We covered everything from retirement withdrawals and portfolio tracking to XEQT, leverage, margin, portfolio lines of credit, the Smith Manoeuvre, and covered-call ETFs in Episode 15 of Financial KarMoe. 🎙️ Some of the questions led us down some pretty deep investing rabbit holes — and we learned a lot along the way too! 💡 Some of the biggest questions we tackle: • Is the traditional 4% retirement rule still the best approach? • Should retirement withdrawals be fixed, or should they adapt to market conditions? • How much of a safety cushion should you leave in your portfolio? • Is tracking your net worth every month actually useful? • If you already own a globally diversified ETF like XEQT, do you really need a more complicated strategy? • What's the difference between margin, a Portfolio Line of Credit and the Smith Manoeuvre? • Is leverage a smart way to increase your investment exposure — or an unnecessary risk? • Should you use distributions from ETFs to pay the interest on borrowed money? • Are high-yield or covered-call ETFs actually "safer" than a globally diversified index ETF? • How important is maintaining a clean paper trail when borrowing to invest? This episode is ultimately about one thing: learning together and challenging our own investing assumptions. 🙏 A huge thank you to everyone in the Blossom community who submitted questions and continues to make Financial KarMoe a community-driven conversation. https://youtu.be/JVzufiQIKn8?si=FKfkv1gW6-BHY9ky
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52 Comments
Heath @incomewealthinvestor · 15d
You have saved your entire career and you decide to retire with an all weather 4% withdrawal but your portfolio goes on a crazy bull run or your first year is a bear market. The 4% rule still applies? You guys didn’t talk about the “cash wedge” in retirement. Money out the market to withstand a draw down that becomes a safety net against market crashes or a bear market. If the market determines whether you eat Mac and cheese or steak during retirement. Cash wedge!
Not Financial Advice @anpc86 · 15d
Glad you guys get the user engagement. But sometimes it baffles me that people who essentially bought leaky tires for the “speed” and fun ride ask questions to two guys who bought reliable, leak resistant tires for the long , steady, comfortable ride… how do I drive on these leaky tires and why is the ride so bumpy? Should I drive, and every 30 min, step out and hand pump the tires? Should I drive and frequently rotate the tires to try to smooth out the leaking? If I keep swapping in new leaky tires, it’ll be ok right, I will be able to drive to my destination? In the end, invest how you want , it meets your financial needs and you are in a good mental state, then I’m happy for you. Leverage, portfolio-rebalance, DCA till you are low riding barely off the road.
Heath @incomewealthinvestor · 15d
Keep your borrow to investments housed or self contained but more importantly, you must know your asset tax treatment before buying. Eligible dividend and capital gain dividends can be used to make interest payments. ROC can be used to pay the principal and or re-invest. EI. Don’t buy an asset that mostly distributes ROC if you want to use the distributions to pay the interest. Eligible dividends will be grossed up with dividend tax credit and added to your marginal tax rate. 😉 ROC is a delayed tax which is not added to your income. Find a mixture of both depending on what your looking to pay or not pay
