Beat The Bank – Simply Successful Investing from Larry Bates
“Millions of Canadian investors are losing up to half of their retirement savings to decades of paying mutual fund fees. Most investors have no sense of the scale of this loss or its impact on their future well-being.” – Larry Bates, author, Beat The Bank.
I’ve argued high money management fees will kill your portfolio for many years now – hence the reason to strongly consider these products here. Then again, I never knew this stuff for years – switching to lower cost investing solutions was a lesson I had to learn myself in my 20s. Going-forward, using my site and Beat The Bank, you have an opportunity to apply Simply Successful Investing practices far sooner than later.
Banking industry veteran Larry Bates recently launched his new book, Beat the Bank: The Canadian Guide to Simply Successful Investing, and in that book he shares his advice to potentially double your long-term investing returns.
Thanks to Larry, I received a couple copies of his book to giveaway below. Before I get to that however, here is some of his sage financial advice you should take to heart.
Larry on any one of the three methods you should employ as part of his Simply Successful Investing approach:
- Become a Do-It-Yourself (DIY) investor – via your own hand-picked mix of stocks, bonds and/or some ETFs.
- Follow Assemble-It-Yourself (AIY) investing – following a passive investing strategy using low-cost ETFs.
- Use a Robo-Advisor (robo-investing) – to support your low-cost investing plan.
On the subject of “wealth builders” and “wealth killers” as part of The Wealth Formula:
Wealth builders are amount, time and rate of return. Added together, more money, more time to compound/grow and higher returns of investment are ideal. Larry reminds us dividends are a big part of rates of return.
Wealth killers are fees, taxation and inflation. Any one or more of these things are wealth destroyers you will need to fight as you work through your investing journey. You should always strive to avoid high priced products – since that’s less potential return for you. Taxation can be mitigated by “applying all savings first to TFSAs, RRSPs, or other tax-sheltered accounts” like RESPs. Given you have no influence on inflation whatsoever, you simply have to beat it via dividends, capital gains, interest income or all three. Invest accordingly!
Be wary of the “Old Bay Street” investing model:
- Old Bay Street portrays sales pitches as objective advice.
- Relative to lower cost alternatives, the investment products upon which Old Bay Street relies doom their clients to failure.
- By closest indexing, many mutual funds in Canada are purpose-built to fail.
- Canada is (unfortunately) a global leader in investment fraud.
- Old Bay Street is fighting to avoid the legal obligation to act in your best interest.
Q: What is the most frustrating answer to any question? A: It depends!
While true, Larry recommends you consider answering these following questions when it comes to your retirement plan:
- What will my annual retirement costs be?
- What size of a retirement nest egg will I need to cover those costs?
- How much should I save to accumulate this nest egg via wealth builders and avoiding wealth killers?
What are the ten commandments of Simply Successful Investing sprinkled throughout the book?
- Learn investment basics
- Understand The Wealth Formula
- Know Your “T-Rex Score” – essentially “Total Return Efficiency Index Score” or in layman’s terms – how much of your total investment return you keep after fees are accounted for. For example, assuming 6% rate of annual return, your T-Rex Score for a portfolio that costs 0.25% per year will be 90% after 40 years of investing. If you were to pay no fees at all, your T-Rex Score would be 100% regardless of your time horizon. A higher T-Rex Score is therefore better.
- Recognize how Bay Street operates
- Be a long-term business owner (i.e., own more stocks than bonds over many investing years)
- Know your risk tolerance
- Make a simple (savings and investing) plan
- Invest like clockwork – ideally – make all your savings for investment purposes automatic!
- Ignore the market (and folks that report on it)
- Enjoy life!
“Reject complexity. Embrace simplicity.” Well said Larry and it’s also my hope investors that read and enjoy this blog also follow that advice that is well articulated in your book.
Again, Larry was kind for deliver two (2) copies of Beat The Bank to giveaway to lucky readers on this site. Enter to win below. Good luck!!