Ian Royle

A lot of people have recently lost heavily in the stock market and real estate market.  The nice part ablut it is…it isn’t real money.  The really important thing is your month to month income.  If monthly your income stays the same you can maintain the lifesyle you are in.  One problem I see with investing in the black box of mutual fund sales is that most people have no idea how much they would need to “earn” from their investments to maintain the lifestyle they want.  Funds sales people bandy about terms like rule of seventy two and come up with obscure numbers like you would need six-hundred thousand to retire.  Problem is, these numbers don’t account for unknowns like how high will rising taxes be when you retire, how much will staples cost, what will energy costs for heating be, what will inflation rates really be, will new technology alter the need.  The truth is, no one knows how much you will need to retire because:

A: No one know what future costs will be.

B: No one knows how much money you will have in your mutual fund account after having several hundred or thousand people pool their money for a fund to mutually benefit the money manager.

C: No one know what kind of annuity you will receive once you convert your RRSP to a RIF.

D: No one knows what taxes will be taken from you by the government.

My advice.  Start a budget now, start investing in things that give you monthly income today and build that.  Don’t go in for pie in the sky money managers and fund sales people pitches…ask them for details on their retirement and see if it doen’t include YOUR money.