so that you can get that tax-free growth on that new money invested, all year long.
Since it’s RRSP season, and tax season is coming up, I thought it would be worthwhile to have another successful Canadian Financial Planner on the show, so that we can get a good second opinion on:
· How much do you need to be financially independent and have the option of retiring?
· What are some of the sustainable withdrawal strategies that you can use when you’re ready to start living off your portfolio?
· What is the process and calculations that should be done annually to ensure that you are withdrawing a sustainable amount from your portfolio?
· And, since our guest has been in the financial planning industry for decades at this point, I ask him if he’s noticed certain patterns when it comes to clients that are successful both financially and in life, versus those that are not. This way we can pick some lessons learned from others, apply them to our own lives, and hopefully avoid some completely avoidable mistakes that others endured before us.
Before we get into the interview, I wanted to invite you to a free webinar and Q&A that I’ll be doing with the actual co-creator of the TFSA.
He’s the former Chief of Staff for the Minister of Finance in Canada. His name is Kevin McCarthy, and if you’ve ever had TFSA or RRSP related questions, or would just like to ask the creator of the TFSA your questions, you can do so at this webinar.
I’ll be there too obviously and so after Kevin goes through his educational presentation where he goes over the RRSP and TFSA fundamentals, as well as the tax deductions and tax credits available to us as Canadians, we’ll then have a live Q&A with him and I and so you can ask him or me your questions when it comes to personal finance, investing, financial independence and retirement, living off your investments, etc.
The session is on February 23, 2023, and it will be recorded so even if you can’t make it live, you can still signup to be emailed the replay once it’s released.
Also, Kevin has informed me that anyone attending live will receive a downloadable version of his and his team’s proprietary Income Tax and RRSP Tax Savings Calculator.
I look forward to seeing and interacting with you there, and now, let’s get into the interview!
How to Live Off Your Investments and How Much Do You Need? Featuring Ed Rempel
17 Jan 2023
00:53:06
In this episode, I interview one of the most experienced Canadian financial planners that I know, and who I tend to go to when I have any complex tax and financial planning questions. His name is Ed Rempel, and in this episode, we tackle:
How to determine how much you need to be financially independent?
What are some sustainable withdrawal strategies that you can use to not run out of money when you’re living off your investments?
How to pay less tax here in Canada
And much, much more.
Thanks so much for tuning in, and please remember to leave a rating on Apple Podcasts or Spotify if you enjoy the show.
Here are all the questions we cover in the interview:
When somebody is trying to determine how much they need to be financially independent and have the option of retiring, what is the process that should be undertaken to figure this out?
What are some of the sustainable withdrawal strategies that you recommend, for those looking to live off their portfolio?
Have you ever used some type of variable withdrawal strategy with your clients where the amount withdrawn every year to live off the portfolio varies depending on how the markets did that year?
Have you ever done any sort of variable withdrawal strategies like using a spending ceiling and floor for the year?
For those that don't feel comfortable going with 100% equities, what do you recommend? Do you change your recommendation depending on what is happening in the bond market? (like with the recent drops)?
What is the process and calculations that you do annually with clients to ensure that they are withdrawing a sustainable amount from their portfolio every year?
When it comes to tax planning and making sure that we’re paying the least amount of tax when living off the investment portfolio, are there any strategies or approaches that you’d recommend?
For those that want to read or watch more of your research and insights, what’s the best place for them to go?
You have so many resources on your website, a YouTube channel with how-to's, where people can learn all about creating a financial plan. Why is it important to also work one-on-one with a financial planner like yourself for example?
You have been in this industry for multiple decades. Would you be able to recommend some resources online that you find to be reliable and reputable sources of information, for those that like to continue to educate themselves when it comes to financial planning, retirement planning, and investing in Canada?
How to Retire in Your 30s on Two Teacher Salaries (A Case Study and Practical Guide)
16 Nov 2022
01:10:11
Today we have another financial independence case study to learn how a real-life couple here in Canada were able to reach their financial independence number by the age of 34.
We talk specifically about the practical tactics, strategies and mindset that you can apply in your own life, to help hit your financial independence number quicker. Or, if you’re already at financial independence, these tactics can further help solidify and enhance your net worth and that extra financial cushion that’s always nice to have, when you’re living off your portfolio.
Our guest today is Kyle Prevost who I have run the Canadian Financial Summit with for the past 2 years. What makes Kyle unique with his financial independence story, is that he and his wife were able to get there on two teacher salaries.
Oftentimes when we hear these stories of couples who have achieved financial independence early, they are often engineers, programmers, or other high paying professions which makes achieving that early retirement number easier. In Kyle’s case, they were able to do it on two teacher salaries instead, so we’re definitely getting a nice unique perspective here.
This interview and presentation that Kyle prepared was actually one of the bonuses that we offered to Canadian Financial Summit attendees who bought the All-Access-Pass so you’ll hear him reference his slides at a few points during this talk, but don’t worry, all the lessons and advice still make total sense without the slides.
1) Kyle, for those not familiar with you, let’s just start with the usual first question in a job interview - “Tell us a little about yourself”.
2) You recently reached financial independence - tell us about what that term means to you, and what your plans are in terms of work going forward.
3) Tell us what you think your keys to financial success were.
4) How did you and your wife Molly earn money after leaving university?
5) Let’s peak inside your portfolio, and tell us how you invest.
6) To wrap up, just to give folks a broad overview on what the financial independence by 34 road map has looked like for you and Molly, can you sum up how you two were able to do it?
Should You Do Any Active Investing? and a Financial Independence Case Study
08 Nov 2022
00:41:19
Many Canadians tend to dabble in at least a bit of active investing, picking individual stocks, even if they consider themselves primarily total market index investors. As long-time listeners of the show know, I personally only do total market index investing through ETFs, but I think it’s important to stay educated and hear the other perspective of how and why active investors choose to invest the way that they do.
This episode is going to be a bit of a hybrid because our guest today, Braden Dennis, is an active stock investor who owns an investment research platform called Stratosphere.io. He’s also the host of the Canadian Investor podcast, and with these two companies, it appears that he’s already hit financial independence at a really young age.
So, in addition to asking him about how one should research companies if they want to buy individual stocks, we also get into one of the ways of reaching financial independence and early retirement quickly, which is by starting your own business.
Interview Questions:
What would you say is your investing style and what made you pick that over total market index investing?
When I speak to a passive vs an active investor, one of the main things that they seem to think differently about is the efficient market hypothesis. Can you explain what that is for anybody not familiar, and what is your take on it?
Bonds have really taken a hit lately, making many investors wonder whether they should instead do GICs, stay the course, put more into equities (despite those falling recently as well), using a high interest savings account, or using some other investment vehicles. What are your thoughts on bonds and fixed income, and what do you personally do in your own investment portfolio? If you were 5 years away from retirement, would your answer be different?
As someone that is very active in the investing and personal finance field, I imagine you have things pretty planned out and optimized when it comes to the most efficient way to get to your financial independence number. What are you personally doing in your investment portfolio, personal finances, and life to get to that financial independence number as quickly and efficiently as possible?
What keeps you going since it sounds like you can technically just fully retire now and never work again?
One of the ways that I’ve seen you move to your financial independence number quicker is by starting your own businesses, which I see are there to help you and other active investors like yourself. Can you tell us more about the tools and businesses you’ve developed?
I noticed that you’re able to search for index ETFs in Stratosphere too. Does your tool do anything for ETF investors or is it primarily for those that want to research individual stocks?
If somebody wants to do some stock picking, even if it’s just for a small portion of their portfolio, where do you suggest they go and learn? Where did you learn?
Which investment account would you recommend Canadians use if they are going to do any stock picking?
A Financial Independence Case Study: How to Achieve Early Retirement and Happiness With Jordan Grumet
01 Nov 2022
01:05:30
Today we have a case study of someone that was able to pull off an early retirement (we get to learn how he did it, and apply those lessons to our own life). He also wrote a book that I personally consider life-changing, in particular when it comes to financial independence, early retirement, and achieving happiness.
His name is Jordan Grumet, and his book is called Taking Stock, A Hospice Doctor's Advice on Financial Independence, Building Wealth, and Living a Regret-Free Life.
I highly recommend you check out the book. I wish I had it when I first set out on my financial independence journey, and I’ve also found it helpful in designing the lifestyle that we want, in this semi-retired life stage that we’re in right now.
In addition to the book, in this interview, we also cover:
How Jordan was able to achieve financial independence at such an early age
How he figured out whether he had enough to retire
How he ensures that he’s withdrawing a sustainable amount from his investment portfolio and not depleting it prematurely
Tips on how you can reach your financial independence number quicker, and much more.
Questions Covered:
For anybody that is hearing you speak for the first time, can you take us through your financial independence story, the path you took to get there, how things actually changed for you once you hit your financial independence number, and what you’re doing now?
When you were on your way to financial Independence, what is the process that you did to figure out whether you had enough to retire?
Now that you have hit your financial independence number, what is the process that you do or the calculations that you do to ensure that you are withdrawing a sustainable amount from your portfolio every year? (ex. variable percentage withdrawal, 4% rule, spending floor and ceiling, etc.)
Are there any online tools or calculators that you like to use or that you found helpful when it comes to figuring out your financial independence number and your sustainable withdrawal rate from your portfolio?
For those that are still working towards reaching their financial independence number, are there any specific tips that you can give them that had a substantial impact on your own life, that helped you get to your financial independence number quicker?
Once you hit your financial independence number, what were some of the mistakes you made that you think could have been avoided knowing what you know now?
One of the fascinating things that I recall hearing from you when you were being interviewed by Paula Pant, is that you actually went through depression once you hit financial independence. I think this sounds very surprising to most as the underlying assumption that I think most people have of financial independence is that once you reach it, you quit your job, and you have all the time and money you need to focus on being consistently happy. What triggered that depression in your case, and what can we all learn from that experience so that we don’t fall into that same trap?
For me, as somebody that is not in the medical profession, being a doctor seems like one of the most meaningful and fulfilling careers that one could have as you are literally saving lives, or at the very least, vastly improving the lives of others in a significant way when conducting your craft. Yet, you decided to move from that to the field of communication via your book, podcasting, speaking and writing about matters relating to personal finance.
Did you ever feel like you were helping less, or not achieving your maximum amount of positive contribution to society by focusing on personal finance instead of saving lives and healing others as a doctor? (i.e. If we achieve fulfilment and happiness by serving others, wouldn’t the medical field be the way where we can have the biggest positive societal impact?)
In your book, you talk about focusing on enjoying the journey instead of the destination by focusing on “the climb” (striving toward our own unique purpose, identity, and connection). Can you explain what “the climb” is, and how can it be applied by those on their way towards financial independence, and those that are already there?
Speaking of your book, can you tell us more about it, and what listeners can expect to get out of it?
After achieving financial independence, we have all this time to do what we want and on the one hand, we want to enjoy what we worked so hard to achieve. However, if we just live a life of pure relaxation and hedonism, that ends up being very unfulfilling, and it's easy to start to feel anxiety and potentially depression because we are not achieving our potential, and not living a life where we are working towards something that we find meaningful and fulfilling.
Have you figured out a way to achieve balance in this regard where you still get to enjoy the fruits of your labour from achieving financial independence (pure fun and relaxation), while also filling your time with challenging activities that bring you joy, fulfilment, and meaning?
How do you deal with any anxiety that comes from opportunity cost while financially independent? For example, the internal dialogue of: “I deserve to relax as I just finished doing meaningful thing X and I should strive for work/life balance, but that means that I’m not working on Y which is a great opportunity, which could be lucrative and would help a lot of people.”
(i.e. If you take on too much, you end up getting burnt out. At least that’s what happened with me post-FI).
In terms of maximizing happiness and fulfilment, is there a routine that you follow during any part of your day that works well for you? Or, do you take a more fluid, go-with-the-flow approach, where things are more spontaneous? (i.e. Morning routine, and how structured to you keep the rest of your day?)
What have you found to give you the most fulfilment, whether it's pre-financial independence or post financial independence?
As someone that used to be a full-time doctor, I imagine you have a wealth of knowledge when it comes to maximizing one’s longevity. Can you give us some advice on that?
Tell us again where we can find your book, as well as all the other educational content that you produce.
Best ETFs in Canada - Featuring MoneySense and Ben Felix
25 Oct 2022
00:58:02
One resource that I check out every year is MoneySense’s “Best ETFs in Canada” guide.
They bring on a panel of experts to find Canada’s top ETFs for DIY index investors (like myself). I found this guide extremely helpful when I was first getting started in investing, and now, many years later, I still read it when it gets updated annually, just to be “in the know” of what’s happening when it comes to index investing in Canada, and to stay up to date on any significant changes like the updated fees, new ETF offerings, and any changes to existing top ETFs that you and I have in our portfolios already.
This podcast interview is different from you just reading the written version of the guide because we actually do a deep dive into the different ETFs that are in the guide.
Definitely check out the written version of the guide as well, especially since it has some really useful tables that nicely summarize what the top ETFs are, in the different categories. But, definitely still listen to this interview as the writer of the MoneySense guide is on the show today to dive deeper into the findings, along with one of the top panellists and experts, Ben Felix from PWL Capital to provide his analysis on the different top ETFs.
Questions Covered:
Bryan, can you start by telling us about your background, as well as this annual initiative led by MoneySense to determine the best ETFs in Canada? Ben, can you tell us a bit about your background and the work that you do?
Bryan, how does voting work among the panellists before an ETF is admitted as one of the “Top ETFs in Canada”?
Bryan, there are a lot of different investing strategies out there. When you and the panellists are evaluating what the best ETFs in Canada are, what is the goal and strategy that you are all focused on and what kind of investor is this top ETFs list for?
Ben, before we get into the results, what should someone do if they are holding a past ‘top pick’, and now they no longer see that pick on this year’s list? In other words, when should we actually really consider swapping to a completely different ETF if we already have a good diversified index portfolio in place?
Ben, when it comes to switching from one ETF to another, what are the trading costs that we need to be aware of? The $5-$10 trading commissions are the one I think most people are familiar with, but what about the bid/ask spread, how much of a cost impact does that have? And are there any other costs we need to be aware of, when for example someone is tempted to switch ETFs because let’s say, a top pick for this year has a slightly lower MER?
Top Canadian ETFs:
Alright, let’s take a look at the top Canadian, total market, index ETFs that give you exposure to the Canadian stock market. I noticed that all three of the top picks have the same management fee.
We have BMO with ZCN, Vanguard with VCN, and iShares with XIC. Ben, BMO’s ZCN and iShares’ XIC look almost identical to me. Are there any key differences between these two that we should be aware of?
The other thing that jumped out at me is that Vanguard’s VCN has fewer holdings, 181 vs 240 compared to the iShares and BMO ETFs. Would this be considered a concern by implying that the Vanguard ETF is less diversified than the BMO and iShares versions? i.e. Why would you go with Vanguard when you can get more holdings and be more diversified with XIC or ZCN?
Bryan, another top pick in this category is Horizons’ HXT ETF, which covers the S&P/TSX 60. You mention in the article that “it’s tax-efficient; and has a rock-bottom 0.04% fee after the rebate, until at least Dec. 31, 2022”. Can you explain what this rebate is, and why the “at least Dec 31 2022” timeline?
Ben, Horizons has this unique tax structure with some of their ETFs, like HXT, where you don’t receive the dividend payouts as income, but instead they get added to the fund so that you instead receive more capital gains. I realize that I’m maybe oversimplifying things a bit here, but essentially by holding an ETF like HXT in a personal taxable or corporate trading account, some Canadians save money by reducing their clawbacks when it comes to things like CPP, OAS, the Canada Child Benefit (CCB), and avoid the high tax rate when investing in a corporate account.
Now in the past, the government closed this, (what I would consider a) loophole, but Horizons figured out a way to restructure their ETFs so that Canadians can still get these tax savings.
This raises the concern of: What if the government changed things again, closes the 2nd loophole, and Canadians that were holding Horizons ETFs like HXT start selling off ETFs like HXT in large quantities because it no longer has this tax advantage? In this scenario, would the ETF plummet in price? Or no, because the ETF is still holding companies (in a way), and it’s not like the value of all those companies will drop because there is a massive sell-off of the Horizons ETFs.
The last time this closing of the “loophole” happened where the government changed the rules, I recall Horizons doing a press release where they said that if they can’t find a workaround, they may have to close down those ETFs. If that was to happen in the future, would Canadian investors be hurt by this?
Bryan and Ben: The other concern with HXT, is that it is only 60 Canadian companies, and I think most Canadians (myself included) would rather go for the total market approach with an ETF like ZCN, where they are now getting the entire S&P/TSX index with its 240 stock holdings.
Do you think this tradeoff is worth it? (where you’re getting less diversification, but some potential tax savings and/or clawback reduction on government benefits).
Bryan and Ben, most Canadians do have a home country bias when it comes to their investment portfolio. Even when we look at asset allocation ETFs from all the major providers, they definitely hold more of Canada than Canada’s percentage of the world equity markets. Why is that, and what is your stance on what percentage Canadian stocks should make up of a Canadian DIY investor’s investment portfolio?
US Market ETFs:
Alright, let’s jump to the US market. XUU still appears to be the favourite here among the panelists, as far as Canadian listed, US total market index ETFs go. The runner-up seems to be VUN which is comparable in terms of US stock market representation, but has a higher fee of 0.15% vs XUU’s extremely low fee of 0.07%.
Do you guys have any thoughts and comments on this one?
International ETFs:
Alright, let’s jump to international stocks. Can you give us your thoughts on these, while touching on some of the nuances when it comes to choosing the different combinations, from the different providers, when it comes to emerging and developed international markets?
Vanguard ETFs in Canada: Your Top Questions Answered, Right From the Source
18 Oct 2022
01:00:33
If you’ve done any sort of research on index investing and ETFs, then I’m almost certain you would have heard of Vanguard, as they are one of the pioneers in this space.
They have a very impressive massive following in the US and have really established themselves in Canada as well, where they are the 3rd largest ETF provider.
I always wanted to interview them because I’m sure, like you, as one invests, you begin to wonder about certain things when it comes to index investing, and ETFs in general.
I’ve been accumulating this list of questions for them over the years and it’s exciting to finally get a chance to interview them.
Questions Covered:
Asset allocation ETFs have become incredibly popular here in Canada so I thought we could start our conversation there.
First, for anybody just getting started in DIY investing, can you briefly explain what asset allocation ETFs are?
One of the key appeals of asset allocation ETFs for many Canadians, is that the funds within the ETF are automatically rebalanced. Therefore, DIY investors don’t need to use tools or a spreadsheet to do this themselves.
How often are the Vanguard asset allocation ETFs rebalanced? And when we have something like the large but brief crash from COVID, are the asset allocation ETFs rebalanced at a different interval during such significant events?
A dilemma that I’m sure many Canadians face is whether they should use an asset allocation ETF for their entire portfolio, or whether they should split it up and buy individual ETFs instead, to get a slightly lower cost and increased tax efficiency by being able to place the individual ETFs in the account type that is most efficient for that ETF.
Is there a certain threshold in terms of portfolio size, or something else where you think Canadians should consider switching from an asset allocation ETF to individual ETFs?
When it comes to your asset allocation ETFs, I noticed that your allocations definitely differ from your main competitor iShares. Can you take us through how your asset allocation ETFs are different from iShares, and why you believe your methodology is superior?
DIY Investors that classify themselves as total market index investors often hear that their equity asset allocation should be based on market cap weights. For example, since Canada is only 2.4% of the world markets, then only 2.4% of our portfolio should be in Canada (source).
However, when we look at the asset allocation ETFs of Vanguard (and your competitors), we notice that Canada is overrepresented (i.e. a home country bias), and the US is underrepresented with respect to just their market cap weights.
I know there is a reason you do this and Vanguard has done research on this so can you take us through why your weights don’t actually try to exactly match the market cap weights that we see across the world?
One particular ETF that I’m sure has caught the attention of many retirees (or soon to be retirees) is the Vanguard Retirement Income ETF (VRIF). Can you explain what this ETF is, and the pros and cons of using it vs just holding a more traditional core total market index portfolio (like VGRO or VBAL for example).
One of your popular ETFs is VUN (the Vanguard US Total Market Index ETF). Traditionally, Vanguard and iShares tend to have almost identical fees (MER), when it comes to total market index investing.
However, I’ve had several listeners ask why in the case of VUN, its main competing ETF (XUU from iShares) is at a 0.08% MER whereas Vanguard is double at 0.16% MER.
Now I realize that these are both still really low MERs, especially when we compare them to traditional mutual funds that tend to have MERs of 2%+, but I was wondering if this uncommon discrepancy in fees is something that is on Vanguard’s radar, and is Vanguard considering matching iShares like it has in the past with many of its other ETFs?
This next one is a bit technical, but for Canadian investors that are really trying to optimize their portfolio: Whether stocks are held directly or through an ETF in another country like the US becomes important, due to the two layers of withholding tax that we have to pay if we’re holding international stocks through a US listed ETF.
With the Vanguard international ETFs (VEE and VIU), are the international companies now held directly instead of through a US listed ETF? And if not, is that something that Vanguard is looking into changing in the future so that Canadian investors no longer have to endure those two layers of dividend withholding tax?
Vanguard is seen by many Canadians as the pioneer when it comes to passive, total market index investing, especially with your founder Jack Bogle being such a strong supporter of total market index investing. I noticed however that Vanguard also has an active investing division. Can you tell us more about that as typically active investing is viewed by DIY passive index investors as the complete opposite of passive total market index investing.
Why does Vanguard believe that having a combination of both active and passive funds plays a critical role in a well-diversified investment portfolio?
Can you tell us about the different resources available on your site for investors?
How to Live Off Your Investments in a Sustainable, Stress-Free, and Tax Efficient Way in Canada. Featuring Ed Rempel, CFP
20 Jun 2024
00:57:04
When we first hit our financial independence number 8 years ago, one of the financial planners that I asked to look at our numbers before my wife and I quit our full-time jobs was Ed Rempel. At the time, I asked Ed if he could do his own math and analysis on our numbers, to make sure that I didn’t miscalculate something when I was doing it myself, and this way I could be certain that my wife and I could quit our jobs and live off our portfolio going forward.
Well, fast forward to today, it’s been around 8 years since we quit our full-time jobs, and so I thought it would be helpful to have Ed back on the show and to once again use us as a case study on how one can live off their portfolio in a sustainable, stress free, and tax efficient way, here in Canada.
On this episode, you’re going to learn what strategies and frameworks tend to work when it comes to living off your portfolio here in Canada.
You’ll learn about a big mistake that I made which was actually causing me money anxiety even though our investment portfolio was going up in value. Ed helped me get through that, and it’s a mistake that is actually totally avoidable, and a skill that you can start building and mastering today.
And, when it comes to a strategy for paying the least amount of tax in Canada, Ed takes us through two main strategies that you can choose depending on your situation so that you pay the least amount of tax throughout your lifetime.