Building Wealth

For the first 30 or so years of working, saving and investing, you’ll be first in the mode of getting out of the hole (paying down debt), and then building your net worth (that’s wealth accumulation.). But don’t forget, wealth accumulation isn’t the ultimate goal. Decumulation is! (a separate category here at the Hub).

Looking Back: 2025 Financial Insights Year-end Recap

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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…

How to Decide which Canadian Bank Stocks are Best for You

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Canadian bank stocks are true blue chip stocks and have long been a top choice for growth and income. Today’s economic uncertainty doesn’t change that

Image courtesy TSInetwork.ca

We’ve long recommended that all Canadian investors own two or more of the Big Five Canadian bank stocks — Bank of Nova Scotia, Bank of Montreal, CIBC, TD Bank and Royal Bank. That’s mainly because of the importance of these institutions, and their blue chip stocks, to Canada’s economy. That hasn’t changed despite lingering economic uncertainty about high inflation. Investing in bank stocks remains a popular strategy for many Canadians.

Canadian bank stocks – unlike Canadian penny stocks – remain key lower-risk investments. As well, the Big Five Canadian bank stocks all have long histories of annual dividend increases. That makes the Big Five the best bank stocks that the country has to offer. It also makes them top blue chip stocks for income investors.

Picking the best bank stock between two of Canada’s big banks is a lot harder choice than choosing between a bank stock and a Canadian penny stock. Still, if you’ve decided to start by investing in bank stocks with just one Canadian bank, one key question remains: which Canadian bank is the best bank stock for you? How can you tell which bank will give you the best long-term performance? There are a few performance clues you can look out for.

Performance clues to look for

When deciding on the best bank stock to buy, you want to start with the same criteria you would use for any investment in blue chip stocks (as well as with a Canadian penny stock):

We believe Canadian bank stocks are still well-positioned to weather downturns in the Canadian economy, despite their significant increases in loan-loss provisions over the last couple years because of COVID, the inflation that followed, and its impact on the economy. All five stocks trade at attractive multiples to earnings and are well positioned for any economic fallout from continuing high interest rates. Investing in bank stocks remains a popular strategy for many Canadians.

Canadian bank stocks have always been some of the best bank stocks globally. They’re also among the best income-producing securities: true blue chip stocks. Below are 3 tips for using dividends as barometer for picking Canadian bank stocks when investing in bank stocks.

1.) Dividends are a sign of investment quality. It’s why so few Canadian penny stocks offer them. While some good banks reinvest a major part of their profits instead of paying dividends, failing banks hardly ever pay dividends. So if you only buy stocks that pay dividends, you’ll automatically stay out of almost all the market’s worst banks.

2.) Dividends can grow. Stock prices rise and fall, so capital losses often follow capital gains, at least temporarily. Interest on a bond or GIC holds steady, at best. But the best banks like to ratchet their dividends upward: hold them steady in a bad year, raise them in a good one. That also gives you a hedge against inflation.

For a true measure of stability when hunting for the best bank stocks, focus on banks that have maintained or raised their dividends during economic and stock market downturns. These banks leave themselves enough room to handle periods of earnings volatility. By continually rewarding investors, and retaining enough cash to finance their businesses, they provide an attractive mix of safety, income and growth. Canadian banks stocks are well known for their financial stability in the face of economic downturns.

3.) Look for Canadian bank stocks with consistent dividends. One of the best ways of picking a quality stock is to look for banks that have been paying dividends for at least 5 to 10 years. Dividends are cash outlays that an unsuccessful bank could never produce. A history of dividend payments is one trait that all the best dividend stocks have.

Don’t limit your investing to bank stocks

Simply put, a well-constructed stock portfolio will make your life easier and maximize your gains.

Early in their investing careers, many investors have only a vague idea of the value of a planned portfolio when investing in the stock market. Continue Reading…

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

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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…

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…

Beyond Annuities: Innovative Longevity Products for Retirees

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Below we canvas 11 retirement experts and financial planners in Canada and the United States about how they and their clients can use new Longevity insurance products above and beyond traditional life annuities.

These experts were gathered by Featured.com, which has been supplying Findependence Hub with quality content for several years. It recently changed its procedure so editors like myself can request input on particular topics we think will interest our readership. The sources are all on LinkedIn, as you can see by clicking on their profiles below.

Here’s what we asked for this instalment:

 “In addition to Annuities, what is one new Longevity product or fund that you believe in enough to recommend to clients approaching or already in Retirement? Examples in Canada are Purpose Longevity Fund and Guardian’s Longevity Funds. Are there similar new products in the U.S. (or Canada) of which  you are aware?”

Here is what these 11 thought leaders had to say:

LifeX ETF delivers transparent Longevity Income

In addition to traditional annuities, one of the emerging longevity products in the U.S. that I have come to recommend to clients approaching or already in retirement is the LifeX Longevity Income ETF, particularly the LFAI fund.

While it is not a classic insurance product, it is designed to provide predictable monthly distributions over a long horizon, effectively hedging against the risk of outliving one’s assets. The fund invests primarily in U.S. Treasuries and money-market instruments, and its structure is built around the concept of a target cohort’s 100th birthday, which allows for a systematic income stream without relying on a life insurance company guarantee.

For many clients, especially those who purchased assets during low-interest periods or are seeking reliable cash flow without tying up their entire portfolio in an annuity, this product offers a compelling complement to their existing retirement income strategy. What I find particularly valuable is the transparency it provides. Unlike certain annuities, clients can clearly see the underlying investments, understand how distributions are generated, and retain the flexibility to adjust allocations as their personal circumstances or market conditions evolve.

It also fits naturally into a broader retirement strategy where a portion of assets remains growth-oriented, some is allocated to defensive income-generating investments, and a dedicated longevity-income segment addresses the specific risk of living decades beyond retirement.

Of course, it is not without considerations; while the fund aims to provide stable income, it is sensitive to interest-rate changes, inflation, and the assumptions built into its cohort-based design. Clients need to assess the fit carefully, ensuring the time horizon and income targets align with their health, lifestyle, and other holdings. For those who understand these dynamics, however, it offers a sophisticated and innovative approach to longevity planning, bridging the gap between traditional annuities and fully self-managed income portfolios, and giving retirees confidence that they can sustain their lifestyle even as they live longer than expected.

Andrew Izrailo, Senior Corporate and Fiduciary Manager, Astra Trust

BlackRock LifePath Paycheck Fund Offers Flexibility

JP Moses, Tennessee

If you’re getting close to retirement, you might want to check out the BlackRock LifePath Paycheck fund. I’ve been following it. It works like those Canadian longevity funds, designed to give you regular monthly checks. The biggest risk is outliving your savings, and this fund has professionals handle the withdrawals so you don’t run out of money. It seems to offer more flexibility than a traditional annuity, which is worth a look.

JP Moses, President & Director of Content Awesomely, Awesomely

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Vanguard and Fidelity Deliver Stable Retirement Income

Evan Tunis, Florida

The Vanguard Target Retirement Income Fund is not an entirely new “longevity” product in the mold of Canada’s Purpose and Guardian funds, but it fulfills a similar role for retirees. It is intended to deliver a steady flow of income while protecting against the effects of inflation by investing in a diversified blend of stocks, bonds and cash. The Fidelity Strategic Advisers (r) Core Income Fund is also designed to provide income for retirees with a diversified approach. The two funds both provide some level of stability for those who want to keep a lid on risk and market vomit in retirement.

Evan Tunis, President, Florida Healthcare Insurance

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Modern LifeX ETFs balance Freedom and Income

Niclas Schlopsna, Germany

I’ve often been asked about newer longevity products beyond traditional annuities, especially by clients preparing for retirement who want flexibility without giving up stability. What I have observed while working with financially cautious founders and executives is that people want income structures that feel modern, transparent, and liquid, and one option in the U.S. that I genuinely find promising is the Stone Ridge LifeX Longevity Income ETFs. I first came across them while helping a client map out a long term retirement strategy, and what stood out was how these funds provide monthly distributions while still allowing investors to keep full liquidity. I remember reviewing the structure and appreciating how it focuses on Treasuries and a long horizon rather than tying someone into an insurance contract. It felt refreshing. many retirees dislike the idea of locking up money permanently, and this approach allowed them to protect their cash while still receiving consistent income. The experience reminded me of moments with founders who want efficiency without losing control, and pattern is similar

In my opinion, the biggest advantage of these longevity ETFs is the balance between predictability and freedom, since investors receive monthly payouts but can still adjust their strategy if life takes an unexpected turn. The main drawback is that there is no lifetime guarantee, so someone who ends up living much longer than expected might outlive the structure if they rely on it too heavily. I often explain that longevity planning still requires layering different tools rather than expecting one product to solve everything. Another point that came up during discussions with retirees is the sensitivity to interest rate changes, which can affect the value of the ETF itself, and it is important not to overlook that risk. Still, for clients who want something more adaptable than an annuity, this has become a strong option to consider. I also pay attention to emerging pooled longevity concepts, similar to modern tontine ideas, which share risk across participants and create higher payouts for those who live longer. Even though these structures are not mainstream in the U.S. yet, the logic is compelling for retirees who expect longer than average lifespans. Whenever I see innovation like this, I feel the same excitement I do when a founder shows us a new model at spectup because it signals that the industry is shifting toward more transparent, flexible solutions.

Niclas Schlopsna, Managing Partner, spectup

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LifeX ETFs offer flexible, predictable Retirement Income

Sovic Chakrabarti, Vancouver, BC

When I think about longevity-focused options beyond traditional annuities, one U.S. product I genuinely find compelling is the Stone Ridge LifeX Longevity Income ETFs. What draws me to LifeX is that it tries to solve the same problem that Canadian funds like Purpose Longevity and Guardian Longevity address — steady income over an unknown lifespan — but without locking someone into an irreversible insurance contract.

Instead of handing over capital permanently, retirees stay invested and receive structured monthly distributions, which feels more flexible and respectful of changing needs. I’ve always liked the idea of having income that mimics an annuity while still keeping the door open if health, family, or market circumstances shift.

I’ve come to see LifeX as especially appealing for clients who want predictable cash flow but aren’t comfortable giving up control of their assets. Because the funds are built largely on U.S. Treasuries, the income stream feels relatively stable, and the target-date structure helps align payouts with the later stages of retirement, when longevity risk becomes more real. The liquidity alone makes it feel like a meaningful evolution in retirement planning: it’s easier to sleep at night knowing the money isn’t trapped.

Of course, I’m also realistic about its limitations. There’s no lifetime guarantee the way a true annuity offers, and the income still depends on market and interest-rate dynamics. It’s not a perfect replacement for insurance-based products. But as a complement — or even a middle ground between full guarantees and full market exposure — it’s one of the few newer U.S. longevity products I’d feel confident putting on the table for someone approaching or entering retirement.

Sovic Chakrabarti, Director, Icy Tales

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