A topic that I think we millennials all need to focus more on is retirement planning. And the reason I think so is because traditionally retirement planning seemed like something for older generations, and what us younger generations needed to focus on was debt-repayment and homeownership.
Listen, I know us millennials have a lot going on, but NOW is the time to start planning for retirement, not when we’re nearing it. That’s why I have Ron Haik, Senior Financial Planner & Regional Manager, Ontario at Nicola Wealth on the show to talk all about how to plan for retirement in Canada and as a millennial.
Here are some things we discussed.
A common question I get, because planning for retirement either seems too simple or too complicated. Where you start is determining what your retirement will look like. Everyone’s retirement is different, but essentially you need to answer what kind of life do you want to lead after you’ve finished your full-time career. Retirement may still include working, or maybe you want to volunteer, travel the world, or help raise your grandkids. Whatever it is, write it down then figure out how much in today’s dollars you’ll need as an annual income in order to afford that life.
For years, RRSPs were given all the attention. Although they are great vehicles for housing your investments for retirement, TFSAs are great too. They may even be better depending on your situation. You see, with RRSPs, you get that wonderful tax deduction that lowers you tax bill while allowing your money to grow tax free. But, once you withdraw funds from your RRSP, that’s when you’ve got to pay tax on that money. That also means you need make sure you’ve included income tax in your retirement budget. With a TFSA, you don’t get a tax deduction when you contribute, but when you withdraw those funds, you don’t have to pay tax either. Things to think about when considering what account type to put your investments into.
I recently did a talk on investing for a retreat, and many people there voiced how they were more comfortable with real estate investing because it made more sense to them. You were investing in something tangible and they could wrap their heads around the concept better. Real estate investing is great, but you should never put your eggs in one basket. Real estate should be a portion of your overall retirement portfolio, not the entire thing.
Once you’ve built a retirement plan, it’s not something you just put somewhere to gather dust. Your life and goals change, and so will your retirement plan with them. Make sure to revisit your retirement plan every 6 to 12 months.
For full episode show notes visit https://jessicamoorhouse.com/194
For anyone interested in startups or starting their own business (no matter how big or small), I’ve got an episode for you! For this episode of the Mo’ Money Podcast, I’m joined by Maria Aspan, the editor-at-large of Inc. Magazine and the author of the new book Startup Money Made Easy.
Maria has a unique perspective on entrepreneurship because she isn’t sharing her own entrepreneurial journey. She’s sharing what she’s learned by interviewing hundreds of entrepreneurs about their journeys. And what’s really interesting is they all have very different journeys. Sure, they are some similarities and patterns, but in general no story is alike. That’s why there can never be a one-size-fits-all guide to entrepreneurial success. What may skyrocket one person’s business may be the downfall for someone else.
In her book, she dives deep about the financial aspects of starting a business, and here are some key things she shared in this episode.
You hear stories all the time about how someone racked up a bunch of debt to get their business started…and it paid off big time and they’re now a millionaire! You don’t often hear the stories of all the people who racked up a bunch of debt and had a business that flopped. We hear a lot of success stories, and maybe not enough failure stories. When it comes to starting a business and finding that initial financing, use the same logic as investing your money for a big goal like retirement – never invest more than you’re willing to lose.
Maria mentioned that Serena Williams, famous tennis player and entrepreneur, once said that in business everyone makes mistakes. What you need to be prepared for is being open to learning from those mistakes. Usually when we make mistakes, we want to brush them under the rug, not talk about them, just move forward and forget about it. But mistakes are amazing learning tools! I’ve learned amazing things from my mistakes and failures! It’s not easy. It will definitely bruise your ego a bit. But you need to remember that success is a long-game. If you want to eventually reach your goals, you need to learn from each one of your mistakes and change your behaviours and actions accordingly.
I see so many people out there get caught up in the idea that they can start a blog, start posting on Instagram, sell an online course, make a fashion line, etc… and start making money right away. That’s no reality. The people who are telling you that you can make money blogging, Instagramming, selling courses, or selling your own clothing designs, they may have neglected to tell you that there’s no such thing as an overnight success. It takes time, hard work, and most importantly a solid plan!
Don’t ever think you can just quit your day job and figure it out. Figure it out while still working your day job. Start learning what you don’t know about running a business, and make a business plan you feel good about.
For full episode show notes visit https://jessicamoorhouse.com/193
I don’t know why exactly, but lately I’ve been hearing from my millennial clients their big concern about not being able to afford retirement. I’m talking 20 and 30 years olds freaking out because they have no idea how they’ll ever be able to save up $1 million (or most likely more) for retirement, plus pay of their student loans, buy a home, start a family, and just simply live!
So, I thought I would bring on a retirement expert who can shed some light on the most important things we all need to know about retirement. My guest for this episode is Larry Swedroe, the author of Your Complete Guide to a Successful and Secure Retirement, as well as the director of research for Buckingham Strategic Wealth and the BAM Alliance.
Here are a few things we discussed in this episode.
Most people focus on the money part. How much do I need? How should I invest to reach that number? Will it be enough? But really, you should start by outlining what you want to do when you’re actually retired. How do you want to fill your days? What’s your exit strategy from the workforce? Are you going to do a full-stop retirement or ease into retirement by going part-time or consult? Before testing out any retirement calculator, define what your retirement will look like first.
Another concern I often hear is that we’re all living longer. Many of us will live until 100! So if we retire at 65 and live until 100, that’s 35 years of retirement we need to prepare to have income for. That might make your palms sweaty, but it’s actually fairly simple math to figure out how to afford a long retirement. Larry suggests taking the number of years you plan on being retired for and multiplying it by the gross annual income you’ll need to live off of in retirement. Then, figure out how inflation will come into play, and that’s your number!
Larry shared some amazing pieces of wisdom when I asked him about how we all can be savvy investors. Here are his top tips:
For full episod show notes, visit https://jessicamoorhouse.com/192
Well, that was a few years ago now so I thought it was time to have her back on the show, but to talk about something very different. As I mentioned at the beginning of the show, we bumped into each other at Melissa Leong’s book launch for Happy Go Money and started talking about the different ways both genders think, talk and manage money. It’s a subject that Robin has been researching quite a bit lately, and one that I thought would make for a great conversation on the podcast since gender roles is a fairly hot topic right.
As humans, we all deal with money differently from one another. As the saying goes, personal finance is personal so there’s really no such thing as a one-size-fits-all financial solution. But, not only do we deal with money different as individuals, there’s a lot of research to indicate striking differences between how men and women handle money.
Here’s one of the studies that Robin mentions in the podcast by CPA Canada:
What much of the research shows is that women tend to be more risk averse or risk conscious, we struggle with financial confidence, and we tend to be better investors than men. We chat about all this and more in the episode, so enjoy!
For full episode show notes visit https://jessicamoorhouse.com/191
This is by far one of my favourite interviews on the podcast…ever! For this episode, I chat with John David Mann, and award-winning author whose books have sold more than 3 million copies, including titles such as The Go-Giver with Bob Burg and the New York Times bestseller The Red Circlewith Brandon Webb.
For his latest book The Latte Factor, which he co-authored with best-selling author and OG personal finance expert David Bach, they discuss the term that Bach coined several years ago in his popular book The Automatic Millionaire. You see, even though pretty much everyone has heard of “the latte factor,” most people don’t really know what it means. Surprisingly, it doesn’t mean you should ditch your morning coffee to save money. It’s actually bigger than that. It’s less about coffee and more about how we all need to spend our money more in line with our values, and how little bits of money over-time can have a major impact on our financial futures.
What I loved most about this book is that it’s a very short read (you can read it in a day), and it’s not a typical how-to book and written in a narrative style. Similar to how David Chilton’s structured The Wealthy Barber, this book has central characters we follow along so we can learn the same lesson they’re learning and can identify with their struggles too. I 100% could relate to the central character, a 20-something city-living millennial who feels like no matter how much they earn, they still never have enough. Who hasn’t felt like that at some point in their life? But, she learns that it’s not necessarily how much you earn that’s the problem. It’s what you do with what you earn now that is most important.
And yes I know, earning more can sometimes be a solution, but from working with so many clients now, I can tell you that cash flow usually isn’t the problem. The problem is not understanding what they are spending their money on. The problem is not having clear financial goals to work towards. The problem is not having the financial literacy necessary to make solid and confident financial decisions moving forward.
The book isn’t out quite yet (it comes out May 7), but you can pre-order now and you enter to win a free copy by visit the show notes.
For full show notes, visit https://jessicamoorhouse.com/190
Can you believe it’s been almost 4 years since Barry Choi from Money We Have on the show? We’ve been friends for years now, and he was guest number 7! Since so much has happened in our lives since that interview, I needed to have him back on the show now that he works full-time for himself as a personal finance & travel expert.
As I mentioned at the beginning of this episode, I’ve done a few unofficial meetups with podcast listeners the past few months, and the feedback I got was to have someone on the show to talk about credit card reward programs and travel tips specifically for Canadians. Well, of course I thought of Barry who is always in the news or on TV sharing his wisdom on how to get the most value out of your credit cards and how to travel on a budget without it feeling like you’re doing budget travel.
Here are some great tips and resources he shared on the show.
If travel is one of your big values in life (it is for me!), then you need to add it as a line item in your budget. Don’t just book a trip and figure out how to pay for it later. Research where you want to go, price out the cost, then start putting away amounts every month until you can afford it.
It’s what both Barry and I do, and honestly it’s the only way to afford travel without getting into debt. For me, I put away money every month for trips I take with my husband and trips I do on my own (usually work-related like conferences or retreats). In terms of how much to save, it depends on where you plan on going. As long as you’re saving a good amount for your emergency fund, retirement and your other financial goals, it’s up to you how much to save for travel.
I’ve used deal sites for years, like Kayak, Booking.com, Expedia, Trivago (you get the picture), and to me it’s the best way to get the best price for flights, car rentals and accommodation. Yes, it can take some time and effort to really figure out the best time, place and dates to travel, but it’s worth it if you can save hundreds if not thousands of dollars! Just think, that savings can be used for excursions, food or shopping to make your trip even better!
You’ve heard this tip before, but it’s true. If you want to save big, travel during that location’s off-season. I’m so used to doing this, I don’t even know what it’s like to go somewhere during the on-season. And I don’t want to! It’s actually really nice to avoid the hordes of tourists, even if it means going somewhere during spring or fall.
Here are Barry’s picks for the best no-fee credit cards in Canada. Just remember, even though it’s no fun paying an annual fee for a credit card, you usually get better benefits with those cards than no-fee cards.
For full episode show notes, visit https://jessicamoorhouse.com/189
It was one fateful day when a 17-year-old Lesley-Anne Scorgie went viral because of her financial acumen. Not only did she get featured in newspapers across Canada, she also landed a spot on the Oprah Winfrey show because she aspired to become a millionaire by 25 and was well on her way to reaching that goal.
As Lesley-Anne says in our interview together, the Oprah effect is real and her short segment on the show catapulted her career into one Canada’s top money experts today, with four books under her belt, regular TV appearances and speaking gigs. Not only that, she launched her own money coaching business called MeVest, and focuses on teaching others how they can take control of their financial future like she did.
In this episode, we discuss what inspired her to get into personal finance at such a young age, what she learned from striving towards an aggressive goal in her 20s (spoiler, she wishes she enjoyed her 20s a bit more), and what some of the most common concerns and struggles her money coaching clients have.
For full episode show notes, visit https://jessicamoorhouse.com/188
Have you ever heard from someone that if a bank fails (goes bankrupt), you’ll lose all the money you had their? Because that is 100% false! You see, there’s a little thing called the Canada Deposit Insurance Corporation (CDIC) and Brad Evenson, the Director of Communications and Public Affairs of CDIC joins me for this bonus podcast episode to discuss in-depth how all Canadians are protected.
For full episode show notes, visit https://jessicamoorhouse.com/187
For this episode of the show, I interview young entrepreneur Nathan Latka who has released his first book (like…today!). It’s called How to Be a Capitalist Without Any Capital, and it’s his guidebook on how to successfully start a business or side hustle without that much money at the beginning.
You see, Nathan has a pretty interesting story. He basically realized that because of the Internet and social media, the possibilities and opportunities for making money were limitless. He’s started many businesses himself, his first being one where he built and sold Facebook pages (back when you could add apps and widgets to Facebook pages).
The reason I wanted Nathan on the show was to talk about a very important, though sometimes overlooked, topic of personal finance — making money. So many personal finance books (or experts) give advice assuming you’re an employee at a company and you’re limited by your salary. Well, that doesn’t have to be the case if you don’t want it to be.
Just take my personal finance journey. I worked numerous 9 to 5 jobs since graduating university, but I always had a second job or side hustle to earn more to I keep reach my financial goals sooner. And at that time, none of my friends or family were doing it. Luckily, I was inspired by other people in the personal finance community who were doing the same thing, so I followed suit. Now, so many of those people who thought I was crazy for working more than one job have started side hustles themselves. And that’s what I hope this episode (and Nathan’s book) help you with. Hearing that you don’t have to start out rich to become rich, you don’t have to be a born entrepreneur to start your own business or side hustle, and essentially your past should not define your future.
Another thing I really want to press is that money should never be the end goal. Building wealth isn’t solution, it’s the journey. The solution or reason you’re building wealth is so you can live a life that is meaningful to you. For me, I work hard to earn my living so I can afford to travel, have more spare time to fly back to Vancouver to visit family and friends, and sometimes just have the flexibility to take a Thursday afternoon off to read a good book when it’s snowing outside.
Why do you want to build wealth? Really define that, then check out this interview or Nathan’s book for some guidance on how to go about making that a reality.
As Nathan mentions in the podcast, his book wasn’t meant to be an evergreen book you can pick up in 20 years and it still be relevant. The business and digital marketing are evolving so quickly these days, his advice may not work even in a few years from now. So, if you want to learn what’s worked for him recently, grab a copy of his book, read it and take action NOW!
For full episode show notes visit https://jessicamoorhouse.com/186
I had Tanja Hester from Our Next Life on the show back in November 2017 for episode 133. Back then, Tanja was still an anonymous blogger who hadn’t yet quit her job yet to retire early with her husband. Well, a few months after we recorded that episode she left her job and has been officially retired ever since!
Not only that, she finally revealed her full name on her blog and the news literally went viral, being picked up by MarketWatch. Because of this, Tanja has had a very busy retired life, that includes doing speaking, writing for MarketWatch, and of course publishing her first book Work Optional: Retire Early the Non-Penny-Pinching Way.
Since so much has happened with Tanja since that first episode, I wanted to have her back on the show to talk more about what life is like in early retirement, and how you can strategize to retire early too!
Planning to retire early doesn’t start with the number crunching (or at least it shouldn’t). You need to figure out the “Why” before the “How”. Most people just think retiring early is a way they can finally opt-out of working, or subtract something from their life. Instead, you should think about it as a way to add more to your life.
As we discuss in this episode, most early retirees aren’t just chilling on a beach reading. That’s nice for a vacation, but that can get boring quick if it’s your every day. Instead, think about what things you want to do now that you don’t have to focus all your time and energy on earning an income. Maybe it’s volunteering. Maybe it’s starting some new hobbies. Maybe it’s writing a book like Tanja.
No matter what it is, retiring early isn’t about opting out of work, it’s about opting into a life that’s more fulfilling and meaningful to you.
Another thing we discuss is the idea that by retiring, that doesn’t mean you have to stop earning money…or working for that matter. Early retirement or financial independence means you don’t have to work to earn an income anymore. But, that doesn’t mean you can’t if you want to.
From talking to so many early retirees on the podcast and in real life, all of them are working in some way. Usually not full-time, but they are definitely staying active and contributing to society in some way. And yes, this means they earn money. Earning money doesn’t negate the fact that they are financially independent or retired. It just means they have extra fun money to play with.
I see and hear so many conversations about F.I.R.E. (financial independence, retire early), most of which are negative. Many people believe it’s a dangerous idea because most people will either run out of money or it’s just completely impossible because they aren’t high income earners.
As Tanja mentions, early retirement isn’t for everyone and that’s okay. Moreover, one person’s path to early retirement shouldn’t serve as a template you should try to mimic because it may not work for you. Personal finance is personal after all, so if early retirement is something you want to do, do your research, learn from other people’s journeys, then carve out your own path that’s unique to you.
For full episode show notes, visit https://jessicamoorhouse.com/185
I’ve got another repeat guest on the show, who first appeared on the Mo’ Money Podcast this time last year in episode 151 to promote her first book Worry-Free Money. I’m talking about the lovely Shannon Lee Simmons, and she’s back with her second book all about debt called Living Debt-Free.
Since her first book was essentially the feel-good personal finance book we were all looking for, Shannon’s second book does the same thing for debt. There are so many negative emotions surrounding debt, such as shame and guilt. Debt is bad right? Well, guess what…real people have debt. And they shouldn’t feel shame or guilt for having it. Shame and guilt aren’t exactly motivators to doing anything, so why would we think making people feel bad about their debt will help them get out of it.
Instead, Shannon shares stories and advice on how to tackle your debt by adopting a new positive mindset and asking yourself some of these helpful questions:
Having clear answers for these questions will help you stay on track to paying off your debt. Yes, strategies like the debt snowball and debt avalanche are helpful too, but from my experience and Shannon’s, people are more likely to get back into debt or stop their debt repayment plan because they lack positive reinforcement and motivation.
By thinking with a more positive mindset, such as “What could I add to my life once I’m debt-free?” instead of being critical of your current situation like “You’re not as well off as your peers because of your debt,” you’ll be able to change your financial picture quicker than you ever thought possible. Not only that, you’ll be able to stay out of debt because you’ll have a clearer vision for your overall finances.
Recently, there was a question that popped up in my Facebook group asking whether it was a good idea to use Emergency Fund money to pay off debt. Shannon and I both agreed that Emergency Funds should be reserved for emergencies only, not debt. Lack of emergency savings is one of the main reasons people fall into debt. Something unexpected happens, like their car breaks down, they don’t have the money to pay for it, they use credit to fix their car, now their in debt and can only afford the minimum payments.
To avoid this cycle, save up 3 to 6 months of your living expenses and put it in a high-interest savings account. Then don’t touch it until a real emergency happens. And once you touch it, make sure to pay that money back so it’s never empty.
Shannon also suggest having two Emergency Funds. One is for real emergencies that you don’t touch unless you absolutely need to. One is more of a slush fund that you are constantly contributing to, but dipping into when you need cash for unexpected expenses (that don’t fall into the emergency category).
There are only a few ways to avoid over-spending with your credit card. One way is to use debit or cash for all of your variable expenses, and just link your credit card to any of your regular fixed expenses like your cable bill, phone bill, and utilities.
Or, if you do like to use your credit card for your variable spending, set its limit to the exact amount you’ve budget for variable expenses. Then, as soon as you make a purchase with your credit card, move money from your chequing account to pay off your credit card.
That’s it! There really isn’t any other magic way to do it. Believe me, I’ve tried them and so has Shannon and these are the ones that work!
For full episode show notes, visit https://jessicamoorhouse.com/184
It’s that time of year again. You know, the time to start thinking of getting your taxes done. Most people dread it, I love it (because I’m a weirdo), but as the saying goes taxes is one of the two certainties in life.
To give you a head start this tax season, and to help you change your mindset so you don’t hate it, I’ve got Lisa Zamparo (CPA & founder of The Wellth Company) back on the show. You probably remember her from episode 137 where she joined me to discuss how to be responsible with debt and credit.
Well, she’s back and is sharing some amazing tips on how to do some tax time prep like a pro! Also, as Lisa mentioned, if you want to get one of her tax season self-care kits, sign up to work with Lisa before February 21!
Tax prep is super easy, you just need to give yourself some time and know what to do. Here are 4 steps you can take to get prepared like never before!
Step 1 – Download my tax prep checklist.
Step 2 – Get some stationary, boxes and tools that are pleasing to the eye to get you excited.
Step 3 – Actively try to switch your mindset about tax time. Remember that by taking the time right now to make a system for tax time, you won’t have to do all this heavy lifting next year. Once you’ve got a system in place, it’ll be 10x easier next time!
Step 4 – Start preparing tax return. If you want to do it on your own, use online tax software like SimpleTax, UFile, TurboTax or H&R Block’s Online Tax Software. Make sure to Google for a promo code to save money. If you need some help with your taxes, hire a professional tax accountant to help you (like Lisa!).
Step 5 – If you’re self-employed, make things easier for next year by using some online accounting software like Freshbooks, Quickbooks or Wave.
Step 6 – After you’ve filed your taxes, if you get a tax refund, be smart about it! Don’t just spend it. Use it to pay down debt or invest for your future.
For full episode show notes, visit https://jessicamoorhouse.com/183
Since it’s launch week for Season 8 of the Mo’ Money Podcast, I’ve got a bonus episode for you!
Last season, CoPower sponsored my podcast. So, I thought it would be fun to bring on Trish Nixon, Managing Director & Head of Capital of CoPower, to discuss impact investing with me.
You may or may not have heard about impact investing before, but that could be because it goes by so many different names: socially responsible investing, green investing, sustainable investing, ethical investing (you get the picture). No matter what the name, what this episode is about is being a more mindful and conscious investor.
You see, with every dollar you invest you are saying you want the companies you’re investing in to become more profitable and successful. There’s nothing wrong with that…unless the companies you’re investing in aren’t actually very ethical or don’t align with your personal values. That’s why we need to be more aware of what companies are in our mutual funds or ETFs. We need to see if there’s something we don’t like, then do something about it.
One thing you can do is negative screening. It’s basically a way to take out the worst offenders in your portfolio, or find a portfolio that doesn’t include them. This is obviously easier if you’re a DIY investor because you have more control with what companies you invest in, but as you’ll see below there are a ton of big banks and robo-advisors that are offering more SRI portfolios now too.
To give you a better sense of what kind of socially responsible investments exist, here’s a quick list of model portfolios and investment products that are considered SRI.
For full episode show notes, visit https://jessicamoorhouse.com/182
Welcome to Season 8 of the Mo’ Money Podcast y’all! I know, I know…where have I been? For the past 3 years I’ve always started a new season of the show the first week of January. Well, to tell you the truth, I only had this episode recorded before I took off to Vancouver to enjoy Christmas with my family. In other words, I wasn’t ready! And I didn’t just want to put a season together quick, I wanted to make sure this season is one of my best yet! I believe it is, starting with having the amazing Melissa Leong on the show for my first episode.
You probably are already familiar with Melissa. She was my favourite financial journalist at the Financial Post for years, then transitioned into an entrepreneur herself as a speaker, host, TV personality on The Social and now personal finance author with her new book Happy Go Money.
This book has been a decade in the works because although Melissa shares some great advice and research in it, it is also very personal. What inspired this book was her husband’s depression that got her exploring the world of happiness.
I think it’s no surprise that we’re dealing with a major happiness problem today. So many of us (myself included) are dealing with depression, anxiety and feelings of failure and unfulfillment. But that doesn’t mean we should just throw our hands up and give in. We need to get our happy back! Especially when it comes to our money.
Here are some of my favourite gems from this episode.
One of my favourite parts of the podcast was when Melissa shares her tip for keeping accountable when trying to focus on the positive, instead of complain about the negative. I find I get especially down during the winter months, so I’m going to practice this whenever I, or my husband, catch myself complaining for no real reason.
How does it work? If you find yourself or someone you know focusing on the negative, say “Give me 3!” and share 3 good things about your life, your day, or whatever you want!
Focusing on the positive takes practice, so start practicing with me today!
I find this a lot with people who I deem “negative”. You know who I mean. Those people that no matter what, everything is always the worst and nothing is ever their fault. Life just happens to them, and they sure are unlucky. Umm…no! The only way to change your life for the better is to stop acting like a victim. You need to take control of your life, your circumstances and your future. The only way to do that is to stop being a victim, take responsibility, and then take action!
This is 100% true, and not just because it’s a claim backed by research. I know so many people who swear that meditation has been the fix they’ve been looking for. I myself have even experimented with it, and when I do it regularly, I do find myself so much more happy with my present.
There are some great apps you can use to get started too like Calm and Headspace, or you can simply practice on your own. But try it out and see if you start to feel a change.
If you want to continue learning about happiness, money or both, here are some book recommendations mentioned in this episode:
For full episode show notes, visit https://jessicamoorhouse.com/181
For my 5th Millennial Money Meetup (and my only event for 2018), I hosted the event in downtown Toronto selling out tickets in only a few weeks to 50 attendees.
This event was sponsored by the Financial Services Commission of Ontario (FSCO) to celebrate Financial Literacy Month. I was joined by technical consultant and pensions expert Tim Thomson of FSCO, and we dived deep into the topics of retirement planning and pensions in Canada.
This is the live recording of Tim and I’s discussion on the subject, but as we’ve mentioned throughout the event, make sure to learn more at fsco.gov.on.ca/retirement.
For full episode show notes visit https://jessicamoorhouse.com/180
Well, we’re almost at the end of another podcast season! Just like last year, for my second to last episode I wanted to do a special solo episode. I wanted to just chat one-on-one with you about some of the things I’ve been up to and have realized this year. Then, I wanted share some of the biggest money takeaways from both Season 6 and 7 of the Mo’ Money Podcast.
My Personal Realizations from 2018
Let’s first start with some of my personal realizations this year. This year has been truly amazing. I’ll do a longer blog post closer to the end of the year really reflecting on all that happened, but two keys things I’ve realized this year: my mission/purpose is to help others, and the only way to do that is to talk to real people like you (meaning, don’t get stuck in my little personal finance bubble).
Going back to when I was a missionary in Africa at 18 (you can learn more in Ep. 20), I’ve been looking for a way to have a career that isn’t just personally meaningful, but also impactful on other people’s lives in a positive way. In short, I’ve felt for a very long time that I’ve been put on this Earth to help people. When I was in my 20s, I thought maybe the way to do that was to become a filmmaker and make documentaries that educated others, or films that lifted people’s spirits.
Then, real life happened and I just needed a job to earn a living. My dream of having a job that helped others went by the wayside, until I got the idea to start my personal finance blog. Even though it was just a hobby at the time, I finally felt like I had a creative outlet and a means to help others by sharing my own personal finance journey.
It’s crazy to think that by starting my blog over 7 years ago, I would eventually end up running my own business and helping others with their personal finances full-time. Life is unpredictable, but for the first time since I became self-employed (almost 2 years now), I finally feel like I’ve been able to accomplish that big goal of having a job that helps others too.
And honestly the big reason I feel like that is this year I’ve had more opportunities to talk to real people. Sometimes they are people like you who listen to my podcast, read my blog, watch my videos, or follow me on social media. Sometimes they have no idea who I am, but I meet them at events or through friends and we strike up a conversation about money. It is seriously so cool to be able to find out what people do with their money, and what they struggle with. For years I was pretty much in this echo-chamber of just talking with other personal finance content creators or reading articles by finance journalists.
That’s not real life. The only way to understand how to help people with their money is to talk to them. It’s been an education, but it’s definitely been helpful in me having a better sense of direction in terms of what I can do in the future to spread the word and help even more people.
8 Money Takeaways from 2018
I’ve interviewed 41 people on the podcast this year. That’s almost one person per week! I’ve loved every single interview, but there are a 8 interviews in particular that stuck out to me because of the tips and takeaways they shared.
[Ep. 139] Perez Hilton – Hustle Hard to Make More Money
I’m a huge fan of Perez Hilton (I’ve been reading his blog for a decade), so it was seriously such a thrill to interview him on my show.
And he did not disappoint as a guest. He was very open and honest about how he made a ton of money mistakes which forced him to file for bankruptcy. But he learned from those mistakes, and is now very conscious of all of his money decisions.
Still, the biggest takeaway from his interview was to hustle hard and focus on earning more. Yes, there is value in living simply and frugally, but that shouldn’t deter you from trying new things, working hard, and striving to always earn more money.
[Ep. 148] J.D. Roth – Take Charge of Your Finances (No One Else Will)
J.D. Roth is one of the OG personal finance bloggers, who started the blog Get Rich Slowly, sold it for a hefty profit, then bought it back to run it again.
The biggest takeaway from his episode was you need to be the CFO of your own life. If you want to be financially successful, don’t just hand off your finances to someone else to deal with and hope they do what they’re supposed to. No one cares more about your money than you do, so you need to step up to the plate and take responsibility for your own financial life.
[Ep. 151] Shannnon Lee Simmons – Money Is a Tool for Good
Shannon Lee Simmons released her first book Worry-Free Money last year, and I’ve been telling everyone who will listen to grab a copy ever since I finished reading it. It is one of the few personal finance books around that has a positive spin on finance. It makes you feel good about your money, not ashamed or judged.
The biggest takeaway from her book was that money is a tool for good. You should feel good about your money. If you’re not happy with your current financial situation, it’s not too late. You can fix it!
[Ep. 161] Laurie J. Cameron – Be Mindful with Your Money
Laurie J. Cameron is the author of The Mindful Day, and teachers others how to practice mindfulness in their daily lives. Wouldn’t you know it, mindfulness is becoming a bigger part of the personal finance space, and for good reason. As I’ve been recognizing by working with my financial counselling clients, money is about the numbers. It’s about psychology. The only way to change your financial situation is to change your mindset and to be more mindful with every single one of your financial decisions.
[Ep. 144] Cait Flanders – Minimalism Could Help with Your Spending Problem
Along the same lines, in my interview with Cait Flanders, author of The Year of Less, living a more simple and minimal life may be the life change you’ve been looking for. Especially if you’re dealing with a spending problem and are looking to create a different type of relationship with your money.
Practising minimalism helped Cait stay out of debt and live a more fulfilled life. Maybe it’s something you’ll want to try out next year too!
[Ep. 165] Kathlyn Hart – You Deserve to Be Paid Your Worth
This was one of my most downloaded episodes, and I’m not surprised. Kathlyn Hart, a negotiation coach, shares tips on how to ask for more money, either in the interview stage or when asking for a promotion.
This is something, especially us women, need to do more of. Whenever I talk to women about this topic, most of the time they tell me they’ve never negotiated a salary or pay raise, they just accepted what was offered. Well, if you want to earn more, you need to ask for more and not be afraid to ask in the first place!
[Ep. 171] Amanda Abella – Don’t Be Ashamed for Wanting to Earn More Money
I loved chatting with Amanda Abella for this episode because I’ve known her for years from the FinCon community, and I also worked with her as a sales coach for my business too.
For this episode, she shares how so many of us (again, mainly women) have a hard time feeling good about earning money. We associate it with negative ideas of greed and unworthiness. But that’s not how we’re going to change the wage gap. We need to ask for what we deserve, we need to feel good about earning, and we need to ignore anyone who shames us for feeling good about making money.
[Ep. 174] Paulette Perhach – An Emergency Fund Should Be Everyone’s Top Priority
If you need some major motivation for starting an emergency fund, this episode is it. Paulette Perhach, an acclaimed writer whose F** Off Fund article went viral, shares why she wanted to write about the importance of having an emergency fund in a new way. Instead of thinking of it in the traditional sense, think of it as a stash of cash you can use in case you need to get the hell out of a really bad situation (like leave your boyfriend or quit your toxic job).
For full episode show notes, visit https://jessicamoorhouse.com/179
For this episode I chat with Brynne Conroy, the blogger behind Femme Frugality and the new author of The Feminist Financial Handbook, about women, money, the wage gap, financial confidence and what we can all do as a society to make the future a more financially equal one.
I hope you’re ready for a deep dive into women, oppression, victim blaming, leaning in, financial confidence and the wage gap, because that’s exactly what my next guest and I discuss for this episode of the Mo’ Money Podcast.
I’m joined by Brynne Conroy, the blogger behind Femme Frugality and the new author of The Feminist Financial Handbook. And as you can guess from the title of her book, instead of writing another how-to finance book, Brynne decided to look at some of the big problems women face when it comes to finance and what we can do about it.
I love this interview so much (as you can tell from my many tangents), because I obviously can relate a ton to the content of Brynne’s book. I’m a woman, and growing up I had no idea that I’d be treated differently, or paid less, when I entered the workforce. It’s the 21st century after all! Haven’t we moved past all that? Unfortunately, no we haven’t.
There is still a lot of work to be done, and the issues of financial confidence and the wage gap aren’t just women’s problems. They are societal problems that we need to fix together. Women can’t fix the fact that they are paid less without the support of men as their allies. The only way we can make a different future for young girls is to work together now. It’s certainly something I’ve passionate about, and it’s honestly a big reason I was so drawn to personal finance in the first place. All of the books and personal finance experts I saw were men. I want to see more women represented. Luckily, I’m already seeing more women enter the personal finance space compared to 10 years ago, and that makes me incredibly happy and hopeful.
For full episode show notes visit https://jessicamoorhouse.com/178
I don't know how I've had this podcast for over 3 years and haven't had one of the OG Canadian personal finance bloggers on the show yet, but here he is! The one and only Tom Drake, blogger and podcaster at Maple Money! He's been in the game for almost 10 years, and he's dropping all types of knowledge bombs in this podcast on investing, making money and budget like a pro!
My next guest was supposed to be on my podcast 3 years ago! That’s when myself and Tom Drake from Maple Money first talked about him getting on my show. Well, I don’t know what happened, but at least I got my act together and finally got him on the show. And honestly, he was worth the wait!
A lot has changed for Tom in the past 3 years. He has been blogging for almost a decade, and recently rebranded his blog to Maple Money and started his own podcast called the Maple Money Show.
As I mention at the beginning of this episode, Tom is literally the nicest guy. Which could be why he’s one of my personal favourite finance bloggers and I am so thrilled with all of his success. What’s even crazier is he blogs and podcasts on the side! He still has a day job and somehow manages to get it all done. Oh, he also has a family. How he does it all, I have no idea. But luckily for me, he does share lots of his finance wisdom when it comes to investing, making money and budgeting on the show.
Investing: Get Out of Mutual Funds
As Tom shares in the episode, he got out of high-fee actively-managed mutual funds as soon as he got a better understanding of what he got himself into. Now, there’s technically nothing wrong with these type of investment products, but the thing is there are better products out there. Namely index funds and ETFs. Since moving out of mutual funds, Tom has been managing his own portfolio of ETFs using a Questrade account, but he’s actually thinking of switching to a robo-advisor to lessen his work-load which I thought was pretty interesting. There’s definitely benefits to both, so it was refreshing to hear a DIY investor actually express interest in using a robo-advisor instead.
Making Money: Why Not Earn Money with Your Hobby?
Several years ago, I saw Tom speak on a panel of bloggers at the Canadian Personal Finance Conference. One of the questions they were asked was what they thought of monetizing their blogs? Most of the panel said they didn’t monetize their blogs and were more focused on just creating good content, but I remember Tom distinctly share that he’d do anything to make money. Obviously he was kidding, but I loved how he was so honest about how it shouldn’t be a bad thing for bloggers to want to earn money from their blogs and work with brands. As someone who does this, and is thus able to create a bunch of free content for my audience, I totally agree! Why not earn money from your hobby, and why not turn your hobby into a business?
Budgeting: Micro-Budgeting Doesn’t Work
Micro-budgeting, or having specific categories in your budget you need to try to stick to, just doesn’t work. Another point that Tom and I share. He shares that he manages his family’s finances and they allocate money to savings and fixed expenses, then have a specific number they want to stay within for their variable expenses. It’s just a simpler way to budget since in most cases it’s impossible to stick to a hard $400 for groceries or $100 for entertainment each month.
For full episode show notes, visit https://jessicamoorhouse.com/177
Want to start investing, but not sure how? Or maybe you are investing, but aren't completely sure if you're doing it right? You're in luck, because I've got the king of ETFs Som Seif on the show to discuss how to build wealth by investing in ETFs and following a few of important rules of thumb too.
I hope you’re ready to get your investing knowledge on, because for this episode I’m joined by the king of ETFs Som Seif! To give you some background on Som in case you’re unfamiliar with his importance in the investing world, he is currently the founder and CEO of Purpose Investments Inc., which he formed after he sold his first company Claymore Investments to Blackrock Inc. in March 2012. You may be familiar with Blackrock as they offer a number of great ETFs you’re probably already invested in, and the same goes for Som’s new company Purpose Investments.
Now, Som started his Claymore Investments in 2005 because although he had been an investment banker with RBC Capital Markets since 1999, he wanted to be able to really help individual investors by making low-cost ETFs more accessible. And he continues to do so with his new company Purpose Investments, and shares more helpful tips to investors of all ages in this episode.
How Much You Should Invest
If you’re just starting out, meaning you’ve recently finished school and are working full-time, Som suggests investing 15-20% of your net income. You’re at such a great stage in life where your cost of living is low (even if your salary is too), but the money you invest this early in life will have a huge, positive impact on your future. If you wait to invest later in life, then make sure to boost that percentage to hit your target end goal.
How to Invest
It’s great knowing how much to invest, but a better question is how to invest? Luckily there are some great options now with all the robo-advisors out there, which is one way Som suggests can be a great way to invest your money. He really does believe in robo-advisors since he was one of the founders of Wealthsimple, and believes in making investing in low-cost ETFs simple for every type of investor.
Or, if you’d rather work with an investment advisor, you may need to have a greater some of money to do so, but it may be what you’re looking for in terms of getting specific guidance and management.
Then again, you may want to be fully in control, which means you’ll want to go the self-directed route and pick your own portfolio and manage it using a discount brokerage.
Don’t Be Scared off by Investing
We dive into some deep subjects like crypto, blockchain and the future of investing, and honestly it was even intimidating to talk about with Som myself, but that’s something that Som wants to make sure doesn’t happen. Investing isn’t hard and you shouldn’t be scared off by new technologies and new strategies emerging.
You need to arm yourself with information, because as you and I both know, the best way to rid yourself of fear and worry is to educate yourself. One way to do that is to follow his suggestion by reading books by Benjamin Graham to have a better foundational understanding of investing.
3 Key Things You Need to Do to Be a Smart Investor
As Som mentioned, investing isn’t hard. Here are the 3 key things he suggests for any investor’s success:
Start Investing Now
The biggest take-away from this episode is that investing is incredibly important to take part in. It shouldn’t be something you delay until your 30s or 40s. The sooner you start investing in life, the better off you’ll be in the future. Moreover, you’ll also become more confident and feel more secure with your finances my having a solid plan for retirement and your other financial goals.
So if you just got your first job out of school, make sure to invest some of that first paycheque. If you’re further along than that in your career, there’s no better time to start than today!
For full episode show notes, visit https://jessicamoorhouse.com/176
Money isn't just about the numbers. And having money struggles doesn't mean you're lazy or "bad" with money. Money is about habits, experiences and what tools we're working with. One of the ways to fix our struggles and become less stressed out about money is adding mindfulness into the mix. Being intentional with your money can make all the difference in your life, and that's what I discuss with my guest Patrick Ens, VP of Strategy & Brand at Capital One Canada.
Capital One Canada is one of the sponsors for this year’s sponsors of Credit Education Week from Nov. 13-16. There are tons of free financial literacy events happening for Credit Education Week, so visit cewc.ca to find out what’s happening in your city!
Like I mentioned in the intro of this episode, I was 100% living my best life this past weekend. Not only did I attend the Canadian Personal Finance Conference (I’ve gone to this conference every year since 2013!), but I also got to moderate the fireside chat sponsored by Capital One Canada, with Laurie Campbell (CEO of Credit Canada Debt Solutions) and Patrick Ens (VP, Strategy and Brand at Capital One Canada).
This was definitely my ideal situation because although I loved getting the chance to do a full-on presentation at last year’s conference, I’ve gotta admit that I was in my element moderating this chat. To me, it was basically like a podcast episode with two incredibly intelligent and experienced guests, and there just so happened to be a live audience watching.
But yes, I know, this wasn’t really a podcast episode. So, in case you weren’t able to catch our talk at the conference, luckily I was able to interview Patrick for the podcast!
We discuss at length (and in-depth) this year’s theme for Credit Education Week — money mindfulness. If you’re a longtime listener of the show, you may have listened to a few episodes I’ve done in the past about this topic.
But what is so great about my interview with Patrick is he comes from a very different background. He’s not a mindfulness guru or your typical money expert. He comes from the brand side of things and helps clients directly with the financial products offered by Capital One Canada. Because of that, he has a very interesting perspective on what it means to be intentional with your money and thus smart and responsible with credit use.
Credit Education Week
Credit Education Week is in its 12th year, and Capital One Canada is one of the sponsors alongside Credit Canada Debt Solutions. The theme for this year is money mindfulness, because we all need to be more mindful with our money habits, our spending and especially our credit use. To learn more about all the free events going on for Credit Education Week, visit cewc.ca.
Get Your Credit Score for Free
If you don’t know your credit score, what are you waiting for? Capital One Canada let’s you check your Transunion credit score for free without dinging your credit score in the process. Click here to get started.
Do you have a f*** off fund? You know, a bit of money you've got in a savings account for emergencies. But I'm not just talking about when your car breaks down or you lose your job. I'm talking about when you need to quit your job because you're being harassed by your boss. Or when you need to leave your abusive boyfriend and need a place to stay. I talk with the woman who coined the term for this episode, and you are definitely going to want to set up a f*** off fund after this.
Before you even listen to this episode of the show, please read my guest Paulette Perhach’s article that went mega-viral — A Story of a Fuck Off Fund. As I mention in this episode, I had a very emotional reaction to her article. It was just such an amazing visual story of why we all need to take care of ourselves by having an emergency fund, so I highly recommend you read it, then listen to our chat together. I know myself and any other personal finance experts out there talk about the importance of having an emergency fund all the time, but her story really can show you how it can be a life-changer.
Besides having an article that went viral, Paulette is also the new author of the book Welcome to the Writer’s Life. She writes for all kinds of major publications like the New York Times, Elle and Cosmo, and she knows first-hand how difficult it is to crack into this business as a new writer. So, if you’ve ever thought about being a professional writer, this is literally the playbook on how to get started!
For full episode show notes, visit https://jessicamoorhouse.com/174.
Jessi Fearon was able to pay off $55,000 in debt in 2 years! Yes, I know, we've all seen headlines like this before, and usually you find out after reading the full news article that they were able to pay off that debt because they got a windfall, their parents helped them, or they earn over 6 figures at their job. Well, that's no Jessi' story. Her and her husband were able to pay that debt off by making some major sacrifices and hustling to make it happen. Now Jessi is a financial coach on mission to help others conquer their finances too!
For this episode of the Mo’ Money Podcast, I chat with another Jessica who is also a financial coach! I’m talking about Jessi Fearon, who was able to pay off $55,000 in 2 years with her husband, while raising a family of 3 little ones. After being a stay-at-home more for a few years, Jessi now spends her days coaching others how they too can build a solid financial foundation and kick their debt to the curb (for good!) just like her family was able to.
What I love about this episode, and Jessi for that matter, is that she is an open book when it comes to her numbers. Most of the time when you see some headline about someone who paid a big amount of debt in a short amount of time, you eventually find out it’s because they got a big windfall, their parents helped them out, or they earn a high salary. That’s not Jessi’ story at all. For her, it came down to making some tough choices, such as taking on some extra jobs like being a server or dog walker to earn some extra money, or having to trade in her dream truck for a more cost-efficient car to put the difference onto her debt.
Basically, if you’re dealing with debt and need some motivation, this episode is going to make you want to get to work right away and start living a better life!
For full episode show notes, visit https://jessicamoorhouse.com/173
Want to earn 5-figures per month as a virtual assistant? No, this isn't a scam. This is the true story of how Kayla Sloan, a former personal finance blogger, started a side hustle as a virtual assistant that led her to earn $10,000/month. Now, she trains others how to become virtual assistants so they can earn extra money on top of their day jobs to reach their financial goals sooner.
As a sort of companion episode to last week’s interview with Amanda Abella (sales coach & CEO of Make Money Your Honey), in which we talked in-depth about how to get over feeling guilty about earning money, this week I’m chatting with Kayla Sloan, a virtual assistant coach. And guess what, the topic of earning guilt pops up yet again. To be fair, I’m the one who brings it up. I’m pretty sure I recorded these episodes close together and it was something I was thinking about a lot.
In any case, I’m excited to share this episode with you because I really want to emphasize the message that earning money is good, not bad. Especially as women, who are still paid less for the same work as men, we need to stop the shame game and empower ourselves to reach our full financial potential!
Just take Kayla’s story for instance. She finished university, got a job, then realized she was always flirting with a $0 balance in her account. She had $8,000 in student debt and $10,000 in credit card debt, not to mention a $110,000 mortgage. She wanted to live a better life, but she didn’t have a business background or even felt like she deserved to earn more.
I think a lot of us who were raised in low to middle income families feel like this. We are taught to be smart, go to school, get a job at a company, and accept whatever salary we get (we should be so lucky we even have a job when so many people don’t!).
The thing is, we’re limited when we work for someone else. That’s why Kayla started blogging (she ran a blog called Shoeaholic No More), then started doing some freelance writing on the side to earn some extra money. She then started getting offers for virtual assistant work, and realized she had a talent for creating systems and project management.
After a year of basically juggling two full-time jobs, she was at a crossroads. She had to give either her day job or her virtual assistant side hustle up, or risk burning out completely. Looking at the numbers, she was earning just as much as a virtual assistant as she was at her full-time job. Believing that virtual assistant work was her calling, she took a big risk (since she was still in debt) and left her day job in 2015.
Since then, she’s actually stopped most of her virtual assistant work and runs her own business as a virtual assistant coach and instructor with her 10K VA online course. Now, she dedicates her days to training others how to become virtual assistants so they can earn extra money at home in their free time.
For full episode show notes, visit https://jessicamoorhouse.com/172
Do you feel bad or guilty about making money? You're not alone. This is a very common feeling that myself and my guest Amanda Abella (CEO & founder of Make Money Your Honey) have had to confront head-on in our financial lives. Here's the thing, earning money isn't bad. It's actually an amazing, empowering thing! Learn why in this very raw episode with Amanda and myself.
I’ve been in some of the same circles as my next guest, Amanda Abella (CEO and founder of Make Money Your Honey), for the past 7 years. Still, I hadn’t gotten to know her properly until we officially met at a party at FinCon in 2017, and then went to the same retreat back in the spring.
Once I got to know her, I just loved her! Her personality is infectious, she’s so positive and energetic, and she makes you feel like you can reach any goal you set your sights on. That could be why after I had her on the podcast, she convinced me to hire her for some sales training. Yeah, she’s that good.
To be fair, I had actually been looking for someone to help me with my sales. I started getting enquiries about my financial counselling services as soon as I became an Accredited Financial Counsellor Canada in January, but over the course of 6 months I still hadn’t locked down any clients. I knew that it wasn’t me not being good enough. I got my accreditation, I worked with some clients for free before offering my paid program, I knew I had the ability to really help people. But for some reason, I just couldn’t get anyone to say “Yes” to working with me.
Well, as I discovered when working with Amanda, it had everything to do with my negative mindset about earning money. It’s something I’ve had for a while, and something I still struggle with. I want to earn money. Actually, I want to earn a lot of money. But whenever I try to do something to raise myself up and reach that next level, I let the nay-sayers and my own self-doubt get the best of me.
It’s not easy being called a sell-out or being shamed for earning money (and yes, this happens to me all the time). But the thing is, they aren’t the people I want to work with anyway. Those people are detractors who have their own issues they’re projecting. For me, I want to earn money, but it’s not out of greed or a desire to be rich just for the sake of being rich. I want to help people. I also want to earn a living, pay my bills, and be able to continue to work for myself.
Long story short, after working with Amanda, I worked hard at shifting my mindset, and since then have been working with financial counselling clients one-on-one and loving every minute of it.
Enough about me though, because that’s only part of what we discuss in this episode. In my chat with Amanda, we talk about how she also had this mindset where she felt bad about earning money and also was afraid to spend it.
What we all need to realize is we’re only limited by the limitations we put on ourselves. If we don’t think we can earn more, we won’t. If we don’t think we can afford something, then we won’t find a way to change that reality. If we’re always afraid that there won’t be enough money, so don’t spend any of it, that money will control us instead of us controlling our money.
This episode is really about empowerment. I never thought I’d be where I’m at right now. Two years ago I would have said you were crazy! But here I am. And a lot of it has to do with shifting my mindset so I feel empowered about making more than I ever have, feel good about spending money on things that I value, and also make a point of giving back more money to the community or charity because I’m earning more.
For full episode show notes, visit https://jessicamoorhouse.com/171
ETFs, index funds...oh my! I talk with Vanguard Canada Investments Managing Director Atul Tiwari about all things passive investing. If you want to dive into a great conversation with an investing pro, this is the episode for you!
For this episode of the podcast, I chat with Atul Tiwari, the managing director of Vanguard Investments Canada. He seriously has such a wealth of knowledge, it was such a treat to ask him pretty much anything and everything about Vanguard, passive investing and some key things us Canadians need to know about how to invest for our futures.
To give you a little background on Atul, he joined Vanguard in 2011, but before that was the senior vice president of BMO Asset Management and founding president of BMO Exchange Traded Funds. Before that, he was president of BMO’s U.S. subsidiary mutual fund business, Harris Insight Funds. If that wasn’t impressive enough, he used to practice law.
Why Low Fees Are So Important
This is a subject that comes up no matter who I’m talking to about investing. Probably because absolutely no one likes to pay high fees! Why would they? As Atul said in the podcast, “The best predictor of your investments’ performance is the cost of them.” In other words, no one can predict the outcome of your investments, but you can control one thing — the fees you pay. The lower the fees, the more money in your pocket.
The thing is, most people have no idea how much they are paying in fees. Typically, if you’re invested in actively-managed mutual funds, you could be paying 2-2.5% on your investments. If you earn a 6% return on your investments, that leaves you with only 3.5-4% after fees. That may sound like nothing, but after decades of investing, that could amount to hundreds of thousands of dollars.
That’s why I’m personally a big fan of low fee index mutual funds and index-based ETFs. They offer the same diversification as actively-managed mutual funds, they track the index, and they have way lower fees.
Index Funds in Canada vs. the U.S.
This is something I swear no Canadian really knows about. I only figured out the difference when I started doing research about it and talked to a rep at Vanguard for my blog post on investing with Vanguard. They would be the people to ask since Vanguard developed the first ever index mutual fund in 1975.
So, when people are talking about index funds in Canada, more times than not they are actually referring to index-based ETFs. In Canada, there are actually only two providers of index mutual funds, Tangerine and TD E-Series. All the big banks offer actively-managed mutual funds, and all the robo-advisors offer index-based ETFs. Then there are the self-directed brokerages like Questrade, though almost all the big banks have their own self-directed brokerages as well. Using those brokerages, you can essentially buy any type of investment product like ETFs, actively-managed mutual funds, stocks, bonds, etc. You cannot however buy index mutual funds. Those can only be bought through those two providers I previously mentioned. Confusing right?
Well, the reason I think we Canadians get confused about some of this is because we get a lot of our information from the U.S. In the U.S., index mutual funds are much more popular, and you can even buy them directly from Vanguard. In Canada, you have to go through a brokerage, robo-advisor or financial institution to buy any of Vanguard’s products.
This is all to say that the next you’re talking with someone and they mention index funds, ask them whether they mean index-based ETFs, and then feel free to share this episode with them.
The Vanguard Effect
Atul mentioned in the episode a thing called “The Vanguard Effect” which was originally coined by Morningstar. What this effect means is that when Vanguard enters a new market, like Canada (though it was originally coined when it entered the U.K.), because it offers such low fee products, it causes other investment product providers to also lower their fees.
It’s a good thing for us Canadians especially since we have some of the highest fees in the world. Let’s hope things continue down this path in the future!
Vanguard Investor Questionnaire
Vanguard has a number of great free resources on their website, but my personal favourite is the Investor Questionnaire. It’s a great example of how to determine your risk tolerance and ideal asset mix. This is just a great thing to try out if you want to see how it compares to the investor questionnaires provided by the robo-advisors in Canada, or if you plan on becoming a DIY investor and need a starting point when building your own portfolio.
For full episode show notes, visit https://jessicamoorhouse.com/170