Build Wealth Canada Podcast

Today, we're going to tackle the debate of whether you should focus on growth vs dividends when it comes to your investing. Dividends are of course very popular. Everybody likes having that passive cashflow show up in their accounts, but are we limiting our net worth if we focus too much on dividends, as opposed to choosing a more balanced and growth-oriented portfolio?

In this episode, we'll also talk about how to best withdraw money from your investment portfolio, and how to decide if you should be withdrawing from your equities, your bonds, or your cash cushion instead.

We also talk about changing interest rates, and the impact that you can expect them to have on your portfolio, as well as some tips on what to choose for the bond portion of your portfolio.

For this episode, I'm excited to have Ed Rempel back on the show, who is one of the top financial planners that I go to whenever I have questions or need a second opinion about my investments, financial planning or on how to minimize my taxes. He's been a Certified Financial Planner (CFP®) Professional for over 22 years, and he's been a professional accountant for over 33 years with a CPA and CMA designation.

Personally, I found that when I ask him questions, his decades of experience as BOTH a financial planner AND a professional accountant really helps me feel secure that he has all the bases covered, as he has a holistic view from both of those worlds due to all that experience. He's also written nearly 1,000 financial plans for Canadians over that time so he's truly as experienced as it gets in this field, and he has extensive knowledge on some of the higher-level investment strategies out there.

We hadn’t had an entrepreneurship/small business episode for a while so I thought it would be great to have the CEO of CanSpace on the show to share some best practices on running your own site, and top mistakes to avoid. This episode is for you if you already have, or are considering having your […]

We hadn't had an entrepreneurship/small business episode for a while so I thought it would be great to have the CEO of CanSpace on the show to share some best practices on running your own site, and top mistakes to avoid.

This episode is for you if you already have, or are considering having your own online business, a blog, or even as a place to showcase your portfolio to recruiters and companies that you may want to work for.

Now I definitely consider having your own business on-the-side as one of the core pillars of personal finance. When we were first getting started, I used a small online business as a tool to help us get financially independent and pay off our mortgage quicker, because we could use the profits from that business to help pay for our vacations and discretionary spending. This way, my income from the day job could go towards investing or paying down the mortgage.

Because of how much having a side business has helped us financially, this is definitely a subject near and dear to my heart. With this episode, my hope is that it'll help you prevent some of the mistakes that I made when first getting started.

Today we're going to talk all about dividend investing for Canadians, including shedding some light on using dividend investing as part of your investing strategy. We'll take a look what to look for, and of course the different types of dividend investing available to Canadians.

Now if you're a long time listener of the show, then you know that there are quite a few investing strategies out there. Dividend investing is definitely one of the really popular ones, especially among those that like the idea of their investments spinning of passive cashflow on an ongoing basis, as opposed to you having to sell-off some of your ETFs or stocks to generate the cashflow you want.

And so today's guest is Nick McCullum from the site Sure Dividend. They specialize in dividend investing whether it's through ETFs or individual stocks so I thought it would be great to have him on the show, so we can learn and to help us make an informed decision on whether having a dividend focus within our portfolios is something that may be a good fit for you.

Nick and his team do a ton of research on dividend investing, and specific dividend investing stocks and ETFs so if this is something of interest to you, and something that you'd like to learn more about, then you can check out the resources page that Nick actually created specifically for Build Wealth Canada listeners where you can actually do a free trial to see their research and advice, and really see if this type of investing is the right fit for you. To learn more and get a free trial to any of their newsletters, you can go to the custom page that they created for us, over at suredividend.com/kornel.

Today I’m excited to have Edward Kholodenko on the show who is the CEO of Questrade. If you’re a long time listener of the show then you know that I actually use Questrade to buy all my investments. So, when Questrade reached out to me about interviewing their CEO I thought it would be a […]

Today I'm excited to have Edward Kholodenko on the show who is the CEO of Questrade.

If you're a long time listener of the show then you know that I actually use Questrade to buy all my investments. So, when Questrade reached out to me about interviewing their CEO I thought it would be a great opportunity to ask him the questions that I have, and that I know a lot of the listeners have about their brokerage.

I currently save at least $480 per year in fees by using Questrade so needless to say I'm a big fan, especially since they let me purchase ETFs for free. At the time of this writing, they are the only brokerage in Canada that I know of that offers this.

It's worth mentioning that this episode is not sponsored by Questrade, or anything like that. I'm simply a big fan of what they offer, have been using them for years, and thought this would be a great opportunity to ask their CEO some top questions that you should know the answers to, when choosing a brokerage for your investments.

Links & Resources From the Episode

• Open a free account to receive a $25-$250 bonus here. This is part of the refer-a-friend bonus which you can learn more about here.
• Learn more about the Build Wealth Canada Investing Course Here
• Get the latest unbiased investment research by signing up for a free 30-day trial of 5i Research. You'll also receive a free 1-year digital subscription to Canadian MoneySaver Magazine (Canada's largest personal finance magazine).

Question's Covered

1. One of the reasons that I chose to use Questrade for all my retirement accounts is because you let your customers buy ETFs for free (or almost for free if we include ECN fees). Is the ability to buy ETFs for free through Questrade something that you see your company offering long term, or is this more of a short to mid-term offer that's temporarily being used to attract new customers?

2. I imagine you get your fair share of potential customers that are reluctant to keep their investments at an online discount brokerage like Questrade, vs at one of the largest brick and mortar Canadian banks. Can you speak a bit about the security that Questrade uses compared to some of these largest banks?

3. What if there was a scenario where Questrade got hacked, or if somebody's account got hacked because their password was compromised (through no fault of Questrade). What kind of protection or insurance is provided in those scenarios? Would the $10 million in private insurance cover the customer in these cases?

4. Can you give us an overview of the state of the online brokerage space in Canada? In particular, what trends and developments are currently happening, where do you see things are heading in terms of technology and innovation, and what can consumers expect in the coming years? Are there certain things that Questrade is really prioritizing for the coming years as one of Canada's largest discount brokers?

5. Can you talk about the lack of financial transparency when it comes to fees that Canadians are paying on their investments? There have been rules that have come out (CRM2) to help with this but is there more that Canadians should know?

6. As far as I know, Questrade doesn't provide some of the more ultra safe investment options such as GICs. For those that want that high level of safety (despite the lower returns), what options do you suggest for them?

7. You probably hear a lot of myths from potential customers about online investing. Can you share some of the most common and critical misconceptions that Canadian have?

8. Please tell us a bit more about where we can learn from you, and learn more about Questrade.

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This is part 2 of the series on how to execute an early retirement, with financial planning veteran John Kalos. You can view part 1 of the series here. You can stream or download the entire episode below. For more information on this episode and series, along with all the resources and questions covered, view […]

This is part 2 of the series on how to execute an early retirement, with financial planning veteran John Kalos.

In this episode, we use our financial plan as a case study so that you and other Canadians can get some insights on how to execute an early retirement.

The goal is to give you a better understanding of what a financial plan should include, what it can do for you, and give you some insider tips from a real ex-banker on what to look out for when you encounter a financial planner or advisor trying to sell you a service like that.

If you do have some questions for John (the financial planner we used), or if you'd like to discuss potentially having him take a look at your financial situation too just like he did with my family, then you can sign up for a free consultation with him by going to buildwealthcanada.ca/john. It's totally free, and there's no obligation or anything like that.

Links and Resources Covered

• Receive a free consultation with John and have your questions answered at www.buildwealthcanada.ca/john.
• Kornel's investing course with free sample lessons at www.BuildWealthCanada.ca/invest
• 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.

Questions Asked During the Interview:

1. You and I went through the entire financial planning process together, with you as our financial planner. After you created the financial plan for us, one of the insights that came out of it, which goes against what we hear in the media a lot is that if you were to retire or semi-retire right now, you don't necessarily always need a 1 million dollar or more investment portfolio to pull it off.For example, our portfolio wasn't at $1 million and all the numbers supported that we still have enough for a full retirement right now. Why do you think we often hear in the media how you need that $1 million dollar portfolio, and why is this not necessarily always the case?
2. To give everyone listening some actionable things that they can do when searching for a financial planner that's right for them, what are the red flags to look out for when meeting with a financial planner/advisor?
3. I really like the process that you and I went through when you did our financial plan, and I think it's a really good example of what the process should be like. So now that we've talked about the negative things to look out for and what we don't want, can you give us a brief overview of your process?. I know this is something you've been optimizing for 20+ years so can you also highlight the critical pieces in the process that everyone should have when working with a financial planner?
4. When you did my plan there were several critical components that you made sure you factored in that could really make a huge impact on whether someone can retire early or not. For anybody looking to do an early retirement, what were these key components that can really shorten the number of years that you need to work? Also, let's break this question down into 2 parts. First, let's talk about the controllable factors (ex. Spending, part time work, etc.) which we can all focus on that have the biggest impact on how early we can retire.And then after that, let's talk about the factors that we can't directly control, but that absolutely need to be factored into the financial plan, no matter who your financial planner or advisor is, because they have such an enormous impact on our ability to retire early (ex. Inflation, CPP and OAS).

1. What I really liked in particular was the summary page that you produced where it talked about things like what's the most we can spend annually and still have enough to stay retired? And how much we actually need to retire? Using our actual numbers and financial plan as a real life example, can you speak to what the results for us were in the context of, what are the answers that we should have from our financial planner when getting a financial plan like this done>

Early retirement execution questions:

1. Now that we have all the numbers we need from doing a financial plan, let's switch gears and talk about how to actually execute an early retirement or semi-retirement once you know you have enough in your investments.To start, how should our portfolio change when we move from an accumulation phase (where we're working full-time, saving and investing), to the decumulation phase where we're not working at all or only working part-time.
2. When in retirement, should Canadians tweak their portfolio to generate more yield and try to live off that? or do you suggest just selling-off a percentage of the portfolio every year during good years and keeping a cash cushion during that bad years so that we're not selling our investments when the markets are down?
3. For the fixed income portion of our portfolio how do you decide between using bonds vs doing a GIC ladder?
4. What size of a cash cushion do you suggest for people in retirement or semi-retirement?
5. How should early retirees deal with moving money out of the RRSP early? (Explain what the basic personal amount is here too please)
6. What type of investments should you keep in each of your accounts to help minimize your taxes?

John has been in this industry for over 25 years, and his lack of bias and general concern for the financial well-being of Canadians has made him one of the very few financial planners that I actually trust and go to whenever I want an unbiased 2nd opinion or some analysis done on my investments […]

In this episode, we use our financial plan as a case study so that you and other Canadians can get some insights on how to execute an early retirement.

The goal is to give you a better understanding of what a financial plan should include, what it can do for you, and give you some insider tips from a real ex-banker on what to look out for when you encounter a financial planner or advisor trying to sell you a service like that.

If you do have some questions for John (the financial planner we used), or if you'd like to discuss potentially having him take a look at your financial situation too just like he did with my family, then you can sign up for a free consultation with him by going to buildwealthcanada.ca/john. It's totally free, and there's no obligation or anything like that.

Links and Resources Covered

• Receive a free consultation with John and have your questions answered here.
• Kornel's investing course: Free Sample Lessons
• Top Tools and Resources for Financial Independence (for Canadians): Sign up anywhere on that page for 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.

Questions Asked During the Interview:

1. You and I went through the entire financial planning process together, with you as our financial planner. After you created the financial plan for us, one of the insights that came out of it, which goes against what we hear in the media a lot is that if you were to retire or semi-retire right now, you don't necessarily always need a 1 million dollar or more investment portfolio to pull it off.For example, our portfolio wasn't at $1 million and all the numbers supported that we still have enough for a full retirement right now. Why do you think we often hear in the media how you need that $1 million dollar portfolio, and why is this not necessarily always the case?
2. To give everyone listening some actionable things that they can do when searching for a financial planner that's right for them, what are the red flags to look out for when meeting with a financial planner/advisor?
3. I really like the process that you and I went through when you did our financial plan, and I think it's a really good example of what the process should be like. So now that we've talked about the negative things to look out for and what we don't want, can you give us a brief overview of your process?. I know this is something you've been optimizing for 20+ years so can you also highlight the critical pieces in the process that everyone should have when working with a financial planner?
4. When you did my plan there were several critical components that you made sure you factored in that could really make a huge impact on whether someone can retire early or not. For anybody looking to do an early retirement, what were these key components that can really shorten the number of years that you need to work? Also, let's break this question down into 2 parts. First, let's talk about the controllable factors (ex. Spending, part time work, etc.) which we can all focus on that have the biggest impact on how early we can retire.And then after that, let's talk about the factors that we can't directly control, but that absolutely need to be factored into the financial plan, no matter who your financial planner or advisor is, because they have such an enormous impact on our ability to retire early (ex. Inflation, CPP and OAS).

1. What I really liked in particular was the summary page that you produced where it talked about things like what's the most we can spend annually and still have enough to stay retired? And how much we actually need to retire? Using our actual numbers and financial plan as a real life example, can you speak to what the results for us were in the context of, what are the answers that we should have from our financial planner when getting a financial plan like this done>

Early retirement execution questions:

1. Now that we have all the numbers we need from doing a financial plan, let's switch gears and talk about how to actually execute an early retirement or semi-retirement once you know you have enough in your investments.To start, how should our portfolio change when we move from an accumulation phase (where we're working full-time, saving and investing), to the decumulation phase where we're not working at all or only working part-time.
2. When in retirement, should Canadians tweak their portfolio to generate more yield and try to live off that? or do you suggest just selling-off a percentage of the portfolio every year during good years and keeping a cash cushion during that bad years so that we're not selling our investments when the markets are down?
3. For the fixed income portion of our portfolio how do you decide between using bonds vs doing a GIC ladder?
4. What size of a cash cushion do you suggest for people in retirement or semi-retirement?
5. How should early retirees deal with moving money out of the RRSP early? (Explain what the basic personal amount is here too please)
6. What type of investments should you keep in each of your accounts to help minimize your taxes?