How Not To Screw Up Your Money in 2025
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- Hello, and welcome to the first 2025 episode of the TLDR podcast, a show about the culture, gossip, and business of money. And this week, are you already screwing up money for 2025? My name is Devin Friedman.

I am here with my co-hosts. Matt Keres is the director of product for Wealthsimple, our sponsor. Matt, happy new year. Happy new year to you too. Can we tell everyone that you just got engaged? Yeah, we can. Mazel tov. I saw a video of it. Someone on the street...

Sarah Rieger is the business and markets correspondent for the TLDR newsletter. Sarah, how are you?

Happy New Year. Happy New Year. Are you snowed in at the moment? Yeah, I feel like that's actually helping my financial goals for the year because I'm all like congested and indoors. So I haven't had an opportunity to spend money yet. So really good for me and my budget. And this week joining us is a frequent contributor to the TLDR newsletter, Ben Mathis-Lilley. Ben is also a staff writer at Slate.com and author of the book Hot Seat,

Ben, welcome to the show. Thanks for having me. Ben, how long have you been writing for the newsletter now? I think it's about two years. I would say, yeah, I've gone from zero understanding of finance to, you know, being probably the foremost expert on it in the entire North American continent. Or at least in your house. Yeah. Okay, so we have a very good show for you coming up today.

We think of it as a transition show, sort of going from 2024 to 2025. What happened last year that we're still thinking about and what's going to happen this year. And we're going to break out some data from the Wealthsimple trading platform about what people were doing in the market and what it means. And of course, we'll catch you up on everything that happened since we all talked to each other on the last TLDR podcast. With that in mind, Sarah.

Who is making or losing money that is interesting to you right now? Well, money news didn't really take a break over the holidays. So I figured I could catch you up on some of the stuff that happened. You know, the Canada post-strike got suspended. The Competition Bureau sued Rogers. Oh, and I don't know if you noticed this, but Canada's prime minister resigned and our entire government is on hold. Yeah, it was a busy holiday season.

It seems like. A little bit. And a busy Monday morning that, you know, when everyone got back to work on January 6th. So let's start with probably the most consequential of those things, which is the prime minister resigning.

Yeah. So on Monday morning, Trudeau said he will be stepping down as liberal leader once a successor is chosen. Trudeau also asked the governor general to put parliament on hold until March 24th, which is to give the liberals some time to pitch that successor and also which will, for the time being, at least prevent a non-confidence vote that would trigger an election. Yeah. I mean, this did not happen in a vacuum. That seems like there were some dominoes that fell yesterday.

and some pretty significant financial backdrop to these events. Take us through a little bit about when things started to unravel for Trudeau.

So in his press conference, Trudeau acknowledged that there has been discord within his party. These calls for him to step down within the liberals for a while. But those got really loud after his finance minister, Chrystia Freeland, surprised resignation. Basically, her mic drop on the day of the fall economic statement in mid-December. I mean, honestly, I thought that's what we were going to be talking about on this episode.

until the events of Monday. We shouldn't just speed past that. I mean, that was kind of a slap in the face to have one's finance minister resign

sort of at a very high media moment right before a big economic announcement. It does really feel like she timed it to have like the most media impact. Before we move on, like what was the nature of the disagreement between the two? Like how did they not see eye to eye? It's hard to say for sure without like knowing what was said between them. And some have reported that Trudeau was removing Freeland from her position and that's what led to this.

She said she was concerned the government's overspending and that it's not taking Trump's tariffs threats seriously enough. Yes. So essentially, everyone sort of agreed that the Canadian economy was, as they say, on the wrong track. But there seemed to be a divergence in opinions about what to do about it. Trudeau was interested in, you know, with an election coming up and his unpopularity, maybe making people happy by...

making things a little bit less expensive by cutting taxes and giving them a little bit of money in their pocket with these $250 checks. And Freeland basically, to quote Succession, got on stage and said, you are not serious people. Yeah, that definitely was the gist of it. So, Sarah, I know that you probably had some other stuff to talk about before Trudeau dropped the bomb on Monday. So,

Tell us, what other stuff should we be catching up on? Okay, so I know I love to come on this podcast and vent about everything wrong in the world. No. And of course, I ended up doing that again today with, you know, needing to talk about this breaking news. But that's really not the energy I want to start out 2025 with. So I also thought I'd just share a couple of positive things that I'm looking forward to with the economy this year. Please.

So the first one is rate cuts. The Bank of Canada cut rates five times last year, and they're expected to keep that going in 2025, although maybe a little less dramatically. It looks like maybe to as low as 2%. Always happy about rate cuts, I think, unless it's because something terrible happened and we have to slash the interest rates because we're all going to die. But as of now, rate cuts are a good thing. So, okay, looking forward to that. What else? The second is that for the first time in history, this year the world is set to have more renewable energy than coal generation. Wow.

Wow. That's a big moment. Yeah. And I think especially as we're heading into this period of really intense energy demands. So it feels good to know that things can get a little greener. And the third thing I'm really excited about is that we're seeing employees in Canada gain more control over their workplaces. As older business owners are retiring, Canada could see about $2 trillion in small businesses change hands over the next decade. And

And last year, it introduced these new rules that make it way easier and cheaper for workers to buy out their company, you know, instead of it being swallowed up by like an oligopoly or bought by private equity. So I'm feeling kind of hopeful that we might see more people profiting and feeling more in control of their work this year. Are you really feeling that? Or are you just saying that because you're trying to be positive? Can it be both? It can be both.

You can have what my kid's pediatrician called double-dip feelings. There we go. I have some double-dip feelings about the economy this year. I'm ambivalent. In fact, that's my new favorite word. Okay, so Matthew, since this show is kind of about what happened last year and what's going to happen this year...

I wanted to talk to you a little bit about what people were doing when they were buying and selling stocks last year. Obviously, it was a crazy bull market and one that maybe people didn't really predict. But as someone who works on the Wealthsimple trading platform, you have access to, you know, lots of patterns and behavior of people. What did you see this year?

Yeah, I mean, I honestly, I find it fascinating to see what people are doing with their money. If you look at what our clients have been doing over the last year, like you sort of really see the stock rally, you know, taking hold and influencing their behavior. The biggest shift and the most interesting shift to me has been the shift from cash into assets. You know, this

on the one hand, like might seem pretty obvious. Like we're talking about like one of the biggest stock booms in recorded history over the last couple of years. But on the other hand is like, you know, a really, really big shift from where we were back in 2022. The big story in 2022 is that people, that rates were rising. People were like searching furiously for places that would provide them interest payments, you know, moving into stuff like high yield bank accounts and stuff like that. Yeah. So like coming out of the pandemic, like,

Obviously, inflation was one of the big stories. And then the other side of that was central banks were raising interest rates to...

levels not seen in recent history. And people were like, okay, I need to take advantage of those high interest rates. I'm looking for the biggest yield on my cash. Yeah. They moved into these alternative products, whether a place is like WellSimple or traded on exchanges that just offered them the going rate for their money. And so people were earning up to 5% or more on their cash and you saw record inflows

And that has reversed over the last year, partially because, you know, rates have started to come back down again. But also because like 5% sounds great when you think that stocks are going to be flat or even like people did in 2022, you think there could be a huge crash. But after, you know, two years of 10, 20, even 30% returns on stocks, that 5% or now even less than 4% just didn't look all that good in comparison.

Right. You have a lot of FOMO when you look over and you see people making 20% buying and selling stocks. So given that people were moving their money out of high interest accounts and into stocks, what were people buying?

So let's start with the numbers. Possibly unsurprisingly, like top of the charts was NVIDIA, which that's about 6% of all of the dollars into stocks last year went into NVIDIA. And how did NVIDIA do last year?

The stock almost doubled. So, you know. After NVIDIA, what else were people buying? The next most popular one was an asset called VFV. It's basically the Canadian dollar hedged version of the S&P 500. Next up after that, probably again, no real surprises here, was Tesla. Sure. This was the most popular stock among Wilsonville clients back in 2023. And, you know, again, was pretty popular in 2024. I think in the past, we've called it a generalist.

giant meme stock. Not pejoratively necessarily, but it behaves the way a meme stock does in a lot of ways. Yeah, I mean, it's incredibly volatile. And then, you know, continuing to get on the list, I'll try to run through some of this pretty quickly. But I think actually going through them one by one is helpful because it gives you a feel for the year. The next was an ETF called XEQT, which is basically a diversified portfolio of U.S. and Canadian stocks.

After that was a high interest savings ETF coming in fifth, which is still pretty high, but is half as popular as the most popular high yield ETF was the prior year. After that, the most popular Canadian stock was Shopify coming in number six. And then rounding out the top 10, you had a couple of levered ETFs. And then you also had a couple of Bitcoin related stocks.

So were you surprised by any of this? Was there anything that you, as someone who works on the platform, didn't expect? So one of the biggest things that I was actually surprised about was just how popular the top ones were. So 30% of all the buying was for the top 10 stocks and ETFs. 50% of all the buying was for the top 30. And 90% were for the top 250 or so. People were buying and selling stuff that they have heard about or knew other people that were buying and selling.

Yeah. On average, though, like you have over the last, you know, the last year seen investing patterns that pretty closely map to what you'd expect based on the kind of environment we've been in. Like, you know, more investing overall, big shift into U.S. tech, big shift into crypto companies and also a smaller but still meaningful shift into these levered ETFs. Sarah, does any of this surprise you?

It is always a little shocking to me that people will pile into something like NVIDIA after it seems like it's already enjoyed so much of a run, just because it's really different from how I like to invest. I'm not saying like NVIDIA is already peaked. Obviously, we don't know. Right. But to me, it just seems like after something has had a historic run, it might not be the time to buy in, at least for me personally. I'm like you, which is that I assume that by the time I know about something, it's too late.

But the story of this year is that, like, things that had gone up a lot went up more. But who knows if it's going to keep happening, you know? Eventually, this is the kind of thing where people pile into the same things and push up their prices so much that, you know, expectations become too high for those companies to meet. And so is the seeds of its own reversal. But it's really hard to know, you know, when you've crossed that point. Yeah.

It can go on for years. Are there other weird curiosities to talk about that you saw? I mean, I'm still consistently amazed at how much Canadians love their weed stocks. People still piling into weed stocks? Yeah. According to Brennan, our researcher, canopy is truly riding high.

A great pun. Ticker is weed. Yeah, exactly. The good ticker has to be part of why people trade it, right? Like that's just a hilarious thing to have in your portfolio. It's like people say the domain names are like the real estate of the internet. Tickers are the real estate of financial markets. Should we do a TLDR?

I think so. There doesn't seem to be one listed on the Toronto Stock Exchange, at least. The closest thing I see is TLRD, which is menswear, tailored. We could keep TLRD. We'll use Matthew as our spokesmodel and do quarter zips only. We must all exceed our own expectations.

All right, Ben Mathis-Lilley, it's time for us to eat our vegetables. It's the new year. There's probably some stuff we should be doing with our money so we feel good about ourselves. And as we have established, you are an expert on all things financial. And my favorite thing about you is that you are an excellent reporter and explainer. So anything you don't know, you can find the answer to and then write about it as if you already always knew it.

That's the gift of a true journalist. Yes. In fact, you wrote a piece for the TLDR newsletter about a few things we can do to get our financial house in order. Can we discuss those important things? Yes. You know, as we've alluded to, I may not be the expert myself, but I can speak to the people who know things. So I talked to some of the heavy hitters of Canadian personal finance TikTok, like Jessica Morehouse, Rennie the Resource.

Rob Engen of Boomer and Echo. He's a blogger. And then Daniel Tersigni at Wealthsimple itself. So some of the most accomplished advisors. So we put together a sort of a checklist of stuff you could do as the beginning of the year. People are thinking about their finances, maybe with some anxiety. Is this going to be painless or painful? It will be low on pain. It will be an easy way in. It's not like when your doctor is about to give you a shot and they'll say, you're going to, you might feel some pressure.

No, there's not going to be any immediate pinch. This is what it's all about, getting started early so you don't have to stab yourself later on. I like that you carried through that metaphor. I appreciate that.

The idea here is, you know, if you're thinking, how do I improve my finances? The first thing you're going to go to might be your personal budget. I've made a personal commitment to buy slightly fewer $5 gourmet scones from our local bakery. Where I live, a $5 scone is cheap. Okay, so we have a checklist of stuff you could start about to think about your long term, to take this like big anxiety. How am I going to do it? What am I doing with my finances into some stuff that's a little more tangible, a little more practical? I'm excited.

So we thought we'd maybe kind of turn that into a pop quiz for someone who happens to be present on the recording right now. Is there anyone who would want to take a quiz about this stuff? Is there anyone? Who could it be? Who would want to be participating in this?

I think we all know I love a quiz, so I'm super down for this. Oh, okay. You're just like flexing on us because you kicked our butts on the TLDR news quiz, but that's fine. It's not even a humble brag at this point. It's just a regular brag. Just a straight up, straight up brag. All right, Sarah's your guinea pig.

Ben, see how she's doing. All right. We'll get started right away with the financial inventory. This is something a couple people recommended. Looking at what you have in terms of your debt, in terms of your savings and your investments, the question here is, do you know your own net worth?

I do. I looked at that pretty recently because I was kind of trying to get my finances in order for the new year as I'm like planning for some big purchases. I'm doing a little better than I expected. I have some credit card debt. I have my mortgage, but my retirement savings are, I would say like more than on track for the average person my age. So I'm pretty content. So what's the important thing to know here, Ben? Is it like, do you have more debt than cash or is it not that?

It's not really figure out if you have a good number or a bad number, but to be able to ask yourself, am I kind of like doing what I think I should be doing? Like if you do want to buy a home or if you are planning to have kids or you want to retire at a certain time, are you heading in the right direction?

And kind of the funny way to say it might be like, are you living in accordance with your financial values? I was not prepared for the depth of this twist. What is the point of knowing this? Like, why ask yourself this question at this time of year? I think the idea is to know where you're going or where you want to go, you need to know where you are. And so if you know that you aren't saving as much as you wanted in areas X or Y, you can make a plan for the year that addresses that.

So that relates to our next item on the checklist. There are a lot of different accounts you can use in Canada that are tax-advantaged, quote-unquote, to save. And so, Sarah, can you just tell us, first off, which accounts do you have open? What are your RRSPs and TFSAs and FHSAs? What are the ones that are in your life? I have two of them. I have an RRSP and a TFSA. All right. Can I interject here for the less-informed people out there like myself? Sure.

What is a tax-advantaged account? What's so advantaged about it? They're accounts where you save on taxes, either at the time of contributing to the account, it might mean you pay less taxes that year, or at the time of withdrawing from the account, so you don't have to pay taxes when you make the withdrawal. Okay, so when this podcast episode airs, it will be January 8th.

Not very far into the year. Asking on behalf of all the procrastinators out there, like, why should we care about this now? Yeah, there's a couple of different reasons. One is that the deadline to contribute to your RRSP for 2024 is not until March 3rd of this year. So until March 3rd, 2024.

2025, you can put money into your RRSP for 2024. And what that does potentially is reduces the amount you're paying in taxes for 2024.

The second thing is just that all these accounts are kind of free money. And these are, in many people's circumstances, the best thing that they can be doing with their money because they have these tax advantages. Your employer might be matching the contributions you're putting into them. And so the beginning of the year is the time to look at it and say, like, OK, if I don't do anything else in 2025, how do I make sure I'm getting as much free stuff as I can?

If you have some money sitting around,

If you're lucky enough to have that situation and you're wondering what to do with it, it's not too late to make 2024 a better year for you financially. Right, exactly. Okay, so we've got the last one. This is kind of like the bonus graduate level question, which is what percentage of your long-term investments are in stocks and what percentage are in bonds? Do you know those numbers? I do know that. But before I say what they are, I feel like I need to clarify this with like, this is deeply not financial advice.

because I know my risk tolerance for this is higher than like many people's probably would or should be. I just bought a house. So my safe savings kind of went into that. So my investments are stuff that I'm not planning to touch for like

years and years and years for retirement at this point. So my percentage right now is about 80% stocks, 15% bonds, and 5% crypto. Okay, this is impressive that you're on top of this. So the idea here is that because, as we've discussed, the stock markets in Canada and the U.S. have had great years this year and pretty good year last year as well.

A lot of people who haven't been paying close attention to their investment accounts might have had stock holdings that rose big time in value in the last couple of years, which is great. But if you had started the account with the intention of having a certain balance between stocks and bonds because you didn't want it to be too risky, you might have a lot more risk in there now than you meant to.

Yeah, this is something I was just talking to my sister about, actually, because she has a way lower risk tolerance than I do. So we were looking at rebalancing her portfolio, basically, so that in the event there is a market drop in this upcoming year, she will not completely panic.

Right, exactly. So you're going to be setting your own limits based on your how much risk you want to take and what you need the money for and how old you are and all that stuff. Some people keep a fairly close eye on this kind of stuff. And anytime their target ratio goes above 5% more or less than they want, they'll rebalance. But just because it's the beginning of the year, it can be a good time to do that, too.

So the idea is either you sell some of the funds you have that are in stocks and buy bonds, or if you want, you can just go for a couple of months just putting everything that you put in into like a bond index, something like that, and get your allocations back to the ratio that you wanted.

Sarah, what do you think? Do you feel any better? I like the gut check. I feel like even if I know some of this stuff, it's such a useful practice, like at least for me for every couple of months, just to like look at what is happening with my accounts, because I might think I have an idea of what I'm doing. But when you actually like have to go through it, you can go, oh, is this is this what I want? Is this working toward my goals? So it was super useful. Thanks, Ben. My pleasure.

All right, let me ask you this. Are there any tricks that you guys use to make good financial decisions that you look back and you're like...

Yep. Look at this account. This has so much money in it now. I nailed it. I think for me, my biggest one has been avoiding lifestyle creep as much as I can. Like when I made basically no money early in my career, I was so frugal. Like, I don't know, baking bread at home, eating like rice and bean meals, not drinking out, you know, like pre-drinking at home. And I feel like the more that I can maintain those habits, the better it's been for my finances.

Sarah's number one financial tip 2025, drink at home by yourself every day. Do you like pull like a George Costanza and eat it out of the trash can too? Or is it just... Oh yeah, that's a top tip. If my wife makes like a beautiful egg sandwich for my son and he eats two bites and throws it away, depending on what it's sitting on, I will eat it. You heard it here first. That's the best way to get rich in 2025. Eat out of the trash can.

All right, Sarah Rieger, let's tell the people what they learned. We learned that despite all of the doom, there are a couple of reasons to be excited for 2025. We learned that investors were super into U.S. stocks last year, and I guess we'll be watching to see if that holds this year. And we learned that it's worth taking a few minutes to look at your financial plan or, you know, just eat out of dumpsters. That is it for this week.

Thank you all for listening. The show is sponsored by Wealthsimple. It is made by me, Devin Friedman, Matt Keres, Sarah Rieger, with Matilda Erfolino, Leah Fetter, Kat Angus, Jared Sullivan, with help from Tom Johnson and Allison Hopkins, fact-checking by Brennan Doherty, theme music by Andy Huckvale, and engineering by Emma Munker. Special thanks this week to Ben Mathis-Lilley.

The TLDR podcast is offered by Wealthsimple Media Incorporated and is for informational purposes only. The content in the TLDR podcast is not investment advice, a recommendation to buy or sell assets or securities, and does not represent the views of Wealthsimple Financial Corporation or any of its other subsidiaries or affiliates. Wealthsimple Media Incorporated does not endorse any third-party views referencing this content. More information at wealthsimple.com slash TLDR.