Weekend Reading – Retiring broke, dividends, real estate going badly and more #moneystuff
Welcome to my latest Weekend Reading edition – where I share some of my favourite articles from the week that was across the personal finance and investing blogosphere.
Here is what I posted this past week:
My June dividend income update – showing we’re >50% to our early retirement goal.
Still on my to-do list is an update on this article – about our financial freedom age 50 target – and next week I will have yet another personal finance and investing book to giveaway. Stay tuned for that!
Congratulations to Adeel who won this book on my site – the book will be in the mail to you very soon. Thanks for being a fan Adeel.
Enjoy these articles I checked out this week and talk soon.
Mark
Go Banking Rates told us why many Americans will retire broke. Only 16% have more than $300,000 saved for retirement.
I’m aligned, for the most part, what MoneySense captured about the TFSA vs. RRSP vs. other investing debate here. This subject is certainly written about a great deal…
Investing in real estate is no windfall, it can easily go sideways. I’m not convinced the multi-millionaires in downtown Toronto or Vancouver would agree. Those markets have made those homeowners very wealthy.
Partnerships and Deals!
Thanks to my passion for personal finance and investing, some great companies want to offer deals. As a reader, you might as well take advantage of them although there is never an obligation.
Happy Investing!
Mark
Mark
My name is Mark Seed - the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I've surpassed my goal and now investing beyond the 7-figure portfolio to start semi-retirement with. Find out how, what I did, and what you can learn to tailor your own financial independence path. Join the newsletter read by thousands each day, always FREE.
Americans: Not that the numbers are not correct, but remember the Total number of them, about 325Mil. So 10% almost equal our entire pop and how many Cdn have adequate savings for retirement.
Regardless of ones situation if no effort is made than nothing will change. Just because one might never be able to save $1Mil over their working life, does that mean they should not bother to save anything? Save what one can and if they only end up with $50k,$100k or whatever that may provide them with what they need to live a better retirement.
Whatever people can save, reasonably, they should try to save. There are some folks that cannot possibly, barely, save at all due to financial circumstances. I don’t include those folks in my “list”. Others, well…. I think unfortunately cannew through very poor financial literacy and therefore bad behaviour many people simply don’t know how even to save $10k over many years of working.
Give up booze & cig, An In Law of ours complains she can barely live on her $2800/mo, but manages to stock up on those and even buy lotto tickets. I tried to help her before she retired 10 yrs ago and she shrugged it off saying what she could save wouldn’t make a difference. But she could have easily saved $100 per month when she was working but didn’t want to make the effort. Now she says $100/mo income would really make a difference.
Alcohol, cigarettes, lottery tickets are MAJOR money wasters for sure.
re: Americans retiring broke
Again, no surprise — Americans are POOR! The US is the wealthiest country on the planet yet has the greatest degree of wealth inequality; a very small minority of the population holds a very large majority of the wealth. According to the poll’s numbers, an average of 68% “don’t make enough money/struggle to pay bills” aka (most probably) 3/4’s of the US population is broke (e.g. almost half of the working population earns less than $25,000/yr.). So, yeah, of course they aren’t going to be saving anything for retirement! Not sure exactly for what kind of audience articles like this are intended, or why.
re: frugality isn’t everything.
Pretty sure frugality is either born out of necessity or born out of fear. Me thinks exceptionally few in the PF blogosphere have a requirement for frugality.
re: real estate…multi-millionaires in downtown Toronto or Vancouver
You’re forgetting the outlying areas to the which the mania has over-flowed. Perhaps as a real estate owner in Victoria, BC I should post my updated $1,000,000+ net worth (house included, of course). All that “value” gained without a single reno! Woohoo!
Speaking of which…A Wealth of Common Sense (Ben Carlson) had a post a while ago about creating wealth vs keeping wealth. I’ve read this before and apparently it’s true: 99% of those who make it into the top 1% of earners will find themselves on the outside looking in within a decade. I believe that also holds true for those in the millionaires club (savings vs earnings) — most will cycle out of the top tier within 10 years of entering. Which brings us back to a few always holding all the marbles.
Hope everyone survived another Friday the 13th.
You have probably already read this, but in case not:
https://www.theatlantic.com/magazine/archive/2018/06/the-birth-of-a-new-american-aristocracy/559130/
Nice summation, Barbara, highlighting a few glaring realities Americans love to ignore/forget.
Also supports Piketty’s theory that the “middle class” is an economic anomaly which will sooner or later dissipate into the only two true factions — rich or poor. In the end, and once again, it’s just more sensationalism, like watching the Hindenburg go down in slo-mo flames. Sure, it’s hard to ignore our obnoxious and blinged out neighbour, but it best serves out mental (and social) health if we do.
If we look at the the generic stat which says happiness peaks around an income of $75,000 and see that 85% of working Americans earn less than that magic mark…it’s not only just the material wealth which is in the hands of the few.
More and more that’s happening…wealth in the hands of the few.
re: Americans. This country is now a have-not for 80% of the population. No surprise to me but I put it here because I think many Canadians have a certain impression of the U.S. – it is a wealthy country. Far from it.
Hopefully I don’t find myself on the outside looking in once we reach our goals SST. Cheers!
re: Frugal Fellow
I often had sources of side income. I consider voluntary overtime as side income as well. We were often offered the opportunity to work overtime. When I was younger I usually accepted it with the intent to save the $$ in the RRSPs or if they were full, to make extra mortgage payments (TFSAs hadn’t been invented yet). One year I got roped into taking on a part time job fueling aircraft (my own fault). It was interesting and sort of fun (until winter hit) and resulted in extra money. Again, RRSPs and extra payments were the primary uses. Now, farming and associated activities earn extra income in “retirement”. Old habits are difficult to break. 🙂
Lloyd I can see that about old habits!! You’re a jack of all trades who always seems to have their finger on making more income. Some of us could learn from that!
lol…I just started a small “kitchen waste pick-up for composting” service. All proceeds going to the local community foundation. I gotta stop doing this crap.
haha The community service / financial gifts you’re making are very admirable. Good for you!.
Our municipality has been picking up our organic waste for composting at least 25 years now. With our bigger property now we just have a pile and compost on our own.
Jason Heath at MoneySense usually gives excellent advice but in this post he makes a popular misconception. Almost all defined benefit pensions (teachers, municipal workers, hospital employees) are integrated with CPP. Thus the 2% formula is not in addition to CPP but reduced by the CPP amount.
Good catch. I read that article and found myself scoffing at the premise of the question. How could a teacher of 11 years who invests not have already researched this? Once the parameters are established, age, # of working years, retirement age, salary levels, etc it’s just math.
Very true. At least on my side I know my pension formula, certainly not 2% but more like 1.6%. That extra 0.4% x years of service is actually a huge number.
Surprising Jason didn’t mention that. I’ve read a number of things lately where he’s made mistakes.
As someone married to a retired teacher we know what will happen @65!
Very fair comment Rich. CPP is usually reduced in this regard.