Breaking Up With An Investment Advisor Is Hard To Do

Breaking Up With An Investment Advisor Is Hard To Do

Over the last few years the number of low-cost investment options has exploded in Canada. There are new and easy ways to create a low-cost diversified portfolio that isn’t dragged down by high investment fees.

There were always low-cost, do it yourself options, but they required a fair amount of manual work to make contributions, invest those contributions, and rebalance periodically (and let’s not forget, the stress of keeping yourself on course during a correction or recession).

But now there are new options available. In addition to a low-cost ETF portfolio or a low-cost mutual fund portfolio, there are options like low-cost “all-in-one” ETFs and low-cost robo-advisors.

These new options provide investors with new ways to invest in a low-cost portfolio without necessarily doing all the work themselves.

This has understandably put a lot of pressure on investment advisors who have historically charged extremely high fees on the investment products they sell.

The average investment fee on a mutual fund portfolio in Canada is around 2.3%. This can cause an enormous amount of drag on an investment portfolio. A $1,000,000 investment portfolio would experience a $23,000 annual drag from investment fees! That has a direct impact on how much retirement income you can create from your investment portfolio.

But switching from a high-priced mutual fund portfolio can be hard to do.

Even with the high fees, traditional investment options continue to dominate the investing landscape in Canada, but things are starting to change. For the first time ever, ETFs have outsold mutual funds. More money is flowing into ETFs than into mutual funds (bear in mind that you can also have high-priced ETFs, and low cost mutual funds, so this isn’t necessarily the best indicator).

But… if these low-cost investment options have been around for a while, why the slow change? Why aren’t more people switching?

There are three main risks people face when making a change of this kind, financial risk, emotional risk, and social risk. These risks can be difficult to overcome. Let’s understand each one and why they make breaking up with an investment advisor hard to do…

The Benefits Of Retirement Planning

The Benefits Of Retirement Planning

Retirement planning is complex and includes many important considerations like retirement spending, income tax planning, income splitting, maximizing government benefits, deciding when to take CPP and OAS etc. etc.

All of these individual parts work together to create a great retirement plan. They are so important that even a small mistake can mean lower retirement spending or a higher chance of running out of money in the future. It could mean $10,000’s in extra tax or $10,000’s in reduced government benefits.

With a typical retirement plan spanning 30-40+ years it’s easy to understand how small change in assumptions can have a big effect on a retirement plan.

There are also many small decisions to consider when planning retirement, like when to convert RRSPs to RRIFs, when to start CPP, when to start OAS, how much to draw from investment assets, which investment assets to draw from first etc. etc.

In this post, we look at some of the important parts of retirement planning. What they are, what you should consider, and some additional resources to help.

A New Way To Share Your Financial Plan: The PlanEasy Public Dashboard

A New Way To Share Your Financial Plan: The PlanEasy Public Dashboard

Talking about personal finances has always been somewhat taboo. It’s difficult to discuss personal finances with friends and family. Everyone has different values and goals. We all have different financial circumstances. And sometimes… talking about personal finances can lead to hurt feelings and personal strife.

This has led to many people avoiding personal finance discussions or discussing personal finances anonymously in online forums and communities.

But discussing personal finances in an online community can be difficult. Personal finances are personal. A financial plan can differ dramatically from one person to the next. To have a good discussion requires a lot of information, something difficult to do in an online community.

At PlanEasy we want to make financial planning easy. We want to make it easier to share and discuss personal finances online.

That’s why we’re introducing the PlanEasy Public Dashboard, a completely anonymous way for PlanEasy users to share their financial plan… let’s take a look at the Public Dashboard…

Do You Have An Emergency Budget?

Do You Have An Emergency Budget?

You may have heard of an emergency fund, but have you ever heard of an emergency budget?

The fear of the unknown is very real. When it comes to personal finances, a little unexpected expense can cause a major issue. One small expense can lead to a snowball of high interest debt. An emergency fund can help avoid those issues. An emergency fund will help cover the cost of an unexpected expense.  An emergency fund will help you worry less about the unknown and will provide a lot of peace of mind.

An emergency fund isn’t the only thing that can provide peace of mind though.

There are many things that you can do to help you worry less about the unknown and avoid financial problems that naturally come up from time to time.

On top of an emergency fund, one thing you can do is have a high savings rate. Having a high (+20%) savings rate will give you room breathe when something unexpected comes up. Another thing you can do is have more than one income stream. Having income from your job, plus investments, plus rentals/AirBnB, plus side gigs will help increase your financial flexibility.

Lastly, having an emergency budget will help you prepare for the unexpected and provide an enormous amount of peace of mind.

Simple Ways To Save Money We Can All Do

Simple Ways To Save Money We Can All Do

We could all use some simple ways to save money each month. Saving money is important. Saving money helps us reach our financial goals.

The problem with traditional “money saving tips” is that everyone’s goals and values are different. We spend money differently and those typical “money saving tips” usually end up focusing on silly things like discretionary spending.

This list is different. This list includes simple ways to save money that we can all do without impacting our lifestyle. This money saving list doesn’t focus on lattes or avocado toast, it focuses on simple changes to our spending/saving/investment routine that can lead to some big savings.

You might be doing some of these things, or maybe even all of these things. If you are, you’re probably saving an extra $1,000+ per year. If you’re not, then there are some big opportunities if you make a few of these changes.

Create Your Own Online Spend Tracker Using Google Forms + Google Sheets

Create Your Own Online Spend Tracker Using Google Forms + Google Sheets

Tracking your spending is a great thing to do every once in a while. Even if it’s just for a short period of time, tracking your spending can provide an amazing insight into where your money is going. It can help you understand if your spending actually lines up with your values and goals.

You may want to do this permanently, to help you track your progress towards your goals, or you may want to do this temporarily, perhaps to help get your spending back on track, or to find out where your miscellaneous spending is going. You may also want to do this 1-2 years before retirement, just to make sure that your retirement budget isn’t missing anything.

You might want to track your spending… but you don’t want to give Mint all your passwords or pay YNAB a monthly fee. What you’re looking for a low-cost budgeting alternative that is still somewhat automated and easy to use, so why not setup your own spend tracker using Google Forms and Google Sheets?

Don’t want to set up your own spend tracker? Use our free Budget Tracking template. It’s built on the same principles as below, but we’ve already done a lot of the work for you. More details at the end of the post.

Creating your own spend tracker using Google Forms and Google Sheets is super easy to do. Google Forms integrates with Google Sheets so that every entry you make gets automatically added to your Google Sheet. As you spend money you simply pull up the Google Form on your phone, enter the amount and the category and hit submit. Google automatically adds this entry to your Google Sheet with a timestamp.

To help we’ve created a short video to guide you through the steps. In this video we’ll create a basic spend tracker, it’s nothing fancy but you can always add more functionality/charts later.

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