Build Wealth Canada Podcast

Kornel Szrejber: Investor

As one of Canada's youngest retirees at the age of 32, and after becoming mortgage-free at 29, Kornel interviews the top financial experts in Canada to help you optimize your investments, reduce your taxes, and help you accelerate your journey towards financial independence and early retirement. He also shares his own experiences and lessons learned in investing and as an early retiree and member of the FIRE (Financial Independence, Retire Early) movement to help you optimize your finances, specifically here in Canada.

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Should You Use Options In Your Investment Portfolio? How Do Options Work in Investing?
13-09-2022
Should You Use Options In Your Investment Portfolio? How Do Options Work in Investing?
I always thought it would be neat to interview someone, that is actually part of the organization that runs the Toronto Stock Exchange. Most of us have the majority of our retirement savings in ETFs or stocks and so it makes sense to actually have some understanding of the exchanges here in Canada, how they work, and the relationships that exist between the brokerage that you use to actually buy your investments, the stock exchange itself, and the governing bodies and regulators that are there to ensure that investors like you and I are protected. To help us with this, I have Richard Ho on the show. Richard works for the TMX Group, which is the organization that actually runs the Toronto Stock Exchange, the Montreal Exchange, and other exchanges that we’ll learn about today, here in Canada. One of Richard’s responsibilities, is leading educational initiatives to help improve investor education, for Canadians like you and I.  One of the educational initiatives that I wanted to really highlight, is that Richard and his team have put together a free to enter competition, with a $10,000 grand prize, and 7 weekly prizes of $500 each. The competition revolves around investing using options. If you’ve ever wanted to learn more about what options are, and how they can be used to make money, definitely listen to this episode, but also take part in this free competition as it’s a risk-free trading simulation contest, with a lot of educational resources. The way that it works is that you have a virtual portfolio of $100k, and the question is: Can you strategize and trade options to earn the highest returns in hopes of winning the weekly cash prizes, a $10,000 grand prize and bragging rights as Canada’s Top Options Trader?  The contest runs for 8-weeks and kicks off on September 19, 2022. You can register for free here. There’s no entry fee, it’s just good education on the subject, and a way that you can try options as a tool in your investment portfolio, without actually risking any of your own real money.  So good luck, and now let’s get into the interview with Richard.  Our Expert Guest: I’ve invited Richard Ho, DMS, CAIA, FCSI, Director of Equity Derivatives and Customer Relationship Management at TMX Montréal Exchange, who is responsible for leading educational initiatives and partnerships with brokerage firms to discuss what makes this contest exciting, how it differs from past editions, and the educational component surrounding it.   Richard also collaborates on Option Matters, a Montréal Exchange blog whose mission is to help individuals increase their knowledge of the options market.  Resources Mentioned: You can enter the contest for free here (it runs from September 19th 2022 to November 11th 2022). More educational resources: Education on Options: optionmatters.ca Montreal Exchange Education Resources: m-x.ca/education Montreal Exchange Equity Derivatives & Options Education: m-x.ca/options The Montreal Exchange Main Site: m-x.ca/en The main TMX site (where all the Canadian exchanges are): tmx.com Questions Covered: To set the foundation, can you take us through the different exchanges here in Canada. For instance, most of us know about the Toronto Stock Exchange, but what are the other exchanges in Canada? and what do we need to know about them as Canadian investors? You are part of the TMX Group. Can you explain what the relationship is between the TMX Group, and these exchanges? And where can we go to learn more, for anybody that wants to dive deeper? Since the exchanges are such a critical component in Canada’s economy and our personal retirement savings, how are investors protected? I imagine there is a lot of government regulation and monitoring? Options have become a very popular topic lately, yet most of us haven’t been taught anything about them when in school. For somebody completely new to options, can you give us some detail on what options are, how they work, what type of investor they tend to be suited for, and where can we go to learn more about them? A lot of the investors on the show (myself included) are DIY, passive, total market index investors. Options seem like a tool that we can learn about and have in our arsenal, to use when needed.  What purpose can they serve for a passive do-it-yourself investor that typically just tries to buy the market as a whole using ETFs? And how much of a time commitment is it to learn how to do it properly? When it comes to the work that you and your team do, what are your actual goals or mandate? For instance, the TMX Group is a publicly traded company on the Toronto Stock Exchange, just like other for-profit companies, yet you don’t actually sell anything to DIY Canadian investors like myself, and I noticed that your team also produces a lot of educational content for Canadian investors like optionmatters.ca, and you even do contests and competitions to encourage investor education. How does all that work? Can you tell us more about the free-to-enter competition that you have coming up? For anybody that maybe doesn’t feel comfortable entering the competition yet, or is listening to this podcast episode months after the competition has already taken place, where can they go to learn more and access the different free investor education resources that you and the team have put together?  Can you take us through any basic options strategies that investors can try out, both during the contest and/or in real-life? Tell us again where we can go to access more of the free investor education tools that you have available, as well as where we can signup, for free, to the Options Trading Simulation Contest.
Should You Use Options In Your Investment Portfolio? How Do Options Work in Investing?
13-09-2022
Should You Use Options In Your Investment Portfolio? How Do Options Work in Investing?
I always thought it would be neat to interview someone, that is actually part of the organization that runs the Toronto Stock Exchange. Most of us have the majority of our retirement savings in ETFs or stocks and so it makes sense to actually have some understanding of the exchanges here in Canada, how they work, and the relationships that exist between the brokerage that you use to actually buy your investments, the stock exchange itself, and the governing bodies and regulators that are there to ensure that investors like you and I are protected. To help us with this, I have Richard Ho on the show. Richard works for the TMX Group, which is the organization that actually runs the Toronto Stock Exchange, the Montreal Exchange, and other exchanges that we’ll learn about today, here in Canada. One of Richard’s responsibilities, is leading educational initiatives to help improve investor education, for Canadians like you and I.  One of the educational initiatives that I wanted to really highlight, is that Richard and his team have put together a free to enter competition, with a $10,000 grand prize, and 7 weekly prizes of $500 each. The competition revolves around investing using options. If you’ve ever wanted to learn more about what options are, and how they can be used to make money, definitely listen to this episode, but also take part in this free competition as it’s a risk-free trading simulation contest, with a lot of educational resources. The way that it works is that you have a virtual portfolio of $100k, and the question is: Can you strategize and trade options to earn the highest returns in hopes of winning the weekly cash prizes, a $10,000 grand prize and bragging rights as Canada’s Top Options Trader?  The contest runs for 8-weeks and kicks off on September 19, 2022. You can register for free here. There’s no entry fee, it’s just good education on the subject, and a way that you can try options as a tool in your investment portfolio, without actually risking any of your own real money.  So good luck, and now let’s get into the interview with Richard.  Our Expert Guest: I’ve invited Richard Ho, DMS, CAIA, FCSI, Director of Equity Derivatives and Customer Relationship Management at TMX Montréal Exchange, who is responsible for leading educational initiatives and partnerships with brokerage firms to discuss what makes this contest exciting, how it differs from past editions, and the educational component surrounding it.   Richard also collaborates on Option Matters, a Montréal Exchange blog whose mission is to help individuals increase their knowledge of the options market.  Resources Mentioned: You can enter the contest for free here (it runs from September 19th 2022 to November 11th 2022). More educational resources: Education on Options: optionmatters.ca Montreal Exchange Education Resources: m-x.ca/education Montreal Exchange Equity Derivatives & Options Education: m-x.ca/options The Montreal Exchange Main Site: m-x.ca/en The main TMX site (where all the Canadian exchanges are): tmx.com Questions Covered: To set the foundation, can you take us through the different exchanges here in Canada. For instance, most of us know about the Toronto Stock Exchange, but what are the other exchanges in Canada? and what do we need to know about them as Canadian investors? You are part of the TMX Group. Can you explain what the relationship is between the TMX Group, and these exchanges? And where can we go to learn more, for anybody that wants to dive deeper? Since the exchanges are such a critical component in Canada’s economy and our personal retirement savings, how are investors protected? I imagine there is a lot of government regulation and monitoring? Options have become a very popular topic lately, yet most of us haven’t been taught anything about them when in school. For somebody completely new to options, can you give us some detail on what options are, how they work, what type of investor they tend to be suited for, and where can we go to learn more about them? A lot of the investors on the show (myself included) are DIY, passive, total market index investors. Options seem like a tool that we can learn about and have in our arsenal, to use when needed.  What purpose can they serve for a passive do-it-yourself investor that typically just tries to buy the market as a whole using ETFs? And how much of a time commitment is it to learn how to do it properly? When it comes to the work that you and your team do, what are your actual goals or mandate? For instance, the TMX Group is a publicly traded company on the Toronto Stock Exchange, just like other for-profit companies, yet you don’t actually sell anything to DIY Canadian investors like myself, and I noticed that your team also produces a lot of educational content for Canadian investors like optionmatters.ca, and you even do contests and competitions to encourage investor education. How does all that work? Can you tell us more about the free-to-enter competition that you have coming up? For anybody that maybe doesn’t feel comfortable entering the competition yet, or is listening to this podcast episode months after the competition has already taken place, where can they go to learn more and access the different free investor education resources that you and the team have put together?  Can you take us through any basic options strategies that investors can try out, both during the contest and/or in real-life? Tell us again where we can go to access more of the free investor education tools that you have available, as well as where we can signup, for free, to the Options Trading Simulation Contest.
Optimizing Investing Through Your Work - Employer Match, Defined Benefit, and Defined Contribution Pensions in Canada - Featuring Robb Engen from BoomerAndEcho.com
10-08-2022
Optimizing Investing Through Your Work - Employer Match, Defined Benefit, and Defined Contribution Pensions in Canada - Featuring Robb Engen from BoomerAndEcho.com
One question that I’ve been getting asked a lot, both from listeners of the podcast, as well as those in my investing course, is how to deal with and optimize any sort of investments through your work.  Typically, in Canada, when you work for a mid-size or large organization, you’ll either be part of a defined contribution pension plan, or a defined benefit pension plan.  We’re going to cover both types of pensions in this interview, and specifically, some of the things we’ll cover are: How should a pension factor into how you view your finances/investments? (And again, this is all going to be for both types of pensions, no matter which one you have). What should your portfolio look like with a pension (i.e. more equity than bonds?), especially depending on the type of pension that you have. How to factor a pension into an early retirement. The tax implications of potentially taking a buyout for early retirement (if that's an option) We cover all that, and much more in the interview (scroll down for the full list of questions).  Our Expert Guest: To help me with this, I have Robb Engen on the show, who is one of the most reputable fee-for-service financial planners that I know of in Canada.  He also runs one of the largest and most reputable personal finance blogs in Canada called boomerandecho.com.  He’s regularly quoted or featured in financial media such as the Globe & Mail, MoneySense, the Financial Post, CBC, and Global News. He used to actually work for a university here in Canada, where he had one of those nice gold-plated pensions, but ended up transitioning from that to becoming self-employed, so he had to go through this pension analysis himself first-hand on what to do when you have a pension, and then no longer wish to stay with that employer.  Because of his background, first-hand experience with pensions, and fantastic reputation in this space here in Canada, I thought he’d be a great fit for this episode, as he’s gone through these options and this analysis himself, so it’s not just some theory that we’re going to be talking about here. Resources Mentioned: Robb's Site: BoomerAndEcho.com Robb's Fee-for-Service Financial Planning Page: You can get your free Passiv account here: BuildWealthCanada.ca/free My guide on how to redeem your free premium account upgrade in Passiv is here: BuildWealthCanada.ca/passiv You can view the stock/equity side of my portfolio (what I invest in and how much of each ETF type I buy) here: BuildWealthCanada.ca/portfolio The account that I use for the safe part of my portfolio is here (I use the high-interest savings account, but they also do GICs if you are willing to lock in the money for a bit to get a higher rate): BuildWealthCanada.ca/safe Questions Covered: To start things off, can you take us through what the main pension types are for Canadians, and what are the key differences between them? How should the 2 different pension types factor into how you view your finances and investments? What should your investment portfolio look like, depending on the type of pension that you have? (ie. more equity than bonds if you have a defined benefit pension?) How do you factor in a pension into an early retirement? (for both pension types) What are the tax implications of potentially taking a pension buyout for early retirement? (if that's an option) Robb, you had a defined benefit pension when you worked at the university before becoming self-employed as a fee-for-service financial planner. Can you take us through how you decided between keeping the pension vs receiving the buyout? What are the pros and cons of each approach? When you have a defined benefit pension plan, your RRSP contribution room gets reduced. This begs the question of whether employees with good defined benefit pension plans should even bother with RRSPs. Let’s also tackle this question for those with a defined contribution pension too. Let’s talk about our investment options with the two different pension types. For people with defined benefit pensions, do they have any options in terms of how much to contribute, and what that money goes into? (ex. Something environmentally or socially conscious (ESG), something more aggressive, more conservative, etc?) For defined contribution pensions, you definitely have to pick what the money goes into but it can be overwhelming analyzing and choosing from the different investment options offered by the company that your employer has selected. When you speak to a client that is struggling with this, is there a certain process or approach that you suggest to them to help them decide on what investments to pick? I’ve gotten asked this a lot by students of my investing course so I came up with a process that I thought I’d share. Robb, feel free to jump in if you have anything to add or if you disagree on anything and that way listeners have a nice step-by-step process from both of us that they can use. Can you take us through some common mistakes that you see people do with the two different pension types? Thanks so much for coming on again Robb. We look forward to seeing you at the Canadian Financial Summit again this year as one of the speakers. Tell us again where we can see more of your, content, research, and learn more about your practice?
Hybrid Investing: An Improvement on Passive Investing?
05-07-2022
Hybrid Investing: An Improvement on Passive Investing?
Long-time listeners of the show know that I am always on the hunt for personal finance and investing tools that actually work for us Canadians. Too often we hear about some great tool or resource and then it turns out that it’s only for those in the US. With that said, I wanted to bring on two CEOs today. The first is from a tool that I’ve been using and been hooked on for years now, which essentially automates any rebalancing that I have to do in my portfolio (so I don’t have to do the tedious data entry into a spreadsheet anymore to calculate how much of each ETF I have to buy every time that I have some money to invest). One thing that I recently noticed is that I almost never log into my Questrade account anymore, because I would much rather just buy the investments right within one tool for all our accounts, whether it’s my account, my wife’s account, or our kids’ RESP, instead of having to log in and out of each account and doing the trades and calculations manually. Our Guests: The tool and company that I’m talking about is Passiv. The CEO and our 1st guest today is Brendan Lee Young, and you can actually use Passiv for free, over at BuildWealthCanada.ca/free. They integrate with different Canadian Brokerages out there like Wealthsimple Trade for example, but if you’re a Questrade user like me, you actually get their Premium account for free, so that you can do the trades right within the tool and make your portfolio more tax efficient right from within Passiv. Our second guest CEO is Alex from Global Predications which is a tool that I just recently heard about that is now available in Canada. I’m in the process of trying it out now. Some of its main functionality is that it can help find risks and problem areas within your investment portfolio, give suggestions on how to improve your portfolio, and let you visualize your net worth using all your assets (instead of just your investment portfolio). And, if you want to check them out, their Canadian page where you can get a free account is here.  I thought we could have an interview to discuss some of the tools available to us Canadians, and as a bonus, what’s really neat is that Passiv actually has a way for you to share what investments you’re holding with others, so in this episode, I also provide a link to my portfolio in Passiv so you can see exactly which ETFs I buy, and what my asset allocation is in terms of bonds vs stocks, and in terms of geography (so how much I have in Canada vs US vs International). I hope you enjoy the discussion! Resources Mentioned: You can learn more about Passiv and get a free account here. You can also see my asset allocation and what ETFs I buy using Passiv here. Here is the Global Predictions page where you can get free access, specifically for Canadians. FYI, this page is specifically for Canadians so you'll find it more relevant than just going to globalpredictions.com (which is the US version). Thank You To Our Sponsor: Shopify A big thanks to Shopify for sponsoring this episode. You can get a free 14-day trial of Shopify here. Shopify, helps make it easier than it’s ever been to start, run, and grow your own business. There’s no need for you to know how to design or code, and I really love how Shopify makes starting your own business possible for anyone. You can start selling on Shopify today by going to shopify.ca/bwc where you’ll receive a FREE 14-day trial.
Are You Holding the Right Bonds in Your Investment Portfolio?
21-06-2022
Are You Holding the Right Bonds in Your Investment Portfolio?
When learning how to invest, we are consistently told to conduct our “due diligence” on the investments that we’re considering buying. Yet, almost all of us haven’t actually been trained on how to analyze the investments that we’re considering, so that we choose the ones that are right for our particular situation. To help remedy this, I thought it would be good to give listeners a bit of a training on how to actually interpret the figures and terminology that we see used here in Canada, when we’re considering purchasing an investment.  Now this is obviously a very large topic as there are many types of investments, so I thought we could start with learning how to understand bonds (especially bond ETFs).  We’ve definitely seen some drops in the market recently and I suspect many investors are wondering about holding bonds, if they are holding the right types of bonds, and how to actually interpret the data that you see when you’re looking up information about a bond ETF.  Guest Bio: To help me with this, I have Danielle Neziol back on the show. Danielle and her team actually created and continue to manage the largest bond ETF in Canada (and in case you’re curious, that ETF is ZAG from BMO ETFs which now has over $5.8 billion in net assets).  Danielle is the Vice President over at BMO ETFs, and I thought it would be great for us to actually get some training from her on how to interpret the facts sheets that we all see when we look up any type of bond ETF, no matter who the provider is. My goal is that this interview gives you the knowledge to be more confident in your investing, and hopefully helps relieve any anxiety that you may feel when it comes to choosing your own investments, or helping ensure that you are in the types of investments that are the best fit for you. Resources Mentioned: Danielle and her team host free weekly webinars where you can learn more about ETFs, as well as ask them your ETF questions. I've been a guest there several times and it really is a great resource for Canadian DIY investors. You can view past replays and sign up to attend the upcoming webinars for free here: etfmarketinsights.com Also, be sure to subscribe to the ETF Market Insights YouTube Channel where you can also see past recordings. Questions Covered: Investors place a lot of time deciding how much of their portfolio should go into bonds vs stocks. Yet, when it comes to bonds, there are several different types and they can each behave differently. Can you speak to the different types of bond ETFs out there, and what differences can we expect from them? Especially when it comes to changing interest rates and different economic climates? When examining all these different types, I can see it being overwhelming for some investors when they do a search and see dozens of different bond ETFs out there from all the different providers. One may begin to wonder whether they should pick and choose individual bond ETFs, or whether they should just hold one large aggregate bond ETF like ZAG which holds all these different types of bonds in a diversified manner. For those struggling with this question, what advice can you give? Does a rising interest rate environment like we are in now change how we should be thinking about bonds? Often when I see a model portfolio from a professional in the industry, the bond portion of the portfolio includes a bond ETF that contains only Canadian bonds. ZAG if I’m not mistaken also holds exclusively different types of Canadian bonds. Why is that, when with equities on the other hand, we want international diversification? One of Canada’s largest bond ETFs (ZAG) is designed to replicate the FTSE Canada Universe Bond Index. Is this index a standard that many other bond ETF providers are using as well? And for us index investors, how can we make sure that the ETF we choose is trying to replicate the correct index? When evaluating which bond ETF(s) to use for our investment portfolio, we should be looking at the fact sheets of those bond ETFs to get a better understanding of what they are and how they are likely to behave. Yet, most of us haven’t been trained on how to read these, especially in regard to what the different terms mean. I was hoping that we could go through a real-life bond ETF fact sheet and you could tell us what some of the less obvious terms mean, and what we should be looking for. Let’s use ZAG as an example. Listeners can go to BuildWealthCanada.ca/zag for anybody that wants to follow along: Weighted Average Term (year): Can you speak to what that is, and what impact does that have on what you can expect from the ETF? I think at the end of the day, a lot of investors what to know, “If I buy this bond ETF now, what kind of interest income can I expect to receive?” When we look at the fact sheet of a bond ETF however, we see three different percentages. There’s the:  “Weighted Average Coupon %”the “Annualized Distribution Yield”and the “Weighted Average Yield to Maturity”. What do each of these mean? And how can we interpret the numbers provided there? Next, we have two terms that apply to equity ETFs as well, and that’s “Maximum Annual Management Fee” and “Management Expense Ration” (the MER). Can you explain the difference between the two, and how should investors interpret these numbers when they see them on any ETF in the marketplace? What would you consider a higher vs low MER? 7. ETF fact sheets typically have an annualized performance section where they show how the ETF performed relative to its index. For ETFs that are looking to match the index, what would be considered a reasonable spread between the two vs a concerning number? 8. One page that seems especially critical to evaluate, whether evaluating a bond ETF or an equity ETF, is the “Holdings” page where we see all the investments that the ETF contains. Let’s pretend that you just pulled up a core bond ETF like ZAG and went to its holdings page. What would you look for and how would you analyze and interpret the data that you see there? (for anybody that wants to follow along, you can go to BuildWealthCanada.ca/zag and that will forward you there) and click on the holdings tab. Areas to cover: Sector allocationGeographic allocationMaturityCredit allocation Are there any other areas that you think are critical to look at, and if an investor is feeling overwhelmed by the large amount of bond ETFs out there and is getting into a bit of paralysis analysis, what would you recommend as their next step? 9. Can you speak to the relationship that bonds have with rising interest rates, and at what point do we start to take advantage of those higher interest rates in our bond portfolio to offset the drop in price that occurs when interest rates go up? 10. For anybody looking to learn more, can you tell us more about ETF Market Insights, the YouTube channel, and any other resources listeners may find helpful?
Andrew Hallam: How to Invest and Spend for Happiness, Health, and Wealth
07-06-2022
Andrew Hallam: How to Invest and Spend for Happiness, Health, and Wealth
Today I’m extremely excited to have Canadian best-selling author, Andrew Hallam back on the show. His first book, Millionaire Teacher continues to be the #1 best seller in the Investment and Portfolio Management category on Amazon. He is one of the world’s most prolific financial wellness speakers and over the past 16 years, he has given hundreds of talks in over 30 different countries espousing research on financial wellness, sound investing and life satisfaction. He has been investing in the stock market for 32 years, having built a million-dollar portfolio on a schoolteacher's salary when he was in his late 30s. In today’s interview with Andrew, we cover the subject of how to achieve balance, and how to maximize your happiness, health, and wealth. We also cover what to expect and how to maintain balance after having hit your financial independence number. Lots of early retirees in the FIRE movement and traditional retirees continue to do some sort of productive paid work. Why is that, and is it realistic to never work again after you retire?  As you can imagine, generating some minor income after retirement, doing something you love, can drastically decrease how much money you actually need to retire from your day job, potentially letting you leave that job you may dislike or be bored with many years earlier.  Since Andrew is already financially independent, we dissect how Andrew has found that balance in his life between taking on meaningful and fulfilling work, and balancing that with leisure, health, and happiness. Questions Covered: 1. When a lot of people, myself included start their financial independence journey, the goal is to never work again and that becomes a major motivator to accumulate all those savings to be able to retire. Yet from my own experience and after interviewing many other early retirees, I've noticed a pattern where most if not all still end up doing some sort of productive work or something that could be classified as “work” even though they don't have to, since they've already reached their financial independence number. Did you have the same experience as you moved from the accumulation stage to the financial independence and retirement stage, and from your experience what have you found to be a good balance in your own life? 2. You've spoken with many other early retirees who I assume had a similar experience in terms of that progression from initially never wanting to work again and live a life of leisure permanently, versus eventually realizing that there needs to be a balance to achieve sustainable happiness. Have you noticed any patterns from those you've talked to in terms of how they were able to find sustainable happiness and what that balance was for them in order to achieve it? 3. After reading your book, it becomes very clear that health and longevity is something that is a high priority for you, and should be for all of us since what’s the point of accumulating all this wealth and retiring if you don’t live long enough to enjoy it.From the research that you’ve done, what have you found to be the best practices to maximize our health and longevity? Nutrition?Types of exercise and frequency?Cancer prevention?Stress control?Energy maximization? 4. In terms of maximizing happiness in retirement, 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? 5. Do you find that goal setting and trying to achieve growth and improvement in retirement adds to your happiness and fulfilment? Or do you take the approach of trying to just be happy with where you are, living in the moment, as opposed to continuously striving for more? 6. Please tell us again where we can learn more from you and get your latest book.
Guaranteed Income For Life: How to Use Annuities in Your Investment Portfolio
11-05-2022
Guaranteed Income For Life: How to Use Annuities in Your Investment Portfolio
When it comes to the safe portion of our portfolio, we’ve talked about GICs and high-interest savings accounts before, but one option that we haven’t talked about yet, is one that gives you guaranteed income for life, no matter what the markets are doing, and those are called annuities. So, I thought it would be good for you and me to get some annuities 101 knowledge under our belts, so that we can better understand what’s out there, what are the pros and cons of annuities, and so that we can better determine if they are something that we should look into further, based on each of our particular situations. To learn more about this, I thought it would be good to get our information from two different sources. The first, would be fee-for-service financial planners who don’t actually create or sell annuities, but are responsible for potentially using annuities as part of a total financial plan.  With that in mind, I’m definitely going to be asking financial planners that I interview in the future about annuities, so that we can get a holistic view and multiple perspectives on the subject. The other source of information that I thought would be good to interview, is an actual creator of annuities. This way we’re getting the information right from the source about how they actually work, their intent, the pros and cons, and how they can potentially fit as part of a financial plan.  To help me with this, I have Selene Soo on the show. She is the Director of Product Strategy and Development in the area of Wealth Management over at RBC. She has been there for over 17 years, and has been in the industry itself for over 2 decades, so she definitely has a wealth of experience and knowledge when it comes to annuities. I thought I’d pick her brain so that we can get a solid foundation on annuities, and one question that I’ve been extremely curious to ask someone like her that’s actually in the industry, is for those of us who don’t have a defined benefit pension through our work (for example, those of us that are not government works, teachers, police officers etc.), is there a way that we can get the type of guaranteed income for life in retirement that the government workers get, by using annuities? We definitely get into that question, plus a lot more. Thanks for tuning in, enjoy the learning, and now let’s get into the interview.
Rising Interest Rates, Variable vs Fixed Mortgages, and How to Take Equity Out of Your Home
05-04-2022
Rising Interest Rates, Variable vs Fixed Mortgages, and How to Take Equity Out of Your Home
In this episode, we cover the rising interest rate environment that we're currently in here in Canada, and how it can impact you financially. We also cover how to decide whether you should go fixed or variable on your mortgage in the current interest rate environment. Next, we cover the subject of how you can take out some of the equity that you’ve built up in your home, so that you can either use it to invest, or deploy it elsewhere (without having to actually sell your home). We also discuss the Smith Manoeuvre, which is a technique that you can use here in Canada to make your mortgage interest tax-deductible (and be able to invest a bit easier when you pay down your mortgage). All this and more on this month's episode.  Questions Covered:  For the first time in over 3 years, the Bank of Canada has started raising interest rates. What should we be considering if we have a variable rate mortgage or have debt that’s tied to the prime rate (like a home equity line of credit)?For Canadians that have their mortgage coming up for renewal in the near future, or those looking for a new mortgage, based on the current environment, what is the mortgage rate outlook for the coming year and how can those Canadians best decide whether they should go fixed or variable?From what you’re seeing, what is the real estate market outlook for this coming spring and the rest of the year? Is it likely to be a buyer's market or a seller's market? What kind of buying/selling environment should people be ready for if they are thinking of moving, buying/selling a house?Home prices have grown substantially over the years making many Canadians who already own a house pretty wealthy on paper, but much of that money or equity is tied up in the house, and I’m sure many of us would like to be able to use some of those gains either for investing, or other things. We’ve probably all heard of using a home equity line of credit (HELOC) to take some of that money out, but what are the other options available to us, and what are the pros and cons of using a HELOC vs these other options? On the flip side, with the rising cost of living (we’re hearing about inflation a lot), cash flow is becoming a challenge for some Canadians, making it even more difficult to find extra cash to invest for their retirement, while also paying down their mortgage and other expenses. However, there are strategies to pay down your mortgage and invest at the same time. Can you explain this strategy to listeners that are in this situation? And what are the pros and cons?
Your Guide to All-In-One ETFs and Socially Responsible Investing
23-03-2022
Your Guide to All-In-One ETFs and Socially Responsible Investing
On this month's episode, we're going to discuss some of the most frequently asked investing questions that I receive. The first of these is helping you decide if you should just pick one ETF for your entire portfolio (these are referred to as asset-allocation ETFs), or if you should pick and choose multiple ETFs for your portfolio to fine-tune tune it based on your specific preferences.  We also talk about how to determine the asset allocation for your portfolio (the stock to bond mix), as well as how to determine how risky the ETFs that you're considering actually are. It turns out that there is an actual standardized risk rating in Canada to help you determine this which I think you'll find really helpful. Last but definitely not least, we cover socially responsible investing (also known as ESG investing) to help you decide whether ESG ETFs could be a good fit for your investment portfolio, and some things to be careful about and consider, when partaking in socially responsible investing by buying these types of ETFs. To help me with this, I'm thrilled to have Danielle Neziol back on the show. Danielle and her team actually create some of the most popular ETFs that Canadians invest in. She works for BMO ETFs which is the largest Canadian ETF provider in the country, so we're literally getting this information right from the source here which I'm always a big fan of.  Danielle and her ETF research team have put together a lot of free resources for Canadian DIY investors over the years, and because there are so many of them, I created a resources page where you can see them listed and access them easily.  They're all free, they're not affiliate links or anything like that, and you can check them out and start learning over at buildwealthcanada.ca/bmo Enjoy, a big thanks to Danielle and the team for putting these together and making them available free of charge, and now let's get into the interview.
How to Use Factor ETFs to Fine-Tune Your Portfolio + Market Update
22-02-2022
How to Use Factor ETFs to Fine-Tune Your Portfolio + Market Update
Many listeners of the show (myself included) are total market index investors, where we just buy ETFs that are meant to represent the entire market as a whole, worldwide (as opposed to stock picking, or trying to speculate what will go up or down and investing based on that). After you’ve been index investing for a while though, it’s easy to begin to wonder whether you should customize your portfolio a bit further so that it’s more aligned with your particular situation, or so that it holds more of the types of companies that you want in your portfolio. When you start looking into this, you’ll quickly come across what is known as factor investing, which can be used to tweak your portfolio so that it holds more companies that contain specific attributes that you like. In this interview, we talk about the benefits of doing this so that you can better decide for yourself whether it’s worth the added complexity in your portfolio. We also discuss the risks that you need to be aware of if you partake in modifying your investment portfolio in this way, and we cover how you can analyze factor ETFs to find out which (if any) are the right fit for you. Of course, we also cover some of the different types of factor ETFs out there and what they mean, so that you can better decide about potentially incorporating them into your portfolio. Questions: A lot of the listeners of the show are total market index investors, where we just buy the market as a whole using the same core ETFs. What is the advantage of now also adding factor ETFs into our portfolio? What are the risks of incorporating factor ETFs into our portfolio vs just sticking with a total market indexing strategy? There are a lot of factor ETFs out there. How do we begin to analyze them as a DIY investors to find out which (if any) are the right fit for us? Are there any educational resources you can recommend? Would you consider factor investing to be “active” investing? When I spoke with your team in the past, it was mentioned that BMO believes that it is most optimum to have both passive and active investments within our portfolio. Interestingly, when I interviewed Vanguard in the past, they also had the same viewpoint (I wonder if that’s a common viewpoint among all the major ETF providers). Can you share why you think our investment portfolio should have an active component as opposed to just being 100% passive through total market index ETFs? When factor ETFs get launched, they don’t have a long history where we can, for example, stress test them by seeing how they performed during the 2008 financial crisis or the tech crash in the 2000s. If we want to see/simulate how that ETF would have performed in adverse market conditions, how would we go about doing that? I suppose we can use this approach for most new ETFs that get launched and that we want to evaluate? How is using factor ETFs different from just using active ETFs or mutual funds? Would it be fair to say that we can start with a broad, total market ETF approach, but then we can use factors to fine tune our portfolio for our specific needs? (i.e. To either increase potential returns at the cost of risk/volatility, or to reduce volatility/risk at the expense of lower expected returns?). Are there things that we should consider other than just looking at returns and volatility? In one of the BMO white papers I read, it was mentioned how one strategy is to go into and out of factors depending on the economic climate. For example, if we’re seeing slowing vs rising growth, or increasing vs decreasing inflation. However, most listeners of the show (myself included), I think prefer the set-it-and-forget-it approach where we don’t have to follow the economy, the different economic markers, or the markets. Instead, we would rather just have the same ETFs to buy every month with a piece of every paycheque, and just hold those ETFs long term until retirement. For those types of investors, should they just do total market index investing or can factors still be a smart tool to use, without having to analyze what economic climate we are in? Can we go through each of the different factor types and explain what they are? Where can we learn more about factor investing, and where can we get some of your free tools, white papers, and other resources? Resources: Free ETF Tools and Resources ETF Market Insights (Free resources, webinars, and Q&A) Factor Based Investing ETF White Paper BMO ETF Lookup, News and Resources: BMOetfs.com ETF Comparison Tool (for both: Non-BMO and BMO ETFs)
How to Live Off Your Investment Portfolio With Best Selling Author Andrew Hallam
01-02-2022
How to Live Off Your Investment Portfolio With Best Selling Author Andrew Hallam
Today I’m extremely excited to have Canadian best selling author, Andrew Hallam on the show. His first book, Millionaire Teacher is currently the #1 best seller in the Investment and Portfolio Management category on Amazon. He has been investing in the stock market for 32 years, having built a million-dollar portfolio on a schoolteacher's salary when he was in his late 30s.  Over the past 16 years, he has given hundreds of talks in over 30 different countries espousing research on financial wellness, sound investing and life satisfaction. We cover a lot of areas in this interview, but since Andrew achieved financial independence in his 30s, I especially wanted to ask him how we Canadians can live off our portfolios long term, without depleting it prematurely (while also maximizing the income that we are able to withdraw).  We discuss what to do when it comes to our withdrawal strategy in different economic environments, and we discuss how one can best use the 4% rule, and how we can modify it, depending on what happens in the markets.  We also talk about one of my favourite topics, variable withdrawal strategies which help us maximize how much income we can take out of our portfolio every year (while not running out of money). Questions: For anybody that hasn’t read your books or is hearing about you for the first time, can you tell us a bit about yourself, especially when it comes to the world of investing, financial planning, and retirement? You're someone that has achieved financial independence many years ago and has had to learn how to live off your portfolio indefinitely in a sustainable fashion. Just to set the groundwork and for somebody that hasn't read your books before, can you tell us what kind of investments your portfolio consists of that has allowed you to do this and retire early? Do you have a system or process that you follow to determine how much money you can take out from your portfolio to live off of every year? (with the implied goal that you’re trying to maximize how much you can take out annually, while still having that amount be sustainable so that you don’t run out of money in the future). There are many withdrawal strategies that one can use to live off their portfolio. Apart from the one that you just mentioned that you do yourself, are there any other ones that you like or have found to work well for others? What are your thoughts on variable percentage withdrawal approaches? Ex. Taking out 4% of whatever the portfolio value is at the time, instead of more static approaches like the traditional “4% rule”. Before we get into more questions can you tell us more about your new book called Balance and where can we get it. When we spoke before the interview, you mentioned that sometimes when pursuing money and financial independence, we can actually fall into a trap and miss the point of why we pursue it in the first place. And in relation to that, in your book, you talk about how we need to be careful about how we define success, and how we need to strive for the goal of life satisfaction as opposed to just a high monetary figure within our portfolio. Can you speak to that bit?
How to Make Sure You’re Covered - Optimizing Insurance in Your Financial Planning
25-01-2022
How to Make Sure You’re Covered - Optimizing Insurance in Your Financial Planning
If you’re working with a good certified financial planner here in Canada (a CFP), there are specific categories that they should be helping you optimize. According to FP Canada, which is the organization that issues the Certified Financial Planning designation (the CFP), there are 6 areas that should be covered, as they are critical to your financial health.  For your reference, the pillars are insurance and risk management, financial management, investment planning, tax planning, retirement planning, estate planning and legal aspects.  Today, we’re going to talk about the insurance and risk management pillar to help you optimize that, and my returning guest today is insurance expert, Laura McKay. Laura used to work as an actuary, and is now the Co-founder of PolicyMe.  One of the things that I REALLY like about PolicyMe, is that they have an incredibly useful tool on their site to help you determine how much, if any, life insurance you actually need.  What I found really sets it apart from the other online calculators that I’ve seen, is that it will actually honestly tell you, if you do not need life insurance.  Questions Covered: As the new year kicks off and we look for ways to optimize our finances, one important area when it comes to our financial health is insurance coverage and risk management.A big piece of this has to do with life insurance. In case somebody is on the fence or not really motivated to look into life insurance, can tell us why this should be on our radar, and what are the consequences of not having this type of insurance when we need it? Can you tell us more about what the role of life insurance is in financial planning? I suspect that one of the reasons that looking into life insurance isn’t often near the top of Canadians’ to-do lists, is that it’s perceived as expensive and as an additional cash flow drain month-to-month. Can you give us a ball-park range of what life insurance can typically cost us in Canada, and what things can we do (that we have control of), to get the absolutely lowest rates for the coverage that we need? Is there any innovation around insurance happening in Canada that we should be aware of, especially when it comes to making insurance more affordable?  I’ve definitely heard of Canadians getting some really slick and persuasive sales pitches to use permanent life insurance as an investment vehicle, in addition to the life insurance coverage that it provides. Often large tax savings are mentioned as one of the key benefits. Can you talk about the pros and cons of using a less expensive term life insurance policy to just cover our life insurance needs, vs using permanent life insurance like whole life or universal life to receive both life insurance as well as an additional investment vehicle (please define whole life and universal life insurance for anybody not familiar too). Of course now, with COVID being the big elephant in the room, I’m sure many Canadians are wondering whether COVID has impacted their life insurance in any way, and if they are in the process of getting life insurance, will they still receive the payout if the insured person in their family passes away due to COVID. How can we best ensure that we are covered if we get life insurance now, and for those that already have life insurance, what’s the best way to check that we're still covered? For anybody listening that does not currently have life insurance, how can we best determine if we actually need it for our particular situation? Whether we’re shopping around for a policy, or already have one, what kind of analysis can we do ourselves to evaluate the quality of a policy? Are there certain types of Canadians for which life insurance is especially critical? Personally, I've always felt a bit skeptical when asking somebody that sells insurance “How much insurance coverage I need?”. I’d think of it like asking a real estate agent how big of a house I need when their commission is obviously higher the bigger the house I purchase. With insurance, I find it often a similar story where the insurance expert that you are speaking to is maybe compensated more depending on how large the policy is that I buy, so there is an incentive for them to paint a story of why you need as much insurance as possible. For people like myself that have this concern how can we best determine how much insurance we actually need without having to take advice from someone that is financially incentivized to sell us as large of a policy as possible? Can you tell us where we can get more of your educational resources and what is a good next step for someone that thinks life insurance is something that should be on their radar, but either doesn’t have any life insurance, or is not sure if they have enough through their employer, or other sources?
Lessons Learned After 5 Years of Early Retirement + Post Pandemic Small Business Update for Canadians
02-11-2021
Lessons Learned After 5 Years of Early Retirement + Post Pandemic Small Business Update for Canadians
Today we’re going to have a two-part episode. Part 1 will be about the lessons that I’ve learned after being either fully retired, or semi-retired for the past 5 years. I definitely made some mistakes both during retirement and leading up to retirement; things that I definitely would have done differently if I were to do it all over again. I hope that by sharing these lessons, it’ll help you avoid them on your financial independence and early retirement journey, as well as give you some insights on what it’s been like to actually live off an investment portfolio as opposed to being reliant on a job. Part 2 of the episode will be some useful information for all the current and future Canadian small business owners out there: As COVID-19 restrictions loosen in many parts of the country and world, consumers are thinking differently about their needs/wants. During the pandemic, new habits and practices were formed, and altered how people do business. For small business owners, it also meant many changes along the way. In the interview, we tackle which of these practices are here to stay because they offered a good client experience? What types of businesses and experiences will Canadians seek out in a post-COVID economy? And what about the businesses that launched during the pandemic - what’s next for them? Resources: Join Our Free Live Retirement Planning Strategies Webinar: The free live webinar and Q&A on Retirement Planning Strategies is on November 24th, 2021 at 1 pm EST. You can sign up for free at buildwealthcanada.ca/retirementwebinar.  If you’re seeing this after the event has already taken place, you can still go to the link above to get the recorded version of the webinar.  Definitely join us live though if you can as that way you can get your questions answered, plus we’ll be giving away prizes during the webinar but you have to be on the live webinar to be eligible.  Excellent Resources for Canadian Small Businesses:  As mentioned in part two, this RBC page has some really useful education and free resources for Canadian Businesses, and they’ve partnered up with other businesses to get you additional discounts and bonuses. You can access all the information for free here: BuildWealthCanada.ca/rbc Free Assessment Call for Financial Coaching: The free assessment call mentioned in the episode is available here: buildwealthcanada.ca/call. This is part of the coaching program that I am currently going through with Enriched Academy.
How to Save Money: Top Lessons From Teaching 100,000+ Canadians
18-09-2021
How to Save Money: Top Lessons From Teaching 100,000+ Canadians
Our guest today is Arian Beyzaei, the Vice President of Enriched Academy, one of the most successful companies to be featured on the show Dragon’s Den.  Over the past 6 years he has travelled around the country teaching students and entrepreneurs how to get smarter with their finances. He has presented to over 10,000 people and has been the keynote speaker for several corporations.  Arian has also been featured on the Financial Post, The Globe and Mail and many more providing personal finance tips and strategies. What’s really neat about Enriched Academy is that they are definitely one of, if not the largest financial literacy educators in Canada. They have over 100,000 students, so I thought it would be useful for Arian to share some of the top money saving lessons learned, after teaching that many students, here in Canada. In other words, what can really move the needle for all of us, when it comes to making a dent in our spending? What are the highest impact savings strategies that we should be focusing on, to really drastically increase the extra cashflow that we all receive month to month? Questions Covered: We talk a lot about increasing our wealth through investing on this show but a higher income, or return on investment, is only one component of growing our net worth. The other of course, is saving and not incurring unnecessary liabilities. To kick things off, why should finding ways to save money be on our radar? As opposed to us just focusing on maximizing our income and returns? When it comes to saving money on things that really move the needle in increasing our financial wellbeing, housing and transportation come to mind as the top areas to optimize. Can you give us some insights and advice on these two areas? While housing and transportation are definitely high priority areas due to their high price, another area that can have a large impact is those smaller but recurring expenses that we sign up for, which end up draining our cashflow on an ongoing basis. Can you give us your thoughts and strategies on those? While mortgage rates are relatively low these days, they are nevertheless a very large monthly cashflow drain for most Canadians. Can you talk about some of your favourite mortgage tactics to help us save money? If someone is looking for a little bit of extra income this year, without an enormous time commitment, do you have a favourite go-to’s that you found many Canadians can benefit from? When it comes to debt, how are Canadians doing vs the rest of the world, and what are your favourite strategies that we can use to lower the interest on our debt? Resources Mentioned In the Episode: The free tickets to this year's Online Canadian Financial Summit are here: The free assessment call mentioned on the episode is available here: The Ultimate Phone Script PDF is available for free download here: The financial literacy for kids educational program is available here: The Mortgage Broker mentioned on the episode (to get your mortgage questions answered for free) is available at:
How to Be Your Own Money Manager - Passiv + Wealthica
21-07-2021
How to Be Your Own Money Manager - Passiv + Wealthica
Today we’re going to focus on how to best track your investments, as well as your net worth. This is of course critical, as you need this data to determine: 1. How much more do you need to be financially independent and retire? 2. Whether you are trending in the right direction(i.e. Is your net worth actually growing to get you closer to that early retirement and financial independence number?). Tracking your net worth and investments is no longer something that you have to do manually, by tediously entering your numbers from all your different accounts into a spreadsheet. You also don’t have to do that boring data entry over and over again, every time that you want an update. So for this episode, I brought on the creators of two free tools available to Canadians. The first is a net worth tracking tool called Wealthica. While the second is an investment tracking and automation tool called Passiv (which I’ve already been using for years to manage, automate, and get reports on my investment portfolio). Questions Asked: We’re going to be talking a fair bit about tracking our net worth in this interview, and how we can automate it. But before we get into that, how should we be defining “net worth”, and how do each of us actually benefit by tracking it? It used to be that in order to track your investments and net worth, you’d be stuck with whatever your banking or investment provider gave you, and oftentimes you had to use a spreadsheet to get a holistic view of all your accounts. It seems that now, we are transitioning to more open banking where that is no longer necessary. Can you speak to what’s been happening in regards to this, specifically here in Canada? For anybody that hasn’t heard of your tools before, can you each take us through what it does, especially when it comes to saving Canadians time, and helping automate some of the more tedious parts of being a do-it-yourself investor, and net worth tracking. Looking at your sites, there seems to be some overlap in terms of what you each provide. Can you take us through the differences between Passiv and Wealthica? Is there a specific type of investor that each tool is more suited for? One of the big developments that many of us have noticed is that your tools are now integrated with each other. Can you take us through what that means for us the end users? And how does that helps us be more efficient and save more time with our investments and net worth tracking?  Brendan, when I spoke with your team offline, they mentioned that users get more functionality if they use one of Passiv’s brokerage partners like Questrade. Can you speak to what users can and can’t do depending on which brokerage they are currently using? Some of us get nervous about using tools where we need to enter our login credentials for the different companies that we bank with or do our investments through. Can you talk about the technology that’s being used here to keep everything safe? And are we potentially breaking the terms of service with some of these institutions we bank with by entering this private information? Resources: You can click here to open up a free Passiv account (Questrade members also get the free upgrade to the Elite Member Plan.  You can sign up to Wealthica for free here. Free tickets to the Canadian Financial Summit: Sign up anywhere for free on buildwealthcanada.ca to get free tickets to the digital event once they are ready (the annual event is on September 22, 2021). Your Mortgage Questions Answered: Since it's real estate season here in Canada, we also mentioned our resident mortgage expert who can answer your mortgage questions for free. You can sign up for a free call here (there is no cost and no obligation to select any of the lowest cost mortgages that he's able to find in from the 60+ lenders that he monitors. Investing Course: The investing course was also mentioned in the intermission, which you can try risk-free for 60 days here. 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.
How to Get Your Will Done in 20 Minutes (and Why It’s Critical)
19-05-2021
How to Get Your Will Done in 20 Minutes (and Why It’s Critical)
More than half of Canadian adults don't have a will which can cause additional legal costs, family conflict, and unnecessary legal battles.  Unfortunately getting a will done is very easy to procrastinate on as it can be a hassle to set up meetings with a lawyer, ask those difficult questions and be involved in all the back and forth that's required when setting up a will the traditional way by meeting with a lawyer face-to-face.  As many long time listeners of the show know, I'm a big fan of technology companies that help automate or at least make it a lot easier to do some of the more tedious but important things that we need to get done.  So in this episode, I'm excited to bring on Daniel Goldgut, a former tax and estate planning lawyer here in Canada, who together with his team over at epiloguewills.com has created a tool that you can use to get a will created in as little as 20 minutes. It's also a lot less expensive than what I paid to have our will done with a lawyer years ago before this tool existed.  We cover what the top mistakes are that Canadians do when creating a will, as well as how and when to properly update it when different events occur in your life.  We also cover designating a power of attorney and how to ensure that your will is actually legally enforceable here in Canada. If you want to check out the tool that Daniel and his team have built you can go to epiloguewills.com, and Daniel's been kind enough to also provide Build Wealth Canada listeners with a $20 discount if you choose to use the service. To get that just use the promo code BUILDWEALTH20. There's no affiliate or commissions for me on that, it's just a straight $20 off for all Build Wealth Canada listeners. Questions Covered: To start things off, why is having a will important, and what are the main negative consequences that we may encounter if we don't have one set up correctly? What are some of the most common or most critical mistakes that Canadians make when it comes to their will? and how can we remedy them? Before we go any further, for anybody that hasn’t heard of you or Epilogue before, can you give us a bit of a background on what you do? I saw an article on your company in the Financial Post about how Epilogue is the first online will platform to give its customers the option to include their RESPs in their wills (Registered Education Savings Plans). Can you speak to why that is important? I noticed you recently launched a free tool to create a Social Media Will. Can you talk about what that is, why it's important, and where can we go to have one created for free? When we hear about wills, we often hear about also designating a power of attorney. Can you explain what that is, and are there any other elements like the power of attorney that we should be aware of? When we set up a will, how can we ensure that it's actually legally enforceable, in case somebody ever challenges it in court? In what scenarios should we be updating our will? And what's the best way to do that? Whenever we do update our will, how can we ensure that the newest version of the will is what will get enforced? What are the pros and cons of using a tool like Epilogue vs hiring a lawyer directly? Are there any clauses that you think are especially critical to have in a will to prevent issues and conflicts in the future? How important is it to use an actual Canadian lawyer or service like yours, as opposed to using something from the US or another country, or one of those “create your own” will packages that we may see in a store or advertised on TV or online? How long does it actually take to create a will using Epilogue, and for anybody that doesn’t have a will or needs one updated, how can we get started? 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.
How to Save On Taxes in Canada, Featuring Tax Expert Neal Winokur
14-04-2021
How to Save On Taxes in Canada, Featuring Tax Expert Neal Winokur
Whether you’ve already done your taxes for the year or not, I wanted to dedicate this episode to the tax optimizations that you can do to save tax not only this year, but for future years as well.  To help me with this, I’ve brought on accountant Neal Winokur on the show. Neal is a Chartered Professional Accountant here in Canada, and he’s the author of the of the book, The Grumpy Accountant. You might have also seen some of his writing over at the National Post. He has been an accountant here in Canada for over ten years so I thought it would be great to pick his brain on what all us non-accounts can do to save money on taxes for this year and for years to come. You’ll also learn what we can all do, to ensure that we aren’t missing out on any credits and benefits that we are eligible for from the Government of Canada. Changes happen every year to the different credits and benefits that the government offers, so how can we ensure that we don’t miss out on any of the ones that apply to us, and that we aren’t leaving money on the table? So enjoy the episode, thanks for tuning in, and now let’s get into the interview. Questions Covered: 1. To kick things off, let’s start with the question on everyone’s minds, “How can we pay less in taxes?”. And more specifically, what are the tools that we Canadians can use, to pay less in tax? 2. For this episode, I primarily wanted to focus on how we can reduce our taxes on an ongoing basis (not just for this year), but before we do that, considering that taxes are due at the end of this month, is there anything new for this year that we need to know about, when filing our taxes by the end of April? 3. One of the things that I’m sure many of us wonder about every year, is “Are there some benefits, tax credits, and/or exemptions that we’re missing out on, resulting in us either receiving less money from the government, or paying more than we have to in taxes”. 4. What's the easiest way to screen the different credits and other Canadian government benefits to make sure we're getting all of the ones we’re eligible for? 5. How do you keep up to date on changes in tax laws? Is there something that we non-accountants can do to be informed as changes occur so that we can determine if they actually impact us? (i.e. any favourite resources) 6. Speaking of good resources, can you tell us more about your book and what we can learn from it? 7. Is there any low hanging fruit in terms of tax savings that you find Canadians sometimes miss? 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.
Rising Mortgage Interest Rates + Real Estate Update For Canadians
16-03-2021
Rising Mortgage Interest Rates + Real Estate Update For Canadians
With fixed mortgage rates finally beginning to increase in Canada, many Canadians are wondering whether they should be locking in their mortgage rate in case interest rates continue to climb. We also cover whether you can lock-in a mortgage rate now, and then have the option to renew at the lower rate if the interest rates continue to climb. And, while it’s easy to get fixated on mortgage rates whether you’re an existing or future home buyer, it is worth mentioning that the penalties for breaking a variable vs fixed-rate mortgages can be drastically different, and can also vary significantly from provider to provider. Which types of lenders tend to have the largest penalties? What can we expect in fees depending on the lender and mortgage type that we choose? We cover all that and more in this month’s episode. Also, the spring real estate season is now upon us with lots of Canadians looking to buy and/or sell their homes. Our resident mortgage expert takes us through what you can expect, and how COVID is impacting the real estate market in Canada. About Our Guest: 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. These days, Sean’s helping others burn their mortgages too, as an independent mortgage broker. Sean has offered to answer for free, any questions that you, the Build Wealth Canada listeners have. Links & Resources Covered: Free private Q&A with SeanWhat's your passive investing style? (Stream Kornel's talk from the Canadian Financial Summit)EQ Bank (The bank that I use with savings account interest rates up to 30x higher compared to other Canadian banks). If you sign up through this link, email me any confirmation that you receive from EQ to bonus@buildwealthcanada.ca and I'll email you my guide on the top ETFs in Canada, with an explanation of what I personally invest in and why. Questions Covered: When we spoke before the podcast, you mentioned that fixed mortgage rates are finally on the rise. What are the implications of that for Canadians who already have a mortgage, as well as those that are looking to get a new mortgage?The spring real estate market is coming up. For those looking to buy a home or a rental property, what do we need to know about this particular time of year in Canada?Seasonality is clearly a factor when it comes to Canadian real estate. Can you take us through what we can generally expect depending on the time of year that we choose to buy or sell a home or rental property?Anytime interest rates move I’m sure you get lots of questions from your clients on whether they should lock-in their variable rate mortgage, or if someone is getting a new mortgage, whether they should go variable or fixed. Based on the current interest rate environment and the new changes to mortgage rates, what sort of analysis should we be doing to determine the best course of action? COVID is of course, still very prevalent here in Canada. Are there any misconceptions about COVID and its impact on real estate that you think are worth clearing up?As we head into the 2021 spring real estate season, would you say that it’s more of a buyer’s market or a seller’s market? 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.
Retired at 29: How They Did It In Canada (with 3 kids)
17-02-2021
Retired at 29: How They Did It In Canada (with 3 kids)
One of my favourite things to do on the show is to interview other early retirees, especially those in Canada to learn how they did it, and really dissect their journey to financial independence and/or early retirement.  No matter where you are on your financial independence journey, I truly believe that we can all learn from others that have done it, and so I like to view what they did as a case study where we can break down their journey into actionable parts that we can apply to our own lives.  There are after all many paths to financial independence, and so it’s valuable to know what those paths are so that you can pick and choose the components that are the best fit for you, and that are most aligned with your own goals. Our guest today is Réjean Venne. Réjean worked in the insurance industry for eight years before retiring at twenty-nine and becoming a full-time parent. Réjean and his wife Danielle, along with their three young children, live in Northern Ontario. They write regularly on topics related to parenting, health, mindfulness, and money. You can follow them at mindfulfamily.ca. Réjean recently published 5 Years to Freedom: A Canadian Guide to Early Retirement which documents his journey to financial independence.  In this interview, he’s going to take us through his early retirement story and how you got there, along with the lessons that he’s learned along the way which you can then apply in your own life to help you retire earlier. We’ll also cover how he was able to cut $53,000 in spending annually by retiring early, and how he and his wife were able to retire so early despite having three young kids which is often perceived as very difficult, due to how expensive many believe kids are. Enjoy the episode :) Questions Asked: Can you take us through your early retirement story and how you got there? As someone that’s been retired for 3 years now in their early 30s, what are some of the lessons you learned that could help aspiring early retirees or those that are new to retirement? Is there anything that surprised you after you became an early retiree? For example, were there any preconceived notions or assumptions of what you thought early retirement would be like, and then it ended up being something different? I find you and I are pretty unique in the early retirement space in Canada as we both got to early retirement utilizing passive investments like investing in index funds, but we also used rental properties to get us there. For me, passive index investing was a better fit so that’s all I do now, but for anybody that is debating using one of them or both of them, what’s been your experience in using these different vehicles? Knowing what you know now, if you had to start over to work your way towards financial independence and early retirement, is there anything that you’d do differently? Are there any mistakes that you made while early retired that we could learn from? You mentioned in your book that you don’t really budget in the traditional sense. Can you take us through how you managed your cash flows with your wife during the pre-retirement stage, and how you do it now in early retirement? How do you structure the withdrawals from your investment portfolio (including real estate) so that they are tax-efficient? Early retirement seems like an unattainable dream to many people, yet it’s surprising how attainable it can actually be when you crunch the numbers. One of my favourite parts of your book, was how you were able to cut $53,000 in spending annually by retiring early. Can you tell us a bit about how early retirement allows you to make such drastic cuts, and consequently how a lot of Canadians may actually be much closer to an earlier retirement than first meets the eye? You’re also retired with three kids, and kids are often seen as this massive expense that makes early retirement nearly impossible. Can you talk about how that’s not necessarily so, especially with the Canada Child Benefit that parents are eligible for Most of the early retirees I’ve talked to and researched built up large investment portfolios with the intention of never working again (myself included). But once they actually reached that financial independence number, they eventually ended up taking on some fun side projects that actually bring in an income. Therefore, they didn’t actually need as large of an investment portfolio as they initially thought, and if only they factored that in prior to retirement, they could have retired much earlier. Can you share your experience with this as it seems to be extremely common with early retirees, and Canadians can definitely retire much earlier if they actually include some anticipation of future side income like this in their early retirement plans. Through my research and own experience, I found that getting that sense of fulfilment can actually be a challenge for retirees when they no longer have to work. I know in your book you said that being a dad gives you that sense of fulfilment, but is there anything else outside of parenting that you find really helps in this regard? I find this answer might particularly be helpful for those retirees who either don’t have kids, or those who have kids, but the kids are out on their own now, and so they no longer require that large time investment. What are your goals and plans now? Especially now that the book is written. Links and Resources Rejean’s Book: 5 Years to Freedom: A Canadian Guide to Early Retirement Get 2.3% interest through the EQ TFSA and RRSP account. This high interest savings account is at 1.50% (up to 30x higher than other banks in Canada) Kornel’s Passive Investing Course Get your financial planning questions answered for free here. Get your mortgage questions questions for free here. Rejean’s Blog: mindfulfamily.ca 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.
Optimizing Your Investments and Finances for the New Year and Beyond
12-01-2021
Optimizing Your Investments and Finances for the New Year and Beyond
Today we have Robb Engen on the show who is the creator of one of the most respected personal finance blogs in Canada over at Boomer and Echo. He’s been writing about personal finance and investing on the blog for more than 10 years, and he’s also a fee-only financial planner, where he helps Canadians achieve their financial goals through unbiased and objective advice. In this interview, you’ll learn: The most impactful financial decisions that we Canadians can make, to set ourselves up for success. The different components that you should look for when analyzing if there are any critical flaws in your investment portfolio. What a good investment portfolio structure is for somebody looking to retire early, and what withdrawal strategies to consider so that you don’t run out of money in retirement.  We cover all that and much more, during the interview. Links from the episode include: The EQ RRSP, TFSA, and Savings Account Robb's Site What passive investing style are you? (video presentation) Passiv (the tool that I use for tracking my investments and rebalancing) Here is the full list of all the questions we covered: With the new year kicking off, I’m sure many Canadians have a New Year’s resolution of getting their finances in order and optimized. What would you say are some of the most impactful financial decisions that we Canadians can make, to set ourselves up for success?  Which ones can we do ourselves vs having to seek out the help of a financial planner like yourself? I noticed that one of the things that you do as part of your financial planning practice are investment portfolio reviews. For anybody new to this, what is an investment portfolio review, and what are the different components that you like to look for when analyzing if someone has any critical flaws in their investment portfolio?What parts of the portfolio review can most Canadians easily do ourselves vs having to hire a professional like yourself for that extra level of optimization? For those that are working towards an early retirement, or are already there, is there a particular portfolio structure that you like?For example: A type of bucket strategy, or something different (ex. just doing a flat withdrawal from a balanced portfolio, etc.) When it comes to withdrawing from your portfolio in an early retirement, or a traditional retirement, which approach or approaches due you tend to prefer so that we don’t run out of money in retirement, but also so we don’t have too much money left to spend by the time we pass away (ex. 4% rule, 3-3.5% rule, VPW, something else?) With the record low interest rates that we’ve been experiencing, many of us Canadians are re-evaluating the fixed-income/safe portion of our portfolio. How do you approach the dilemma of buying a bond ETF for the fixed income portion of your portfolio, vs just putting that money towards a really high interest savings account which can give us higher interest than the bond ETF, plus then we also don’t have to worry about losing money if the interest rates go up in the future. Where can listeners go to learn more from you or hire you to get their questions answered?