Retirement planning
- Thread starter cldemott
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Save lots .. Borrow smartly .. And invest wisely !
The rest is just smoke & mirrors !
Opinions vary widely on what a wise investment looks like !
The rest is just smoke & mirrors !
Opinions vary widely on what a wise investment looks like !
I guess what I'm looking for is an outside opinion - objective viewpoint - as to the definition of "lots", "smartly" and "wisely" that will help both of us with different ideas, come together and agree to work towards. We have a start with real estate but the strategy is lacking. Are you saying the only professionals that give advice only sell their products?
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If you are already in your mid fifties and do not have a plan or significant savings then you will likely need to work till 65 or beyond. With some luck you may be able to survive on Canada pension and old age.
If on the other hand you have plenty of savings then your best option is to find out who your close friends are happy using rather than asking strangers. Financial advisors are valued for the personal relationship they can develop with there clients, in addition to there investing skills, which is why I suggest you talk to your friends.
If on the other hand you have plenty of savings then your best option is to find out who your close friends are happy using rather than asking strangers. Financial advisors are valued for the personal relationship they can develop with there clients, in addition to there investing skills, which is why I suggest you talk to your friends.
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Didn't intend to imply you did not have savings just didn't know.
I still believe the very best source of information regarding financial advisers is close friends. You really need to have a good heart to heart with someone to find out what it is they like about their financial advisor.
I have found it can be quite difficult as the personal relationship is essential. Took me three tries before I had the right fit.
I still believe the very best source of information regarding financial advisers is close friends. You really need to have a good heart to heart with someone to find out what it is they like about their financial advisor.
I have found it can be quite difficult as the personal relationship is essential. Took me three tries before I had the right fit.
Thanks for the comments, but as far as family and friends..... my parents did their own planning and if they are late 70/80's the idea was save, save, save only, and the friends I have spoken with regarding this topic, only one couple in their 40's said they have a financial planner. Generational?? So I was merely going to the members for some advice - ya know.... networking. So your three tries? You must have started somewhere, and as far as REIN members - I was looking to create a relationship of sorts - discussion.
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[quote user=cldemott]Are you saying the only professionals that give advice only sell their products?
Every person has a bias (that includes me, of course).
Thus: understand their bias. How do they get paid ?
There are three types of "advisors":
1) those that sell only certain products and make a commission and/or trailer fee of investments with them. Most of these advisors are sales people and the fees are VERY HIGH .. VERY !!
2) Those that sell expertise for $s/h. Say $1000 for an initial consult .. and then $200-$500/h ..
3) Those that take a % of asset under management, independent of product (although even those do not include real estate, for example, into consideration). About 1.5% to 2.5% for the first million .. then lower as asset base grows !
Try all 3 types .. maybe 2 people per category .. and see where it goes !
Best is to invest in this 10 cm real estate: the one between your ears. That has the highest yield !! read, blogs, conferences, networking ..
A rule of thumb: allocate $s into 10 buckets that are not too correlated, say
1) 10% real estate,
2) 10% gold,
3) 10% oil / energy / gas / uranium stocks/ETFs,
4) 10% transportation (oil, gas, buses, trucks, shipping, cars) stocks/ETFs,
5) 10% retail firms stocks/ETFs,
6) 10% bonds/bond ETFs,
7) 10% banks/financial institutions stocks/ETFs,
8) 10% high tech stocks/ETFs
9) 10% pharmaceuticals / health care stocks/ETFs,
10) 10% "specialty/exotic" i.e. international currencies or penny stocks or green or coloured diamonds.. as an example.
Then, one year later, sell those that have outperformed and bring it back to 10% .. so if gold has gone up 50% and now is 14% of your total portfolio .. sell some so gold totals 10% again. Buy more of the underperforming one .. so if oil has slumped, buy more oil stocks/ETFs .. etc. a proven and Nobel Prize winning strategy !! Easy to execute from your PC with ETFs .. low cost .. low time investment .. cheap .. no advisor required !!
This way you have a fairly balanced portfolio .. IF this is your goal.
Other folks specialize because they know a market real well or have certain beliefs .. such as gold bugs or oil guys or real estate guys or guys that love gold coins or coloured diamonds.
This is a real estate forum. You don't get advise on "what gold stocks to buy" or "Is Silver at $35/ounce a good buy ?" or "Which ETF is better: ABC or XYZ ?" here !
THIS IS NOT ADVICE !! IT IS AN OPINION !! I AM NOT AN ADVISOR. I AM BIASED.
Other considerations:
I have done very well in real estate and continue to believe in it in the right markets / asset types (with proper leverage and impeccable management and not in all cases/markets) i.e. I believe that a substantial portion (say 30-50%) of your investable assets should be in real estate !
A second asset class is private equity, i.e. shares of private, non-public firms (again it assumes some special knowledge on your end). Co-owing a restaurant franchise or Mr. Lube or a garbage removal firm or internet start-up or software developer or any profitable small or medium sized business is usually far more profitable than co-owing a public REIT or Encana or Microsoft or Google or any other public firm. Private firms trade at a 3-5 multipe of earnings .. wheeras most public firms trade at 10-12+ .. so the same profit costs maybe 1/2 to 1/3 of the same profit in a public entity !!!!
These two investment classes [real estate, private equity] are very poorly served by so called "advisors" .. primarily because they do not get paid on it !! But they are a SUBSTANTIAL form of wealth of entrepreneurs or any successful business person. A substantial portion .. maybe 70%+ ..
of course I also have some ETFs / stock and follow this 10 bucket allocation model .. plus we use an advisor with % fee of (non real estate) asset under management !
With ETFs or stocks, well balanced, you can do about 6%/year .. with bonds maybe 3-5% .. with real estate 10%+ .. but some folks love stock picking and have done better .. but of you look at the stock market over the last 10 or 20 years, after a 2% mutual fund fee, 6% is HIGH .. likely you will do less unless you buy ETFs and have a low fee advisor !!
Many advisors should be called "sales person". Nothing wrong with selling. You do not go to a BMW dealer to get advice on what car to buy. You go there to pick a BMW.
Ask the advisor:
1) how to you get paid ?
2) What do you invest in ?
3) Show me a sample client's [name removed, of course] portofilio and its return over 3,5,10 or 15+ years !
Very few will do that and can show results !
Every person has a bias (that includes me, of course).
Thus: understand their bias. How do they get paid ?
There are three types of "advisors":
1) those that sell only certain products and make a commission and/or trailer fee of investments with them. Most of these advisors are sales people and the fees are VERY HIGH .. VERY !!
2) Those that sell expertise for $s/h. Say $1000 for an initial consult .. and then $200-$500/h ..
3) Those that take a % of asset under management, independent of product (although even those do not include real estate, for example, into consideration). About 1.5% to 2.5% for the first million .. then lower as asset base grows !
Try all 3 types .. maybe 2 people per category .. and see where it goes !
Best is to invest in this 10 cm real estate: the one between your ears. That has the highest yield !! read, blogs, conferences, networking ..
A rule of thumb: allocate $s into 10 buckets that are not too correlated, say
1) 10% real estate,
2) 10% gold,
3) 10% oil / energy / gas / uranium stocks/ETFs,
4) 10% transportation (oil, gas, buses, trucks, shipping, cars) stocks/ETFs,
5) 10% retail firms stocks/ETFs,
6) 10% bonds/bond ETFs,
7) 10% banks/financial institutions stocks/ETFs,
8) 10% high tech stocks/ETFs
9) 10% pharmaceuticals / health care stocks/ETFs,
10) 10% "specialty/exotic" i.e. international currencies or penny stocks or green or coloured diamonds.. as an example.
Then, one year later, sell those that have outperformed and bring it back to 10% .. so if gold has gone up 50% and now is 14% of your total portfolio .. sell some so gold totals 10% again. Buy more of the underperforming one .. so if oil has slumped, buy more oil stocks/ETFs .. etc. a proven and Nobel Prize winning strategy !! Easy to execute from your PC with ETFs .. low cost .. low time investment .. cheap .. no advisor required !!
This way you have a fairly balanced portfolio .. IF this is your goal.
Other folks specialize because they know a market real well or have certain beliefs .. such as gold bugs or oil guys or real estate guys or guys that love gold coins or coloured diamonds.
This is a real estate forum. You don't get advise on "what gold stocks to buy" or "Is Silver at $35/ounce a good buy ?" or "Which ETF is better: ABC or XYZ ?" here !
THIS IS NOT ADVICE !! IT IS AN OPINION !! I AM NOT AN ADVISOR. I AM BIASED.
Other considerations:
I have done very well in real estate and continue to believe in it in the right markets / asset types (with proper leverage and impeccable management and not in all cases/markets) i.e. I believe that a substantial portion (say 30-50%) of your investable assets should be in real estate !
A second asset class is private equity, i.e. shares of private, non-public firms (again it assumes some special knowledge on your end). Co-owing a restaurant franchise or Mr. Lube or a garbage removal firm or internet start-up or software developer or any profitable small or medium sized business is usually far more profitable than co-owing a public REIT or Encana or Microsoft or Google or any other public firm. Private firms trade at a 3-5 multipe of earnings .. wheeras most public firms trade at 10-12+ .. so the same profit costs maybe 1/2 to 1/3 of the same profit in a public entity !!!!
These two investment classes [real estate, private equity] are very poorly served by so called "advisors" .. primarily because they do not get paid on it !! But they are a SUBSTANTIAL form of wealth of entrepreneurs or any successful business person. A substantial portion .. maybe 70%+ ..
of course I also have some ETFs / stock and follow this 10 bucket allocation model .. plus we use an advisor with % fee of (non real estate) asset under management !
With ETFs or stocks, well balanced, you can do about 6%/year .. with bonds maybe 3-5% .. with real estate 10%+ .. but some folks love stock picking and have done better .. but of you look at the stock market over the last 10 or 20 years, after a 2% mutual fund fee, 6% is HIGH .. likely you will do less unless you buy ETFs and have a low fee advisor !!
Many advisors should be called "sales person". Nothing wrong with selling. You do not go to a BMW dealer to get advice on what car to buy. You go there to pick a BMW.
Ask the advisor:
1) how to you get paid ?
2) What do you invest in ?
3) Show me a sample client's [name removed, of course] portofilio and its return over 3,5,10 or 15+ years !
Very few will do that and can show results !
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Go with flat fee or hourly paid advisor AND read through a ton of investment books... ETF's based portfolio's seem like the way to go for many people....
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[quote user=housingrental]Go with flat fee or hourly paid advisor AND read through a ton of investment books... ETF's based portfolio's seem like the way to go for many people....
Indeed .. but: why do the majority of Canadian NOT do that ?
Indeed .. but: why do the majority of Canadian NOT do that ?
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Ignorance. Don't care. Disclosure: I don't use an advisor. Never have, never will. All try to sell me ideas that I don't believe in such as diversification, asset allocation, and rebalancing. These concepts are nonsense. My opinion only. I am also biased.
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Hi Thomas
Some do not like the idea of paying money for a service
Apparently the perspective of having someone recommend products that they get fee if you purchase is more desirable
I do not get it
Some do not like the idea of paying money for a service
Apparently the perspective of having someone recommend products that they get fee if you purchase is more desirable
I do not get it