Increasing Retirement Savings

[Frank MetaMusil]

Originally Posted by macker

Reading someone elses opinion won't change mine one bit. As I said it is not all good and anyone can google rich dad scam and find all kinds of similar articles. You won't catch me at a Darren Weeks seminar either but why dismis the book completely. The book being a best seller for the length of time that it has tells me that people enjoy it and it is readable. The investment advice (pay yourself first, live within your means and then increase your means, find out what everyone else is doing and do the exact opposite, why consumers will always be poor, Newtons law etc. etc.) is sound. It is not original as it is all pointed out in books from years gone by. Some might say that the principals are too basic but you don't see many people following what is preached in his books today...Like it or not the question I have is what book better points out the basics if you have read better, keeping in mind that the average person isn't interested in sitting down to Benjamin Graham etc. and the focus is too narrow...

For sure, I agree with what you are saying. I've never read the book myself, but might consider it in the future. What's interesting is the multitude of comments calling this a scam, and how many people claim they were hustled on the courses.

[BloodFetish]

Hey Slava, or anyone, do you have an opinion "The Smith Manoevre"?

I've thought about getting this set up once I've paid my mortgage down enough to qualify for a readvancable mortgage.

[Slava]

I still like the Smith Manoeuvre as long as it's done in a relatively conservative manner. I wild be careful in knowing what you are getting into though. At it's root you are borrowing money to invest and no matter how someone attempts to spin this it's higher risk.

There are also people out there using this in a more aggressive manner still that you should watch out for. The good thing is that if you did things conservatively you canpay the mortage ahead of normal and save yourself some money though.

[flamesfever]

Originally Posted by 1stLand

I suggest everyone reads "The Wealthy Barber" and "Rich Dad Poor Dad"

It's all u need to know about saving for retirement.

Buy assets that generate passive income.

Have enough assets and maybe you will be able to buy toys that depreciate over time.

I would never buy a vehicle or boat or quad or motorcycle brand new, even if I was rich.
Whats the point?

I recall "The Wealthy Barber" is a good book for younger people. It was the first book I sent to my son in University.

I think it's a healthy balance between enjoying yourself today vs sacrificing for the future, however, in the younger generation, I've seen too much of the former.

[chemgear]

I personally didn't get much out of Rich Dad Poor Dad myself. But like all things - different strokes for different folks. However, I did see this program earlier in the year - interesting watch.

http://www.cbc.ca/marketplace/2010/r..._dad/main.html

A few years back I went to a Quixtar seminar at the suggestion of my friend who was getting into it. To be honest, it was a kinda disturbing experience - it felt very much like a religious cult. I certainly didn't feel comfortable declined to participate and years later I came across this:

http://video.google.ca/videoplay?doc...89802739458876

I guess it's associated with Amway in the US.

[Sylvanfan]

Originally Posted by chemgear

A few years back I went to a Quixtar seminar at the suggestion of my friend who was getting into it. To be honest, it was a kinda disturbing experience - it felt very much like a religious cult. I certainly didn't feel comfortable declined to participate and years later I came across this:

http://video.google.ca/videoplay?doc...89802739458876

I guess it's associated with Amway in the US.

Yeah, IIRC it was a subsidiary of some type trying to distance itself from the Amway name.

I've had former bosses who tried to sell my on being in Amway, even friends who were gung ho to get into it because of the big promises it made. I always found the big flaw was that they seemed to be promising enormous never ending wealth. They can't tell you how much these people make but they can show you the lifestyle they live? Even today my co-workers brother is involved with it, and he rips him all the time for not buying stuff from him so his wife can retire.

This guy is an uneducated guy who operates a brake in a fab shop making something like $28 an hour, which to be honest is an only in Alberta type of job. With the sluggish ways of late he's been laid off occasionally. His wife is a Dental Hygienist who made well over $35 and they don't want her to go back to work again so they're trying to replace her income doing this. Problem for them is all their friends are the same group of people they've been associated with since high school who are all now in this so they're all trying to sell to each other.

He just won't hear anyone who advises him that he should stay home with the kid past a certain age, and let his wife work. While he's home he can attempt to educate himself so that down the road he can get a better job of some type. The idea that focusing that effort on a real job, saving and traditional wealth building is insensitive to his situation he says. Of course they also go to a lot of these other get rich quick by investing in Costa Rica real estate that will increase 25% in value by next September type of thing.

[albertGQ]

So anyone know much about the new proposed PRPP? Is it a better alternative then increasing CPP premiums?

Are Canadians depending on the govt too much for their own retirement?

[Phaneuf3]

IMO, the biggest thing to get people to save is to give kids a good proper financial education in school.

[Phanuthier]

Originally Posted by flamesfever

From what I have witnessed, the average person in the 20 to 40 year age group tends to get sucked into the idea that he or she has to have all the toys e.g. expensive cars or trucks, motorcycles, quads, snowmobiles, boats and motors, etc. These are all depreciating assets, that become worthless with time, and continually take away the ability to generate savings...in years when it counts most.

Anything that you can invest in, that appreciates with time, will help you create assets, which when sold will generate money to live on when you retire, eg. your house, cottage, land, various investments in stocks, bonds, etc.

(Sorry to hi-jack) I don't know if thats true. Sometimes, I think thats just old people looking down their nose at young people. I look at a lot of older people who drive Lexus and Mercedes and complain that they have no money at the end of the day. I'm in my 20's, maxed out my 401k (18% I think), 10% ESPP and still throw back another 25% of my paycheck (after all deductions) into stocks. I don't need a BMW when a Honda will do. Same with all of my roommates, and we're all in our mid-20's. Maybe more and more young people are being stupid with money? Many older people are still dumb as #### with money though.

Its funny though ... that we need the government to help protect us from ourselves and tell us to save money. Granted I'm all for incentives to encourage people to save, I just find it really (sad?) that we need government to tell us how to save.

[mykalberta]

They need to keep the CPP contributions where they are. I dont want to have to pay for my parents retirement. In 40 odd years when I retire I highly doubt there will be any CPP for me as the so called "greatest generation" will have bankrupted it. It shouldnt be up to us to subsize someones standard of living. When you retire the simple fact is that if you arent rich, you shouldnt be entitled to live in Arizona or Florida every winter.

I am putting 7% (company maxed match) into RRSP and 1/2 of whatever bonus I get each year into retirement. That is more than enough for me IMO.

[Cowboy89]

Originally Posted by Phanuthier

Its funny though ... that we need the government to help protect us from ourselves and tell us to save money. Granted I'm all for incentives to encourage people to save, I just find it really (sad?) that we need government to tell us how to save.

I also dislike the dependence on government. Bad outcomes are a fact of life and I really dislike people 'privitizing profits, while socializing losses.' I believe that if you don't save for retirement that you deserve to have to work until death. It's not like there's anything innately unfair or inhumane with this. Also it was only my grandparents generation that popularized the concept of living high on the hog after age 55.

[Cowboy89]

Originally Posted by albertGQ

So anyone know much about the new proposed PRPP? Is it a better alternative then increasing CPP premiums?

Are Canadians depending on the govt too much for their own retirement?

Ultimately because one can opt-out the proposed PRPP, it will be much less intrusive than increasing CPP premiums. Essentially because one would have to actively 'opt-out' those who are so clueless as to not know it is there would automatically generate savings, and those who know for a fact they have no dicipline can choose to avoid opting-out.

[Hi-Psi]

I've got an interesting take on things.

What if you're parents haven't saved enough over the years to retire properly? Instead of saving properly they spent their money on vacations for themselves and living waaaay outside their means to the point where they now have amassed debt rather than savings.

Do you feel responsible to help them since they're your parents or do you turn a blind eye to it and make them lay in the bed they made?

I think this is going to be a very big issue in the next 10-20 years as more and more of that generation begin to hit the age of 65.

[Drury18]

Originally Posted by Hi-Psi

I've got an interesting take on things.

What if you're parents haven't saved enough over the years to retire properly? Instead of saving properly they spent their money on vacations for themselves and living waaaay outside their means to the point where they now have amassed debt rather than savings.

Do you feel responsible to help them since they're your parents or do you turn a blind eye to it and make them lay in the bed they made?

Lay in the bed. Especially if they were the type of parents that instilled fiscal responsibility in you from an early age and then have gone back on what they taught you. In my case, I started paying rent the day I graduated from high school, told to pay for my own post-secondary education and pretty much be financially independent since the day I stepped out of that high school classroom. If my parents were to come back to me when they retired and said they ran out of money because they blew it all on extravagant things I'd laugh at them and tell them it's their own fault.

[Russic]

A few weeks ago we were going to be buying a new vehicle. At the last minute I asked my wife:

a) don't we like our car?
b) how many times a year do we need a larger vehicle?
c) What's it going to feel like to spend $75 every time we fill up?

On a whim we canceled the idea to buy a new car and I've felt an overwhelming sense of relief since we did. There was a scary moment of want overtaking need and I was blind to it. I can definitely see how people get wrapped up in unnecessary purchases.

[Cowperson]

Lots of Boomers are on the "Inheritance Retirement Plan."

The greatest transfer of wealth between generations in history is upon us in the next 20 or 30 years.

I know too many people on "The Inheritance Retirement Plan" and the parents they're depending upon.

Cowperson

[Dion]

Lots of Boomers are on the "Inheritance Retirement Plan."

I will be inheriting a good amount of money when my mother passes on. That said i'm not relying on that money for my retirement. I started making regular contributions to an RRSP when I was 18 and also have a union pension plan to fall back on also when the time comes.

[calumniate]

I have a question with regards to CPP. Apparently the fund has been taking a hit of sorts, and my employer has been matching my contributions for 3 years.

My dad mentioned that it's actually a good thing to contribute to CPP in this downturn, as the 'units' or stock of CPP will be less expensive so technically I'm buying more stock right now then I would be otherwise? Are there any wheels to this argument? Honestly I haven't paid much attention to my CPP - sorry if this question isn't that clear.

[Russic]

Originally Posted by Cowperson

Lots of Boomers are on the "Inheritance Retirement Plan."

The greatest transfer of wealth between generations in history is upon us in the next 20 or 30 years.

I know too many people on "The Inheritance Retirement Plan" and the parents they're depending upon.

Cowperson

My Grandma is currently the last remaining of her generation and my parents, aunts and uncles stand to inherit a decent amount of money. She has hinted at the idea of just giving it to them now equally as there's "no need to postpone the inevitable". Some members of the family want that, but there is one issue ... she's becoming less and less easy to care for. She is increasingly frail and her mind is getting to the point that there's concern she won't be able to care for herself much longer. A home is one option, but those are fataing expensive. That impressive inheritance that some members of my family are hoping for could be burned up quite quick if she needs several thousand dollars worth of care each month.

[MarchHare]

Statistically, Gen X-ers are saving the greatest proportion of their income and Baby Boomers are the worst off.

This can be explained because of the way the workplace has changed over the decades. For members of the Greatest Generation, it was pretty common to work ~40 years for the same employer and then retire with a generous company pension plus government assistance. The Baby Boomers expected to follow this same pattern, but then companies started laying people off en masse and cutting back pension plans, leaving many of them unprepared for retirement because they didn't start investing in RRSPs early enough. Having witnessed this, Gen-Xers have an attitude that nobody is going to take care of them but themselves, hence why they're the biggest savers. It's still a bit too early to evaluate Gen Y's long-term saving habits.

And don't let anyone fool you into thinking that kids today have a sense of entitlement unlike their elders. No other generation has a greater sense of self-entitlement than the Boomers.