Episode 34: The Safe Savings Rate: Shifting the Focus Away from Wealth Accumulation

Welcome to Episode 34 of the Rational Reminder Podcast. Today we are discussing how our new ETF model portfolios will be employed to better accommodate our non-client listeners to whom Dimensional Fund Advisors are not as relevant. We talk about how BlackRock and Vanguard are dominating the market, why the US is leading in passive investment and why traditional financial planning needs to be re-evaluated. In addressing our main topic—safe savings rates—we explore the need for moving away from a focus exclusively on wealth accumulation to an approach more concerned with a safe savings strategy. We ask the all-important question, “How much will I need a month when I stop working?” and provide helpful guidelines on how focusing on the process rather than on the number that can help you to achieve your financial goals. Join us today to find out how you can adopt a safe savings approach! 

Key Points From This Episode:

  • How we will accommodate non-client listeners using ETF model portfolios. [0:03:34.0]

  • The issue of accessibility with Dimensional Fund Advisors. [0:04:51.0]

  • How the world is exploding with asset allocation ETFs. [0:05:26.0]

  • The dominance of BlackRock and Vanguard in the market. [0:09:33.0]

  • How the US is leading in passive management. [0:10:06.0]

  • What the Vanguard-effect does [0:10:27.0]

  • Investing in factor funds versus portfolios of factor funds. [0:11:17.0]

  • The benefit of having a one-decision portfolio that has a variety of different factors. [0:13:28.0]

  • Factor returns versus smart beta returns. [0:15:33.0]

  • Why low beta looks good on the factor side, but bad on the implementation side. [0:16:19.0]

  • More about the 4% rule. [0:17:35.0]

  • The four steps of traditional financial planning. [0:18:06.0]

  • Pfau’s suggestion for a better alternative to traditional financial planning [0:20:27.0]

  • What your savings rate should be [0:24:00.0].

  • The benefit of having a safe savings approach rather than focusing on wealth accumulation. [0:25:09.0]

  • The challenge of knowing how much you need when you stop working. [0:25:49.0]

  • Why you need to focus on the habit rather than on the target. [0:27:10.0]

  • And much more!

Episode 31: Single Decision ETFs: Unpacking XGRO and XBAL from BlackRock

Today on the show we are joined by Steven Leong who is the Head of Canada iShares Product at BlackRock. Steven is here to talk about single decision ETFs, the new XGROs and XBALs from BlackRock and whole lot more. We start off the episode with a bit of an introduction on BlackRock and iShares before Steven informs us on the new relationship between BlackRock and RBC Global Asset Management. From there we get into the meat of the episode looking at the portfolios in question and Canada’s current positioning in the global trends. We talk about some of the great advantages that these funds offer investors and Steven shares his ideas on the current role of the financial advisor with regards to the rise of passive investing. We are lucky enough to have Steven offer his perspective on a slew of related topics before ending off with two great pieces of advice for our listeners. For this and more, be sure to join us!

Key Points From This Episode:

  • A quick overview of BlackRock’s scope and size [0:02:44.0]

  • BlackRock’s relationship with RBC Global Asset Management. [0:04:35.8]

  • A little about the XGRO, the XBAL portfolios. [0:06:32.3]

  • Overweighting in Canada in common model portfolios.. [0:08:52.1]

  • The advantage of automatic rebalancing for the investor. [0:11:06.3]

  • The evolving role of the trusted financial advisor. [0:12:27.4]

  • Sharp downturns in fund fees and the results of this trend. [0:15:01.8]

  • Canada’s relatively slow uptake in index funds and iShares’ factor products. [0:19:46.9]

  • The future of active versus passive investing. [0:25:21.2]

  • Two pieces of investment advice from Steven! [0:27:14.7]

  • And much more!