The Money Scope Podcast

In this episode of The Money Scope Podcast, Benjamin Felix and Dr. Mark Soth (The Loonie Doctor) take a deep dive into the complex world of pensions for incorporated professionals. They unpack the pros and cons of the various pension structures available in Canada—from RRSPs and IPPs to MEPPs—and explain how these compare in terms of tax treatment, investment flexibility, creditor protection, and long-term retirement security. Through their discussion, Ben and Mark illuminate how pensions really work for business owners who are both employer and employee, why "pension envy" can cloud rational decisions, and how evidence and math—not marketing—should guide your retirement planning. They also explore the behavioral and psychological side of pensions: why risk pooling matters, how defined benefit plans manage longevity and sequence risk, and when the added complexity of an IPP or MEPP might actually be worth it. This is one of the most comprehensive overviews of pensions you'll hear—combining research, real-world application, and practical insight for anyone trying to optimize their corporate retirement strategy. Key Points From This Episode: Why pensions matter for Canadian business owners—and why this episode took a while to make. (0:01:20) Canada's three-pillar retirement system: public pensions, employer-sponsored pensions, and personal savings. (0:02:16) The pension landscape: RRSPs, individual pension plans (IPPs), and multi-employer pension plans (MEPPs). (0:03:19) Defined contribution (DC) vs. defined benefit (DB) pensions—who bears the investment risk. (0:06:24) How MEPPs like Medicus and HOOPP allow incorporated professionals to join group plans. (0:08:54) The truth behind branded pension products—why the legislative structure is what really matters. (0:10:20) Pension envy and the economics of compensation: who actually pays for "employer contributions." (0:12:27) Comparing RRSPs and pensions: tax deferral, limits, and liquidity differences. (0:14:55) RRSP flexibility vs. pension restrictions in withdrawals and contributions. (0:17:54) Defined benefit vs. defined contribution pensions—how risk and control shift between employer and employee. (0:22:57) Why small business owners often prefer IPPs after age 40. (0:25:20) What happens to pensions in retirement: RRSPs → RRIFs, pensions → LIRAs/LIFs. (0:29:06) Group pensions vs. individual pensions: pooling risks and costs. (0:31:34) Do big pensions really have investment advantages? A data-driven look at costs and active management. (0:33:18) Why institutional investors often underperform passive portfolios—even with elite managers. (0:39:24) CPP Investments as a case study: $700B in assets, billions in fees, and lagging benchmarks. (0:42:24) Evaluating pensions on liabilities, not just returns—what "immunizing liabilities" means. (0:45:45) Sequence-of-returns and longevity risk: why pooling helps retirees sleep better. (0:48:46) Behavioral finance and the comfort of cash buffers in retirement planning. (0:53:48) The trade-offs of pooling mortality risk—winners, losers, and stability. (0:57:56) Individual Pension Plans (IPPs): what they are, how they're structured, and when they make sense. (1:02:10) Contribution limits and past-service buybacks—why IPPs become powerful after age 40. (1:05:40) How spouses can be included in an IPP—and the nuances of spousal RRSPs. (1:09:39) The importance of actuarial valuations and how contribution "holidays" or "top-ups" work. (1:11:27) IPPs in practice: shifting corporate pre-tax dollars into a tax-sheltered pension efficiently. (1:14:38) Links From Today's Episode: Medicus Pension Plan — https://www.medicuspensionplan.com/ HOOPP (Healthcare of Ontario Pension Plan) — https://hoopp.com/ Canada Pension Plan Investments — https://www.cppinvestments.com/ PWL Capital — https://pwlcapital.com/ Dr. Mark Soth (The Loonie Doctor) — https://www.looniedoctor.ca/ Dr. Mark on X — https://x.com/LoonieDoctor Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ Benjamin on X — https://x.com/benjaminwfelix Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/ Money Scope on YouTube — https://www.youtube.com/@MoneyScopePodcast

Today's episode comes to you live from the 22nd Institute for Advanced Financial (IAFP) Planning Conference in Gatineau, Quebec, recorded in front of an audience of professional financial planners. For this special episode, we cover key planning issues for incorporated business owners and walk through the lifecycle of a business owner or professional who eventually chooses to incorporate. We discuss crucial financial decisions they face along the way, particularly as corporate assets begin to grow, and wrap up with a Q&A covering topics like tax brackets, salary offsets, and more. Our conversation also tackles common misconceptions and explains strategies for income smoothing, tax deferral, and managing 'corporate bloat.' With today's conference theme inspired by Star Wars, expect plenty of niche references along the way! Key Points From This Episode: (0:00:17) Introducing the topics that will be covered in today's special live episode at the 22nd Institute for Advanced Financial Planning Conference in Gatineau, Quebec. (0:03:57) Guidelines and benefits of becoming incorporated, including income smoothing. (0:06:49) Advice for navigating taxes when becoming incorporated. (0:08:42) Common misconceptions that people have regarding getting incorporated. (0:13:53) How to capitalize on the benefits of tax deferral in a corporation. (0:16:24) Key insights on tax integration and eligible dividends. (0:20:07) Achieving optimal compensation and how it solves the problem of "corporate bloat." (0:25:08) Ways to treat and prevent corporate bloat. (0:28:47) The math behind Mark and Ben's optimal compensation algorithms. (0:32:08) Advantages of planning over products for solving optimal compensation. (0:35:10) Audience questions and answers, from tax brackets to Star Wars. Links From Today's Episode: Institute for Advanced Financial Planning Conference — https://iafpsymposium.ca/Salary and Dividend Optimizer Calculator — https://www.looniedoctor.ca/ccpc-income-disperser/ 'Dividends To Maximize Your Corporate & Personal Cash Flow' — https://www.looniedoctor.ca/2023/06/30/pay-dividends-corporation/#algorithm Dr. Mark Soth (The Loonie Doctor) — https://www.looniedoctor.ca/ Dr. Mark on X — https://x.com/LoonieDoctor Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ Benjamin on X — https://x.com/benjaminwfelix Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Business owners often have reservations about paying into the Canada Pension Plan (CPP). Many think they're getting a bad deal by paying both the employer and the employee portion of the contribution, but can they do better by paying themselves dividends? In the last two episodes, we did an extensive review of how you can compensate yourself as a business owner through a private corporation. Today, we take a deeper look at two of the payroll expense aspects that often come up in discussions with financial planners: CPP and Employment Insurance (EI). If you are self-employed, there are a few things you need to consider, including your decision to pay yourself a salary or take dividends. We discuss that in this episode, as well as whether self-employed business owners are really getting the short end of the stick when it comes to CPP and EI contributions. Tuning in today, you'll learn about some of the unique features of CPP, how it's calculated, and the three major risks it offers protection against, plus we walk you through various models to illustrate the consequences of paying yourself dividends versus salary. We also delve into EI for self-employed business owners, the special benefits thereof, models that consider different amounts of income and consumption, and much more. For a comprehensive guide to CPP and EI for self-employed business owners, don't miss this episode of Money Scope with Benjamin Felix and Dr. Mark Soth! Key Points From This Episode: (0:00:20) Reasons that today's topic on CPP and EI is so complex. (0:04:04) How CPP is calculated: an overview of what you pay and what you receive. (0:05:59) Whether or not business owners get a bad deal with CPP. (0:11:34) Viewing CPP as a tax and when paying dividends versus salary is favourable. (0:17:33) The unique features and benefits of CPP and the risk protection it offers. (0:25:15) Assessing the value creation and performance of a pension fund like CPP. (0:30:42) Crunching numbers to calculate a combined CPP benefit for a household. (0:33:52) Making the comparison between paying CPP and investing in a corporation. (0:37:23) Tax planning consequences of paying dividends to avoid paying into CPP. (0:41:16) Various models to illustrate many of the scenarios we covered in this episode. (0:48:36) Why paying into CPP and dying early results in a bad financial outcome. (0:51:36) Comparing CPP with other corporate and personal investment options. (0:59:54) Key takeaways on CPP; a chance to buy into a truly inflation-indexed annuity. (1:01:48) An overview of employment insurance (EI) for self-employed individuals. (1:05:38) EI special benefits that self-employed business owners can access. (1:13:55) Insight into EI for incorporated versus non-incorporated business owners. (1:23:43) Our post-op debrief of today's episode on CPP and EI! Links From Today's Episode: Dr. Mark Soth (The Loonie Doctor) — looniedoctor.ca Dr. Mark on X — twitter.com/LoonieDoctor Benjamin Felix — pwlcapital.com/author/benjamin-felix Benjamin on X — twitter.com/benjaminwfelix Benjamin on LinkedIn — inkedin.com/in/benjaminwfelix Aravind Sithamparapillai — ironwoodcanada.com/aravind-sithamparapillai Sebastien Betermier — sbetermier.com Papers Mentioned: 'Five Examples of Direct Value Creation and Capture in the Pension Fund Industry' – papers.ssrn.com/sol3/papers.cfm?abstract_id=4616266

Whether you're self-employed or you own a small business, there are many nuances to how you can pay yourself from your business. Our episode today hones in on how we pay ourselves personally from a corporation (along with other key employees, including spouses) and the many intricacies you need to understand when making decisions about this process. While today's episode may be our most complex and ambitious one to date, we hope it will serve as a useful resource for helping you get the most out of your business. Tuning in, you'll learn about the benefits and drawbacks of paying yourself with a salary versus dividends, how to optimize your meetings with accountants and financial planners, and much more. We get into key topics such as employee insurance (EI) in different contexts, the benefits of the Canada Pension Plan (CPP), why you need to put together an income smoothing plan, and how to use shareholder loans without consequential missteps. The final portion of our show is dedicated to income splitting, the best ways to go about it, and how to make sure you adhere to Canadian Revenue Agency (CRA) requirements. Today's episode covers a lot of ground and serves as a useful reference for listeners to return to. Join us today for this expansive conversation and arm yourself with the knowledge you need to get the most out of your corporation! Key Points From This Episode: (0:02:42) Important disclaimers and exceptions concerning today's topics. (0:05:37) Common questions on taxation of active business income, personal income, the nuances of tax integration, business expenses, exemptions, and deductibles. (0:19:32) A breakdown of how net active income is taxed, what to do with retained earnings, and navigating the dividend gross-up system. (0:28:57) Planning for retirement, asset allocation, and determining your time horizon. (0:34:44) An overview of General Rate Income Pool (GRIP) as a notional account for tax tracking purposes and an example of how GRIP works with active income. (0:38:03) Looking at tax rates and tax integration as you move through different tax brackets and how rules vary between various jurisdictions in Canada. (0:56:02) Unpacking what you need to know when it comes to paying yourself a salary and paying employees (including spouses). (01:01:08) Employee Insurance (EI) in different contexts, the distinctions between arm's length and non-arm's length employees, and navigating Canada Pension Plan (CPP) payments. (01:05:18) The many benefits of the Canada Pension Plan (CPP), and why the reservations people have due to it being government-mandated is not unhelpful in this instance. (01:08:20) Key insights on the Canada employment tax credit when considering the salary versus dividend debate, and how salaries can create other financial planning benefits. (01:16:38) Putting together an income smoothing plan, how to keep yourself in a lower tax bracket over your lifetime, and how to work with a financial planner. (01:25:17) A Breakdown of shareholder loans, how they work, the tax risks involved, and the best ways to use them. (01:27:32) Other ways to get money out of your corporation efficiently, like with your capital dividend account (CDA), and optimal ways to use your CDA. (01:34:25) The concept of income splitting, its benefits, the best strategies for going about this, and how to adhere to Canadian Revenue Agency (CRA) requirements. (01:45:17) A recap of what we covered today and what we have coming up next time. Links From Today's Episode: CRA Interpret Bulletins - https://www.canada.ca/en/revenue-agency/services/forms-publications/current-income-tax-interpretation-bulletins.html Dr. Mark Soth's Calculators — https://www.looniedoctor.ca/canadian-financial-calculators/ Dr. Mark Soth (The Loonie Doctor) — https://www.looniedoctor.ca/ Dr. Mark on X — https://twitter.com/LoonieDoctor Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ Benjamin on X — https://twitter.com/benjaminwfelix Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Accountants and financial advisors offer excellent professional support, but it's also important to keep yourself informed and understand key tax implications when it comes to managing your corporate account. In today's episode, we take a closer look at the type of information you should arm yourself with to help you optimize your tax planning and manage your corporate investments efficiently. Tuning in, you'll learn why personal investing can often be surprisingly tax-efficient, why the biggest challenge is moving money out of the corporation into your personal accounts in a tax-efficient way, and why the best way to achieve this is with a CDA. We break down key aspects of tax drag and tax deferral in corporate investments and what you need to know about tax planning for a corporate account. Our conversation also covers how to use ETFs and corporate class funds for tax deferral within a corporation, why spending and giving are important financial skills that you should practice, how to be a good steward of your wealth, plus a whole lot more. For all the important details on tax planning and how to manage your corporate investments, be sure to tune in for this informative conversation! Key Points From This Episode: (0:01:27) Managing investments with accountants and financial advisors, keeping yourself informed, and the missteps Ben has seen when onboarding new clients. (0:04:21) The major buying power that CDAs represent. (0:05:34) Taxes, investing, and prioritizing a diversified executable investment strategy that suits your goals and risk tolerance. (0:07:43) An overview of tax drag with corporate investing. (0:12:41) The active-passive income limit problem and how to avoid it. (0:14:25) A rundown of corporate tax deferral on investments. (0:19:42) Relevant details on tax planning for a corporate account. (0:24:31) Navigating more complex products and strategies, like insurance. (0:34:09) How to use ETFs and corporate class funds for tax deferral within a corporation. (0:41:19) Asset allocation, location, managing risk, and a reminder to be careful that the downsides don't exceed your tax savings. (0:44:08) Advice for avoiding inefficiencies in corporate investing when you have a high income and don't spend much personally. (0:46:10) Why spending and giving are important financial skills and why you should prioritize being a good steward of your wealth. Links From Today's Episode: Dr. Mark Soth (The Loonie Doctor) — https://www.looniedoctor.ca/ Dr. Mark on X — https://twitter.com/LoonieDoctor Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ Benjamin on X — https://twitter.com/benjaminwfelix Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/ HXS ETF vs Conventional S&P 500 ETFs in a Corporation HXDM ETF For International Exposure in a Corporate Account HXCN vs ZCN Tax Efficiency in a Private Corporation Corporate Class Bond ETF (HBB) in a Private Corporation

The overarching theme of today's conversation revolves around prudent financial decision-making, including tax-efficient investing, risk assessment, and leveraging home equity for investment purposes. This acts as supplementary material for the main episode, where we take a deep dive into the nuances of tax. Join us as we look at taxation and income through the lens of common scenarios that often lead people to make poor decisions with their investments. We uncover the importance of structuring investment portfolios with tax implications in mind and venture into the realm of corporate-class bond ETFs, assessing their potential benefits and complexities. You'll gain insight into the free dividends fallacy and the benefits of high dividend yield stocks. We also unravel the strategy of leveraging home equity to defer tax and share our personal experiences and insights, along with essential criteria to determine your risk profile. Tune in as we turn dollars into sense and pave the road to a prosperous financial future! Key Points From This Episode: (0:01:32) Optimizing investment portfolio structure without relying on dividends. (0:03:33) Essential aspects of taxes on capital gains and dividends. (0:06:41) The risks of dividend-chasing strategies. (0:09:56) A case study comparing premium with discount bond tax efficiency. (0:12:26) Practical examples and steps for leveraging discount bonds effectively. (0:19:11) Income after tax between discount and premium bonds. (0:22:52) Using corporate class bond ETFs for tax deferral. (0:25:07) Another case study that demonstrates leveraging home equity to invest. (0:28:15) Risks and complexities of leverage investing. (0:33:32) The value of a clear plan and reasonable expectations regarding your risk profile. (0:36:31) Mark's experience of leverage investing. (0:40:06) How he used leverage investing to reach his financial goals. (0:47:39) Final thoughts and key takeaways. Links From Today's Episode: Rational Reminder Podcast: Professor Samuel Hartzmark — https://rationalreminder.ca/podcast/273 BlackRock — https://www.blackrock.com/ca Horizons ETFs — https://horizonsetfs.com/ Dr. Mark Soth (The Loonie Doctor) — https://www.looniedoctor.ca/ Dr. Mark on X — https://twitter.com/LoonieDoctor Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ Benjamin on X — https://twitter.com/benjaminwfelix Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Today's Case Conference accompanies an episode in which we provide a detailed breakdown of the registered account types available to Canadian investors and how to utilize them. Despite their numerous potential advantages, however, there are still many people who avoid them, primarily because optimizing these can seem too complicated and overwhelming. Our hope is that today's episode will provide you with the confidence and knowledge you need to feel empowered to take the next steps in your investment journey. Tuning in, you'll hear several case studies that address common concerns, like how to avoid having a Retirement Savings Plan (RRSP) that's too big and how to navigate your RRSP and tax-free savings account (TFSA) as a high-income earner. We also get into Registered Education Savings Plans (RESPs), why group RESPs can be so predatory, how to plan your exit from a group RESP if you're already in one, and more. For relatable examples of how to use these accounts, plus the many benefits of diversifying them, listen in today! Key Points From This Episode: (0:00:58) Our first case study concerning a technology company employee with restricted share limits (RSUs) as part of their expected compensation. (0:02:02) Relevance for high-income earners and how to make decisions about RRSPs and TFSAs. (0:05:35) A case study on two physicians with a young child who want to shift their investment plan from a group RESP to an individual RESP. (0:06:59) The complexity of group RESPs, why they're predatory, and how to plan your exit. (0:12:56) Case study three: common fears of a too-big RRSP, especially for those who are incorporated. (0:15:54) How to optimally use your RRSP or Registered Retirement Income Fund (RRIF) when it comes to tax deferral, tax sheltering, and taking dividends out of your corporation. (0:17:45) Controlling the income from a corporation, paying yourself dividends, and how to ensure you aren't penalizing yourself. (0:19:09) Rational Reminder Episode 70 and key takeaways on how to avoid a too-big RRSP. (0:21:10) A rundown of the many benefits of diversifying your accounts. Links From Today's Episode: Money Scope Episode 8 — https://moneyscope.ca/episode-8-canadian-investment-accounts Rational Reminder: Episode 70 — https://rationalreminder.ca/podcast/70 Dr. Mark Soth (The Loonie Doctor) — https://www.looniedoctor.ca/ Dr. Mark on X — https://twitter.com/LoonieDoctor Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ Benjamin on X — https://twitter.com/benjaminwfelix Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

In this special episode of the Money Scope Podcast, we take a break from their regular content to reflect on the journey so far and engage with our audience. As we pause to catch our breath halfway through the planned core curriculum, we discuss the evolution of the podcast, share listener feedback, and offer insights into what lies ahead. We outline topics covered in the initial episodes, ranging from goal setting to investment basics, and highlight the upcoming shift towards more Canadian-focused content. We express gratitude for the enthusiastic response from our audience and discuss the impact the podcast has had on listeners' financial decision-making and life trajectories. We also share excerpts from listener reviews, address mixed opinions on certain aspects of the podcast, unpack the value of research-backed insights tailored to Canadian professionals, and much more. To uncover the future of the podcast and find out how you can help shape it, tune in now! Key Points From This Episode: Introduction and outline of the theme for today's episode. (0:00:17) Feedback, platform features, and engagement from listeners. (0:02:20) The Money Scope Podcast versus Rational Reminder. (0:06:45) Ben responds to feedback regarding his view on dividend investing. (0:07:40) Mark shares his view on dividends and factor-weighted ETFs. (0:09:30) Feedback on the podcast's theme, style, and approach. (0:11:59) Review of the mixed feedback received about the show. (0:14:59) Get a sneak peek of upcoming episodes. (0:17:30) Links From Today's Episode: The Money Scope Podcast — https://moneyscope.ca/ The Money Scope Podcast on YouTube — https://www.youtube.com/@moneyscopepod The Money Scope Podcast on Apple Podcasts — https://podcasts.apple.com/ca/podcast/the-money-scope-podcast/id1721425088 The Money Scope Podcast Email — info@moneyscope.ca Rational Reminder Community — https://community.rationalreminder.ca/ Dr. Mark Soth (The Loonie Doctor) — https://www.looniedoctor.ca/ Dr. Mark on X — https://twitter.com/LoonieDoctor Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ Benjamin on X — https://twitter.com/benjaminwfelix Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Picture your investment portfolio as a carefully crafted puzzle and asset allocation as the key to solving it. It not only helps you navigate the treacherous waters of risk but fine-tunes your investments to harmonize perfectly with your financial dreams. In this episode, we take a deep dive into the art and science of portfolio management. Discover the intricacies of portfolio planning, execution, and maintenance as we dissect this critical aspect of wealth management. We unpack asset allocation with a focus on the stocks-to-bonds ratio, a crucial decision that balances the quest for maximum returns with the need for stability. We uncover the dangers of volatility and behavioural risks and explore strategies to safeguard your financial health. Tuning in, you'll hear how assessing your risk tolerance and automating tasks can lead to a well-crafted portfolio (and why we suggest using a portfolio manager). We also guide you through the maze of asset allocation options and the vital steps for effective portfolio maintenance. Whether you're a seasoned investor or just beginning your financial journey, this episode will equip you with the knowledge you need to navigate the complexities of portfolio management with confidence, so be sure to tune in for expert insights, practical strategies, and actionable advice that will empower you to make informed decisions about your financial health! Key Points From This Episode: (0:03:55) Portfolio planning basics, an overview of risk, and the goal of asset allocation. (0:08:07) Unpacking the concept of 'optimal portfolios' and why it is not achievable. (0:14:13) Essential asset allocation aspects, the role of human capital, and strategies to manage risk. (0:20:41) Individualized job skills and their impact on asset allocation in the broader economy. (0:24:54) How social capital plays into asset allocation from an investment standpoint. (0:28:25) Risk expected return, correlation of assets in a portfolio, and the different types of risk that should be considered. (0:36:03) Using historical returns for forecasting expected returns and the nuanced ways that behaviour drives investment decisions. (1:04:04) Applying asset allocation principles to construct a diversified, market-efficient portfolio (plus some common pitfalls to avoid). (1:19:13) Trade-offs of a less volatile portfolio and a framework for risk tolerance calculation. (1:34:45) Fundamentals of good portfolio maintenance and how to protect your investments. (1:50:36) Navigating portfolio execution errors and the portfolio pyramid. (1:56:32) Closing comments and important takeaways from the episode. Links From Today's Episode: https://moneyscope.ca/2024/02/09/episode-7-portfolio-design-management/ Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ Benjamin on X — https://twitter.com/benjaminwfelix Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/ Dr. Mark Soth (The Loonie Doctor) — https://www.looniedoctor.ca/ Dr. Mark on X — https://twitter.com/LoonieDoctor Rational Reminder Podcast Episode 100: Professor Kenneth French — https://rationalreminder.ca/podcast/100 Rational Reminder Podcast Episode 224: Professor Scott Cederburg — https://rationalreminder.ca/podcast/224 Rational Reminder Podcast Episode 258: Professor Meir Statman — https://rationalreminder.ca/podcast/258 Rational Reminder Podcast Episode 260: Professor James Choi — https://rationalreminder.ca/podcast/260 Rational Reminder Podcast Episode 262: Professor Francisco Gomes — https://rationalreminder.ca/podcast/262 Rational Reminder Podcast Episode 263: A Tribute to Harry Markowitz — https://rationalreminder.ca/podcast/263 Morningstar | 'Mind the Gap' — https://www.morningstar.com/lp/mind-the-gap 'Long-Horizon Losses in Stocks, Bonds, and Bills: Evidence from a Broad Sample of Developed Markets' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3964908 Vanguard Investor Questionnaire — https://investor.vanguard.com/tools-calculators/investor-questionnaire

Today's episode is a colonoMoneyScope as we dig deep into the basics of investment strategy. But we've already laid the foundation (in previous episodes) and the hard work is done, and we are now moving onto a necessary procedure for the preventive care of your investment portfolio. It's important to understand why we invest and why it matters in our lives, why fear and risk are not necessarily bad things, the differences between investing and gambling, and the inherently speculative nature of investments. After that, you'll learn about financial assets, the ins and outs of stocks and bonds, the efficient market hypothesis, and the two risk types that you need to understand before investing. We also discuss diversification, passive investing and active investing, the two key investment vehicles, and everything you need to know about investment costs. With the wealth of information that we cover in this episode, and with far less discomfort than the standard colonoscopy, we deem this colonoMoneyScope operation a resounding success! Key Points From This Episode: (0:03:35) Why we invest; why it's important. (0:07:16) Addressing fear and risk: a prevalent theme throughout the episode. (0:08:40) Investing versus gambling, and why it's important to know the difference. (0:12:59) Why people still choose to gamble even with the high loss probability. (0:15:18) How all investments are speculative by nature, but some more so than others. (0:21:35) Everything you need to know about financial assets. (0:31:09) The ins and outs of stocks and bonds. (0:38:26) Understanding the efficient-market hypothesis. (0:46:18) The two risks that matter for investing, and how diversification fits in. (0:50:35) A brief recap of everything we've covered so far. (0:51:21) Passive investing versus active investing, and how to pick the right fund manager. (1:02:58) Two crucial investment vehicles: mutual funds and exchange-traded funds (ETFs). (1:06:08) Taking a closer look at investment costs. (1:14:15) Our post-colonoMoneyScope briefing. Links From Today's Episode: https://moneyscope.ca/2024/01/26/episode-6-key-investing-concepts/ Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ Benjamin on X — https://twitter.com/benjaminwfelix Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/ PWL Capital — https://www.pwlcapital.com/ Dr. Mark Soth (The Loonie Doctor) — https://www.looniedoctor.ca/ Dr. Mark on X — https://twitter.com/LoonieDoctor Angus Reid Institute | Retirement in Canada — https://angusreid.org/wp-content/uploads/2015/06/2015.05.15-Retirement.pdf 'Individual differences in susceptibility to financial bullshit' — https://www.sciencedirect.com/science/article/pii/S2214635022000193 Meir Statman on LinkedIn — https://www.linkedin.com/in/meir-statman-17967b/ 'Episode 258: Prof. Meir Statman: Financial Decisions for Normal People' — https://rationalreminder.ca/podcast/258 2022 Management Report of Fund Performance — https://www.blackrock.com/ca/investors/en/literature/annual-mrfp/mrfp-xus-en-ca.pdf

Our relationship with money changes throughout our lives. While this journey will vary between individuals, there are broad trends that will apply to many of us. In today's we investigate how to navigate debt, savings, and investing at different stages of our lives and break down how these mechanisms can help you move your economic value through time. From an economic perspective, it makes sense to use debt early in life. But taking on debt can be a scary prospect, and it's important to take into account the emotional weight of debt and how it can negatively impact subjective well-being. Tuning in you'll hear valuable tips on how to approach debt in a constructive way, the distinctions between good and bad debt, and how to ensure financial resilience and cash flow security. We discuss the various approaches one can take to saving and investments and their relationship to risk, before providing a breakdown of the various account types one should consider. Our conversation also unpacks the concept of time horizons, how to balance inflation risks and investment risks, and how taxes factor in when assessing debt. We want to help you build a solid financial platform to launch from. Tune in as we discuss how debt, saving and investing can help you move your lifetime economic value through time and learn how this can empower you to live the life you want, both now and in the future! Key Points From This Episode: (0:01:03) How we typically progress through debt, saving, and investing in our lives. (0:05:54) The drawbacks and benefits of using mental accounting. (0:06:49) Financial wealth over one's life cycle and how it can differ between individuals. (0:08:45) The distinction between good and bad debt, psychologically and economically. (0:10:32) Practical tips for how to think about debt and spending constructively. (0:16:07) The importance of dealing with the emotional weight of debt. (0:21:33) How to ensure financial resilience and cash flow security, different sources of liquidity, and the risks of relying on lines of credit. (0:28:26) The psychological considerations you should take into account with debt and the benefit of having funds designated for certain purposes. (0:31:23) An overview of the relationship between savings, investments, and risk. (0:35:48) What it means to put your money into savings and a breakdown of the different account types to consider. (0:42:11) Our recommendations regarding concerns about CDIC coverage and limits. (0:47:04) Matching the financial instrument and financial product that you use with the account type. (0:50:30) The concept of time horizons and how to balance inflation risks and investment risks. (0:54:10) A rundown of how taxes factor in when assessing debt. (0:59:41) Dealing with the psychological stress of seeing your investment value fluctuate and why most people find a compromise between repaying debt and investing. Links From Today's Episode: Rational Reminder Episode 141: Hal Hershfield — https://rationalreminder.ca/podcast/141 Rational Reminder Episode 256: Prof. Hal Hershfield — https://rationalreminder.ca/podcast/256 Dr. Mark Soth (The Loonie Doctor) — https://www.looniedoctor.ca/ Dr. Mark on X — https://twitter.com/LoonieDoctor Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ Benjamin on X — https://twitter.com/benjaminwfelix Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

We make countless decisions every day, from choosing what we'll have for breakfast to determining whether we have the time to take a break from our busy schedule and go for a walk. Not all decisions require the same amount of effort. And while the big decisions certainly deserve our time and attention, it can be easy to overlook how the small decisions we make every day accumulate and influence our quality of life. In today's episode, we continue our exploration of how to master your wealth and well-being by offering a collection of concrete strategies for planning your life and your finances. Tuning in you'll learn about the small but significant steps you can take to improve both your financial health and your mental health, and how they accumulate to give you greater happiness and improve your quality of life. We unpack popular financial advice, like why you should invest in experiences rather than stuff — and the one exception to this rule — along with more complex ideas, like why spending time in nature is so beneficial for us, and how you can reach a flow state in more areas of your life. Be sure to tune in as we break down our good life principles and help you navigate the many small decisions that can amount to a much greater quality of life! Key Points From This Episode: (0:01:39) Good life principles and actionable strategies for planning your life and finances: how deliberate, small decisions accumulate and influence your quality of life. (0:03:40) Why you should choose experiences over stuff — unless it facilitates experiences. (0:09:11) Tips on maximizing your time and avoiding distractions with the 'times left' exercise and how to pay attention to detail when forecasting future happiness. (0:17:31) The value of reflecting on what you're grateful for and learning to be more mindful of small, everyday joys. (0:19:02) Prioritizing time over money and what prevents people from doing this. (0:21:35) The rule of adaptation and why spending time in nature is so beneficial for us. (0:23:54) What you can do to improve the way you commute. (0:26:36) Limits we have on our time and bundling good habits to be more time efficient. (0:30:27) Finding flow states in your life, your work and at home; how this improves resilience, satisfaction, and happiness. (0:37:20) The importance of relationships and engaging in prosocial behaviours. (0:38:56) Decision policies: what they are, how to set them, and why they're so helpful. (0:41:03) How knowing your values can help you in your decision-making. (0:42:03) Using regret to your advantage, and how to 'satisfice' on small decisions rather than trying to maximize them. (0:47:10) Goal setting, and the satisfaction we get from pursuing goals. (0:48:50) A quick recap of key principles discussed today. Links From Today's Episode: Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ Benjamin on X — https://twitter.com/benjaminwfelix Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/ PWL Capital - https://www.pwlcapital.com/ Dr. Mark Soth (The Loonie Doctor) — https://www.looniedoctor.ca/ Dr. Mark on X — https://twitter.com/LoonieDoctor Money Scope - https://moneyscope.ca/ Give Yourself a Nudge: Helping Smart People Make Smarter Personal and Business Decisions — https://www.amazon.com/Give-Yourself-Nudge-Personal-Decisions/dp/1108715621 Episode 238: Ralph Keeney — https://rationalreminder.ca/podcast/238 Episode 226: Colonel Chris Hadfield — https://rationalreminder.ca/podcast/226 Episode 222: Cassie Holmes — https://rationalreminder.ca/podcast/222 Happier Hour: How to Beat Distraction, Expand Your Time, and Focus on What Matters Most — https://www.cassiemholmes.com/happierhour