Learn to Play The Long Game

Today’s article is the first in a series written by Simon Chan who started his own VLR earlier this year after working for 20 years in the financial services industry. He has a broad base of experience with the subjects of pre-retirement and financial independence having worked in multiple businesses such as banking, wealth management, insurance and group retirement benefits. Most recently Simon was the head of business strategy for the Canadian Retail Business for a global insurer. In his role, he became interested in how technology, globalization and the rapidly changing environment is impacting the lives of millennials. In short Simon knows his stuff, is a great guy and wants to help.

I believe it’s important that we understand the new challenges that will be faced by our kids and grandkids in the years ahead. It won’t be easy but we can succeed if we all work together. -Mike 

 

 This morning I woke up and as part of my daily routine, I began to read my Twitter feed to catch on the latest basketball news and what’s been happening in the world. Over the past several weeks, I’ve seen several articles on the rapidly changing workplace with the entry of new technologies like artificial intelligence and machines learning. This got me thinking about the “Big Dip” article that I read on the   Victory Lap Retirement blog and whether Millennials who are in the early stages of their lives will experience the “Big Dip” in the same way as the Boomer generation.  

The Early Years (A) 

When I think of what Millennials are dealing with early in their lives and careers my belief is they are facing a much more difficult road than Boomers. Millennials are entering a globally competitive job market which has made post-secondary education table stakes resulting in students taking increasing amounts of debt. In addition to the pressures of school and finding an entry level job to begin the process of paying off their student debt, Millennials are bombarded with marketing messages encouraging them to spend and buy new products. No wonder we are seeing the incidence of anxiety, stress and depression increase in university students and young adults. They feel paralyzed and in constant stake of anxiety. 

The Valley (B) 

Both Boomers and Millennials enter their 30s/40s with increasing levels of responsibility which starts them down the big dip as the mounting obligations of getting married, growing a family, buying a home begin to reduce their financial flexibility and overall freedom. However, Millennials today are entering their 30s already behind the proverbial “8 ball” with higher levels of student debt, historically high housing prices making housing almost unaffordable, and an uncertain job market. To make matters worse, most Millennials will not have access to traditional financial building blocks such as a defined benefit pension plan that provides a guaranteed retirement income stream leaving them to decide how much to save and what investments to choose. This has led some Millennials to reject the path their boomer parents took and consider non-traditional paths such as not having children, rejecting the notion of buying a home, and taking more of a minimalist approach to life.  

The Bumpy Climb (C) 

As Boomers reached their late 40s and 50s, they began to experience more freedom as their children moved out of the home, their incomes began to rise, and financial obligations were declining. For most of their working careers, Boomers had stable jobs and a good pension plan to rely on in retirement. As Millennials reach a similar stage it their lives, the world will not be as stable and constant change will be the new normal. The constant change will result in the need to consider relocation to find work, going back to school to re-skill to remain relevant, and other working models such as freelance and being an entrepreneur. This stage will require Millennials to make multiple life transitions which will create stress both financially and emotionally. This creates questions like how will a Millennial fund these multiple life transitions and will they need to dip into their “retirement” savings. Will Millennials have the resilience to adapt to the ever-changing environment? 

What does this mean? 

My belief is that the Millennial version of the “Big Dip” will be much more challenging than the ones that Boomers experienced. Their journey to higher levels of freedom will be slower than the Boomer generation and will require more life transitions. This means the traditional path to success that the Boomers took is no longer relevant for Millennials. Millennials will need to find a way to play the “Long Game” and develop a new agile approach to maneuver in their constantly changing world.

 

 

 

 

 

Every Picture Tells a Story

 

 

 

Another RRSP season is now behind us and I don’t know if it’s just me but this one seemed more low key than usual. Maybe Mr. Trump was hogging all the airwaves this time around?

What concerns me is that the advertisers continue to sell us a version of retirement that doesn’t reflect the current reality for many people. The images of the carefree happy couple sitting on a beach while sipping on a strawberry daiquiri, or the couple sailing on a yacht, smiling with the sun shining and the wind blowing through their hair.           Continue reading “Every Picture Tells a Story”

Financial Independence and Zen Awakening

 

 

 

I was recently asked to review a new book “Zen and the Art of Wealth” by Warren Mackenzie, which is a story of two friends who chat while one helps the other build his drystone wall. It’s a good book and reminded me of some important life lessons that I had forgotten over the years. The book also triggered some memories about how I was first exposed to the world of Zen. Continue reading “Financial Independence and Zen Awakening”

Prolonged Exposure To High Stress Will Mess You Up

Wall Street Banker
Wall Street Banker

I had to write this blog in response to what happened recently at Wells Fargo.

I’ve spent most of my working life, thirty eight years, in the financial services industry and was lucky to escape relatively largely free from long-term damage (I was damaged a little, but am recovering nicely).  I feel for the employees of Well Fargo who, in order to survive, in order to protect their jobs and their families, felt compelled to open over two million chequing and other accounts without their customers knowledge.

 

How did this ever happen?

Continue reading “Prolonged Exposure To High Stress Will Mess You Up”

Considering A Sale Leaseback On My Home

Real Estate and Cash concept on green blackboard

This idea came to me while away fishing and the more I think about it the more appealing it becomes. Sale leasebacks are common in the commercial property arena but I couldn’t recall seeing it discussed with respect to residential property. I googled “sale leaseback residential property” and was pleasantly surprised to find that some people are already doing it.

Continue reading “Considering A Sale Leaseback On My Home”

Don’t Fall for The Great Retirement Con (Part 2)

Snake oil Salesman

Over the years, like many of you, I was lulled into believing that retirement was the natural conclusion of things, the final step so to speak. I bought into the deal that my role was to work for thirty plus years, pay off the mortgage and help the kids get through school and off to a good start in life. Once that was all done, and my major responsibilities were behind me, I would be allowed to retire. But retire to what?

Nobody really talked about that part of the deal and that was the part that I was really interested in. Something started to smell funny. Remember, I’m skeptical and so I started to dig deeper into this retirement thing. I was surprised when I finally came to discover that retirement is a relatively recent twentieth century phenomenon and that prior to the industrialization of this country, retirement didn’t exist at all!

Continue reading “Don’t Fall for The Great Retirement Con (Part 2)”

Books That Changed My Life

Books That Changed My LifeI have always been a firmer believer that most of the answers that we are looking for have already been written about. The trick is finding out where that information is hidden and one of the purposes of this site is to share helpful information sources with each other so that we can all benefit. I’m also a big believer in the power of role models, people who have proven successful at what I want to do. It’s much easier to see how another person accomplished some goal and then just copy what they did. Odds are if you do that you will be successful as well.

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My Financial Epiphany

My Financial EpiphanyFirst, a little bit of background. I have spent all of my working life (38 years) in the banking industry so it’s safe to assume that I have a good handle on most things relating to money. I’ve always been a good saver and like most people bought into the idea that the more money I saved for retirement the better my eventual retirement would be. That wasn’t my only mistake.

Continue reading “My Financial Epiphany”