# Who do you trust with your money and retirement planning with?



## jmarks (Feb 14, 2012)

I'm a 54 year old married male who has worked all his life and had the misfortune of being divorced twice. The reason I mention divorced twice is because it resulted in a financial reset each time.

My wife aged 57 and I are trying to plan for our retirement, but the problem is that I don't know who to turn to for GOOD SOLID ADVISE!
I'm seeing the stock market and investment's in general as very risky business these days, especially wanting to retire sooner than later. Also have a few friends who have had lost a ton of $$ to crooks recently, in one case an intelligent friend went to a large reputable company to invest his money. Problem was the adviser and manager for this branch of the company where crooks and stole his and several hundred other peoples money. 

Have also gone to a few retirement seminars/course's and find the information to be all over the map. i.e one person will say you will require 50% of your pre-retirement income while another say's 100%. 


So to those of you that feel good about your plans, how did you get there?


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## lonewolf (Jun 12, 2012)

Independent thinking based on a strong commitment to reason.

I dont trust anyone with my money except myself, When I dont have a strong committment to reason (judging by information provided by the senses) Iam my worst enemy.


Qoute
"Independence is the recognition of the fact that yours is the responsibility of judgement & nothing can help you escape it - that no substitute can do you thinking, as no pinch hitter can live your life - that the vilest form of self-abasement & self -destruction is the subordination of your mind to the mind of another, the acceptance of an authority over your brain, the acceptance of his assertions as facts, his say-so as truth,his edicts as middle man between your consciousness & your exsistance."
Ayn Rand

Iam not good with words so I qouted Rand.


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## lonewolf (Jun 12, 2012)

From my experience banks have given me the worst guidance, I have found credit unions to be sincer


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## jmarks (Feb 14, 2012)

lonewolf said:


> From my experience banks have given me the worst guidance, I have found credit unions to be sincer


I find both of your answers to ring true for myself! My latest trip to the bank had me scratching my head as the "advisor" knew less than I did and was trying to sell a product she did not understand.

When I had less than $50k in my trading account I would spend a large amount of time doing D&D on companies and felt quite secure in my investments, even though many were small caps I did quite well and had a sense of conviction about my investments. But now that free household cash flow has increased to $75k a year and there is significantly more $$ in the account to invest, I've taken the advice of others(newsletters,investment house info., etc.) that are supposed to have knowledge and access to more information than myself. I've done this mainly because I don't have the time and expertise to evaluate the companies as I used to. 

But that isn't working as well, losing big time on a couple "no brainer" investments that went bust . That combined with friends loosing large amounts of $$ to unscrupulous people has resulted in me having about 70% of my $$ in cash which isn't going to do much at 1.5%. However 1.5% is a lot better than what my friends experienced, and they are supposed to be retired. Instead they continue to work, their dreams shattered ! In one case the Advisor , murdered one of his clients because she was endangering his ponzi scheme!!

So now I've managed to scare the heck out of myself and am left wondering what to do with the cash flow.


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## fraser (May 15, 2010)

I do the planning. I use a private advisor to manage the funds on our behalf. Very pleased. Far better than those dumbells at the bank. The quarterly conversations are on a completely different level. It is fee for service. We do not like hidden fees. There is an old saying in my former industry......'where there is mystery there is margin.'


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## james4beach (Nov 15, 2012)

Difficult topic. Best thing you can do is read and learn as much as you can, yourself. Just keep reading and learning. In the end it's your own money and nobody is going to care for it as well as YOU can.

I am very wary of external advisors. They all have an agenda and are all selling products... I don't think they're going to look out for your best interests. It's just about impossible to get unbiased advice in the financial space.

On top of that, there's the crookedness -- which you know about. It's rampant. I've described this industry before as a cesspool and I really think it is. So many criminals working around here. Above all else I recommend caution. The other big advice I have is that I find that risks are universally under-stated.

Whenever someone pitches an idea or strategy to you, grill them on the risks. What is the downside? What is the worst case scenario? What bad things could happen? How likely is it to happen? When is the last time something like that happened?

e.g. someone says "get into stocks". OK well, what is the downside? Well judging by the last financial crisis, the downside is about -50% meaning you could lose half your money. OK when did it last happen, how likely is it? Well crashes like that happened in 2000, and again in 2008. So pretty often by the looks of it.

e.g. someone (like me) says put most of your money in cash & GICs. OK what is the downside? Well your return is worse than inflation, so you lose purchasing power. If you put more than the CDIC limit into a bank, you could lose that money if the bank collapses. etc


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## james4beach (Nov 15, 2012)

I saw your later post now so I have a better idea.

Sounds like you're already pretty knowledgeable. So you're not missing the background info, I think what you need to do is devise a plan ... and again, reading a lot will probably help you there.

The other big suggestion I have is start to use the computer to run some projections. Use a spreadsheet and learn to 'model' a portfolio. It's really a vital skill and will help you experiment with different schemes to see what happens over time.

General rule of thumb I use when it comes to money management, is to always reduce the number of middlemen between you and your money. I like the idea of fee-based advice, of an external NON-BROKER party. Make sure he is NOT tied to the bank, brokerage, or a fund company. Then you can pay him for the advice, and then it's up to you whether to take it or leave it.


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## Daniel A. (Mar 20, 2011)

Act like a lawyer always know the answer to the question first.

Start with knowing what you need this means having a detailed budget as a starting point.

Divorce has always been a major killer to wealth management. 
You would need to provide as much information as you feel OK with to get an objective opinion based on where you are now. 
What are your skill sets.


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## kcowan (Jul 1, 2010)

You are vulnerable to any "Get rich quick schemes" floating around. Resolve to work for 15 years to build your new life. Emphasize saving. If you build equity, use Couch Potato. Avoid any advisors.

As for % needed to retire, you have little choice but to make do with what you will have. This might mean selling everything and living in a motorhome. Spend your time trying to imagine how that might work well for the two of you. Make lemonade! Consider becoming a host on a cruise ship. There are many creative ways to live a good life.


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## uptoolate (Oct 9, 2011)

I agree with kcowan above. I trust myself and my accountant. I keep it simple with a small cap/value tilted Couch Potato approach. I used to have a reasonable amount of money in single stocks but the gains didn't justify the effort to me so I don't 'play' in the market anymore.


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## pwm (Jan 19, 2012)

Who do I trust? The answer is *no one* but me. I started investing in 1979 with Richardson Greenshields. My full service broker churned my account for commissions until I had had enough and went with TD Greenline. Since then I've been a DIY investor and have had no regrets. Mistakes? I've made a few, but then again too few to mention. The record shows, I took the blows, and did it my way.

Love the quote from Ayn Rand. I actually plowed through "Atlas Shrugged" a few years ago and it's quite a read.


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## Cal (Jun 17, 2009)

Agree that the best way is to make your own plan, and achieve it.

Figure out what you think you will spend in retirement, or would like to spend in retirement, and put a plan in motion to get there.

Or revise your retirement plans accordingly.

Divorce is definitely a financial set back, but it doesn't have to stop you from achieving your goals in life.


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## jmarks (Feb 14, 2012)

fraser said:


> I do the planning. I use a private advisor to manage the funds on our behalf. Very pleased. Far better than those dumbells at the bank. The quarterly conversations are on a completely different level. It is fee for service. We do not like hidden fees. There is an old saying in my former industry......'where there is mystery there is margin.'


fraser, how did you go about finding an advisor? Do you give him access to your accounts or just pay for advice on a quarterly basis? 
I live in a relatively small city and can't seem to find an adviser that isn't trying to sell something more than just advice and expertise.


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## My Own Advisor (Sep 24, 2012)

To answer the question, I trust very few people. Trying to learn as much as I can, to chart my own path. That includes learning about taxes, estate planning, etc., not just investing. 

I like what pwm and specifically james4beach wrote above... 

"Best thing you can do is read and learn as much as you can, yourself. Just keep reading and learning. In the end it's your own money and nobody is going to care for it as well as YOU can."

You betcha.


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## jmarks (Feb 14, 2012)

james4beach said:


> Difficult topic. Best thing you can do is read and learn as much as you can, yourself. Just keep reading and learning. In the end it's your own money and nobody is going to care for it as well as YOU can.
> 
> I am very wary of external advisors. They all have an agenda and are all selling products... I don't think they're going to look out for your best interests. It's just about impossible to get unbiased advice in the financial space.
> 
> ...


Very articulate answer, with some excellent points! Thanks james...

Still won't stop the PSN's of the world from cooking the books and most all the analysts giving it a buy; however "if it's too good to be true then..." would apply  sounds too simply LOL


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## cannew (Jun 19, 2011)

I agree with most of the others, the best advice you’ll get is from yourself and you need a plan. 

1.	I’d suggest you read several investment books (get them from the library) such as: The Investment Zoo, Winning the Loser’s Game, Stop Working, Here’s How You Can, and The Ultimate Dividend Playbook.
2.	Don’t sign up those Internet Investment strategies like VestorVest
3.	Start saving and putting money aside for investing. Open an Ing Savings account so you’ll earn some interest on your money
4.	If you are looking to save for retirement, don’t consider an investment strategy which requires constant trading. Fees and commissions will seriously cut into your earnings.
5.	Don’t invest in Mutual Funds
6.	Don’t buy IPO’s
7.	Don’t buy on tips from others
8.	Don’t buy hot stocks or exciting stocks
9.	Look into DRIP’s
10.	Use TFSA & RRSP


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## spirit (May 9, 2009)

Go Old School. Always remember that there is no free lunch. You are in no position right now to make any major decisions about your finances. Stick them into a GIC or somewhere safe for the timebeing, go to this website every day and find out which posters here use caution in their writings. Follow them and you will find references to classic readings about finance. Read them.
I have been coming here daily for over 5 years (; I was panicking then because I was about to quit my job, cash in all my investments and generally second guessing my decisions....all because of the financial crash of 2007. During that time, I read, asked questions, read some more, asked more questions, reviewed our investing decisions and generally had a much better situation of where we were and where we were going but more importantly, where we were not going to go. It was not easy, we actually did not make a lot of changes in our investment strategy but most importantly, I can now sleep at night. Thanks to all here.
Go easy on yourself.....you have made a few mistakes, I am sure, and you will make some more. That is what life is about. The choice you have now is whether or not you will make informed choices or not. Good luck.


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## Spidey (May 11, 2009)

I also don't trust financial advisers and prefer to do my own plan - there is just too much of a conflict of interest in the way that advisers are compensated. The best bet is to educate yourself with books by authors such as William Bernstein, Jeremy Siegle or John Bogle. 

However, for someone who is not comfortable with DIY investing or buying ETFs, I would say the next best thing would be Phillips, Hager, North's D-series funds. You need a minimum of $25000 to set up an account with PHN directly. Even though these funds are technically supposed to be for independent investors, from my experience they are very helpful and would help you put together a portfolio that would suit your objective. If you wanted no "muss - no fuss" you could simply just buy the PHN balanced fund with a MER of 0.9% and you have a balance of Canadian, US and International equities and bonds.


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## kcowan (Jul 1, 2010)

I would mention that IPOs can be efficient because the listing company pays the commission. So you avoid any fees. I used Royal Bank for just that purpose. I only bought two, Macdonald Detweiller and Tim Hortons. Both were good buys. I was offered many others. So I was cherry picking.

I also buy convertible debentures from TDW at IPO to avoid the fees from their bond desk. This is only useful if you are not into couch potato. But there is a lot of crap being offered these days. And the good ones are totally subscribed in a couple of hours.


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## Islenska (May 4, 2011)

Just read "Wizard of Lies" on Bernie Madoff. Terrifying, how could you be protected from that?

Many very intelligent people and companies swept up in the tragedy.

Diversify comes to mind.


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## fraser (May 15, 2010)

If you choose an adviser it is crucial to understand how they are paid/goaled. You have to ask the right questions.

Some will get paid based on commissions, front end, back end, or both on your investments. Some will get additional incentives by signing you up to specific funds.

Others, such as the bank folks, may not be on commission but will be goaled, measured, and perhaps bonused by how much they bring in to certain portfolios. Not sure, but I would assume they get more benefits or goaled higher if they are able to sell you the high MER products. 

Understanding how someone is paid or goaled by their employer is vital to your understanding of where the first loyalty lies.

As an aside, Australia is bringing in some new, very strict fiduciary responsibilities for those who sell securities. These new rules are very good for consumers. Our banking/investment industry folks would not welcome something like this...they have been spending a great deal of lobby money to prevent any such legislation-even if it is in a typical Canadian watered down, ineffective fashion.

I prefer a fee for service approach. 

I do not like commissions, not do I like high MERS. Both will take big bites from your nest egg.


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## Feruk (Aug 15, 2012)

Read "The Smartest Investment Book You'll Ever Read" by Daniel Solin. Very simplified, dumbed down, approach that works better than almost any advisor when it comes to the stock market. I just bought a copy for my sister who is brand new to investing.


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## 6811 (Jan 1, 2013)

Feruk said:


> Read "The Smartest Investment Book You'll Ever Read" by Daniel Solin. Very simplified, dumbed down, approach that works better than almost any advisor when it comes to the stock market. I just bought a copy for my sister who is brand new to investing.


I agree, just make sure that you get the Canadian Edition.


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## Karen (Jul 24, 2010)

I trust absolutely nobody! I don't mean that I doubt the honesty of most financial advisors - I just doubt that most of them are much more likely to be right with their "educated guesses" than I am with my extremely limited knowledge. I'm perfectly well aware that my lack of investing over the years has probably cost me a lot of money, but I also know that I never spend a moment worrying about money in my retirement years. I know several people who lost between 40 and 50% of their retirement funds in the 2008 disaster, following the advice of highly-respected financial advisors; some of them hung on and recovered a lot of it - some panicked and sold at huge losses - they all lost a lot of sleep over it and some are living a much lower lifestyle than the one they had planned for. With everything I own in GICs, I didn't have to make those kinds of decisions, and that's the way I like it. I know that I have more than enough money to last me my lifetime, so why would I take chances with my investments? I fully expect to have a fair amount left over for my kids, but I don't plan my life around that - they know they'll get what's left over, but they're not making plans to spend it yet!


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## kcowan (Jul 1, 2010)

Karen said:


> I know that I have more than enough money to last me my lifetime, so why would I take chances with my investments?


Exactly. That is the phase that I am in now. The chances that I take are calculated based on my knowledge and comfort level.


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## My Own Advisor (Sep 24, 2012)

Smart stuff @kcowan and @Karen.

So Karen, you're 100% GICs? Were you always this way, with asset allocation?

Kcowan, what is your asset allocation if you don't mind me asking for you to sleep at night?


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## Karen (Jul 24, 2010)

> So Karen, you're 100% GICs? Were you always this way, with asset allocation?


I worked for a number of years for a couple of mining exploration companies on the old Vancouver Stock Exchange where I had employee stock options. During those years I used to "play" with strictly speculative stocks using money I made on my stock options - I always felt comfortable risking money that I didn't feel I had really "worked for." I won some, lost some, but made enough to pay off my mortgage. But when the companies I worked for went broke and I was out of work, I went to work for the federal government and that was the end of my "penny stock" days - I wasn't going to risk my hard-earned salary on speculative stocks and I didn't know enough about real investing to switch to that.  I knew a lot of stock brokers from my earlier work days and I saw no signs that even the well-respected ones were doing much more than making educated guesses. By this time I was divorced with two teenaged daughters to support and a retirement to prepare for and that's when I decided to stick to GICs. Mind you, interest rates were much higher at that time (this was back in the 1980s and I remember getting 5-year terms at 14%!) so I was able to accumulate a good-sized RRSP in a fairly short time. Now, even though I get a decent bonus from my bank, I'm only getting a little over 2% when I renew my GICs (I decided on a 3-year-term at 2.1 percent when I renewed one yesterday.) It's pretty pathetic, I know, but I have enough pension money to live on so I just keep re-investing my GICs as they come due and transferring as much as possible into my TFSA. It's a pretty simple way to live and definitely worry-free from a financial point of view.


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## fraser (May 15, 2010)

Karen, the VSE also helped pay down our mortgage...mining stocks etc. 
Used to buy them as primaries or in the .25-1.50 range and then wait for the crooks to push them up over the $2. so they could be margined.

I still remember selling a bunch of Amazon Petroleum for $2.15 just a month before the whole thing crashed and charges were laid. Our broker said we were 'nuts' to sell. My wife was due and we wanted to pay down the mortgage. We were lucky, we paid .25-.50 and we got out. It was the very last time that we bought anything on the VSE. Our broker picked up sticks quickly and moved to Toronto!


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## Karen (Jul 24, 2010)

Good for you, Fraser. I think the reason I made money on these stocks is because I didn't believe all the hype that the directors convinced themselves was true. If the stock price was up, I would exercise my options, sell the stock, and then sit back and listen to the directors tell me what a mistake I had made. A few months later, I would be enjoying my profits and they would be watching the stock price drop back into the penny range. I still shake my head at the stupidity of some of them. A lot of them weren't really crooks - they just believed what the promotors told them and didn't seem to learn.


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## My Own Advisor (Sep 24, 2012)

"Mind you, interest rates were much higher at that time (this was back in the 1980s and I remember getting 5-year terms at 14%!) so I was able to accumulate a good-sized RRSP in a fairly short time."

Hard to believe those 80s days. I wasn't an investor, then. Well, maybe I was, of NHL hockey cards 

If you have a great pension, and have been burned many times with stocks, I don't blame you with holding GICs. Whatever strategy works for people is the one they should likely follow.

For me, I would be surprised if I ever own a GIC in my lifetime. I can't see it, especially with yields these days, but never say never.

Thanks for sharing, I was curious to know how you came to such a convincing conclusion.


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## kcowan (Jul 1, 2010)

My Own Advisor said:


> Kcowan, what is your asset allocation if you don't mind me asking for you to sleep at night?


30% equities but all blue chip dividend stocks and funds. Much of my fixed is convertibles paying around 5% but I am protected from major inflation by the conversion privileges. That has worked well (except for Yellow Media).


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