Observations on retirement ... by a participant
While browsing through earlier copies of my favourite Canadian magazine dealing with personal financial matters, "Canadian MoneySaver", I found some information that I thought it worthwhile to share here.
There's a man who writes frequently there, who developed a system of investment over 10 years ago, based on a similar system in the U.S., that has someone buy several low cost stocks of major companies that pay high rates of dividend.
He has observed that a high percentage, in the neighbourhood of 85 - 90%, of managers of mutual funds don't succeed in producing better results than some of the market averages, despite their major claims to be smart managers of money.
His project has produced better rates of return, averaging about 14%, than several market averages, and better than most mutual funds, over the last 12 years, and he'd checked it back through several years before that.
One of the nice things about it is that one invests in individual stocks directly, so avoids paying the fund managers that annual fee ... that doesn't look so bad ... until a person realizes that s/he's paying them about the same rate on the investments that they administer as s/he pays income tax on that same income.
If you are of the opinion that any information that's more than about a week old is so outdated that it scarcely merits more than a moment's consideration ... you may want to pass the information that I'm about to give, giving it only a cursory glance ... for it appeared in the February 1999 issue of the magazine.
Here's what he said,
"Finally, a word or two about retirement. Since I am now, officially "retired" [ed: I think that he taught in University],and was "semi-retired" for three yeas before, it is a subject to which I have given some thought. And so have many others, mostly 'MonweySaver' readers and conference attendees, who have asked me about retirement planning. I have always answered along the lines of, 'Get a sound financial plan and stick to it', but now, since I am wintering in Florida and coming into contact with so many retirees, I wish to add something to this dictum. The people that I meet who are the happiest are those who have settled into a comfortable but simple post-materialistic lifestyle and have a purpose in life. Whether this is to volunteer their time to various charities, to improve their golf or tennis games, or simply to spend more time with their families, doing the things you believe holds meaning seems to be an essential part of retirement".
That makes a lot of sense, to me.
Good wishes for the coming spring days to you and yours.