Thursday, 2 March 2017

Stars Alignment

I can’t seem to recall when was the last time all the stars were aligned in the world of investments.  We currently have a roaring stock market reaching new highs almost every day (at least in the United States), higher interest rates , which is good for retirees or people contemplating retirement, and a irrationally exuberant real estate market (mostly in the Toronto area and part of United States).

When will this come to an end? Or is this the start of a wonderful era? I seem to recall back in November last year, the world was coming to an end once the results of the United States Presidential election were announced. If only I had a crystal ball then. Hindsight is always 20/20.
With that in mind, I would like to take a moment and put on a reality check hat and use my financial training to properly chart a long lasting and sustainable retirement plan for my clients as well as for myself.

See my assumptions below and if the situation applies to you , and if you need further assistance, please contact me at for further assistance . For full disclosure purposes, I am Certified Financial Planner professional (CFP) based in Toronto, Canada.

Assumptions (very conservative):
Age and Family: Somewhat Irrelevant, willingness to relocate is a plus!
Total Net Worth of $1 million and upwards consisting of home in Toronto or GTA (depending on your equity, approximately $750K and upwards), other financial holdings such as RRSP, TFSA ($250K and up).

List your home, expect multiple bids, and sell for at least 30% above your wildest expectations. Pocket $800K net after commissions and other expenses .

Relocate to another city, preferably  Ottawa and the long lasting winter comes to my mind.  It has been ranked the number 1 city to live n in Canada for the past couple of years.  Purchase the same type of home for $300K. Net  savings $500 to invest.

Start looking for a job, preferably with the federal government or at a municipal level. Ideally, start the process before you move.  You could potentially be earnings less (or more), or if you are retiring , does it really matter?

Oh, and make sure your better half and your kids are on board as well. I recall my daughter asking for a pony when we had to relocate for a job once.

Final analysis
The additional $500K can be invested in a combination of low cost ETF and laddered GIC and earn 5% a year almost guaranteed.   You will be surprised  at how few so-called experts financial managers fail to even attain this return. In addition, the same amount pocketed will l take one approximately a lifetime to save assuming one saves 10%-15% of his or her paycheck each month, continue working at your dreadful  job,  and pray to God that the market returns (before fees!) are in line with the mutual funds with huge fees that the  financial advisors at the bank sold you.   If you are onboard with my analysis so far, you can essentially retire early (or at least continue to have one person working while the other one stays home (notice that I did not refer to either “He” or “her” in this equal opportunity world.

Contact me at if you are interested!

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