Quote:
Originally Posted by PeanutButter
What a depressing conversation this morning.
Client comes in and she's noticeably low energy/mood, so I ask her what's up. She said that she's been thinking lately and she doesn't have anything to her name. She rents and only has a very small investment portfolio with some standard mutual funds in it. She's 55 this year and I guess she's having some sort of mid life crisis. She came here when she was 30, sent money home for her family, and she's probably at like $50k salary.
She asked what she could do and I pulled out a compound interest calculator. I told her that if she could save $300/month for the next 15 years and invested that in the market at 10% return she would have $125k when she's 70. Not a lot, but better than nothing. If she could invest more aggressively she would have more.
But then she said getting 10% return is too high, that's not possible and it dawned on me that there's no way she'll be able to invest aggressively. She just doesn't have the experience and knowledge about the market. If she doesn't invest aggressively now, she's not going to have anything when she retires. It's pretty sad. I guess if you're 55 and you're not financially on your way, I don't know if you will ever be. I guess it's not realistic for a 55 year old to invest aggressively, it's just out of character and I suppose quite scary to do.
My oldest client is 76 and she's still working because she needs the cash flow, that's probably the worst.
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You are right about the 10% return thing. I have lots of friends who have been toting about 10% yoy the last few years, and my mutual funds are doing around 5%. The problem is I don't have the experience or time to unlock that 10% average yoy. Nor do I have the wealth for some one to manage my money. The average Joe isn't going to see those gains.
I'm curious what your 55 yo client does for a living. Even without a healthy retirement saving, she should still have a decent amount of OAS and CPP at 65 if she's worked for around 30 years by the time she retires. If she's not alone and has a spouse to share costs, it's not an untenable situation. Lots of seniors in Vancouver don't drive and because they don't have anywhere to go to in a hurry, the annual senior's bus pass is all they needed.
There's lots of places that have senior friendly activities that also saves monies. Killarney community center for example has senior lunches for a few bucks and you can get out, food cheap, mingle, kill time, etc.