Podcast 3: A Hedge Fund Manager Comes Clean + MORE Jan 11th

The third episode of the Canadian Couch Potato podcast is now live. You can listen in your browser using the tool below, or download it using iTunes or your favourite podcasting software.

My first podcast of 2017 features an interview with Lars Kroijer, author of Investing Demystified, which will soon be released in a second edition. Based in the UK, Lars is a former hedge fund manager, but today he advises investors to give up the dream of market-beating returns in favour of a simple indexing strategy. As he says in our chat: “It’s my view that the overwhelming majority of investors have no chance whatsoever of beating the financial markets and they should act accordingly.”
Lars outlines his arguments in a new series of YouTube videos. The clips are well-produced and provide a good introduction to the principles of index investing.
What’s your expected return?
In the Bad Investment Advice segment, I scoff at an advisor who recently told one of my readers that he could expect 12% returns from traditional mutual funds…

Illustration by Dan Page
Salary vs. dividends. Holding companies. Most business owners’ eyes glaze over when presented with accounting jargon. Yet tactics like these are essential to maximizing the value of your business. These tax tips prove that knowing your options can really pay off.
Deal yourself more dividends
Greg Toner of London, Ont., is an accountant with LiveCA LLP and says many entrepreneurs never think to take part of their pay in dividends, to take advantage of their lower tax rate. You do want employment income at some point, to qualify you for RRSP contributions and Canada Pension Plan. But depending on where you live, you can earn $30,000 to $40,000 in dividend income before you start paying tax. If you’re a young entrepreneur starting out, with minimal cash needs, Toner notes you might even take all your income as dividends. Then you can change your income mix every year to reflect your changing needs.
Income-split like a pro
Most entrepreneurs know how to cut taxes by splitting income with family members…

If you rely on historical returns to guide your financial plan, then you may want to rethink your strategy. As I argued recently, investors need to brace themselves for substantially lower returns versus what they are accustomed to. It’s a helpless feeling—but investors aren’t completely powerless in this situation.
We can distill your choices in this situation into four options:
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Invest (save) more while you’re working

Invest more aggressively

Accept a lower standard of living (income stream) in retirement

Retire later
 

Most people can mix these variables and aim to tweak them to suit their circumstances. Life is about trade-offs and whatever you choose ought to reflect both your situation and your values. I might add that the obvious admonition to lower your costs should go without saying…

Corus Entertainment Inc. had $71.1 million of net income in the first quarter of its 2017 financial year, a big increase from the same time a year earlier before it acquired Shaw Media last spring.