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).
My latest MoneySense Retired Money column has just been published and features input from Rob Carrick, who just retired from the Globe & Mail after almost three decades covering Personal Finance (PF henceforth). You can find the full column by clicking on the hyperlinked headline here: How financial journalists plan their own retirement.
While some may view this as an exercise in Inside Baseball, the column also features interviews with someone Rob and I agree was the “granddaddy” of Canadian PF writing: Bruce Cohen of the Financial Post. Bruce in effect handed off the PF beat to me a few years after I joined the paper in 1993. For the column, Bruce provided several retirement tips but clarified there were at least two such PF writers even before him (Mike Grenby and Henry Zimmer.). Guess you could call them the grandaddies of Canadian personal finance writing!
Unlike other journalists mentioned in the column, Bruce is one of the few who actually did truly retire: after a 5-year transition he says he fully retired at the traditional retirement age of 65. Now 75, he lives on 50 acres north of Toronto. He cites actuary Malcolm Hamilton’s conclusion that spending/lifestyle in retirement is pretty much the same as pre-retirement: “Ergo, most people did not need a 70% income replacement ratio. That’s been true for me, though I don’t know if it still applies to the general population as many older people seem to carry significant debt into retirement and many adult children are living with their parents.”
The MoneySense column also includes input from Garry Marr, another ex Postie who just weeks ago announced he is returning to the Financial Post to write about — you guessed it — Personal Finance.
Since Rob Carrick is still only 62 years old, he clarifies that while he is no longer a salaried employee at a newspaper (he formally left on June 30th), he definitely plans to keep his hand in PF writing, including two monthly columns at the G&M: one on traditional PF, the second on his new Retirement experience.
He agrees that Retirement is a bit of an outdated word and that what he is doing is closer to Semi-Retirement, or indeed the term I coined in my financial novel, Findependence Day. Continue Reading…
Finding new ways to build wealth beyond traditional investment options requires thinking outside the box. Geoarbittage may be one of the most interesting ways to embrace property investment with a decent return on investment (ROI). Wise investors are finding ways to overcome cost-of-living increases by studying the price differences between areas and investing in emerging global markets. In Canada, some areas have high real estate prices and capped rental fees, making investing locally less attractive.
Geoarbitrage is the practice of earning income in a high-cost area, such as major cities around the globe, but living in a lower-cost-of-living location. Earning more while paying less allows anyone to stretch their money. Property investment is just one branch of the larger geoarbitrage concept.
Using Geoarbitrage as a Property Investment Strategy
Although the June 2025 jobs report shows an increase of 147,000 jobs and an unemployment rate of 4.1%, the numbers may not show the full impact of rising costs on middle- and low-income families. Real estate investing can help pull people out of generational income gaps or maintain family wealth for future heirs.
Property investors looking for more powerful approaches to increase wealth quickly understand that investing in real estate with low entry and high growth equals significant appreciation. You can gain passive rental income and diversify your holdings nationally or internationally.
A geographically diverse portfolio also protects your investments from market fluctuations. Values may drop in one city but remain steady or grow in another. You can work alongside investment partners to increase long-term financial health, finding the right collaborations in each area and learning strategic moves to gain the most profit.
Current Geoarbitrage Hot Spots
Although the properties that make the best investments change rapidly as housing markets shift, some of the major players you should consider in 2025 include:
1.) Philippines
The country is seeing a lot of infrastructure development, making big cities the ideal location for investment. Some of the pros of buying property in the Philippines include their growing middle class with needs for rentals and high potential returns. Do be aware of foreign ownership restrictions, such as for condo ownership. Aligning with a locally based partner may be the way to go if you want to invest in condominiums. Continue Reading…
ADRs (American Depository Receipts) are a great way for Canadian investors to invest in foreign stocks
TSInetwork.ca
Our view on foreign investing is that for most investors, U.S. stocks can provide all the foreign exposure they need.
We also feel that virtually all Canadian investors should have 20% to 30% of their portfolios in the U.S. stocks that we recommend in our Wall Street Stock Forecaster newsletter.
What is an ADR?
An ADR (American Depositary Receipt) is a negotiable certificate issued by a U.S. bank that represents shares of a foreign company, allowing American investors to buy and trade foreign stocks on U.S. exchanges in U.S. dollars without dealing with foreign currencies or international brokerages: essentially making it easier for Americans to invest in companies like Nestlé, Toyota, or Diageo plc through their regular brokerage accounts.
How do ADRs differ from regular U.S. stocks?
ADRs differ from regular U.S. stocks in several key ways: they represent foreign companies traded in U.S. dollars on U.S. exchanges but carry additional fees (administrative costs, currency conversion expenses), often lack voting rights, may have lower liquidity and wider bid-ask spreads, face foreign exchange rate risk, and have different regulatory reporting requirements depending on their level (I, II, or III), while regular U.S. stocks offer direct ownership with full voting rights, higher transparency, and typically lower costs.
What’s the difference between sponsored and unsponsored ADRs?
Sponsored ADRs are created with the cooperation and agreement of the foreign company, which works directly with a U.S. depositary bank that handles recordkeeping, paperwork, and dividend payments, while unsponsored ADRs are issued by broker-dealers without the foreign company’s involvement, participation, or even consent, and may not meet full SEC requirements: sponsored ADRs generally offer better investor protections and more reliable information than unsponsored ones.
Why should a Canadian investor consider ADRs?
A Canadian investor should consider ADRs to gain easy access to foreign companies, particularly from Europe, Asia, and emerging markets. That allows for greater portfolio diversification beyond North American markets while trading in familiar US-dollar-denominated securities on major U.S. exchanges like the NYSE and Nasdaq: all the while eliminating the complexity of dealing with multiple foreign currencies and international brokerage accounts.
If you want to add more foreign content, you could buy individual stocks. But for most investors, directly investing in foreign stocks can add an extra layer of risk and expense. As well, timely and accurate information about overseas companies is not always available, and securities regulations vary widely between countries. It can also be hard for your broker to buy shares on foreign markets without paying a premium. Tax rules and restrictions on transferring funds between nations add further uncertainty and cost.
Understanding the ins and outs of ADRs
All in all, we think the best way to invest in foreign stocks is to buy high-quality firms that trade on the New York Stock Exchange as American Depositary Receipts (ADRs). An American Depositary Receipt is a U.S. traded proxy for a foreign stock and represents a specified number of shares in that foreign corporation.
ADRs are bought and sold on U.S. stock markets, just like regular stocks, and are issued or sponsored in the U.S. by a bank or brokerage firm. If you own an ADR, you have the right to obtain the foreign stock it represents. However, investors usually find it more convenient to continue to hold the ADR and to sell the ADR when it no longer serves their needs.
One ADR certificate may represent one or more shares of the foreign stock. Or, if the stock is expensive, the ADR may represent a fraction of a share; that way the ADR will start out trading at a moderate price or be in the range of similar securities trading on the U.S. exchange. Continue Reading…
When it comes to investing, there’s no such thing as a “perfect” investor. Making mistakes is part of an investor’s life. Mistakes are simply unavoidable. So be careful when someone claims to be an investing guru and declares that he or she has never made any investment mistakes!
Even if you look at professional sports, there’s no such thing as a 100% batting average, a 100% passing completion rate, or a 100% 3-point percentage. Being “100%” is simply not possible.
In case you’re wondering, in baseball, a batting average of 0.300 or higher is generally considered excellent; in hockey, a shooting percentage above 15% (number of goals scored divided by number of shots taken and multiplied by 100) or higher is considered excellent; in football, a 70% or higher completion percentage is considered excellent; in basketball, a 40% or higher 3-point percentage is consider excellent.
There are two key things in investing:
Limit mistakes and failures
Maximize winners
That’s why legendary investors like Warren Buffett, Charlie Munger, Mohnish Pabrai, Bill Ackman, and John Templeton all have made millions but still have had their shares of mistakes.
Since I started investing as a young adult, then started our Financial Independence journey in 2011, Mrs. T and I have built our investment portfolio from almost nothing to over seven figures. Over that time, we have made mistakes, which I have shared a few times on here.
Looking at these mistakes posts I wrote, I thought they were too general. So, I thought it would be interesting to share more specifics and details.
Here are the five worst investments we’ve owned.
Note: I went through our historical investment transactions for this post. I couldn’t help but laugh at some of these bad investments.
1.) HNU – BetaPro Natural Gas Leveraged Daily Bull
HNU is a leveraged ETF from Global X. It aims to provide investors up to double the exposure to the daily performance of the BetaPro Natural Gas Rolling Futures Index. The idea is to provide investors the opportunity to benefit from daily price increases in natural gas.
I was trading HNU between 2009 and 2011. The basic idea is to trade often and try to take advantage of the 2x leverage exposure from this ETF.
There were a few things stacked up against me:
Futures trading is extremely complicated. I had no clue how the natural gas index would perform over time.
I had a very simplistic view when it came to natural gas price – price would go up in winter and price would go down in summer, simply due to demand
There was no such thing as free trades back then, so I was paying $4.95 (Questrade) per transaction
The natural gas index was highly unpredictable (at least to me)
Natural gas index from 2008 to 2012
Initially, I had some small successes, making between 10% to 40% gains with my trades. That was the proverbial ‘kiss of death’ as I thought making money was easy!
Because of the 2x bull nature of the ETF, things turned ugly in early 2011 when the natural gas price went into a free fall. The 2x bull thing worked against me and meant I was losing money fast! Twice as fast as “normal.”
I learned my lesson and got out of the silly leveraged ETF trading practice and never got back into it.
2.) Just Energy (JE.TO)
When we first started dividend growth investing, we knew very little about the key stock metrics like the P/E ratio and the payout ratio. We were simply focused on dividend yield (such a rookie mistake!)
Naturally, we went to an online stock tool and ranked Canadian dividend stocks by dividend yield. Just Energy was a stock with one of the highest yields, so we sank a few thousand dollars into Just Energy.
We spent very little research on the money and knew nothing about how Just Energy operated and how they were making money. All we knew was that Just Energy was a Canadian-based electricity and natural gas retailer operating in North America.
Like HNU, the stock performed alright initially and we were happy collecting dividends (JE was mentioned in many of our monthly dividend reports early on).
Eventually JE stock price went into a tailspin and we closed out the position in mid-2014, losing about $1,500 or about 47% of our initial investment (yes, we collected about $520 in dividends, but half of that was reinvested for more shares).
In case you’re wondering, I googled Just Energy out of curiosity and this is what I found:
On December 15, 2022, the company announced it would be delisted from the NEX board of the TSX Venture Exchange
The company’s shares now trade on the Over-the-Counter (OTC) market, typically with lower liquidity and potentially higher volatility compared to the TSX
Ouch!
3.) Laurentian Bank (LB.TO)
For a long time, we owned the Big Six Banks in Canada – Royal Bank, TD, Bank of Montreal, Bank of Nova Scotia, CIBC, and National Bank. Since we have done quite well with all six of these positions, I thought it would be a good idea to continue investing in Canadian banks.
Laurentian Bank was enticing because it had a solid dividend growth history and a good initial yield. We filtered LB.TO as one of the potential stocks to purchase after going through the Canadian Dividend All Star list.
“Laurentian Bank has seen its share price retreating over the last little while. At a PE ratio of 9.9, it is one of the cheapest Canadian banks available from a PE ratio evaluation point of view. With a 10-year dividend payout increase streak and a 10-year dividend growth rate of 7.8%, LB has a solid dividend track record.
LB certainly isn’t as big as the big 5 Canadian banks, with most of its branches in eastern Canada. So from a future growth point of view, LB may not grow as quickly compared to its Canadian peers.
One of the concerns with Laurentian Bank is that it has high exposure to residential mortgages. In the fourth-quarter earnings, LB disclosed that an internal audit found some documentation issues on some mortgages it had sold to a third-party company. As a result, the bank has decided to buy back $392 million of problematic mortgages from the third-party.
Having said all that, I think at the current share price, it may make sense to purchase some shares of LB, collect dividend income, and see what the future holds.
Furthermore, it also makes sense to expand our banking exposure to outside of the Canadian big 6. Laurentian Bank of Canada is relatively small compared to the Canadian Big 6. If LB manages to grow outside of eastern Canada and possibly internationally in the future, the earnings will go up.”
The problem with Laurentian Bank? The share price started to slide shortly after we initiated the position and the share price never went back up to $46, our cost basis.
LB stock performance
Looking back, my mistakes with the LB.TO purchase were:
I pointed out the following in my original statement – “Laurentian Bank isn’t as big as the big 5 Canadian banks,” “LB may not grow as quickly compared to its Canadian peers,” and “LB has a high exposure to residential mortgages.” Well, they all turned out to be true
I failed to look at the big picture. A bank that was concentrated in Quebec had significant limitations in terms of growth
Laurentian Bank tried to sell itself over the past few years but there was no buyer. None of the Big Six Banks wanted to touch LB. That itself is a tell-tale sign of the state of the Laurentian Bank’s business!
4.) HND – Betapro Natural Gas Inverse Leverage Daily Bear
Since I wrote about HNU earlier, I had to mention HND, GlobalX’s Betapro Natural Gas Inverse Leveraged Daily Bear ETF, to keep myself accountable.
HND is like HNU but works in reverse. HND aims to give investors up to double the inverse exposure to the daily performance of the Betapro Natural Gas Rolling Future Index, providing a strategic opportunity to potentially benefit from price declines in natural gas.
I started buying HND as a way to protect myself from the daily movements of the natural gas index. The idea is to buy some HNU and HND and come out positive in the end.
Since I couldn’t accurately predict which way the natural gas index would go, I was betting blind. That was a very stupid strategy!
In reality, things didn’t work that way. I was getting a double whammy from both HND and HNU!
5.) Algonquin Power & Utilities Corp (AQN.TO)
I can’t mention the five worst investments we’ve owned without mentioning AQN.
AQN used to be one of the darlings in the Canadian dividend growth investor community. The company had solid renewable energy assets, good revenues, an attractive yield, and a solid dividend growth record.
Due to poor company decisions, excessive spending, and weak mismanagement, the stock price went into a death spiral. The company sold some assets to try to stabilize its books rather than cutting dividends. When that didn’t work out, the company eventually cut its dividends a couple of times, but it was a little too late. The stock price went from a high of $20 to below $8.
We closed AQN in November 2023 and ended up with a loss of 40%, not including dividends.
This was a very humbling learning mistake and one of the worst investments we have owned.
Summary – The five worst investments we’ve owned
There you have it, the five worst investments we’ve owned. I had a few laughs at myself looking back at these terrible investments and wondering what the heck I was thinking. At the same time, it was good that we made most of these mistakes early on during our financial independence journey (except AQN) so we can learn from these mistakes.
What are the key lessons I have learned and the key principles I have developed from owning these five investments?
Never leverage, that includes borrowing money to invest and use leveraged ETFs
No penny stocks (I didn’t include any here but owned a few in the past)
No niche ETFs, especially ones I don’t understand
I can’t say we won’t make any more mistakes as we move forward. The key, as mentioned, is to limit the number of mistakes and maximize winners.
What are some of your worst investments?
Hi there, I’m Bob from Vancouver, Canada. My wife & I started dividend investing in 2011 with the dream of living off dividends in our 40’s. Today our portfolio generates over $5,000 in dividends per month. We originally dreamed to become financial independent and live off dividends by 2025. Although we could live off dividends by supplementing it with a part time income in 2025, we aren’t in a rush to cross so called “finish line.” Therefore, we are taking it easy and we plan to realize the dream of living off dividends before 2030. This post originally appeared on Tawcan on July 7, 2025 and is republished on Findependence Hub with the permission of Bob Lai.
Investing for Income vs. Total Return, why choose?
Leading off this Weekend Reading edition, a theme I’ve written about from time to time here: income investing vs. total return.
Is there a right way to invest? Which one is better?
Both approaches have merit: which was the subject of my enjoyable debate with passionate DIY income investor Henry Mah a few weeks ago. You can watch it here!
Personally, while I’ve always had a passion for owning some dividend-paying stocks in my portfolio and likely always will, I can’t ignore the benefits of total return.
At the core:
Investors often focus on total return and likely should during their asset accumulation years in particular since total return encompasses both income generation, such as dividends, and capital appreciation (changes in the market value of your investments). We should all know by now that growth/price increases remain an essential component of wealth-building: prices moving higher and higher than what you paid for them is good.
Income investing focuses on generating regular cash flow from your investments, rather than solely relying on capital appreciation or downplaying it based on your stock selections. Income funds, income-oriented Exchange Traded Funds (ETFs) or in Henry’s particular case, owning a small basket of concentrated stocks from the TSX that pay dividends has provided income-focused investors like Henry arguably lower-risk for him while growing his income higher over time via higher dividend payments.
Source: Honestmath related to income vs. total return debate.
In the TD debate here, I argued striking the right balance between income needs and growth in the total return equation is probably best for most: it has historically delivered long-term success and there is no reason to believe why a basket of global stocks won’t continue to do so.
So, I get the income investor debate, I really do, and maybe moreso given I consider myself in semi-retirement now; my part-time work started a few months ago.
Investing for income via dividend stocks often includes these benefits for retirees:
Tangible income: shares of companies that distribute a portion of their profits to shareholders, are often mature and established businesses that have ample cashflow to sustain their payment obligations. This tangible income (and arguably stable income) can help cover living expenses.
Rising income: such established companies can also raise their dividends year-over-year, rewarding shareholders with rising income that can help offset inflationary pressures. Sustained 3-4% or more dividend increases by some companies can be inflation-fighters.
Academic history lessons along with any Google search on this subject will show various charts and graphs that demonstrate the critical role that dividends – and, in particular, reinvested dividends – play in delivering an attractive total return to investors over time. But this just makes sense, in that reinvested dividends are like not getting any dividend payment paid to you in the first place …
Another important contributor to equity market returns has been dividend growth. Equities are growth assets – which I argued in the TD debate – so companies who tend to grow their revenues, profits and earnings over time, is the reason why they can continue to reward their shareholders with higher dividend payments. Growth is needed, for total return, for your/our juicy dividend payments to continue. Continue Reading…
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