Debt Free is the New Wealth

demystifying the financial system for those who actively avoid it

[debtfreenewwealth]

Inflation: what is it good for?

Have you noticed everything from dog food to tattoos cost just a little bit more than they used to before the pandemic? (Hi btw, I haven’t written in two years, but I can only blame the pandemic for half of that). Inflation is what happens when the cost of production (including supply chains and distribution) goes up causing the price of goods as measured by the consumer price index to also rise. Seems normal and natural, right? Right . . . 

Inflation scares a lot of people because it is the slow creeping rise of daily costs that you can’t avoid. You can skip getting that tattoo, but your dog still needs to eat, as do you. Clothes, toothpaste, all basic essentials inch up, but your paycheque has stayed absolutely the same. In other words, inflation is not only preceded by debt, but also leads to debt. 

For decades now the Bank of Canada has tried to maintain inflation at 2% to not shock its economy. One of the ways they do this is by pushing down interest rates, meaning cash keeps flowing because it’s relatively affordable to keep borrowing. But the last big inflation spike was in the early 90s when inflation was closer to 6% during the 1990-91 recession that was preceded by rising global competition and a huge amount of domestic debt. But what came after is also telling as Canada leaned into globalization via the North American Free Trade Agreement (NAFTA) which has now been renamed as the United States Mexico Canada Agreement (UMSCA). Both of these agreements ultimately benefit the United States and keeps Canada tethered to its market, for better and for worse. 

With the aforementioned pandemic of the past year, global supply chains came under heavy scrutiny. As nations try to build out domestic infrastructure to produce PPE and vaccines to green power networks, trillions are being budgeted for years of debt to come. What this means for inflation in the coming years is uncertain, but if you are tracking your spending, you may have already noticed a slight uptick in recent months. Keep monitoring. If your income cannot change, your spending habits will have to. 

[debtfreenewwealth]

It’s a really bad time right now

The Great Barrier Reef has been rapidly dying in the last three years. Large swaths of the Amazon rainforests are currently on fire because cattle ranchers keep setting them on fire. Keystone’s XL pipeline, supported by the state and stopped by water defenders, just received approval last week by the Supreme Court to go ahead. 

This is just a tip of the melting iceberg of active ways our existing economies are destroying ecosystems and pushing us further into climate catastrophe. 

While climate change deniers say it’s business as usual, it’s also not a great time for the stock market, which is no surprise given the market sentiments often move in line with public confidence, and these days, all arrows are pointing down. All major indices are down, despite continual encouragement by Federal banks to keep interest rates down and corporate taxes low. A lot of funds have been swimming in cash while we all wait and see what the US/China trade war will do, how Brexit will impact the UK and the EU, and what 2020 will bring in terms of international relations. It’s not a bad idea at all to keep or move funds to cash and divest from markets that keep riding higher than their means. Patience will be required, but a change in the wind is coming whether we wait for it or not.  

[debtfreenewwealth]

Do I really need to pay my taxes every year?

Yep. 

[debtfreenewwealth]

Is the worst really over?

Since hitting some major lows at the end of 2018, markets across the board seem to have rebounded and are back on track in hitting new highs. By most technical measurements, the outlook looks strong and in favour of BUY, but naysayers look to the inverted yield curve, which has preceded every major recession in stock market history. 

So what’s really going on here?

Like much of the chaos that surrounds us politically and socially, the market is also due for a reckoning, but it is going to go down swinging. Most analysts have been predicting for years now that the market is overdue for a crash, and that the US stock market is not going to be able to keep gushing double digit returns like it has been in the past. The markets did suffer a major correction at the end of 2018, but that could have just been the rain before the storm.

Right now, everything looks fairly rosy, save for the inverted yield curve, which psychologically people are wishing away with other indicators like low unemployment and a freeze on interest rate hikes to stimulate spending, et cetera et cetera. The US market looks like it’s about to go for another bull run, but you know that old adage: the higher you jump, the harder you fall? Either way, this is a good precaution to those who have only invested in a single economy. Now is the time to diversify your holdings and cover your bets if you haven’t already done so.

[debtfreenewwealth]

Market Dips

If you have any invested any money into any of the North American or international markets, you have probably noticed that your overall balance may have taken a nose dip as of late. The difference between your book value and market value may be in the red, and there’s really no cause to panic or do anything rash. It’s true that the American market, which is the largest market, has actually had the worst slide since 2011, and international markets are being pummelled because imperialism. High interest rates in America (and consequently, Canada) mean countries who are indebted to the USA have to borrow and pay back at higher costs, which impacts most emerging markets. With Brexit looming and Italy and Turkey spinning, European markets are also not doing so hot. Higher interest rates also impact domestic consumers and corporations who are now finding borrowing to be harder and expansion to be more costly. The psychology behind the market is fascinating, and largely can only be determined after the fact, but if I am only looking at the numbers and technicals, the market bull just really needed this break. 

After a correction earlier in this year where the markets fell sharply to slowly recover over the Spring and Summer before falling again in October, I liken this slow down to pumping the brakes on a runaway train. The train that is the longest running bull market in history finally looks like it’s slowing down, and this, in my opinion, is a good thing. While it’s too early to call it a bear market, I wouldn’t be surprised if the market went into a much needed hibernation soon. 

While investors may be pissed that double-digit returns are suddenly barely keeping up with inflation, the good times couldn’t roll on forever. Cyclical downturns are good for the market, despite what most headlines tell you. 

Anything goes at this point, but in the long run, market momentum moves up. If you’re not a day trader or playing on margins (and if you were, why are you even here reading this?), I would sit tight for the next 18 months. If you like a gamble and have some extra money to play with, now would seemingly be a good time to jump into the market with everything from defensive stocks like Canadian bank going for bargain prices to a weakened market where global balanced ETF funds are hovering near year-lows. Some may say this is a dangerous time to jump in, and others will say this is the best time to jump in. I lean more towards the latter, but also know that support for this free fall is yet to be determined. If you’ve already got skin in the game, sit tight. And if you’re thinking about investing, a bear market could be a great time to jump in if you have the time and the patience. 

[debtfreenewwealth]

What to do when you spend more than you make

Hi, so first things first, do you spend more than you make? Are you keeping track of your spending and earning on a monthly basis? You will never really know how much you need to save if you don’t know how much you spend, so I will continue to advocate for meticulous tracking. 

If you’re already doing this, great! Now let’s analyze what’s going on. If you are earning more than you make, great work! Hopefully you are building up your emergency reserves and contributing to your savings and other mid to long term goals. But this post is about what happens when you’re consistently earning less than you’re spending. I’ll be honest here: budgets don’t work. It’s far more realistic to track what it is you spend over a 3 - 6 month period and adjust accordingly. There’s no sense in budgeting $400 for groceries if what you’re consistently spending is $600. You’re not going to magically knock out 1/3 of your food intake without having detrimental effects on other parts of your life. So it’s important to track what you’re spending to see where the real excess lies. Let’s say you make $2000 a month and spend $2500 a month. Over a year, that puts you in $6000 deeper in the red. That is unsustainable and why credit card debt is so real. 

Take a deep look at what you’re really spending your money on. Are there expenses that stick out, like minimum debt repayments that take out a good chunk of your monthly earnings? If you are also spending more than you earn, you are likely living off your credit cards and not being able to pay them off. Are there some reoccurring expenses that stick out that doesn’t cover the bare essentials of food and shelter and that you’re continually putting onto your credit cards? If you’re stuck in debt, you can still have fun, but that fun should be no more than 10% of your overall income, which as a sum can be held in cash each month. It is also a very tangible source of funds to dip into, so that when it’s gone for the month, you know you have reached a limit. For a while at least, everything that isn’t essential should be going towards eliminating your debt. Get aggressive with your debt elimination plan. You are going to feel soooo good when you’re debt free. Mean while, cutting up your credit cards is a scary and painful step, but it will be necessary if you ever want to stop the leak. Give your self the chance to catch up. 

[debtfreenewwealth]

Should you invest in Italian bonds right now?

No.

[debtfreenewwealth]

Who and What are Robo-Advisors?

It seems like everyone is just jumping on board with robo-advisors out of convenience. With lower fees than most traditional financial advisors and a super user-friendly platform without the stress of actually doing it yourself, robo-advisors seem like the perfect middle ground for the future of investment, right? 

This recent article sums up the options fairly well. There are a lot of options out there, but looking around, I am more interested in how we got here and what the potential risks may be. 

Since mutual funds took off in the 1960s, they have dominated the marketplace in terms of providing everyday investors with access to the stock market through a professionally managed pool of non-cash financial securities. Some of the perks of mutual funds include the option of automatic dividend reinvestment, fractional units/shares, and active professional management through a licensed financial advisor. Mutual funds are also steady eddy. They can only be bought at the end of each trading day so you don’t have to sit there and watch the market move up and down all day wondering when to jump in. Being an established industry that also uses active investment strategies, they have historically charged the highest fees from front-load to back-end fees, switching and trailer fees, all on top of the base fee of the Management Expense Ratio (MER). These days with so much more competition, the front-load fee is mostly gone and MERs have dropped slightly, but comparatively speaking, they still have far higher fees. This is not always the case, but if you find a good advisor (i.e. one who can beat the market), then it could be worth it. 

A counter to mutual funds have been the Exchange Traded Fund (ETF), which looks like a mutual fund, but moves and behaves very differently. Increasingly popular because they have far lower MER fees and can be traded throughout the day, ETFs have exploded in a way that makes me worried, but not worried enough to stay away. For the most part, ETFs are mostly passive investments that follow an established index (which technically can be either a mutual fund or an ETF, but index-linked ETFs are the ones we hear about the most.) Tracking established indices like the TSX 60 or S&P 500, an index-linked ETF mirrors the underlying index’s asset value, allocation, and holdings, and provides a cheap and cheerful access point to a broad range of investments. With an ETF approach, you never really beat the market, you just end up hitching onto it, which statistically is a safe and solid bet. 

So why the long preamble of mutual funds and ETFs? Because their evolution along with the longest running bull market in history has led to the rise of robo-advisors. 

A robo-advisor is just what it sounds like, an automated financial investment service that serves up investment portfolio management in quick and easy steps. Many offer convenient services like portfolio rebalancing and online initiations with no paper-trail or in-person meetings. They almost all appear to be offering low-cost ETFs, or ETF wraps, in the form of passive investments that follow the buy-and-hold strategy. It all seems easy and straightforward at a fraction of mutual fund fees, but I have a couple of flags I’d like to point out:

- When I recently looked inside of one robo-advisor account, once you get past the design and branding, there was actually very little useful information. The investments themselves were not transparent as no holdings were made available, let alone their allocation, and only a basic rate of return % was offered with no dates, targets, or indexes for comparison. This robo-advisor firm had offered the choice for “ethical” investments, but how do you know if they really are ethical if you can’t see what you’re investing in? The lack of transparency was frightening, but the return % was positive, so nobody felt that alarmed.

- This brings to me the real warning: robo-advisors have yet to go through a bear market. The last recession was over ten years ago and most of these services have only popped up in the last few years. When everything is going up and up, there is no cause for panic, and no need to talk to anyone who can assess the market in comparison to your own investment objectives. Many robo-advisor firms are stocking up on real life flesh and blood human advisors to round out their firms, but the irl advisors are still far out numbered when it comes to client to human advisor ratios. Maybe everyone will be super chill during the next market crash, or they will freak when an automated e-mail comes in telling them not to panic and they panic because they have just been notified that a large percentage of their money has disappeared. The true test of the robo-advisors will be to see what happens when the market finally cycles down, and how panic and risk will be adjusted for automation.  

Overall, there seems to be a fabricated rivalry that pits mutual funds against ETFs, like investors have to choose one over the other. In my opinion, I prefer to hold both types of funds in different accounts, letting them serve complementary, yet separate investment objectives. I let a professional actively manage my mutual funds while I manage a selection of stocks and ETFs in my self-directed accounts. I fully understand that this route is not for everyone, but with countless options of what to invest in, there are also numerous options of how to invest your hard-earned savings. 

[debtfreenewwealth]

Debt free is the new wealth

Okay, so what is this suppose to mean and why the hell should you care?

For starters, it means almost everyone you know is in debt. 

Canadians rank globally in the top five in terms of household debt, and the average Canadian holds over $20,000 in consumer debt as of late 2017. You may think, well, that’s how it is. I have to live my life and pay for things, so going slightly into debt is the easiest way to have everything I want. Who cares? We live in a stable, wealthy country and I deserve to be comfortable?

Dude, no. Staying in debt is a privilege we need to learn to give up. Going into debt willingly is encouraging capitalism to bleed you dry. Being in debt means that you will work for the rest of your life just to pay off the interest. Those extra few hundred to a thousand dollars a month will hardly dent your debt. Your monthly earnings will never go towards what you really need or want to spend it on. Debt keeps you trapped in its own vicious cycle that we have grown accustomed to calling the new normal.

The problem is debt is not normal. Not for individuals, anyways. Debt financing is business as usual for corporations, who can write off their interest payments on their debt obligations, and have a thousand and one ways to balance their debt to equity ratio. But individuals can’t weather the kind of debt. In fact, personal consumer debt is a newly developed habit of the 20th century that comes from the colonizing history of North America’s bottomless hunger for consumption. 

A brief history of debt:

Credit (a euphemism for debt) began in the 1800s with companies like Singer, who began the instalment plan for their very popular and mass produced sewing machines. Personal consumers could pay the company directly in small payments for a relatively large purchase over a predetermined period of time. Credit began modestly, but how it spiralled. Credit payment plans also started appearing around this time in the agricultural industry where credit history was more based on mutual self-interest and social pressures to be respectable rural neighbours than it is today on credit agencies and credit scores. You were only as good as your word, or your name, and that worked for a while until the population grew too large or the trains brought in too many strangers. (I don’t have enough information on the demographic breakdowns of the early history of rural agricultural lines of credit, specifically who they were extended to and who were denied, but from what I do know about the Canadian farming system is that European settlers were the most privileged and supported demographic in terms of accessing land and equipment.)

Credit cards as we know them today were developed in 1950s America. Going into debt to buy clothes or electronics or household items were unthinkable until after the 1960s. Now, we max out our credit cards on gum and wine and spend the majority of your twenties if not thirties paying off these debts. And the longer we are paying off our debt, the shorter time we have in actually surviving. 

Because the real problem with debt is that it never lets you go. 

So when I observe that being debt free is the new wealth, I literally mean it. We need to adjust how we understand wealth, especially if 50% of current Canadians are living paycheque to paycheque with an average five figure load of consumer debt weighing them down. If you are carrying any amount of consumer debt, getting out from underneath its burden should be your number one financial goal. 

Essentially, it is a three step process:

1. Track your monthly expenses. (Understand what you are spending your money. The act of keeping track alone makes you more conscious of shelling out $50 for X product that you may or may not want).

2. Trim whatever is unnecessary to your basic needs (from shelter and food to mental and emotional health requirements, but please set a limit. No one category should surpass 30% of your overall monthly budget). 

3. Start an aggressive debt repayment plan. (And stick to it).

There is really no other way. Don’t wait around for an inheritance that may never come (this is really a bad idea all around). If you are already in more than debt than you can handle, look into a Consumer Proposal before you consider running away or filing for bankruptcy. I really want you to start thinking about savings and investing, but you have to get yourself out of consumer debt first, otherwise the interest you pay against your debt will continually erode or overtake any amount of return your savings can accumulate. 

I know this can all sound very doom and gloom. It’s August, can’t I just chill? Nope. Spending is only going to increase from here on out for the rest of the year. You’ve hopefully had a rejuvenating summer and now is a great time to take a breath and reassess your finances. 

[debtfreenewwealth]

Fixed-Income living is for the retired . . . and for artists

I’ve joked in the past about being retired at different points in my life, specifically when I was 28, and again at 35. At those respective ages, I was transitioning careers by getting a Masters; and leaving a full-time job to work on my own projects. In both these instances, I had also applied and received grants and scholarships to cover my cost of living for at least a calendar year. I felt free to do my own work, but I always knew how to budget.

Having freelanced for the majority of my adult life, I knew that incoming cash flow would be inconsistent and that outgoing cash flow would still need to be paid like clock work every month. When you don’t have a regular paycheque coming in, my go to is to break down my existing funds (be it a lump sum grant or my savings), and pay myself a flat monthly fee over a predetermined period of time that covers my base living costs. The time period is usually set by the value of the lump sum divided by my monthly expenses, so understanding your monthly cash flow is extremely useful. 

Keeping track of my expenses has trained me to live within my means, which allows me to put more toward my savings whenever possible. Living on a fixed-income allows me to better understand my finances and to really identify what it is I am spending my money on now and helps me anticipate what I will likely spend my money on in the future.

Most of you whom I’ve talked to think retirement will be impossible, or that you will need to save upwards of two million dollars to retire in comfort. Both these scenarios are as real as you want them to be, but the one thing they have in common is that no matter what amount you have in the bank when you’re older, you will have to learn how to live on a fixed-income.

So what does “fixed-income” mean?

Simply, fixed-income means have a steady stream of cash flow paid out to you for the remainder of your estimated life. Sounds ideal, no? No matter how you cut it, the first step to building a fixed-income stream will likely begin with savings and investing. 

For the most part, fixed-income payments stream out of your savings and investment pool, which has been hopefully accruing a double digital rate of return and compounding for a couple of decades or sitting in property, a trust, or a profitable business. A Registered Retirement Savings Plan (RRSP) is a cheap and easy place to store investments as it penalizes you for early withdrawal and offsets your annual income tax until you withdrawal at retirement. You can even delay paying taxes on your pool for even longer as a RRSP can also be streamlined into a Registered Retirement Income Fund (RRIF) before the age of 71. RRIF is set up so that your savings and investments can continue to modestly grow, but you will be required to withdrawal a certain percentage each year (on which you will finally have to pay taxes). 

If you’re a young retiree (aka artist living on a grant or from grant to grant), you may want to apply some of these principles of fixed incoming living to your next grant or project. 

First things first, pay yourself! If you received a grant, throw 10% if you can into your RRSP. The amount you contribute each year to your RRSP offsets your taxes depending on your marginal tax rate (federal tax bracket + provincial tax bracket). As long as you have contribution room in your RRSP, put aside 10% of that year’s income. This should be a portion of your artist/administrative fee. 

Second, put the remainder of your grant money into a separate savings account (ideally one that offers some interest, at least .75% please). The savings account should be still easily accessible that lets you withdrawal at least once a month for free. A simply savings account at any bank will do. You want to keep this grant money separate from your every day funds as the more you have in your everyday account, the more you are likely going to spend it everyday. A side bonus of this extra step is that the funds can earn some interest each month, too. 

This next step is the clincher: break down and anticipate monthly costs of your project and pay yourself monthly payments (ie. transfers from savings to chequing). In doing so, you stay on top of your finances each month so you don’t feel surprised when the money runs out, and whoops! your project isn’t done. This happens all too often, and then you’re dipping into your savings or a line of credit or a credit card, amassing unnecessary debt even when you had the money literally in the bank.  

Your project funds end up being low-level managed and have a greater chance of finishing on time and on budget, and since the first thing you did was pay yourself, you can rest assured that you are providing for your future self.

You can apply this framework to grants or contracts or even your own rainy day savings that you are tapping for a good cause. Understanding how you spend will lead to understanding what you need to save. 

[debtfreenewwealth]

Is inflation deflating your life?

For anyone who’s ever felt confused about inflation, or honestly, just not cared enough to look into what it means, this one goes out to you. I understand if you find this categorically boring, but stay with me here as your future self will hopefully appreciate this. 

Inflation is the force that keeps your everyday expenses (from your morning cereal to the same brand of jeans to your monthly housing costs) perpetually rising. Inflation usually rises to keep up with the rising cost of production, which might be due to an increase in interest rates or if demand outruns supply. I won’t go into the monetary policies behind inflation here, but as a general rule of thumb: you just have to know that over time, inflation goes up more than it goes down.

Since the 1990s, the Bank of Canada has kept a close eye on the country’s rate of inflation, which grows at about 1 - 2% a year. It’s a very stable rate, but it’s an important rate that more individuals should take note of in terms of their pay cheques, savings plan, and if they have one, their retirement plans.

Inflation works like this: if this vegan ice cream cone costs $5 today, at 2% inflation/yr, the same vegan ice cream come will cost $5.31 in 3 years. It may not seem like a big deal, but also, nothing has changed about the ice cream cone. It hasn’t gotten bigger or better. It might have even gotten smaller. But the rising costs of raw goods, employee wages, storefront lease, and utilities, will drag up the price of products that consumers want or need. This is true of almost everything you buy that is widely available.

Over the course of your life, you have probably observed inflation’s power of erosion on your purchasing power through a lens of nostalgia. You remember how two quarters could get you a bag of chips, or how dollar stores use to actually have $1 items. These memories for me are at least 20 years old and reflect 20 years of inflation at work.

But here is where this gets important: if you have been working for the past 20 years, have your annual wages and savings kept up with inflation? Yearly raises are important for this very reason, if only to keep up with inflation. You may have done an amazing job, or you may have just coasted, but either way, if your wages aren’t going up at the rate of inflation, then your annual salary is actually decreasing each year at the rate of inflation. Same with your savings. If they are not growing at least with the rate of inflation, then your money is actually worth less than it did a year ago.

You may not think that’s a big deal at 1 or 2%, but it adds up. If your living wage has not kept up in 10 years, and this is a common occurrence amongst too many people I know, it means everything else in your life is now approximately 20% (2% x 10 years ignoring compounding) more expensive. Circumstances haven’t changed much. Your apartment isn’t any bigger or better, your coffee still tastes the same, and your haircut looks the same. It’s just your money doesn’t go as far as it use to, because inflation has only impacted your spending instead of your earnings. This squeeze will only get worse as you get older and hit your income ceilings and transition into fixed-income living. This is why saving now will save you later.

As inflation rises each year, I strongly recommend your annual contribution to your savings also go up. I know this sounds crazy, as it means squeezing more out of less, especially if you have hit your income ceiling or are making barely enough to scrap by. But take a good look at your spending habits. Can you scale anything back now so that your future self has something to live off of?You have to remember that your savings is your future spending power, and if you’ve taken anything from the above paragraphs, then it’s that things are going to cost more in the future.

I am a firm believe in paying your future self FIRST. Do you really need that new thing now or will your future self need it more? If this is a hard concept to wrap your head around, think just even a year down the road. Do you really need that new thing now, or does your future self want to go on a holiday? The concept of saving can be for short term or long term, but you need to have something saved first and foremost.

[debtfreenewwealth]

Hot topic: pot stocks

By now, every person in Canada knows at least one person who knows someone whose cousin is on the “inside” of the pot industry, and their stock is about to soar!

Right? 

Hmm. I am not so sure. 

As many financial experts have already observed, the next few months leading up to the legalization of recreational marijuana in Canada will see a lot of consolidation happening in the industry. When the dust settles, it will be easier to see who is still standing, yet alone soaring.

I am skeptical about stocks rocketing upwards as many of the companies have not proven they are even profitable. Their valuations are off the charts, and that is something that will take the next few years to even out. 

Also, the pot industry is currently held up by individual investors and not the big banks and funds. Until institutional money comes on board in a real way, it will remain unknown as to who survives and who doesn’t. 

As the pot stocks are taking a summer dip, amidst a potential international trade war in the background and consequently an increase in Canada’s interest rates, these emerging companies are going to feel the crunch, no matter what industry they’re in. 

So to my peers who are throwing everything they’ve got into pot, I want to offer these thoughts for your measured consideration:

- Is the money you’ve invested something you can afford to lose? If yes, please proceed. If no, rethink what you’re doing.

- If you are entering the market for the first time on pot stocks, do you have an exit plan for your investments? Half the game is knowing when to exit the market, ideally after you’ve made some gains, but sometimes, it’s about exiting before you lose everything. Have a couple numbers in mind: the number you want the stocks to hit before you sell in the money, and the number you can withstand to lose before you sell out of money. (If the stock tumbles down, and you still feel optimistic, you can always buy back in at a lower value!)

- This will be unpopular, but consider keeping no more than 10% of your overall investment portfolio in pot stocks. If you’re really ride or die about pot stocks, then no more than 20%. That doesn’t mean 20% of one pot company and another 20% of another pot company. Diversification requires more than one industry, specifically, diversification requires counterbalance of risk. And in layman’s parlance: pot stocks are risky AF! Don’t pick companies that will move in a pack up and down the charts. Balance it out. Pot stocks, like any speculative or new venture stock, i.e. cryptocurrencies, are very susceptible to wild price swings. Depending on which side of the swing, and your timing, this could be good or bad, but if watching the stock market is not your full-time job, consider counter-balancing your volatile stocks with more steady fixed-income securities or a large cap index in order to minimize the swings in either direction. 

Personally, I have high hopes for the pot industry in Canada. As long as the US stays out of the weed game on their federal level, Canada holds the global advantage. The problem is that the US is actually the biggest potential market, meaning the Canadian pot industry may never really realize its full potential until the US wades in, which also comes with the almost-guarantee that US companies will simply take over the market, effectively bursting the Canadian pot bubble. There may be a window where Canadian pot companies profit until the US catches up, but this is now far into the speculative future.