Ben Carlson says You Probably Need Less Money Than You Think for Retirement .  His “favorite research on this topic comes from an Employee Benefit Research Institute study in 2018 that analyzed the spending habits of retirees during their first two decades of retirement.”  Unfortunately, this study’s results aren’t what they appear to be. The study results Here are the main conclusions from this study: Individuals with less than $200,000 in non-housing assets immediately before retirement had spent down (at the median) about one-quarter of their assets. Those with between $200,000 and $500,000 immediately before retirement had spent down 27.2 percent. Retirees with at least $500,000 immediately before retirement had spent down only 11.8 percent within the first 20 years of retirement at the median. About one-third of all sampled retirees had increased their assets over the first 18 years of retirement. The natural conclusion from these results is that retirees aren’t spending...

We’ve heard for some time now that China’s rise as an economic superpower is inevitable, and that China will surely surpass the U.S.  Extrapolating from the past few decades, this appears certain.  However, changes made by China’s current leader, Xi Jinping, have cast doubt on China’s ascendancy.  Chun Han Wong has covered China for the Wall Street Journal since 2014 and has written the book Party of One: The Rise of Xi Jinping and China’s Superpower Future .  His descriptions of the massive changes Xi is making lead me to believe that China’s growth will at least slow, if not falter altogether. My take on China is hardly original, and does not come from a deep understanding of China.  It comes down to the simple observation that for a society to become wealthier over the long term, its most brilliant and driven citizens must have the freedom to innovate.  We can’t know in advance which citizens will make a big impact, so this freedom must be available to ...

There are many mistakes we can make when investing in mutual funds or exchange-traded funds.  Joe Wiggins discusses these mistakes from a unique perspective in his book The Intelligent Fund Investor .  He covers some familiar territory, but in a way that is different from what I’ve seen before.  Although most of the examples in the book are from the UK, the points of discussion are relevant to investors from anywhere. Each of the first nine chapters cover one topic area where fund investors often make poor choices.  Here I will discuss some of the points that stood out to me. “Don’t invest in star fund managers.”  There are many reasons to avoid star fund managers, but I never thought of lack of oversight by the fund company being one of them.  “Individuals working in risk and compliance have little hope of exerting any control – they are likely to be relatively junior and considered expendable.  If they go into battle against a star fund manager, ther...

I’ve noticed an increase in the number of businesses offering discounts for paying in cash.  I’m happy to see this for two reasons.  One is that those who pay in cash (or some equivalent)  have been subsidizing credit card users who collect various perks at others’ expense.  The second is that I’m happy to have some of my purchases not contribute transaction fees to Canada’s banking oligopoly. Here are some short takes and some weekend reading: Teksavvy has some advice for the CRTC aimed at improving competition among internet providers.  The most interesting one is to “Examine functional or structural separation , where large providers are split into two distinct companies. Under such an arrangement, one company owns and operates a network and sells wholesale access to it to all comers on an equitable basis. The other purchases that access on the same terms and rates as every other competitor, and then offers it to customers as retail internet service. Canada'...

After only 10 short weeks, I’ve managed to open a checking account at a U.S. bank and move some money into it.  Some of the delay was due to misunderstandings on my part about what steps I was supposed to take next, and some of it was due to weird restrictions on the type of account in Canada that can be used to transfer money out of the country.  Mostly, though, it was the fact that there are many steps and each one seems to take a few business days. I doubt that the specific details of my experience matter much.  The main takeaway is that if you’re considering opening a bank account in the U.S., consider starting the process long before you need the account to be in place. Here are my posts for the past two weeks: Bad Retirement Spending Plans My Answer to ‘Can You Help Me With My Investments?’ Here are some short takes and some weekend reading: Robb Engen at Boomer and Echo describes a smart two-fund solution for investing in retirement. Tom Bradley at Steadyhand exp...

Occasionally, a friend or family member asks for help with their investments.  Whether or not I can help depends on many factors, and this article is my attempt to gather my thoughts for the common case where the person asking is dissatisfied with their bank or other seller of expensive mutual funds or segregated funds.  I’ve written this as though I’m speaking directly to someone who wants help, and I’ve added some details to an otherwise general discussion for concreteness. Assessing the situation I’ve taken a look at your portfolio.  You’ve got $600,000 invested, 60% in stocks, and 40% in bonds.  You pay $12,000 per year ($1000/month) in fees that were technically disclosed to you in some deliberately confusing documents, but you didn’t know that before I told you.  These fees are roughly half for the poor financial advice you’re getting, and half for running the poor mutual funds you own. It’s pretty easy for a financial advisor to put your savings into some...

I mentioned a month ago that I was trying out BMO InvestorLine’s high-interest savings accounts (HISAs) that are structured as mutual funds (BMT104, BMT109, and BMT114).  They pay exactly the advertised rate of 4.35%, but I couldn’t tell this from the confusing list of transactions.  Looking at the month-end balances, I was able to determine that they pay 1/365 of the annual interest each day, accumulating as simple interest over a month, and the accumulated interest is paid each month.  So, longer months pay more interest than shorter months, which is different from most other interest-bearing accounts I’ve had in my life. My most recent post is: Bad Retirement Spending Plans Here are some short takes and some weekend reading: John Robertson signed for a new Ford vehicle, and now Ford is demanding an extra $4000. Nathan Proctor says companies are using legal tricks to get us to pay extra in the form of subscriptions for products we’ve already bought.  He’s fightin...