Canadian Money Forum banner
1 - 20 of 31 Posts

·
Registered
Joined
·
204 Posts
Discussion Starter · #1 ·
Based on the ages of people divulging data in the "Introduce Yourself" thread, it seems most of the people posting on this excellent new discussion forum are in their 20s or 30s. Speaking as a 56-year old baby boomer, I'd like to say I envy you for several things:

1.) The new Tax Free Savings Accounts. Clearly, many of you see this as a centerpiece of your retirement planning 20 or 30 years out. The boomers had nothing like this: just non-registered investments: the gift that keeps on giving (to Government tax coffers) every time you crystalize capital gains or receive dividend or interest income. Yes, we had RRSPs but they're taxable in the end game and the more we have in Defined Benefit pensions, the less we could stash in RRSPs.

2.) The boomers paid inflated prices for stock for the last 20 or so years. You guys get to buy in during an historic bear market, at far more reasonable prices than we ever had.

3.) Internet tools. You have a wealth of web-based free resources, from social networking sites to online news feeds to online discount brokerages to forums like this one.

4.) Exchange-traded funds (ETFs). Another investment product that didn't exist when the boomers started out. You can build tax-efficient (if non-registered) portfolios with very low costs.

That's my short list: i'm sure there are others.

www.wealthyboomer.ca
 

·
Banned
Joined
·
701 Posts
Based on the ages of people divulging data in the "Introduce Yourself" thread, it seems most of the people posting on this excellent new discussion forum are in their 20s or 30s. Speaking as a 56-year old baby boomer, I'd like to say I envy you for several things:

1.) The new Tax Free Savings Accounts. Clearly, many of you see this as a centerpiece of your retirement planning 20 or 30 years out. The boomers had nothing like this: just non-registered investments: the gift that keeps on giving (to Government tax coffers) every time you crystalize capital gains or receive dividend or interest income. Yes, we had RRSPs but they're taxable in the end game and the more we have in Defined Benefit pensions, the less we could stash in RRSPs.
I agree. Big benefit.

2.) The boomers paid inflated prices for stock for the last 20 or so years. You guys get to buy in during an historic bear market, at far more reasonable prices than we ever had.
I strongly agree. Huge benefit.

The only similar time I can think of would be to be in your 30s during the 1974/75 bear market. That was an amazing time!

3.) Internet tools. You have a wealth of web-based free resources, from social networking sites to online news feeds to online discount brokerages to forums like this one.
I agree. Big benefit.

4.) Exchange-traded funds (ETFs). Another investment product that didn't exist when the boomers started out. You can build tax-efficient (if non-registered) portfolios with very low costs.
I disagree. No benefit (to us).
 

·
Banned
Joined
·
150 Posts
The only similar time I can think of would be to be in your 30s during the 1974/75 bear market. That was an amazing time!
Unfortunately, we boomers were not in our 30's during that time. The majority of us were just out of our teens and had just finished school and were attempting to find jobs or begin careers in that bear market. We did not have any money to invest yet.
 

·
Registered
Joined
·
82 Posts
Yes I also noticed that many of us who introduced ourselves tend to cluster around the late 20s and early 30s, and I partly agree (but partly disagree) with Jon about whether or not our generation (What are we? The tail end of Gen. X or the front end of the Millenials?) is "lucky."

It is true that we are blessed with all the tools that Jon mentioned, and there is no doubt we are benefiting from greater general awareness of financial knowledge (compared to 20-30 years ago).

But at the same time, I am highly aware of the societal shift in treating retirement from societal responsibility to personal responsibility. You can see this shift more dramatically in the U.S., but Canada is seeing some of the same trend (e.g. replacing defined benefit plan with defined contribution plan). So, in one sense, many of those wonderful tools Jon speaks of are there as a result of the arguably not-so-wonderful change. The news coverage of this recession (again more so in the U.S. than in Canada) is making us see some of the results of the eroding social protection, and it's not a pretty sight (If you don't swim, you really sink.)
 

·
Registered
Joined
·
2,626 Posts
More on societal shifts.

Our generation is also much more subject to rampant consumerism, the lowest savings rates in history, lower real take home earnings, fewer pension plans, and we are about to inherit some BIG BAD debt.

Obviously this does not apply to many of us on this forum, but I sure have a lot of peers with not a cent to their name, and no plans to get there.
 

·
Registered
Joined
·
73 Posts
I wonder if the Boomer's parents are the best off. A relative & accountant of that generation once described his generation as "stepping on the bottom step of the golden escalator." They grew up post WWI, benefited from the huge increases in the economy generated by WWII, and kept going! The ride was pretty much non-stop. That generation will (and has) transferred a HUGE wealth to the next generation, because they were workers, savers, and investors. They were borne in an age when telegraph was the means to move information around the world, and now interact with their grandchildren on the other side of the globe using live video in the comfort of their den.
 

·
Banned
Joined
·
150 Posts
As a boomer I can agree with that one.

Boomers' parents keep reminding us what financial geniuses they were to be blessed with 6% 25 year mortgages and high interest on their safe bank savings (10% was considered low). They could save a lot because they paid a pittance for their homes and mortgages and their savings multiplied quickly because of the high interest rates.

Boomers on the other hand couldn't save because we were paying 18 and 20% mortgage rates. We had no money left for consumerism :)
 

·
Registered
Joined
·
8 Posts
Another reason

I would say we will also benefit from the lesson that six sigma events like the internet and credit bubbles are possible, and that diversification does not just mean buying stocks from different countries, or a bunch of equity mutual funds.
 

·
Banned
Joined
·
701 Posts
I would say we will also benefit from the lesson that six sigma events like the internet and credit bubbles are possible, and that diversification does not just mean buying stocks from different countries, or a bunch of equity mutual funds.
Or perhaps that bubble's aren't as rare as six sigma events; that the probability curve of corrections have long tails.
 

·
Registered
Joined
·
236 Posts
Based on the ages of people divulging data in the "Introduce Yourself" thread, it seems most of the people posting on this excellent new discussion forum are in their 20s or 30s. Speaking as a 56-year old baby boomer, I'd like to say I envy you for several things:

1.) The new Tax Free Savings Accounts. Clearly, many of you see this as a centerpiece of your retirement planning 20 or 30 years out.

2.) The boomers paid inflated prices for stock for the last 20 or so years.

3.) Internet tools.

4.) Exchange-traded funds (ETFs).

That's my short list: i'm sure there are others.
Compared to myself, you still have lots of time to make another million Jon before age 65

In nine years Jon having the availability & flexibility of 1-4, one can go imaginary wild, especially having the access to so much free information on the www, as well as what is posted by all kinds of people on forums like this one

There is no need to buy financial investing or retirement books these days or to go with any one strategy/technique ... a world of information is wide open & available to everyone, with less dependancy on the so called experts.

In my world the biggest thrill or opportunity has come from the web & the use of my computer software tools
 

·
Registered
Joined
·
160 Posts
My biggest concern is the buy and hold era for North America is over. The boomers invested during the golden years of NA. The technology was revolutionized several times and the US was undeniably the powerhouse of the world. Resources were plenty and productivity leaped.

I am afraid those days are over. The US is showing its ages. Let's say China or India became the next powerhouse, Canada's unique position would be no more whereas Australia would probably benefit enormously. Even the global couch potato portfolio has 75% its asset invested in North American markets and my worry is that this is a fast shrinking market.

Politically, North America is following Europe's steps to the left, which means less productivity improvement and huge inefficiency building up in our society. If NA consumerism collapse (which IMO is a matter of time), we might be a in a lot of troubles. Our scientific society and financial system might be our saving grace, but that remains to be seen.

Unfortunately, both China and India have very fundamental problems which makes the future very cloudy. No idea how to hedge against the decline of NA.
 

·
Banned
Joined
·
150 Posts
The idea that we entered a secular bear market beginning in 2000 that lasts for 17 to 20 years suggests that for the next decade buy and hold will not be profitable and the lows we just experienced will be revisited again years from now. This does not come at a good time for boomers who will likely be chased out of the market before this secular bear ends. They may never get back in and will miss the long term secular bull which will follow and last for most of the boomer retirement years.

Under that scenario the "lucky generation" will have to endure the next decade but after that can buy and hold their way to wealth perhaps until their retirement.
 

·
Banned
Joined
·
701 Posts
The idea that we entered a secular bear market beginning in 2000 that lasts for 17 to 20 years suggests that for the next decade buy and hold will not be profitable and the lows we just experienced will be revisited again years from now.
This would be true if we bought the market. My wife and I never buy the market. We buy companies that churn out profits that are listed at bear-market prices.
 

·
Registered
Joined
·
84 Posts
Leah McLaren's whining screed

Based on the ages of people divulging data in the "Introduce Yourself" thread, it seems most of the people posting on this excellent new discussion forum are in their 20s or 30s. Speaking as a 56-year old baby boomer, I'd like to say I envy you for several things:

1.) The new Tax Free Savings Accounts. Clearly, many of you see this as a centerpiece of your retirement planning 20 or 30 years out. The boomers had nothing like this: just non-registered investments: the gift that keeps on giving (to Government tax coffers) every time you crystalize capital gains or receive dividend or interest income. Yes, we had RRSPs but they're taxable in the end game and the more we have in Defined Benefit pensions, the less we could stash in RRSPs.

2.) The boomers paid inflated prices for stock for the last 20 or so years. You guys get to buy in during an historic bear market, at far more reasonable prices than we ever had.

3.) Internet tools. You have a wealth of web-based free resources, from social networking sites to online news feeds to online discount brokerages to forums like this one.

4.) Exchange-traded funds (ETFs). Another investment product that didn't exist when the boomers started out. You can build tax-efficient (if non-registered) portfolios with very low costs.

That's my short list: i'm sure there are others.

www.wealthyboomer.ca
I find it funny/ironic that Jon's posting how great it is to be a late Gen-Xer/buster/miilenial/whatever on the same day Leah McLaren whining about how baby boomers are putting the screws to future generations.

Now granted, McLaren is not a financial columnist and if she lives like the fiction she writes, she deserves the huge economic smack-down she has coming to her.

However, what isn't funny, when looking at the harsh criticism of McLaren's post is how it is impossible in this country to have a civilized discussion "macro-economic" on how the actions of one generation affect the ability of younger generations to make decisions about their own financial well being. Every argument reverts back to personal, using arguments like: "It's not my fault that the government is spending $x billions more than it takes in, therefore stop blaming my generation for the growing debt."

Looking at this list, and considering the overall theme of McLaren's article - who do you think is really benefiting today on your list? Are 20/30 year olds using TFSAs more than boomers and who's buying stocks and etfs at deflated rates?

I'm curious - are there things that you'd like to list of which you are not envious of? On balance - are you envious or not envious of "younger generations?"
 

·
Banned
Joined
·
150 Posts
Using the figure "a million bucks" and extolling the virtues of buy and hold may give the wrong idea to some new investors reading this thread. Most people have a different idea of what buy and hold means than you do.

Using the annual return percentages you give on your website, while it is true that you did an admiral job investing - the average person who would have invested an S & P 500 index fund (or failed to beat the returns of the index) in the beginning of 2000 and held it till the end of 2008 would have lost their shirts - they would be down almost 40%. Buy and hold would not have worked for the average investor.

You on the other hand would have made a million dollars if you had started with a million dollars - an average 8% return.
 

·
Registered
Joined
·
204 Posts
Discussion Starter · #19 ·
Fersure, the original post wasn't really about envy per se. When the market was tanking in the fall I did a couple of interactive blogs and said that while it was a disaster for near retirees and retirees it was a great chance to build wealth for the younger generation. Then I started to think about some other good things along with it.

That doesn't mean I want to be 17 again, like the current film of the similar name. My daughter's that age and I don't want to go back to that! We all get a crack at youth and, unless you are unfortunate, we all get a crack at middle age and hopefully old age.

Fortunately, they let you start with youth first!
 

·
Registered
Joined
·
759 Posts
I wonder if the Boomer's parents are the best off. A relative & accountant of that generation once described his generation as "stepping on the bottom step of the golden escalator." They grew up post WWI, benefited from the huge increases in the economy generated by WWII, and kept going! The ride was pretty much non-stop. That generation will (and has) transferred a HUGE wealth to the next generation, because they were workers, savers, and investors. They were borne in an age when telegraph was the means to move information around the world, and now interact with their grandchildren on the other side of the globe using live video in the comfort of their den.
But the Boomer's parents had a bunch of kids - sort of a "forced savings" sort of idea. They had the kids, raised them and then had their consumer power push them into good paying jobs and could retire with them kicking in the money for their pensions.
 
1 - 20 of 31 Posts
This is an older thread, you may not receive a response, and could be reviving an old thread. Please consider creating a new thread.
Top