About this video

• Video Title: COPY MY EXACT INVESTING STRATEGY To Retire Early in Canada
• Channel: MICHAEL KIM, CPA
• Speakers: Michael Kim
• Duration: 00:12:31

Overview

This video outlines Michael Kim's personal investing strategy aimed at helping viewers achieve early retirement in Canada by achieving an 8-10% annual rate of return with minimal time commitment. He shares three key strategies: appropriate asset allocation based on time horizon, optimizing investments by focusing on the US market while minimizing fees, and understanding investment income taxation to maximize returns.

Key takeaways

• Asset Allocation for Time Horizon: For long-term goals (10+ years), a high-risk, high-growth portfolio is recommended. For medium-term goals, a balanced 50/50 portfolio is suggested. For short-term goals or when in retirement, a lower-risk, balanced portfolio is advised to preserve capital.
• Investing in the US Market: US investments historically offer a 2-4% higher growth rate than Canadian investments. Canadians should be mindful of withholding taxes on dividends (waived in RRSPs) and consider currency conversion fees when investing in US assets. Using platforms like Mumu can significantly reduce these fees.
• Tax Efficiency of Investment Income: Capital gains are taxed at 50%, and taxes are triggered only upon selling. Dividends have a gross-up and dividend tax credit system, making them relatively tax-efficient, especially in registered accounts like TFSA and RRSP for higher tax brackets. Interest income is taxed at 100% and is best held in registered accounts.
• Integrated Strategy for Early Retirement: The speaker's strategy combines a tailored portfolio for each financial goal, optimizing for US market growth while minimizing fees, and strategically managing taxes on investment income to maximize overall returns for early retirement.