For many Canadians, becoming mortgage-free as quickly as possible feels like an obvious financial goal.

But I think there’s a more important question to ask first:

Once your mortgage is paid off, what percentage of that former mortgage payment will you actually invest?

I call this the 95% test.

If you pay off your mortgage early but then use most of the newly available cash flow for travel, restaurants, renovations or simply a more expensive lifestyle, you haven’t necessarily accelerated your path to financial independence. You may have simply delayed investing.

The Mortgage Victory Trap

I’ve seen this happen many times.

Someone works hard to eliminate their mortgage 10 years before retirement. Suddenly, they have hundreds or even thousands of additional dollars available every month.

It feels fantastic.

And because retirement still seems far away, that extra cash gradually gets absorbed into their lifestyle.

They travel more. They spend more freely. They become accustomed to living on a higher level of disposable income.

Then retirement arrives — and the paycheque disappears.

The problem wasn’t paying off the mortgage. The problem was becoming accustomed to a lifestyle that their retirement savings may not be able to support.

That’s what I call the mortgage victory trap.

Your Bigger Goal Is Financial Independence

For most people, the larger challenge is building a portfolio capable of supporting the lifestyle they want in retirement.

Someone hoping to spend roughly $75,000 to $100,000 per year in today’s dollars could require a substantial retirement portfolio, depending on their pensions, taxes, investment returns, retirement age and other circumstances.

That is why I generally believe the focus during your working years should be on becoming a confident, disciplined investor — rather than simply eliminating debt as quickly as possible.

Historically, diversified long-term investments have had the potential to earn higher returns than typical mortgage borrowing costs, although investment returns are never guaranteed and the right strategy depends on your individual circumstances.

For some people, aggressively paying down a mortgage is absolutely appropriate. Debt tolerance, interest rates, retirement timing, cash flow and personal risk tolerance all matter.

But paying off your mortgage purely because investing feels uncomfortable can be expensive if it means missing years of potential compound growth.

Consider Timing the Mortgage With Retirement

My general preference is to structure your finances so that the mortgage is paid off around the time you retire — perhaps a year beforehand — rather than a decade earlier.

During those working years, continue making your regular mortgage payments while directing available savings toward building your investment portfolio.

Then, as retirement approaches, two things happen at roughly the same time:

Your employment income stops.

And your mortgage payment disappears.

You haven’t spent a decade getting accustomed to extra disposable income that will suddenly vanish in retirement, and you’ve continued investing throughout your highest-earning years.

The goal isn’t simply to own a mortgage-free house.

The goal is to reach retirement with a paid-off home, a strong investment portfolio and the financial freedom to maintain the lifestyle you worked so hard to build.

Ed

The post Should You Pay Off Your Mortgage Early or Invest Instead? appeared first on Ed Rempel.

How to Build a Safety Net Without Putting Your Future on Hold

A practical guide for ages 16-25 to building emergency savings, understanding where a TFSA can fit, and balancing saving with investing – without making money feel all-or-nothing.

The goal is not perfection.
The goal is enough breathing room that an ordinary surprise does not force an expensive decision. Start small, protect liquidity, and build from there.

Build in stages:  $250  ->  $500  ->  $1,000  ->  1 month of essentials   TRY THIS NOW  If a $250 surprise happened tomorrow, where would the money come from? That answer tells you where to start.

Life does not wait for the perfect budget

A cracked phone you need for work. A laptop that dies during exams. An urgent dental bill. A car repair you need to make it to your shift. A sudden drop in work hours. Life can get expensive before you feel fully “grown up.”

The uncomfortable question is simple: if something went wrong tomorrow, could you handle it without creating a second problem?

An emergency fund helps turn a crisis into a problem you can solve. It is cash, but it is also time, flexibility, and the ability to make a clear decision without immediately reaching for expensive credit.

You do not have to build three to six months of expenses overnight. You do not have to stop every long-term goal until your emergency fund is “finished.” But you do need a sequence that puts stability first.

What actually counts as an emergency?

A useful rule: an emergency is necessary, urgent, and genuinely unexpected. Irregular expenses that you know are coming belong in your budget or a separate sinking fund.

When money is tight, build your safety net in layers

Trying to do everything at once can make saving feel impossible. A layered plan creates progress without pretending that a credit line and cash savings do the same job.

Sage reframe
Your line of credit can be a backup to the plan. It should not be the plan. Cash is what gives you the most control when life is already stressful.

Saving and investing are different jobs

The question is not “Should I save or invest?” The better question is “What job does this money need to do?”

A TFSA is an account type – not an investment strategy

A TFSA can hold cash, GICs, mutual funds, exchange-traded funds, stocks, and other permitted investments. That flexibility is useful, but it also means the label “TFSA” does not tell you how safe or accessible the money is.

If part of your TFSA is serving as emergency money, keep that portion aligned with an emergency fund’s job: protected, liquid, and easy to access. Money you will not need for years can be invested according to your longer-term plan.

If you are 16 or 17, start with cash savings first A TFSA is not available until at least age 18. In some provinces and territories, you must be 19 to enter into the TFSA contract; contribution room from the year you turned 18 can carry forward. If you are not eligible yet, you are not behind – build the saving habit in a regular savings account and learn how the account works before you need it.

One TFSA detail worth remembering
If you withdraw from a TFSA, the amount withdrawn is added back to your contribution room on January 1 of the next calendar year. Re-contributing in the same year can cause an over-contribution if you do not already have enough unused room.

Where a line of credit can fit

For readers who are legally eligible, approved by a lender, and able to repay what they borrow, a line of credit can sometimes serve as a temporary secondary bridge while a cash reserve is still small. It usually carries a lower interest rate than a credit card, but the rate is often variable and interest starts from the day you borrow. If you are younger or do not qualify, simply skip this layer. Credit is a backup – not an emergency fund and not free money.

A more resilient order of operations is:

What an emergency fund can look like at your age

Your responsibilities can change a lot between 16 and 25. These examples are not rules or required balances; they are illustrations of how the next useful milestone can grow with your life.

A simple age-based roadmap

Use this as a flexible progression, not a scorecard. Your living situation, family support, income stability, and responsibilities matter more than your birthday.

Aisha and Jason: two paths, one important difference

Aisha builds liquidity before optimization

Aisha is 21 and can save $150 a month. Instead of investing every dollar immediately, she first directs the full $150 to a starter emergency fund. Because she is eligible and approved, she also keeps a $5,000 line of credit unused as a secondary backup – not as her primary emergency plan.

When her starter fund reaches $1,000, she changes the split: $50 a month continues to emergency savings and $100 a month goes toward long-term TFSA investing. Her safety net and her future goals grow at the same time.

Then her laptop dies during exam season. She uses her emergency cash. If the bill is larger than the cash available, she can use a small amount of the line of credit and prioritize repayment. She does not have to automatically sell long-term investments just because an emergency happened.

Jason invests everything and keeps no cash

Jason is 24 and feels that cash is “doing nothing,” so he invests every available dollar and keeps no emergency reserve. When his car needs an urgent repair, his only easy options are a high-interest credit card or selling investments at whatever price they happen to be worth.

The difference is not that Aisha predicted the emergency. She simply built liquidity into the plan.

The practical lesson
The best financial plan is not the one that maximizes every dollar on paper. It is the one you can keep following when real life interrupts it.

How to build the fund without feeling overwhelmed

What small contributions can become

Consistency matters more than finding a perfect number. Here are simple examples before interest or investment returns:

The right number is the one you can repeat. Once the habit is stable, increase it when your cash flow allows.

The emotional shift is real

Something changes when you know there is money set aside for the unexpected. You may still dislike the surprise, but you no longer have to solve the expense and the financing at the same time.

You move from “What if something goes wrong?” to “If something goes wrong, I have a process.” That confidence usually arrives before the emergency fund is fully built.

Your emergency-fund checklist

• I know which expenses in my life would count as a true emergency.
• I have a first cash-buffer target that feels achievable.
• I have chosen a next milestone that fits my current age, responsibilities, and income.
• If I am considering a TFSA, I know whether I am eligible to open one and I understand my available contribution room.
• I have an automatic transfer set up.
• My emergency money is separate from everyday spending.
• If emergency money is inside a TFSA, I know how it is invested and how quickly I can access it.
• I understand the interest rate, fees, and repayment terms on any line of credit I may use as backup.
• I know that a TFSA withdrawal is added back to contribution room the following calendar year.
• I have a plan to pause or reduce investing if I need to repay emergency debt.
• I will rebuild the fund after I use it.

Closing message
You do not need to choose between feeling secure today and building wealth for tomorrow. Start with enough liquidity to protect the present, then invest for the future from a more stable foundation

Government of Canada reference points

Key technical points in this article were checked against current Government of Canada guidance:

• Financial Consumer Agency of Canada – Setting up an emergency fund – start small, keep emergency money accessible, distinguish unexpected costs from planned expenses, and work toward roughly 3-6 months of regular expenses over time.
• Canada Revenue Agency – Opening a TFSA – TFSA eligibility begins at age 18, with contract-age rules in some provinces and territories.
• Canada Revenue Agency – Withdrawing from a TFSA – withdrawals create new contribution room in the next calendar year.
• Financial Consumer Agency of Canada – Lines of credit – lines of credit are borrowed money; rates are usually variable and interest accrues on amounts borrowed.

Important note

This article is for general educational purposes, not personalized financial, investment, tax, legal, or credit advice. Examples and milestone amounts are illustrative. The right approach depends on your age, eligibility, cash flow, obligations, goals, and risk tolerance. Credit is debt; understand the cost and repayment terms before borrowing. If you are under the age of majority, involve a parent or guardian as appropriate.

— Sabiha

The post Building an Emergency Fund When Money Is Tight (And How to Stay Protected While You Invest) appeared first on Ed Rempel.

Having enough money to retire is one thing. Knowing how to use it wisely is another.

Tom and Judy are in a strong financial position. With a $1.16 million investment portfolio and a valuable defined benefit pension, the bigger question isn’t whether Tom can afford to retire at 63 — it’s how they should make the most of what they’ve built.

Their situation raises several interesting retirement planning questions:

• How to think about whether it is worthwhile to delay an employer pension.
• When it makes sense to start CPP and OAS.
• How income tax rates in British Columbia compare with Nova Scotia.
• How large a mortgage their investments should be able to support.
• Whether they should consider a future cottage sale when deciding how much to spend on a home now.
• Why carrying a mortgage into retirement can sometimes make sense when you invest mainly or entirely in equities.

CLICK THE LINK BELOW TO READ THE ARTICLE BY MARY TERESA BITTI:

Can Tom afford to retire by 63 with a $1.16 million portfolio?

Married couple Tom* (61) and Judy (63) are at an inflection point. Judy retired just over a year ago and loves it. Tom plans to retire in two years. He’s happy to retire sooner, if possible, so long as they can achieve their target after-tax annual retirement income of $120,000 indexed to inflation. 

Tom and Judy have built an investment portfolio valued at approximately $1.16 million, largely in Registered Retirement Savings Plans ($620,000) and Judy’s Locked-In Retirement Account ($460,000). The asset mix in these accounts is 75 per cent equities, 23 per cent fixed income, and 2 per cent cash. They also have approximately $80,000 in Tax-Free Savings Accounts, with an asset mix of 65 per cent equities, 25 per cent fixed income, and 10 per cent cash.

If Tom does retire in 2028, he will be eligible to receive an annual defined benefit indexed employer pension income of approximately $100,000 with lifetime survivor benefits for Judy valued at 66 per cent of the pension. 

They are confident they have enough money to see them through retirement. Their financial focus now is tax efficiency and how to strategically draw down the wealth they have accumulated. 

Should Tom delay his employer pension until age 65 or later to minimize the couple’s tax costs? At what age should they start receiving Canada Pension Plan and Old Age Security benefits and begin withdrawing from their RRSPs? 

When Tom does retire, the couple are considering a shift to a bicoastal lifestyle. This could potentially see them divide their time between British Columbia, where their son lives, and their longtime home of Nova Scotia, where they own their principal residence and a cottage. 

At this point they are exploring their options and looking for advice to determine the most financially responsible approach. For example, should they purchase or rent a home in British Columbia, where house prices are much higher than Nova Scotia, but where tax rates are much lower.  Should they sell their principal home, currently valued at approximately $750,000 to help fund a new home on the West Coast and keep their East Coast cottage to use in the summer – at least for the next few years? 

“If we cleared $750,000 from the sale of our home in Nova Scotia, what is the outer envelope that we could spend on a new home in British Columbia that would effectively mean breaking even in terms of the additional mortgage debt versus the tax benefits of changing our province of residence,” asked Tom. 

The cottage is conservatively valued at $500,000 and has a mortgage of approximately $190,000 at 3.99 per cent for the next three years. The only other debt Tom and Judy have is a $70,000 home equity line of credit against the cottage. If they do purchase a home in British Columbia and take on a mortgage, when they’re ready to sell their cottage, those proceeds could be used to pay down that additional debt – if that is the best option. 

The couple don’t want the emotional comfort of being debt-free to create a blind spot in how they move forward. “We know that the choices we make now are really important,” said Judy. 

Financial Plan

For him to retire in 2 years with their desired lifestyle of $120,000/year after tax, they will need a before-tax income of $160,000. To achieve this, they would need $510,000. They are expected to have $1.35 million. They are 128% ahead of their goal, which is a comfortable margin of safety.

They are confident they have enough money to see them through retirement. Their financial focus now is tax efficiency and how to strategically draw down the wealth they have accumulated. 

Should Tom delay his employer pension until age 65 or later to minimize the couple’s tax costs? At what age should they start receiving Canada Pension Plan and Old Age Security benefits and begin withdrawing from their RRSPs? 

Don’t delay pension. Income split when it starts. Pensions typically are based on an actuarial formula that uses a rate of return of about 5%. Their investments are about 75% equities, which should give them a higher rate of return. That means they would likely lose a bit of lifetime income by delaying their pension.

It is common to only look at how much the pension would pay without considering how much more they should be able to get with more investments. Those with a high equity allocation are normally better off having more investments and a bit smaller pension.

Deferring CPP from age 60 to 65 gives him an implied return of 10.4%/year on investments they would have to withdraw to provide the same income. Deferring to age 70 gives him an implied return of 6.8%/year. Since his investments are about 75% equity investments, they should provide roughly the same as 6.8% while giving him more flexibility with his income, but would be quite unlikely to beat 10.4%. It is probably best for him to start CPP and OAS at age 65.

At this point they are exploring their options and looking for advice to determine the most financially responsible approach. For example, should they purchase or rent a home in British Columbia, where house prices are much higher than Nova Scotia, but where tax rates are much lower.  Should they sell their principal home, currently valued at approximately $750,000 to help fund a new home on the West Coast and keep their East Coast cottage to use in the summer – at least for the next few years? 

“If we cleared $750,000 from the sale of our home in Nova Scotia, what is the outer envelope that we could spend on a new home in British Columbia that would effectively mean breaking even in terms of the additional mortgage debt versus the tax benefits of changing our province of residence,” asked Tom. 

The same income gives them $5,000/year more after tax in BC vs Nova Scotia. That would pay for a mortgage about $125,000 higher. If they sell their home for $750K and clear just over $700K and pay for a mortgage of $125,000, that gets them a home in BC of about $850,000 with the same cash flow.

They have about $800,000 more than they need for their desired lifestyle. They should keep $100-200,000 at least as a margin of safety. That means they could use up to $600,000 to make mortgage payments. They could withdraw 4%/year or $24,000/year which would be about $17,000/year after tax. That could make payments on a mortgage about $400,000.

That means the maximum home they could afford with a safety margin is about $1.25 million.

If they do purchase a home in British Columbia and take on a mortgage, when they’re ready to sell their cottage, those proceeds could be used to pay down that additional debt – if that is the best option. 

Likely it is not best to consider their cottage in a possible home price now, since they may keep the cottage for many years.

The couple don’t want the emotional comfort of being debt-free to create a blind spot in how they move forward. “We know that the choices we make now are really important,” said Judy.  This is an insightful comment because most seniors with mostly or all equities in their investments could generally afford a significantly higher lifestyle if they keep a large mortgage with the same amount of additional investments. Their equity investments should have a higher rate of return after tax over time than normal mortgage rates.

-Ed

The post National Post article: Can Tom afford to retire by 63 with a $1.16 million portfolio? appeared first on Ed Rempel.

At a glance: match the structure to the business stage

Most business owners do not need every trust strategy on day one. Needs change as the business grows, profitability improves, succession becomes clearer, or liquidity becomes a priority. The key is to build deliberately instead of reacting late – and to keep the structure practical enough that it still supports real life.

Infographic: trust planning can evolve as the business moves from growth to transition.

1. Early to growth stage: building the foundation with a family trust

As a business starts to grow and build real value, holding shares personally can limit future options. This is often a good time to ask whether a discretionary family trust should be part of the structure.

How it works

Instead of the founder holding all growth shares personally, a family trust may hold some or all of those shares. Beneficiaries often include a spouse, children, or other family members, depending on the family situation and legal advice.

Why it matters

2. Established and profitable stage: protecting wealth with a Holdco and family trust

Once the business is profitable and generating more cash than it needs day to day, it may not make sense for every dollar to stay inside the active company. A holding company can help separate the operating business from the wealth being built over time.

Infographic: a Holdco can help separate business operations from accumulated savings and investment assets.

How the structure works

• The active business continues to operate inside the operating company, often called the Opco.
• A separate holding company, or Holdco, may be introduced.
• A family trust may sit above the structure, depending on the share design and what the family is trying to accomplish.
• Surplus cash may be moved from Opco to Holdco as inter-corporate dividends, but the details need to be reviewed carefully with tax and legal advisors.

Why it matters

3. High growth or pre-exit stage: locking in value with an estate freeze

When a business is growing quickly, future tax exposure can grow quietly in the background. An estate freeze can help lock in the current value for the founder while allowing future growth to accrue elsewhere, often to a family trust.

Infographic: an estate freeze can separate today’s value from future growth.

How it works

The owner may exchange common shares, which capture future growth, for fixed-value preferred shares based on today’s value. New common shares are then issued to a family trust or successor structure, so future growth can be planned for more intentionally.

Why it works

4. Transition and retirement stage: simplifying continuity with a Joint Partner or Alter Ego Trust

After an exit, or once the owner has fully stepped back, the planning conversation changes. The focus often shifts from growing the business to protecting income, maintaining privacy, planning for capacity, and making estate administration easier for the family.

How it works

For individuals age 65 or older, certain assets may be transferred into a Joint Partner Trust, or an Alter Ego Trust for a single individual, on a tax-deferred basis. These trusts are often used to help manage assets during life and support a smoother transition later.

Why it matters

5. Liquidity layer: funding tax liabilities with corporate-owned insurance

Even with thoughtful corporate and estate planning, there may still be a future tax bill. The key question is often not whether tax will be payable, but whether the estate will have enough cash available when it is needed.

In many corporate structures, life insurance proceeds can create a Capital Dividend Account credit, which may allow tax-free capital dividends to be paid to shareholders. The mechanics are technical and should be coordinated with tax and insurance professionals, but the planning purpose is simple: create liquidity so the family is not forced to sell important assets at the wrong time.

Key planning questions for business owners

The ultimate act of protection

The best trust planning is not about making life more complicated. It is about creating stability, protecting what has been built, and making sure the structure supports the family – not the other way around.

When you strip away the legal terminology, this planning is really about continuity. It protects a lifetime of early mornings, late nights, shared sacrifice, risk-taking, and the quiet promises made to the people who helped build the business alongside you.

The right structure can help a spouse avoid financial chaos during grief, give children a clearer path forward, and preserve a business or investment legacy without forcing rushed decisions at an already difficult time.

Business owner checklist

• Confirm whether shares are held personally, by a corporation, or through an existing trust.
• Review whether Opco is holding more cash or investments than it needs for operations.
• Confirm whether shares could qualify for LCGE planning before a future sale.
• Discuss whether an estate freeze is appropriate before the next major growth stage.
• Review liquidity for future tax, buyout, estate, or succession needs.
• Coordinate the plan with your accountant, corporate lawyer, estate lawyer, insurance advisor, and financial planner.

Important note

This article is for general educational purposes only and should not be treated as legal, tax, accounting, insurance, lending, or investment advice. Canadian trust planning, TOSI rules, LCGE planning, estate freezes, probate planning, and corporate-owned insurance are technical areas. Always review your situation with qualified Canadian tax and legal professionals before making changes.

— Sabiha

The post The Right Trust Structure for Business Owners in Canada- How Smart Planning Evolves as Your Business Grows appeared first on Ed Rempel.

I get this question a lot. Is a retirement plan safe if you retire when the markets are at an all-time high? Can you reasonably still expect good performance in the future?

The Conventional Wisdom About Retirement Risk

The conventional wisdom here is 3 things:

1. The risk to your retirement is “sequence of returns risk” (SOR), meaning the risk of what happens if the first years are bad.
2. The main risk is the first 5 years.
3. You should protect your portfolio somehow by putting part of it into either cash or a fixed income investment like bonds.

All the questions I get about sequence of returns risk focus on 5 years. Why 5 years and not 3 or 10? Everyone is reading the same sources and studies. I can guess the logic is that markets give you a normal 10%/year return for 5 years and you only withdrew 4%/year, then you should be ahead of your goal. However, if you are worried about the first 5 years, there is an obvious question: “After 5 years, is the main risk done or is the next 5 years the main risk now?” If the next 5 years is always the main risk, then the risk is your entire retirement!

I have heard hundreds of variations of how much and which income investment should protect you, but the questions essentially always include fixed income as the answer to the risk of temporary market declines.

My Unconventional Wisdom

Here is my unconventional wisdom based on studies and actual experience:

1. Markets are not necessarily riskier when they are at an all-time high. All-time highs happen all the time.
2. Sequence of returns risk is not a thing for a 30-year retirement.
3. You do not need any fixed income investments, unless that will help you stay invested.
4. If you have any fixed income investments, you should assume that you will have less growth and less cash flow during your retirement.
5. People who don’t think about sequence of returns risk usually have significantly more comfortable retirements.

Note that if you need fixed income to stay invested, then it is probably better for you to have some. Markets have reliably provided strong long-term returns, but only if you stay fully invested for the long term. Many people cannot stay fully invested after a large market decline.

My unconventional wisdom applies to people who want to optimize and maximize their retirement and have the risk tolerance to stay invested right through any market declines. Not nearly everyone can do this, but it is a highly valuable skill and is the way to reliably maximize your retirement. Remember, high risk tolerance is the ability to do nothing after a major market decline.

Are Markets Riskier at an All-Time High?

Why are markets not riskier at an all-time high? The markets typically rise in 3 of 4 years, so most years include an all-time high. They happen all the time – in about 60% of years. After a large market gain, the most likely next year based on history is another gain. If you become more defensive when the market is at an all-time high, you will be defensive most of the time!

Sequence of Returns Risk Over a 30-Year Retirement

How can I say sequence of returns risk is not a thing for a 30-year retirement? Looking at the stock markets for the last 95 years (the modern stock market), the worst 25-year period had a gain of 8%/year. That is the worst period. The worst 25-year period in the last 150 years had a gain of 5%/year.

My point is that the stock market has reliably provided strong returns over the long term – even when the first years are bad. In fact, my study showed adding fixed income consistently increased your risk of running out of money during retirement. Fixed income makes a 30-year retirement MORE risky, not less risky. There is no guarantee that this will always be true, but it has been true in the last 150 years.

The 4% Rule and Fixed Income

The general recommended withdrawal guideline for your retirement is the “4% Rule”, which says you should withdraw 4% of your retirement investments the first year and then increase that by inflation every year – regardless of what the markets do. I studied this 4% Rule in detail for the last 150 years and found that a 100% equity portfolio with no fixed income has provided a reliable retirement 96% of the time with no management. If you manage your withdrawals effectively by taking less if you find yourself withdrawing more then 5% or 6% of your portfolio, then it has worked 100% of the time the last 150 years.

Fixed income successfully provided a 30-year retirement with the 4% Rule less than half the time. Fixed income usually fails over 30 years. This is because you need an income that rises with inflation – not a fixed income. Don’t assume that adding fixed income is safer over a 30-year retirement.

Bottom line: You do not need any fixed income investments, unless that will help you stay invested.

The Cost of Holding Cash or Fixed Income

What is wrong with holding a bit of cash or fixed income to use after a market crash? The problem is that you hold that low-return investment for your entire retirement. That means you almost definitely will have lower returns, and therefore less cash flow during your retirement.

For example, you put just 10% of your investments into fixed income. If that 10% averages 6%/year lower return than the stock market, then your long-term return of your portfolio is .6% lower – such as 7.4%/year instead of 8%/year. With compounding over 30 years, that is 15% less growth! You may or may not be able to use the cash after a market decline and then replenish it when the markets are higher (because market timing is hard), but you do lose the 15% of your return for 30 years. The lower returns you get for 30 years is why studies show holding cash or fixed income of any amount does not help you provide more for your retirement.

I studied holding cash holdings of a wide variety of sizes over the last 150 years and could not find even one example where it was helpful over a 30-year retirement. There was not a single time in the last 150 years when you would have run out of money with 100% in equities when you would not have if you had any amount of fixed income. Of course, the 100% equity portfolio always provided much more growth and cash flow during retirement.

Bottom line: If you hold any cash or fixed income through your retirement, you should assume you will have less cash flow during your retirement.

Retiring at an All-Time High: The Bottom Line

The bottom line to questions about “Retiring when Markets are at an All-Time High” is that they are usually at an all-time high, so it does not necessarily mean anything. You can have the highest, reliable retirement if you ignore sequence of returns risk. Stay invested for long-term growth right through your retirement. Use your Financial Plan or a guideline like the 4% Rule to withdraw about 4% of your portfolio the first year and then just increase that by inflation every year to maintain the purchasing power of your retirement income. Monitor how much you withdraw each year and consider taking less if you find yourself withdrawing more than 5% or 6% of your portfolio in any year.

Note that when you have a professional retirement plan, your actual income each year is based on your desired lifestyle. The amount you withdraw is calculated more precisely and may vary quite a bit from the 4% Rule. Following your Financial Plan is usually the most effective and reliable advice. The 4% Rule is just a guideline.

We have extensive experience with this working with many retired clients for years, including some that retired just before 2008 (the worst crash since 1930s). Staying fully invested in equities (especially global and US growth equities) right through your retirement, following your Financial Plan, and monitoring your withdrawals has worked for us and our clients reliably. It is amazing how comfortable your retirement can be when your portfolio continues to give you strong growth all the way through your retirement!

Check out the Reviews page on my blog for stories like the story of P.H. from Brampton who said, “With Ed’s knowledge and vision, he has shown how his plan can generate $15-20,000 of additional income per year throughout our retirement years. And THAT, in short, is the difference between penny pinching “golden years” or the freedom to finance all the plans we had already made, but for which we didn’t really know if the money would be there or not. “

In short, our extensive experience is that you can have the most comfortable, reliable retirement by ignoring all the conventional wisdom. Just relax, stay focused on long-term growth, and enjoy your comfortable retirement.

Ed

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A practical guide to managing your first full-time income with clarity, consistency, and room to enjoy your life.

The Moment Your Income Starts Feeling Real

There is a moment that happens a few months after you start earning a full-time income.

First, everything feels new – your paycheques, your routines, your sense of independence. But then something shifts. You are paying your bills, buying groceries, going out, and still asking yourself: where did all my money go?

It is usually not because you are irresponsible. It is because no one ever taught you how to manage a full-time income in a way that feels supportive instead of suffocating.

So, this is not about a restrictive, colour-coded, track-every-coffee budget. It is about a system that helps you breathe easier, enjoy your life, and still move forward.

Why Most Budgets Fail

A supportive budget gives permission and clarity. A restrictive budget usually collapses.

Most people hear the word budget and immediately think about cutting everything fun, tracking every dollar, and feeling guilty about spending. No wonder people avoid it.

But a good budget is not about restriction. It is about clarity. It tells you what is safe to spend, what needs to be protected, and what can be enjoyed without anxiety.

The Three-Bucket Budget

Instead of a complicated spreadsheet, think of your money in three buckets.

The target ranges are flexible. The goal is consistency, not perfection.

Two People, Two Budgets, Two Very Different Experiences

Let us revisit Aisha and Jason from the first-paycheque conversation.

Aisha and Jason earn similar incomes. The difference is the system around their money.

Aisha – The Calm Budgeter

Aisha did not create a perfect spreadsheet. She did not track every purchase. She simply divided her money into three buckets and automated the first two.

·       10% to savings

·       55% to essentials

·       35% to living her life

She knew her bills were covered. She knew her savings were growing. She knew exactly how much she could spend guilt-free. She was not magically good with money – she was consistent.

Jason – The Figure-It-Out-Later Budget

Jason avoided budgeting because he did not want to feel restricted. He wanted freedom. But without a plan, his money slipped through the cracks.

·       A few extra dinners out

·       A subscription he forgot about

·       A weekend trip he did not plan for

·       A new gadget he convinced himself he deserved

By the end of the month, Jason was not sure where his money went – only that it went fast. He did not feel free. He felt stressed because he did not know what was safe to spend.

A Real Full-Time Income Budget Example

Let us say your monthly take-home pay is $3,800. Here is one simple, healthy budget framework.

The Secret to Budgeting Without Feeling Restricted

The system works because the important money moves before you have to make another decision.

Here is the part that changes everything: you do not need to track every dollar. You just need to automate the important ones.

When your paycheque lands:

·       Your savings move automatically.

·       Your bills get paid.

·       Whatever remains is yours to enjoy.

That means no guilt, no spreadsheet anxiety, and no constant second-guessing. Just clarity.

Add Sinking Funds So Life Does Not Surprise You

One enhancement that makes this system much stronger is adding small sinking funds inside your Life or Future bucket. A sinking fund is money set aside for an expense you know is coming, even if it is not monthly.

When the Numbers Do Not Fit

A budget is a guide. When life is expensive, adjust the plan instead of abandoning it.

Some months, the three-bucket budget will not fit perfectly. Rent may be too high. Groceries may jump. A car repair may hit. That does not mean you failed. It means the system needs a reset.

Use this order of operations

·       Start with a smaller savings rate if 10% is not realistic yet – even 3% to 5% builds the habit.

·       Review recurring expenses before cutting the things that genuinely bring you joy.

·       Separate true essentials from lifestyle upgrades that became automatic.

·       Keep a Life bucket, even if it is small, so the budget does not feel like punishment.

·       Revisit the numbers monthly instead of judging yourself daily.

Why This Works Emotionally, Not Just Financially

Budgeting is not really about controlling your money. It is about creating a life where money does not control you.

·       Permission to enjoy your life.

·       Confidence that you are moving forward.

·       Protection from unexpected expenses.

·       You can feel a sense of stability.

Your Monthly Money Check-In

You do not need a complicated tracking system. A 15-minute monthly check-in is enough to keep the system alive.

Final Thought

Here is the thing no one tells you when you start earning a full-time income: you are not just learning how to manage money. You are learning how to manage your life.

You are learning how to take care of yourself, build stability, create a future that feels safe, and still enjoy the life you are working so hard to build.

Budgeting is not about restriction. It is about giving yourself room to breathe. It is about knowing that you can enjoy today and still protect tomorrow.

You do not need perfection. You need consistency. Keep saving your first percentage, keep honouring your responsibilities, and keep giving yourself permission to enjoy the life you are building.

Your Payday Checklist

Disclaimer

 — Sabiha

The post Budgeting With a Full-Time Income Without Feeling Restricted appeared first on Ed Rempel.

Most investors think dividends are one of the safest and smartest ways to create retirement income.

But are they really?

Ordinary dividends have some significant drawbacks that are often overlooked:

• They’re a forced withdrawal you don’t control
• They can create unnecessary taxable income
• They can increase OAS and GIS clawbacks
• Dividend portfolios are often concentrated in slower-growth sectors
• They can cause you to miss many of the world’s best growth companies

There’s another option: self-made dividends.

Instead of relying on companies to decide when and how much income you receive, you create your own cash flow by selling small portions of a broadly diversified, total-return portfolio.

In my latest article, I explain why self-made dividends are better than ordinary dividends in every way — from taxes and diversification to flexibility and control.

CLICK THE LINK BELOW TO READ THE ARTICLE BY JOANNA LEWIS 

Ed Rempel, CFP, Explains Why Self-Made Dividends Are Better Than Ordinary Dividends, In Every Way

For decades, income-focused investors and retirees have treated ordinary dividends as the holy grail of financial security. The narrative seems simple and comforting: buy shares in established blue-chip companies that pay reliable dividends, collect the quarterly payouts, and live off the yield without ever touching the capital. However, Ed Rempel CFP, Toronto, argues that relying strictly on traditional dividend-paying stocks is an old and heavily flawed income strategy for modern investors. Instead, a comprehensive analysis of portfolio mechanics reveals that self-made dividends (generating predictable cash flow by selling small portions of a broadly diversified, total-return growth portfolio) are superior to ordinary dividends in every measurable way.

To evaluate both investment methods, financial analysts point to how share prices behave on distribution dates. When a corporation issues a cash dividend, the company’s stock price decreases by the exact amount of the payout on the ex-dividend date. In practical terms, an ordinary dividend functions as an automatic, mandatory withdrawal of capital, determined by corporate executives rather than the individual investor.

“Dividends are not ‘free money,” says Rempel. “When a company pays a dividend, the stock price drops by the exact amount of the dividend on the ex-dividend date. Dividends are just a forced cash withdrawal.”

Conversely, self-made dividends operate by holding a portfolio optimized for global market expansion and selling off precise dollar amounts on a monthly or quarterly basis using a Systematic Withdrawal Plan (SWP). This shifts the primary investment goal from immediate yield generation to total portfolio return, providing investors with complete authority over the timing and size of their distributions.

A primary drawback of traditional dividend strategies involves taxation. When corporations distribute dividends, investors incur taxable income in that calendar year, regardless of whether they require the liquidity. For high-earning individuals or retirees, eligible and non-eligible dividends can inflate taxable income due to Canadian gross-up formulas, potentially triggering higher marginal tax rates and benefit clawbacks, such as the Old Age Security (OAS) or Guaranteed Income Supplement (GIS).

By contrast, self-made dividends help investors control their taxable event. Because liquidating a portion of an investment yields a return of original capital with capital growth, only the capital gain portion is subject to taxation. In Canada, where capital gains receive favourable tax treatment compared to ordinary income or grossed up dividends, this structure minimizes overall tax liability.

“In your retirement plan, it is actually cash flow that you need, not income,” says Rempel. “Income is taxable. Cash flow is sometimes taxable and sometimes not. Self-made dividends give you the cash flow you want in your retirement, while having only a small portion of it be considered taxable income.”

For instance, if an investor holds a portfolio that has doubled in value from $500,000 to $1,000,000 and requires $40,000 in annual retirement income, selling $40,000 worth of shares results in $20,000 of returned capital (tax-free) and $20,000 of capital gains. Under standard tax rules where 50% of capital gains are taxable, only $10,000 enters the investor’s taxable income calculation for the year.

Beyond tax considerations, financial advisors highlight severe sector concentration as a major risk associated with dividend-focused portfolios. In Canada, high-dividend mutual funds and exchange-traded funds (ETFs) remain heavily weighted in Canadian stocks, as well as cyclical, lower-growth industries like telecommunications, utilities, energy, and financial institutions. Consequently, investors who filter strictly for dividend yield routinely exclude major international growth sectors, particularly global technology, healthcare, and broad-market innovations.

Focusing strictly on yield can also lead investors into “dividend traps”, holding mature or financially strained companies that maintain high dividend yields to attract capital despite stagnant earnings. Should market conditions deteriorate, corporations can reduce or eliminate payouts, disrupting an investor’s income stream.

Rempel notes that a total-return approach avoids these constraints by enabling broad geographic and sector exposure without requiring individual companies to pay dividends.

“Smart investors never pay extra for dividends on their investments,” Rempel emphasizes, citing legendary investor Warren Buffet’s view that investors should remain agnostic about dividends. “Invest based on fundamentals like risk, return, and growth potential, and invest for the highest, reliable long-term total return after tax.”

This is the key point. The long-term success of your investing and retirement plan is based on the highest, reliable long-term total return after tax. Whether or not there is a dividend payout is a minor technical heavier tax factor.

From an operational standpoint, financial planners emphasize that self-made dividends offer a level of flexibility that corporate dividends cannot match. Retirees can set exact monthly distributions to match their budget, increase withdrawals for major expenses, or pause cash flows entirely during years when secondary income streams are sufficient.

By prioritizing total return over dividend yield, investors retain full ownership over their financial plan, insulating their cash flow from corporate board decisions while maximizing long-term portfolio growth.

Ed

The post iWatchMarkets article: Ed Rempel, CFP, Explains Why Self-Made Dividends Are Better Than Ordinary Dividends, In Every Way appeared first on Ed Rempel.

A practical, emotionally grounded guide to sorting out post-separation debt, protecting cash flow, and rebuilding one clear step at a time.

The debt is not your identity

There is a specific, heavy feeling that can come with debt after a separation. It is not just financial. It is emotional, personal, and often tied to grief, fear, anger, uncertainty, and pure exhaustion.

You log into your banking app and see a negative balance. Credit cards are higher than you expected. Legal fees keep adding up with every email. Maybe debt that used to feel shared now feels like yours alone to carry.

In those quiet moments, the numbers can stop feeling like numbers. They can start sounding like a personal judgment:

·       I completely messed up my life.

·       I should have seen the warning signs.

·       How did I let myself get here?

This is the trap of post-separation finances. A balance on a screen can start to feel like a story about your worth. But a negative balance does not make you a negative person. Debt is a math problem that needs a timeline. It is not a verdict on your character, your future, or your ability to rebuild.

Infographic: Post-separation debt becomes easier to manage when it is separated into practical categories.

The core shift: from shame to structure

Debt that builds up during a separation is often caused by the situation itself, not by poor character or a lack of effort. Legal fees, two households, moving expenses, frozen accounts, delayed support payments, and unclear joint liabilities can all hit at the same time.

The most important shift is this: stop treating debt like a moral failure and start treating it like a problem that needs structure. Shame leads to avoidance. Structure gives you options.

Breaking it down: three types of post-separation debt

Try not to lump everything into one scary total right away. First, understand what each balance actually represents. Then decide what needs legal separation, what needs repayment prioritization, and what needs a realistic cash-flow plan.

Example: Carla’s survival bridge

After her separation, Carla went through a very difficult ninety-day period where her household income dropped by roughly 60%. She used her credit card for groceries, utilities, and basic supplies for her children. At first, she saw the balance as proof she had failed.

Once she separated the debt into categories, the story changed. This was not lifestyle debt. It was survival debt. She had used credit as a temporary bridge to keep her household stable. That did not erase the balance, but it did remove the shame that was making it harder to face.

Why panic is your most expensive mistake

Debt can make everything feel urgent. But urgent feelings do not always lead to the best financial decisions. Panic can push people to avoid statements, accept payment terms they cannot sustain, borrow at worse rates, or fight expensive legal battles for emotional relief instead of practical progress.

Infographic: Panic multiplies pressure. Structure creates a repeatable next step.

The audit: face the numbers without the noise

Before making extra payments, create a clean debt list. Do not start with one overwhelming total. List every liability separately so each balance can be handled with the right strategy.

Once the information is visible, the debt often feels less frightening. It may still be serious, but it is no longer vague or endless. It has names, rates, payments, and possible timelines.

Example: Jason’s ‘infinite’ debt became finite

Jason was convinced his debt was impossible. Because he had avoided the statements for months, his mind filled in the blanks with worst-case numbers. When he finally built a debt list, the total was about $16,000: two credit cards, a legal balance, and a line of credit. It was not easy, but it was knowable. Once it was knowable, he could make a plan.

Four post-separation blind spots to watch for

Five rules for regaining financial control

Infographic: The sequence matters. Stabilize first, then accelerate.

1. Perform financial triage first

Separate joint and individual finances before making aggressive payments. Pull credit reports from both Equifax and TransUnion, identify every shared liability, and contact financial institutions to freeze, close, or require two signatures on joint credit where possible.

2. Secure your base camp

Protect the basics first: housing, food, utilities, insurance, childcare, and transportation. A debt plan that leaves no room for real life usually pushes people right back into credit.

3. Choose one repayment method

Use the debt snowball if early wins will help you stay motivated. Use the debt avalanche if you want the most mathematically efficient route and can stay consistent. The best method is the one you can realistically follow for the next six months.

4. Lower the temperature on legal fees

Do not ignore legal bills. Ask whether a structured monthly payment plan is available. Many firms are used to working with clients who are navigating financial transitions.

5. Enforce a no-new-damage policy

Stop the bleeding. Remove saved cards from online accounts, keep credit cards out of daily reach, and use debit or cash for discretionary spending while the plan stabilizes.

Snowball or avalanche? A practical example

A simple 30-day reset plan

This is a season, not a sentence

Rebuilding after separation is rarely a straight line. Some months will feel slow. Unexpected expenses may still come up. That does not mean the plan has failed. Financial recovery is less about doing everything perfectly and more about staying consistent.

Post-separation debt can carry a lot of guilt, anger, grief, and fear. But it can also be seen as a record of a chapter where you had to make hard choices under pressure. It may show what it cost to get through the transition. It does not have to define what happens next.

Example: Daniel’s financial reset

Daniel left his marriage with credit card debt and legal fees. For months, he avoided the mail because every envelope felt like proof of failure. His turning point came when he changed the rule: “I am allowed to have debt. I am not allowed to avoid it.”

He opened the statements, automated minimum payments, and used the snowball method. The debt did not disappear overnight, but the fear started to shrink because he had a process. His confidence started to come back before the balances were fully gone.

Client checklist: debt after separation

·       I have listed every debt separately.

·       I know which debts are joint and which are individual.

·       I have pulled or requested both Equifax and TransUnion credit reports.

·       I have contacted institutions about freezing, closing, or restricting joint accounts.

·       I know my baseline monthly survival costs.

·       I have chosen either snowball or avalanche for the next six months.

·       I have a no-new-damage rule for discretionary credit use.

·       I have asked for advice before withdrawing registered assets or changing mortgage debt.

— Sabiha

The post Debt After Separation: How to Regain Control Without Panic appeared first on Ed Rempel.

As equity investors, we put our money into companies through the stock market because we believe in the power of innovation, competition, and long-term growth.

But for the stock market to deliver strong returns over time, we need economic freedom and free enterprise.

When people can freely start businesses, invest, trade, hire, and compete without excessive government barriers or favoritism, capital flows to the best ideas, companies create real value, and investors are rewarded with compounding wealth.

Without that freedom, markets become distorted, innovation slows, and returns suffer. That’s why defending economic freedom isn’t just good policy – it’s essential for anyone who owns stocks or wants a prosperous future.

Yet stubborn myths keep blaming free markets for problems and pushing more government control. These stories ignore the hard numbers. Here’s the truth about the seven biggest myths, backed by the clearest evidence.

I constantly read books. “The Triumph of Economic Freedom” by Phil Gramm & Donald Boudreaux is a wonderful eyeopener! I believed a couple of these myths.

Read the book to see the evidence is clear.

You will learn:

• Why economic freedom and free enterprise are essential for strong, long-term stock market returns and widespread prosperity.
• How persistent myths blaming free markets for society’s problems distort history and policy.
• The real evidence showing how free markets – not government intervention – have driven the greatest gains in living standards in human history.
• Practical reasons why protecting open markets benefits investors, workers, and families alike.

Myth 1: The Industrial Revolution made workers poorer and more miserable.

People still picture dark factories and ruined lives in the 1800s. The facts say otherwise. Real wages (after inflation) for ordinary workers more than doubled in Britain between 1840 and 1900. Life expectancy jumped (men from about 40 to 48 years, women from 42 to 52). Literacy soared. People chose factory towns over farms because pay and opportunities were better. This was the start of the greatest rise in living standards in human history.

For nearly all of human history before the 1800s, living standards were essentially stagnant. The industrial revolution in the 1800s in Britain and the United States marked the most transformative and historically unprecedented improvement in living standards up to that point – and the foundation for all subsequent gains.

Myth 2: Robber-baron monopolies jacked up prices until antitrust laws saved consumers.

The story claims big oil and steel companies crushed rivals and gouged buyers until the government stepped in. Look at the actual prices. When Standard Oil began in 1870, kerosene cost 26 cents a gallon. By 1885 it had fallen to 8 cents, and by the 1890 Sherman Antitrust Act it was down to just over 7 cents. Steel-rail prices dropped 30% from 1870 to 1880 and then another 53% by 1890. Output in these industries grew faster than the rest of the economy, and prices fell faster than the overall price level. After the regulations hit, many rates (especially rail shipping) actually rose.

Antitrust laws were supposed to prevent monopolies from gouging consumers, but in reality, have mostly been used to protect weaker competitors and keep prices higher, not to deliver lower prices to consumers.

“Based on 90 years of hard evidence that reveals the overwhelming failure of this regulation, a bipartisan consensus was reached … in the 1970s and 1980s to bring that regulatory approach to an end.” It was finally repealed or reformed to focus only on clear harm to consumers.

Myth 3: A stock market crash caused the Great Depression & big government cured it.

Greedy markets crashed the economy; only heavy intervention fixed it. The evidence points the other way. A normal market downturn turned into a catastrophe by policy errors.

The Great Depression was prolonged into a decade of high unemployment primarily by government and central bank policies. The Federal Reserve allowed the money supply to shrink by about one-third between 1929 and 1933 while failing to act as a lender of last resort during bank panics and runs – causing thousands of bank failures and a severe credit crunch. Then, the Smoot-Hawley Tariff Act of 1930 raised tariffs sharply, triggering retaliatory trade barriers worldwide that crushed exports and international commerce. Finally, the New Deal’s interventions—such as wage controls (preventing wage cuts needed for adjustment), pro-union regulations that raised labor costs, and other price/wage rigidities – made it far more expensive and risky for companies to hire workers, discouraging job creation and slowing recovery for years. Unemployment remained extremely high – close to or above 20% for much of the 1930s.

These policy errors caused the longest and deepest depression in U.S. history.

Fed official Ben Bernanke later admitted the truth to Milton Friedman: “Regarding the Great Depression. You’re right, we did it. We’re very sorry. But thanks to you, we won’t do it again.” Tariffs, wage controls, and prolonged interventions created the pain and made it last a decade.

Free markets did not fail – policy errors did.

Myth 4: Free trade hollowed out American manufacturing.

Imports, especially from China, supposedly killed factory jobs and left the country weak. The numbers show manufacturing is still strong. U.S. industrial production capacity sits at all-time highs – well above levels from decades ago. Output has kept rising even as employment shifted. A careful study found that 88% of the manufacturing job losses from 2000 to 2010 came from productivity gains and better technology, not trade. We make more goods with fewer workers because machines and methods have improved.

Consumers enjoyed lower prices, and the country’s manufacturing industry – factories, machines, equipment, and infrastructure – grew dramatically.

Myth 5: Deregulation caused the 2008 financial crisis.

Wall Street ran wild without enough rules. Government policies fueled the fire. Easy money from the Federal Reserve, pressure on banks to make riskier home loans, and the special role of Fannie Mae and Freddie Mac created the housing bubble.

Government mandates on low-income lending rose steadily, requiring 30–40% of loans to be for low/moderate-income borrowers in the early 1990s. In the 2000s, this was pushed to 50–55%+, with tougher subgoals for very low-income borrowers. These quotas, especially via Fannie and Freddie, drove riskier subprime lending.

The crisis was not the result of free markets left alone; it was the result of distorted incentives created by public policy.

Myth 6: Income inequality is exploding under capitalism.

The rich race ahead while everyone else falls behind. Official figures hide the full picture. Census data claim the top 20% earn 16.7 times more than the bottom 20%. However, the official stats ignore 88% of the government programs for the poor. Once you count all government transfers (food stamps, Medicaid, housing aid, tax credits – most of which the Census ignores) and subtract taxes paid, that gap shrinks to about 4 times.

A significant factor in the income difference is that in the bottom 20% of households, only about .3-.5 people per household are working. In the top 20%, on average 2.0 people per household are working.

When poverty is measured properly – counting all government transfers that the official Census largely ignores – the deep or “intense” poverty rate (the kind involving real material hardship) falls to roughly 2–3% of the U.S. population.

The most visible and persistent cases of extreme hardship today, such as chronic homelessness and street poverty, are disproportionately driven by severe mental illness, drug addiction, and related issues (often co-occurring), not widespread material destitution or large traditional slums. Studies consistently show 30–70%+ of the chronically homeless population struggles with these problems, which create barriers to stability even when aid is available. This is very different from the mass urban poverty or shantytowns many people imagine from history or other countries.

Real income after inflation for the bottom fifth, including transfers, has risen roughly 300% since the 1960s, faster than the gains at the top. Consumption and material living standards for the bottom 20% are much closer to middle quintiles than official income numbers suggest.

Markets create wealth that is then shared through both wages and transfers.

Myth 7: Poverty remains stubbornly high because capitalism fails the poor.

Markets leave millions trapped with no way out. Adjusted numbers tell a different story. The official poverty rate hovers around 11–12% because the government refuses to count most of the $2.8 trillion in annual transfer payments as income. Include those benefits and the poverty rate falls to 2–3%. The remaining hard cases are mostly people struggling with addiction or severe mental illness whom the programs cannot easily reach.

Lower-income Americans today have far better housing, cars, appliances, and medical care than previous generations. Economic freedom reduces poverty by creating jobs and lowering the cost of everyday goods.

Free Enterprise Built Our High Living Standards

Every one of these myths collapses under the data. When people can freely invent, invest, trade, and compete, wages rise, prices fall, and ordinary lives improve. The stock market is one of the purest expressions of that system—it lets millions share in the gains.

Government overreach – through bad money policy, protectionism & tariffs, price-raising regulations, or distorted incentives – creates or worsens the very problems it claims to solve. Our comfortable modern lives exist because of economic freedom, not despite it. Protect that freedom, keep markets open, and living standards will keep climbing for the next generation.

Conclusion: Invest in the Future of Freedom

From my own experience seeing the full finances of thousands of people, the people with money are usually the ones that invested in stock market “equity” investments or in their own businesses.

By embracing economic freedom, we create the conditions for innovation, growth, and opportunity. As equity investors, we can all benefit by putting capital to work in the stock market – backing the companies that deliver better products, more jobs, and higher living standards – and participating in their growth. When free enterprise thrives, your portfolio and society both win. Protect that freedom, invest confidently, and help build a more prosperous world for everyone.

Ed

The post Why Economic Freedom and the Stock Market Make Us All Richer appeared first on Ed Rempel.

The Habit That Builds Wealth Not the Amount

A -friendly guide to using your first corporate paycheque with confidence, clarity, and a system that protects your future self.

The first paycheque is exciting. The real opportunity is what you automate before lifestyle creep takes over.

Your First Paycheque: What Actually Matters

There is a moment you will never forget. You open your banking app, the screen loads, and there it is: your first real corporate paycheque.

For a second, you feel completely unstoppable. You worked for this. You survived the interviews. You earned this. You are finally stepping into the driver’s seat of your own life.

Then the real-world math hits: rent, groceries, phone bill, Wi-Fi, transportation, maybe a student loan payment. Suddenly, the number that felt big starts to feel smaller.

The 10% Rule: A Small Act of Self-Respect

Before you stress over complicated spreadsheets, restrictive budgets, or tracking every single coffee, start with one simple move: save 10% of every paycheque from day one.

• Not when you make more money.
• Not when life finally settles down.
• Not when you finally feel ready.
• Right now.

This is not only about the math. It is about the psychological message you send yourself: “My future matters just as much as my current bills.”

A 10% cut is small enough that you won’t even notice it’s gone, but meaningful enough to create real momentum over time. If 10% is too much at first, start with 5% or even 2% and increase it with each raise. The most important part is starting the habit.

Automating the first 10% turns saving from a monthly decision into a default setting.

Two Paths: Same Income, Different Futures

Let’s look at two people who started at the same starting line.

Profile 1: Aisha – The Quiet Saver

• The setup: Aisha gets her first full-time job at 22. Her take-home pay is $3,600 per month.
• The move: She sets up an automatic transfer so $360 moves to a separate savings or investment account the morning her pay hits.
• The lifestyle: She still goes to concerts, travels on long weekends, and orders takeout when it fits her spending plan.
• The result at 27: She has an emergency fund, a growing investment account, and the confidence that she can handle a curveball.

Profile 2: Jason – The “I’ll Save Later” Strategy

• The setup: Jason has the same job, same company, and same $3,600 per month take-home pay.
• The move: He genuinely wants to save, but every month life happens: a weekend trip, a phone upgrade, a nicer apartment, and a few more subscriptions.
• The mindset: He tells himself he will start investing when he gets the next promotion.
• The result at 27: He has no savings, a credit card balance that never quite hits zero, and a background anxiety that he is falling behind.

The Real Paycheque Breakdown

Here is an illustrative example for someone earning roughly $70,000 per year and taking home about $3,800 per month after income tax and payroll deductions. Actual take-home pay will vary by province, benefits, pension contributions, and personal tax credits.

The point is not that every person should use these exact numbers. The point is the order: pay your future self first, then make the remaining money fit your real life.

Where to Put Your 10%: The Three Pools Strategy

Do not leave your 10% sitting in the same chequing account where you spend from. If it sits there, it is too easy to accidentally spend it.

Instead, divide your savings into three pools based on when you will need the money. The timeline matters because short-term money should be kept safer, while long-term money may have more room to grow.

Pool 1: Short-Term Goals – 0 to 2 Years

• Purpose: Emergency fund, sudden travel, moving costs, or near-term purchases.
• Where it fits: High-interest savings or cash-equivalent options.
• Why: You cannot risk the stock market dropping right before you need the money.

Pool 2: Medium-Term Goals – 2 to 5 Years

• Purpose: A down payment, wedding, relocation, or major life transition.
• Where it fits: FHSA if eligible, TFSA where appropriate, and a more conservative or balanced approach.
• Why: You may want growth, but you still need a smoother ride than a full equity portfolio.

Pool 3: Long-Term Goals – 5+ Years

• Purpose: Financial independence, long-term investing, and serious wealth building.
• Where it fits: TFSA, employer retirement plan, RRSP where suitable, or long-term investment account.
• Why: If you do not need the money soon, you may be able to ride out market ups and downs and benefit from compounding.

Two Mental Frameworks to Protect Your Cash

1. The 24-Hour Rule for Impulse Buying

To protect your lifestyle cash from quick-tap payments, social media ads, and emotional spending, use the 24-hour rule. See something you love online? Add it to your cart, close the tab, and walk away for 24 hours.

If you still want it tomorrow and it fits your guilt-free spending cash, buy it without shame. You may be surprised how many impulse purchases lose their appeal once the dopamine spike fades.

2. How to Handle a Raise

What happens when you kill it at work and your monthly take-home increases by $300, you have a choice. You can let lifestyle creep absorb the entire raise, or you can split the difference.

By splitting every raise, you upgrade your current lifestyle and accelerate your future at the same time.

What Actually Matters vs. What Is Hype

Your Next Move

Your first real paycheque is not going to buy a house or fund a permanent beach vacation tomorrow. But the psychological muscle you build right now can determine whether you feel financially stressed five years from now or completely in control.

You do not need a massive executive salary to build a massive future. You need to protect the first slice of every paycheque, divide it cleanly by timeline, automate the transfers, and let time do the heavy lifting.

Be like Aisha. Give your future self respect, put your wealth on default, and spend the rest completely guilt-free. You earned it.

What’s Next

In the next breakdown, we are replacing old-school budget rules with a cash-flow framework that works for real life. No restriction, no guilt – just a system that lets you spend on the things you love while still getting ahead.

Disclaimer

This article is for general educational purposes only and should not be treated as investment, tax, legal, or personalized financial advice. Investment choices, registered account eligibility, savings rates, and cash-flow priorities depend on your income, province, debt, benefits, goals, and risk tolerance. Speak with a qualified professional before making major financial decisions.

— Sabiha

The post Your First Real Paycheque: A Smart Money System for Young Professionals appeared first on Ed Rempel.