Weekend Reading – Surviving a recession edition

Weekend Reading – Surviving a recession edition

Welcome to a new Weekend Reading post: surviving a recession edition.

You can check out other recent posts below:

This recent Weekend Reading edition offered up some ideas and thoughts about what my semi-retirement plans might look like – and some considersations about the current retirement landscape in Canada.

In more detail, this is my Financial Independence Update answering questions like:

How much money should I have to retire?

When should I take my government benefits?

How can I generate income from my retirement portfolio?

Weekend Reading – Surviving a recession edition

Are we headed for a recession?

Weekend Reading - Recession

It certainly looks and feels that way…in the U.S. and here in Canada. 

Earlier this year, I read the odds of the U.S. falling into a recession were about 50/50. Triggering any U.S. recession was/then the combination of higher than normal gas prices, a Federal Reserve bent on controlling inflation (via higher interest rates), and slower economic growth.

But we have seen this drill before….

Are we headed for a recession - Oil and Recession Correlation

Source enclosed in graphic.

Here at home, with any pending recession coming, a recent poll highlighted a modest number of Canadians are expecting to suffer. A new poll has found that more than a quarter of Canadians feel they won’t be able to financially weather a recession – they will be gasping for financial air per se. 

Recession Yahoo November 2022

That’s not very good for sure…

A recession is typically defined by a contraction in economic growth (i.e., two consecutive quarters of falling GDP), lasting at least six months, as higher oil prices, higher inflation and higher borrowing rates take toll.

And…the signs this is happening are around us:

  • Slowing economic growth.
  • Industry layoffs.

I’ve previously shared on my site, there is certainly more than one way for a recession to start:

  • A sudden economic shock: The coronavirus outbreak is a good, powerful example.
  • Excessive debt: When individuals or businesses take on too much debt, the cost of servicing such debt grows. Growing debt can trigger defaults. Bubbles happen and need to pop.
  • Asset bubbles: Irrational exuberance can inflate stock prices or asset classes. Corrections are necessary and required.
  • Too much inflation: Inflation isn’t a bad thing but excessive inflation is bad. Inflation was out of control in the 1970s. History might repeat.
  • Too much deflation: While runaway inflation can create a recession, deflation can be even worse. Deflation is when prices decline over time, which causes wages to contract, which further depresses prices. Japan struggled with deflation throughout most of the 1990s and well beyond.

You can read about some “sticky inflation” on Dale’s site here.

Are there ways to survive a recession?

I think so, even if any recession is totally out of your personal finance control. Here is what I am doing and preparing for the best I can:

  1. Keeping cashflow as constant king. I see some financial experts quoting “cash is king” but while cash is good, managing your cashflow is much better. Ultimately, you should always be living below your means which means you’re running a financial surplus every month. That surplus should go into an emergency fund / cash surplus first and then into income producing investments (in my opinion) next. The combination of having cash savings stored when calamity strikes AND income producing assets for cashflow will be an enabler if you lose your job and/or are temporarily unemployed at least.
  2. Keeping my emergency fund intact – until I need it. Given you are running a surplus every month, cash savings stored away can be used as needed during a recession. If you need to find ways of running a surplus, then be ruthless with your budget and avoid unnecessary subscriptions, dining out, and any discretionary items you can cut back on. This might not be easy…
  3. Minding the debt. If you have a mortgage still, that’s probably plenty enough. I know it is for us. Work on paying it off. Consumer debt will be more costly in a recession when budgets get tighter. Where possible, as always, avoid lingering consumer / credit card debt and any major lines of credit. (We’ll be debt-free in another year or so here.)
  4. Finally, practicing diversification and keeping the investing course. Going all-in on a few stocks or stocks in just a few sectors (i.e., like tech as a growth sector) could be risky to your financial situation. See Algonquin Power of late – anything can happen to any one stock. Recessions come and go, eventually, so don’t let your emotions get the best of you near-term when your financial plan is designed for the long-term. You are welcome to look at (and comment on) some key stocks in my portfolio here

Recessions, hardly fun for anyone, are normal and a period to get things back into economic balance. Our C.D. Howe Institute Business Cycle Council highlighted we’ve had five recessions since 1970.

These recessions usually last between three to nine months.

So, best plan for them, expect them from time to time, and learn to navigate them for that period of time as best you can.

More Weekend Reading…

I read about more backlash on the 4% rule of late – maybe rightly so?

It’s a good starting point as a rule but hardly a great rule for anyone – far from it. Poor Bengen. 

From the Globe article I read:

“Jeet Dhillon, senior portfolio manager at TD Wealth Private Investment Counsel in Toronto, says she tries to steer clients away from some of the investing rules of thumb, like the 4-per-cent rule.

“Instead, we try to look at their personal situation because there’s a lot of factors that affect it,” she says.”

“A plan isn’t something you do once and forget about,” she says. “Good advisors will look at this plan and see how a client is tracking” from year-to-year.

Smart. I like it!

Better still, I like what Ian Calvert, certified financial planner, vice president and principal, wealth planning at HighView Financial Group in Oakville, Ont mentioned:

“Capital moves up and down … but accounts that have been structured correctly from the beginning have been able to maintain their withdrawal rates through this year,” he says. “It means having a portfolio where you’re not forced to sell equities in a negative market.”

“A good retirement planning strategy … comes back to yield. It could even be more than 4 per cent, depending on the asset allocation for the client,” he says.


Ben Carlson highlighted it might just take a recession to slow down the consumer. 

“As long as the labor market remains strong, most households will be fine going to restaurants, taking a trip to Disney and filling up the airports.”

A pending recession isn’t slowing Chrissy and her family down one bit – it’s been one year of FIRE/early retirement for her. Amazing. Some interesting Q&A with Chrissy can be found here – so ask her anything! 

My friends at 5i Research highlighted bubbles aren’t just for stock markets. 

On the subject of DIY investing, Mike, aka The Dividend Guy Blog, interviews Bob from Tawcan in his new podcast. This podcast is about FIRE and dividend investing and is one of his most popular interviews yet.

Mike and Bob are always two of my favourite people to chat with about personal finance and investing. If you are curious about any dividend stocks that really rock – make sure you check out my great partnership with Mike at DSR for a whopping discount on his membership. Full details at the top of this page here. 

Buddy Tom Drake has some good ideas for your RRSP investments. I know I’m buying more stocks in a few weeks, Tom!

Best RRSP Investments for Canadians In 2022

Have a great weekend!


My name is Mark Seed - the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I'm looking to start semi-retirement soon, sooner than most. Find out how, what I did, and what you can learn to tailor your own financial independence path. Join the newsletter read by thousands each day, always FREE.

21 Responses to "Weekend Reading – Surviving a recession edition"

  1. Hi Mark: My position in BAM.A was a combination of greed and dumb luck. In the ’90’s I bought 800 shares of Great Lakes Power. They split in two so that gave me 1600 shares. In 1999 Brascan took Great Lakes private. My 1600 shares would be worth 1448 of Brascan. At the time Great Lakes paid a dividend of $.64 while Brascan paid $1.00. I did the math and took the shares instead of the money. Brascan changed its name to Brookfield Asset Management. Within the next six years BAM.A split their shares three times 3/2. Now I have 4887 shares and I thought this was a bi-yearly event, so I bought 500 more, but the shares just sat there, but the company did start spinning off their platform companies and then in 2011 they split the shares 3/2 again. Now I have 8080 shares. In 2020 they split the shares 3/2 again so now I have 12120 shares. When the company took BPY.UN private I received 67 BAM.A shares. That is how I got to my total of 12187. Base cost is between $55000- $56000 so in the future there will be much capital gain. It is the company that keeps on giving as in a couple of weeks they plan to spin off the Manager to shareholders. The Manager will be Brookfield Asset Management while the company will be Brookfield Corp. Brookfield Corp. will still own 3/4 of the Manager while the Manager will look after the platform companies and pay dividends and distributions.


  2. Hi Mark: The brokerage in question is TD Webbroker. Thanks for the advice. Before I received the dividends, I looked at the currency rates on the Globe and Mail. That is why I was expecting more than I got. It may seem small but on 12187 shares it adds up.

  3. Hi Mark,
    Thank you for another great article.
    I know in recessions living below your means is the best way to survive it but last month we took a two week trip to Mexico and right after that came back and put a deposit on a brand new car that I hope to get it delivered by May of next year, I know we always worry about retirement but at my previous job I remember coworkers worked for the company for 30 or more years with a hefty pension only to die a year or two later and a couple within few months so like we all know tomorrow is not guaranteed so this is why we decided to strike a balance between saving and enjoying life and also helping the kids now with their education and help them maxing their tfsa instead of waiting till we pass from this life.
    On the investing side I can’t wait for Jan 1 to deploy the 13k this year in our tfsa I have my eyes on ATD but it’s at all time high so I’m not sure if I should wait for a pullback but all I know is that it’s a great company with a strong balance sheet low yield with a great dividend growth so we’ll see.

    1. A great reminder, Gus.

      Yes, I hope to start semi-retirement for a few reasons soon: 1) more time to enjoy things beyond work 2) more time to divert to passion projects, hobbies and exercise and 3) more time for travel including local stuff. It’s hardly all about money for sure.

      That said, I have my $13k almost ready to go. Just a bit more savings to make. I will provide an update on that, this week.

      I own ATD in my taxable account for growth. I have my eye on a mix of WCP, BCE and XAW for my TFSA but I haven’t nailed that yet.

      Thanks for reading and sharing. Keep me posted on your purchase(s)!

  4. Hi Mark: I receive this online newsletter that showed up like junk mail. They confirm that it looks like we are heading into a recession. The letter is called Pitchbooks and deals with new PE’s and venture companies mainly in the US but also in Europe and overseas. I scroll the companies in the letter to see if any pertain to me as sometimes, they mention BAM.A or its affiliates, or Shopify and the pension funds as they deal in real assets. On another topic I am curious about the $US to CAN. conversion factor. It appears that in this case you can never calculate beforehand what your dividend may be. The stock in question is BAM.A and its affiliates. At the end of Sept., the Canadian dollar was a way down and the posted rate went from $1.368- $1.378 but when I got my dividend from BAM.A the conversion rate was $1.3445. It had never been that low all summer. Since you appear to be in the industry and studying stocks seems to be a passion so that is probably why you would work part time I wondered if you could answer this discrepancy. It has me puzzled. Thanks! By the way, recessions are good as you can buy stock at a discount.

    1. We’re a BAM.A holder so maybe I can assist. The BAM.A Sept 29, 2022 dividend declared was .14 USD or .1848 CAD (1.32 conversion). According to the Brookfield web page, the distribution is converted using the average CAD value 14 days prior to distribution day (so Sept 15). The CAD low and high for Sept 15 was 1.3159 & 1.3251 giving a simple average of (1.3159 + 1.3251)/2 = 1.3205.

      This is my interpretation of the numbers, I never asked an expert.

    2. Depending on the brokerage, could be/should be Bank of Canada spot rates? re: spot rate in foreign exchange is the current exchange rate between two currencies. It is the price to be paid today for immediate settlement in an exchange of two currencies.

      Best to double-check with brokerage directly about how they manage any dividend conversions/payments since they all do things a bit differently is my experience.

      Also, related note, the brokerage (depending on who you use) could also take a small cut/charge a fee for various transactions. See Questrade as an example:

      Hope that helps a bit!

  5. Recessions are kind of a nonevent for retired people like us. In fact it would probably help reduce the cost of the vacation home we are building if the housing bubble bursts at the same time. We do everything with cash, never borrow money, so the mortgage interest rates are immaterial to us. If you are financially set then a recession just looks like everything is going on sale. Of course I wouldn’t wish it on younger people who still have to have a job, but if it does happen there will be winners and losers depending on financial status and stage of life.

    1. Thanks Steve. I love this for my motivation since I feel the same way:

      “If you are financially set then a recession just looks like everything is going on sale.”

      Not great for younger folks or folks struggling though for sure.


  6. Hi Mark: I got laid off when I was 43 going on 44 so I have been out of the work force for going on 31 years. I never made much money and so don’t consider myself well off although I am. The reason I say that is because as a salaried employee there are different codes were 1 is at the bottom and 13 is at the top. I started at 1 and improved to codes 3 and 4 so you can see I was at the lower level, but with the power of compounding I have managed to survive. The ’70’s were more than inflation as it was an economic shock. When OPEC raised the price of oil suddenly interest rates increased rapidly. New preferred’s you could get for 22% and Canada Savings Bonds could be had for 19.5%. As mentioned before I mainly dealt though a broker until 1990 and I didn’t start a RRSP until 1988 at which time I double dipped. Anything from 1992 on would be interest income so I stopped contributing, but it built up anyways. Most of my portfolio is non-registered and most are blue chips. Like DividendsOn stated even blue chips can have nasty surprises. In 1999 TransCanada cut its dividend. If you are in to high priced, low yield stocks I’ve got one for you to check out. It is sort of off the beaten path and I don’t see it mentioned much, but stock in question is OLY-T. When I first noticed it, it was a $40 stock paying a dividend of $2.40. I looked at it again and it is now $63.99 and pays $3.24 for a 5.06% yield. They are mostly into pension plans and healthcare.

    1. Yes, I recall TRP cut their dividend many years ago. I wasn’t a DIY investor then but I remember articles about it.
      Interesting, OLY. Quite the 5-year chart!

      Thanks for shairng,

  7. Thanks so much for the mention, Mark!

    I’m hopeful that Canada will be able to avoid a recession. (But I’m getting more doubtful by the day.) Too many people and businesses are still recovering from the impacts of COVID—it doesn’t seem fair that they keep getting knocked down. 🙁

    1. For sure, Chrissy. Very challenging. Recessions are tough for many including small business owners and it’s those people I really feel sorry for since they take on so much finanical and related risks to be entrepreneurial. I hope the recession doesn’t last long.
      It’s been a tough 2.5 years for many folks.

      I liked your Q&A on your site 🙂

  8. Hi Mark,

    I was mostly working right through the 1970’s and even though there was inflation and I wasn’t exactly making a high salary I seemed to manage to get through it all relatively unscathed financially.

    In retirement now, for seventeen years and the 4% rule doesn’t apply to us at all. We’re lucky enough to have pensions from our workplace but that was pre-planned about forty years ago when I was in my early 30’s. The only item we’re mandated to withdraw from is the minimum from our RRIF’s. Early this year the after tax cash from the RRIF withdrawal went into buying more dividend stocks in the non-registered account but I think in 2023 I may change that a bit and save the money for the maximum 2024 TFSA contributions. The contributions for 2023 are already waiting for January. By my calculations the RRIF accounts should last until our mid-90’s (if either of us are still alive).

    Unfortunately as my wife and I have seen, unplanned expenses in retirement can be much larger than expected. The only way around it for our own personal comfort zone was to have a much larger cash allocation in a HISA than probably most others would, but it seems to work for us.

    We own shares in Algonquin but with around thirty or so other Canadian dividend companies in our taxable portfolio, I’m not too worried about it. Perhaps they cut the dividend, perhaps not. I don’t know. I’ve been around long enough to see even what are tagged as Canadian blue chip companies make a tragic mistake and the original investors lose their whole investment. That’s always the worst, but fortunately it doesn’t happen too often.

    Have a great weekend.

    1. Gosh, 17 years in retirement? Kudos.

      I loved reading the 4% rule didn’t apply – ha. I figured it might not to many retirees…

      “The contributions for 2023 are already waiting for January.”

      Me too! I might buy some energy, BCE and XAW for me. Not sure yet. You??

      Like you, I also own AQN (I think you know that), so yes, perhaps a dividend cut which is fine since <1.5% of my portfolio overall in it. Almost insignificant.

      We’ll see how things shake down but I suspect with 30 or so other CDN stocks you are hardly worried! 🙂

      1. Aside from it will be an index ETF in the TFSA’s I haven’t finalized on which one yet Mark, so good question. I may just decide to continue with ZBAL which we’ve owned since early 2020, or there may be a complete change into XAW you’ve mentioned above. The RRIF’s will stay the same invested in ZBAL.


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