Build Wealth Canada Podcast

Today we have Susan Daley on the show and we’re going to talk all about early retirement, such us how to pull it off, what to look out for, and some of the most common mistakes that Canadians make when trying to plan this out. Susan is an Associate Portfolio Manager at PWL Capital in Waterloo, where she provides financial planning and investment management services to a wide range of clients. She’s also an Honours BBA graduate from Wilfrid Laurier University, which is actually where I graduated from too, so it’s always fun to chat with a fellow grad about best practices when it comes to financial planning and investing. Links and Resources Top Tools and Resources for Financial Independence (for Canadians): Sign up anywhere on www.BuildWealthCanada.ca for a free guide on all the top tools and sites that I’ve personally used to help us achieve financial independence in our early 30s. They’re also what we use now to optimize and manage our finances, and ensure that we’re paying the lowest fees while getting solid returns on our investments. Kornel's investing course with free sample lessons at www.BuildWealthCanada.ca/invest You can reach out to Susan at sdaley@pwlcapital.com and she's at www.pwlcapital.com/waterloo Questions Covered: For somebody that is saving money for a large purchase like a house, wedding, a car, etc., where do you suggest they keep their money to let it grow safely? What to consider when deciding between RRSP vs TFSA vs non-registered?  What if you’re planning to retire or semi-retire early (ex. 30s or 40s where it’s still a long time before government benefits come in). Does that change anything in terms of what accounts you put the funds in?  Is there any time that you would use a non-registered account before using an RRSP and TFSA? How to determine if you’ve saved enough to retire early?  Once you hit that number, what changes do you make to your portfolio since now you’re focused on sustainability instead of growth (changes in terms of asset allocation, and the investment products you choose). Would the answer be different if the person is in their 60s and about to receive government benefits vs if they are retired much earlier (ex. 40s)? What cash cushion do you recommend for those in retirement and semi-retirement? Some advisors recommend real return bonds for those in retirement. What are your thoughts?  How to decide what accounts to take money from in retirement? (RRSP vs TFSA vs non-registered)  

In this episode, we’re going to continue covering the subject of “How to Not Run Out of Money in Retirement”, specifically for Canadians. This is from a live webinar that I did for Canadian MoneySaver Magazine so in case you weren’t able to make it, I wanted to provide you with as many tips as possible from that presentation in audio form. If you missed part 1 of the series, it's the episode right before this one (episode 31). Links and Resources Top Tools and Resources for Financial Independence (for Canadians): Sign up anywhere on www.BuildWealthCanada.ca for a free guide on all the top tools and sites that I’ve personally used to help us achieve financial independence in our early 30s. They’re also what we use now to optimize and manage our finances, and ensure that we’re paying the lowest fees while getting solid returns on our investments. Kornel's investing course with free sample lessons at www.BuildWealthCanada.ca/invest Bonuses for Build Wealth Canada Listeners: You are eligible to receive a free 1-year paid subscription to Canadian MoneySaver Magazine by signing up for the free 5i Trial at www.buildwealthcanada.ca/trial. If you would like more information, just listen to the beginning of the episode or you can learn more about 5i Research below: In case you’re new to the show, 5i Research is Canada’s only conflict-free investment research network. What that means is that as you know, there is a lot of conflict of interest in Canada when it comes to people telling you what to invest in.   So let’s say you go to your bank and ask to speak to a financial advisor because you want to invest some money. Well what many of them will do, is try to sell you their investment products like their mutual funds for example. You’ll get a well-rehearsed sales pitch, but what they don’t tell you is how ridiculously high their fees are compared to just investing the money yourself using ETFs or stocks. There’s also a conflict of interest because they are incentivised (either through bonuses or getting a promotion at work) to sell you products that make the company the most money, but may not necessarily be the best fit for you and make you the most money. So here’s the thing, why would you ask someone what you should invest in when that person has a financial incentive to sell you what makes them the most money, as opposed to what makes you the most money so that you can, for example, retire early because you’re not paying ridiculous fees on underperforming investments? Where 5i Research comes in is that they actually have a team of analysts that do the research, and all the financial math and analysis for you on the best investments to own (whether it’s the top stocks or the top ETFs in Canada), and whether you’re a growth focused investor, or a dividend focused investor. What makes them stand out, is that they don’t try to sell you any investments, so they’re not getting some commission or fee on the back-end, and the result is you getting unbiased investment analysis and insights, where you never have to worry that they are recommending something just because they are getting some sort extra compensation on the back-end. What’s also neat, is that you can ask them questions, like if you’re considering a particular stock or ETF. Or, maybe you have no clue what you should invest in, and in that case they can recommend some model portfolios for you depending on your risk tolerance, objectives, and whether you want to invest in ETFs, stocks, or both. They actually already have over 54,000 answered quested in their database, so you can actually see what others are asking too about the stock or ETF that you’re considering buying, and see the answers to those too. Now as a listener of the Build Wealth Canada Show, you can actually get full access to everything for free for 1 month. In other words, you get full access to all the stock and ETF recommendations, all the model portfolios, as well as 5i’s database of over 54,000 answered investing questions. I definitely encourage you to check it out as at the very least you’ll learn a ton and it’s all free anyway. And if for some strange reason that’s not enough, I’ve also arranged for Build Wealth Canada listeners to get two extra bonuses: Bonus 1: The first, is that when you sign up for the free trial, you’ll also get a 1 year, paid subscriptions to Canadian MoneySaver Magazine, absolutely free. This is the exact same magazine that you see at Chapters and other stores all across Canada, and you get the entire subscription, for free, for an entire year, no strings attached. Bonus 2: The 2nd bonus, is that you’ll also get 1 question credit for free, on the 5i Research site. This means you can actually ask 5i’s team of analysts your most pressing investment question and they’ll answer it for you, using the knowledge and investment tools that you and I simply don’t have access to. So enjoy, it’s all free, you’ll learn an absolute ton, and you can get it all by going to www.BuildWealthCanada.ca/trial. In Closing: If you enjoyed the episode, please take a moment to leave an honest review and rating on iTunes by clicking the “View in iTunes” button at this link. If you have any tips, suggestions or comments, please be sure to leave a comment in the section below. I read all responses and look forward to hearing from you. Have a great week, Kornel  

How Much Do You Need to Retire? No matter what age you are, chances are you’ve asked yourself this critical question at some point. The stakes are high, and there are no do-overs, so how can you best prepare yourself now to ensure that you have enough to live the lifestyle you want in retirement? Join me as I dive into the best practices and key factors to consider when figuring this out for yourself. Is there a magic retirement number that you should aim for with your investments? What levers can you pull to retire early, and sustain that retirement long-term?   Whether you’re decades away from retirement or are getting close to that big day, join me to learn some of the key considerations to ensure that you have enough to retire. Links and Resources Top Tools and Resources for Financial Independence (for Canadians): Sign up anywhere on www.BuildWealthCanada.ca for a free guide on all the top tools and sites that I’ve personally used to help us achieve financial independence in our early 30s. They’re also what we use now to optimize and manage our finances, and ensure that we’re paying the lowest fees while getting solid returns on our investments. Kornel's investing course with free sample lessons at www.BuildWealthCanada.ca/invest

Ex-banker John Kalos shares insider tips on saving at banks, negotiating better rates, and comprehensive financial planning. Topics include maximizing savings with ETFs, tax strategies for business owners, and the importance of independent financial advice.

In this episode, I’ve pulled together the newest numbers of what you can expect from your investments. These are based on historical returns using several different highly reputable sources that I personally use and trust. In other words, this isn’t some subjective opinion of what one person thinks you’ll get on your investments. Instead, it’s actual data, studies, and reports that reputable sources in the industry have put together, and is what I personally use. I’ve also created a summary where you can see the ranges of possible investment returns based on the different sources (which use different times frames and assumptions). You can get all that by going to the episode's show notes over at www.BuildWealthCanada.ca/29 Links and Resources The summary, graphs, and text version of this is available in the episode's page at www.BuildWealthCanada.ca/29 Top Tools and Resources for Financial Independence (for Canadians): Sign up anywhere on www.BuildWealthCanada.ca for a free guide on all the top tools and sites that I’ve personally used to help us achieve financial independence in our early 30s. They’re also what we use now to optimize and manage our finances, and ensure that we’re paying the lowest fees while getting solid returns on our investments. Kornel's investing course with free sample lessons at www.BuildWealthCanada.ca/invest

When it comes to the Build Wealth Canada show, there are 2 questions that I get asked more than any other. The first is how to actually buy ETFs, so how to actually be an index investor, what tools to use, which ETFs are great ones to consider, and how to actually do it step-by-step. So that’s why I built the course (to basically answer this question). If you're interested, you can check it out at www.BuildWealthCanada.ca/invest Now the 2nd question that I get most often is from Canadians who are either in their 50 or 60s, are about to retire (or will be retiring in 10 years or less) and are looking learn how to do it properly. So how do you withdraw from your portfolio properly to pay as little tax as possible? What are some best practices and things to look out for so that you don’t run out of money during your retirement? Obviously when it comes to retirement planning like this, things gets really complicated, and the risks are ridiculously high since you’re basically at a life stage where you’re going to start spending the money that you’ve been saving and investing throughout your whole life. So, the stakes are really high. We’re dealing with a lot of real money here, and the terrifying thing is that there are no do-overs. In other words, if you mess this up, you can’t just hit the rewind button, get all your money back and try again. Because of this, it’s extremely important to get this right as the worse case scenario is basically you running out of money during retirement. Also if you do run out of money, then going back to the workforce may not be an option due to the physical and/or mental health that you may be in at that time. Employers might also have a preference to hiring someone younger that they can pay less money for, and groom to stay with the company long term (unlike you since you’ll be back in retirement at the first possible opportunity). Also with all the development in medical technology, now more than ever we are faced with the new challenge of living too long and outliving our money. This makes having a good financial plan that you review with a professional periodically even more important to ensure that you are living the type of lifestyle that you want in retirement, while minimizing the risks of running out of money. Now I’m not trying to instill fear or anything like that, but I say all this just to help anybody out there realize that this is critically important, doing it wrong can be catastrophic to you and your partner’s life, and so you have to take accountability and responsibility for your financial situation, and not just hope that everything will turn out okay. So with that said, I’m of the opinion that since the stakes at this stage of life are so high, you need a customized financial plan specific to your particular situations. This is definitely one of those times where you can’t just read a blog post about the top 10 retirement tips and assume that you’re all set, and that some “general” guidance is good enough for you as well. You simply can’t do this because the stakes are too high (i.e. you running out of money in retirement), and there are too many variables in your life that can change the plan drastically. For example: The assets and liabilities you have The income sources you’ll have in retirement The dependents you’ll have Your health Your goals and ambitions for retirement Inflation and market returns that you’ve endured in your lifetime The emergency fund you have The lifestyle you want in retirement Family dynamics like marriages, deaths and inheritances Your risk tolerance and the list goes on and on. To address and help you with this, I’d like to introduce you to Sandi Martin who is a professional fee-for-service financial planner here in Canada. Sandi has been requested by listeners of the show, and in this interview I chat with Sandi about the top questions that I’ve been asked from Build Wealth Canada listeners, especially those in their 50s and 60s that are nearing or at retirement. So enjoy the interview, and thanks for submitting the questions. Now just to give you a bit of a background, Sandi is an expert in helping Canadians answer questions specific to their situation such as: Are you on track to retire? Did you miss something in your analysis? Are you saving enough for retirement? What’s the best way to take out income from your portfolio to minimize taxes (based on all your assets and income sources) How much do you need to save so that you can retire comfortably? When can you retire? Can you fully retire or semi-retire now? When should you choose to take your CPP and OAS? What kind of lifestyle can you expect when you retire based on your current savings? How can you help ensure that you don’t run out of money in your retirement? Links and Resources Top Tools and Resources for Financial Independence (for Canadians): Sign up anywhere on www.BuildWealthCanada.ca for a free guide on all the top tools and sites that I’ve personally used to help us achieve financial independence in our early 30s. They’re also what we use now to optimize and manage our finances, and ensure that we’re paying the lowest fees while getting solid returns on our investments.  Kornel's investing course with free sample lessons at www.BuildWealthCanada.ca/invest Questions Answered: Listener Question: “I would be interested in strategies for withdrawing accumulated assets from RRSPs and TFSAs. Is there an order of preference to save on taxes?” What if a Canadian earns income vs doesn’t earn income during their retirement. How does that affect things? Can you talk about converting an RRSP to a RRIF. What is it? How does it work? What is “sequence of returns risk” and how can we protect ourselves from it? What is an RPP? What is a LIRA? Converting to LIF (Life Income Fund): What is it? How does it apply to this? What is a Locked-In Retirement Income Fund (LRIF)? What is a Prescribed Registered Retirement Income Fund (PRRIF)? What about holding money in unregistered accounts. Can you define what that means and how does it apply to this? When it comes to pensions, what are “defined benefit plans” vs “defined contribution plans”. How does this impact everything? What numbers do you like to use when forecasting returns for stocks and bonds? What are real vs nominal returns? Some Canadians consider purchasing annuities for their retirement. Can you define what these are and what are your thoughts on it?

Today I wanted to cover the subject of debt consolidation. What is it? Should you do it? and if so, then what are the options available to you? Links and Resources Top Tools and Resources for Financial Independence (for Canadians): Sign up anywhere on www.BuildWealthCanada.ca for a free guide on all the top tools and sites that I’ve personally used to help us achieve financial independence in our early 30s. They’re also what we use now to optimize and manage our finances, and ensure that we’re paying the lowest fees while getting solid returns on our investments. Kornel's investing course with free sample lessons at www.BuildWealthCanada.ca/invest Questions Covered What does it mean to consolidate your credit, and in what circumstances should somebody consider doing this? A common argument against credit consolidation services is that they don’t solve the underlying issue. In other words, somebody might consolidate their debt which frees up space on their credit cards or line of credit, and then they just end up taking on more debt since they haven’t changed their lifestyle and habits to live a debt free life. How can someone prevent this from happening to them? Since you deal with a lot of individuals that have gotten into significant debt and are struggling to get out, what are the most common mistakes that you see people make that get them in this situation in the first place? What are you thoughts on the use of emergency funds? Some experts suggest keeping it in cash, while others suggest having a line of credit for emergencies and using any available cash to pay off the debt. Where do you stand on this debate? After paying off any high interest debt, what are your recommendations on paying off student loans and the mortgage vs investing the money for retirement? For somebody that wants to see if consolidating their credit is right for them, what is the process that they get taken through with you from beginning to end?

Questions Covered For those Canadians new to this type of investing style, can you explain what dividend investing is? When should someone consider doing dividend investing? (i.e. Is there a particular life stage when it’s most appropriate?) Is there a type of person that is most suited for this type of investing? (ex. time commitment, personality, etc.) What are the pros and cons of this investing style vs something like index investing, mutual fund investing, or stock picking for growth? The idea of investing to “live off the dividends” sounds very tempting to Canadians. How realistic is this? What is actually needed to pull this off? What are some of the top mistakes Canadians make when investing in Dividends? (ex. Chasing yield) At 5i one of the things I noticed you do, is that you have sections of the site dedicated specifically for dividend investors, and I noticed that in there you recommend primarily Canadian companies. Can you explain why that is? (i.e. preferential tax treatment, anything else?) Peter said (in a previous interview) that at 5i you like companies that have a growing dividend. If somebody is researching a company themselves, how can they check if a company is growing its dividend? What are some good resources for somebody that is considering, or wants to learn how to do dividend investing? I know you guys offer a lot of help on this to 5i subscribers so feel free to talk about some of the resources that you have available for investors too. Links and Resources You can get a free 1 month trial of 5i Research by going to www.BuildWealthCanada.ca/trial. As a "thank you" for trying it out and checking out their research, you'll also receive a free 1 year subscription to Canadian MoneySaver Magazine (Canada's largest personal finance and investing magazine). Top Tools and Resources for Financial Independence (for Canadians): Sign up anywhere on www.BuildWealthCanada.ca for a free guide on all the top tools and sites that I’ve personally used to help us achieve financial independence in our early 30s. They’re also what we use now to optimize and manage our finances, and ensure that we’re paying the lowest fees while getting solid returns on our investments. Kornel's investing course with free sample lessons at www.BuildWealthCanada.ca/invest

In this episode, I cover several mistakes and misconceptions that held me back from maximizing the growth of my investment portfolio.   By sharing my mistakes and what held me back, I hope that it will help you avoid these same mistakes. Fortunately, things still ended up great, although not perfect, and definitely not the most efficient in terms of net worth growth. These are the lessons about the money left on the table, and what I would tell my younger self. Links and Resources Top Tools and Resources for Financial Independence (for Canadians): Sign up anywhere on www.BuildWealthCanada.ca for a free guide on all the top tools and sites that I’ve personally used to help us achieve financial independence in our early 30s. They’re also what we use now to optimize and manage our finances, and ensure that we’re paying the lowest fees while getting solid returns on our investments. Kornel's investing course with free sample lessons at www.BuildWealthCanada.ca/invest

This episode covers how to protect yourself from overpaying in hidden investment fees, and how to ensure that you are getting unbiased advice from your financial professionals.  Did you know that there is a lot of conflict-of-interest that exists with many of the financial advisors here in Canada. We also have one of the highest investment fees in the world.  While there are ways to bypass these fees, you need to know what to look for so that you can spot if your advisor is recommending a poor investment that is primarily designed to maximize their firm’s profits, instead of growing your net worth. Join me as we cover some of the most dangerous traps that exist for us Canadians in the investing and financial services industry. Links and Resources Top Tools and Resources for Financial Independence (for Canadians): Sign up anywhere on www.BuildWealthCanada.ca for a free guide on all the top tools and sites that I’ve personally used to help us achieve financial independence in our early 30s. They’re also what we use now to optimize and manage our finances, and ensure that we’re paying the lowest fees while getting solid returns on our investments. Kornel's investing course with free sample lessons at www.BuildWealthCanada.ca/invest