“YOU CANNOT KEEP DOING THE SAME THING OVER AND OVER AGAIN AND EXPECT DIFFERENT RESULTS”. - ALBERT EINSTEIN.
I am still unable to fully understand why many Canadians keep making the same investment mistakes over and over again.
What are these mistakes?
A new survey by Edward Jones, an investment firm found that the average person spends less time planning for their retirement than their vacations.
As retirement looms only 40 % of those aged 55 to 64 plan for retirement and many of these are a result of “retirement courses” offered by their employer.
Sadly this is more common than not. It’s no wonder that so many Canadians are worried about whether or not they will be able to retire in comfort and whether or not their money will last given the fact they are living longer.
Imagine for a moment that you are asked to compete in the Olympics without any training. Silly as this seems that’s what many Canadians are doing.
Another mistake that is all too common, is that many Canadians seem to think all advisors and all companies are created equally.
A little bit of research and knowledge is all you need. Spend a few minutes planning and just like the trip you planned, you will come up with some interesting results.
Another mistake is investing at the last minute. This is what we call “RRSP Season.” By the very virtue of investing last minute, means that its priority is last on your list of to do’s. This in turn creates an attitude of indifference until the markets crash, at which time panic sets in.
Panic creates market crashes. Couple this with negative salacious headlines from the media, and, the television becomes many Canadian investment advisor. BNN, which I call the Bad News Network makes its money from advertising. Think about it.
A little knowledge goes a long way. I don’t know about you but if I needed open heart surgery I would not go to a dentist.
The same goes for your investments. You are putting your future in the hands of someone who will either be your greatest ally or your worst nightmare.
As mentioned in my previous blogs, we are undergoing the largest shift in demographics in the Western world’s history. If your only source of information is negative news and the “guru” at work, you certainly have lots to worry about.
If on the other hand, you spend a little time with a capable wealth advisor your chances of having a wonderful worry free retirement are magnified.
As an industry we are also at fault for creating this mind set. For some reason we seem to think that complexity solves problems.
In fact the opposite is true. Simplification is the start of meaningful change. Simplification creates clarity and clarity provides a clear vison of the future.
I am always amused when I look at software programs that create financial plans which are cookie cutters for the most part, and end up collecting cob webs due to their seeming endless numbers of charts, graphs and assumptions that are at the best, attempts to provide a window into the future based on historical results.
This is where Albert Einstein’s quote becomes meaningful. Given the changing dynamics of the aging population, is it not reasonable to expect that we as an industry, should stop applying outdated thinking to your planning?
Is it reasonable to think that we cannot use the same outdated thinking towards retirement planning than what we did for your parents and grandparents?
Today is the dawn of something new, something big and something that you should not delay in implementing. If you don’t know what I am referring to then read my previous blogs and this should set things straight.
Live Well. Invest Intelligently.
28 November, 2015 Financial Planning