Financial Minimalism and XEQT: Why Less Really Is More in Canadian Investing

Last spring, I spent an entire Saturday afternoon cleaning out my closet. I pulled everything out – every shirt, every jacket, every pair of shoes I had not worn in years – and piled it all on the bed. The heap was enormous. I counted 47 shirts. Forty-seven. I wore maybe twelve of them regularly. The rest just hung there, taking up space, making it harder to find the ones I actually liked, and quietly generating a low hum of guilt every time I opened the door.

By the end of the day, I had donated three garbage bags of clothes. My closet was half empty. And something unexpected happened: I felt lighter. Not just physically, but mentally. Every morning after that, getting dressed took thirty seconds instead of five minutes of indecision.

A few weeks later, I logged into my brokerage account and had the exact same feeling I had when I first opened that overstuffed closet. Fifteen holdings stared back at me. Three Canadian bank stocks. Two U.S. tech names I bought after reading a headline. A cannabis ETF from 2018 that was down 74%. Four mutual funds my old advisor had sold me, each charging over 2% in fees. A bond fund I did not understand. And a handful of positions so small they would not move the needle even if they doubled overnight.

It was a cluttered, disorganized mess – and I realized the same principle that transformed my closet could transform my portfolio.

That realization led me to financial minimalism, and eventually to a single holding that replaced everything: XEQT.

1. What Financial Minimalism Actually Means

Financial minimalism is not about deprivation. It is not about owning nothing, spending nothing, or living in a bare apartment with a single chair. That is a caricature.

Real minimalism – the kind practiced by thinkers like The Minimalists (Joshua Fields Millburn and Ryan Nicodemus) or popularized by Marie Kondo – is about intentionality. It is about keeping only what serves you and removing everything that does not.

Applied to your financial life, this means:

• Fewer accounts, not more – consolidating where possible
• Fewer holdings, not more – owning what you understand and need
• Fewer decisions, not more – automating what can be automated
• Fewer fees, not more – eliminating the hidden costs of complexity
• Fewer sources of anxiety, not more – simplifying so you can stop worrying

The goal is not an empty portfolio. The goal is a portfolio where every single holding earns its place – where nothing is there by accident, by impulse, or by inertia.

When you apply this filter rigorously, most Canadian investors discover something surprising: they need far fewer holdings than they think. Many need just one.

2. The Maximalist Investor’s Portfolio: A Horror Story

Let me describe a portfolio I have seen dozens of times. Maybe it looks familiar.

Meet Sarah. She is 34, lives in Toronto, earns a good salary, and has been investing for about eight years. Here is what her portfolio looks like:

• RBC Canadian Equity Fund – her first investment, opened by a bank advisor when she was 26 (MER: 2.14%)
• TD Monthly Income Fund – added because the advisor said she needed “income” (MER: 1.89%)
• Fidelity Global Innovators Fund – bought after a colleague recommended it (MER: 2.37%)
• BMO S&P 500 Index ETF (ZSP) – her first self-directed purchase (MER: 0.09%)
• iShares Core S&P/TSX Capped Composite (XIC) – added for Canadian exposure (MER: 0.06%)
• Vanguard FTSE Emerging Markets (VEE) – because she read she needed emerging markets (MER: 0.24%)
• Individual shares of Royal Bank (RY) – bought on a tip from her uncle
• Individual shares of Shopify (SHOP) – bought near the 2021 peak
• Individual shares of Enbridge (ENB) – for the dividend
• HIVE Blockchain Technologies – a small speculative bet from 2021
• A Bitcoin position on a crypto exchange
• An Ethereum position on the same exchange
• A TFSA with one advisor, an RRSP with another, and a non-registered account at a third institution

That is 12+ holdings across three accounts at three institutions. Sarah cannot tell you her overall asset allocation without spending an hour with a spreadsheet. She pays a blended MER somewhere north of 1.5% on her managed funds. She has overlapping exposure – her Canadian equity fund and XIC hold many of the same stocks. She has no rebalancing strategy. Her Shopify position is down 40% and she cannot decide whether to sell or hold. Her crypto positions keep her up at night during downturns.

Sarah is not a reckless investor. She is a typical one. And her portfolio is making her life harder, not easier.

3. The Minimalist Investor’s Portfolio: Just XEQT

Now meet David. Same age, same city, same salary. Here is David’s entire portfolio:

XEQT. That is it.

One ETF. One holding. One line item when he logs in. David’s XEQT gives him instant exposure to over 9,000 stocks across Canada, the United States, international developed markets, and emerging markets. His management expense ratio is 0.20%, a fraction of what Sarah pays. His portfolio automatically maintains its target allocation across four underlying index funds. He never rebalances. He never agonizes over individual stock picks.

David spends approximately fifteen minutes per year thinking about his investments. He has automated his contributions and does not check his account more than once a quarter.

Here is the thing that surprises most people: David’s portfolio is not just simpler than Sarah’s. Over the long run, it is almost certainly going to perform better.

Not because David is smarter. Not because he got lucky. But because simplicity itself is a competitive advantage in investing.

4. The Hidden Costs of Complexity

Complexity in a portfolio is not free. It carries costs – some obvious, some invisible. Here is how a complex portfolio like Sarah’s stacks up against a minimalist XEQT-only approach like David’s:

That $1,300 annual fee difference is not a small number. Over 25 years of investing, assuming a $100,000 starting balance growing at 7% annually, the fee difference alone costs Sarah over $95,000 in lost wealth. That is the real cost of fees – and it does not even account for the behavioral costs of complexity.

The behavioral costs are harder to quantify but arguably more damaging. Every additional holding is another opportunity to panic-sell during a downturn, another position to second-guess, another reason to log in and tinker. Research from Dalbar consistently shows that the average investor underperforms their own investments by 1-2% annually due to poor timing decisions. The more holdings you have, the more opportunities you have to make those mistakes.

This is what I call the attention tax – the invisible cost of giving your portfolio more attention than it deserves.

5. Marie Kondo Your Portfolio: The Three-Step Declutter

Marie Kondo famously asks one question about every item in your home: Does this spark joy?

For your portfolio, the question is slightly different: Does this holding serve my long-term financial goals better than XEQT alone would?

If the answer is no – if a holding duplicates exposure you already have, charges fees that drag on your returns, or exists only because you have not gotten around to selling it – then it is time to let it go.

Here is a three-step process to declutter your portfolio:

Step 1: Audit Everything

Pull up every investment account you own. Every TFSA, RRSP, RESP, non-registered account, robo-advisor, crypto exchange, and workplace pension. List every holding, its current value, its fees, and the reason you bought it.

Be honest about the reasons. “My advisor recommended it” is not a strategy. “I saw it on Reddit” is not a strategy. “I bought it in 2021 when everything was going up” is definitely not a strategy.

Step 2: Eliminate What Does Not Serve You

For each holding, ask:

• Do I understand what this investment actually holds? If not, it goes.
• Is this duplicating exposure I get from XEQT? If Canadian bank stocks are 25% of your portfolio AND you own a Canadian equity ETF, you have massive overlap. Those individual stocks can go.
• Am I paying more than 0.25% in fees for this? If you are holding mutual funds charging 2%+, the math is unambiguous. They go.
• Would I buy this today if I did not already own it? This is the most powerful question. Sunk cost bias keeps us holding losers. If you would not buy it fresh today, it should not be in your portfolio.
• Is this holding causing me stress or decision fatigue? If checking on a single stock makes your stomach clench, that emotional cost is real.

Step 3: Automate What Remains

Once you have stripped your portfolio down to its essentials – ideally, just XEQT – set up automatic contributions and stop thinking about it. The best investment plan is one that runs on autopilot, removing you from the decision-making process entirely.

If you want a deeper guide on this process, I have written about how to consolidate your investments step by step.

6. Why Minimalism Beats Maximalism in Investing

This is not just philosophy. The data strongly supports the minimalist approach.

The SPIVA Scorecard tracks how actively managed funds perform against their benchmark indices. The results are damning: over any 15-year period, roughly 85-90% of actively managed Canadian equity funds underperform their benchmark. The more funds you hold, the more likely you are paying for underperformance.

Vanguard’s research on portfolio complexity has repeatedly shown that investors with simpler portfolios earn higher net returns – not because simple portfolios have higher gross returns, but because they incur lower fees, less tax drag, and fewer behavioral mistakes.

Behavioral finance research (Barber and Odean, 2000) demonstrated that investors who trade more frequently earn significantly lower returns. A portfolio with 12 holdings invites 12 times the temptation to trade compared to a portfolio with one.

The Morningstar “Mind the Gap” study consistently finds that investors lose 1-2% annually to poor timing. This gap is wider for investors holding volatile individual stocks and sector funds – exactly the kind of holdings that clutter a maximalist portfolio.

The pattern is clear: complexity is the enemy of returns. Every additional holding, every additional decision, every additional fee is friction between you and your financial goals. Removing that friction is not lazy investing – it is smart, boring, effective investing.

7. The One-Number Dashboard: How Minimalist Investors Track Progress

One of the most underrated benefits of a minimalist portfolio is how easy it becomes to track your progress.

When Sarah logs into her accounts, she sees a wall of numbers. Twelve holdings, each with a different gain or loss, each pulling her attention in a different direction. Shopify is down 40% – should she sell? Her cannabis ETF just had a small green day – is it coming back? Her emerging markets fund underperformed this quarter – should she switch to something else?

This is the attention tax in action. Every number on that screen is a micro-decision waiting to happen.

When David logs in, he sees one number. His total XEQT balance. That is the only number that matters. It either went up or it went down. If it went down, he knows that global markets had a rough stretch and they will recover. If it went up, great. Either way, he logs out in under a minute.

David’s “dashboard” is beautifully simple:

• Total XEQT balance: $127,450
• Total contributions this year: $12,000
• Growth this year: +6.2%

Three numbers. That is it. No spreadsheet. No portfolio tracker app. No morning routine of checking five different accounts. David knows exactly where he stands at all times because there is only one thing to look at.

This simplicity is not a limitation. It is a feature. When you have one number to track, you can focus your mental energy on the things that actually move the needle: earning more income, controlling your spending, and consistently contributing to your XEQT position. Those are the levers that build wealth – not agonizing over which of your fifteen holdings to sell or buy more of.

8. Financial Minimalism Beyond Your Portfolio

The minimalist investing philosophy does not have to stop at your brokerage account. Once you experience the clarity that comes from a simplified portfolio, you will want to apply the same thinking to your entire financial life.

Banking: Do you really need accounts at three different banks? A single no-fee chequing account, one high-interest savings account, and one credit card covers most Canadians. Close the rest.

Insurance: Many Canadians are over-insured in some areas and under-insured in others. A term life insurance policy and tenant or home insurance covers the essentials. If you are paying for extended warranties, credit card insurance you will never use, or life insurance products with investment components, simplify.

Subscriptions: The average Canadian household spends over $200/month on subscriptions – streaming services, gym memberships, apps, software, subscription boxes. Audit ruthlessly. Each one you cut is money that could flow into your XEQT contributions.

Accounts: Consolidate your investment accounts into one institution. There is no benefit to having a TFSA at one bank, an RRSP at another, and a non-registered account at a third. One platform, one login, one view of your entire financial picture.

Financial products: If a financial product requires a 30-page prospectus to explain, you probably do not need it. XEQT’s strategy fits in a single sentence: buy and hold a globally diversified portfolio of equities at the lowest possible cost.

The theme is always the same: identify what serves you, eliminate what does not, and automate what remains.

9. The Minimalist’s Year: What 12 Months of XEQT Investing Actually Looks Like

People assume that managing your investments requires regular attention and effort. Here is what a full year actually looks like for a minimalist XEQT investor:

January: Automatic contribution of $500 hits your account and buys XEQT. You receive a notification. You glance at your balance. You go back to your life. (Time spent: 2 minutes)

February: Same automatic contribution. Same notification. You do not even open the app this month. (Time spent: 0 minutes)

March: Markets drop 8% on some geopolitical headline. You see the news. You do not log in because you know it does not matter for your 25-year timeline. Your automatic contribution buys XEQT at a lower price. (Time spent: 0 minutes)

April: Tax season. Because you hold one ETF in a TFSA, there is nothing to report. If it is in a non-registered account, you have one T3 slip. One. (Time spent: 5 minutes)

May: Automatic contribution. You log in to check your balance because it has been a few months. You are up 4% year-to-date. You feel good. You close the app. (Time spent: 3 minutes)

June: Same automatic contribution. A colleague at work mentions they are “rotating into value stocks.” You nod politely. You do nothing. (Time spent: 0 minutes)

July: You get a raise at work. You increase your automatic contribution from $500 to $650. This is the single most impactful investing decision you will make all year. (Time spent: 5 minutes)

August: Vacation month. You do not think about your portfolio once. Your automatic contribution runs without you. (Time spent: 0 minutes)

September: Markets wobble. A friend asks if you are worried. You say no. You mean it. (Time spent: 0 minutes)

October: Automatic contribution. You glance at your year-to-date return. Still positive. You close the app. (Time spent: 1 minute)

November: A financial influencer on social media says you need to add small-cap value and international REITs to your portfolio. You read the post, consider it for thirty seconds, and remember that XEQT is the only ETF you need. You keep scrolling. (Time spent: 30 seconds)

December: Year-end. You log in one final time. Your portfolio grew by 9.2% this year. Your automatic contributions added $7,350 in new capital. Your total balance crossed a milestone. You feel a quiet sense of satisfaction. You close the app and enjoy the holidays. (Time spent: 5 minutes)

Total time spent on investing for the entire year: approximately 21 minutes.

That is financial minimalism in practice. Not neglect – intentional simplicity. Your money grows while you live your life.

10. When Minimalism Goes Too Far: The One Exception

I believe strongly in the one-ETF approach, and I think XEQT is the only ETF most Canadians need. But intellectual honesty requires acknowledging one scenario where you might add a second holding.

As you approach retirement (within 5-10 years of needing the money), you may want to add a bond allocation.

XEQT is 100% equities. That is perfect for long time horizons because equities have historically delivered the highest long-term returns. But as your timeline shortens, reducing volatility becomes important. A retiree who experiences a major market downturn in their first few years of withdrawals faces sequence-of-returns risk that can permanently impair their portfolio.

The minimalist solution is straightforward: add one bond ETF (such as ZAG or VAB) to your portfolio as you approach retirement. Even then, you are holding exactly two ETFs – hardly a complex portfolio.

For anyone with a timeline of 10+ years, the answer remains the same: XEQT alone is enough. It provides the global diversification, the automatic rebalancing, and the low fees that make it superior to DIY multi-ETF approaches for the vast majority of Canadian investors.

The minimalist rule is: add complexity only when it solves a specific, well-defined problem. “I am retiring in seven years and need to reduce volatility” is a specific problem. “I feel like I should be doing more” is not.

11. Key Takeaways

1. Financial minimalism is about intentionality, not deprivation. It means keeping only what serves your goals and removing everything that does not.

2. Most Canadian portfolios are needlessly complex. Multiple mutual funds, individual stocks, overlapping ETFs, and speculative positions create a tangled mess that costs you money and mental energy.

3. XEQT replaces complexity with clarity. One ETF gives you exposure to over 9,000 stocks across the globe, with automatic rebalancing and a 0.20% MER.

4. Complexity has hidden costs. Higher fees, more tax headaches, greater decision fatigue, and more opportunities for behavioral mistakes all drag on your returns.

5. The data supports simplicity. SPIVA scorecards, Vanguard research, and behavioral finance studies consistently show that simpler portfolios outperform complex ones over the long term.

6. A minimalist portfolio takes about 20 minutes per year to manage. Automate your contributions, check your balance quarterly, and spend your time and energy on things that matter more.

7. Apply minimalism beyond your portfolio. Consolidate accounts, simplify banking, cut unnecessary subscriptions, and direct the savings toward building wealth.

8. The only exception is approaching retirement. When you are within 5-10 years of needing the money, adding a bond ETF is a reasonable and minimal addition.

12. Related Reading

If the minimalist approach resonates with you, these posts go deeper on specific aspects:

• What Is XEQT? A Complete Guide – everything you need to know about Canada’s most popular all-in-one ETF
• XEQT vs. Mutual Funds – a detailed comparison showing why mutual funds are the antithesis of financial minimalism
• XEQT vs. DIY Multi-ETF Portfolios – why one ETF beats a custom-built portfolio for most investors
• Is XEQT the Only ETF You Need? – the case for a true one-fund portfolio
• How to Consolidate Your Investments into XEQT – a step-by-step guide to simplifying
• Decision Fatigue and XEQT – the psychological cost of too many choices
• The Attention Tax of Active Investing – what your portfolio complexity is really costing you
• The One Percent Rule: How Fees Destroy Wealth – why even small fee differences matter enormously over time
• Set Up Auto-Invest for XEQT on Wealthsimple – automate your minimalist portfolio in minutes
• The Case for Boring Investing – embracing the beauty of doing less