Vol. 10, #10.1 – July 24, 2018 – ALLAN GOLD’S BLOG
Third blog post of series on Elder Law for seniors and their families, particularly spouses, adult children, caregivers, etc.
BLOG ALERT! We have interrupted the business series to bring you in this space another series, this one on Elder Law, another area of specialization of Attorney Gold.
OPEN LETTER TO READERS FROM A. J. GOLD:
As you know, my current subject is retirement income. Last time, I dealt with company pension plans. I know that I said the next blog would be on governmental pensions. It’s coming. But in the interim, I thought it opportune to now run an extra blog. You see, when it comes to personal retirement investing, particularly, in the instance of non-registered investments, I find certain things funny-read peculiar. In each instance, I think the correct course of action is to ask the right question or questions. And as my closing, I offer my 5-Steps to help building a retirement portfolio. I call this piece, “Gold’s Top 10 Peculiarities in Non-Registered Investing (And Gold’s 5-Steps To Help Building a Portfolio) **”.
Note. A.J. Gold is the author of the following books:
“Elder Law in Canada*ELIC*” It’s a ground breaking (2,500+ page) legal text, acquired by legal libraries, Bar Associations, and Law Schools. (For testimonials, excerpts etc, please visit www.practitionerspress.com)
“Estate Document Professor* EDP* (Part of the www.45pluslifehandbook.com* series), informing Canadians everywhere about greater estate preparedness, covering: Last will and testament (will); Power of attorney (POA); Advance medical directive (living will); Trust; Organ donation consent; Estate Inventory and Distribution Survey(For testimonials, excerpts etc, please visit www.practitionerspress.com)
TOPIC & PROPOSITION: “Pensions & Retirement Income (Part #1.1): Making (Non-Registered) Investments To Provide For Retirement**
“Gold’s Top 10 Peculiarities in Non-Registered Investing (And Gold’s 5-Steps To Help Building a Portfolio) **”.
If you ask me, personal retirement investing is a matter of 5 +!0. You see, it’s because, I have come up with 10 peculiarities respecting non-registered investments plus a 5-step plan, helping to build a portfolio. Get ready – here it comes!
Gold’s Top 10 Peculiarities in Non-Registered Investing
When it comes to making (non-registered) investments, with a view to providing for your retirement, isn’t it funny (i.e., peculiar),
1. THAT although you’re an everyday person, with average savings, you get offers from folks pitching penny stocks in a gold or silver mine or some such. And it’s really curious that someone wants to show little old you something, when apparently he/she is a big-time player, from a company with a highfalutin name suggesting success and name dropping customers, suggesting old money. But it could be a load of crap. As for example, this could be a boiler-room style brokerage or the object of a stock price manipulation scheme. That’s why you need to ask yourself: “Is this guy or gal and the mother lode really good or does it just sound that way?” And then you need to make inquiries into the investment and investigate this guy or gal ‘right up the wazoo’.
2. THAT in the financial world, a representative of a company (not part of a financial institution), introduces you to an investment, promising great growth and high dividends, yet seems
a. Put-off, fumbling with words, only able to provide a fuzzy response to your simple question: “How is this possible?”. This is especially curious if he or she has just finished a beautiful presentation, with variety of reports, lots of tables and colourful charts. Obviously, you need to have proof of what he/she is saying. That’s why you must ask even more questions and then listen and evaluate the answers given. If they’re hard to believe, you should dismiss the guy or gal as spewing nonsense. If there is one ‘non answer’ after another, you should see them as useless deflections and go no further. If they’re wrong, you should reject the offer out of hand. In any event, you need to fact check, ‘until the cows come home’, this before writing a check.
b. Way out-of-sync, with the prevailing expert view of today’s market and/or miles above the bank rates currently quoted. This prompts you to ask: “If a bank can’t do it, how can your company do it?” Most times, the answer will be a ‘dipsy-doodle’, requiring that you take it with a grain of salt. In the end, it will likely turn out that you\re eating crow, much too salty for your taste, prompting you to use very salty language describing an unhappy experience.
3. THAT there are still investment units available, although apparently, it’s the opportunity of a lifetime, the chance to ‘get in on the ground floor’ with ‘the best (or greatest) thing since sliced bread’. So you ask yourself: “Why haven’t smart people before me, already snatched them all up?” And you add: “Why am I so lucky?”
4. THAT you have this person in your face, focused on you and your money, wanting to know how much you have and what you’re doing with it, although he/she is a real hot shot, who has a real “hooooot” tip, the proverbial ‘sure thing’ to make money galore. So you ask yourself: “What does he/she need me for?”
5. THAT a guy, who apparently has a sure fire ‘get- rich- quick’ scheme, is not rich and too busy living, the good life, to speak with you. You can’t help but wonder: “Why is this guy so anxious to make me, a complete stranger, rich?”
6. THAT someone offers something for nothing; and it doesn’t make sense to you. So you ask yourself, “What’s the catch?” On not finding one, you cannot help, but think that you’re missing something and that you will pay a price somewhere down the line and it will be a lot bigger than what you are prepared to pay.
7. THAT before signing off on an investment, a salesperson speaks to you of a written contract, quickly flashing it, offering a quick explanation and summing it up as nothing special. But after it’s signed, he/she says that it says what it says and he /she now has nothing to say or do about the terms and conditions.
8. THAT although this investment person aka selling agent says that the deal is so good that it sells itself, he/she resorts to high pressure tactics. That’s why, you need to ask yourself: “Why does he/she feel the need to pressure me?” Of course, he/she is looking to clinch the deal, but maybe he/she really thinks that the deal is not all that good and he/she needs to do something extra in order to close the sale. If you’re smart, you’ll realize that in this deal, “talk is not cheap”, because it’ll probably cost you later big-time! And that should be enough to call everything into question and cause you to pause and take a time-out to think it over. If the deal won’t wait, then pass on it. And yes, it could be one of your fish stories…the big one that got away. But that’s far better than the one about you being devoured by a shark.
9. How your selling agent might go hot and cold. If looking for reassurance, once you’ve made your investment, you might get, in your first call, a cold statement: “I’m sure everything is OK”. But when you call again, you may be frozen out since, apparently, he/she may be in so many meetings and too busy to call you back. This is in contrast to the time beforehand when he/she was “hot-to- trot”, readily available, quickly returning your calls.
10. How the same investment statement could make an investor overly happy and also equally sad, with impending doom and gloom. This could happen when it shows spectacular growth regardless of a difficult economic environment, and increasing returns far better than the going rate. Of course, the gladness is easily understood. But this may soon give way to great alarm. You see, deep down you know that a great return on paper may not be much of a comfort, worrying that in the end, it may not be worth the paper it is written on!
Gold’s 5-Steps To Help Building a Portfolio
When it comes to making investments, with a view to providing for your retirement, here’s my 5 –Step Plan!
1. BE VERY careful – if you have some money. Remember, it’s your money and you deserve to end up with it in your golden years. This means:
1.1 That when presented with an investment opportunity, you need to adopt a strong defensive stance. This calls for you, being skeptical and untrusting. You see, there are a thousand and one bad guys and gals out there who are ready to take your money off your hands. They want you to buy into the dream; but you must assume that the investment is at best, not real or at least, high risk.
1.2 That you should never, go on a hope and dream. Instead, you aspire to be a savvy investor, keeping your feet firmly planted on the ground. This means that you consider making an investment, only after completing a thorough ‘due diligence’ and on being satisfied that the opportunity proves to be ‘as good as it gets’, failing which, it’s a firm “No!”
1.3 That you must tame the greed monster in all of us if you want to get to investment paradise.
1.4 That you must keep saying to yourself… until it’s ringing in your ears, “I’m not going to play games with my retirement. It’s just too important!”
2. THINK before swimming with the sharks. It might get you an adrenalin rush, but you could end up eaten alive. If you really like the excitement of these slippery, man-eaters, here’s a word of advice. TRY going to the aquarium and visiting the shark exhibit. I guarantee that on leaving, (apart from pick pockets), you’ll still have your wallet in tact.
3. TRUST you gut. I agree with the old adage, ‘If it sounds too good to be true, it probably is’. This is correct in the vast majority of instances. But in the other cases, it’s usually only the financial gurus or whiz-kids, who are able to pick out the winners. If you’re an average investor, play it safe …always!
4. PUSH back, if and when, you’re on the receiving end of the hard sell. I want to share an experience of mine. A few years ago, I attended a breakfast in ‘sun & sand ’country, featuring timeshare vacations. Of course, it was high pressure sales. I was struck by how the whole thing was organized, with a salesman sitting beside me at my table, telling me how great everything was and that I must act without delay or otherwise, I would miss out, as there were only a limited number of open spots. Furthermore, in order to take advantage of the promotional discount then available, it was necessary for me to write a check that very day. I pushed back and said “No”. Here’s the epilog. The next day, I found out that there was another breakfast event scheduled. I then figured out that spots were not so scarce and time was not that short. And years later, I heard about something called a ‘timeshare exit team’. I wondered why such a thing existed when timeshares were so wonderful. These findings made me think that my decision was the right one. I think that there’s a lesson there. Don’t you agree?
5. BE relentless in making inquiries if you suspect having made a poor investment decision. SEND a formal demand letter once you’ve determined that you’ve made a bad investment. KNOW that it’s best to immediately put yourself on notice, enumerating the acts and/or omissions, of which you complain. Next, FIGHT like mad in order to get out, as whole, as possible. You see, it’s usually those who are first out, who do better in recovering their money. And BE aware that those still in, if and when everything ultimately collapses, who typically do the worst.
PREVIEW OF NEXT IN THE BLOG SERIES: OAS Pensions (& Retirement Income)
Do you think about your retirement? Do you stress over your pensions? Or are you concerned about the revenue of an elderly loved one. If so, you’re in luck. Next week, I will write a blog post on governmental plans, particularly about the rules that may lessen your monthly check. Interested? See you next time.*
NOTICE – CAUTION -DISCLAIMER
The material provided herein is of a general nature, strictly for informational purposes. The interpretation and analysis is not to be misapplied to a personal situation with a particular set of facts. Under no circumstances, are the herein suggestions and tips, intended to bring a reader to the point of acting or not acting, but instead, the hope is that they are to be a cause for pause and reflection. It is specifically declared that this content is not to be a replacement of or substitution for legal or any other appropriate advice. To the contrary, for more information on these presents, related subjects or any other questions, it is the express recommendation of the author that everyone seek out and consult a qualified professional or competent adviser.
* ©/TM 2005, 2008 Allan Gold, Practitioners’ Press Inc. – ALL RIGHTS RESERVED
** ©/TM 2015, 2016, 2017, 2018 Allan Gold, Practitioners’ Press Inc. – ALL RIGHTS RESERVED