The price of bitcoin is surging again and recently surpassed all-time highs. That has brought all of the ‘crypto bros’ out of hibernation to gloat about bitcoin taking over the financial system (or whatever they think happens next).

Shares of NVIDIA Corp are also soaring to new heights. The semi-conductor company recently surpassed $2 trillion in market capitalization to become the third most valuable company in the world (behind Apple and Microsoft).

Surprisingly, shares in NVIDIA have performed even better than bitcoin over the past five-and-10-year periods. In fact, you would have had to own bitcoin in the very early days (2009-12) to have seen better performance than holding shares of NVIDIA stock.

But when I say this on social media, the crypto bros come out in full force telling me all the reasons why bitcoin is superior and investors should get in now before it’s too late.

Hey, at least NVIDIA actually makes and sells something useful.

I’m not one for speculating on assets with lottery-like properties. Usually by the time we hear about how great the investment is, most if not all of the upside has already been captured.

Unfortunately, we can’t go back in time and capture past returns from any stock, coin, real estate market, or any other asset class. 

I say this to caution readers not to get caught up in the next speculative bubble, whether that’s AI or cryptocurrency or the next big thing.

CPP as an investment

Few topics are as divisive in Canada as the Canada Pension Plan. Business owners and self-employed individuals hate it for having to fork over both the employer and employee contributions. People who die early also don’t like CPP and accuse the whole program of theft.

Proponents of CPP say it helps the social safety net and acts as longevity insurance for those who live to a normal to above average life expectancy thanks to its guaranteed, paid-for-life, and indexed-to-inflation properties.

Ben Felix is a huge proponent and argues that CPP is one of the best retirement assets money can buy, despite what the skeptics say.

“The CPP benefit is an inflation-indexed annuity – the only true risk-free asset for a long-term investor.

This is an asset that hedges three of the most important risks that retirees face: longevity risk, inflation risk and sequence-of-returns risk. Inflation-indexed annuities are not available for sale privately in Canada.”

Felix also says a less appreciated aspect of CPP is that it allows investors to take more risk with their other financial assets, increasing their expected returns without increasing their chances of financial ruin.

But, oh the comments! What if I die at 65? Why can’t I opt-out and invest on my own? Business owners get screwed?

The reality:

“We should be happy to have an asset like CPP. Planning to get the most out of it is far more productive than griping about its existence.”

Dividends aren’t free

If you ever get tired of debating bitcoin bros and CPP cranks, there’s always the dividend delusionists.

For the record, I have no problem with dividends. They’re an important part of the stock market’s overall returns. I receive regular dividends from the 13,500+ stocks I own through the globally diversified VEQT (about half the companies pay a dividend).

But dividends are not magic. They’re not free. They get paid out from a company’s earnings, and that payment to shareholders reduces the value of the company by the exact amount of the dividend. 

For some reason this is a concept that many dividend investors fail to understand. One such investor told me:

“Dividends come from earnings or free cash flow. Share price increases only come from someone being willing to pay more today for the same company than they did yesterday.”

I think this is a serious misunderstanding of how the stock market works, especially if you believe that word ‘free’ actually means free.

Investors pay higher prices because they expect higher future returns. Why would you invest in a company that you don’t believe will increase its value in the future?

Promo of the Week:

We enjoyed a week away in Cancun and took advantage of some of our American Express travel benefits on the way there and back.

First, we used the free night certificate that comes with the Marriott Bonvoy Card to stay at the Calgary Marriott in-terminal hotel the night before our early morning flight. This saved us from driving up from Lethbridge super early the day of the flight and made for a stress-free travel day.

At the airport we took advantage of the free lounge access that comes with our American Express Platinum cards. The cost of entry is generally $49 USD per person. We visited the lounge in Calgary and in Cancun, which would have cost us $392 USD or $532 CAD

Finally, we boosted our rewards points earlier this year with the best offer I’ve seen in a while from the American Express Business Gold Rewards Card (<–scroll to the bottom and click “explore other cards”).

Earn a whopping 75,000 Membership Rewards points when you spend $5,000 within the first three months.

Transfer those points to Aeroplan where you can typically redeem them at 2 cents per mile. That’s $1,500 in value ($1,301 when you subtract the $199 annual fee). Not a bad return on $5,000 spending.

Do you need to have an incorporated business to qualify? No! Sole proprietors and side hustlers are welcome.

Sign-up for the American Express Business Gold Rewards Card here.

Weekend Reading:

The Globe & Mail’s Erica Alini says new tax rules have many Canadians in a bind. It’s hard to find an accountant and risky to DIY.

Tim Cestnick explains why spousal RRSPs still have a place in clever planning.

Why Canada’s former chief actuary says you should wait to take your CPP benefits (subs).

An age-old question for Canadians: Should you pay down your mortgage, or fund your RRSP?

Rob Carrick took a deep dive on the OAS clawback: How many people are affected, and how much does it cost them?

Ben Felix looks at home country bias and says it can reduce fees and taxes, it may hedge the cost of local consumption, and it reduces exposure to the potential mistreatment of foreign investors when times get tough:

Last month, for the first time, passively-managed funds controlled more assets than did their actively-managed competitors. Index funds have officially won.

Dare to compare your investment results with your colleagues and friends?

“When people talk about money, it’s like social media posts. They rarely share the bumps and bruises.”

These 15 funds managed to lose value for shareholders even during a generally bullish market.

Michael James on Money discusses private equity’s fantasy returns.

Finally, here’s Ben Carlson’s take on avoiding burnout and a mid-life crisis.

Have a great weekend, everyone!

We spent a few years building up a massive bank of travel points before our first trip to the U.K. in 2019. Indeed, we put nearly 1 million travel points to work booking flights and hotels for a 32-day trip to Scotland and Ireland. Then we went back to work replenishing travel points for our revenge travel year in 2020, which ended up getting postponed to 2022. We took it easy(ish) on travel in 2023, but have three trips booked this year that pretty much drained all of our points again.

I get it. Obsessing over travel points is not for everyone. My wife and I have collected rewards from more than a dozen credit cards, all in a well thought out goal to maximize our travel points, save money on flights and hotels, and upgrade our experience whenever possible.

We’ve also willingly paid – wait for it – more than $3,000 in annual fees! Crazy, right?

But I’ve done the math and figured that paying $3,000+ in fees was a good investment to earn more than 1 million travel points. I valued those points at about $20,000. How? Let me explain.

The main rewards program to drive all of this was the American Express Membership Rewards program. It’s the most lucrative in terms of number of cards available, the incredibly generous sign-up bonuses, and the ability to transfer Membership Rewards points to other programs such as Aeroplan and Marriott Bonvoy.

I typically transfer Membership Rewards to Aeroplan on a 1:1 basis. I value Aeroplan miles at 2 cents per mile. That means 1,000,000 Aeroplan miles x 2 cents per mile = $20,000 worth of travel rewards.

Marriott Bonvoy is not as lucrative – these points are only worth about 0.9 cents – so I limit the number of points I transfer to Bonvoy on an as-needed basis. Besides, we mostly rent Airbnbs when we travel as a family.

Amex Cobalt

I start with the Amex Cobalt card – the best card for everyday spending in Canada with 5x points for food & drink. Sign up and spend $750 per month on this card to get an extra 15,000 Membership Rewards points (plus the 45,000 points you’d earn if you spend $750 per month on a 5x spending category).

Then use your own referral link to refer your spouse or partner (called: activating Player 2), and have them do the same thing. This could be worth a total of 120,000 Membership Rewards points in a year, plus another 10,000 for the referral bonus.

Amex Platinum

Next, go big with a premium card like the American Express Platinum Card. This one is great for airport lounge access, plus preferred status at Marriott Hotels (automatic Gold Elite tier). Yes, it’s a steep annual fee of $799 but you get a $200 annual travel credit AND a $200 annual dining credit to offset $400 of that fee. Plus, in the first year you can earn up to 100,000 Membership Rewards points when you spend $10,000 within the first 3 months.

Amex Aeroplan Reserve

Wanna get crazy? Refer your spouse or partner to the American Express Aeroplan Reserve Card where they can earn up to 90,000 Aeroplan points (plus a sweet 30,000 point referral bonus for your partner).

This card comes with a whopping $599 annual fee but includes access to select Air Canada Maple Leaf Lounges, plus Priority Check-In, Priority Boarding, and Priority baggage handling with Air Canada. Not bad!

American Express Business Gold Card

The best sign-up bonus in Canada right now is for the American Express Business Gold Card, where you’ll get 75,000 Membership Rewards points when you spend $5,000 within the first 3 months. The annual fee is just $199, which is reasonable for a business card.

I *just* completed my $5,000 spend on this card (deposits for Airbnbs for this summer) and instantly received the 75,000 Membership Rewards welcome bonus. I transferred that to Aeroplan and it allowed us to upgrade our flights to business class to Edinburgh on October. Nice!

Again, refer your partner or spouse and do it all over again to earn another 75,000 Membership Rewards points.

Marriott Bonvoy Cards

Chalk this one up as an absolute no-brainer card to have in your wallet. The Marriott Bonvoy Card gives you 55,000 bonus (Bonvoy) points when you spend $3,000 within the first three months. Not only that, you get an annual free night certificate to stay at a category five hotel (easily worth $300+), making this a card a keeper from year-to-year. The annual fee is just $120.

We just used our free night to stay in the Calgary Marriott Airport in-terminal hotel the night prior to an early flight departure. Nothing beats walking out of the hotel lobby and right to your gate without stepping foot outside!

Again, refer your spouse or partner and do it all over again to earn another 55,000 Bonvoy points, plus 20,000 referral points, and another free night certificate.

Building your Travel Bank

By my count, that’s up to 530,000 Membership Rewards points and 130,000 Bonvoy points (plus two free nights, plus $400 in travel & dining credits) from eight cards, split between spouses so there’s only four cards each. Spread these out over the year so you can better align your regular spending with the minimum spend amounts required for each card.

This strategy is not for the faint of heart. You’d be paying more than $2,200 in annual fees for these cards. But the payoff could be worth $12,700 or more, depending on how you redeem your points. Plus, hotel status, airport lounge access, priority boarding, etc. 

The time to use this strategy is when you have multiple trips lined up for a year.

Guess what? Cancel the cards after almost a year so you don’t have to pay a second annual fee. I keep the Cobalt card as my everyday card, since it has a high earn rate, plus the Platinum Card for the hotel status and airport lounge access, and the Bonvoy Card for the free annual night certificate. The others have been rotated through over the years by either me or my wife to capture the bonuses.

Questions? Hit me up in the comments.

This Week’s Recap:

Kyle Prevost shared the details on his new DIY retirement planning course for Canadians. Worth checking out!

Also popular was the last Weekend Reading edition all about when to RRIF.

From the archives: A two-fund solution for investing in retirement.

Promo of the Week:

Author and friend of the blog Mike Drak has generously offered to send Boomer & Echo readers a free electronic copy of one of his three books, choosing from:

• Retirement Heaven or Hell
• Victory Lap Retirement (2nd Edition)
• Longevity Lifestyle by Design

If interested, please email Mike directly at michael dot drak at yahoo dot ca. He’d also love for you to write an Amazon review afterwards.

Weekend Reading:

Short and sweet this week. 

The always eloquent Morgan Housel shares a few thoughts on spending money.

Dr. Preet Banerjee asks if today’s young, diverse investors are making good choices with their money?

It’s a Ben Felix trifecta. First up, Ben explains the role of bonds in retirement portfolios, and suggests we move beyond common asset allocation advice.

Then, on YouTube, he says that popular personal financial advice suggests that portfolios should contain at least some bonds and that asset allocations should shift increasingly into bonds as investors move toward retirement, but new research suggests that this thinking is due for an update:

Finally, Ben takes a hard look at ESG investing and says it may be counterproductive:

“Hedging ESG risks and feeling good about your portfolio are valid reasons to consider the ESG characteristics of the companies that you own. When it comes to making the world a better place, I don’t have the solution, but ESG investing probably isn’t it.”

The Humble Dollar’s Jonathan Clements says our experiences – especially those during childhood and that involve family – tend to triumph, shaping our world view and potentially setting us up for costly financial mistakes.

Jason Heath shares some surprising retirement math you need to know, from how long you’ll live to deferring CPP.

Advice-only planner Anita Bruinsma compares active versus passive investing.

Finally, retirement expert Fred Vettese explains (and charts) why you should be able to save more money closer to retirement.

Have a great weekend, everyone!

“Will I be OK in Retirement?”

“How much do I save this year if I don’t want to have to eat pet food when I’m 83?”

“What do most Canadians spend each month after they retire? I don’t even know where to start with this stuff!”

In response to questions like this, most mutual fund salespeople from major Canadian financial institutions (you can usually find them in big banks and strip malls) generally respond something along the lines of:

“Look, investing is the key here. Saving more is always better. Look at this chart – now here’s another chart that shows how awesome your life would eventually be if you saved more. Finally, here’s a third – really fantastic chart – and it shows that you’ll have [fill in # of millions here] if you invest with us, because we pick by far the best investments. After all, we help thousands of Canadians across the country everyday, we’re pros at this stuff.”

Then a year later (usually right around this time of the year – aka: “RRSP Season”) a lot of folks feel they should probably check in on their plan and/or realize they still don’t really know the answers to the questions they had the year before. They make their once-per-year appointment with their “adviser” and they are treated to some “free” coffee, great small talk about their family, maybe a chat about the weather and the local sports team. Finally, investments are discussed, reassurances are made, semi-complicated vocabulary gets tossed around… and the cycle repeats itself.

All the while, 2%+ is being funneled out of the client’s entire nest egg, and into the company’s earnings.

I know that this isn’t news to most Boomer & Echo readers. I’m preaching to the choir a bit here. But given that there is still over 5x as much money in Canadian mutual funds as there is in ETFs, I don’t think the message is getting through to too many people. 

Wait – Who Is This Guy Again?

My name is Kyle Prevost, and I’m interrupting today’s regularly-scheduled Boomer and Echo programming to chat about retirement planning.

Big shout out to Robb for letting me reach out to you all and do my thing.

I’ve been writing and talking about personal finance in Canada for 16 years. You might have seen Robb and I chatting at the Canadian Financial Summit, and read some of my writing at Moneysense or MillionDollarJourney.ca over the years.

But it’s a recent project on DIY Canadian retirement planning that I wanted to highlight today. It’s the best resource that I’ve ever created and that I’m most proud of in my career.

I’m talking about the first ever online course for planning your Canadian retirement – at any stage of your life.

It’s called 4 Steps for a Worry Free Retirement – and you can find it here.

What’s So Special About an Online Course?

Sure, there is some really solid information out there on blogs and in books. But here’s the advantages that 4 Steps to a Worry-Free Retirement has over those products.

• Everything – all in one place. No more saving specific articles to come back to. Now it’s all tied together for you in a logical order, and you can come back to the information whenever you need a refresher or want to double check something.
• It gets instantly updated. For example, I just went through and filled in all of the new 2024 tax and CPP/OAS information. Any book you buy is out of date a few months after you purchase it.
• Passively reading something is not the best way for most people to thoroughly understand a topic. My course comes with original explainer videos, 25+ full-length interviews from the Canadian Financial Summit (including a couple with Robb), a downloadable/printable workbook, and concrete recommended steps to take action.
• Access to our virtual Worry-Free Study Hall. (Which is really a teacher’s attempt to name a private discussion group. It kind of looks like a Facebook discussion wall that only people in the course can see. Questions or answers can be posted anonymously. I answer all questions in this area, so that everyone can benefit from reading through other’s inquiries.)

How Do I Know This Thing is Any Good?

Don’t take my word for it. Hear what these Canadian personal finance experts had to say about 4 Steps to a Worry Free Retirement:

• Here’s a podcast with longtime Toronto Star columnist and university instructor Ellen Roseman – who thoroughly reviewed the course.
• Multi-decade retirement expert from Moneysense and the Financial Post, Jonathan Chevreau also took a look at the course.  You can read his review here.
• If you are still in a podcast state of mind, I chatted with Kornel Szrejber on the Build Wealth Canada Podcast after he took the course. Mike Heroux (aka: The Dividend Guy) also had me on his podcast.
• I was even on the TV show Money Matters with Mike Braga. You can check out the episode here.

Here’s what fee-only financial planner and columnist Jason Heath (of Objective Financial Partners) had to say about the course.

“Kyle’s course can be a great resource for someone preparing for retirement or already retired. There is no single “right” way to manage your finances but what he does is distill many best practices into plain English for a layperson to help them figure out what is right for them. His background as a teacher definitely comes across in the course. Too many financial industry people do a poor job of conveying financial topics in a way that makes sense. The approach of the course is meant to teach and empower, and it definitely does just that.”

But – after all that – you’re still not sure if you want to invest the time, effort, and cash, I go one step further: A 100% money-back guarantee. Look, I’m not here to make a quick sale. If you’re not happy with the purchase, I don’t want you going around telling everyone that I’m a jerk. It’s really simple, if you don’t think the quick tax wins alone won’t easily save you the purchase price of the course – if you don’t think it’s worth your hard-earned cash – I’ll refund your order.

So How Much Does This Thing Cost Anyway?

In exchange for creating a resource that took thousands of hours to research and create + the commitment to keep updating the course AND the promise to answer your specific questions, the price tag is 500 bucks.

But – for the first 20 Boomer and Echo readers who sign up, I’m going to take a hundred bucks off the price tag. The promo code is: echo100. Make sure and click “Have a Coupon” on the order screen here, and then type in: echo100  

Hey, I’m aware that $500 is a lot of money. It’s about half the cost of a university course these days.

If you look through this course and can honestly say that you don’t think it’s twice as useful as any university course out there – I’ll give you your money back.

That’s it. 

No tricks. No hidden fees, kickbacks from big companies, or percentages taken out of your portfolio. No upsells to get to the “second magical VIP tier where you’ll get the REALLY good stuff”. Just a simple upfront price tag for a resource that I stand behind 100%.

Can I Get a Few Details About What’s In the Course?

You can check out the course website here to get a full sense of everything that is included.

But just to whet your appetite, here’s a sneak peak of the topics covered:

• How Much Do I Need to Retire?
• How Much Will My CPP Payment Be?
• How Much Will My OAS Payment Be?
• Decoding Private Pension Plans
• Safe Withdrawal Rates and the 4% Rule
• Working In Retirement
• What Should I Invest In?
• How to Buy and Sell Your Investments
• Decumulation: Withdrawing From Your RRSP, TFSA, and Other Accounts
• RRSP to RRIF Transitions
• Annuities – Buying a Pension
• Can You Retire With a Mortgage?
• Downsizing vs Reverse Mortgage vs HELOC
• Long Term Care Insurance
• Life Insurance in Retirement
• Retire Sooner with More Sunshine
• Bonus Resources (including a handy retirement-specific Tax Breaks Checklist)

I just want to quickly reiterate two things:

1. There is no risk in trying the course. It has a money-back guarantee.
2. The first 20 people to use the coupon code: echo100 get a hundred bucks off.

Would You Do Me a Favour?

I’m trying to get better at this self promotion thing. I’ve seen a lot of mediocre-or-worse products sell like hotcakes because they promised the “silver bullet” to all of life’s problems.  

Usually they were pitched by a good-looking individual who promised that just like them, you too could be successful. 

That’s just not me. 

Call me old school, call me a boring teacher, call me a terrible marketer. That probably all fits.

This course is not a magical silver bullet.  

I don’t have “the one simple secret” that will solve all of life’s problems.

I just have my best attempt to present the latest retirement facts from a Canadian perspective, and a couple decades of helping readers and students understand their personal finances.

What I really want you to know is that I created this course in order to help people just like my own middle-class Canadian parents. I read dozens of books and hundreds of articles (including several from Boomer and Echo) in order to make sure my research was on point. I endured the humbling process of asking experts to give me feedback. And, at the end of the day, I know that this course can really, really help a lot of Canadians – but only if they find out about it first!

So I could really use your help.

I know that Boomer and Echo readers understand that there is a lot of money to be saved by withdrawing from their RRSP and TFSA in the right order once they hit retirement – but the average Canadian has no idea on this stuff.

Folks are busy, and it’s really hard to separate the slick marketing of bogus products from the resources and advice that will actually help them.

So I’m hoping you’ll let people know that the course exists and that I’m available to answer any questions.

A positive word from you to a friend would mean a lot to me. Your friend or family member is much more likely to listen to you than to a Facebook ad or even to the recommendation of a notable Canadian financial expert. 

Thanks in advance for your time and consideration – and hopefully we’ll talk soon in my virtual classroom!

Kyle Prevost is a financial educator, author and speaker. He is also the creator of 4 Steps to a Worry-Free Retirement, Canada’s DIY retirement planning course.