All posts by Financial Independence Hub

What if you run out of life? Save-Spend balance

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Mrs. T and I went on an Alaska cruise years ago, before kids and had a great time.

By Bob Lai, Tawcan

Special to Financial Independence Hub

Let’s be honest here, inflation is real. Very real! Despite being as frugal and careful with our expenses as possible, we are seeing an increase in our living expenses; arguably, just like everyone else.

Unfortunately, many of these expenses are completely outside of our control …

  • We were just informed by the city that our property tax increased by 11.5% this year
  • Our monthly equalized Fortis-BC payment increased by 20% due to natural gas rate adjustments
  • Gas prices recently hit over $2 per litre
  • Groceries cost way more now. I mean, a bag of Hardbite chips is over $5, and avocado costs $2 at regular price? What is this, highway robbery?

Let’s not forget the rising interest rates, leading to higher mortgage payments.

And those are just core expenses. Now if we consider discretionary expenses as well …

  • It’s not unusual to see hotels at over $250 per night, or even over $300 and even $400! In fact, recently a lawyer complained about the hotel prices in Vancouver. And is not alone!
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  • Staying at an Airbnb is just as costly and sometimes it costs even more than staying at a regular hoteltweet 2
  • Airfares are far more expensive than pre-COVID. Good luck finding tickets to Europe for under $1,000 per person.
  • Dining out is more expensive. A bowl of ramen costs close to $20 with taxes and tips added. We spent over $120 for the four of us dining out at a local White Spot last month, and we only had burgers, a couple of milkshakes, and a dessert to share.

You get the picture. At this point, I wouldn’t be surprised that our 2023 annual expenses will be considerably higher than the previous years.

Feeling frustrated with our expenses

The other day I was looking at our budget/expense tracking spreadsheet. To my horror, I noticed that we have been overspending in our Play account by a significant margin. To be more specific, we have dined out far more so far in 2023 than in other years. We have had three months where we spent over $1,000 on dining out! (On average, we usually spend around $350 on dining out per month)

While I know we’ve spent big money on a few occasions, like Kid T2.0’s birthday dinner with 15 people, a big dim sum lunch with 9 people, dinners a few times in Whistler with Mrs. T’s family, Mrs. T’s birthday lunch with 11 people, and celebrating our wedding anniversary, I was surprised to see that we spent over $1,000 on dining out for May.

Sure, we ate out multiple times during our recent 4-day trip in Calgary, but that was around $500 in total. I couldn’t explain how we spent the other $500.

I was frustrated and bummed out about spending so much money dining out yet again. For the life of me, I couldn’t figure out how we spent the other $500. I did recall having takeout sushi for about $120 but I couldn’t think of other dining-out occasions.

After going through the credit-card statements and spreadsheet, I realized we have had many smaller dining out expenses. $20 here and there, $30 here and there, and the amount quickly added up.

During this frustrated & annoyed state, the only thing I could think of was that we needed to take some extreme action.

“No dining out or take-outs for June!” I declared to Mrs. T.

“And what do you plan to spend our money on?” Mrs. T asked.

I couldn’t answer her question at all. All I could think of is that we need to reduce our spending, so we can save more. I think deep inside I was worried that we’d run out of money because of the increase in our overall expenses.

Even with me writing about having a save-spend balance (i.e. spending money to enjoy the present moment and saving money for the future), all I could think of are…

Save! Save! SAVE!

Unfortunately, my save, save, save, and save some more mentality was creeping in very quickly.

What the heck is going on here? Continue Reading…

Contradictory Retirement Plans

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By Michael J. Wiener

Special to Financial Independence Hub

I get a lot of friends and family asking for help figuring out their retirement finances when they’re just a few years from retiring.  These discussions follow a common pattern: people say they want to spend more in their 60s while they’re still able to enjoy new experiences, but they make plans that involve spending less in their 60s than they will have available in their 70s and beyond.  They resist a simple idea even after I show them how much more they could be spending early on.

I’ll illustrate what’s going on with an example that borrows from some of the real cases I’ve helped with.

Meet Dan

Dan is a single guy about to retire at 60.  Here are his relevant financial details:

TFSA: $200,000
RRSP: $300,000
Pension: $4000/month indexed to inflation + $800/month bridge until he is 65
CPP: entitled to 90% of the maximum amount ($826 at 60, $1290 at 65, $1832 at 70)
OAS: entitled to the full amount ($740 at 65, $1006 at 70, 10% increase at 75)

Dan tried to work out what to do on his own initially.  His thinking was mostly short term.  To compensate for his drop in income when he retires, he would take his CPP right away, and take his OAS at 65.  He wants some money to do some traveling over the next decade, and his work pension isn’t enough.

Here’s a chart of Dan’s inflation-adjusted income based on these plans.  Note that in nominal terms, his income will go up with inflation each year, but we show it in constant 2025 dollars.

The first thing to notice is that Dan hasn’t included his RRSP or TFSA in these plans.  He didn’t really think about them; he just assumes that they are for “later.”  By default, Dan will have to convert his RRSP to a RRIF when he’s 71, and will have to start drawing from the RRIF when he’s 72.  Let’s add in Dan’s RRIF income, assuming conservatively that his RRSP/RRIF will earn 2% above inflation.

We see now that contrary to Dan’s stated goal of having more income for traveling in his 60s, he’s actually planning to live small in his 60s.  This is the point where I suggest starting to draw from his RRSP/RRIF right from the start of retirement.

Immediately, we run into a problem.  Dan doesn’t think of himself as the sort of person who spends his RRSP.  That’s for old people.  He doesn’t feel very old.  He doesn’t like this idea.  He’s still the kind of person who saves money.

Not everyone can get past this point.  Some live small for years to give themselves a large income in their 70s and beyond.  Let’s hope that Dan can get used to the idea of starting to live now.  Here’s a plan that smooths out Dan’s RRSP/RRIF income: Continue Reading…

How to turn a Little Money into a Lot of Money

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Alain Guillot in Cascais, Portugal, a rich neighborhood.

By Alain Guillot

Special to Financial Independence Hub

Learning how you can turn a little bit of money into a lot of money is a great way to get your finances on the right track. After all, this can help with everything from paying off debt and credit card bills to growing your savings.

With that in mind, here are some top tips that you can use to do exactly that!

 

Add money to your savings immediately after getting paid

Don’t wait until the end of the month (i.e., when you have spent all your money) to think about transferring cash into your savings account. Instead, transfer a pre-designated amount of money into your savings account each payday. This way, you are reducing the chances of spending money you’d originally wanted to save!

By regularly adding to your savings account, you put yourself in the best possible position to improve your finances in the long term. When setting up a savings account, make sure you choose one with a great interest rate!

Start investing

Whether you’re going to buy and sell Cyrpto currency or going down a more traditional investment pathway, investing money is a great way to turn a little cash into a lot of cash. This can also be a great way to earn passive income, as a lot of the work is out of your hands once you’ve made the initial investment.

Of course, you should make sure to do plenty of research ahead of time so that you are protecting your best interests as much as possible. Remember, while no investments are risk-free, some are more stable than others, and you should not invest money you cannot afford to lose.

Turn your hobby into a side-hustle

Turning your hobby into a side hustle can also help you to turn your finances around, and could even become a real money-maker over time. While it may not seem that way to begin with, you can monetise just about every hobby. Whether you’re a painter or a writer, you simply need to be willing to put the work in to refine your craft and get your name out there. Continue Reading…

AI Bubble Worries? Read This

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By Ariel Liang, BMO Global Asset Management

(Sponsor Blog)

If you’ve ever felt nervous about the stock market ups and downs, you’re not alone. Most investors want their money to grow steadily without the wild swings: especially if you’re thinking about retirement. Lately, worries about an AI bubble and changing interest rates have shown just how quickly things can get unpredictable.

That’s why building the right portfolio is important to help you stay calm and stay invested, even when markets get a little rocky.

Low-volatility investing, and specifically using funds such as BMO Low Volatility Canadian Equity ETF (ZLB) and BMO Low Volatility US Equity ETF (ZLU), are designed to give you a smoother experience. These strategies help you stay invested with confidence no matter what the markets are doing.

What does Low Volatility mean for your Investments? 

Imagine low-volatility investing as playing it smart in baseball: not trying for risky home runs, but focusing on steady singles and doubles. This way, you keep making progress, scoring runs over time, and avoiding big losses. It’s all about reliable growth, not wild swings that could set you back.

ZLB and ZLU are designed to help your investments stay on track, even when markets get unpredictable. They pick companies that don’t jump around as much as the overall market: think of them as the steady players on the team. By steering clear of those big ups and downs, your money can grow more smoothly, and you can benefit from compounding over time.

Building a Smoother Ride with Low volatility

ZLB and ZLU focus on defensive sectors like utilities, consumer staples, and healthcare. These ETFs can act as financial shock absorbers, reducing risk from market swings and limiting exposure to more volatile sectors like technology. Position and sector caps further protect against over-concentration, while the selection of low-beta1 companies means the portfolio is designed to cushion losses during downturns.

The disciplined construction of ZLB and ZLU helps you stay on course regardless of market conditions. This approach isn’t about chasing the latest trends but about building steady, long-term growth through stability and diversification, letting compounding work its magic over time.

Low volatility cushioned the blow with stability

Chart 1

Note: Data as of September 30, 2025. Source: BMO AM Inc. Bloomberg Sector allocation subject to change without notice.  Chart compares sector allocations of BMO Low Volatility Canadian Equity ETF and S&P/TSX Composite Index as of September 30, 2025, and shows Consumer Staples outperforming Energy in Canada from 2011 to 2024.

Common Myth: Low-Volatility ETFs reduce Return

Low volatility doesn’t mean you have to settle for lower returns. In fact, Canadian low-volatility investments have consistently outpaced the S&P/TSX Capped Composite Index since inception, offering strong returns while helping to reduce risk.

Chart 2

Note: Data as of September 30, 2025. Source: BMO AM Inc. Bloomberg Sector allocation subject to change without notice.  Chart compares sector allocations of BMO Low Volatility US Equity ETF and S&P 500 Index as of September 30, 2025, and shows Technology outperforming Utilities from 2013 to 2025.

The U.S. market is highly concentrated in the Magnificent 72 and generally information. Because ZLU invests more in stable sectors like utilities and healthcare, it provides steady, long-term returns, though it might not keep up with the S&P 500 when the market is booming, as it has more recently with the growth dominated in the Tech sector. Even with this more cautious approach, ZLU still delivers strong annual returns for investors by emphasizing stability and value rather than jumping into the latest tech trends.

Balanced Growth, Less Stress: Blending ETFs for Smoother Returns

If you want steady growth for your portfolio without taking on too much risk, you may not have to choose between safety and strong returns. By combining BMO Low Volatility US Equity ETF (ZLU) with BMO NASDAQ 100 Equity Index ETF (ZNQ), you can get the best of both worlds: reliable stability and exciting growth. This mix has delivered higher returns and lower risk than simply investing in BMO S&P 500 Index ETF ( ZSP) as shown in Chart 3. Continue Reading…

Generational Wealth in Canada: Tailoring Financial Advice for every Generation

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Adobe Stock

By Kevin Anseeuw, CFP  

Special to Financial Independence Hub

Canada is about to experience an unprecedented transfer of wealth across generations that will transform household balance sheets, life plans, and the role of financial advisors. Experts estimate that roughly $1 trillion will transfer between generations over the next decade, and this shift is discussed weekly.

As someone who advises families across multiple generations, I see three key implications. First, the amount of capital shifting hands is significant, but equally important are the who and the how: younger recipients seek different things than their parents. Second, the timing and structure of transfers (gifts made during life versus testamentary bequests) are driven by family dynamics as much as tax considerations. Third, the industry itself must modernize to stay relevant: advice now goes beyond portfolio selection to include income architecture, behavioral coaching, private-market access, values alignment, and digital delivery. The landscape is changing more quickly than I have experienced in the past 25 years.

Understanding what each generation needs and why they want it is the foundation for giving meaningful advice.

Baby Boomers: stewardship, income, and legacy

Baby Boomers still hold a disproportionate share of wealth in Canada, and their priorities have shifted from accumulation to preservation, predictable income, and legacy planning. The questions they ask are practical and existential: Will I outlive my money? How do I leave a legacy without causing family conflicts? How do taxes and health-care risks affect my plan? In practice, this means structuring retirement income to address longevity risk, incorporating tax-efficient solutions, and creating estate plans that minimize friction at death.

At Trans Canada Wealth, an advisory group of Harbourfront Wealth’s independent platform, we integrate investment strategies with our in-house CPA tax specialist and estate planning expertise so clients can see the full chain of outcomes, cash flow, taxes, and transfer, rather than isolated portfolio returns. This comprehensive approach is what gives Boomers the peace of mind they value most. We walk clients through our “Atlas” system to ensure they have peace of mind that no stone has been left unturned and that they have a structure and plan that works for their unique situation.

 Gen X: the bridge generation demanding clarity

Generation X is in the middle, often financially squeezed, supporting aging parents while raising children, yet they are likely to be the most active people in managing wealth transfers. Many Gen X clients will inherit significant wealth but usually don’t plan for it; instead, they seek control, transparency, and practical plans that address debt today, catch up on retirement savings, and fund education. Unlike parents of previous generations, they have a stronger desire to help their children buy their first home and ensure they start their financial journey on solid footing.

An important role for advisors is facilitation: helping families have clear conversations about intentions and timing. We frequently counsel Boomers on the merits of lifetime gifts versus estate transfers because earlier transfers can increase intergenerational utility and allow parents to witness the benefits. Equally, Gen X wants straightforward, independent advice that filters noise, ensuring one poor decision doesn’t derail a 20- or 30-year plan.

Millennials: aligning performance with purpose

Millennials prioritize differently when they invest. While performance remains important, purpose and fees are now key factors. Studies and industry reports reveal that younger investors are highly interested in sustainable and impact strategies; they seek access to alternative investments and ESG-informed allocations as part of a diversified portfolio.

For advisors, this means providing institutional-grade access and clear discussions about costs alongside values-based solutions. Millennials are well-informed but have limited time; they expect advisors to add value by curating investment opportunities, conducting thorough due diligence, and explaining trade-offs: such as how an ESG focus might affect risk/return, liquidity, and fees. When advisors excel at this, they not only retain inherited capital but also build lifelong relationships.

Gen Z: digital-first, early adopters and learners

Gen Z approaches wealth conversations with a different relationship to money. They are digital natives, comfortable transacting and learning online, and many start their investing journey earlier than previous generations. Research shows a significant rise in early retail investing and financial literacy among Gen Z, and their expectations for digital access, education, and transparency are high. Continue Reading…