Friday, July 31, 2015

Short Takes: Gold a Pet Rock, Rent vs. Buy, and more

Here are my posts for the past two weeks:

So Stocks are Overvalued – Then What?

Your Retirement Income Blueprint

Here are some short takes and some weekend reading:

Jason Zweig calls gold “a pet rock.”

Mr. Money Mustache brings us some clear thinking on whether to rent or buy your home.

My Own Advisor finds confusion in the advice on how to create retirement income from your portfolio after retirement. There could be a problem with incentives here. By the time you’re 15 or so years into retirement and realize your plan isn’t working, it’s too late for you, and your advisor is probably long retired. You’re essentially relying on advisors’ integrity because they have little economic incentive to make sure your income lasts long enough.

Boomer and Echo find the Financial Planning Standards Council’s projected stock and bond returns to be very low once you factor in the typical fat fees in Canada. After-inflation returns are low enough without giving a big chunk of them away in fees.

Big Cajun Man has amassed a lot of experience with Registered Disability Savings Plans (RDSPs) and the Disability Tax Credit (DTC). Here he shares his experience with working through the system to get benefits.


  1. Thanks for the inclusion, and it is the Disability Tax Credit (DTC), have a great weekend.

  2. Thanks for the mention! It shows a big problem with the investing landscape in Canada when the FPSC needs to account for 2% fees in its projected investment returns.

    1. @Robb: Agreed. The part that bothers me is that a huge chunk of the fees go into sales activities. Many advisors spend more effort looking for new clients than working with the ones they have.

  3. It would be (very) scary to be years into retirement and realize your plan isn't working. I wonder how many of the huge demographic called Boomers are going to encounter this?

    You won't be one of them for sure...

    Enjoy the long weekend!

    1. @Mark: Based on my very limited sample, I would expect that most Boomers who live long into retirement are going to find their incomes dwindle in real terms.

      There are a host of possibilities that could put me into the same boat: tax changes, big political changes, war, climate havoc, fraud by index ETFs, etc.

  4. "Economic incentive" is still a huge driver for financial sector employees. At the end of the day, it's basically a sales job, and people do crazy things when money is on the line (e.g. the recent Home Capital debacle). My Own Advisor's best advice is his moniker.

    What'll be more interesting than all the Boomers who screwed up a sure thing, is how the Millenial generation -- now the largest -- will fare in retirement since they have a propensity to shun the markets and traditional components of finance and will not have the luxury of an extended 30-year bond/stock/real estate bull in front of them to build wealth. Perhaps they will live a more balanced life, instead of awarding "Greed is good!", and create things more beneficial to society than manipulative accounting schemes.

    Never a dull moment in life. :)