I came across this article from The Globe and Mail the other day. The article profiled Jeremy Finney, who retired five years ago at age 41. Soon 46, he is dealing with regrets about early retirement.
According to the article, Jeremy worked at IT and used to push himself to the edge: 70-hour work weeks, back-to-back meetings, working 50 hours straight without sleep. His typical work week meant he was leaving home at 4 AM on Monday to fly to Chicago and returning home late Friday.
The work was so demanding that Jeremy couldn’t take time off around Christmas and from time to time, he had to work through statutory holidays. His job was so stressful that he believes it may have contributed to the breakdown of his first marriage.
That certainly doesn’t sound like a good work-life balance. From the article, my impression was that Jeremy was focusing on earning a high income, saving as much money as he could, and crossing the FIRE finish line as early as possible. [FIRE is an acronym for Financial Independence, Retire Early.] Spending quality time with his family and having an identity outside of work simply weren’t a priority.
Since I work in high tech, I can relate to this high-pressure, high-demand situation. It’s not unusual for me to have multiple meetings back to back. Since I deal with people globally, it’s also not unusual to have meetings as early as 6 AM and meetings as late as 8 PM.
Sometimes, it can feel like I’m working constantly and the so-called work-life balance is simply not possible.
Three things I learned about work-life balance
Having said that, I have learned a few key things over the years to help me improve my work-life balance:
Setting limits and boundaries. Block off early morning, lunchtime, and dinner time in my calendar.
It’s OK to turn down meetings
If possible, delegate the meeting to someone else
I’m not perfect, but I’m working on getting better at finding the right balance between work and life.
When it comes to FIRE, I think it’s important to approach it with a balanced mindset. The FIRE journey isn’t a sprint, it is a marathon. It takes years and years of planning, saving, investing, and dedication to achieve FIRE. If you approach it like a sprint, I believe you will burn out very quickly. Even if you end up achieving FIRE, you will regret it like Jeremy.
Some additional thoughts on the FIRE journey and approaching it with a balanced mindset: Continue Reading…
How real Spending Patterns challenge Traditional Retirement Income Planning
Canva Custom Creation: Lowrie Financial
By Steve Lowrie, CFA
Special to Financial Independence Hub
Here’s a contrarian thought.
When most people imagine retirement, they picture steady cash flow from their investments to support their lifestyle.
The common assumption is that they’ll preserve their financial nest egg and live off the growth” drawing a consistent amount each year while keeping the principal largely intact.
But there are actually three broad approaches. At one end, some plan to spend their entire portfolio over their expected lifetime (as one client joked, “I want my last cheque to bounce.” At the other end is the idea of preserving capital entirely. Most people, in practice, end up somewhere in between.
But what if that assumption is only part of the story?
The reality is that real-life retirement spending isn’t flat. It fluctuates unevenly and unexpectedly over time. And those patterns can have a big impact on your retirement income strategy.
Retirement Planning has changed. Have you?
For decades, retirement planning has focused on Saving: building a nest egg, maximizing RRSPs, and making the most of tax-advantaged accounts.
But the real challenge begins after you stop working. Then, the question becomes:
How do I turn my savings into reliable, lasting income?
This is where traditional models often fall short. Most assume spending stays constant throughout retirement. But as recent research from J.P. Morgan Asset Management shows, that’s not how real retirees actually spend.
J.P. Morgan studied anonymized spending data from more than 5 million U.S. households, offering a detailed picture of how retirees actually spend in retirement. These findings closely align with what I’ve observed over 30 years of working with Canadian clients.
Three key Retirement Spending patterns:
Spending Surge: Many retirees experience a spike in spending right around the time they retire. This is often due to lifestyle changes and delayed goals coming to fruition in the early retirement years, like travel, home upgrades, or helping adult children.
Spending Curve: Over time, overall spending tends to decline. For example, households with investable assets between $250,000 and $750,000 saw an average inflation-adjusted spending decrease of about 1.65% annually through retirement.
Spending Volatility: Perhaps most important, spending is anything but steady. According to J.P. Morgan’s 2025 Guide to Retirement, 60% of retirees saw their expenses fluctuate by 20% or more in the first three years of retirement. And this volatility often continues well into later years.
These findings show that retirement income strategies need to be flexible enough to accommodate spikes, declines, and everything in between.
Why it matters
Most financial plans assume a flat, inflation-adjusted income for 25 to 30 years. That’s a very good place to start. However, based on both this research and my practical experience observing hundreds of client habits over three decades, here’s what can happen:
You over-save early, delaying retirement unnecessarily
You under-spend during healthy years, missing out on the freedom you’ve earned
You get caught off guard by spending spikes, leading to early withdrawals or tax surprises
J.P. Morgan’s data shows retirees typically need about 92% of pre-retirement income at age 65, but just 70% by age 85. That is a significant shift and a reminder of why you want healthy exposure to equities, which is the only asset class that has historically given the best chance of outpacing inflation over the long run.
A better way to Plan for Retirement Income
Here are a few ways to build a more adaptable, evidence-based retirement plan: Continue Reading…
The good news for Canadians who build their own stock portfolios is that if you simply buy enough of those blue-chip companies, then get out of your own way, you’ll likely be a very successful investor. At least on the Canadian equity front.
Research shows that big ‘boring’ blue-chip stocks outperform the TSX Composite. Low volatility and high yield are top of the heap for Canadian equity over the last 25 years. On the Sunday Reads we’ll look at Canadian stock portfolios.
Here’s the post that offered Norm Rothery’s graphic on the performance of Canadian stock portfolios.
Yes we have to remember that the big dividends help us find those blue-chip stocks (and value at times), but the dividend payments don’t contribute to the wealth creation: as the dividend is merely a removal of value from your stock holding. The share price drops by equal on ex dividend day. That said, the dividends can help us find those great companies, and well, they make investors feel good.
From that post, the BTSX is having a good 2025 after a couple of years of underperformance. Of course, the big dividend payers suffered during the inflationary rising rate environment.
While the Beat the TSX invests in the top 10 yielding stocks from the TSX 60, I’d suggest investors consider more stocks from the sectors where the BTSX hunts: more financials, more utilities including pipelines. Remove some of the concentration risk. The approach has a very considerable long-term record of outperformance, but it can be very volatile. You might even consider the top 20 yields as I have suggested in the past.
Canadian wide moat portfolios
Personally, I like the Canadian wide moat portfolio approach. Greater returns, less volatility, that floats my boat in semi-retirement. I’ve updated the post for the Canadian Wide Moat Portfolios.
Be sure to give that post a full read, but here’s the wider moat portfolio:
And the returns comparison. There’s a nice beat with lower risk:
In that Canadian Wide Moat post I also offer an update on my wife’s Canadian Wide Moat portfolio. We added more financials and ditched the cyclical railways. There’s more than one way to ‘wide moat.’
Time grabs you by the wrist, directs you where to go
So make the best of this test and don’t ask why
It’s not a question, but a lesson learned in time
It’s something unpredictable, but in the end is right
I hope you had the time of your life
— Good Riddance (Time of Your Life), by The Green Day
By Noah Solomon
Special to Financial Independence Hub
The Latin term sine qua non literally means “Without which, not.” It refers to something that is indispensable. With respect to investing, this term applies to risk management, which is essential for achieving better than average results over the long term.
In this month’s commentary, I will discuss the advantages and drawbacks of the more commonly used approaches to reduce portfolio volatility. I will also explain why volatility management for its own sake is a value-destroying endeavour. Lastly, I will provide a contextual framework for measuring managers’ risk management skills.
Macro Forecasting: Failing Conventionally
Ever since tariff-related concerns unsettled markets in April, I have been asked countless times what I think is going to happen and how investors should be positioned. Relatedly, to improve performance by predicting macro developments, you need the ability to:
Consistently predict short-term developments, and
Make portfolio changes that produce results that are better than what would have been the case had you simply done nothing.
By no means is this failure due to lack of effort, diligence, or intelligence. However, the simple fact is that interest rates, inflation, unemployment, and economic growth are all influenced by thousands of factors. Not only do these factors influence economic conditions on an individual level but also influence each other. In other words, millions of complex interactions affect macroeconomic conditions, thereby making forecasting a thankless endeavour.
How prices respond to events is not merely a function of the events themselves but also of the degree to which events are already discounted in prices before they occur (i.e. investor expectations). This observation explains why overly optimistic expectations can result in a company’s stock falling after it reports stellar results. Similarly, it also explains how excessively pessimistic expectations can result in price increases after disappointing news.
In short, with respect to price movements and events, it’s not about whether an event is positive or negative, but rather about how the event compares with what was expected. Unfortunately, when it comes to gauging expectations, and by extension, how much of a given event is “baked in” to security prices, investors are by and large flying blind. There is no place where you can determine exactly what investors are expecting regarding inflation, GDP, or unemployment. Whereas asset prices offer some clues in this regard, they by no means offer any reasonable degree of precision.
Finally, even if people could predict future events and accurately estimate broad-based expectations of such events, it is still unclear if such knowledge would lead to superior performance, as shorter-term price movements are largely a function of swings in investor psychology, which are impossible to predict.
If I am correct in my assertion that basing one’s investment strategy, either in whole or in part, on forecasting future developments is at best impractical, then why does doing so remain popular? All I can offer in this regard is the following:
1.) The proverbial “size of the prize” is so large that investors can’t resist the temptation, regardless of how poor the odds: if you could consistently profit from short-term market movements, your performance would make even Buffett’s look poor!
2.) Entertainment value: predicting economic trends can be intellectually engaging and even a “sport” for some.
3.) Following the herd: Managers may engage in forecasting for the simple reason that everyone else is doing it, and that it would therefore be irresponsible not to. According to John Maynard Keynes, “Worldly wisdom teaches that it is better for reputation to fail conventionally than to succeed unconventionally.”
Volatility: Winning the Battle but Losing the War
Considered in isolation, portfolio volatility is undesirable. However, like almost anything desirable, volatility reduction comes at a price. All else being equal, the more you tilt your portfolio in favour of lower-volatility securities and strategies, the lower your returns will be. I suspect that most people who allocate a portion of their portfolios to lower-volatility assets have a reasonable appreciation for what they are getting. However, I also believe that they have little appreciation for what they are giving up in exchange for this benefit, or more specifically for the magnitude of this sacrifice.
The aftermath of the late ’90s Tech Bubble involved a three-year decline in stocks. During this time, hedge funds weathered the storm relatively well, far outperforming their traditional, long-only peers.
Predictably, the pain of those years in combination with an augmented appetite for stability prompted investors to pile into hedge funds, which caused assets to grow from several hundred billion dollars in 2000 to over $2 trillion by 2007 and to over $4 trillion today.
Just as Adam Smith’s theory of supply and demand would have predicted, the aftermath was far less rosy than hoped for. While the average hedge fund made good on its promise of stability, returns were sorely lacking, resulting in massive opportunity costs for their investors. Over the past 10 years, the HFRX Global Hedge Fund Index has delivered an annualized return of 1.87%, as compared to 9.8% for the MSCI All Country World Equity Index. Using these figures, a $10 million investment in the HRRX Index ten years ago would currently have a value of $12,035,470, while the same amount invested in global stocks would be worth $25,469,675.
Given this stark difference, investors should ask themselves whether their aversion to volatility is mostly financial or mostly emotional. By definition, the answer is the latter for those with long-term horizons. In such cases, the emotionally driven component of volatility aversion has proven, and likely will prove to be very costly indeed!
Private Assets: See no Evil, Hear no Evil, Speak no Evil
Over the past decade or so, private assets have become increasingly viewed as a “you can have your cake and eat it too” panacea which can deliver strong returns while simultaneously shielding investors from high volatility and severe losses in challenging environments. These perceived attributes have led to explosive growth in private investment funds, with assets under management increasing from roughly $600 billion in 2000 to $7.6 trillion as of the end of 2022.
There is good reason to be somewhat suspect of private asset funds’ low volatility and short-term, unrealized returns. While most funds may provide accurate asset values for their holdings, this may not always be the case. Although 2022 was a horrific year for both stocks and bonds, many private equity, private debt, and private real estate funds reported negligible losses. Continue Reading…
As the second half of 2025 unfolds, many Canadians are grappling with economic uncertainty. Headlines about slowing growth, persistent inflation, and global trade tensions may have many wondering whether their portfolio is ready for what’s next. While economists debate whether Canada is teetering on the edge of a recession or not, the real concern for investors is ensuring their financial future remains secure. Here are some items to consider to help protect your investments during turbulent times.
Understand the Economic Landscape
Economic indicators suggest Canada’s economy is under strain. The Bank of Canada has maintained elevated interest rates to curb inflation, which — while cooling — remains a concern at around 2.5% in mid-2025. This has slowed consumer spending, impacting sectors like retail and manufacturing. The S&P/TSX Composite Index — heavily weighted toward financials, energy, and materials — has seen volatility, with energy stocks particularly vulnerable due to fluctuating oil prices amid geopolitical tensions. A potential recession could further pressure corporate profits, leading to declines in stock prices, especially in cyclical industries.
Diversify to reduce Risk
Diversification remains the key to maintaining a resilient portfolio. Spreading investments across asset classes — such as stocks, bonds, real estate, and even alternative assets like gold or infrastructure — can cushion against market swings. For instance, while equities may falter in a downturn, government bonds or fixed-income securities often provide stability. Within stocks, consider balancing exposure between cyclical sectors (e.g., consumer discretionary) and defensive ones (e.g., utilities or healthcare). Geographic diversification is also key, as international markets, particularly in the U.S. or emerging economies, can offset domestic weaknesses.
Avoid emotional decisions
Market dips can test even the steadiest investor. Panic-selling during a downturn often locks in losses and derails long-term goals. Historical data shows that markets recover over time. For example, after the 2008 financial crisis, the TSX rebounded significantly within a few years. Staying focused on your investment horizon — whether it’s retirement in 20 years or a home purchase in five — helps avoid knee-jerk reactions. Regular portfolio rebalancing ensures your asset mix aligns with your risk tolerance and objectives.
Leverage professional Advice
If you are feeling uncertain about the current economic environment and how it may impact your portfolio, now is an ideal time to consult an Investment Advisor. A professional can assess whether your portfolio is positioned to weather volatility and aligns with your financial goals. Continue Reading…
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