No doubt a 50 basis point rate cut is in order, inflation is a killer for the middle and lower class. Monetary policy decisions should prioritize economic stability for the working class, not cater to wall street’s big boys and politics.
My concern is where we will begin to see the effect of these cuts, is housing going to follow suit? I missed out on my dream home during the pandemic, I am now all eyes and ears for a further decline in mortgage rates.
Further decline? This is the reason I had wanted to refinance in the 1st quarter according to our budget but my spouse likes the space and the pool. If I go ahead with the plan, I will have over 200k to put in a HYSA as I had initially intended, seeing stocks are very volatile these days and the bond market (10Y) is pricing in the effect of rate cuts by ticking upwards, is it a good time for an average joe to get into the financial markets?
Consider consulting a financial advisor to protect your retirement savings from inflation. I personally saw my portfolio grow from $750,000 to $1.2 million in 3 years, saving $23,000 in taxes and earning $45,000 in dividends, despite 2.5% annual inflation. A financial advisor can help you rebalance your portfolio, optimize retirement income, and develop a tax-efficient strategy to safeguard your future.
The GIC rate has come down with inflation, so it's still offering relatively the same gains, against inflation. (just got a 1yr. 4% GIC, latest inflation number at 1.75%) Not big gains, but keeping ahead of inflation. And very safe, you know your money will be there, and no riding out low points in stock market, which can be prolonged and painful if you do need money from your stock investments when they're down. My retirement plan is based only on my investments keeping up with inflation, and returns above that are gravy. I do have a few relatively short term (conservative) market linked GICs, that have done well (conservatively speaking...6%). For me, the market linked GIC is still a wee bit of risk, you could get theoretically get a near-zero return (they often offer a tiny min. return, regardless) , but you'll never lose any of your capital. Basically, for me it comes down to: If I make extra money investing in stocks, that's nice. If I loose a chunk of money invested in stocks, it could be catastrophic and at the very least very stressful.
People need to have the right mindset... invest now. Retire early. I've had family member get diagnosed with leukemia, within 3 mths after retirement, pass away a year later... And, a travel-loving colleague invest entire working career in my company.... retire early 2019-right before covid-...... pass away in 2024. All of the above saddens my heart. They worked their whole life, and never enjoyed retirement. People should save money. Have an actual plan to enjoy life---- it should not be a 65yrold carrotonastick in the sky..
With my retirement plan I have used 2.0% annual return once I am in retirement and increase of income at 3.0%. This also allowed me to determine how my money I need based on income amount that desire to live by. My goal for currently saving for retirement is 5% average return.
@ParallelWealth Nothing inheritentlly wrong about covered calls if one understands the risks ,we are talking HYLD type here not Yieldmax ETF’S. Afterall the likes of QuadraWest and Brompton offered split funds for long time now. Guess how they generate the high yields ?
Nothing wrong with CC if you need income and understand that you are giving up some capital appreciation. Also need to understand that ROC doesn’t necessarily mean you are getting your own money back. In funds like HYLD it’s simply a tax classification.
I found your content very informative. This next part will come across as if I'm trolling you but it's genuine question: How do you construct a portfolio to only return 5% per year? I understand you're talking about "low risk" stuff here but that numbers seems to ridiculously low to me that I'm genuinely having a hard time imagining what "investments" you'd select which would only yield that between capital gains and dividends/interest payments/return on capital. Is it the 100% in GICs you mentioned? My savings account pays me 5% and I don't have to lock any of my money up for even a minute let alone laddering it for years.
It's not investments we choose. It's a nominal return that is fully adjustable within the program. It's used for illustration purposes. The sad truth is that the average Canadian averages not much better than 5%, even most DIYers we come across. And yes, we have had a short term blip for savings accounts, but you won't be getting 5% again anytime soon.
@@ParallelWealth Thanks for your response; much appreciated. Of course msot 5% accounts are going down or their "promo" rates are expiring. I'm a much higher risk investor and for me personally, anything below 9% annual returns I consider "savings" not investing. But I fully understand how tech stocks or certain more speculative assets wouldn't work for many retirees. One quick question, what are your thoughts about ETFs that use a built-in covered call startegy to either increase or create a dividend where there isn't one? Held inside of a TFSA, some of those puppies can generate 15-25% in dividends on an annualized basis, typically paid out monthly. I'm not naming names specifically here because I don't want this to be a financial advice question. I'm just wondering your overall take on those types of ETFs. Obviously, they have inherent additional risk due to the covered call strategy backfiring in some cases and the fees being higher since they are more actively managed. But, provided someone does their research and understand the risks and is fine with them. Wouldn't those types of ETFs be able to play a substantial role in providing additional, fairly-consistent high cash-flow inside a retirement portfolio, even for people that are less risk tolerant than silly old me? And of course, proper position sizing is important as well. Not suggesting anyone should go "all in" on these or any other investment for that matter.
So if we're not hugely wealthy, we should probably get out of the market onec we're living off savings? If you dont have 10 years to kill, the market is scary. 2021 and 2022 were bad. I decided not to sell anything for a down-payment on a home. Speaking of homes I wish someone would do a sample breakdown for non-homeowners. So many case studies out there assume little to no housing costs for retirees.
Actually 2012 was very good,2022 very bad,made a little back in 2023..Now 2024 was also good..This month might end up flat..Looking back,the November and December months have been positive..Hopefully will continue this year a little better with the change of government..It’s a crazy ride
Seems to have missed Blue Chip Canadian Dividend etfs here. Monthly income. Low fees. Dividend growth over time. Dividends are much more stable than stock prices Can be very tax friendly. Big ommission IMO.
~40% in CDN blue chip dividend stocks💰 ~40% in large US & Cdn growth stocks📈 ~15% in cash, GICs, or banker acceptance certificates.💵 ~5% in alternative investments such as gold or crypto or higher risk growth stocks.🎲 It’s working for me 👍
Adam, I use a High Interest Savings Accnt (ie Tangerine) that I use for my cash wedge. Currently getting 4.75 % til the end of Oct/2024. What alternative product would you recommend to try and get similar rates of return? (but dont want to use GIC)
There are a few out there. I use National Bank, paying me roughly what you get. It's once rates come down, assessing the market and seeing what's out there.
I recommend EQ bank - they give a higher yield for their high interest savings accounts as well they have the new "notice' savings acct. I use Tangerine just to direct deposit my pay and they offer a credit card (EQ does not have a credit card). Even when rates drop they are still higher than other banks. They are worth checking out. I switched to both Tangerine and EQ over a yr ago from RBC and haven't looked back. Online banks are in competition for business so it's worth shopping around and switching when it benefits YOU.
Thanks for so much great information! A good investment manager is EVERYTHING! ❤ But i still love watching your videos. We have the bulk of our retirement with a mgr but we do each have a little bucket of 100k that we each control for fun investing.
It really is a shame that rates are this low. Money should not be "virtually free' when accessing capital. It is not fair to those who want to make money with their money. The only ones that win are the large institutions. Us little guys should be able to earn at least a few points above inflation with our GICs. Crazy government monetary interference has just yo-yo'd us all for the last 15/16 years.
People renewing their mortgage would disagree with you on that, lol! Read up on macro economics to understand how interest rates relate to inflation and this will help your understanding of the “crazy” government “interference”. Inflation is under 3% currently, so any GIC earning more than that over a year covers short-term cash needs.
@@g.belanger8302 Yes, I fully understand how banks and governments want to play with interest rates to control their economies. God forbid the crazy actions of governments in their spending frezies 'ever' be considered as contributing to the (macro)economics of the nation. No, it is way easier to punish the individual citizen or the businesses. But the businesses can leave, and so can the able citizen who sees the writing on the wall. Those unable to leave (financially) remain subservient to the state and the financial mess that they leave the citizens in. But hey, who doesnt want free money and be living high on the hog for as long as they can.....
I like how Warren Buffet talks about "just invest in the S&P 500 index - and just set it and forget it"... the ROI is solid long term. But for whatever reason, I still buy and sell stocks, mutual funds etc ... thinking I can out perform the S&P (and I dont beat the index). I feel foolish
True Canadian: Unless a First Nations member, Metis or Inuit, conveniently forgets their own family were immigrants and forgets they contributed to building Canada, just like newer Canadians.
It's my experience the "new" Canadians are the ones willing to get off their butts and work the crappy jobs that keep Canada running, that your spoiled, entitled kids won't do because they think their first job should be an executive with a company car...
@@monah5532First Nations were also migrants. Also first European had to struggle and build from nothing, not get everything handed to them because reasons
I was a stay at Home mom with no money in my IRA or any savings of my own,which was scary at 43 years of age. Three years ago I got a part time job and save everything I make. After 3 years, I am 46 yo and have put $9,000 in an IRA and $40,000 in my portfolio with CFA, Kathie. Since the goal of getting a job was to invest for retirement and NOT up my lifestyle, I was able to scale this quickly to $150,000. If I can do this in a year, anyone can.
I know this lady you just mentioned. She is a portfolio manager and investment advisor. She gained recognition as a former employee at Goldman Sachs; a renowned investor she is. She has demonstrated expertise in investment strategies and has been involved in managing portfolios and providing guidance to clients.
Given valuations are super high , I would not recommend that with money you can't afford to lose. Yes the stock market could go up 20% ,it could also correct 20,30 ,50% . Can you afford that with borrowed money ? If Yes, go for it .
My sister did this. She took a home line of credit on the home for 100,000 put it in the market and it was up about 10%. I told her to take profits and cut initial investment amount as valuations were really high. But she got greedy started buying overvalued tech names …. Come this month she’s down 14 1/2%. She owes $100,000 to the bank at 5 1/2% . I wouldn’t recommend doing this. I’ve seen the stress it puts on my sister is driving her crazy that’s all she thinks about now.
If you're asking the question, then you're not capable of doing it. When you finish reading The Intelligent Investor by Benjamin Graham, then maybe decide if you are interested in trading. If you can't read that and spend a lot of time watching good financial videos for fun, just save and buy ETFs.
No doubt a 50 basis point rate cut is in order, inflation is a killer for the middle and lower class. Monetary policy decisions should prioritize economic stability for the working class, not cater to wall street’s big boys and politics.
My concern is where we will begin to see the effect of these cuts, is housing going to follow suit? I missed out on my dream home during the pandemic, I am now all eyes and ears for a further decline in mortgage rates.
That will be in 2025, the mortgage market already anticipated this as early as May.
Further decline? This is the reason I had wanted to refinance in the 1st quarter according to our budget but my spouse likes the space and the pool. If I go ahead with the plan, I will have over 200k to put in a HYSA as I had initially intended, seeing stocks are very volatile these days and the bond market (10Y) is pricing in the effect of rate cuts by ticking upwards, is it a good time for an average joe to get into the financial markets?
Consider consulting a financial advisor to protect your retirement savings from inflation. I personally saw my portfolio grow from $750,000 to $1.2 million in 3 years, saving $23,000 in taxes and earning $45,000 in dividends, despite 2.5% annual inflation. A financial advisor can help you rebalance your portfolio, optimize retirement income, and develop a tax-efficient strategy to safeguard your future.
Who's your financial advisor? how do I get in touch ?
The GIC rate has come down with inflation, so it's still offering relatively the same gains, against inflation. (just got a 1yr. 4% GIC, latest inflation number at 1.75%) Not big gains, but keeping ahead of inflation. And very safe, you know your money will be there, and no riding out low points in stock market, which can be prolonged and painful if you do need money from your stock investments when they're down. My retirement plan is based only on my investments keeping up with inflation, and returns above that are gravy. I do have a few relatively short term (conservative) market linked GICs, that have done well (conservatively speaking...6%). For me, the market linked GIC is still a wee bit of risk, you could get theoretically get a near-zero return (they often offer a tiny min. return, regardless) , but you'll never lose any of your capital. Basically, for me it comes down to: If I make extra money investing in stocks, that's nice. If I loose a chunk of money invested in stocks, it could be catastrophic and at the very least very stressful.
People need to have the right mindset... invest now. Retire early. I've had family member get diagnosed with leukemia, within 3 mths after retirement, pass away a year later...
And, a travel-loving colleague invest entire working career in my company.... retire early 2019-right before covid-...... pass away in 2024.
All of the above saddens my heart. They worked their whole life, and never enjoyed retirement. People should save money. Have an actual plan to enjoy life---- it should not be a 65yrold carrotonastick in the sky..
It would be nice to retire early but if you have your health most people have to work to 65 as you need the CCP and OAP to live
I buy more dividend growth stocks n ETF.
I buy High Income Dividend ETF's. I like the financial sector ones. They make a ton of profit from people buying GICs and I get that! 😂
With my retirement plan I have used 2.0% annual return once I am in retirement and increase of income at 3.0%. This also allowed me to determine how my money I need based on income amount that desire to live by. My goal for currently saving for retirement is 5% average return.
I am so glad you said the solution was cash wedge and not covered calls........
Bahaha. Ya seems to be a trend right now. Like all trends, will likely pass.
@ParallelWealth Nothing inheritentlly wrong about covered calls if one understands the risks ,we are talking HYLD type here not Yieldmax ETF’S. Afterall the likes of QuadraWest and Brompton offered split funds for long time now. Guess how they generate the high yields ?
Nothing wrong with CC if you need income and understand that you are giving up some capital appreciation. Also need to understand that ROC doesn’t necessarily mean you are getting your own money back. In funds like HYLD it’s simply a tax classification.
I found your content very informative. This next part will come across as if I'm trolling you but it's genuine question: How do you construct a portfolio to only return 5% per year? I understand you're talking about "low risk" stuff here but that numbers seems to ridiculously low to me that I'm genuinely having a hard time imagining what "investments" you'd select which would only yield that between capital gains and dividends/interest payments/return on capital. Is it the 100% in GICs you mentioned? My savings account pays me 5% and I don't have to lock any of my money up for even a minute let alone laddering it for years.
It's not investments we choose. It's a nominal return that is fully adjustable within the program. It's used for illustration purposes. The sad truth is that the average Canadian averages not much better than 5%, even most DIYers we come across. And yes, we have had a short term blip for savings accounts, but you won't be getting 5% again anytime soon.
@@ParallelWealth Thanks for your response; much appreciated. Of course msot 5% accounts are going down or their "promo" rates are expiring. I'm a much higher risk investor and for me personally, anything below 9% annual returns I consider "savings" not investing. But I fully understand how tech stocks or certain more speculative assets wouldn't work for many retirees. One quick question, what are your thoughts about ETFs that use a built-in covered call startegy to either increase or create a dividend where there isn't one? Held inside of a TFSA, some of those puppies can generate 15-25% in dividends on an annualized basis, typically paid out monthly. I'm not naming names specifically here because I don't want this to be a financial advice question. I'm just wondering your overall take on those types of ETFs. Obviously, they have inherent additional risk due to the covered call strategy backfiring in some cases and the fees being higher since they are more actively managed. But, provided someone does their research and understand the risks and is fine with them. Wouldn't those types of ETFs be able to play a substantial role in providing additional, fairly-consistent high cash-flow inside a retirement portfolio, even for people that are less risk tolerant than silly old me? And of course, proper position sizing is important as well. Not suggesting anyone should go "all in" on these or any other investment for that matter.
So if we're not hugely wealthy, we should probably get out of the market onec we're living off savings? If you dont have 10 years to kill, the market is scary. 2021 and 2022 were bad. I decided not to sell anything for a down-payment on a home. Speaking of homes I wish someone would do a sample breakdown for non-homeowners. So many case studies out there assume little to no housing costs for retirees.
Actually 2012 was very good,2022 very bad,made a little back in 2023..Now 2024 was also good..This month might end up flat..Looking back,the November and December months have been positive..Hopefully will continue this year a little better with the change of government..It’s a crazy ride
The cash wedge approach seems very sound. How is the firm that buys these corporate bonds on my behalf get renumerated?
There can be many ways, depending on the firm etc. From a set fee to ongoing percentage.
Seems to have missed Blue Chip Canadian Dividend etfs here. Monthly income. Low fees. Dividend growth over time. Dividends are much more stable than stock prices Can be very tax friendly. Big ommission IMO.
What would you suggest about the mix for a new retired couple in this actual enviroment?
90%, 80%, 70% , 60% or 50% in stocks?
~40% in CDN blue chip dividend stocks💰
~40% in large US & Cdn growth stocks📈
~15% in cash, GICs, or banker acceptance certificates.💵
~5% in alternative investments such as gold or crypto or higher risk growth stocks.🎲
It’s working for me 👍
U are so smart!@@svenhodaka9145
Adam, I use a High Interest Savings Accnt (ie Tangerine) that I use for my cash wedge. Currently getting 4.75 % til the end of Oct/2024. What alternative product would you recommend to try and get similar rates of return? (but dont want to use GIC)
There are a few out there. I use National Bank, paying me roughly what you get. It's once rates come down, assessing the market and seeing what's out there.
I recommend EQ bank - they give a higher yield for their high interest savings accounts as well they have the new "notice' savings acct. I use Tangerine just to direct deposit my pay and they offer a credit card (EQ does not have a credit card). Even when rates drop they are still higher than other banks. They are worth checking out. I switched to both Tangerine and EQ over a yr ago from RBC and haven't looked back. Online banks are in competition for business so it's worth shopping around and switching when it benefits YOU.
Is cash wedge called bucket method as well?
It can be. Often bucket is more attached to types of investment versus the focus on future cashflow needs.
Thanks for so much great information! A good investment manager is EVERYTHING! ❤ But i still love watching your videos. We have the bulk of our retirement with a mgr but we do each have a little bucket of 100k that we each control for fun investing.
It really is a shame that rates are this low. Money should not be "virtually free' when accessing capital. It is not fair to those who want to make money with their money. The only ones that win are the large institutions. Us little guys should be able to earn at least a few points above inflation with our GICs. Crazy government monetary interference has just yo-yo'd us all for the last 15/16 years.
People renewing their mortgage would disagree with you on that, lol! Read up on macro economics to understand how interest rates relate to inflation and this will help your understanding of the “crazy” government “interference”. Inflation is under 3% currently, so any GIC earning more than that over a year covers short-term cash needs.
@@g.belanger8302 Yes, I fully understand how banks and governments want to play with interest rates to control their economies. God forbid the crazy actions of governments in their spending frezies 'ever' be considered as contributing to the (macro)economics of the nation. No, it is way easier to punish the individual citizen or the businesses. But the businesses can leave, and so can the able citizen who sees the writing on the wall. Those unable to leave (financially) remain subservient to the state and the financial mess that they leave the citizens in. But hey, who doesnt want free money and be living high on the hog for as long as they can.....
Any thoughts on Structured Notes?
Meanwhile S&P 500 has 15% return for last 10 years. Buckets make sense.
I like how Warren Buffet talks about "just invest in the S&P 500 index - and just set it and forget it"... the ROI is solid long term. But for whatever reason, I still buy and sell stocks, mutual funds etc ... thinking I can out perform the S&P (and I dont beat the index). I feel foolish
how do you account for inflation running at 2 to 3%- would you not look at how that will effect the yields
How do you recommend finding a financial planner?
He, Adam, is the one who made the video you are watching.
this is how canadians will pay for all the new canadians comming in.
True Canadian: Unless a First Nations member, Metis or Inuit, conveniently forgets their own family were immigrants and forgets they contributed to building Canada, just like newer Canadians.
It's my experience the "new" Canadians are the ones willing to get off their butts and work the crappy jobs that keep Canada running, that your spoiled, entitled kids won't do because they think their first job should be an executive with a company car...
@@monah5532First Nations were also migrants. Also first European had to struggle and build from nothing, not get everything handed to them because reasons
Private equity in land development, 20-25 percent return per year. Double your money every 4-5 years! 4-5 percent is less than inflation!
I was a stay at Home mom with no money in my IRA or any savings of my own,which was scary at 43 years of age. Three years ago I got a part time job and save everything I make. After 3 years, I am 46 yo and have put $9,000 in an IRA and $40,000 in my portfolio with CFA, Kathie. Since the goal of getting a job was to invest for retirement and NOT up my lifestyle, I was able to scale this quickly to $150,000. If I can do this in a year, anyone can.
How can I reach your CFA, if you don't mind me asking?
Well her name is 'Kathie Daisy Bosco' just research the name. You'd find necessary details to work with a correspondence to set up an appointment
I know this lady you just mentioned. She is a portfolio manager and investment advisor. She gained recognition as a former employee at Goldman Sachs; a renowned investor she is. She has demonstrated expertise in investment strategies and has been involved in managing portfolios and providing guidance to clients.
I think I may have seen a video of Kathie creating copper jewelry while skipping rope AND giving financial advice. She really was incredible.
What about taking a small mortgage on a fully paid primary residence and investing it in the stock market while interest rates are very low?
No guarantee that the stock market returns will continue to exceed mortgage interest costs. The market could crash at any time.
Given valuations are super high , I would not recommend that with money you can't afford to lose. Yes the stock market could go up 20% ,it could also correct 20,30 ,50% . Can you afford that with borrowed money ? If Yes, go for it .
My sister did this. She took a home line of credit on the home for 100,000 put it in the market and it was up about 10%.
I told her to take profits and cut initial investment amount as valuations were really high.
But she got greedy started buying overvalued tech names …. Come this month she’s down 14 1/2%.
She owes $100,000 to the bank at 5 1/2% .
I wouldn’t recommend doing this.
I’ve seen the stress it puts on my sister is driving her crazy that’s all she thinks about now.
If you're asking the question, then you're not capable of doing it. When you finish reading The Intelligent Investor by Benjamin Graham, then maybe decide if you are interested in trading. If you can't read that and spend a lot of time watching good financial videos for fun, just save and buy ETFs.