Beer & cigarettes

DOUG  By Guest Blogger Doug Rowat

Unfortunately, I have many difficult conversations with clients regarding their retirement plans. As you might expect, some clients want to live a retirement lifestyle far beyond their means or retire far sooner than their investments will allow.

We’re transparent regarding the long-term investment returns that clients should expect from us: roughly 6% annually in the form of a balanced and globally diversified ETF portfolio. Naturally, such returns cannot be guaranteed each and every year and, with the Government of Canada 10-year bond yield (the risk-free rate) below 2%, such returns mean accepting some capital market risk. However, this targeted rate of return is still a reasonable assumption for future financial planning. So, if a client is unable to meet their retirement goals under such investment growth expectations, one (at least) of three things has to happen. They’ll have to: 1) earn more (thus save more), 2) spend less (thus also save more) or 3) downgrade their retirement lifestyle expectations.

Steps can be taken to find a more desirable and better paying job, of course, but this rarely happens quickly and can cause a lot of personal upheaval, so we’ll set this option aside for now. And, at least initially, we’ll also be optimistic and try and preserve our clients’ retirement lifestyle expectations—this lifestyle is, after all, what they’ve been working their whole lives for. So, the most immediately actionable option is to start spending less.

The average Canadian household forks out $86,070 a year on expenses. Naturally, there’s not a lot of wiggle room for many of these costs (health care or public transportation, for instance), but some of this spend falls clearly into the discretionary category. The below table contains a select list of expenses (selected by me). I’ll highlight the difference it could make to your retirement savings if you’re able to make some sacrifices in each of these areas. The median age in Canada is about 40, so we’ll use this assumption for our calculations, along with an age-65 retirement date. We’ll also apply that 6% annual growth rate to the extra money saved each year.

Canadian yearly household spending

Source: Statistics Canada, Turner Investments, 2017 data

First, restaurants and clothing. Could you eat out less often? Go to less expensive restaurants? Substitute lunches out instead of dinners? Skip desserts and alcohol? Do you need that expensive coat, suit or handbag? Could you repair or alter clothing rather than buy new? Avoid impulse clothing purchases and wait for sales? If you could trim even $1,000 off this almost $6,000 combined total yearly expense, it would result in roughly $58,000 in additional retirement savings.

Second, private transportation and recreation equipment. Canadians spend only about $1,300 annually on public transportation versus more than $11,000 on private transportation, so this ratio remains significantly out of balance. Also, do you need brand new golf clubs? And, be honest with yourself, are you actually going to become a serious kayaker or paddle boarder? If you could trim $1,500 off private transportation and $200 off recreation equipment costs per year, it would result in roughly $99,000 in additional retirement savings.

Finally, smokes, booze and gambling. Needless to say, you should quit smoking, and buying a few less cases of beer each year wouldn’t hurt either. And the odds of winning the Lotto 6/49 main draw are one in 14 million. A total of five hundred bucks saved per year across these categories would translate to more than $29,000 in additional retirement savings.

If you implemented all of these cost reductions at once across all of these categories, you’d have more than $186,000 in additional retirement savings. That’s meaningful and could result in a more fulfilling or much earlier retirement. Also, for our free-spending millennial readers, it’s worth noting that if you implement these cutbacks at age 30, instead of 40, it results in almost $378,000 of additional retirement savings. Suddenly, your retirement becomes a whole lot sexier.

Obviously, I’m not the first person to highlight the importance of trimming expenses to build wealth. David Bach in his book The Automatic Millionaire, for instance, famously mentions the Latte Factor. If you spend, for example, five bucks a day on a Starbucks latte, you’re forgoing more than $105,000 in investment savings over 25 years. Still, I write this blog to highlight that reaching retirement goals isn’t the sole responsibility of your employer, the government or your financial advisor—it requires personal sacrifice on your part as well.

Here’s the Statcan link to the complete household spending list:

Go trim some more fat.

Doug Rowat, FCSI® is Portfolio Manager with Turner Investments and Senior Vice President, Private Client Group, Raymond James Ltd.

 

106 comments ↓

#1 Steven Rowlandson on 04.20.19 at 11:02 am

If I had expenditures like that I would be running a deficit.

#2 Dboy1 on 04.20.19 at 11:11 am

There you go being practical and forward planning. Tough sell in today’s world. I do like the common sense way of looking at a very serious issue that everyone has to eventually has to deal with

#3 AK on 04.20.19 at 11:26 am

“or retire far sooner than their investments will allow”
=====================================
More and more companies continue to throw older workers under the bus.

How many really have the option of working until “65” ?

#4 Parksville Prankster on 04.20.19 at 11:34 am

Thankfully, life and retirement are more than just a math problem.

The Financial Planning Practice Standards (CFP Board 2017) boils down to:
1) Establish and define the relationship with the client 2) Gather client data 3) Analyze and evaluate the client’s financial status 4) Develop and present financial planning recommendations 5)Implement the financial planning recommendations 6) Monitor

Up until recently, before financial planning had been taught through university level courses, a large number of financial planners were only experienced in two areas:
Investment vehicle product knowledge and selling techniques, yet they saw themselves on the same professional level as accountants or lawyers, both of which must undergo rigorous testing and a professional levels of standards and conduct.

Up until the 1970s, only the very wealthy invested, and normally only to preserve their wealth against inflation, and to slowly grow their wealth over time. Since the downward spiral of most DB pension plans, folks are leaning more and more on investing to ‘create’ wealth, rather than maintain it. Is it any wonder why most people leave their financial planner’s office feeling frustrated and discouraged?

Just use our investing strategy system they say, save more, work longer, or cut back, are all some of the common swan songs.

There will ALWAYS be worries about money, even among the very wealthy. The key is coming to a place of peace, learning to live with that uncertainty, and enjoying life on each person’s own terms rather than focusing exclusively on paint by numbers math based solutions while a personalized masterpiece for our lives awaits being created.

#5 Ponzius Pilatus on 04.20.19 at 12:12 pm

Good read for those who really wanna know what drives oil prices.
Or you can just blame the commies and continue driving your F-150.

https://oilprice.com/Geopolitics/International/Trumps-Oil-Waiver-Decision-Is-A-Double-Edged-Sword.html

#6 Yukon Elvis on 04.20.19 at 12:13 pm

Biggest expense will be housing/shelter. Ouch if you have to maintain and heat a big house and pay big property taxes. Ouch if you have to pay rent. I have a paid for condo, strata and property taxes are under $300 per month. Heat, light, phone, and cable are $200 per mo. In Kelowna.

#7 Ponzius Pilatus on 04.20.19 at 12:18 pm

#91 Dolce Vita on 04.20.19 at 2:57 am
Has anyone, including you Garth, heard of THE TIME VALUE OF MONEY?

To put into perspective for Millennials what the Toronto Average Home Price was OVER TIME in 2018 Constant $ (inflation adjusted), here are the numbers (prices per TREB for those years, BoC Inflation calculator):

1985 = $228,277
1999 = $325,723
2018 = $787,300

And the Median Household Income converted to 2018 $ (BoC Inflation Calculator):

1985 = $68,298
1999 = $73,384
2018 = $85,319

The above compares “apples to apples” in 2018 $ (so a Millennial can make a fair comparison of prices and wages in 2018 $).

Times Average Home Price vs. Median Income, per the above:

1985 = 3.34
1999 = 4.43
2018 = 9.22

Then again, what is an “Average Home”?

Take a look at the “Average Home” SQUARE FOOTAGE over the years:

1975 = 1,000 sq. ft. (93 sq. m.)
2010 = 2,000 sq. ft. (186 sq. m.)

Basically, since the early Boomer’s to current day Millennials and recent GenX, the GenX and the Millenials purchased DOUBLE the home size, on average.

So if you HALVE the Average Home Price for the Millennials and GenX, you conclude (price vs. income):

GenX HAD IT THE BEST.

WORST the Millennials.

The Boomer’s in the MIDDLE of the pack.
—————
Good attempt.
Try again with average lot size than average house size.
Lots have become much smaller.

#8 Figure it Out on 04.20.19 at 12:38 pm

“Up until the 1970s, only the very wealthy invested, and normally only to preserve their wealth against inflation, and to slowly grow their wealth over time.”

Eh? Plenty of books like ‘Confessions of a Stock Operator’ and ‘Where are the Customers’ Yachts?’ detail small time speculation through the ages. The Northern Miner used to be on most newsstands in this country, and it was more properly called the Northern Penny Mining Stock Speculator, for those who weren’t there or don’t remember.

Used to be every newspaper carried stock quotations, (and bonds on Mondays) even the papers rich people don’t read. There was a section of “odd lot” volume leaders, so the big fish could watch what the little fish were trading.

I agree that there is much confusion between using the markets to get rich versus to preserve and grow wealth, but it was ever thus.

#9 SmarterSquirrel on 04.20.19 at 12:41 pm

I looked at this recently. Though a lot of people talk about saving money by stopping buying lattes and avocado toast it misses the bigger categories. In Canada the top three spending categories are the roof over your head, taxes and transportation. If you can reduce your spend on those categories you’ll probably save a lot more than cutting out your coffee drinking. See where you can reduce your spending to save more to retire well. https://smartersquirrel.com/month-4-plug-the-hole-in-your-bucket

#10 meslippery on 04.20.19 at 12:41 pm

Average Canadian income $76,900
Canadian yearly household spending $86,070
Beer and Cigarettes wont be enough.
https://www150.statcan.gc.ca/n1/pub/12-581-x/2018000/is-rd-eng.htm

#11 Mohammad Omarkhail on 04.20.19 at 12:41 pm

Thanks for the insightful post. Reminds me of useless spending and how I need to fix it. It goes to show you gotta keep making more money in Toronto to stay afloat.

#12 Ponzius Pilatus on 04.20.19 at 12:42 pm

The thing is, most people don’t consider private transportation as discretionary.
Gotta drive the F-150 two blocks to pick up milk.
Did a quick calculation.
To fill up a F-150 costs 100 liters x 1.6 = 160.
Last about a week.
Yearly cost is 160 x 54 = roughly 8,000.
Add insurance, depreciation, financing, maintenance and you could be looking at 15 k.
Insane.
And many driveways have 2 of these monsters on it.

#13 BlogDog123 on 04.20.19 at 12:43 pm

But the lottery plays on your psychology when your group at work wins a free play once in a while…

you hear in the news of a group of 25 at a factory winning $55,000,000. That could be you so I’ll put my $5 per week into the pool.

That Mr. Money Mustache guy says the same thing about optimizing your spending. Trade in your car for a bicycle and save thousands on crazy clown car culture.

#14 Yanniel on 04.20.19 at 12:58 pm

In addition to options 1, 2 and 3…

4.) Bust returns by having a satellite portfolio that diversifies beyond simple buy and hold, passive investing. Yes, it is possible and not necessarily hard to do. Example: Dual Momentum strategy. It beats the balance portfolio in returns and guess what, it avoids catastrophic drawdown better than the holly grail balanced portfolio. Don’t believe me or anyone for that matter. Go to PortfolioVisualizer(or similar) and run your own backtest.

5.) Use leverage RIGHT. Despite its bad rep leverage could be used not only to bust returns but to control/decrease risk. What do you think would do better: a balanced portfolio (60/40) or a simple portfolio comprised of 20%UPRO/80%SHY. Again, run your backtest. This was just an example of many ways in which leverage could be used right.

#15 Andrewski on 04.20.19 at 1:10 pm

As my Dad always & still says, live below your means.

#16 Ana on 04.20.19 at 1:18 pm

Working full time until age 65 is my current nightmare! We are doing whatever we can to reduce the timeframe to 50 at the latest, earlier if we can swing it. As Garth says- the only thing that really counts is time and I refuse to be a slave to my job for longer than I need to. Not being a slave to consumerism definitely helps!

#17 Sold Out on 04.20.19 at 1:49 pm

#7 meslippery

Beat me to it. The rise of debt in general, and the HELOC in particular, doesn’t necessarily reflect irresponsible spending. A lot if it is just keeping the wolf from the door.

#18 crowdedelevatorfartz on 04.20.19 at 2:06 pm

@#16 Ponzie Fonzie

“To fill up a F-150 costs 100 liters x 1.6 = 160….”
****

You seem to have a Freudian infatuation with F-150’s…

Weird.

Oh, and gas is $1.72.9 today in Burnaby …. try and keep up…..

#19 expat on 04.20.19 at 2:08 pm

I’d say the bulk of folks should just take the blue pill and kick it….

There ain’t a hope in hell that the average joe is gonna make it in retirement with Defined benefit pensions gone and few responsible enough to save and forgo the pleasure dome of weekly life……

They blew every nickel they had of corvettes, travel, and Rv’s…

Add in 600K mortgages for most of these folks….

A failure to plan is a plan to fail……

#20 crowdedelevatorfartz on 04.20.19 at 2:08 pm

@#12 Ponzie Pilot

“Yearly cost is 160 x 54 = roughly 8,000.

****

Ummmm
On this planet there are 52 weeks in a year……..

#21 expat on 04.20.19 at 2:11 pm

My kid is in University and I’ve met some of his cohorts….

The girls get their nails, hair, and body plucked every 5 weeks on average at a tune of 300 bucks a shot..

I took my kid aside and said clearly and concisely as I could…

You marry one of those deadbeat momma’s girl freeloaders and I’m donating my net worth when I croak to the SPCA

#22 Dolce Vita on 04.20.19 at 2:26 pm

#5 Ponzius Pilatus

Google this:

“average home size canada us over time”

https://www.darrinqualman.com/house-size/

Land cost small with a 20 storey condo. People look at $/sq. ft. Also, product mix (home, townhome, condo) decidedly skewed to condos nowadays. Thus land cost not the major cost.

Lot sizes not small in mid-70’s. Back then home construction price still the largest expense, land was inexpensive relative to home construction materials and labour (built a few, of that I can attest even in an Estate development).

I’d say, not a bad attempt at all.

Time value money is what it is and the above is as well.

#23 Good Luck Ana on 04.20.19 at 2:52 pm

@#16 Ana
Working full time until age 65 is my current nightmare! We are doing whatever we can to reduce the timeframe to 50 at the latest, earlier if we can swing it. As Garth says- the only thing that really counts is time and I refuse to be a slave to my job for longer than I need to. Not being a slave to consumerism definitely helps!
————————————————-
I hope you can achieve your goal Ana. I’m in my early fifties, married with 3 kids and a loving wife, and a workaholic. I don’t have any hobbies or know what I would do with my time if I wasn’t working. I’m not into consumerism and have what would be considered a small starter home that’s paid for.
I’m working in a stressful position that I dread going to every day yet pays me well. No pension plan at all. Over 3.5 million in liquid investable assets saved yet it doesn’t seem to be enough to convince me that I can pull the retirement trigger. Hopefully when you achieve whatever number you feel you need to retire, you have the courage to do it.

#24 Doug Rowat on 04.20.19 at 2:57 pm

#4 Parksville Prankster on 04.20.19 at 11:34 am

Just use our investing strategy system they say, save more, work longer, or cut back, are all some of the common swan songs.

There will ALWAYS be worries about money, even among the very wealthy. The key is coming to a place of peace, learning to live with that uncertainty, and enjoying life on each person’s own terms rather than focusing exclusively on paint by numbers math based solutions…

Retirement planning is always math based. I’ve yet to meet a client whose “place of peace” is gratis.

–Doug

#25 Doug Rowat on 04.20.19 at 3:10 pm

#13 BlogDog123 on 04.20.19 at 12:43 pm

But the lottery plays on your psychology when your group at work wins a free play once in a while…

you hear in the news of a group of 25 at a factory winning $55,000,000. That could be you so I’ll put my $5 per week into the pool.

Forget peer pressure and FOMO. Save your 5 bucks (and cut back on all the other unnecessary spending I mentioned) and walk off that factory floor three years earlier than everyone else your age.

–Doug

#26 Eco Capitalist on 04.20.19 at 3:43 pm

Unless you live in Toronto proper, transit just isn’t an option around here. The car is king and the way we built our cities reflects that. Now we try and shoe horn an LRT in and everyone complains about the effect it will have on traffic!

Also, housing. Lots continue to shrink while houses continue to grow. Empty nesters and the elderly would be quite comfortable in a tiny home, but municipalities have minimum building sizes that frequently prevent them.

Where’s the Sim City bulldozer icon for reality? We need to employee it judiciously.

#27 Winterpeg on 04.20.19 at 3:46 pm

Great post Doug.
I finally found a very simple free app called “Spending tracker”. Very easy to use with categories to enter expenses. You can even create separate categories and name them. For example, I created a lunches at work category and it was sobering. Helping me me modify my behaviour in that area. ( also in the area of lottery tickets and booze) “Literally” sobering.

#28 Remembrancer on 04.20.19 at 3:49 pm

#3 AK on 04.20.19 at 11:26 am
“or retire far sooner than their investments will allow”
=====================================

How many really have the option of working until “65” ?
——————————–
Correct, so unless your are self-employed, own a separate stream of business income etc (and even then, life happens that can upset the apple cart) start planning accordingly from the earliest possible opportunity…

#29 Stan Brooks on 04.20.19 at 4:10 pm

I appreciate the noble intentions but retirement in any shape of form here is practically impossible.

Cost of living, diminished incomes, crappy economy, ever increasing taxes, stagnant wages and ever weakening currency combined with stellar inflation won’t let you ever retire.

Of course you will be kicked out from the workforce permanently one way or another sooner or later but that won’t be the retirement you are dreaming about.

Unless you find a piece of land and live from it…

All these investment strategies, balanced portfolios etc. will end up working for a very little minority, not to mention that greedy politicians at some point will be tempted to dip into your investments one way or another, most likely through confiscating taxes.

It is quite funny that income taxes are included in the family expenses statistics quoted here. They still forgot about CPP and EI contributions, HTS, carbon, property taxes etc. This is gross income, not living expense.

Get ready for food to become quote more expensive.

#30 Ace Goodheart on 04.20.19 at 4:18 pm

Alcohol is actually one of the most heavily taxed and overpriced items that people in Canada purchase regularly.

Most of that alcohol is beer and wine.

Both of these can be made at home, with minimal effort. Making beer requires about as much skill as baking a cake, and the equipment to do so can be purchased for about $100.00. Wine is similar, though it takes a bit longer and requires slightly more expensive equipment (and you have to figure out a source for your grapes).

I make beer. I can produce 65 bottles of craft beer quality liquid, for about $20.00 CDN. I grow my hops in my backyard. Which means I have to purchase the grain (which I grind myself using a hand grinder) – $15.00, and the yeast (which comes in a package – $5.00.

This works out to roughly thirty cents per bottle of beer ($0.30).

The same bottle of beer can be purchased at the LCBO for around $3.50 to $4.00 depending on the brand. So roughly a 1066 % to 1233 % mark up (one thousand and sixty six percent to one thousand two hundred and thirty three percent).

Someone is getting very rich off of alcohol sales in the Province of Ontario. If you guessed that this someone is the Government of Ontario, you would be right!

Making beer is easy. And incredibly cheap. And you can do it pretty much anywhere.

#31 Kurt on 04.20.19 at 4:19 pm

Doug, what you write is true, but it is re-arranging the deck chairs on the Titanic. The number one discretionary expense that people piss away more money than they need to is the *level* of housing they choose. Bigger, better appointed, higher status than absolutely necessary. Buy smaller, less toney, a little further away, a little lower status. BTW, I rent – it’s cheaper than owning for what my wife and I want.

Oh yes, number two is the automobile – again, bigger, better appointed, higher status than required. An automobile is an appliance, nothing more. No-one – absolutely no-one – *needs* an M3, an A5 or what have you, and damn few people *need* a Dodge power wagon. I wouldn’t go so far as to suggest most people don’t need a car, but I’ve known a number of true urbanites who have ditched this sinkhole for good and walk or use transit. Heck, I’m married to someone who puts more miles on her bicycle than her ’95 Colt – which she bought new.

#32 O Cannabis! on 04.20.19 at 4:20 pm

DouG dUDe -iTs lIKe TotaLLY 4:20 on 4-20, the BesT DAy eVER iN cANaDa!!

ChiLL bRO – HOW bOUt yoU teLL uS aBOUT MariJUANa eTFs?

AnD rePLACing caSH waSTED on bEEr and SMokes with MJ wilL bE AwesoMelY BeTTr FInanCiAl PlannING donTCHA tHInk?

#33 Northern Miner on 04.20.19 at 4:24 pm

#8 Figure It Out – I am very familiar with the Northern Miner, but the book was of more value. Of course it was a shell game, and while going to university in Montreal figured it out. I looked at the details of stocks selling at about 15 cents that once a year went over $1.00. Then wrote the Directors and Officers down that held control. Imagine my shock that they were related in control of it all. These were the ones I bought, and sat back waiting for my day to sell for my cut too.

#34 the ryguy - In cabo on 04.20.19 at 4:28 pm

Id like to take the contrarian view on one topic..the group lottery.

IF..I repeat IF your office/warehouse does a group lotto..spend the $5. Yeah thats a couple hundred bucks a year..and from a long term financial planning aspect you shouldn’t take part.

But if they won and you declined? You’d likely go insane and you would never forget about it.

When I turned 18 my buddy and I went to the casino for the first time. We took $60 bucks each and played blackjack. He said you gotta play the bonus, I was like no I heard you weren’t supposed to do that. 7 or 8 hands later I get a 7-7-7 all hearts..would have payed out $7k. TO THIS DAY he busts my balls about it, that was almost 20 years ago.

Id say the $5/week is worth the preventative mental health care. Either no office lotto or take part.

#35 Ustabe on 04.20.19 at 4:57 pm

DELETED

#36 reynolds531 on 04.20.19 at 5:08 pm

My five bucks for the work lottery pool is something I view as ahole insurance. I pay because I don’t want to be the last ahole here.

#37 BillyBob on 04.20.19 at 5:14 pm

I feel sad for those whose only reason to work is so they don’t have to work. Clinging with their fingernails to some plan to “escape”. Nirvana awaits if they can just run down the clock. Ugh.

Perhaps another approach is to find something you actually don’t hate doing for a living rather than existing to “walk of that factory floor three years earlier”.

I’m dreading the day I can’t fly airplanes anymore, and not because I desperately need the income to hit some target projected on a spreadsheet.

I fully agree in financial education and discipline to enable the freedom to make choices. And I realize there aren’t enough fulfilling jobs for everyone to love what they do. But a huge part of it is mindset, and stoking the “counting the days till retirement” mentality is soul-destroying.

I think that’s why the smugness of the FIRE movement and that twerpy pair that were featured awhile back always grated…it doesn’t account for the fact that not everyone hates their livelihood.

#38 NoName on 04.20.19 at 5:29 pm

I worked with dude who won lotto, i remember a day i was leaving my graveyard shift, and there e was beating on wending machine because it swallow some of his money.

I remember telling him billy you are not hitting it hard enogh, because if you do it would spit your monay back…

I go home came back tomorrow, bastiges mug shot with him holding winning ticket, pinned on a board beside punch cloak.

He was good bastige, keep buying us turkis every christmas, until lean manufacturing put a lock on a door.

#39 meslippery on 04.20.19 at 5:44 pm

#30 Ace Goodheart
Agreed beer is way over priced, but not as much as you say. $34.35 will get you 24 bottles many varieties or a $1.43 a bottle.

#40 Doug Rowat on 04.20.19 at 5:49 pm

#29 Stan Brooks on 04.20.19 at 4:10 pm

I appreciate the noble intentions but retirement in any shape of form here is practically impossible.

Cost of living, diminished incomes, crappy economy, ever increasing taxes, stagnant wages and ever weakening currency combined with stellar inflation won’t let you ever retire.

Unless you find a piece of land and live from it…

While some of our clients are in trouble, the vast majority (at all stages of life) are well on track for the retirement that they want. And, I assure you, they’re not planning on being hunter/gatherers.

–Doug

#41 Be the shits on 04.20.19 at 6:02 pm

Be horrible if u had to pinch penny’s on a latte. But if u can’t afford it, it’s your problem cause you either didn’t work hard enough or saved your money. I sure don’t miss working 400-500 hours a month that’s for sure but can afford all the lattes I want. Only 45 to, sure is nice. Kids go get a trade and go bust ur ass for next 25 years and save all ur money so you don’t gotta worry about lattes costing 5 bucks by then they will be 15
Health, family & cashflow all that matters now!! & invest all the money you make in stocks/etf’s and rental property’s

#42 tccontrarian on 04.20.19 at 6:04 pm

Simple math – trying to teach my children the power of compounding, because it works in both directions! Lose 0.5% of your brain-power every weekend (by drinking etc), and eventually you become dumb as nails.

With respect to when to retire, since I can reasonably assume 15-20% returns on average (being contrarian has its advantages), I have loose plans to ‘retire’ when I have >$2M in liquid assets. At that level, even at 10% annual yield, that’s $200k in disposable income.
And since I have several interests to take up all of my ‘free’ time, I can’t see boredom being an issue.

I only hope I can sustain my health well into my 90’s so I can have at least 30 years of high-quality ‘retirement’.

Good post!

TCC

#43 Penny Henny on 04.20.19 at 6:05 pm

#23 Good Luck Ana on 04.20.19 at 2:52 pm

I hope you can achieve your goal Ana. I’m in my early fifties, married with 3 kids and a loving wife, and a workaholic. I don’t have any hobbies or know what I would do with my time if I wasn’t working. I’m not into consumerism and have what would be considered a small starter home that’s paid for.
I’m working in a stressful position that I dread going to every day yet pays me well. No pension plan at all. Over 3.5 million in liquid investable assets saved yet it doesn’t seem to be enough to convince me that I can pull the retirement trigger. Hopefully when you achieve whatever number you feel you need to retire, you have the courage to do it.
////////////

Boy, I feel sorry for you.
3.5 mil and you can’t pull the trigger?
Workaholic? Find something you like, money is not the issue. Get rid of the stress.
Best of luck!

#44 Reality is stark on 04.20.19 at 6:20 pm

You don’t need a spending tracker. Strap on the tool belt when you get home from work and on weekends. You won’t spend a nickel outside of Home Depot.
You’ll retire easily by 50.
All the money earned from selling the fixer upper every five years is tax free and you’ll be in great shape.
Now for the bonus. By chasing women you’ll never have money. By chasing money you’ll always have women.
Let them chase you.
Life is actually easy when you make prudent choices.
Most people make themselves sick.

#45 JSquared on 04.20.19 at 6:39 pm

@23 I hope you can achieve your goal Ana. I’m in my early fifties, married with 3 kids and a loving wife, and a workaholic. I don’t have any hobbies or know what I would do with my time if I wasn’t working. I’m not into consumerism and have what would be considered a small starter home that’s paid for.
I’m working in a stressful position that I dread going to every day yet pays me well. No pension plan at all. Over 3.5 million in liquid investable assets saved yet it doesn’t seem to be enough to convince me that I can pull the retirement trigger. Hopefully when you achieve whatever number you feel you need to retire, you have the courage to do it.
____________________________________________
This is kind of a sad statement…you’re 50ish, paid for house, 3.5M in the bank, hate your job, but too afraid to quit because you wouldn’t know what to do with your time. You’re a free bird too afraid to fly out of the cage. Most people would kill to be in that position (myself included!). Life is short, go enjoy the next couple of decades before disease, old age, dementia, aches & pains start kicking in. No guarantees in life. Had a friend who recently died of a heart attack at 53yrs old, all his plans for retirement gone in an instant. YOU ARE NOT YOUR JOB. Go find some new interests, travel, hobbies, friends. There’s a whole world of life out there waiting for you. What’s the point of working your butt off for years if you never allow yourself to enjoy the fruits of that labour?

#46 Hawk on 04.20.19 at 6:59 pm

Retirement is a luxury. For most of human history such a concept never existed, it is only a century or two old.

That said if a person is not in debt and has a few hundred thousand dollars saved it may be possible, by taking your passive income but living abroad is some low cost sunshine destination. People who are not working should not live in such a high priced place as Toronto.

#47 Penny Henny on 04.20.19 at 7:06 pm

#42 tccontrarian on 04.20.19 at 6:04 pm
Simple math – trying to teach my children the power of compounding, because it works in both directions! Lose 0.5% of your brain-power every weekend (by drinking etc), and eventually you become dumb as nails.
//////////////////

Guilty as charged.
But after doing the math I should be in the negatives.

#48 islander on 04.20.19 at 7:15 pm

#21 expat
Thank you – Laugh out loud funny!

#49 acdel on 04.20.19 at 7:20 pm

Nah, I will stick with my cigars and beer; that is the only thing keeping me sane in this insane world.

#50 TurnerNation on 04.20.19 at 7:40 pm

Sign of the times in Brick and Mortar? In USA Dollar General stock is tearing up new highs; Dollar Tree is almost there.

In Dollarama we trust; the rest pay cash. They accept credit cards now.

#51 Nonplused on 04.20.19 at 7:43 pm

Two pain problems I see with today’s post. Like so many things in life, the result of various choices are not clear cut but instead result in many trade-offs.

The first one is the easy one but it does highlight the futility of longevity: Cutting back on smokes and drinks. Sure, that’ll save you some money, but it also means you’ve going to spend a lot longer as an 85+ year old geriatric in a $4000 per month old age home. You need to NPV those years. You aren’t doing yourself a whole lot of good trying to live to 100. Do you really want to trade your years in the Kayak for years in a wheel chair?

The second, and much more serious issue, is one of commerce. I believe Bernanke referred to it as “the paradox of savings”. It is a real catch-22. Let’s look at the “food purchased from restaurants” category because it is the easiest to understand how it works. If I take the $2593 I am spending eating out (it’s actually way higher than that, I order wine) and reduce it to zero and everybody else does too, the waitress, cook, and owner all hit the welfare lines. I then have to pay more taxes to support increase welfare spending, but I don’t get the “eating out” experience. Is this a net plus to society? Now I know that the key principle behind society is self interest, but I am not sure that by refusing to spend on things I want I am really acting in my own self interest once the pretty waitress is on the street and collecting welfare, which I also have to pay for. And if, as I have experienced, spending really gets cut, who is going to pay for my services or that of say my brother-in-law the electrician? Well we know who at this point, practically nobody.

The economy is a curious thing, and the role of money in it is poorly understood. Money is meant to facilitate transactions, nothing more. Savings, or more appropriately investments, are meant to be a sort of Adam Smith improvement in capital and equipment. Both are important parts of the economy, but none so much as the role cash plays in putting us all to work in the most efficient manner. It is our collective labor that results in our collective lifestyle.

Now I still believe in saving and investing, but all things in moderation. Retirement is a really new concept in human evolution and it is hard to see how we could all do it at once. If we can’t all do it, it may be a strange concept that anybody can. Remember, when CPP was invented the average life expectancy in retirement was 2 years. It was designed as a payroll tax.

Since it’s Easter, perhaps it would be fitting to throw in a quote from the most famous Rabbi of all time: “Take therefore no thought for the morrow, for the morrow shall take thought for the things of itself. Sufficient unto the day is the evil thereof.”

So tip your waitress/waiter. And smoke them if you’ve got them.

#52 TheOnePercent on 04.20.19 at 8:03 pm

We the savers and investors need people to spend their money on the things you flagged to cut back on. If everybody saved 20% of their take home pay the economy would tank.

#53 Smoking Man on 04.20.19 at 8:12 pm

What does 420 , Easter bunnie gummy bears have in common.

Me…..

#54 Sam on 04.20.19 at 8:25 pm

Golf clubs ?

C’mon can’t cut corners there . In the bag for 2019;
– ping g400 max
– SeeMore putter fgp

#55 I remember on 04.20.19 at 8:31 pm

a young bullpup coming up to me at work asking if I wanted to put up a few bucks into his lotto pool. I said “no thanks.” He looked at me like I was nuts and said “you’ll be sorry when we are all rich and you are the only one left here.” I replied … “would you like to make a little wager on that happening?” No answer …

#56 Out Of Work CEO, Will Travel on 04.20.19 at 8:40 pm

The most meaningful economy I use to keep my alcohol budget modest is purchasing my liquids in America. My most recent shopping at the Fry’s in Sierra Vista, Arizona were 2 bottles of Evan Williams Bourbon for a total of $16.00 using their flyer coupons. Yes, frugality is a requirement in our very “meagre” close to zero interest rates. The Americans make the best alcoholic products.

#57 Keith on 04.20.19 at 8:52 pm

The company pension plan has largely disappeared. It was forced savings. It was replaced by RRSPs, TFSAs, and a reliance on private industry to provide cost effective retirement savings plans. Canadians proceeded to pay the highest MER’s in the world, a good match with the cost of cell phone service.

People don’t proactively take care of themselves. Savings have to be forced. Telling people that is up to them, when they don’t have the knowledge and skills is not good enough. Taking care of poor seniors is going to get very expensive in the coming years.

#58 TurnerNation on 04.20.19 at 8:56 pm

Counterpoint: In the USA the railroad stocks CNR, CP, CSX are at or steaming toward record highs.
What are they shipping? Oil, grains, or plastic junk!?

#59 NoName on 04.20.19 at 9:11 pm

Both links to pdf files

Bit dated (2005) but interesting read abou saving rate vs economic output, BOC. What i read so far “poor” countries more savings more economical output, “rich” country savings rate does not affect economical output much, interesting. governor are you reading this? Can you updated this study?

https://www.google.com/url?sa=t&source=web&rct=j&url=https://www.bankofcanada.ca/wp-content/uploads/2010/08/ahsavingsnov14.pdf&ved=2ahUKEwiHy5LR-9_hAhXImq0KHdlOBBYQFjAKegQIAhAB&usg=AOvVaw3WguoJ-qW0bKq0IYakqz90&cshid=1555808087349

—–

Oecd economic/demographic outlook 2060.

https://www.google.com/url?sa=t&source=web&rct=j&url=https://www.oecd.org/eco/outlook/2060policynote.pdf&ved=2ahUKEwjEgNDz_d_hAhVFnp4KHVVpB8Y4FBAWMAB6BAgGEAE&usg=AOvVaw13u0if0Dd_u_aEVbPJg-kF

#60 TAX AND SPEND on 04.20.19 at 9:18 pm

Why is it no one understands everyones fastest growing expense over the last 30 years has been taxes. 3 levels of government never seem to be satisfied with there take always dreaming new ways to spend ones hard earned funds. No accountability because that what happens when you spend other peoples money.

Then stop electing people who promise more. – Garth

#61 stage1dave on 04.20.19 at 9:27 pm

Interesting post, and even more interesting replies.

Not certain I ever understood the term “retirement”, but now that I’ve actually received my CPP statement (due to my advanced state of decay) stating what may be my max/min payments at 60/65/70 I’m certain I don’t.

“Not HAVING to work” at some point is more my personal philosophy, and riding that idea for 30+ years has kept me focused. Can’t picture a day in the future where I won’t want to get out of bed and do something, but the thought of waking up and going somewhere daily to do something I dislike seemed repugnant 30 years ago, let alone now. A person is better off enjoying “work” and consequently their life in general; everyone close to them is better off as well. Find something you enjoy doing – or several things – and people you enjoy working with.

I’ve always felt (even though it’s not exactly enunciated) that one of the central messages of this blog is that poor (or nonexistent) planning (financial mostly, but not limited to) severely limits your choices moving forward.

I’ve also been the victim of my own lousy financial decisions early in life, and that’s a great education in how to make better ones later. Couple things I’ve noticed about my own habits that might benefit someone else:

At whatever stage of my career (or careers) I always seemed to blow 10% of my income, in that I couldn’t account for it. To be fair, some of it bought groceries, or I lost a gas receipt, but a good chunk would go to eating out, the odd car or guitar magazine, parts or minor car repairs; the odd drink, etc. What I learned was that out of any large cheque, commission, or advance payment I should be mentally able to account for 90% of it once it’s spent, even a month later.

This means bill payments, rent/mortgage, taxes, investments, (short or long term) cash on hand, the odd toy, etc…needful or necessary expenditures consume 90% of the income I generate. Whenever I’ve noticed more than 10% of my income disappearing, I pull out the notepad.

Secondly, being a life-long gearhead I have unfortunately become convinced that a newer auto or truck is the largest waste of disposable income possible. (speaking for the middle class here, btw…or what’s left of it) $700/mt payments on vehicle, $300/mt insurance to take Johnny to school, soccer, and get back and forth to a job? No thanx…I’d rather have the money!

Wife and I run 4 X 4 GMC Sierra, a Suburban, Pontiac Sunbird and Sunfire…rotate insurance between park/active depending on season; about 1K yearly no collision/no glass. Nothing newer than 98; we’re both hands-on and do our own repairs/maintenance. Purchase prices varied from $1500 (suburban) to $280 (sunbird) 50K and 3 yrs later it still pulls 35mpg. Exterior-wise we’re both OK with dirt and a touch of rust, but the interiors can be eaten off of, and everything usually works.

It’s important to note that the above vehicles can be repaired and/or fixed, and parts are readily available…new and used. Most vehicles post ’96 (especially ’06 fwd) will last as long as their electronics do…and good luck “repairing” them!

(We also have the odd muscle or collector car passing thru btw; but they seem to be getting fewer and farther between; hobby nowhere near as enjoyable as it once was IMO)

Thirdly, cut back or better yet quit smoking! I go back and forth with this, but it’s the biggest waste of money out there thanx to various layers of gov’t taxation. Hypocritically, I did buy a pack this am but it was the first since wednesday…a pack a day habit in AB between a couple would pay the rent ffs…

Misc…run minimal credit and pay it off ASAP. Don’t borrow money to buy toys. Never borrow money to buy something that depreciates unless you can write it off. And if you’re driving 20 year old vehicles, get a CAA membership…JIC.

Live, learn, laugh, love, as the wife says…money won’t buy happiness, but it sure does make unhappiness easier to endure.

#62 TalkingPie on 04.20.19 at 9:42 pm

People really do go overboard on cars, and it’s hard to justify.

In the 80s and before, economy cars were cramped, difficult and uncomfortable to run at highway speeds, dangerous in an accident, and most of them either fell apart (American brands) or rusted to hell (Japanese) within a few years. A case could be made for shelling out more for an “upmarket” car.

Nowadays, just about anything you buy will have all the necessary amenities and more, a solid structure to shame upmarket cars of a decade or two ago, a brace of airbags, and enough power to just about double any speed limit in Canada. My Mazda 3, for example, is the cheapest model Mazda sells in this country. My mid-trim model has A/C, power everything, a backup camera, auto headlights, auto wipers (!), sat nav, cruise control, enough room for 4 adults, 6 airbags, Bluetooth, and will hit 200 km/h if you let it, which of course you never will.

At the same time, luxury cars went from being extravagant, quality products to being lease specials (the Germans especially), so the extra purchase price guarantees more expensive maintenance and in most cases *less* durability than an economy model.

Even as someone who loves cars enough to have run on the race track and has a 20 year-old convertible toy, spending the kind of money that people do on daily drivers is a non-starter for me, unless you have money to burn. People with 60 month payments on the douche-mobile du jour while crying financial hardship get no sympathy from me.

Then again, my budget for piloting little tin-can airplanes this year leaves me with little authority on my soap box.

#63 acdel on 04.20.19 at 9:52 pm

#61 stage1dave

While I am enjoying my cigar and beer this evening (no judgement) I must say, what you have written, is of one that many can or should appreciate; and if they have not; I certainly have, thank you. Very clever!

#64 Doug Rowat on 04.20.19 at 10:10 pm

#51 Nonplused on 04.20.19 at 7:43 pm

Let’s look at the “food purchased from restaurants” category because it is the easiest to understand how it works. If I take the $2593 I am spending eating out (it’s actually way higher than that, I order wine) and reduce it to zero and everybody else does too, the waitress, cook, and owner all hit the welfare lines.

Where did I say reduce restaurant spend to zero? My point was to spend within a budget that you can afford. And the staff at lower-cost restaurants would, I’m sure, appreciate the business.

Also, I have clients who are too frugal and in no danger of a retirement shortfall, and I encourage them to live a little. Thus supporting the economy.

–Doug

#65 lifexprt on 04.20.19 at 10:21 pm

My humble opinion, most people take the wrong approach, work and save to enjoy retirement when most of us will be either too sick or too tired to enjoy it. I prefer to make 30% less and have 30% more free time in my 30’s, enjoy my prime years with the family, partake in hobbies that give me joy and dont delay experiences until some distant uncertain future date.

#66 Mr. Frugal on 04.20.19 at 10:43 pm

Speaking of saving money I’ve been making my own beer and wine for 10 years now. A much better product for about a tenth of the regular price.

#67 mike from mtl on 04.20.19 at 10:48 pm

Thing is whilst I agree wasteful spending is, well, wasteful, it’s a matter of opinion. There is certainly a world of difference between a debt-laden spendthrift and a cheap ass.

For sure ‘mandatory’ bi-annual trips to Cuba/Mexico/sunny spots are a colossal waste to only then complain to any open ears for the remainder of the year about how nothing is left. But then living on nothing, never doing anything, only to work & live for ‘retirement’; I’m sorry is not a plan either.

Sad truth is for males in general past say 60 is blessing, 70 is almost guaranteed you’re in far worse health than a decade prior – provided you make it there.

As with everything there is a balance, I’d gladly trade hundreds of thousands (possibly more) to be 10 years younger. I’ve been working since 17, worked myself up if I do say so and amassing ‘stuff’ gets you nowhere.

As Garth says, life goals is not about ownership.

#68 Ponzius Pilatus on 04.20.19 at 11:59 pm

#20 crowdedelevatorfartz on 04.20.19 at 2:08 pm
@#12 Ponzie Pilot

“Yearly cost is 160 x 54 = roughly 8,000.

****

Ummmm
On this planet there are 52 weeks in a year……..
————–
I use the Mayan calendar.

#69 Tony on 04.21.19 at 12:01 am

I thought the same about lotteries until my mother’s sister won one million dollars in the B.C. lottery back in 2013 three days after my mother died.

#70 mitzerboyakaQueencitykidd on 04.21.19 at 12:04 am

Smoking Man on 04.20.19 at 8:12 pm

What does 420 , Easter bunnie gummy bears have in common.

Me…..

Nice……

#71 The Great Gordonski on 04.21.19 at 12:26 am

Instead of asking Canadians to go penny pinching into the grave after a lifetime of hard work why not focus on the fact that they are too poor to retire with dignity because the government has taxed them beyond reason. Let’s call it for what it is, Canada’s special interest groups inside and outside Canada are parasites sucking citizens dry.

Trudeau gives away hundreds of billions, you say nothing. Instead you give advice on how to starve yourself and mend a tattered coat, this is ridiculous advice. This advisory should be about how to sharpen sticks and which gas mask is more effective fighting against the Trudeau Tax Tyranny.

We are poor because Trudeau takes too much. It’s got nothing to do with skipping dessert !!! Rise up , Rise up Canada against those who oppress you.

https://business.financialpost.com/opinion/vivian-krause-rachel-notley-the-rockefellers-and-albertas-landlocked-oil

Where are the accolades for Vivienne Krausse , a national hero in the fight against Canadian job losses? Vivienne should be given the Order of Canada. The media who hide this, the politicians and Rockefeller-Soros should be persona non grata in Canada with arrest warrants plastered up at every post office. The real enemies of Canada haven’t built a school or hospital. Suzuki and the other lickspittles have funded a hospice or trained the unemployed.

Stop whining about having no money for retirement and start fight the thieves who are stealing you blind.

#72 millmech on 04.21.19 at 12:33 am

Doug
Every $4k reduction in expenses means needing $100k less in capital using the 4% SWR.

#73 Stan Brooks on 04.21.19 at 2:37 am

While some of our clients are in trouble, the vast majority (at all stages of life) are well on track for the retirement that they want. And, I assure you, they’re not planning on being hunter/gatherers.

–Doug

Hunter gatherers? God forbid, that is not a good strategy, there is already stiff competition for the garbage bins in Toronto/Van City.

Of course I meant farming.

I agree with you though that considering the average intelligence of the sheeple that could be a stretch for most.

As for planning it might work for some, but considering that Canadians save only 0.8 % of their income, the number of people who would most likely retire comfortably once the housing bubble deflates and all that fake wealth evaporates won’t be very large. 5 % at max.

And let’s not forget that these RRSP investments are yours only after you pay the taxes… As for TFSAs we will see how long it will last.

#74 BigAl (Original) on 04.21.19 at 3:27 am

#30 Ace Goodheart
“…
Someone is getting very rich off of alcohol sales in the Province of Ontario. If you guessed that this someone is the Government of Ontario, you would be right!”
================================

Not as rich as the the privatized business owners in Alberta, who are only paying their retail workers barely above minimum wage while charging customers more than Ontario, whereas the LCBO pays living wages and benefits.

As of May 2018:
“The price of a 24 of Molson varies pretty widely across the country. The cheapest 24 in Canada can be purchased in Quebec for $26.99 and the most expensive is $56.65 in the Northwest Territories. The reason for the big discrepancy? Varying taxes and transportation costs. Between these two extremes there is some more nuanced pricing. Ontario ($34.95) and British Columbia ($34.99) are relatively inexpensive. Prices rise a little in the sparsely-populated Prairies, with Manitobans paying $40.49, Albertans shelling out $44.99, and Saskatchewanians getting their drink on for $46.49.”
Source: https://www.theloop.ca/where-is-beer-cheapest-in-canada-2/

Privatization: Higher profits for a few owners, higher prices for millions of customers, lower wages for thousands of workers.

“Free” market reality doesn’t jive with free market reality in modern complex economies.

#75 Hanson Skarrsgaard on 04.21.19 at 7:28 am

Proof positive that American energy haters and George Soros attacked the Harper govt with millions of propaganda tainted USD because one group saw Canada as an easy target to grow their Green Carpet Bagger businesses and Soros hated Harper because in defending Canada Harper told the Soros UN to eff off on the mass migration file.

Trudeau has not only accepted the American job killer but has also embraced what Harper saw as a danger to Canada. Canada will never be the same and we’ll have to fight like hell to get rid of the parasites these groups have put in place.

https://nationalpost.com/news/politics/millions-in-foreign-funds-spent-in-2015-federal-election-to-defeat-harper-government-report-alleges

#76 expat on 04.21.19 at 7:39 am

In our “what’s the payment” era where no one ever asks what something actually costs how do these people ever hope to have enough to retire?

They live bi-weekly.

Having foresight requires people to get it of their “what’s the payment” mentality.

It would appear given this mentality that the bulk of people own nothing.

They rent their cars
They rent their houses from the banks
They rent their first and belongings
They now rent their vacations through HELOCs…

They do not lease or finance
They rent

At some point we the few that save will have to support these people with higher taxes….

Socialism is failing folks …
Slowly we are slipping into an event….

One quiet Sunday afternoon this systemic event will occur imho.

#77 Headhunter on 04.21.19 at 7:53 am

Why trade good years in a Kayak for bad ones in a wheelchair? Sage advice.

I dont have the answer and I wish I did. Yes hard to save for retirement when 1/2 or more of you income goes to taxes. Therein is the rub. Retirement or not doesnt pay to work hard in Canada. Basically its a “caste” system here. #1 predictor of future wealth is the family you are born into.

May as well enjoy it now. I copied this from this section and show it to my friends every now and again. Its a racket and as George Carlin said game is rigged. Rigged bread, carbon tax, $1.60+ litre/fuel $6 sticks of butter.. laundrymat for illegal $$$$.. etc etc etc

“The problem with the Canadian housing market is simple: Collusion between interested parties and the civic governments. We have the second largest land mass on this planet earth, and only 36 million people. We have lots of trees to build houses out of. We have lots of concrete and steel to build high rise apartments. We have lots of our own energy to run the equipment. There is no way to explain using market theory why our housing prices are not the lowest in the world, no matter what interest rates are. What we are experiencing is one of the biggest cases of collusion the world has ever seen. Trump has nothing on your city counselor.”

#78 Doug Rowat on 04.21.19 at 8:07 am

#73 Stan Brooks on 04.21.19 at 2:37 am

Hunter gatherers? God forbid, that is not a good strategy, there is already stiff competition for the garbage bins in Toronto/Van City.

Of course I meant farming.

I agree with you though that considering the average intelligence of the sheeple that could be a stretch for most.

—-

I see. The blog is your friend.

—Doug

#79 maxx on 04.21.19 at 8:37 am

Canadians used to be such great savers.

Then TPTB and FIRE tapped into a great weakness: ego. Rates were dropped and Canuckleheads got sucked in big time…..lifestyles of the rich and famous, eh wot?

You always pay for your ego. Always. Designer bag…..fancy car…..over-sized pressed cornflakes house…..name it.

Pouff! Suddenly, after acquisition, mostly gone is the high you had BEFORE the purchase, and it takes endless cash outlay to continue servicing Mr. Ego. The stuff starts to decay or is replaced by “new” designs……and much of it is on credit, generating huge profit for the bozos that had a hand in starting it all……

#80 Dissident on 04.21.19 at 8:54 am

Seems appropriate: The man who lives with 110 dogs. Enjoy. There’s also a little economic lesson hidden in the video. See if you can find it.

https://www.bbc.com/news/video_and_audio/headlines/47977584/i-m-the-father-to-110-huskies

P.S. Siberian Huskies and/or Alaskan Malamutes are the best dogs, period.

#81 NoName on 04.21.19 at 9:03 am

Hey stan broke here is nice write up about angry people, but before you read answer me this are you angry that you are not like rest of us low intelligence sheeple or its some things else? And while you at it how do you quantify luck, especially one by birth.

Don’t you chikin out or hold back, just let me have it.

——

Straight from Poland study abou angry people.

Perhaps not surprisingly, the researchers found that narcissism was a key factor in how people judged how smart they were. The more ill-tempered personalities were associated with “narcissistic illusions,” Zajenkowski told PsyPost.

It’s important to note that while the study found that angry people tend to be more narcissistic and overestimate their brilliance, anger was unrelated to actual intelligence level. And, although the researchers found an association between the two traits, it’s unclear if there’s a cause and effect relationship between anger and overestimating intelligence.

https://www.google.com/amp/s/amp.livescience.com/63266-angry-people-overestimate-intelligence.html

#82 dharma bum on 04.21.19 at 9:18 am

#23 Good Luck Ana

Over 3.5 million in liquid investable assets saved yet it doesn’t seem to be enough to convince me that I can pull the retirement trigger.
——————————————————————–

That problem is strictly in your head.

It is psychological.

You can definitely do it, financially speaking.

If you really want to, that is.

Do you?

You need to read http://www.mrmoneymustache.com

You also need to get some interests and/or hobbies outside of your crappy stressful job.

The Dharma Bum life awaits you.

#83 dharma bum on 04.21.19 at 9:44 am

#30 Ace Goodheart

Making beer is easy. And incredibly cheap. And you can do it pretty much anywhere.
——————————————————————–

https://www.youtube.com/watch?v=jiFtHsLMVpQ

https://www.youtube.com/watch?v=l0wXV1AYPsA

#84 jess on 04.21.19 at 10:02 am

back lash from earlier policies

https://therealnews.com/berlins-rental-revolution-activists-push-for-properties-to-be-nationalised

https://www.theguardian.com/cities/2019/apr/04/berlins-rental-revolution-activists-push-for-properties-to-be-nationalised

#85 Capt. Serious on 04.21.19 at 10:02 am

If you spend, for example, five bucks a day on a Starbucks latte, you’re forgoing more than $105,000 in investment savings over 25 years.

I would submit that having or not having your $5 latte is not going to make or break your financial well being. Buying a $1M house when you can’t afford it, buying a $65k SUV when you can’t afford it, doing things that prevent you from saving at all – these are the retirement killers. I think it’s disingenuous of authors to put out the view that just saving a few expenses here and there will make the difference. It’s trees for the forest stuff. The big ticket items have a much larger impact on how things turns out for you, in addition to your income gains as you age and (hopefully) grow in job responsibilities.
How can I justify this? Simple example, let’s say you find lodging that sets you back $2000/month instead of $3000/month. This is $12k per year, or $300k after 25 years without any investment returns. The big decisions matter most, and you still can enjoy your latte.

#86 crowdedelevatorfartz on 04.21.19 at 10:06 am

@#74 BigAl

“Privatization: Higher profits for a few owners, higher prices for millions of customers, lower wages for thousands of workers….”
****

Al. You do realize you’re on a Financial Advice Blog yes?
And part of the advice is to invest in things like ETF’s.
And most ETf’s that make money are invested in companies that make profits…

I’m pretty certain your beloved union pension funds are “hopefully) invested in the market as well….
In companies that make a profit.

I for one would like to see more BC liquor stores privatized so that I dont have to deal with arrogant, lazy, slugs that are almost impervious to being fired….stock shelves and run a bottle over a bar code scanner for $30/hr plus benefits….

And then there is their lack of productivity…..
I can get a T-shirt delivered to my door from China in 48 hours but it takes a bottle of booze 6 to 8 WEEKS to be delivered from point A to point B in the Lower Brainland.

https://www.cbc.ca/news/canada/british-columbia/bc-restaurant-bcldb-liquor-delivery-late-1.5099444

Start firing some of them and watch productivity improve.

#87 Dogman01 on 04.21.19 at 10:46 am

The Guy in his 50’s with 3.5 Million liquid…wow that is sad, you really need to re-examine your life.

I get it you are stressed and busy so you just can’t imagine what to do….but take a Sabbatical or a leave or just quit and take a break for a year.

Yes breaking a lifetime routine is not easy but you can.
This blog is quite good and he addresses the first year or retirement angst and struggle well:

http://www.canadian-dream-free-at-45.com/

#88 millmech on 04.21.19 at 10:48 am

#77 Headhunter
The only collusion is between the stupid and their money. There are lots of places for sale for less than $100k yet everyone talks about housing for $700k+ and what a great deal it is. People have lost perspective I guess, the most I will ever spend on a house is $200k, which I believe is a lot, but there are lots of 2-3bdrm 1bth ranchers on nice lots in this price range in Canada.
If you want farmland it is super cheap and you just have to look online, not hard to find at all.

#89 Oilaphant on 04.21.19 at 11:09 am

Man if I hear the latte / avocado toast thing one more time from a professional financial planner I’m going to lose it lol

As they say “don’t sweat the small stuff”. I moved from a city where a house costs 1,000,000 to a city where they only cost 300,000. I have no debt other than a completely manageable mortgage, a 25% after tax personal saving rate and I can go on vacations and eat avocado toast and Starbucks lattes 5 times a day every day if I wanted to.

The only thing I agree with in the author’s analysis is to trade the car payments for a transit pass. Move around the big boulders blocking your path, not the pebbles. Don’t waste resources and your own sanity trying to save $2.37 per day. Sorry I repeated myself so much…it bears repeating imho. The words latte and avocado should be banned in personal finance blogs! Terrible advice!!

#90 Doc on 04.21.19 at 11:32 am

#30 Ace Do you have a link re making great craft beer and growing hops? Sounds like a great investment. Asking for a 68 year old friend retired on a measly million and doing great growing veggies and raising a few chickens in the Okanagan.

#91 Carly Simmons on 04.21.19 at 11:42 am

Whoa Nelly,

https://www.foxnews.com/world/sudan-president-suitcase-cash-protest-clash

Didn’t Trudeau give this guy over a hundred million Canadian tax dollars? Now it’s gone? Where’s our money Justin?

#92 Headhunter on 04.21.19 at 12:00 pm

#88 millmech on 04.21.19 at 10:48 am

very fair points indeed and I agree. If farmland is so cheap why is bread so expensive? (add any other foodstuff here) Was a big shitfit over dairy the other day.. need to be a millionaire just to buy your dairy cow tickets.. thats before land equipment etc etc

my point is the system is “gamed” for the noble caste

anyhow have fab easter

#93 O caNnABis! on 04.21.19 at 12:02 pm

DoUG i fEEl jUSt LIke tHe puP iN thAT pHoTO.

HaPPY 420 WknD eVERBUddY !!!

aWEsoME tiME tO BEE CANNAbian!

#94 Karma on 04.21.19 at 12:10 pm

Doug,

I just thought of something. When you, Garth or Ryan talk about long term annual returns (6% in this post), is that net of fees to the client? Thanks

No, since a portion of advisory fees is tax-deductible, and marginal tax rates vary among individuals. No client actually pays the full amount. (Typically the management fee is 1% annually, but less for large portfolios.) – Garth

#95 Long Branch Apprentice on 04.21.19 at 12:16 pm

https://youtu.be/KAGENje0zRk

This goes out to all you myopic Baby Boomers who blame everything and everyone except your own flawed decision making skills, then claim Millenials are the most entitled generation.

I look forward to buying your muscle cars for pennies on the dollar.

Personal responsibility went out of style with crew cuts and slide rules.

Boomers were your age in the late ’80s, kid. Crew cuts and slide rules were known in the 1950s. Good music, though. – Garth

#96 georgist on 04.21.19 at 12:20 pm

If everyone did this rents and house prices would rise, more money would go to unproductive landlords and speculators, and less to job creation via services/producers.

“Select” expenses. The largest, accommodation, is missing, and it soaks up all disposable income. Because that is how prices on monopoly goods are set. As per economics.

#97 crowdedelevatorfartz on 04.21.19 at 12:35 pm

@#95 Long Broken Branch
” …..then claim Millenials are the most entitled generation…..”

++++++

nah.
Just the fattest.

https://www.thetimes.co.uk/article/millennials-are-fattest-generation-in-history-z2ptrf7cz

You win the ‘Obesity awards”.

Good Job!

#98 Gravy Train on 04.21.19 at 12:44 pm

#22 Dolce Vita on 04.20.19 at 2:26 pm
“Time value [of] money is what it is and the above is as well.” Please explain the connection between the time value of money and increases in the prices of lots and houses. Non capisco. Gracie. :)

#99 jess on 04.21.19 at 12:44 pm

…”The only collusion is between the stupid and their money…?”

digital gangsters /‘whitelisting agreements

incentives bonuses and no clawbacks
http://wallstreetonparade.com/2019/04/after-a-354-billion-u-s-bailout-germanys-deutsche-bank-still-has-49-trillion-in-derivatives/

4 his customers?

JPMadoff: The Unholy Alliance between America’s Biggest Bank and America’s Biggest Crook

“In April 2011, JPMC agreed to pay $35 million to settle claims that it overcharged members of the military service on their mortgages in violation of the Service Members Civil Relief Act and the Housing and Economic Recovery Act of 2008.

“In March 2012, JPMC paid the government $659 million to settle charges that it charged veterans hidden fees in mortgage refinancing transactions.

“In October 2012, JPMC paid $1.2 billion to settle claims that it, along with other banks, conspired to set the price of credit and debit card interchange fees.

“On January 7, 2013, JPMC announced that it had agreed to a settlement with the Office of the Controller of the Currency (‘OCC’) and the Federal Reserve Bank of charges that it had engaged in improper foreclosure practices.

“In September 2013, JPMC agreed to pay $80 million in fines and $309 million in refunds to customers whom the bank billed for credit monitoring services that the bank never provided.

“On November 15, 2013, JPMC announced that it had agreed to pay $4.5 billion to settle claims that it defrauded investors in mortgage-backed securities in the time period between 2005 and 2008.

“On December 13, 2013, JPMC agreed to pay 79.9 million Euros to settle claims of the European Commission relating to illegal rigging of benchmark interest rates.

“In February 2012, JPMC agreed to pay $110 million to settle claims that it overcharged customers for overdraft fees.

“In November 2012, JPMC paid $296,900,000 to the SEC to settle claims that it misstated information about the delinquency status of its mortgage portfolio.

“In July 2013, JPMC paid $410 million to the Federal Energy Regulatory Commission to settle claims of bidding manipulation of California and Midwest electricity markets.

“On November 19, 2013, JPMC agreed to pay $13 billion [that’s billion with a ‘b’] to settle claims by the Department of Justice; the FDIC; the Federal Housing Finance Agency; the states of California, Delaware, Illinois, Massachusetts, and New York; and consumers relating to fraudulent practices with respect to mortgage-backed securities.

“In December 2013, JPMC paid $22.1 million to settle claims that the bank imposed expensive and unnecessary flood insurance on homeowners whose mortgages the bank serviced.

“On May 15, 2015, five financial institutions, including JPMC, pled guilty to a criminal conspiracy to fix the foreign exchange market, paying a total of $5.6 billion in fines. JPMC paid $892 million in fines.”

Less than three months ago, JPMorgan agreed to charges by the SEC that it had steered its customers into in-house products where it reaped higher profits without disclosing this conflict to the customer. It paid $267 million to settle these charges.

#100 jess on 04.21.19 at 12:54 pm

The daughter of the kleptocratic ruler of Republic of Congo used millions of dollars of apparently stolen state funds to buy a luxury apartment at the Trump International Hotel & Tower in New York City, Global Witness’ new investigation reveals. Despite the risks associated with the transaction, the Trump Organization brokered and profited from the apartment deal.

“What follows is the story of apartment 32G in Trump International, and how Claudia Sassou-Nguesso, daughter of Congo’s President, used apparently stolen public funds to purchase it in the summer of 2014. The tale involves a notorious Portuguese middleman, a world-renowned American law firm, a complex network of secretive companies in multiple jurisdictions, and a now-defunct bank, and raises serious questions about the role Trump Organization played in a suspected money laundering scheme….”

https://www.globalwitness.org/en/campaigns/corruption-and-money-laundering/trumps-luxury-condo-a-congolese-state-affair/

https://www.newyorker.com/news/swamp-chronicles/allen-weisselberg-the-man-who-knows-donald-trumps-financial-secrets-has-agreed-to-become-a-cooperating-witness

#101 Slim on 04.21.19 at 12:56 pm

In old age do you really want to be on cheap “farmland”, in the middle of nowhere? It’s -40 and there is a blizzard raging outside your door, you need to go to town for that doctor’s app’t. No thanks!

#102 Mainly Correct on 04.21.19 at 1:25 pm

#88 millmech – I just saw a new listing in a small city for $234,900. 4 bedrooms, 2 baths, a 3 level split, fully renovated, built in 1973, in prime neighbourhood, on a 15,475 SF lot just a 5 minute walk to the transit bus. I also love the garage with a new paved driveway into a double space. Comparing 2014 photos with the 2019 it appears the entire outside was renovated too. Who could ask for more with two mini splits for heating and air conditioning regulated by hydro.

#103 jess on 04.21.19 at 1:37 pm

A major EU vote and a direct call to action from investors with assets worth €1.7 trillion signals the start of a transformation of the financial sector – which could help in delivering on the Paris climate agreement, and prevent human rights abuses.

This week has seen historic moves from across both politics and industry, which could transform the financial sector in the European Union.

The European Parliament has made a major step towards a more ethical financial sector, by unanimously voting for new rules that mean investors will have to put proper measures in place ensuring their activities do not cause human rights abuses or environmental destruction.

#104 Christina on 04.21.19 at 1:51 pm

Ahhh…sweet frugality. A subject that is very near and dear to my heart.

My hub and I are sort of anomalies, and always have been. We live well on very little, have a (VERY) old Corolla that sufficiently gets us from point A to B, oh and a fluffy ginger cat with an attitude. (Sorry blog dogs! At least Felix will understand our devotion.)

And we are really happy. Life is simple and sweet, and we work together (or are trying to! Hahah) and are pretty grateful for what we DO have. If being frugal means we have more time together, and are able to do unpaid work that really matters – well, then that’s a sacrifice that I’m willing to make.

#105 dennis on 04.21.19 at 1:52 pm

Being a boarder city with the USA brings benefits. We go to Walmart USA and buy a gallon of 3% milk for $.98 and then stroll over to the egg section and buy eggs at $.67 for an 18 pack. Imagine, we buy 7 gals of milk for under $7 and 7 1/2 doz eggs for $3.35. Add the 40% exchange rate and we end up with $14.50 Canadian money.

Then we trip on over to the Walmart gas bar and pay $2.72 per american gal. Ya Ya the smaller gallon. 1.2 USA gallon = 1 Imperial so that would work out to an extra $.50. So $3.25 x 40% exchange rate = approx $4.50 Canadian.

Us Canadians are so gouged by Government at all levels including the new pretend Carbon Tax that is the slush fund of the Liberals. We are also gouged by the Dairy/Poultry Cartel protected by Gov’t especially Trudea’s buddies in Quebec.

So being a capitalistic society as we are suppose to be and let the market dictate prices, gov’ts that touch all capitalistic entities of life will always screw up and end up costing us huge prices.

Should we chat about Liberal Wynne who was totally booted out of existance in Ontario and her Ontario previous Premier buddy Mc Guinnty who who got such ugly press for his incompetence that between the 2 of them we have the highest most outrageous hydro bills in Canada. Another example of Government incompetence to the 10th degree in business decisions.

Why would big business want to set up here in Ontario. We have incompetent Governments that scare the hell out of doing business for high electricity bills just to start with. Then we have an entitled trust fund, part time drama teacher who never held a real job governing our Canadian County.

It’s always the good people of Canada that has to keep stretching their money while Gov’t is the parasite and catalyst that drives us into the ground.

#106 Windsurfer on 04.21.19 at 1:53 pm

Don’t play the lottery and never ‘play’ Encore. The house owns all the odds.

If you’re going to try investing in the lottery, research systems of play and spend your money on this in a regular fashion.

However, here is the caveat: “You will either win or go broke.”

Happy trails to you………