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In this episode, I interview two professional financial planners to discover what are the most common questions that they receive when working with Canadians.
Our two guests are also going to cover what the most important and frequently occurring blind spots are that we Canadians tend to make in our own finances.
We also cover how to know if you are on-track to reach financial independence and retire early, or if you have enough to retire comfortably.
We cover all this and more, as we tackle the top questions that Canadians have, here in Canada.
Our guests today are Hannah McVean and Thuy Lam from Objective Financial Partners. They are both fee-for-service financial planners, are both Certified Financial Planners (CFP), and they and their firm don’t sell any investments and instead focus on providing unbiased, conflict-free financial planning advice.
Hannah was actually a guest on our January episode with Jason Heath and that was our most popular episode this year. So, it’s great to have her back, along with Thuy to get multiple perspectives on these most popular questions that Canadians have.
Resources Mentioned:
You can book a free introductory meeting with Hannah, Thuy and their team at buildwealthcanada.ca/plan. As a Build Wealth Canada listener, you’ll get 10% off if you end up working with them. The discount is for a limited time, and you can sign up for free here. A big thanks to Hannah and Thuy for offering this to Build Wealth Canada listeners.
A Big Thanks to Our Sponsors:
“Views from the Desk” Podcast
On this podcast, we often cover best practices that can not only help you now, but will also be relevant throughout your investment lifetime. But what if you also want an update on what is happening with your investments, the markets, and the economy right now?
To help me stay up-to-date on these topics, a great Canadian podcast that I listen to weekly is called “Views from the Desk” (Apple, Spotify, Direct).
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Market Insights brings in industry experts and their weekly episodes cover the hottest themes like inflation, infrastructure, healthcare, and more. Tuning in helps me stay up-to-date on what’s happening so I can be a smarter investor. You can also submit your own ETF questions, to be answered on the show.
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Questions Covered:
- During our pre-interview discussion, you both mentioned that one of the most popular reasons that Canadians reach out to you for advice is to see if they have any blind spots or if there’s anything that could be done better when it comes to their finances, financial planning, and investing.
Can you each take us through some of these important or frequently occurring blind spots that we should be on the lookout for in our own finances? - Can you take us through how you suggest Canadians evaluate the decision to pay down their mortgage quicker vs investing for retirement? Are there certain thresholds that you like to use to help decide?
- For those that do decide to focus on investing, the general rule-of-thumb in Canada is that the focus should first be on trying to max out all the contribution room that you have in your TFSA and RRSP, and then once those are filled up, you start investing in a taxable/non-registered account. Can you think of any cases or examples where that may not be the optimum course of action to take?
- Once a Canadian investor ends up maxing out their RRSPs and TFSAs, what should they consider when deciding how to deploy the extra cash going forward?
- Thuy, during our pre-interview, another question you told me you get frequently is from Canadians wondering if they are on-track to reach FIRE (financial independence, retire early), or retire comfortably.
The best answer that I’ve been able to find on this is to get an in-depth financial plan done since the final financial independence number needed can vary wildly from person to person based on their circumstances and what they want to do in retirement.
Can you speak to that, but also provide us with some general rules or guidelines that Canadian investors can do themselves to at least get a rough estimate on what might be needed to achieve financial independence as a Canadian? - Hannah, when we get into topics such as this, one challenge that inevitably comes up is dealing with the risk of varying returns, often referred to as the sequence-of-returns risk. Hannah, can you define what this is for anybody new to the concept, and can you each take me through your favourite way(s) of dealing with this challenge to help ensure that we all have acceptably high odds of a successful retirement?
- One of the challenges that you work on with a lot of clients is how they can manage and reduce the tax that they pay, as they start to decumulate and live off their investments. Can you speak to some of your favourite approaches or strategies to help us not pay any more tax than we need to once we’re ready to start living off our investments?
- We created a special page where listeners of the show can sign up to have a free introductory call with you (BuildWealthCanada.ca/plan). Since you were last on, you and your team have developed something new specifically for DIY investors. Can you tell us more about this, and how is this different from the free introductory calls and discount that you are already providing to Build Wealth Canada listeners?
Disclaimer:
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