I used to be a hardcore credit card rewards junkie and wrote frequently on the subject (I even had a separate blog dedicated to it!). I considered it a game, and tried to win big each year by signing up for multiple cards with massive welcome bonuses, while optimizing rewards with specific cards for everyday spending (think groceries, gas, travel, etc.).

But credit card rewards aren’t nearly as lucrative as they used to be. Back in the day, it was nothing to get tens of thousands of travel points, or $200 to $300 in cash back, for minimal effort and minimal spending.

Often you’d get a bonus immediately upon approval, or after your first purchase. Easy! Or, spend $1,000 within the first three months. Still pretty easy. Best of all, these cards typically waived the first year annual fee.

But today these minimum spending thresholds have ballooned out of control. Card issuers are fighting back against “churners” like me, and so many credit cards now come with an annual fee, hefty minimum spend requirements, and often require you to hold the card past the one-year anniversary mark (and pay another annual fee). No thanks!

That said, it’s a game I still enjoy playing and I’ll take a swing at a fat pitch whenever I see a juicy credit card offer hit the market.

Related: I applied for 13 credit cards last year. What happened to my credit score?

I don’t apply for as many cards as I used to, but I have my daily drivers – the cards I keep in my wallet for everyday spending. Those include:

• American Express Cobalt Card (5x points on food and drinks)
• Scotia Passport Visa Infinite (No foreign exchange markup – plus for shopping at No Frills where Amex is not accepted)
• American Express Platinum Card (for travel, airport lounge access, and Marriott Bonvoy elite status)

Then, I like to scan the market for new offers and time those applications around any planned one-time spending that is coming up in my budget. I call this ‘light’ churning.

For instance, I’ve already mapped out our spending and saving plan for 2025. Our youngest daughter needs braces and we’ll be shelling out about $7,000 early in the year. 

I signed up for the TD First Class Travel Visa Infinite card, which offered 20,000 TD Rewards upon first purchase, and an additional 115,000 TD Rewards points after reaching $5,000 in spending within 180 days. It also came with a $100 travel credit when you book at Expedia for TD.

Perfect! I’ll pay for the braces in the new year and earn 135,000 TD Rewards points, and then redeem the points through Expedia for TD to book a hotel and/or rental car for our trip to Italy in April.

We’re also planning a small office renovation (built-in desks, shelves, cabinets) early in the year that should cost us around $10,000.

To pay for that, I signed up for the American Express Aeroplan Business Reserve Card, where (with a referral link) I can earn 70,000 Aeroplan points when I spend $10,500 within three months.

I’m confident I can turn 70,000 points into $1,750 in travel rewards value (at 2.5 cents per point), so even the steep spending and $599 annual fee will be worthwhile.

Have you noted any large one-time expenses coming up in 2025? Strategic credit card applications can help turn those already planned purchases into future travel rewards.

This Week’s Recap:

My last weekend reading update (VEQT and Chill for Life) generated a ton of traffic, comments, and emails from readers. 

Many thanks to Rob Carrick for linking to that post in his latest Carrick on Money newsletter.

Speaking of newsletters, The Wealthy Barber David Chilton is back and absolutely crushing it on social media and with his new podcast. His email newsletter neatly summarizes the video and podcast updates, and it’s a must-read for your inbox. Sign up for it here.

Dave, call me if you want to chat about retirement spending or advice-only planning on your podcast!

Weekend Reading:

Short and sweet before the holidays.

Natasha Knox explains the money trauma of financial fawning – when we prioritize the financial needs of others to the point of neglecting our own well-being.

It’s a good time of year for Robin Wigglesworth to remind us to never ever make financial predictions – especially about interest rates.

A Wealth of Common Sense blogger Ben Carlson answers the age-old question about investing in stocks at all-time highs:

“You have to get used to dealing with all-time highs. They happen regularly, around 7% of all trading days since 1950. On average, that’s one new high every 14 trading days or so.”

Here’s Ben Carlson again sharing the four types of investing mistakes.

Mark Walhout walks you through the five big decisions that retirees need to think about as they plan out their retirement investment plan. He says, if you get these 5 decisions correct, you will be able to enjoy a virtually stress-free retirement when it comes to your investment portfolio:

Here’s more on the new study that suggests holding 100% global stocks is the way to go through life, even in retirement.

Finally, Andrew Hallam says you could be making this $1M mistake without realizing it.

Thanks very much for your readership and engagement this year, and all the best to you this holiday season!

One question I’m often asked about my investment approach is when it makes sense to switch my portfolio from 100% global equities (represented by Vanguard’s All Equity ETF – VEQT) to something less risky that includes bonds and/or cash.

In other words, does it make sense to switch from VEQT to VGRO to possibly VBAL as you enter retirement?

A traditional rule of thumb for asset allocation is for investors to hold a percentage of equities equal to 100 minus their age. A 60-year-old, therefore, would hold just 40% of their portfolio in equities and 60% in bonds.

More risk-seeking investors might adapt that rule to be 110 or 120 minus their age, but that would still mean holding a maximum of 60% equities at age 60.

Target date funds took this approach and ran with it, creating a diversified one-fund solution designed to automatically decrease its equity exposure as you get closer to retirement.

Take BlackRock’s LifePath Index Funds, made popular in defined contribution pension plans across Canada and the US. Contributors pick a fund that most closely aligns with their desired retirement date and over time the fund adjusts its asset mix from aggressive to balanced to conservative.

Indeed, the LifePath Index 2025 Fund is made up of 40% global equities and 60% bonds.

Self-directed investors in Canada don’t generally have access to purchase target date funds, and so the closest approximation would be to invest in VEQT in their 30s, sell it and buy VGRO in their 40s, sell it and buy VBAL in their 50s, and sell it and buy VCNS in their 60s. Something like that, anyway.

Scott Cederburg, an associate professor of finance at University of Arizona, challenges this traditional thinking around “lifecycle investing” with his latest research. He tried to determine the optimal asset allocation to achieve the highest retirement consumption and bequests.

“An optimal lifetime allocation of 33% domestic stocks, 67% international stocks, 0% bonds, and 0% bills vastly outperforms age-based, stock-bond strategies in building wealth, supporting retirement consumption, preserving capital, and generating bequests.”

Cederburg compared this all-equity strategy to a two benchmarks: a balanced strategy with 60% domestic stocks and 40% bonds and a target-date fund that employs an age-based, stock-bond strategy.

Interestingly, a couple using the balanced strategy must save 19.3% of income (i.e., nearly twice as much) to achieve the same retirement and final estate outcome as a couple investing in the optimal strategy and saving just 10% of income.

The couple investing in the target date fund must save 16.1% (i.e., 61% more) to match the expected utility of the optimal all-equity strategy.

Vanguard’s All Equity ETF (VEQT) is the closest approximation we can get to Cederburg’s optimal lifetime allocation.

VEQT holds:

• Canadian equities = 30%
• US equities = 46%
• International equities = 17%
• Emerging market equities = 7%

My takeaway from this research is to not only buy and hold VEQT throughout my working years but also to maintain that 100% global equity allocation all throughout retirement. It’s to literally VEQT and chill, for life.

By doing so I can either get away with saving less throughout my working years to achieve the same retirement outcome as a more conservative investor, or I can get away with spending more in retirement and/or giving more away to my kids if I maintain a similar savings rate.

But I understand the psychological challenge of holding 100% stocks throughout retirement. We don’t have any pension income, so we’ll rely on significant withdrawals from our various accounts throughout retirement. That won’t feel good in the years that stocks are down.

But the Cederburg research takes those poor performing years into account, and the all-equity investors for life are still better off if they can keep their emotions in check.

For those who can’t, I still recommend a two-fund solution where you continue to hold the same risk appropriate asset allocation fund with 90% of your retirement assets, but just add a 10% allocation to a high interest savings ETF to meet your withdrawal needs. This “bucket” approach can typically cover 1-3 years’ worth of expected withdrawals in retirement.

After all, the best investing approach is going to be the one you can stick with for the long-term.

Here’s Ben Felix with a closer look at why it might be time to rethink lifecycle asset allocation:

This Week’s Recap:

Last week I explained when it makes sense to hire a full service financial advisor, even as a backup plan for DIY investors.

From the archives: building if/then statements into your financial plan.

Promo of the Week:

I got the call from Wealthsimple saying that they’re finally rolling out self-directed corporate accounts next week! I’ve got an appointment set-up with a “gold glove” team member to assist with the transfer of our existing corporate investing account from Questrade (a transfer that I’m perfectly capable of doing on my own, mind you, but the account type still does not appear to be available to open online so perhaps some extra handholding is still required).

In any case, the timing is great because we’re moving just under $500,000 over to Wealthsimple, which will qualify me for an iPhone 16 Pro or a MacBook Pro with M4 chip. Merry Christmas to me!

There’s still time to register for this promotion (until December 13th) and by registering you’ll have 30 days to deposit or transfer $100,000 or more over to Wealthsimple.

Open a Wealthsimple account here.

Once the corporate account is transferred I’ll have eliminated Questrade from our lives and just have an outstanding RESP at TD Direct Investing left to manage. Incidentally, self-directed RESPs are still on the roadmap for Wealthsimple and should be available towards the end of Q1 2025 (so I’m told).

Weekend Reading:

A deep dive into the world of investing with Ben Felix and David Chilton on The Wealthy Barber Podcast. What, you didn’t know The Wealthy Barber is back putting out personal finance content? Subscribe to his newsletter here.

Wealthy older investors with cognitive decline risk losing money. It’s one reason you need a Trusted Contact Person (Globe and Mail subs):

“A recent study suggests that how well we perceive our own cognitive decline can have a huge impact on our retirement success. It also found that the financial losses that can result from being unaware of cognitive decline are most felt by wealthier investors who are active in the stock market.”

Why John Bogle was wrong about expected future returns and what it means for young investors.

What you’re getting wrong about dividend investing – a look at the pros and cons of this popular income investing strategy:

• Con:

“What investors don’t realize is that stock prices do adjust for those dividends that are paid. I might have a full-size bar and a bite-size, but my full-size bar has shrunk just a little bit and I have the same amount of chocolate as before. So, you and I have the same amount of chocolate, but my fallacy is that I’ve got a little piece that you don’t have, so I somehow have more.”

• Pro:

“You always have this option to create income by selling shares of stocks that you own. But that creates a whole other set of questions: Which shares do you sell from your portfolio? Then do you have subsequent decision regret because, “Oh, I sold those shares and now those shares have gone up.” And I’m not suggesting in any way that you settle for a suboptimal strategy or anything like that, but simply saying from a psychological standpoint: Dividend investors don’t face those questions because they are receiving that regular income from their portfolio without having to sell shares.”

The Ontario Securities Commission (OSC) and the Canadian Investment Regulation Organization (CIRO) are undertaking a joint review of sales practices in bank branches amid worries about “potential investor harm due to alleged high-pressure sales practices for mutual funds at some Canadian banks.”

Finally, congratulations to Nick Maggiulli on getting engaged – and here’s his excellent take on things you can’t buy.

Have a great weekend, everyone!

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!