Life Stage for Baby Boomers

Baby Boomers in Canada make up about 8.5 million people or roughly 25% of the Canadian population.  They are usually described as the group of people born between 1946 and 1965, often to parents who got married right after World War 2. 

Some Boomers have already gone into a retired lifestyle, with either a change to something part-time or outright retirement.  For most, they will be considering how they want to retire in the next dozen years.  This group, hopefully, is already looking at their lifestyle and adjusting it so they will be ready for the day when their retirement and income change their lives substantially.

What Boomers should be doing before retirement?

Retiring debt - Boomers should be paying down debt.  In their 50's they should be at the peak of their earning potential, and as children move away, the Boomers should have more money to pay off the mortgage, vehicle loans and all credit card debt.  Also important, Boomers should not be accumulating debt during the years leading into retirement.  Any purchase that will increase debt into the retirement years should be seriously reviewed, as cashflow will be lower in retirement and debt payments will be more difficult than they were during the working years.

Investing 101

This is an updated article from 2009.

What is your Risk Level?
"What is the chance that I'll lose money?" Every investor asks himself this question when making an investment. And understandably so–nobody likes to lose any of his or her hard-earned money. The key to understanding risk—and getting it to work for you—is to understand the trade-off between risk and reward.

Simply put, to seek greater rewards—such as a higher investment return—you must be willing to accept greater risk. If you wish to reduce risk, you must be willing to accept lower returns.

Historically, foreign stocks have entailed the most annualized risk, followed by U.S. stock and lastly Treasury bills. The more risk you are willing to take, the higher your return potential may be. But, it is possible to seek a high long-term return and keep your risk relatively low with a diversified portfolio.

Avoiding The Debt Trap

I presented a seminar called "Avoiding the Debt Trap" at the Rocky Public Library on Thursday, Feb 3.  I have included some of the highlights and a link to the slide show that I used (500 kb).

Avoiding The Debt Trap

Debt is an obligation to pay for money/services given out, often at an additional cost of interest

When do debt problems start?

• Usually when spending more on wants than needs
• Spending more than is taken home
• Put extras on credit cards and don’t pay them off

Controlling Your Wants

• Write down what you need and their costs - Mortgage, rent, insurance, food, medicine
• Write down what you want and their costs - Cable, phone, movies, meals, vacations
• Look at take home income, figure what fits - Needs come first, wants can be postponed and may even change with time

Common Bad Debt

• Vehicle (truck or car)
• Quad & snowmobile
• RV, motor home
• Vacation
• Sports
• Entertainment (movies, bar, TV)
• All things that while enjoyable, but add no money to savings, no value. They cost money, but there are no monetary returns.

Choices - Avoiding debt or getting out of debt is about choices

• Choosing needs over wants
• Choosing long-term over short-term
• Choosing to control your lifestyle and its costs vs. your lifestyle

For full details from the presentation, please go to the slide show pdf (500 kb).  Any comments or questions, please post them and I'll get back to you as soon as I can.  Jerry