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!

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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!

[bctt tweet=”“The world is exploding with asset allocation ETFs, which I think is a great thing.” – Cameron Passmore” username=”CameronPassmore”]

[bctt tweet=”“Vanguard has an incentive to spread the message of low-cost index investing, whereas every other company is disincentivized to do so.” – Benjamin Felix ” username=”benjaminwfelix”] [bctt tweet=”“As soon as you implement a safe savings strategy as opposed to safe spending, it changes the whole conversation around financial planning.” – Benjamin Felix” username=”benjaminwfelix”]

Links From Today’s Episode:

Benjamin on Twitter — https://twitter.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Cameron on Twitter — https://twitter.com/CameronPassmore

Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

Dimensional Fund Advisors — https://us.dimensional.com/

BlackRock — https://www.blackrock.com/za

iShares — https://www.blackrock.com/corporate/ishares-global

Vanguard — https://about.vanguard.com/

BMO — https://www.bmo.com/main/personal

Financial Times — https://www.ft.com/

John Bogle — https://www.investopedia.com/terms/j/john_bogle.asp

Rick Ferri — https://rickferri.com/

Morningstar — https://www.morningstar.com/

CFA Institute — https://www.cfainstitute.org/

Wade Pfau — https://retirementresearcher.com/

David Chilton — http://www.wealthybarber.com/

Download the transcript of this episode: The Rational Reminder Podcast Ep.34 – Transcript

About The Author

Cameron Passmore

Cameron Passmore has been a leading advocate for evidence-based, systemic investing for over 20 years in the Ottawa area. Today, Cameron and his team serve a broad range of affluent clients across Canada.