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DEC 12, 2017

Merry Christmas from Monty the Penguin


For each of the last ten years the British retailer, John Lewis, has aired what has become an iconic holiday season commercial. Although this year’s #MozTheMonster was clever, in my opinion nothing comes close to 2014’s, “Monty the Penguin”. Admittedly, it is a rather slick piece of marketing directly targeted to tug on our heart strings … and open up our wallets and purses! Having said that, I challenge you to watch this two minute advert without getting even a little bit choked up, not to mention the ear worm of a song, “Real Love”, by John Lennon that will have you humming along all day long.

As 2017 winds down, I sincerely hope you have the opportunity to spend more time with family and friends, and perhaps reflecting on who and what brings meaning into your life. It is with this in mind, and your interpretation of the moral from “Monty the Penguin” that I wish you all the best for the season and a very happy New Year.

Merry Christmas!

These monthly blog posts are sent with my hope to provide context and content around “Wealth with Wisdom”.

JUL 20, 2017

Why you are wealthy?


If you are reading this there is a very good chance you are wealthier than 90% of the Canadian population. Have you ever paused to think why this may be the case? Of course there could be any number of reasons that quickly come to mind such as living below your means and saving the difference, the long term compounding of returns in your portfolio or owning high quality companies etc. However Morgan Housel, a partner at Collaborative Fund and one of the most astute financial writers blogging today, has some ideas on the subject which you probably have not thought of.

One, you are wealthy because you are a pleasant sociopath. As Housel writes, “I’m convinced that nearly every rich person has the characteristics of a sociopath. Not in a cruel, soulless way. But sociopaths can discharge emotional events that cause normal people to worry and panic. Great investors can do that, too. They can watch stocks fall 50% and shrug their shoulders or see 10 million people lose their jobs and remain unshakably calm.” Napolean’s definition of a military genius was ‘The man who can do the average thing when all those around him are going crazy’. Perhaps you are wealthy because you are the same – you can remain normal when all those around you are losing their heads.”

Two, you are wealthy because you do things differently. Again Morgan Housel writes, “The funniest thing about rich people is how little their income has to do with their wealth. Mike Tyson earned $300 million during his career and went broke. An orphaned, unmarried administrative assistant died with millions in the bank.”

Three, you care about time periods most can’t comprehend. Think about it this way, there are four ways to invest:


Long term (varying degrees of success)

Short term (successful due to luck)

Short term (successful due to manipulation/fraud) 

Reflecting on the above options one comes to the inevitable conclusion that the only logical way to invest is over the long term. But here’s the thing … it’s totally unnatural! As human beings it has been encoded into our DNA to go for the immediate gains and avoid imminent threats.


Carl Richards, the artist of the above sketch, notes that we have the same emotional connection to ourselves 30 years in the future as we do to a complete stranger. The bottom line is that nearly all sizeable accumulations of wealth can be traced to a single variable, a long term outlook.

Four, you are wealthy because you don’t give a damn what other people think of you! Finally, Morgan Housel points out, “The price of being rich is really simple: You must live below your means. But living below your means is hard. Most people want to be rich to impress other people. They do this by spending money, which is the surest way to have less of it. Rich people avoid this trap. A lot of them are after control over their time, which comes from having a wide gap between what they can afford to buy and what they actually buy.” Or, as the poet William Shenstone once wrote, “A miser grows rich by seeming poor. An extravagant man grows poor by seeming rich”.


Like all of life’s rich emotional experiences, the full flavor of losing important money cannot be conveyed by literature. You cannot convey to an inexperienced girl what it is truly like to be a wife and mother. There are certain things that cannot be adequately explained to a virgin by words and pictures.
Fred Schwed Jr.

(Author of “Where Are the Customers’ Yachts?” First published in 1940)


JUN 14, 2017

The success circles


I have a wise friend who shared with me how he helps individuals whose major challenge in life has been a “failure to launch”. Taking the “less is more” approach, he simply draws three intersecting circles and labels each one “what you love”, “what you’re good at” and, finally, “what pays well”. He then suggests that one should strive to find the activity in which the three circles intersect. I have read many books on career planning and nothing comes close to my friend’s simple yet profound insight.

More recently I came across a similar idea that expands on this theme. I invite you to take a few moments to reflect on how the illustration below not only provides clarity with regard to career counselling, but also to many aspects of one’s life.


“The difference between knowledge and wisdom is knowledge is knowing a lot of things. Wisdom is knowing which things matter.”

– Anonymous


I cannot believe that the purpose of life is to be happy. I think the purpose of life is to be useful, to be responsible, to be compassionate. It is, above all to matter, to count, to stand for something, to have made a difference that you lived at all.
Leo Rosten


MAY 23, 2017

The pyramid of investment success


What is the secret to multi-decade, inter-generational wealth creation? Fortunately, it can be summed up in one easy illustration I call “The Pyramid of Investment Success”.


I am utterly convinced that over 80% of one’s long term investment success comes down to a single variable … one’s individual behaviour. In other words, for many of us, our single greatest enemy in our quest for wealth creation is the person who stares back at us from the mirror every day! Somewhat counter intuitively it matters much less if you have the most scientifically determined asset allocation, if you have hired the world’s most successful money manager, if your fees are close to zero, or, if you have eliminated all tax consequences from your portfolio. If you panic sell just because the Toronto and New York Stock Exchanges have one of their temporary fire sales (also known as a bear market), then everything else just doesn’t matter. Think back to late 2008 early 2009 when so many individuals committed financial suicide by doing just that.

Once you have a handle on your behaviour and/or have a trusted advisor to help you through these periodic fire sales, (based on my experience, about once every five years and take the markets down, on average, around 30%), then we can move on to the next level of “The Pyramid of Investment Success”. To put it more specifically, a correct asset allocation that is customized to your defined needs and goals. An overwhelming impact on your lifelong returns will be determined by what percentage of your net worth should be in real estate, GICs and other fixed income securities, Canadian, U.S., and international companies/stocks. As an example, if 5% of your portfolio is invested in a magical company whose stock goes up 20% every single year but the remaining 95% is sitting in a GIC earning 1.5%, then I’m afraid your fantasy stock is not going to move the needle very much on your portfolio’s overall return.

The next level of investment success focuses on owning a diversified collection of world class companies – much better to be an investor in a great businesses  than a speculator in Moose Pasture Mines. Next, make sure you have done all you can do to minimize taxes and, finally, ensure you are receiving fair value for the fees that are being charged for having your financial life professionally handled.

Paradoxically, the financial media tend to focus on the top levels of the pyramid. I believe this is because fees, taxes, and security selection are much easier to quantify. As important as these issues are, do not be fooled. One must be ever vigilant in regard to making sure one’s behaviour is helping and not hurting. Do this and 80% of long term investment success should inevitably ensue for you and your family.

“The single most important variable in your quest for equity investment success is also the only variable that you  ultimately control: your own behavior.”  —Nick Murray

These monthly blog posts are sent with my hope to provide context and content around “Wealth with Wisdom”.


APR 19, 2017

When NOT to invest


I am convinced there are Canadians who can actually invest successfully themselves. However, like the Loch Ness Sea Monster, they are often sighted but rarely actually seen! For long term wealth creation you need to possess what I call “The Three T’s”, specifically, the time, training and, perhaps most importantly … the temperament. Most Canadians struggle to achieve even one of these characteristics, let alone all three.

I have created a checklist to make it easier for you to decide whether or not you should be making critical investment decisions yourself.

1. If you use the words “play”, “gamble”, “flyer”, or any similar speculation-oriented word when you describe your investments.

2. If you don’t like to do math.

3. If you think you will only ever buy stocks that go up. News flash – you are not perfect. No system is perfect. No provider of advice is perfect. You can – and will – lose money at some point during your investment journey.


4. If you believe that the share price alone or share price movements alone tell you anything about the underlying quality of the company or its business. All too often people buy low priced shares with the idea that they are cheap, only to find out that they are low priced because the underlying business is a train wreck waiting to happen.

5. If you couldn’t write down a list of why you bought and what might make you sell. If you don’t know why you bought the stock in the first place, how can you know when to sell? Bad scene. Avoid it.

6. If you cannot tell the difference between a balance sheet and an income statement, especially if you don’t even know where to find a copy of either.

7. If you don’t know how to get the phone number for Investor Relations at the company in case you have questions.

8. If you cannot define any of the following words: gross margin, operating margin, profit margin, earnings per share, costs of goods sold, dilution, share buyback, revenues, receivables, inventories, cash flow, estimates, depreciation, amortization, capital expenditure, GAAP, market capitalization or valuation, shareholder’s equity, assets, liabilities, return on equity.

9. If you have only one source of information about the company. It doesn’t matter whether it is your best friend, the Globe & Mail or the internet. If you cannot verify the facts independently, you most certainly are bound to get unintentionally bamboozled. No one likes to admit they are wrong. If you depend on one source of information, odds are that when it finally coughs up the conclusion that it made a bad call, it will be too late.

10. If you cannot name the major products the company makes or the company’s major competitors.

11. If you refer to management on a first name basis nine times out of ten the investor has lost complete objectivity regarding the company. Unfortunately, ignoring this one has caused me significant losses in the past!

So there you have it: eleven reasons why it probably makes sense for 95% of the  population to use professional money management. After all, if your car breaks down there is a good chance that instead of trying to fix it yourself, you would utilize the services of a trusted mechanic. Why would your investment portfolio be any different?


Knowing what you don’t know is much more useful in life and business than being brilliant
Charlie Munger

(Warren Buffet’s older, and some would argue, smarter partner)


FEB 10, 2017

Time to feed the goose 2017


As I have now begun to receive a flurry of tax “T-Statements” I realize, once again , it is that time of year when we all prepare to feed the goose. Given this fact, I thought you might appreciate our2016 Personal Income Tax Organizer and The Personal Tax Calendar for 2017.


The 2016 Personal Income Tax Organizer provides you with a checklist to help you compile the information you need to complete your personal tax returns, whether you do it yourself or engage the services of a professional tax preparer.

The Personal Tax Calendar for 2017 gives you a list of important dates for personal tax filing and planning for this year.


Taxes are our way of feeding the goose that lays the golden eggs of freedom, democracy and enterprise. Someone says, ‘Well, the goose eats too much!’ That’s probably true.  But better a fat goose than no goose at all
Jim Rohn


JAN 18, 2017

99 reasons 2016 was a good year


It has been my practice to begin each year’s “Wealth with Wisdom” with a focus on the many positive things that are happening in the world today. As I become older and, hopefully, a bit wiser, I have come to the conclusion that how we perceive our universe is largely a matter of choice. If you so choose, you can  pay attention to organizations such as our publicly funded CBC with their “Think 2016 Was Bad? 2017 Will Be Worse” (Honestly, I can’t make this stuff up!) or decide that that, although the world is far, far from perfect there are many reasons for optimism:

To that end, check out the above video for some absolutely spectacular shots of British Columbia’s Great Bear Rainforest. Last February the B.C. government announced that it has now protected 85% of one of the world’s largest temperate rainforests. This happens to be the # 1 reason for the “99 Reasons 2016 Was A Good Year”.

Have a great 2017 and, if you are still feeling somewhat pessimistic after reading this, you may wish to remember what the Dali Lama once said, “Choose to be optimistic, it just feels better!”.


The progress of human knowledge will be rapid, and discoveries made of which we have no conception. I begin to be almost sorry I was born so soon, since I cannot have the happiness of knowing what will be known 100 years hence.
Benjamin Franklin

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