2 Things You Must Focus on to Be Financially Secure

Do you feel financially secure? What would it take for you to build a huge nest egg to become financially secure?

Conventional wisdom says it’s mostly about investing better. It suggests you should focus on getting a higher return or lower fees.

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My experience, though, is surprisingly completely different. I have seen the full finances of thousands of people. The ones focused on investing usually had small portfolios. I call these people “performance maniacs”. This is a broad generalization with lots of exceptions, but mostly true. They were mostly young guys focused on investment returns, fees, dividends, market timing, the economy, etc. For some reason, the typical portfolios I have seen are usually under $200,000.

By comparison, when I meet people much less interested in investing with mutual fund portfolios and working with advisors, they tend to have much larger portfolios of $300,000 to $1 million, and often much larger. This is partly because they are usually older. However, the comprehensive study by CIRANO1 in 2012 showed people with advisors had 4.2 times more financial assets – after adjusting for age, income, gender and almost 50 other factors.

Investors with Advisors Save More

Many studies have shown that people working with advisors tend to have much larger investment portfolios, similar to my personal experience.

This difference cannot possibly be explained by higher rates of return. The Ipsos Reid survey (chart 1) shows the longer you work with an advisor, the farther you are ahead of the non-advised. I did the math. It would take a return 10% per year higher to explain this only from investing.2

Key #1: Better saving behaviour

The CIRANO study showed the real secret is better saving behaviour.  People working with advisors had much larger portfolios mainly because they invested more! Those with advisors:

  1. Were more likely to save.
  2. When they saved, it was twice as much (8.6% of income vs. 4.3%).
  3. They invested the savings, leaving much less in cash.
  4. They used RRSPs, TFSAs and other tax methods more effectively.

Financial planning – not investing – is the key to financial security.

This is good news. Saving behaviour is much easier to control than investment returns. The study was clear that saving behaviour was a far more important factor than investment rate of return. “Investment returns, while important, are of limited value ultimately.”3

Key #2: Retirement Plan

The core of a financial plan is the retirement plan. It alone is a huge factor in both achieving financial security and having a large nest egg. Another study “Making a Difference” (chart 2) shows that people working with a financial planner who prepared a retirement plan (Comp Planner) had almost 50% more retirement savings than those working with an investment-focused planner (Planner).

Retirement Wealth with Planner & with Retirement Plan

Do-it-yourselfers benefited even more from a retirement plan. DIYers that estimated their own retirement needs (Self Directed) retired with about 100% more than those that didn’t (No Plan).

The financial industry and the media just give lip-service to financial planning, but my experience and these studies show direct, huge benefits.

Why is having a financial plan, especially a retirement plan, so hugely beneficial? When you have a plan:

  1. You have a clear picture of the future you want.
  2. You know how much to save to get there.
  3. It is important to you, so you find the money to save.
  4. You work towards it consistently.
  5. You are clear on which strategies may fit your plan.
  6. You save tax because it’s obvious whether RRSP, TFSA or other methods are best for you.
  7. You know the return you need, so you may invest less in interest-bearing investments.
  8. You are less likely to get distracted by short-term factors like business news or market crashes.
  9. You think long term.

A retirement plan makes you think long term and puts all your financial decisions in perspective. Whether or not you work with a financial planner, the secret is to have a quality, written financial plan with a retirement plan.

In short, the 2 things you must focus on to achieve financial security are:

  1. Better savings behaviour. Focus on the 4 saving behaviours.
  2. Retirement plan. Develop and follow a retirement plan.

Investing is the last 20% of financial planning. To have the future you want, focus on the 80%.

Join this discussion forum to Get updates by email. I will walk you through becoming financially secure in Quest for Freedom.

Planning With Ed


Ed Rempel has helped thousands of Canadians become financially secure. He is a fee-for-service financial planner, tax  accountant, expert in many tax & investment strategies, and a popular and passionate blogger.

Ed has a unique understanding of how to be successful financially based on extensive real-life experience, having written nearly 1,000 comprehensive personal financial plans.

The “Planning with Ed” experience is about your life, not just money. Your Financial Plan is the GPS for your life.

Get your plan! Become financially secure and free to live the life you want.


  1. Phil Gosselin on October 24, 2020 at 8:43 PM

    Thanks again, Ed.

  2. Ed Rempel on October 24, 2020 at 8:18 PM

    Hi Phil,

    The 20% in Canada is likely to be a drag on your returns in the future. Without knowing your specific investments, you would probably have a higher return with 3% or less in Canada, and reallocate it to US or global equity investments.

    I can’t comment on specific other investments services. However, any service with an allocation to fixed income or Canada is almost definitely dragging down your long-term returns.

    That’s why I find you can EASILY outperform investment advisors and robo-advisors: https://edrempel.com/how-to-easily-outperform-investment-advisors-robo-advisors/ .


  3. Ed Rempel on October 24, 2020 at 7:45 PM

    Hi Barrie,

    The issue is not whether your stocks are “losers”. Will they keep up with the global stock market index MSCI?

    In my opinion, all equity investors should use the MSCI World index as their benchmark, even if their stocks are all Canadian. This tells you how effectively you invest.

    I think that investors that outperform the lowly TSX60 have not accomplished anything. It’s a low return index that is easy to beat, simply by investing outside of Canada.


  4. Phil Gosselin on October 20, 2020 at 7:16 PM

    Thank you for the excellent presentation at the Summit, Ed. I am retired and have a pension that more than covers all my needs, so I have been invested entirely in equities for quite some time. However, you have convinced me that I am overweight in Canadian stocks. Two questions: (1) What do you think about an equity portfolio that is 20% Canadian, 60% US and 20% International? (2) What do you think about Motley Fool (US) as an investment service?
    I’m not sure these questions are appropriate here. If not, where should they be posed?
    I’m looking forward to reading more of your articles.

  5. Ed Rempel on October 18, 2020 at 2:17 PM

    Hi Barb,

    I checked and you have been added to the list.


  6. Barb Day on October 18, 2020 at 2:00 PM

    Hi Ed, I watched both your presentations At the Canadian Financial Summit. I would like to hear more, I am on your site and tried to send my information to receive email updates, I filled in boxes but the location to send the information would not scroll down. Please add me to your list. Barb

  7. Barrie Nichol on October 17, 2020 at 11:58 PM

    Your presentation changed my thinking 180, (too bad Kornel kept interrupting). Monday I’ll be buying a global equity ETF (CIBC)for my TFSA. Thanks (I hope). I think I’ll hold onto my BMO, CIBC, BCE, ENB, and Fortis stocks, too early to call any of them “losers”.

  8. Ed Rempel on January 14, 2018 at 2:50 PM

    Very well said, Rick! I agree.


  9. Rick on January 7, 2018 at 7:50 PM

    Trying to get ahead financially is somewhat similar to getting physically fit. Many people try to lose weight by starting an exercise program which is good but ofter fails, they would be much more successful by focusing on what and how much they eat. Similarly to be financially fit focusing on reducing costs and investing the savings will be more successful than getting a 1% higher return.

  10. Sarah De Diego on November 25, 2017 at 2:55 PM

    Dear Ed,

    Another reason why I kept contributing to my managed account(s) was that I was under the baseline total amount for the minimum charged. So I was paying for them to manage money that they didn’t have. I could have gone to another company but wanted to invest with them. I got my total up within a year. Whatever helps me save.

    Thank you so much for sharing your knowledge with us.

    Besos Sarah.

  11. Commoncents on April 17, 2016 at 3:18 PM

    It’s nice to see a study that captures the qualitative advantages of advice that are difficult measure. This study actually looks at the results of financial advice rather than a single arbitrary metric like rate of return. Rate of return is definitely important, but it is a very small part of achieving financial goals. Even with a 20% rate of return, you need to save regularly in order to achieve any financial goal.

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