We’ve all heard of high interest savings accounts that we can open up at our bank. But is that always our one and only best option when it comes to where we keep our short term cash?

What about for things like our emergency fund, or when we are saving for something expensive like a car and we want that money to be available immediately when we need it, and not be subject to the sometimes large day-to-day fluctuations that we see in the stock market?

In this episode, you are going to learn what your options are, here in Canada, when it comes to that short term cash that you want to be readily available, without you having to worry about incurring any massive day-to-day fluctuations that you would typically see in the stock portion of your investment portfolio.

Today’s guest, Matt Montemurro is going to take us through the different options that we have, as Canadians, and he’s going to take us through the pros and cons of each of these options so that you can make your own educated decision on which option is the best one for you, based on your situation and risk tolerance.

Spoiler alert: The best solution isn’t always the traditional high interest savings account at your bank.

Make sure you stick around because there are actually some regulatory changes happening here in Canada, which are going to be impacting high interest savings ETFs.

A lot of Canadians have been investing pretty heavily in these, and now it’s gotten to the point where the regulators have started to take notice, and they are about to implement some pretty significant rule changes that can negatively impact some of your investments, if you purchase or are considering purchasing high interest savings ETFs.

A bit of a background about our guest:

Matt is a specialist when it comes to fixed income. He is currently the team lead for all fixed income portfolios managed by BMO ETFs, which is the largest Canadian ETF provider.

In his role as portfolio manager and trader, Matt and his team are responsible for all segments of the fixed income market, both in Canada and internationally. He has over a decade of experience in this field and holds an HBA and MBA from the Richard Ivey School of Business at the University of Western Ontario and is a CFA Charter holder (definitely a very difficult designation to get).

I’m thrilled to have him on the show, and I must say, speaking with him during this interview actually made me re-evaluate where I keep my short term cash.

I really wish we were all taught this back in school, as it’s important for us to know what our options are here in Canada, along with the pros and cons of each, instead of just always automatically defaulting to a regular high interest savings account at our bank.

Enjoy the interview, I learned an absolute ton, and I’m sure you will too. Let’s get into it.

Questions Covered:

1. The high interest savings account is something that most of us have heard of, and this is often the default choice for many of us when we’re saving for something, or using it as an emergency fund or as an account that pays for our day-to-day expenses.
   
   However, there are also high interest savings ETFs. What is the difference between those, and a high interest savings account that we would open up at a bank? Can you take us through the pros and cons of these two options and why wouldn’t someone just put their cash in their existing high interest savings account at their current bank?
   
   
2. There seem to be some changes coming up in 2024 when it comes to high interest savings ETFs. Can you take us through what those are, and how it will impact us regular Canadian investors?
   
   Follow up questions:
   
   Now that we know the significance of this, what should we do or start thinking about regarding these rate changes?
   
   Is a consequence of this that we should also expect to see the rates offered at banks for high interest savings accounts to drop?

3.    For those of us that do invest in high interest savings ETFs, can we expect a drop in those ETFs coming Jan 2024 because of a potential sell off?

Follow up: If not, how do sell-offs work when it comes to ETFs? For example, when there is a sell-off of a specific stock, we know that the price of the stock will plummet. But does it work differently with ETFs because ETFs consist of many different underlying assets?

4.    How is a high interest savings ETF different from a money market ETF? Can you take us through the pros and cons?

5.    How does using something like a high interest savings account compare to using something like a money market ETF instead (i.e. what are the pros and cons)? And for anybody not familiar, can you define what it means when an ETF is considered to be a “money market” ETF

6. For something like a money market ETF like ZMMK or a high interest savings ETF, would you expect the capital gain to be $0, because everything from that investment is coming in as income in the form of interest?

7. When we are comparing the interest rates that we can get on an ETF like ZMMK vs a high interest savings account, or a high interest savings ETF, when looking at the ETF page, should we be looking at the annualized distribution yield or the weighted average yield to maturity? And can you define what those are for us?
   

8.    While we are on the subject of ETFs that we can use for that relatively safe portion of our portfolio, can you speak to using ultra short-term bond ETFs instead of a money market ETF, like the ZMMK that we just talked about. What are these ultra short-term bond ETFs, and what are the pros and cons of using those, vs something like a money market ETF or even instead of just using a high interest savings account at our current bank.

1. Follow-up question: I noticed that in your case, you also have a different variation of the ETF ZST which is ZST.L. What is the difference between the two? 

9.    When it comes to bond ETFs like ZST for example, can you teach us how they can have some tax advantages, in certain scenarios, over something like a high interest savings account?

10. Alright Matt, thanks so much for training us on all of this today. For everybody that wants to learn more, what’s the best place for them to go?

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:

1. 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. 

2. What investments do you buy for your own portfolio, and what accounts do you put your own investments in?

3. 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.

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:

1. 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?
   
   

2. 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?
   
   

3. 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)

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:

1.    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?
   
   
2. Some homeowners in Canada are facing a doubling or more of their mortgage rates at renewal. What options do homeowners have?
   
   
3. 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?
   
   
4. 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?
   
   
5. 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).
   
   
6. Are you buying more shorter-term or longer-term investments? (ex. short term vs longer term bonds/GICs etc.)
   
   
7. 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?
   
   
8. 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?

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:

1. What he’s found to be the main problem areas that tend to prevent us Canadians from reaching financial independence years earlier. 

2. 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!

Get show notes and more free educational resources over at BuildWealthCanada.ca

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.

Resources mentioned in the episode:

• My guide on How to do Norbert's Gambit
• The video guide on: How to Setup Passiv to Pay the Least in Investing Taxes (for Canadians)
• You can get a free Passiv account at this link.
• Instructions on how to get the free PREMIUM account from Passiv is here.

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

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 :)

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

1. To kick things off, can you tell us about your book and why you decided to write it?
   
   
2. 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?
   
   
3. 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?

4. 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?
   
   
5. 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?
   
   
6. 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?
   
   
7. 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?
   
   
8. 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?
   
   
9. 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?

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:

1. 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?
   
   
2. 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?
   
   
3. 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?
   
   
4. 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?
   
   
5. 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:
   1. What ‘tracking error’ is?
   2. Why is it important?
   3. How can we check it ourselves?
      
      
6. Is some tracking error normal, and how do fees (MER) factor into the tracking error number that we see published?
   
   
7. 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)
   
   

8. 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”?

9. 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?

10. 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?

11. 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?

12. 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?

13. 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.

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:

1. 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.
   
   
2. 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:

1. 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?
   
   
2. 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?
   
   
3. 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?
   
   
4. 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?
   
   
5. 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?
   
   
6. 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?

Our Guest: Steve Chou

Steve's New Book: The Family First Entrepreneur

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

Steve also runs one of my favourite marketing podcasts here.

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:

1. Why is it important to have an estate plan here in Canada?
   
   
2. 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?
   
   
3. 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?
   
   
4. Are there any other fees or taxes that we should be aware of when thinking of inheritance and estate planning?
   
   
5. 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.
   
   
6. 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?
   
   
7. 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?
   
   
8. 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?

Resources from the Episode:

Retirement Investment Solutions - RBC Insurance

Facebook: @RBCInsurance

LinkedIn: https://www.linkedin.com/company/rbcinsurance/

Check out my previous interview with Selene on Annuities - Guaranteed Income for Life

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:

1. 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?
   
   
2. 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).
   
   
3. 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.
   
   
4. 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:

1. 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?
   
   
2. 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?
   
   
3. 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?
   
   
4. 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.
   
   
5. 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?
   
   
6. 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?
   
   
7. 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?
   
   
8. 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?
   
   
9. Tell us more about where we can see your work and tell us more about your practice.

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.

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. 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:

1. 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?
   
   
2. 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?
   
   
3. 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?
   
   
4. 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? 
   
   
5. 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?
   
   
6. What are some ways to qualify for a higher home purchase price, despite the new pending mortgage rules? 
   
   
7. 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?

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.

The link to sign up for free is BuildWealthCanada.ca/webinar.

I look forward to seeing and interacting with you there, and now, let’s get into the interview!

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:

1. 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?
   
   
2. What are some of the sustainable withdrawal strategies that you recommend, for those looking to live off their portfolio?
   
   
3. 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?
   
   
4. Have you ever done any sort of variable withdrawal strategies like using a spending ceiling and floor for the year?
   
   
5. 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)?
   
   
6. 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?
   
   
7. 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?
   
   
8. For those that want to read or watch more of your research and insights, what’s the best place for them to go?
   
   
9. 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?
   
   
10. 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?