Victory Lap

Once you achieve Financial Independence, you may choose to leave salaried employment but with decades of vibrant life ahead, it’s too soon to do nothing. The new stage of life between traditional employment and Full Retirement we call Victory Lap, or Victory Lap Retirement (also the title of a new book to be published in August 2016. You can pre-order now at VictoryLapRetirement.com). You may choose to start a business, go back to school or launch an Encore Act or Legacy Career. Perhaps you become a free agent, consultant, freelance writer or to change careers and re-enter the corporate world or government.

AI Bubble Worries? Read This

Posted By |

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

Posted By |
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…

Real Estate Investing in Canada can be Profitable but It’s no sure thing

Posted By |

Here’s what we think about real estate investing in Canada — and it may surprise you

TSInetwork.ca

We’re constantly asked about real estate investment in Canada (or investment in Florida real estate, for that matter), and we understand the appeal. Even though today’s house prices still remain high in most markets (i.e., Toronto and Vancouver) mortgage interest costs are expected to fall as inflation comes back down. And owning your own home has a number of advantages.

In terms of real estate investment, owning your house is a great tax shelter. That’s because gains on your principal residence are exempt from capital-gains taxes. Note, though, that this benefit only applies to your principal residence, and not investment in Florida real estate as a second home or income property. You must still pay tax on gains on the sale of a recreational property, such as a cottage or a ski chalet. But these properties generally appreciate at a much slower rate than, say, a home in a major urban centre. That’s a key consideration with any real estate investment.

What are the best real estate investment strategies in the current market?

Given Canada’s diverse real estate landscape in 2025, the most effective strategy is to focus on suburban multi-family properties in growing secondary markets like Hamilton, Halifax, or Kelowna, where prices remain relatively affordable while offering strong rental demand and potential for appreciation.

What are the potential risks of investing in real estate right now?

The primary risks include rising interest rates affecting mortgage payments, potential market corrections in overvalued areas, and stricter regulations on foreign buyers and short-term rentals in major Canadian markets.

Capital-gains taxes are also applicable to gains on real estate investment, such as rental properties you buy for investment purposes.  Moreover, this type of real estate investing in Canada (or investment in Florida real estate) involves a number of other commitments that can make it feel more like running a small business than, say, investing in stocks. With stocks, you only have to tell your broker to buy: everything else is done for you.

By contrast, when you own rental property, you have to spend time finding and dealing with tenants, arranging for maintenance, doing the accounting and so on. You can hire others to do these tasks for you, but that can get very expensive.

Moreover, real estate investing in Canada can entail higher levels of risk than stocks. That applies to investment in Florida real estate and other U.S. sunshine destinations. Simply put, all real estate investment must contend with the fact that real estate is less liquid, more expensive to manage and to buy or sell, and highly geographically concentrated. Rising crime, unpleasant neighbours and other changes on the street or in your property’s neighbourhood can make it hard to find tenants or buyers. So can physical problems, like adverse traffic patterns, backed-up sewers and zoning changes that allow undesirable development, or limit what you can do with your real estate investment property.

Many real estate investing enthusiasts say that if you buy a property with a 20% down payment (which is the Canadian government’s proposed new minimum to qualify for government-backed mortgage insurance on a property that is not your principal residence), then a 20% rise in the property’s value means you have doubled your money.

However, that claim neglects the costs of selling (up to 5% or 6% for real-estate commissions, plus lawyer’s fees and related costs). It also overlooks any negative cash flow you may have experienced while you owned the property, because rents failed to cover expenses. When you’re less familiar with the market, such as with Canadian investment in Florida real estate, that kind of unfavourable outcome is more likely.

How can I prepare my real estate investments for potential economic downturns or unexpected events?

Maintaining substantial cash reserves (ideally 6-12 months of expenses per property), keeping conservative loan-to-value ratios, and diversifying across different property types and locations provides the strongest protection against market volatility.

What is the best long-term investment strategy for building wealth through real estate?

The most reliable strategy is buying and holding cash-flowing multi-family properties in growing metropolitan areas while systematically paying down the mortgages to build equity over time.

We continue to believe that ownership of a primary residence is all the real estate exposure most investors need. Still, we get many questions about real estate investment beyond that. If you want to add to your real estate holdings, one good way to do it is through real estate investment trusts, or REITs.

Real estate investment trusts invest in income-producing real estate, such as office buildings and hotels. Some may even focus on investment in Florida real estate or other key U.S. markets for vacationers. Generally, that’s a segment of the market that is difficult for most investors to access through direct ownership of property. Moreover, real estate investment trusts save you the cost, work and risk of owning investment property yourself.

If you’re interested in real estate investing in Canada through a REIT, we still recommend RioCan Real Estate Investment Trust (symbol REI.UN on Toronto). It, like all REITs, continues to suffer fallout from the COVID-19 pandemic. Still, RioCan continues to benefit from an increasingly solid portfolio of properties now focused on Canada’s biggest markets. It is also working to diversify its portfolio beyond malls (these malls feature large stores that are usually part of a chain). We cover RioCan in our Successful Investor newsletter. Continue Reading…

2026 shaping up to be a difficult year for financial assets

Posted By |
iStock/Pixabay

By John De Goey, CFP

Special to Financial Independence Hub

As you know, I have frequently expressed concerns about high valuations for stocks. The concern has been expressed vehemently, yet so far, no serious risk has presented itself in terms of market drawdowns.

The narrative of U.S. public markets being risky has not proven to be accurate over the past few years. That said, what was once a minority view is becoming increasingly mainstream, as valuations remain stretched. The adage of ‘markets can remain irrational for longer than you can remain solvent’ has proven to be prescient and problematic for those who raised their cash positions. It has also caused certain commentators (including myself) to feel like Chicken Little. Despite our breathless admonitions, the sky has not fallen: yet.

Reallocate to more reasonably priced Asset Classes

Some people chose to exit public securities, but not capital markets. Private assets where there are likely to be pockets of more realistic valuation, as well as traditional inflation hedges like infrastructure and gold, have all performed relatively well in 2025. Rather than engage in market timing, this approach is more akin to an active reallocation toward being fully invested in asset classes that are more reasonably priced.

Continue Reading…

Early Retirement Q&A with Dividend Daddy

Posted By |
Image courtesy Tawcan/Unsplash

By Bob Lai, Tawcan

Special to Financial Independence Hub

The Financial Independence Retire Early (FIRE) community is a very supportive and tight-knit one. Because the community is made up of folks who have different backgrounds and different ages, it’s very diverse (not just Caucasian bros from high tech).

Earlier this year, after having been financially independent for a while, Dividend Daddy decided to step away from work to pursue other passions! Since stepping away from work, Dividend Daddy has been travelling around the globe and enjoying life.

I’m happy to have Dividend Daddy joining me today on the latest Early Retirement Q&A.

Q1: Welcome back Dividend Daddy. Congratulations on reaching FIRE and stepping away from full-time employment. Can you tell us a little bit about yourself? 

 

I’m in my late 40s and Canadian. I worked in high pressure roles for my working career and this January, I pulled the plug on full-time work. With return to office mandates clashing with my desire for work location freedom, work was no longer tenable for me so I stepped away. As of July 2025, I’ve been retired for 7 months and travelling a ton.

Tawcan: Amazing stuff!

Q2: You and I utilize hybrid investing, a combination of individual dividend stocks and low-cost ETFs. What made you decide on utilizing hybrid investing in the first place? 

Replicating the Canadian stock market is super easy so I buy individual Canadian dividend stocks and get the dividend tax credit for doing so.

Internationally, in the U.S. and world, it’s very hard to do that yourself so buying an index fund like $VTI and an ETF like $XAW just makes sense.

Q3:What made you decide to finally pull the plug and step away from full-time employment? Walk me through your decision process.

It was a mix of mental burnout and circumstances at my job that led to my early retirement. Of course, I had done the “math” several times and early retirement was possible financially for me.

Being financially independent meant that I had the control to decide my future. If work arrangements no longer suited my needs, I could walk away from them. So, that’s what I did.

At this stage, I wanted time freedom more than I did the next pay cheque.

Tawcan: that makes a lot of sense. In some level I’m probably there too.

Q4: Tell me more about your plans for this new chapter of your life.

Right now, it’s all about travel. I’m doing a ton of it and I have to say, it’s great without having the stress of work or a job on your mind.

I’m not travelling with a laptop for the first time in a very long time. Just my smartphone. Being untethered from your job while travelling is so very freeing, mentally and physically. It’s wonderful.

Q5: Prior to stepping away from full-time employment, did you do a lot of soul-searching to determine what you plan to do in early retirement? Why is this an important process for early retirement? 

I did do some soul-searching and planning. Nothing rigorous, trusting myself to figure it out. Some planning is important because you suddenly have many more hours in a day and week to fill.

For me, I increased the amount of pickleball I play (when I’m at home), I cycled way more at home and abroad, increased the amount of time I spend at my second home in Mexico (to avoid those nasty Canadian winters), and have been travelling a ton more.

Q6: I know you were considering doing part-time work with your previous employer. Did that ever happen? Why or why not? 

I did not end up doing part-time work with my employer. Circumstances changed at my employer and that flexibility was no longer available.

I may end up doing some very limited consulting in the future but that’s not on the table for 2025 or 2026. I do miss aspects of my work.

Q7: Tell me a bit more about your portfolio withdrawal strategy. I believe you plan on withdrawing from non-registered (N) and registered (R), and leaving TFSA (T) untouched for as long as possible? Are you planning to collapse your RRSP early? Or do you envision converting RRSPs to RRIFs at some point?

Not sure completely yet on strategy but I’ve only been early retired for 7 months as of July 2025. I’m definitely spending dividends from my non-registered account with a cash reserve/bucket of $75,000.

I will reinvest most dividends from my RRSP and all of them from my TFSA. I will need to seek professional advice for what to do with my RRSP going forward and whether spending it down is advisable give tax planning purposes.

Q8: Why is it important to “learn” how to spend money and enjoy life a bit more in retirement rather than a “save-save-and-save-some-more” mentality so many FIRE seekers tend to have? 

Life is short. This hits you as you approach 50 years old. My parents’ generation is starting to pass on and I know I’m next in line (hopefully a long way off still). Continue Reading…