060: Drawdown Planning + Contest Announcement!

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Money Mechanic
Hello, listeners. Welcome to Explore FI Canada, where we sit at the roundtable with Canadians, and share their thoughts, ideas and personal journeys to financial independence.

Money Mechanic
It kind of feels like the first day back at school. I’m not quite ready to jump back into this. What do you think, Chrissy?

Chrissy
Me too, It was a good summer and it’s kind of weird to be back on the mic.

Money Mechanic
Well, it’s funny were just talking before the show. And I’ve definitely dropped the ball on some my summer homework here. But we’ll have a little catch up talking about our summer and talk about this exciting upcoming season that we have. I guess we’re doing like seasons now that we get the summer off.

Chrissy
Yeah, seems like it. I like the summer off. It was a good recharge.

Money Mechanic
It was, Did you do anything fantastic? Did you become even more Mustachian then you already are? Did you do some amazing things to improve your financial independence journey?

Chrissy
I wish we’d done a lot more, but still COVID. So we are grounded. And we’re sticking close to home. So the most exciting thing we did was go up to Whistler for a couple of nights, which was fun. It’s always nice to visit somewhere local, but it would have been nice to go somewhere further. But maybe next year.

Money Mechanic
I think what the highlights for me was we actually got to see a little bit of family that I hadn’t seen for a long time. I’ve got some relatives moving out west. And you know, seeing your mother after not seeing her for a long time was a huge bonus. Right? So it’s a few little trips like that. Just local as well. And a little bit of camping time. So yeah, nothing extravagant. And, you know, in a way, it’s kind of nice, because, you know, we really enjoyed ourselves. And it wasn’t, you know, like some big overseas expensive trip, which I think a lot of us want to do, but just not quite there yet.

Chrissy
It’s true. Yeah. And I actually, my family has been on almost weekly bike rides with my dad around Vancouver. And I just never realized how amazing the bike network in Vancouver is. It’s so safe, and you can get anywhere by bike path, completely bike path, you hardly ever have to go on to a busy road to get anywhere. So that’s been really fun. And I feel like a tourist in my own city just doing that. So that’s been really cool. Low cost, eco friendly and fun.

Money Mechanic
Totally. Yeah, exactly. That’s great. Well, I think I’ve seen and this is nothing new. Everybody knows this is everybody’s been spending a lot more time outdoors, whether it’s, you know, kayaking, or biking or hiking or whatnot. That’s sort of what everybody’s done this summer. But apart from the unfortunate wildfires that we had in BC, which affected the interior terribly. It was very smoky, all summer up there. So yeah, anyway, we move on into the fall and the exciting season, we have coming up a couple FI note things of the summer for me that I would like to share is I’ve been thinking a lot about my margin account. We’ve talked about this with guests on the show. And it’s kind of that, you know, what do you do after your TFSA or if you stopped with your RRSP. And I thought a long, long time about it. And I was originally using Questrade for, you know, DIY self directed and trying to keep it as sort of a holistic portfolio with my TFSA and my RRSP. But I realized that the fees are a lot lower at interactive brokers, because I’ve wanted to learn how to do a little bit of options trading. And I don’t know, I think you follow along with Freedom 35 liquid.

Chrissy
That’s right. Liquid.

Money Mechanic
And have you been, he’s been writing a whole bunch of stuff on options, because he’s doing a similar strategy is what I would like to do. So I’ve been learning from him and him and I have been in touch on the Twitter machine a little bit back and forth. And yeah, so I’m super excited. I finally got this interactive brokers, brokerage, but now I’ve got like this monumental task of moving assets around because I’ve got some in Questrade, I’ve still got some TD, and let me tell you, this is the biggest headache of my FI journey is trying to figure out and this is in margin, which makes it difficult to because it’s like, well, that one’s a capital loss. That one’s a capital gain. And it’s like I’ve got at what point, do you sell these right, now you’re gonna sell them and then you got to transfer and wait. And of course, because without getting into too much detail, I want to buy options. And so listeners that are familiar with that will know that I’m selling naked puts, right? It doesn’t mean they don’t have clothes on it means that I don’t own the shares, but I have enough money to buy them if my option gets assigned. So we won’t get too complicated, but it’s been a big rabbit hole for me. And it’s been like my summer homework and that’s why I didn’t do my EFIC summer homework.

Chrissy
Understandable, that sounds like a lot of fun. A previous guest of ours, Cici. She and her husband have been doing options trading for a while now. And it’s been quite lucrative for them and she keeps telling me you got to do it, Chrissy. It has tweaked my interest. I have been intrigued by it even before speaking to her and knowing more about it recently, I read about it years ago and thought it would be a fun thing to dabble in, but it’s just the learning curve is a bit steep. You got to give time to that.

Money Mechanic
You got to really dig into it and I consider myself fairly sharp because I spent many years learning about investing and all the things that we talk about. And this has just been so new to me. And there’s tons of YouTube but it’s got its own language, it’s the way things are referenced. And it’s a bit of a mental gymnastics to really understand what you’re doing with it, you have to be very careful, because I think I told you like, last year was I did one of my first options trades and totally lost money, right? And I was like, oh, what did I do wrong? So that’s like, that’s the learning experience, right? But because I’m much more of a index ETF investor now, and I’m not doing a lot of research on dividend stocks and things like that. The options trading has been like a new source of interest to learn more about and dig into it, because my goal with it, is to generate some relatively passive monthly income. So that kind of dovetails into what we’re going to talk about in sort of our welcome back episode, which is drawdown and cash flows and how you get passive further down in your FI journey. So that’s why I’m adding it in there as it’s just another source of a little bit of income for me monthly, right. So, yeah, it’s been interesting. And the other exciting thing is I mentioned just before the end of the season that I was taking the Smith Manoeuvre Certified Ambassador course, which another reason why I didn’t do my EFIC homework is because I finished that and wrote the exam. And I’ve been presented with my official certificate that I can now kind of talk about it, I guess. So.

Chrissy
Wow. Congrats. I didn’t know there was an exam.

Money Mechanic
Yes. And you know what, it was a hard exam. It was hard. legit. I was like, I know this stuff. It won’t be that won’t be that hard at all. And it was tough. So good job Robinson writing a challenging exam. And yeah, so you know, people can look that up it just, it doesn’t make I’m not gonna give any advice or anything like that, I’m kind of a first point of contact, if people are interested in it. The feel free to reach out type of thing. I’m not here to promote myself in that in any way on that. But it was it was an interesting thing was I wanted to learn more about it. And I wanted to be able to speak confidently about it, and have a little bit of sort of background on it. So yeah, that was another reason why I didn’t do my EFIC homework. So I did have a busy summer,

Chrissy
We still have time, we will slowly ease back into the EFIC swing of things.

Money Mechanic
I think a quick reminder, for all the listeners that are going, I’m not ready to learn about drawdown strategies, I’m still trying to learn about FI and get started on my journey. Just a reminder, stay tuned, because we are digging back in to the eatsleepbreathefi.com FI school, that’s like a lot of FI’s in there. Because you’ve got a an excellent section on your blog, which is FI School, which a long time ago, Ryan and you were going to do all these episodes. And somehow I’ve gotten talked into doing them now. And and so we’re going to pursue that and we’ve recorded a few and they’re going to be released. So that’s going to be great content for the people that are just starting out on their FI journey and great resources to go and check out and you know, just improve your knowledge base, right? Because one of the things we want to talk about you and I Chrissy is we’re getting much closer to the drawdown area where we need to do a lot of learning.

Chrissy
Yeah, absolutely. And that’s something that I did this summer, that was my FI activity over the summer was to sort of review our drawdown and, and start thinking ahead because I’m a planner, I always like to think ahead, even if it’s a long way off, but it’s nice to just have a rough idea of what’s going to happen when we start our drawdown phase. And I spoke to our financial planner, and we discussed it in some detail. And I found it really interesting and eye opening. And so we thought maybe we can share some of what we’ve learned and maybe our potential plans on the air here so that you can benefit from our knowledge and we get the conversation rolling on this very important aspect of your FI journey.

Money Mechanic
I think what I underestimated was how nuanced it is and how complicated it is, you know, at the beginning of the FI journey, most of us are overwhelmed with getting started in investing and do it yourself brokerage and things like that. But once you’ve got that dialed in, it’s kind of you know, your cruise controlling it. It’s all good, right? And then you get to this drawdown and you’re going well, what if I have a company pension? What about my CPP? You know, how do I drawdown my RRSP. Oh, I have a LIRA from some other job. And it’s okay, I’ve got my, I’ve worked on my TFSA, and I’ve got a margin account and you’re like, oh, and I’ve got a mortgage and I plan to downsize and then I’m going to have some cash. And you know, there’s just so many moving parts and especially when it comes to couples, because you’re going to have the similar but separate financial situations as well with different assets. And maybe you have kids, and then it like gets into tax planning and maybe you want to do estate planning because you want to have generational wealth and it’s like whoa, pump the brakes, slow down. I don’t know anything about this.

Chrissy
Yeah, exactly. Just to clarify, our conversation today is a little bit separate from the conversation we had with Mark about, Mark Seed about drawdown like we in that episode, we spoke more generally about the entire, all the tactics that you could use in drawdown. In this episode, what we wanted to drill down on was the planning aspect of drawdown and how you could get a second opinion and when it might be wise to talk to an expert or just talk to someone else who may be able to run the numbers for you just to have a backup I guess, just to double check that your numbers are in fact accurate and that you’re on the right path.

Money Mechanic
And we should mention that that’s a good teaser because we will be introducing later in this episode, a new, should we call it a FinTech, it’s a FinTech, a new FinTech, that Explore FI Canada has been partnering up with a little bit so that we can bring that service. So we’re going to talk a little bit about that in a few minutes. One of the things I thought of Chrissy is, how do you know when to start thinking about this? Like what is your advisor say, like how far from when you initiate drawdowns do you need to start thinking about this?

Chrissy
Well, I think, at minimum, you probably want to start planning in the tax year before you start drawing down. Because there are some things, there’s some wiggle room there then that you could plan for. And it also depends how close you are to those the ages where you can take government benefits. So if you’re really close to that, is it 60? Is 60 one of the

Money Mechanic
60s one of the early ones, yeah, you can take CPP at 60.

Chrissy
Okay, so yeah, if you’re getting close to that age range, you should probably look at it maybe a little farther ahead, possibly two or three years ahead, just so that you can start winding down some of your income sources, if you want to aim for that eight year GIS strategy that Ed Rempel talks about where you can aim to get the GIS if you’re able to keep your income low. But that takes a lot of planning ahead. You can’t just jump into it and get it going. Because if your income is too high, there’s only so much wiggle room once you’re in that age range. And once you’re coming up against RRIF withdrawals and things like that, it’s a lot harder to plan for something like that. So yeah, I think if you’re higher up in the age range closer to 60, you should maybe start planning earlier. But if you’re you know, in your 30s or 40s. I don’t know what would you say? Would you say a year is adequate?

Money Mechanic
No, I don’t think so at all. I think you need way more time. You know, I, because I think you’re well we all know that a good plan is going to change as soon as it you know, what’s how’s the saying go the first punch in the face. So, I think you need to really start looking at your future plan for drawing down or decumulation, I would think five years out, because even though that’s not going to be the plan you go with, it’s kind of like setting you up with some, you know, the thought process of like, okay, maybe I need to deal with my RRSP. Or maybe I’m going to choose to leave that like, it helps you make some of those base decisions along the way. Like anything, it’s gonna be personal, and you can adjust as you go. But I think if you leave it till you’re too close, like you said, you may not have that wiggle room to make the adjustments and go, Oh, wait, I put too much money in an RRSP. I don’t have enough time to withdraw it. Now when I’m in a low tax bracket. So I think you need to, you know, say you’re on a 10 year journey to FI. Like, say you go full Mustachian and you go full FIRE, you’re going to work hard for 10 years, pull the pin at 35 or 40. Right, I think five years before the end, at least you got to start looking ahead and going okay, that’s what my projections are. So if I hit my targets, then that this is how I’m going to start the plan.

Chrissy
Yeah, I actually think you’re right. Yeah.

Money Mechanic
But it’ll change obviously, is gonna change, but it gets you in the mindset of thinking about what I’m going to need to do.

Chrissy
Yeah, I think that’s absolutely right. And I would argue maybe even start that at the very beginning. As soon as you discover FI to sort of work backwards, you know, what’s your end goal and then work backwards from there to where you are? I was thinking more along the lines of at what point would you seek out expert help. So that might be closer to the end. But it might even be helpful, closer to the beginning, because, for instance, I have an individual RRSP, I still have room in it. But my financial planner, he told us to stop contributing to it. It didn’t make sense in our situation. I still don’t fully understand why it doesn’t make sense. But it he did the math and you know, it just makes more sense for us to contribute to my spousal’s RRSP through my husband’s contribution room. But that’s one of the things that could be surprising. If you don’t have expert help helping you. You could be plowing money into accounts that maybe won’t be optimal later on.

Money Mechanic
Yeah, exactly. And not that we want to focus on taxes, but it’s something to keep in the back of your mind to try and just be as optimized as possible, right? We don’t want to let them to wag the tail, wag the dog, as the account likes to say, but you know, it’s something that is really important in your drawdown is you can lose a lot to taxes if you’re not doing it efficiently. Right. So.

Chrissy
Yeah, all along the path to it’s not just at the end, you know, all along the away, that there are tax issues that you have to consider even before you reach your FI number.

Money Mechanic
So, you’re right, what you were talking about is when you might seek somebody out, is I definitely for myself, I think I have a fairly concrete plan. But I am definitely going to go get a second opinion. Because, as we know, there’s so much of this financial journey that psychological and with that, so many of us have our own biases, right. And we think we’re right, because we’re not seeing our blind spots. So having that second opinion is going to be super important. Now, I always thought I was gonna contract a fee for service, financial planner, right? Just a lump sum, sit down. Here’s what I’m thinking, here’s what my goals are, here’s what I want in my non working years, shall we call that, I want to, like stop saying retirement this season, because bugs me so much everybody defines it the wrong way, anyway. You know, sit down, have that go through it, and feel confident and make adjustments with a professional that can help me with that. Further the future tax planning, the drawdown from CPP and things like that. Right. So that was my original thought. One of the things that’s cool, that’s come up and why we’re partnering with this new. Should we tell them now?

Chrissy
Sure, why don’t you tell them?

Money Mechanic
We should tell them, we should tell them. So it’s Cashflows and Portfolios and astute listeners will recognize that, because we did bring it up when we talked to Mark Seed. And I’m sure most of our listeners know who Mark Seed is now, he’s a fantastic blogger over at myownadvisor.ca?

Chrissy
I believe so. Yes. Yeah. Mark has partnered with Joe, who is a blogger, a famous blogger in his own right, but I’m not sure if he’s revealed that yet which blog he created. He’s actually created quite a few websites. But` Mark and Joe are working together on Cashflows and Portfolios. And they have a new service that we are going to discuss later on in the episode. But it’s I think it’s a great niche kind of service that is filling a gap in the landscape of Canadian personal finance that I think is much needed.

Money Mechanic
Yeah, one of the things that Christy, that you and I discussed about this, and we definitely don’t want to make this too salesy. This is important information, for sure. But this fills the niche, like you said, for a DIY investor, right. I want to have control, I want to do the investing myself. I want to plan my drawdown strategy myself.

Chrissy
Yeah, exactly. This isn’t me who has a financial planner working for me full time, I don’t need this service. And yet, I got excited when I heard about it. Because I know there are a lot of people who, I was previously a hardcore DIY person. I never thought I’d work with a planner, now I am, but I still have those roots in me. And I know, people who are into DIY, they really, really want to do it themselves. It’s really hard to give up that control. And this service is for those kinds of people. And I get it and I think it’s awesome that it exists for these kinds of people.

Money Mechanic
Yeah, exactly. Now, more importantly, we should also mention, as I mentioned, we’re we’re partnering with them. So that’s important to note. Also important to note is we’re gonna run a contest. Well tell us about that.

Chrissy
This is exciting, so we are running a contest where we will give you more details after at the end of this episode, but we will have our listeners that you enter to win a free retirement projections service from Cashflows and Portfolios. So it’s a valuable service, it doesn’t matter if you’re single or a couple. They are happy to pick a winner from whatever situation you have, and they will work with you to develop this retirement projection and at the end of it, you’ll receive a detailed professional report that includes a variety of things.

Money Mechanic
Do you remember the email that Fringe Doc sent us?

Chrissy
Which one was that?

Money Mechanic
He sent us one was like this gorgeous like overlapping multi layered spreadsheet with like, income is coming from here and income is coming from there. And I’m looking at it going this is impressive like this doctors got his finances figured out of like his drawdown strategy was like all mapped out and he’s like, and he had like, what if this and what if that and I’m going I am way out. I need to get on this stuff because I’ve admitted in the past that my spreadsheeting is, shall we say average, improving all the time. But yeah, I was like, Okay, this is, but it’s a lot of work. Like I could tell that spreadsheet that Fringe Doc built was a lot of work. And he built it for his custom scenario because he’s got corporate income, and he’s personal. And, you know, so he really spent a lot of time on that. And I think a lot of people, either A, are like, spreadsheet phobic like a lot of people, or B is like, Man, that’s a ton of time to sit down and build all that out, right? Because all of this is only as good as much information you put in.

Chrissy
Absolutely, yeah.

Money Mechanic
And for a lot of us, it’s like, well, what’s my CPP even going to be? How do I even find that projection? Right? And so things like that, like building this, building, this whole drawdown thing yourself is quite a daunting task. I found it more difficult than figuring out which ETFs to invest in to be perfectly honest with you.

Chrissy
Absolutely. And I actually misspoke in that drawdown episode with Mark about how my drawdown will play out because I had thought that my financial planner had said, you know, they, they plug it all into their fancy software, and it spits it out for you. But he said, Oh, no, no, that’s not how it works. It’s a very manual thing. So it’s something that we would have to revisit, ideally, once a year, because life changes, plans, change, spending changes, you know, the economy changes all these things that are different every single year. And so I think this is something that millennial revolution talks about in their book, quit like a millionaire, where they say you should look at each year of your retirement like a new year. Whereas if you’re starting retirement all over again. And so that’s basically what we are going to do in our drawdown is that you need to look at it, relook at it every year. And it’s a manual thing where you decide which accounts or account is best to drawdown from each year. And so I think it’s really important to get that professional help, because it’s not just a set it and forget it kind of thing.

Money Mechanic
Well, totally. And did you listen to the most recent Rational Reminder that talked all about the 4% rule?

Chrissy
Yes, I loved it.

Money Mechanic
Did you? I didn’t like the episode. Great, like great content, like those guys always have fantastic content, but it was it kind of chopped and changed a little bit too much for me, like it didn’t have nice cohesive flow. But anyway, great information in there. But one of the things, my takeaways from that episode, and of course, we talked lots about the 4% rule before and sorry, it was 4% assumption. That’s what we like to call it.

Chrissy
Yeah.

Money Mechanic
Is that you know, that’s just something that maybe at the beginning, you’re going to figure out your 25x number, but really, as you get further along the path, and then you get down to this sort of the end game or planning out drawdowns is like one of the things that Kitces brings up right is like, you know, you’ve got guard rails or if you if you’re way up, give yourself a little raise, if you’re way down, take out the inflation numbers, or, you know, there’s there’s all sorts of little nuance to it. It’s not just Okay, I got my million dollar portfolio, I get 40 grand a year. Close the laptop. Go kayaking. Right?

Chrissy
Yeah. Definitely not that simple, especially since I’ve worked through this exercise in the summer. And we realize we have probably a dozen contingencies built into our plan. So we’ll probably wind up somewhere near a 3% withdrawal rate, if it really came down to it, right. But it could be as high as you know, four, four and a half, 5% in some instances. So there’s a ton of leeway. And I just realized this leeway gives us so much freedom to, you know, not have to save up to crazy amount. Yes, we do have a cushion that we will say about more than we need. But it’s nice to know that there’s so many little ways to guarantee that you’ll succeed with maybe not guarantee but give you more peace of mind knowing that you’ve got these backups in case one thing fails or two things fail or or more than that.

Money Mechanic
Yep. And I’ll come back to the why I think starting the process of thinking about your your drawdown planning, you know, the three, four or five years out is it’s just projections, like you said, they changed but they also help you make those contingencies because you’re like, Oh, well, this projection says, I’ll have cash till I’m 90. So that’s okay. This one says, Oh, I run out of 85. Well, what do we need to change to make that better? Do I need to spend less? Do I need to save more? Do I need more aggressive investments, like it really helps you think on all these sort of, you know, different subjects and come up with something that’s gonna work for you personally, right? Because at the end of the day, it’s all personal.

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Chrissy
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Chrissy
Yeah. So I wonder if we should maybe think of some kind of a framework for people to decide at what point they need what kind of service you know, I think at the beginning of your journey, it’s enough to consult a few free calculators, you know, there are lots of them out there. Just plug in some very basic numbers, some of them only take a minute to plug in a number. You know, I think there’s a net worth FI early retirement calculator where you can plug in your income and how much you want to spend, and it spits out a number for you and tells you how close you are to your goal. So at the very beginning, you know, maybe first few years, that’s enough for you. And then as you progress along, there are more advanced calculators that you can enter more and more detailed numbers to get somewhat of a plan or some data that you can use to work towards your end goal.

Money Mechanic
I’m gonna just throw it out there. I know exactly when you’re supposed to do this.

Chrissy
When’s that?

Money Mechanic
Coast FI?

Chrissy
Yes, you’re right. Yes, yes.

Money Mechanic
Because it think about it from a logical standpoint, if you’ve hit Coast FI, right, that’s your own projected numbers, which means you don’t have to save or invest another dollar. And you can have a traditional retirement at 65. So that seems like a logical place to go, Well, I’m gonna have my projected savings to 65. And then I can figure out my drawdown. And that’s also the point where you can make the decision where you’re like, oh, maybe I choose to scale back on some work. Or maybe I just keep going hard at it and hit full FIRE when I want to, I think to me, that’s kind of like the tipping point where you’re like, Okay, I’ve worked really hard. I got to this point where I can coast if I want to, or I can keep pushing. But now’s the time, I should probably pull that all together and go, that’s where I want to end up. Is it going to be in 5, 10 or 15 years or whatever it is? Right? I may and start making that plan. That’s my personal opinion.

Chrissy
That makes a lot of sense. Now, would you say that that is the time for a second opinion? Or would you say that’s just the time to get a little more detailed with some more sophisticated calculators?

Money Mechanic
I think that’s the time you get detailed and sophisticated. And then as you get closer, and really I agree with you. If you’re going to action your plan like actually start drawdown right coast FIRE doesn’t involve any actual drawdown. Right? So when you’re actually going to action it, to actually going to action it. Well, that’s sort of bad English. Actually Action.

Chrissy
You can edit that out, or leave it just for fun.

Money Mechanic
No no, I thought I pronounced it well

How do you pronounce asterisk?

Chrissy
That’s right, asterisk.

Money Mechanic
Oh, good. Because it was on the radio today. And somebody couldn’t pronounce asterisk. I was like it’s not that hard

Chrissy
It’s a weird one. As a kid, I always said asterix, but that’s not right.

Money Mechanic
That’s what the DJ was saying. And like that’s not right. Anyway, when you’re going to action it I think, yeah, maybe a year out, or a year or two out is like, okay, let’s get this double checked. because like you said, you need that tax year to figure things out, you need a little bit of wiggle room to do it, but it’s gonna change. It’s gonna change for everybody. And, you know, don’t sweat it too much. But have it something that you’re going to start thinking about as you get closer, right?

Chrissy
Yeah. And speaking, as someone who has had a financial planner for a few years, some people might actually appreciate working with someone all along the way, I was probably DIY for half that time. And then half the time I had a planner, and I can see really now it’s almost been four years, I can really see the value of working with someone because it’s given me so much peace of mind. And my situation is more complex, because we use leveraged investing, and a lot of people Money Mechanic included, could do that on their own no problem. But for me, that was quite scary. It really scared me. No? I think you’re pretty confident with that kind of stuff.

Money Mechanic
You know, I’m fairly confident with it. But you know, you bring up a great point for me included, because I’ve had an accountant for my corporate business, right? And I had to sit down with her earlier this year when doing corporate taxes. And I said, it’s my personal finances just getting a little more complicated with more leveraged investments, and more margin accounts and more tax consequences. I really want to make sure I do everything properly. track it and file. I said, You know, I think maybe we need to expand from just doing corporate with you to do my personal as well. And you know, have an accountant do it. So I know that I’m comfortable. doesn’t have to be a CFP, but an accountant can help me with that part of it. Right?

Chrissy
Yeah, you’re right. Yeah, I should clarify that part. My planner does offer the accounting services because they file… not accounting, I shouldn’t say accounting, but the tax planning and the tax filing service for free, that’s included in our services with them. So that for me is so valuable, because I know that, you know, with our leverage investing, we’re not going to make a mistake somewhere they know what they’re doing. And they’ve done this with so many clients for so many years that I just know that something I’m, if I had done it myself, I’m not going to miss enter something somewhere and then get a penalty notice down the line. And that’s like my greatest fear of getting audited and having penalties and all that.

Money Mechanic
Well, totally. And you know, the other thing too is right, you have two beautiful children, you want to be spending time with them, not buried behind your computer with spreadsheets, trying to figure out your leverage every month and tracking and for some people, they love that and that’s the time they spend and that’s okay, right. But it’s, you know, make the choice that works for you. So, the contest, we mentioned about Cashflows and Portfolios. Should we learn more about it so we can hear from the man? The men who invented this and created it Joe and Mark.

Chrissy
Yeah. Let’s do that

Money Mechanic
We pre-recorded a segment with them. During the summer, we managed to drag Mark off the golf course and get Joe online as well. And so we chatted with them.

Chrissy
We mention “them” but Joe was there, he just didn’t say anything.

Money Mechanic
Mark’s a great speaker. So he kind of carried the ball, but Joe was there. So, but we really wanted to hear it from them and ask them a few questions that you the listener might be interested in learning more about. So we’re gonna play that now. And we’ll come back in afterwards and explain to exactly how this contest is gonna work.

Chrissy
Sounds good. Here we go.

Money Mechanic
Okay, well, it’s great to have Mark and Joe on the line with us from Cashflows and Portfolios is the real deal. They are here to share a little bit about what this new platform, what this new venture is all about. Welcome, Mark. Nice to have you here joining us.

Mark
Yeah. Awesome to be here. Thanks for having me back.

Money Mechanic
Yeah, it’s always a pleasure to chat with you.

Mark
Yeah. I mean, it’s great to be here. And I know we had a really good chat last time and I can’t wait to come back on the site. I think hopefully in the fall, I think we’re gonna be able to queue something up so I’ll hold you to that.

Money Mechanic
Sounds good. Well, you got over me bashing golfing on FI Garage. So you okay with that?

Mark
I’ll live with it Money Mechanic

Money Mechanic
Alright, well, introduce this, just tell us a little bit more about Cashflows and Portfolios, please.

Mark
Yeah, happy to do it. I mean, certainly, I still have my own site chronicling my own financial journey, but Cashflows and Portfolios I find with my partner Joe is quite unique in the Canadian personal finance space. And that, you know, we’re really trying to be that go to resource for, you know, new DIY investors or definitely existing DIY investors who are thinking about, you know, retirement planning, our contents always free. But we’re our value proposition, I think really lies is because we’ve got so many years of experience as personal finance and investing bloggers. I think we’ve got basically 25 years between Joe and I, which does seem like a lifetime in some cases. We’re really trying to provide some great case studies and educational information. So things that you may not find in other sites in terms of how to drawdown your portfolio for semi retirement, for any FIRE seekers, how do you know you have enough money your irrespective if you follow the 4% rule? When might it be best to take your government benefits, including Canada Pension Plan, or OAS. So we’ve got lots of different perspectives on that. And we also have the tools to show Canadians basically how to do that and charts and graphs. And that’s one of the services that we offer beyond the free case studies, beyond the free educational content. So happy to run the site, and it’s slowly gaining a lot of traction. And it’s a thrill to meet more Canadians on their financial journey, including financial independence.

Chrissy
Can you tell us a little more about where Cashflows and Portfolios services fall in the whole financial industry, because I think you’re filling a gap that no one else is really filling right now, it’s quite necessary. And I’d like you to talk a little bit more about that. So our listeners can understand what you do.

Mark
Yeah, for sure Chrissy. So we feel Joe and I, there’s a massive chasm or, you know, crevasse, if you will, between, do it yourself investing and some of the free resources and calculators that are out there. And then you know, your full fledged financial fee only planner. And there’s nothing wrong with kind of either end of the spectrum, in some cases where you’re getting some free quick and simple tools online that, you know, are largely available to most Canadians if you know where to dig. And there’s certainly nothing wrong with paying for the comprehensive advice based fee only plan. But what’s missing is resources, case studies, “how-to” information in the middle and we feel through our services through our personal finance and blogging experience. Plus, with the access with with professional software tools, we can offer these financial projections at a much lower cost. And it gives Canadians really the confidence check they need that they’re going about things the right way, we’re not in a position to offer any advice. So that’s really where we fit in is we feel we can take the time and run the math for people that don’t have time to do it. They have very busy lives, but they know some of the assumptions quite well and they know what they’re striving for. And that’s where services kind of fill the gap is we can take that time on their behalf, run some numbers and give them a fairly comprehensive report about where they’re trending to. And certainly they can ask any personal questions of both Joe and I but anything they want, whether it’s about our own experiences, our own success stories, some of our mistakes in the past and what we would, you know, consider basically telling people over a coffee conversation.

Chrissy
Yeah, and I’d like to mention something kind of special about Cashflows and Portfolios in that you’re not just offering a plan, what you offer is membership into a community. So it’s not just this piece of paper or a stack of printouts that you get, but you get a forum-like platform where you can ask questions, and you get a lot of personalized service.

Mark
Yeah, totally. I mean, we have a couple different tiers on our site. And we encourage folks to contact us and obviously read the free content, but think of it some of our membership services. And you do get access to our membership forum, where you could ask unlimited financial questions, you get our answers. There’s nobody else that’s providing these answers. We’re the one that monitors the forum. And again, you get that forum membership, as well as the personalized report. And in some cases, you get an hour of our time where we’re actually just having that coffee talk conversation virtually, about any questions you may have about product, services or what’s going on in the financial industry.

Money Mechanic
Wow, you’re gonna have a lot of questions from me Mark, I’m gonna keep you busy, because now this could be perfect membership for me because I could just go in there and get all my questions answered.

Mark
There you go, come on board. What are you waiting for Money Mechanic?

Money Mechanic
No, I like the way this model is gonna fit in. Because so many of us in the FI community are DIY. And so many of us have learned and there’s so much content out there for the accumulation phase. And Chrissy and I, it’s been it’s what we’ve been talking about today. And in past episodes, the drawdown is that much more difficult. And especially for a lot of us that just aren’t familiar with all the little pegs that go in the holes with OAS, CPP, and the rest of it and planning ahead. And if you’ve got LIRAs and pensions. And so you’re using some fancy software that helps you, how do you onboard me? Do you? Do I need to contact you directly? Do we have a meeting? Do you send out emails? Do you have an online form? What does it look like? What matter level of work do I need to do as your client? And what kind of information do I need to provide you?

Mark
Yeah, great question and happy to share that information with your listeners. So the essence is it does take a little bit a level of effort on behalf of the client. And certainly for folks that are maybe fairly savvy at DIY investing, they understand their TFSAs and their RRSPs and some of their accounts, I think it will be very straightforward. So to answer your question, whether you’re an individual or whether you have a partner or a significant other, we’re happy to run those services through basically an intake form, or we’ll ask you specific questions about your TFSA, not what necessarily you’re invested in, we’re not interested in any of those details, it’s more round numbers in terms of TFSA balance, any assumptions on growth or rate of returns. Same with your RRSP. Same with your LIRA, you’re locked in retired accounts, even your pensions, we can make some calculations. But you do need to know some of your estimates in terms of well, if you leave your workplace and you have a defined contribution or defined benefit pension, it’s really good to know, not necessarily your commuted value or any of those types of details. But it’s good to know what your benefit payout would be in terms of a DB defined benefit plan, or even the current value of your defined contribution plan and what some of your rates of return are because obviously for any financial projection, you’re basing your your your future on a set of assumptions. And it’s important for us to discuss those assumptions over email through the intake form, such that we can give you an accurate report. And that’s that’s kind of the conversation we’ll have in terms of turnaround times we aspire to get to pretty much every email we can within 24 to 48 hours. We’re busy folks. And I know everyone else is busy too. But we feel that’s a pretty reasonable turnaround time. And certainly for clients, we’re aspiring to get, you know, through the intake form. And any Q&A back and forth, probably reports done within a week. So it is quite a quick turnaround time. And in some cases, it could be even less depending on our client load. So definitely the response rate back to us in the correspondences is quite quick and swift.

Chrissy
Great. So we would like to ask you one more question. Tell us what qualifies you and Joe to do this, as we know, you’re a blogger and you have your website. But what else is there so that listeners know that they’re getting good info, from a good source?

Mark
Yeah, I certainly feel that based on my experiences and successes, but also some mistakes. I mean, nobody’s perfect in life. I think I mentioned at the top, you know, between Joe and I, we have 25 years of combined experience or over that now, in terms of helping Canadians, you know, my partner, Joe, has been the founder of a few great sites and certainly has been a, you know, an exceptional investor. That’s been helping Canadians for for many years through, you know, Canadian money forum and other ventures. And so the upshot of it all is because we are so passionate about investing, because we’re, you know, we think about these things quite a bit. It’s part of our DNA, it’s part of our lives, we feel we have a unique value proposition to offer Canadians that’s really unbiased. And to be honest, we’re also part of a great Canadian personal finance community where we tend to grow and evolve with each other a little bit. And I think that’s what makes our value proposition unique. And that we get to talk with folks like you at Explore FI Canada, we get to talk with other serious passion bloggers that have really no other interest, then, you know, trying to make our own lives a little bit better through personal finance, and we put this site put this information on the public domain because we want to share it with other people. So we’re optimistic that by doing that, and being transparent about our own journeys, but also sharing what we know and also sharing some of our success stories, but also opportunities to improve, it can help people become just much, much better DIY investors and take control of their money and, and be better and wealthier for it.

Money Mechanic
Yeah and I think adding on to that is the fact that you have first hand experience of getting to that stage in your own FI journey, that the whole drawdown this whole planning thing is becoming is right in front of you that you have to deal with with your own personal journey so that that experience you can take further as well.

Mark
Totally true Money Mechanic. I mean, I’m living this real time and Joe is kind of almost been there done that, you know, he’s working through and he is executing on his own drawdown plan is using the same financial software that we’re using for other clients. So this is a real time exercise and us understanding what we’re doing ourselves. But we’re also trying to pay it forward for other people who may want to take advantage of some of our time and some of our expertise in a totally unbiased way. To be honest, you know, there are no assets under management for us to chase. We’re not financial planners, we’re not looking at CIMs or to be certified money managers. We’re just offering up our time and our services to help Canadians who may want a refreshing perspective.

Money Mechanic
Fantastic. Well let our listeners know where they can find you.

Mark
Yeah, so we’re over at CashflowsandPortfolios.com, just reminder, our newsletters totally free. There’s also a free downloadable tool that Canadians can take advantage of, we call it our cash flow tool. And it’s beyond budgeting, it really helps you understand where your money is going. And in some cases, once you document where your money is going, it may be different than what you expect. And we feel that’s a really great way of really trying to better understand money management other than the big scary B word which is budget, which tends to scare people away, because they feel it’s very rigid. You can’t manage what you don’t measure right. And I feel tracking is such an important system whether it’s you know, talking about you know, your exercise regime or your diet intake or whatever, you know, if you measure it, you can manage it. And so tracking is a much better way of approaching finances, but that’s another topic. Another topic for another day. But yeah, check us out at CashflowsandPortfolios.com and obviously we have a range of case studies. And obviously, you can contact us more about our services hit us up and we’re happy to talk to you.

Chrissy
We’ll include links in the show notes as well.

Money Mechanic
Yeah, fantastic. Thanks a lot for joining us and looking forward to staying in touch and continuing the relationship between Explore FI Canada and Cashflows and Portfolios

Mark
As always, thanks very much to both you.

Money Mechanic
Okay, that was excellent. We really appreciate Mark (and Joe*) joining us. And I’m, I’m going to have to somehow buy him a round of golf or something, get my own portfolio tested with this thing. But let’s tell the listeners about this contest and how they can enter and what it is going to entail.

Chrissy
Yes. Okay. So what you’re entering to win is a free retirement projection from Mark and Joe from Cashflows and Portfolios. So you will work with them just like a real client would. And you’ll receive a professional report that will highlight your retirement cash flow year over year projections, net income changes, detailed sources of retirement income over time. So it’s very detailed, it’s professional level, they use a high quality software that usually professional planners actually use. So they have access to the software, and they’ve learned how to use it, which is, you know, I think they’re pretty complicated to use. So that is really what you’re paying for their expertise in knowing where to plug in the numbers, how to guide you towards giving them the right numbers so that you get an accurate projection. And so that is what you’re entering to win. And so to enter, it will be on the show notes of this episode. So this is number 60. I’m not sure the title of the episode yet. But look for number 60 on our website, ExploreFICanada.ca. And you will go to the show notes. And probably at the bottom of the show notes after the transcript. Somewhere near the bottom, you’ll see a Rafflecopter box. Rafflecopter is just a service that runs contests. And so you’ll see that box and there’ll be a number of things that tasks that we will assign to you that you’ll need to do in order to enter the contest. And so look for that box and enter the contest. And the deadline will be 11:59 Pacific Standard Time pm on October the 10th, 2021. Oh, exciting. So that is the deadline. So basically a month from when this episode airs. That’s the deadline to enter. And then after that, we’ll randomly select a winner and contact you probably via email, and then we’ll announce on on the episode after.

Money Mechanic
So sometime late November, we’ll be presenting one of these plans, which is exciting.

Chrissy
That’s right. Yeah, yeah, it’ll take about a month or for us to. Well, I think Mark and Joe can turn around the projection a lot sooner, but we’ll need to time to sort of work out how we’ll talk about it on the air because we want to make sure it’s something that you want to listen to, because they’re discussing a bunch of numbers and that’s not going to be really fun.

Money Mechanic
So here’s the spreadsheet, and in column three.

Chrissy
Yeah, we’re not gonna do that.

Money Mechanic
Column C, line three is $8,972. Okay, so the other thing is, if you don’t want to enter the contest, which I can’t understand why you wouldn’t, but if you are interested in the service, from Cashflows and Portfolios, you can skip the contest altogether, you can get a 15% discount on the service by mentioning that Explore FI Canada sent you over there when you contact when you reach out to Mark and or Joe, at that service. And of course, as I mentioned in full transparency, this is sort of an affiliate with us. So you’ll be helping Chrissy and I keep this wonderful show on the air.

Chrissy
Yes, yeah. And we’re excited for this partnership. We don’t take these partnerships lightly. We’re very selective about who we work with, because we’re kind of protective of you guys, our audience. We never want to expose you to services or products that we don’t fully believe in and that we would use ourselves so you know, for what it’s worth. We hope you can trust us and know that we’ve got your best interests in mind. And you know, we really believe in the service and think we know Mark and we know we’ve met Joe as well, and we think they’re great people and we hope you’ll enjoy working with them if you choose to work with them or have fun with a contest. Let’s see if you win, and if not, then you can enjoy the case study afterwards.

Money Mechanic
For sure, and stay tuned for FI School that’s coming up.

Chrissy
That’s right.

Money Mechanic
Is that the next episode?

Chrissy
I think it will be. Yeah, we’ll be diving right in and it’ll be lesson three—that’s budgeting and tracking, which is one of my favourite topics. Tracking especially.

Money Mechanic
Tracking yeah, well, we’ll see what side of the fence I sit on for that one. Excellent. Well, it is so important to learn about drawdown but there’s, there’s so much to learn about this FI journey, and we’re gonna continue exploring it all the way across Canada this season. We’ve got lots of exciting guests from some of the province we haven’t hit yet. And I’ve been getting a few emails over the summer with some interesting stories. So I’m looking forward to chatting with people and and sharing this journey.

Chrissy
Me too. I’m excited.