Many Canadians in their 30s, 40s not saving enough for retirement

[Azure]

So, at what point are all these Canadians who aren't smart enough to save for retirement become a burden to the rest of us?

Maybe the government should create a special pension plan for these people.

[Pastiche]

Originally Posted by Azure

So, at what point are all these Canadians who aren't smart enough to save for retirement become a burden to the rest of us?

Maybe the government should create a special pension plan for these people.

?

it's created, it's called the Canadian Pension Plan and Old Age Security

[Azure]

Originally Posted by Pastiche

?

it's created, it's called the Canadian Pension Plan and Old Age Security

What do they get? $20,000/year?

Enough to put yourself into a nursing home? Depends where I guess.

But if that is indeed what they get, it certainly won't cover everything. Which is why you're supposed to save for retirement.

What happens when all those old folks need to go on low-income support because they suddenly don't have enough money to support themselves?

[afc wimbledon]

Originally Posted by blankall

It's also possible that he did some time on the rigs or up North... may that was what was implied by "work overseas for months at a time for startup and commisioning away from all the good stuff, going to places you don't want to go too".

If spent a year or two up north in the oilfields at the right time and then invested in the housing market (and pulled out at the right time), you could easily make a lot of money quickly. I wouldn't call it luck, but more good timing.

Well that and not sticking all the money up your nose or on dodgy 'companions' when you get back to town!!!

[Sylvanfan]

Originally Posted by blankall

If spent a year or two up north in the oilfields at the right time and then invested in the housing market (and pulled out at the right time), you could easily make a lot of money quickly. I wouldn't call it luck, but more good timing.

Yeah I would agree that the timing thing was there. Lets face it for someone trying to get started today with say that NAIT Petroleum Engineering degree vs someone who started out 10 years ago. The guy starting out 10 years ago gets a job pretty easy, makes a good wage within 2 years, can buy a decent house for $150 grand, has his house increase in value by about 35% in 3 years to the point where he can leverage his equity to buy 2 or 3 more properties with 0-5% down and still rent them out for a positive cash flow. Two years later these properties have gone up in value an additional 50%, as well as his primary residence. So no doubt there were oppurtunities to create a lot of wealth....I don't think that same method is going to work very well in the next 10 years, unless you're buying that property outside of Canada.

The guy graduating today...he'll have to do something different to create that type of wealth for himself.

[blankall]

Originally Posted by afc wimbledon

Well that and not sticking all the money up your nose or on dodgy 'companions' when you get back to town!!!

On a serious note, I saw many a teenage kid fall into exactly that trap. Difficult to do when you're working a job that sucks surrounded by people having fun doing exactly that.

Originally Posted by Sylvanfan

Yeah I would agree that the timing thing was there. Lets face it for someone trying to get started today with say that NAIT Petroleum Engineering degree vs someone who started out 10 years ago. The guy starting out 10 years ago gets a job pretty easy, makes a good wage within 2 years, can buy a decent house for $150 grand, has his house increase in value by about 35% in 3 years to the point where he can leverage his equity to buy 2 or 3 more properties with 0-5% down and still rent them out for a positive cash flow. Two years later these properties have gone up in value an additional 50%, as well as his primary residence. So no doubt there were oppurtunities to create a lot of wealth....I don't think that same method is going to work very well in the next 10 years, unless you're buying that property outside of Canada.

The guy graduating today...he'll have to do something different to create that type of wealth for himself.

I would agree with this. For the next 10 years the person graudating today will probably be paying off the debt created by people from the last 10 years as a result of their "profits".

The real estate market will be especially speculative. The whole sub-prime crisis and skyrocketing in values has essentially create a giant pyramid scam where people were gaining money off lending etc.. without the actual increase in value actually occuring.

I'm at the point now where I can afford real estate, but will probably just rent for the next little while.

[Sliver]

Originally Posted by KTown

Its funny how someone could assume and judge someone like you, because I worked extremly hard to get to where I am today without financial support from anyone.

Originally Posted by KTown

Either your jealous or just a bitter person.

Kettle, meet pot.

[macker]

Originally Posted by Slava

^this thread is like crack to me. I know that I shouldn't even click but I do and can't help but reply when I do!

Anyway, I can do ETFs and basically anything security-wise (as long as it's approved). I still hold to the fact that 50 basis points isn't that far off once you factor in the costs of aquiring the ETFs. In fact some of the ETF MERs are actually starting creep up (depending on the type of underlying security and whether or not it's actively managed). Pretty hard to say with certainty that you are saving a full 2% on that basis. There are also lower cost mutual funds depending on the load and amount invested.

You got me like eightball....The costs to acquire ETF's are dirt cheap....you won't find any crack for $9.99. Who says you need to trade them? I have a few that I bought years ago that are based on long ideas that I don't think I will sell within the next 10 years. 10 years of MER's at 2.5% and up is significant. If the average investor would read this guy http://en.wikipedia.org/wiki/William_J._Bernstein they would see how easy it is and how boring and un-emotional investing can be. ETF's are as boring (transparent) as it gets! 60-40 for most people and forget about it...the costs of acquiring ETF's are not an issue and that is why people are flocking to them....ETF's have become favorites of hedge fund managers to day traders who like to pull the trigger frequently but this doesn't have to be the case and ETF's are the cheapest way to outperform the ponzies. It takes the Goldmans etc. right out of the picture. Look at billions that Lehman had guaranteed in funds (100% principal protected) that evaporated and investors were left with nothing. The SEC will take care of Goldman and Jake Zamansky, Lehman
http://www.seclaw.com/docs/LehmanPri...Litigation.htm
Even here in Canada, Manulife got into big trouble because they forgot to hedge and the stock price has been reflecting that. As much as MER's are a factor people also need to make sure the financial instituion they are investing in knows what they are doing and they aren't going to default on them. If you can't DIY then ETF's are the lowest risk way to be diversified in the market imo. The average MER of the average ETF is 12 times lower then the average MER of the average mutual fund in Canada today. 12 X. There was a "couch potato" in this thread and im sure he sleeps well at night. Use a process and avoid chasing product.

[MoneyGuy]

Originally Posted by macker

You say 50 basis points difference in MER's between the two but we both know that you are about 2% off on that estimate.

Actually, I wasn't referring a 50-bp difference in the MERs of mutual funds versus ETFs. I was referring to coming within 50 bps of the performance of the ETF.

I feel that if you compare the performance of the elite fund managers with their index subtracting fees, you'll roughly match the index, or at least come within 25-50 bps. That assumes you follow your advisor's advice, when what he tells you to do is the smart thing but may be contrary to what your heart tells you to do. Throw in all that a good advisor can do for you and you'll be better off than buying the index.

[MoneyGuy]

Originally Posted by Azure

So, at what point are all these Canadians who aren't smart enough to save for retirement become a burden to the rest of us?

Maybe the government should create a special pension plan for these people.

Good idea. Let's have a pension plan for fools. They're talking about it now. I don't support another pension plan. If you're not smart enough to save, fend for yourself. If you're destitute, there are social programs that can help you. I feel that most people can save if they really wanted to, but they blow it on other things.

[Slava]

Originally Posted by macker

You got me like eightball....The costs to acquire ETF's are dirt cheap....you won't find any crack for $9.99. Who says you need to trade them? I have a few that I bought years ago that are based on long ideas that I don't think I will sell within the next 10 years. 10 years of MER's at 2.5% and up is significant. If the average investor would read this guy http://en.wikipedia.org/wiki/William_J._Bernstein they would see how easy it is and how boring and un-emotional investing can be. ETF's are as boring (transparent) as it gets! 60-40 for most people and forget about it...the costs of acquiring ETF's are not an issue and that is why people are flocking to them....ETF's have become favorites of hedge fund managers to day traders who like to pull the trigger frequently but this doesn't have to be the case and ETF's are the cheapest way to outperform the ponzies. It takes the Goldmans etc. right out of the picture. Look at billions that Lehman had guaranteed in funds (100% principal protected) that evaporated and investors were left with nothing. The SEC will take care of Goldman and Jake Zamansky, Lehman
http://www.seclaw.com/docs/LehmanPri...Litigation.htm
Even here in Canada, Manulife got into big trouble because they forgot to hedge and the stock price has been reflecting that. As much as MER's are a factor people also need to make sure the financial instituion they are investing in knows what they are doing and they aren't going to default on them. If you can't DIY then ETF's are the lowest risk way to be diversified in the market imo. The average MER of the average ETF is 12 times lower then the average MER of the average mutual fund in Canada today. 12 X. There was a "couch potato" in this thread and im sure he sleeps well at night. Use a process and avoid chasing product.

I guess at this point we are so far from the original topic we might as well continue with the age-old argument about passive and active investing.

So, sure $10 for a buy is a good price. How many people make one purchase for their whole retirement account though? What brokerage would survive if that was the case for the majority of investors? A lot of places are charging you inactivity fees if you don't make enough trades for them in a quarter as it is....so saying that someone is going to spend a mere $10 and solve all of their problems is just intellectually dishonest- you know that is not accurate.

Frankly I feel like I'm arguing with a guy who doesn't believe his own arguments though. You were in the stock thread last year telling everyone how they should be looking at companies like AGU, CPG, ECA, SU. At one point you even suggest that you would buy only one stock: BHP! But saving the best for last in this post was the part when you talked about how you valued these companies: Vector Vest!!

So which is it macker? On one hand you are stock-picking and actively trading, and now its passive investing ftw? Surely you aren't a guy who thinks that no professional managers can beat the market, but you can...right?

(To be fair it was that thread where we had this run in, perhaps for the first time. One day you'll just join the dark side though!)

[KTown]

Originally Posted by Phanuthier

I don't know you personally, but if you indeed did this with no help AND you overleveraged like crazy (not surprising since you seem to see Donald Trump as somewhat of an idol)... you should at least recognize that you were very, very lucky to have a lot of things go your way. No offense, but from reading your posts (and knowing a bit about investing and business)... you do not strike me as overly intelligent when it comes to money (not stupid, but not exactly a world class entrepreneur)... more like, the Donald Trump style worked for you.

I never claimed to be an expert on investing. Was I lucky I don't think I was, Every job I ever got wasn't handed to me I had to interview for them. I never had a friend or a parents friend ever get me a job. I also go turned away for work plenty of times but I kept on trucking. Using equity you built up in an investment or property is your smartest way of making money. Your right that I am over leveraged right now probably, but if you don't take a risk then chances are you won't make money. If all my tenants start to leave and I lose my job than there is a good chance I'd have to sell some properties or some of my shares in my investments. Do I think I will lose my contract job? No considering I just got a raise on my rates by about 25% since another firm tried to steal me away from my current firm. I've got a good reputation out there in the industry that I built up over time.

I have lost money on investments any investor will. The question is do you make more than you lose, I also bought stocks last summer when everything was at its lowest point. Was I lucky there or was I smart? Probably a bit of both. Buy low sell high, right. Easier said then done it takes a bit of a risk taker to buy stocks when everything is tanking and people are losing there jobs left and right.

I have no problems disclosing how I've managed to start taking care of my future and how I am years ahead of people in there 40's and 50's. I just hate when people question ones integrity.

I always say work hard, invest hard and then play hard.

[KTown]

Originally Posted by blankall

It's also possible that he did some time on the rigs or up North... may that was what was implied by "work overseas for months at a time for startup and commisioning away from all the good stuff, going to places you don't want to go too".

If spent a year or two up north in the oilfields at the right time and then invested in the housing market (and pulled out at the right time), you could easily make a lot of money quickly. I wouldn't call it luck, but more good timing.

I know a few other people who have managed to do the same thing in sales. The rest all used family connections though (Which I think is a much much bigger edge than having someone support you through college).

Sort of right, I worked overseas in places such as Indonesia, Papua New Guinea, Russia and Iran. I didn't make as much money as people think there, but the experience I got there you can't buy and it looks good on a resume. When I finished commisioning gas plants and refineries in places like that I decided to stay home more. I missed the boat in Calgary for the housing market so I wasn't going to miss another one. I took the equity I built out of my house and bought the houses in Regina when the average house cost was around $150K there. The average house cost there is now around $260K I believe. If I really want to stretch myself I can pull all the equity out of the properties I have there and by more stuff. Right now though my priority is too get my house paid off with buying stocks as I see fit. I do my research before I buy. I talk to experienced investors that I've met in the industry before buying the stocks that I am interested in.

[KTown]

Originally Posted by Sylvanfan

Yeah I would agree that the timing thing was there. Lets face it for someone trying to get started today with say that NAIT Petroleum Engineering degree vs someone who started out 10 years ago. The guy starting out 10 years ago gets a job pretty easy, makes a good wage within 2 years, can buy a decent house for $150 grand, has his house increase in value by about 35% in 3 years to the point where he can leverage his equity to buy 2 or 3 more properties with 0-5% down and still rent them out for a positive cash flow. Two years later these properties have gone up in value an additional 50%, as well as his primary residence. So no doubt there were oppurtunities to create a lot of wealth....I don't think that same method is going to work very well in the next 10 years, unless you're buying that property outside of Canada.

The guy graduating today...he'll have to do something different to create that type of wealth for himself.

Your right there, the new generation out of school now is going to have to find a different way to make more revenue, but it can be done its not hard. You can buy alot of places cheap in the states still. Property management companies can be cheap if you find the right one.

The thing that bothers me about new grads nowadays is that they think the company owes it to them to pay them 70K at a minimum a year. Earn your stripes dude is what I say. Take a beating for a year or two show what you are worth, and if you show your good and willing to learn and take on new challenges you will be rewarded quite quickly in this industry. There are alot of bad people still working in this industry. The industry is always looking for good people.

When I finished school in 2001 I went for an interview and there was a stack of resumes applying for one job and the employer said he had to throw out alot of other useless ones. Needless to say I undercutt the competition and took the job for 30K a year. Now in 2001 my guess is 30K would equal about 45K nowadays but still far less than what new grads where getting paid.

[Phanuthier]

Originally Posted by KTown

I never claimed to be an expert on investing. Was I lucky I don't think I was, Every job I ever got wasn't handed to me I had to interview for them. I never had a friend or a parents friend ever get me a job. I also go turned away for work plenty of times but I kept on trucking. Using equity you built up in an investment or property is your smartest way of making money. Your right that I am over leveraged right now probably, but if you don't take a risk then chances are you won't make money. If all my tenants start to leave and I lose my job than there is a good chance I'd have to sell some properties or some of my shares in my investments. Do I think I will lose my contract job? No considering I just got a raise on my rates by about 25% since another firm tried to steal me away from my current firm. I've got a good reputation out there in the industry that I built up over time.

I have lost money on investments any investor will. The question is do you make more than you lose, I also bought stocks last summer when everything was at its lowest point. Was I lucky there or was I smart? Probably a bit of both. Buy low sell high, right. Easier said then done it takes a bit of a risk taker to buy stocks when everything is tanking and people are losing there jobs left and right.

I have no problems disclosing how I've managed to start taking care of my future and how I am years ahead of people in there 40's and 50's. I just hate when people question ones integrity.

I always say work hard, invest hard and then play hard.

Lucky as in the investing deals you did worked out for you (not that you didn't work). I think you are offended because you see it as "i did my time and worked labour jobs and look where i am now cause i invested" but the way I think of it, you don't have to do your time, its a matter of finding a job you like and being intelligent with your money (that is my approach). I could be wrong, but the impression I get is you buy property and invest in stocks with a mindset of just "lets do it" .... again I could be wrong, but I'm not sure you did all the due dilligence by that my bias expects, I expect all decisions with money to be cognative - you have to read the annual reports, go through the income statements, see how they use their money (especially profits et al), et al... not just "just do it" ...

FTR... I don't think you HAVE to earn your stripes... again, I think some planning ahead and being cognitive about what you do goes a long ways.

[Azure]

Originally Posted by MoneyGuy

Good idea. Let's have a pension plan for fools. They're talking about it now. I don't support another pension plan. If you're not smart enough to save, fend for yourself. If you're destitute, there are social programs that can help you. I feel that most people can save if they really wanted to, but they blow it on other things.

Exactly the way I feel.

But these people ARE going to be a burden on society down the road.

[macker]

Frankly I feel like I'm arguing with a guy who doesn't believe his own arguments though. You were in the stock thread last year telling everyone how they should be looking at companies like AGU, CPG, ECA, SU. At one point you even suggest that you would buy only one stock: BHP! But saving the best for last in this post was the part when you talked about how you valued these companies: Vector Vest!!

So which is it macker? On one hand you are stock-picking and actively trading, and now its passive investing ftw? Surely you aren't a guy who thinks that no professional managers can beat the market, but you can...right?

(To be fair it was that thread where we had this run in, perhaps for the first time. One day you'll just join the dark side though!)[/QUOTE]



Ok....full disclosure. In that thread I recommended AGU which I bought in on December 4, 2008 @ $31 and as of today I am up 100.97%. Better yet in that thread was my recommendation to buy TCK.b which I did on December 23, 2008 @ $4.98 and as of today I am up 739.97% so yes I am outperforming the index and the other active managers out there. Am I just pumping my chest about my winners? No my overall portfolio is up 82% since I started on my own. If you go back and read my posts all that I was saying was that imo the safest/easiest/cheapest/most transparent way for the average investor who doesn't have time to do it themselves to gain diversification in the market today is with ETF's. Cheap and easy. Am I being passive aggressive? I don't think so. I think active and passive management styles have their place and should both be used. I have a bunch of ETF's in my portfolio. If you use the above example a small retail investor could do their homework and buy into TCK.b when it was beaten down whereas fund managers have mandates that won't allow them to so it is advantage small retail investor. If I can beat the index and the fund managers anyone can. Also now is not necessarily the time to invest in the stocks I am referencing above. You use ETF's also so we are good.

[Sylvanfan]

Originally Posted by Azure

But these people ARE going to be a burden on society down the road.

Which people? The boomers make up enough of the population to control public policy and the demands that come with it. People currently in their 30's and 40's aren't in the right demographic and no one is going to do anything for that demographic.

Essentially the bust generation between the Boomers and the echo generation that follows is the group in question. Demographically they're too insignifcant to really effect how policies get formed. If they end up putting in more pension rules it will be boomers doing it knowing that they need to do it for their kids because they spent all the money they inherited from their really rich parents and have nothing left for their kids.

[Azure]

Originally Posted by Sylvanfan

Which people? The boomers make up enough of the population to control public policy and the demands that come with it. People currently in their 30's and 40's aren't in the right demographic and no one is going to do anything for that demographic.

Essentially the bust generation between the Boomers and the echo generation that follows is the group in question. Demographically they're too insignifcant to really effect how policies get formed. If they end up putting in more pension rules it will be boomers doing it knowing that they need to do it for their kids because they spent all the money they inherited from their really rich parents and have nothing left for their kids.

The people that don't save enough money for retirement and will need to go on welfare down the road for financial help.

Doesn't really matter if there are 10 or 10,000 of them. They're still going to be a burden on society.

I certainly don't want another pension plan to cover those idiots, but we can't just ignore the fact that it might cost us down the road.

[Traditional_Ale]

Regardless of how much or little one has saved, if they have paid their taxes their working life and contributed to CPP then they are entitled to at least the minimum compensation, imo. I do, however, feel that there should be much more specific rules for these people. IE, no using CPP money when you haven't saved anything on your own to go on a vacation or something.

I would also like to see more tax breaks for those who do save, aside from the TFSA. Being prepared for retirement is good for the whole of society and as such should be rewarded. You've done the entire country a favour by being ready.