One of the biggest retirement questions and potentially one of the most frequently asked retirement questions is “How much is enough”? The answer to this question is of course “it depends” but at least there is a new edition of Diane McCurdy’s book to help you out.
In How Much Is Enough? financial educator, speaker, certified financial planner and author, Diane McCurdy helps readers figure out their “Enough” retirement number.
Today’s blogpost will provide you with an overview of Diane’s book and your chance to win a free copy. I want to thank my supporters at Wiley for this book and of course, Diane for the support of my blog.
“If you’re going to be successful, it won’t be because everybody else thinks you are; it’ll be because you’ve set your own goals and taken real, practical steps to make them happen.” – Diane McCurdy
Diane sets the tone for the rest of the book early on, stating our attitudes about money are critical for financial success. She’s probably right. My friend Preet Banerjee often remarks money management and successful investing is “…about 90% psychology and about 8% math.” The other 2% really doesn’t matter because it’s our mindset about money that is so critical to success. It seems like Diane and Preet are on the same page. How Much Is Enough? is broken down into two main parts: What Is Enough? and Getting Enough.
Part One: What Is Enough?
Continuing the psychology of money theme, Diane states “money is an emotional subject.” “People have deep-rooted attitudes about money, and their own attitudes have to be taken into account if any financial program is going to work for them.” Part one explores the four common money attitudes Diane sees in her work with clients. In the book, you can take Diane’s quiz and find out what your profile is.
Chapter 2 helps you discover where the money goes, if you don’t know already, allowing you to complete some expense worksheets along the way.
Chapter 3 pushes you to determine what you really want. How much is enough and enough for what? Diane encourages you to write down “a wish list of things you want to acquire” and then capture a list of “personal, career, financial and relationship goals. Throughout the year, these two lists will remind you what you’re after and motivate you to get it.” Wish list favourites can include:
- Your children’s education
- An early retirement
- Moving to a new home
- Taking a vacation
- New household toys
- A new car
Chapter 4 is more tangible than other parts of this book, providing some number crunching examples to determine what could be your “enough” number. One thing that was nice to read in this chapter was Diane’s conservative estimates for rates of return on investments, recommending 2% annual inflation and 4% annual return for calculations.
Part Two: Getting Enough
“There are no rules for getting rich quick. There are, however, rules for getting rich slowly.” – Diane McCurdy
In Chapter 5, Diane encourages you to separate needs from wants, mentioning the “B” word a number of times (budgeting). To get rich slowly, she suggests you focus on debt before savings and “pay off your highest-interest debts first, then move to the next highest” as soon as you can.
Chapter 6 provides some guidelines for finding a financial advisor, which is not surprising to find in this book, and outlines some decent questions to ask in your quest.
Chapter 7 looks at where you can invest, to make your money grow. Diane didn’t slam dividend-paying stocks but I disagreed with her when she recommended mutual funds for an investment option; I feel the majority of these products are poor investment choices because of their high fees over other available products.
Chapter 8 is all about registered plans, namely RRSPs, RESPs and TFSAs, and how best to use them. Diane is also a fan of savings and investments outside these registered plans for many clients.
Chapter 9 looks at financial ages and stages. For 20- and early 30-somethings, Diane recommends starting a lifetime savings habit; advocating saving 10% of your income every year. For ages 35-50, Diane suggests you invest in RRSPs, start some non-registered investments, plan for the worst; get an emergency fund and pay down that mortgage. For ages 50+, clear up your debt and start some aggressive savings if you haven’t already done so – the time is now to get your retirement act together.
Chapter 10 includes some family finance topics, mainly how to have open and frank conversations with your children about money.
Chapter 11 tackles the emotional side of retirement and how you can prepare yourself and your family for this life stage. Regarding your portfolio, she provides her stance on the RRIF versus annuity debate.
Chapter 12 is about estate planning and includes some strong points about having a will.
Lastly, Chapter 13 summarizes what you should have learned in the book, stating this book was “designed to motivate you by working with your individual needs and desires.” “If you go off track occasionally, don’t beat yourself up. Just get back in there and keep at it.”
How Much Is Enough? is a light-hearted look at some basic financial principles that should make many Canadians more comfortable with their financial plan. In cases where some Canadians don’t have a financial plan, this book will provide some incentive to get one making sure you worry less about finances in retirement than you do today.
Now, it’s your turn to win a free copy of this book. Enter the draw below and I will select a winner at random. Yup, it’s that simple.
I hope you enjoyed this blogpost and I look forward to your comments about it here or via social media. Take some time to Like My Own Advisor, follow me on Twitter @myownadvisor or subscribe via email if you haven’t already done so.