A few months ago I made an offhand remark in a weekend reading update that caught the attention of several readers:

“You might be surprised to hear that if something happened to me, my wife has been instructed to hand everything over to PWL Capital. That’s how much I believe in the good work that group is doing.”

Apparently that surprised some of you. I understand that it’s a surprising statement coming from an advice-only planner who is a big proponent of self-directed investing.

Here’s one recent email from a long-time reader:

Hi Robb,

I keep going back to this comment which you made a while ago. I’m not sure if anyone else has noticed or reacted. So as a “fee-only advisor,” and a “one-fund” investor I am curious as to how you have arrived at this decision. What is it about PWL that made you arrive at this decision to let go and let someone else carry the load? 

To start, I don’t have any affiliation at all with PWL Capital – I talk them up because I really respect the work they do for their clients, for DIY investors, and for the financial planning community in Canada (truly leaders in their field). 

The fact is my wife is a brilliant woman who understands our financial situation and investing approach, but she has little-to-no interest in managing our long-term financial plan.

And while I’ve taken great steps to simplify our financial life so that, in theory, someone could take the reins after I’m gone, we still have a complex situation with a corporation and multiple account types. 

It’s not just about continuing to hold VEQT or XEQT across all accounts. It’s the tax planning that complicates things, and where a firm like PWL can help ensure the correct compensation (salary/dividends from the corporation, withdrawals from personal accounts, timing of government benefits) is used throughout her lifetime to meet financial goals for herself and our kids.

For some context, imagine I tragically get hit by a bus in 12 years. At that time, we have a net worth of $5.66M, and $2.2M of that is in our corporation.

Does this look like a simple situation for someone to begin their DIY planning and investing journey?

Meanwhile, PWL is out there leading the charge on evidence-based financial planning (plans before products) and investing. They use one-fund solutions from Dimensional Fund Advisors, that have a tilt towards small cap and value stocks that have (theoretical) higher expected returns than a market-cap weighted index fund.

“PWL’s service includes goals / values identification, asset allocation, portfolio management, retirement planning, tax planning, and estate planning. We view all planning and advice through both utilitarian and emotional well-being lenses.”

They charge reasonable fees (well under 1%, since it’s on a sliding scale based on investable assets) and that fee would be easily made up in peace of mind for my wife to not have to think about this, and for the precision-like tax planning to help my wife and kids meet their spending needs and live their best lives in the most efficient and effective way.

I realize that paying fees of $25,000 per year might sound outrageous to some of you – but to put that into context it’s just 0.57% per year to work with a firm and advisor team that I completely trust to look after my family’s best interests.

A reasonable alternative might be to transfer everything to Wealthsimple’s robo-advisor (managed) solution and use their financial planning and advisory service. The cost would be similar (0.40% management fee + the cost of the ETFs used in their model portfolios). Let’s call that plan ‘B’ in case PWL gets bought out by an evil bank or something.

But what I like about PWL is their commitment to finding and funding a good life for their clients. They put planning, goal setting, and well-being first, and then they’re at the cutting edge of best practices to help clients meet those goals in the most tax efficient way.

That sounds like a pretty good recipe for successful outcomes.

This Week’s Recap:

Last week I shared an update to our 2024 financial goals and a look ahead to our goals for 2025.

I was happy to contribute to this article on why some retirees are reluctant to spend money when they can afford to (Toronto Star subs).

Promo of the Week:

Get an iPhone or Macbook when you register and move $100,000 or more to Wealthsimple. 

• Register by December 13th
• Transfer or deposit $100,000 or more within 30 days of registering
• Once you qualify you can choose an iPhone or a Mac starting January 15th
• Deposit $100,000 – $299,999 and you’ll get an iPhone 16 or a MacBook Air.
• Deposit $300,000 – $499,999 and you’ll get an iPhone 16 Pro or a MacBook Pro.
• Deposit $500,000+ and you’ll get an iPhone Pro Max or a MacBook Pro with M4 Pro chip.

Get another $25 when you fund any Wealthsimple account with my referral code: FWWPDW

Transfer or deposit at least $100,000 of qualifying funds into your Self-directed Investing, Managed Investing, or Cash account within 30 days of registering.

Weekend Reading:

Here are five costly mistakes to avoid in your 40s for a better retirement.

The psychology of retirement income – from saving to spending.

From CTV news, here’s how to switch from saving for your golden years to spending.

Aaron Hector shares what the REAL OAS deferral enhancement means.

How often should you update your financial plan? Jason Heath explains why a financial plan is never final.

Ben Felix looks at Trump’s win and expected stock returns (the Presidential puzzle):

A Wealth of Common Sense blogger Ben Carlson looks at the 30% up years in the stock market.

The biggest risk to your retirement might not be what you think (spoiler, it’s inflation).

The Loonie Doctor takes an in-depth look at a common problem – transferring a managed taxable account to a self-directed brokerage and capital gains tax versus fee savings.

Finally, a recurring theme, why retirees struggle with the transition from saving to spending.

Have a great weekend, everyone!

I’ve been blogging for nearly 15 years and one reason I keep things going here (admittedly more infrequently than I’d like) is that I thoroughly enjoy looking back at old articles, especially when it comes to financial goals. In fact, one of my favourite posts of all time is a 2019 net worth update when I optimistically quipped, “2020 is going to be a great year!”.

Too funny.

Setting financial goals can be tricky because you need to make some assumptions about the future – that you’ll earn what you think you’re going to earn, spend what you think you’re going to spend, and save what you think you’re going to save without too many surprises along the way.

But a year is a long time and life can be surprising. Heck, just look at the last five years and what has changed around the world and in your own lives.

At the end of 2019, I had just quit my day job and decided to go all-in on my financial planning business and freelance writing. Then a global pandemic hit, markets crashed, and I was questioning everything.

But it turned out the shift to Zoom and more work-from-home freedom was a tremendous boon for our business. With travel plans on hold for two years, we saved a bunch of money and reconsidered our living situation. We built a new house that fit our new lifestyle (office, home gym, closer to the kids’ new schools).

Annual goal setting is just a microcosm of financial planning. You have a general idea of what you want out of life, and chart a course to get there. Short-term planning is a little more certain than planning many decades in advance. But it still requires regular monitoring, not only to see if you’re on the right track but if those goals are still your top priorities. Again, life can be surprising.

Last year I listed our financial goals for 2024:

1. Give ourselves another pay raise for 2024. We plan on increasing our wages by 10%.
2. Reorganize kids’ RESPs to follow the Justin Bender RESP strategy. That means selling e-Series funds and setting up a risk appropriate ETF portfolio for each child. We’re also switching to annual contributions (January) and making one catch-up contribution for our oldest child. Total contributions of $7,500 in 2024.
3. Revenge travel part two. We plan on taking a hot holiday in February, an epic trip through Europe in July (including a Taylor Swift concert in Zurich!), and a return to Scotland later in the year.
4. Invest excess profits in the corporate investing account (targeting $90,000).
5. Renew mortgage, taking the best of either a short-term fixed rate (1-2 years) or 5-year variable rate when it comes up for renewal in May.

Checking in a year later, how did we do?

Well, we recognized a glaring hole in our plan. Our TFSAs. So, we actually increased our income significantly more than expected this year (40%) to help facilitate our TFSA snowball (refilling our TFSAs as quickly as possible). My wife and I will have each contributed $28,000 to our empty TFSAs this year.

We did reorganize our kids’ family RESP account, selling off the long-held TD e-Series funds and buying VEQT and VSB for our oldest daughter and XEQT and XSB for our youngest daughter. We did the catch-up contribution of $2,500 for our oldest daughter and contributed a total of $7,500 in January. I’m really pleased with this transition, as it’s dead-simple to manage and separate each child’s share of the account.

We thoroughly enjoyed our trips this year, soaking up the sun in Cancun, traversing across four countries this summer, and enjoying a relaxing stay in Edinburgh this fall.

Our business hit record revenue this year, which allowed us to meet our higher personal income needs and come reasonably close to reaching our corporate investing target. We’ll contribute $70,000 to our corporate investments. Again, we changed this up on the fly to prioritize a faster TFSA catch-up. Paying a bit more personal tax now is worth getting money into our TFSAs to grow tax-free for longer.

Finally, we did renew our mortgage in April but ended up going with a 3-year fixed rate term at 4.94%. That term was projecting to save the most money at the time, since we had yet to see an interest rate cut from either the Bank of Canada or the U.S. Federal Reserve. Had our renewal come up later in the summer we might have opted for a variable rate. Oh well.

What’s in-store for 2025? Here are our top financial goals for the year ahead:

1. Contribute $28,000 each to our TFSAs as part of our TFSA snowball (aggressive catch-up) strategy.
2. Contribute $5,000 to our kids’ RESP in January and rebalance the portfolio for their age 16 and 13 years.
3. Take three trips (Cancun in February, Italy in April, and England/Scotland/possibly Finland in the summer).
4. Earn enough business revenue to meet our personal income needs (same as 2024) and contribute $80,000 to our corporate investments.
5. Pay for bi-weekly cleaning, summer lawn care, and winter snow removal to allow more time for work, leisure, and family.
6. Reach the $2M net worth milestone (a stretch goal that is only possible with another strong year of market returns).

We’re painfully aware that our kids are fast approaching their post-secondary years and life could look dramatically different in the near future. We’re thinking carefully about the trips we want to take with them while they’re still under our roof, and about where they might want to attend school when the time comes.

We’re building up our financial resiliency by maxing out our TFSAs again, maxing out the kids’ RESPs, and likely holding more cash than usual in our business just in case. In case of what? In case post-secondary is more expensive than anticipated. In case we have a chance to take a bucket list trip together. In case we want to move again (not anytime soon, I hope!) and follow our kids wherever life takes them.

Financial planning is about setting up future-you with options. Goals and priorities might change. We always want to be in a strong financial position so we can adapt, if needed.

How did you do with your financial goals in 2024? Have you thought about your 2025 goals yet? Let me know in the comments.

I’ve fielded a dozen emails from clients and readers about the U.S. election and how it might impact their portfolios.

The short answer: Who knows?

A longer answer: The stock market probably doesn’t care as much about the election as you think it does.

Besides, there has been an election every four years for the last 250 years. What do people think is going to happen?

There will always be something going on in the world that causes anxiety for investors. What we need is to come up with an investing strategy that we can stick with through good and bad times, knowing that it will meet our long-term objectives.

Once you’ve decided on that investing approach, the first rule to know is:

“Your investing approach shouldn’t change based on current market conditions.”

It’s one thing to be nervous about high market valuations, inflation, or changing governments. We can use evidence-based thinking to calm our fears knowing that staying invested in a globally diversified and automatically rebalancing portfolio leads to the best outcomes.

We also know that markets frequently reach all-time highs. And, while US markets in particular are high, emerging markets and international stocks are still relatively cheap by comparison.

We also know that the best inflation hedge is a globally diversified portfolio of stocks.

Finally, when it comes to government changes we often look to the US where investors get nervous around presidential elections. Investors wanted to dump stocks when Trump got elected the first time in 2016. Then they wanted to dump stocks when Biden got elected in 2020. On both occasions it would have been disastrous to bail on stocks and move to cash.

In summary, the stock market probably doesn’t care who is President of the United States.

If your portfolio is sitting in cash today, I cannot stress enough to get your money invested right away and not worry about macro events that may or may not have an impact on the market. 

Otherwise you’ll always have a reason to panic and try to time the market (a slowdown in China, a European debt crisis, a regional conflict, the Dallas Cowboys winning the Super Bowl, etc.).

Stay invested in a low cost, risk appropriate fund and go enjoy your life!

This Week’s Recap:

10 years ago I sold all of my dividend stocks and switched to low cost index funds. Thanks to Bob Lai for giving me the chance to explain myself to dividend investors on his Tawcan personal finance blog.

We had a lovely 10-day holiday in Edinburgh, staying in the iconic Dean Village and exploring more of our favourite city.

This time we checked out the Edinburgh Zoo, hopped on a bus to Roslin to visit the famous Rosslyn Chapel, took a day trip to Glasgow to check out the University (our oldest daughter’s dream), met up with my friend and long-time freelance editor for drinks, and had some amazing vegan food in Edinburgh.

That’s it for trips this year, but we already have some travel plans for 2025 – including a week in Cancun in February and 10 days in Tuscany during Easter break. Summer is up in the air, but will likely include the Scottish Highlands and/or exploring more of England, specifically the Cotswolds.

My last weekend reading update looked at the TFSA snowball – an aggressive savings strategy to catch-up on unused TFSA contribution room.

Speaking of contribution room, it’s now official that the annual TFSA contribution limit will remain at $7,000 in 2025. That brings the total lifetime limit up to $102,000.

Promo of the Week:

Wealthsimple is fresh off of a wildly successful campaign in which they paid a 1% transfer bonus to customers who deposited or transferred money to their accounts.

Now they’re back with a new promotion, where you can get an iPhone or Mac when you register and move $100,000 or more to Wealthsimple.

• Register by December 13th
• Transfer or deposit $100,000 or more within 30 days of registering
• Once you qualify you can choose an iPhone or a Mac starting January 15th
• Deposit $100,000 – $299,999 and you’ll get an iPhone 16 or a MacBook Air.
• Deposit $300,000 – $499,999 and you’ll get an iPhone 16 Pro or a MacBook Pro.
• Deposit $500,000+ and you’ll get an iPhone Pro Max or a MacBook Pro with M4 Pro chip.

Get another $25 when you fund any Wealthsimple account with my referral code: FWWPDW

Good news for those of you with simple corporations – Wealthsimple has started to roll out early access for self-directed corporate accounts. For now, the entity must be a corp and must have only one beneficial owner and director (bummer for us, we’re joint owners).

I’m registering for the iPhone promo anyway in hopes they expand access to the self-directed corporate accounts. We’ve got $425,000 parked at Questrade that we’d love to move over to Wealthsimple.

Weekend Reading:

From MoneySense: After rushing into the real estate market, I quickly learned I wasn’t ready for the real cost of home ownership.

Forever an optimist (like me!) A Wealth of Common Sense blogger Ben Carlson asks: Am I a permabull?

Financial planner Markus Muhs shares why dollar cost averaging is good for the soul.

In retirement, some income is not subject to withholding tax, and you may potentially owe tax after filing each year. Advice-only planner Jason Heath explains how to plan for taxes in retirement.

Are you afraid to begin investing? Millionaire Teacher Andrew Hallam explains why you should invest your money as soon as you have it. Hmm, sounds familiar.

Does your relationship with your financial adviser feel off? Financial planner Anita Bruinsma shares three red flags to watch for.

PWL Capital’s Ben Felix explains why you will probably lose money trading options:

Some advisors and investors like to play semantic games, saying passive investing doesn’t exist because even an index like the S&P 500 is “actively” reconstituted, while even the most passive investor still needs to “actively” contribute or rebalance. The point is that decisions need to be made.

Michael James on Money says that’s nonsense – passive investing does exist. I agree.

Finally, from HENRY to NENRY – Of Dollars and Data blogger Nick Maggiulli shares a cautionary tale about the low stability of high income.

Have a great weekend, everyone!