All posts by Financial Independence Hub

Looking Back: 2025 Financial Insights Year-end Recap

Posted By |
Canva Custom Creation: Lowrie Financial

By Steve Lowrie, CFA

Special to Financial Independence Hub

As we close out 2025, it’s worth pausing to reflect on the financial principles that matter most. This year, I focused on investment philosophy, retirement planning options, and helping you avoid strategies that look appealing but rarely deliver results.

Below, I’ve grouped this year’s most important insights into themes that matter for your financial future, not because they made headlines, but because they make a difference in real portfolios and real lives.

2025 Financial Insight 1: Focused and Disciplined Investment Philosophy

Measure what actually Matters

Too many investors obsess over beating “the market”; but which market? U.S. stocks like S&P 500? Canadian stocks? The NASDAQ, which is really a proxy for technology stocks? That target keeps shifting based on whatever performed best recently, making it a moving goalpost that has nothing to do with your actual goals.

In Personal Financial Goals vs. Market Benchmarks, I pointed out that your only meaningful benchmark is whether you’re on track to fund the life you’ve planned for. Everything else is just comparison that pulls you off course.

Ask yourself: Am I on track to retire when I want to? Can I fund the experiences that matter most? If the answer is yes, you’re succeeding, regardless of what any index did this quarter.

Don’t bet against the Market

When breaking news hits, it’s tempting to think you can act before the market does. But as I wrote in Betting on the Markets Being Wrong, by the time you hear or read about a news event, it’s safest to assume the market has already priced it in. Every trade has two sides, and the question to ask is: Who is on the other side of mine? In today’s markets, where roughly 80 to 90 per cent of trading is done by institutions with teams of highly skilled analysts and high-powered computers, the odds are that it’s an institution on the other side. That institution, or the person trading on its behalf, must believe they are getting a good price; otherwise, they wouldn’t do the trade. To take this a bit further, you also must ask yourself: What do you know that a professional on the other side of the trade doesn’t know?

Instead of trying to outsmart the market, recognize that prices already reflect available information. Successful investing isn’t about prediction; it’s about discipline.

The Gap between Belief and Action

Perhaps the most troubling revelation of 2025 was detailed in The Financial Philosophy Gap. Research analyzing over 4,000 Canadian financial advisors found they systematically underperformed simple, evidence-based strategies by approximately 3% annually, not because of conflicts of interest, but because of genuinely misguided beliefs about investing.

Even more striking: when these advisors left the industry, they continued making the same mistakes in their personal portfolios. The lesson? Philosophy without consistent execution isn’t really philosophy at all. It’s just expensive intentions.

2025 Financial Insight 2: Planning for your Retirement and Beyond

Three approaches to Retirement Freedom

Retirement at 65 is becoming quaint. In Mini, Semi, or Early Retirement, I explored three very different approaches people are actually taking:

Mini-retirement (a career intermission to travel or recharge) requires dedicated savings but lets you enjoy life while you still have the energy. Semi-retirement (scaling back to part-time work) dramatically reduces the capital you need for full retirement while maintaining purpose and social connection. Early retirement (the complete exit) requires substantially more savings, potentially millions, to fund decades without employment income.

Each path has different financial implications for CPP timing, RRSP withdrawals, and withdrawal rates. The right choice depends on your resources, your lifestyle goals, and what brings meaning to your life.

Passing it on, Thoughtfully

With over $1 trillion expected to transfer from baby boomers to younger generations in Canada, Transferring Wealth to Your Children, Sensibly examined two contrasting approaches: incremental lifetime gifts versus traditional large estate inheritance.

The analysis revealed striking differences. Incremental giving can reduce lifetime taxes significantly and offers the personal reward of seeing your wealth make a difference while you’re here. But it comes with a financial trade-off: in my example, about $1.1 million in today’s dollars compared to maximizing estate value.

The best approach isn’t about the math alone. It’s about aligning your financial decisions with your values, supporting family at meaningful life stages, and creating opportunities for shared experiences and guidance.

2025 Financial Insight 3: Avoiding Investment Traps

The Real Estate Obsession

Canadians love real estate, but in Why Canadians Love Real Estate as an Investment Vehicle, I examined why the numbers often don’t support the emotional attachment.

From 1990 to 2023, average Canadian home prices grew about 6.3% annually. After maintenance, taxes, insurance, and transaction costs (roughly 2% of market value yearly), the net return drops to about 4.5%. Meanwhile, the S&P/TSX Composite returned roughly 8% annually over the same period.

More concerning, cap rates on investment properties have fallen so low that many investors now rely entirely on capital appreciation, not cash flow, to make any sort of positive return. That’s not an investment strategy. It’s speculation.

The DIY Trap

In DIY Investing: Is It Really for You?, I explored why managing your own investments is harder than it looks. Dr. William Bernstein argues that successful DIY investing requires four rare qualities: genuine interest in the process, mathematical skill, strong grasp of financial history, and emotional discipline.

Even if you have all four, most investors still underperform the very investments they hold, not because they pick bad funds, but because they buy when markets feel good and sell when they feel scary. The result is a silent drag on performance from poorly timed decisions. Continue Reading…

Where global market leadership could shift to in 2026 (hint, likely not the U.S.)

Posted By |

 

Franklin Templeton ETFs

By Dina Ting, CFA, Franklin Templeton ETFs

(Sponsor Blog)

Global markets are entering 2026 with widening dispersion, lowering cross-country correlations and a shifting interest-rate landscape that is reshaping relative equity opportunities.

After several years dominated by a narrow group of large-capitalization U.S. names, investors now face a more varied, region-driven market. With policy cycles, earnings paths and structural growth drivers pulling in different directions, we believe broad global diversification — with targeted country tilts — may be key to capturing the next wave of leadership.

Regardless of whether artificial intelligence (AI) enthusiasm proves overdone, the broader U.S. economy is clearly slowing. Sentiment weakened heading into the “Black Friday” sales season, and all three components of The Conference Board’s Expectations Index — business conditions, job prospects and future income — fell in November. As the organization’s chief economist noted, “Mid-2026 expectations for labor market conditions remained decidedly negative, and expectations for increased household incomes shrunk dramatically after six months of strongly positive readings.”

What’s more, many investors continue to have limited exposure to international markets within their portfolios. Single-country exchange-traded funds (ETFs) can help broaden global allocations and add diversification by accessing markets with unique long-term growth characteristics. While the Federal Reserve is easing cautiously, parts of Europe appear closer to stabilizing, with pockets of above-trend momentum emerging. Diverging rate paths are reinforcing this global split. In the United Kingdom, we expect steady Bank of England cuts to relieve consumer pressure while boosting the appeal of high-dividend stocks.

Across Asia, several central banks remain in easing mode. If U.S. growth cools while Asian momentum holds, market leadership could broaden further. In South Korea, even incremental Bank of Korea cuts could lift exporters and tech firms by improving funding conditions and helping fuel the global semiconductor rebound. Meanwhile, some economists expect Brazil’s central bank to trim its current elevated rates, lowering financing costs across banks and consumer sectors. Mexico’s Banxico has already begun easing and may continue if inflation stays contained: supporting both corporate activity and household demand.

Together, we believe these shifts point to a more supportive monetary backdrop in 2026 for investors ready to look beyond the United States.

Recent correlation trends also indicate that markets such as Taiwan, Japan and South Korea have seen their correlations with the S&P 500 Index decline over the past year.

Falling cross-country correlations amplify diversification benefits

Diverging policy paths, currencies and sector exposures are producing more idiosyncratic returns, allowing international allocations to contribute more meaningfully to portfolio resilience.

The United Kingdom offers compelling value, in our analysis. Sticky but moderating inflation and ongoing Bank of England rate cuts support its defensive, income-heavy market. UK-US equity correlation has dropped 57%, falling from roughly 0.30 over three years through October 31, 2025, to 0.13 over one year through the same date: a meaningful shift that enhances the United Kingdom’s diversification role within global portfolios.1

We believe Brazil is positioned as a value and income opportunity supported by commodities, interest‑rate cuts and fiscal discipline. Government forecasts now call for gross domestic product growth of roughly 2.4% in 2026, with inflation easing toward the country’s official 3% target.2 Valuations remain attractive to us relative to emerging‑market peers. If global manufacturing and commodity cycles reaccelerate alongside domestic monetary easing, then Brazil could continue delivering late‑cycle cyclicality and income. Continue Reading…

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

Posted By |
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!
Tweet 1
  • 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

Posted By |

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

Posted By |
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…