Description
Book SynopsisStop risking everything to make your investment advisor rich The stock market crash of 2008 proved one thing: traditional retirement planning advice simply doesn''t work. The risks are too enormous. Trusting the stock market is like gambling with your family''s future. But how do you plan for retirement without risking everything? Enough Bull shows you how, with an easy-to-understand, simple-to-apply strategy for a better retirement.
Enough Bull overturns the conventional wisdom about retirement planning, and offers the simple secrets to securing a comfortable retirement. In an accessible and straightforward style, this practical guide explains how it''s possible to save for retirement starting later in life, retire comfortably on less money, and incur less risk. Updated to apply to both the U.S. and Canada, this new second edition offers a message of hope for average, cash-strapped baby boomers by detailing a step-by-step plan for avoiding all the traps
Table of Contents
About the Author xiii
Acknowledgements xv
Introduction 1
The Fall of 2008 1
Angry yet? 3
Why I Wrote this Book 3
Your Retirement Journey 4
Down the River 5
Uh-Oh, it’s the Niagara River 5
Retirement Journey: Plan B 7
Here’s What They Don’t Want You to Know 7
PART ONE: THE ANTIDOTE - A SIX POINT PLAN FOR FINANCIAL FREEDOM 9
Chapter 1—Avoid Personal Financial Disasters 13
The Ponzi Scheme 14
Bernie Madoff 16
Our Very Own Canadian Fraud 18
What Did the “Average” Victim Look Like? 19
How Did Investors Become Involved in Eron? 20
What Steps Did They Take Before Investing? 20
Why Did They Invest? 21
Where Did They Get the Money? 21
The Lessons of Eron 21
Extraordinary Popular Delusions 22
Other Potential Disasters 23
Credit Card Disease 23
Taking Out a Mortgage on Your Home to Invest 24
The Latest Stock Chase 24
Trusting Your “Friends” 24
Mortgage Fraud 24
How to Prevent Personal Financial Disasters 24
Conclusion 25
Chapter 2—You Don’t Need the Stock Market or Mutual Funds 27
The Worldwide Economic Meltdown 27
The United States 29
The Recovery 31
What Caused the Meltdown 32
The Vicious Spiral 34
Who Wants to be Rich? 35
Why You Don’t Need Stocks 36
Why You Don’t Need Mutual Funds - Risk 37
Mutual Fund Risks 38
Those Darn Mutual Fund Fees! 43
1. Fees and Expenses Payable Directly by You 43
2. Fees and Expenses Payable by the Fund or Portfolio 45
We Won’t Get Fooled Again 49
The Canada Deposit Insurance Corporation 50
The Advantages of GICs 54
Why They Try to Make Even GICs Complicated 55
How and Why They Bash GICs 56
The Laddered GIC 57
Getting the Best GIC rates 60
Consider a Deposit Broker 61
Who Regulates Deposit Brokers? 63
Fiscal Agents 64
GIC Rates of the Future 68
Chapter 3—Buy a Home and Pay off the Mortgage 69
Gains in Value are Tax-Free 70
Source of Cash 70
Source of Retirement Funds 70
Should I Buy a House? 71
Can I Afford a House? 72
Gross Debt Service Ratio (GDS) 72
Total Debt Service Ratio (TDS) 72
Just How Much House Can You Afford? 72
Saving For the Down Payment 73
Buying With Less Than 20% Down 74
WARNING: Mortgage Companies Love Selling Mortgage Life Insurance! 74
Pre-Approved Mortgages 76
What if I don’t qualify? 77
Your Credit Report 77
What is in a Credit Report 78
How to Get a Free Copy of Your Credit Report 79
Getting Your Credit Report Online 79
What is a FICO Credit Score? 80
What Affects Your Credit Score? 80
An Important Warning: 80
How to Improve Your Credit Score 81
Your Home as an Investment 82
“The Best Investment I Ever Made” 84
Chapter 4—Reducing Expenses Doesn’t Have to Be Painful 85
Reducing the Interest You Pay 85
The Spending Years 86
Reducing the Amount of the Debt 86
Reducing the Interest Rate on the Debt 88
Debt and the Economy 90
Reducing Taxes 91
How to Calculate Your Tax Bill 91
Happy New Year – Here’s Your Reduced Paycheck 92
Marginal Tax Rates 94
Pension Income Splitting 96
What You Can’t Split 97
How to Split Pension Income 98
Benefits of Splitting Pension Income 99
How Much Pension Income to Transfer 100
How to Claim the Pension Income Amount 101
Spousal RRSPs: Still a Useful Tool 101
Self-Employment – King of the Income Splitters 103
But I Don’t Know Anything About Being Self-Employed 106
Self-Employment Does Not Have to Be Complicated 106
Conclusion 107
Chapter 5—Forget RRSPs Until Your Debt is Paid Off (The Opportunity Zone) 109
Pretend the Stock Market Does Not Exist 109
The RRSP Fallacy 110
Compound This 113
The Tax Turbo-Charged RRSP 113
A Word about Your RRSP Limit 113
Do You Trust the Stock Market? 114
Those Ugly Fees 115
Don’t Put All Your Eggs in One Basket 115
Conclusion 116
Chapter 6—You May Not Need an Investment Advisor 117
My Story 118
What I Did Next 120
What to Look for in an Investment Advisor 121
For Those Who Have a Lousy Advisor 121
No Advisor is Better than a Bad One 122
Henry’s Story 122
Conclusion 127
PART TWO: THE DETAILS 129
Chapter 7—The Canada Pension Plan 131
What is the Canada Pension Plan? 131
How they Calculate CPP premiums 132
How they Calculate the CPP Pension 132
How the CPP adjusts for Inflation: The YMPE 132
CPP Pension 133
The New CPP Rules 134
Early election penalty 134
Deferring election premium 135
Removal of work cessation test 135
Post-Retirement Benefit (PRB) 135
Drop-out Provision 136
How to Apply for your CPP Pension 136
My Service Canada Account 138
How to Register for My Service Canada Account 138
How to Calculate your CPP Retirement Pension 140
Money Saving Tip – CPP Pension Sharing 146
CPP Pension Sharing Example 146
When Should I Elect to Receive CPP? 148
Step 1 149
Step 2 149
Step 3 149
Step 4 149
Warnings 149
Catch #1 150
Catch #2 150
Catch #3 151
Conclusion 151
Chapter 8—The Money Maximizer 153
Why Work Against the Taxman? 153
The Value of Time 154
The Time Value of Money 155
The Money Maximizer Spreadsheet 155
Meet Pat and Jane 157
Pat and Jane: The Assumptions 161
Pat and Jane: The Results 162
Pat and Jane Try Income Splitting 163
Putting the RRSP “Start Late” Theory to the Test 164
Pat’s Turbo-Charged RRSP 166
Conclusion 167
Chapter 9—Retiring Without the Stock Market 169
The Devastating Effect of the Crash 170
Are You Going to Throw Good Money after Bad? 170
You Can Still Retire Well 171
1. CPP Pension Splitting 173
2. Electing CPP early 173
3. RRSP/RRIF Income Splitting 173
4. Extending Your Retirement Date 173
Other Ideas 174
Conclusion 174
Chapter 10—You May Not Need an RRSP 175
A Common Misconception 175
Alternatives to RRSPs 175
Investing Outside Versus Inside an RRSP 176
Investing in Real Estate 179
Investing in Your Own Business 180
Invest in a Tax Free Savings Account 180
The TFSA as an Income Splitter 182
Opportunity for Retirees 182
Does Anyone Have $5,500 Outside a Registered Account? 183
Why the TFSA is Better than an RRSP for Home Buyers 183
The RRSP Home Buyers’ Plan 184
Keeping Profits in a Corporation 185
Conclusion 185
Chapter 11—The Antidote Summary 187
1. Avoid Personal Financial Disasters 187
2. You Don’t Need the Stock Market or Mutual Funds 187
3. Buy a Home and Pay Off the Mortgage 188
4. Reducing Expenses Doesn’t have to be Painful 188
5. Forget RRSPs Until Your Debt is Paid Off (the Opportunity Zone) 188
6. Ask Yourself if You Really Need an Investment Advisor 188
Index 189
