Two weeks ago, I was at a seminar and had the opportunity of listening to a presentation by Mitch Anthony, author of “The New Retirementality: Planning Your Life and Living Your Dreams…at Any Age You Want”. For me, it was a great presentation as it aligned completely with my thoughts and ideas around retirement.
Return on Life (ROL) is getting the best life possible with the money and resource you have! It is a simple concept that challenges the old mentality around retirement. Retirement is not about reaching a particular age, it’s not about hitting a particular net worth target; it’s not about the excessive focus on Return on Investment (ROI). Retirement is all about change, it is a transition and it is very personal. Of course, to retire well requires good planning and guidance. In many cases, it requires changes in habits around money, but unlike the planning in our current market place that is excessively focused on ROI, reaching a certain age bracket and on net worth, a great retirement plan should be value-based.
A value-based plan focuses on generative values across families from generation to generation. Value-based planning goes to the core of our values as humans and takes into consideration not only wealth but also intimacy, spirituality, giving and other core values that are vital to us. Moving from ROI to ROL requires this kind of planning and thinking around wealth and retirement.
Over the last couple of months as I’ve been reflecting on my faith, my life experiences, my values and my businesses I’ve been increasingly drawn to the need to do more, not only for myself and my family/friends but also for my clients and the community. As I reflect on my own struggles and those of my clients around business building and finances in general, I believe there is a lot we can learn from this new perspective on financial and retirement planning.
As you may already know retirement is very personal. My vision for retirement will be different from yours. However, the media and the financial planning industry have created a picture of retirement that often raises fear rather than confidence or inspiration. In fact, in recent surveys, only two out of ten people feel comfortable they can achieve their financial goals. 70% of family owned businesses never make it to the next generation, and for those that do, only half make it to the subsequent generation. In our society today, overall contentment is low, principally because people focus too much on money, often spending it in the wrong places. Bankruptcies amongst seniors (ages 65 and up) is at an all-time high. These are pathetic stats that give me a great deal of concern. So there is urgency to act before it gets worse and that’s why I’ve been investing time and resources in recent months in this area to help change the trend.
Our financial/retirement planning industry is not as regulated as it should be and as a result, there are a lot of Advisors who are not qualified to be providing financial, retirement or investment advice. While there are a few good Financial/Retirement/Investment Advisors, majority of those who have a great need for financial and retirement advice cannot access the services of these Advisors as they often don’t qualify based on arbitrary qualification criteria such as net worth and investible assets. Often times, you need to have a net worth in excess of one million dollars or/and at least $250,000 in investible assets (cash or registered and non-registered investments in securities) to be accepted as a client. As a result, majority of Canadians are left without the help of a qualified Advisor. The only alternative left is to do it yourself. Now, Robo-advisors (Online Wealth Management firms like WealthSimple, etc.) have emerged and are now growing in popularity to meet the needs of these Canadians that have been excluded, based on their net worth, from the services of qualified Advisors.
Fortunately, I am in a profession that gives me some close insights into people’s personal finances and preparedness for retirement. Coupled with current research in this area, my own experience around personal finance and what I’ve seen over the years in the financial affairs of friends and clients I’ve worked with, we will fall short, way short of meeting our retirement needs if we don’t take concrete action towards planning for a better future. The principal reason we will fall short is lack of planning. Often, we underestimate what lies ahead and the financial implications of what it takes to sustain the lifestyle we enjoy today. Just think about it for a moment, if you lose your job or source of income today, how long will it take you to go completely bankrupt? Three months? Six months? Maybe one or two years? Or perhaps you don’t even know, which simply means you don’t have a plan, it could well be less than 3 months.
The good news is that we are doing something about this. We want to change the trend and change the discussions around retirement and financial planning. We want to remove fear and give people the confidence they need as they begin to take meaningful actions toward planning for their future. First, I must admit that I don’t know it all. In fact, if I lose my job today, I will only last a few years before I go totally bankrupt, so I am very much an open-minded student learning as much as I can to get to where I want to be.
So I invite you to join me in this learning journey and together let’s build something we will all be proud of. For those of you on Facebook, you can join the private Facebook Group called “Plan To Retire Well” that I have recently created. For those not on Facebook, you can join My Email List here. Through accountability, objectivity, proactivity, education and meaningful partnerships, we will bring clarity and help each other take actions that will enable you move from where you are today to where you want to be in the future. Ultimately, my goal is to help you live the life you want with the means you already have. More to come…stay tuned!
Ken Green, MBA, CPA, CA, LPA
Partner, GMS Professional Corporation
Chartered Professional Accountants