More Money Podcast - 194 Millennial Retirement Planning: How to Save Enough - Ron Haik, Financial Planner at Nicola Wealth

Episode Date: April 24, 2019

A topic that I think we millennials all need to focus more on is retirement planning. And the reason I think so is because traditionally retirement planning seemed like something for older generations, and what us younger generations needed to focus on was debt-repayment and homeownership. Listen, I know us millennials have a lot going on, but NOW is the time to start planning for retirement, not when we’re nearing it. That’s why I have Ron Haik, Senior Financial Planner & Regional Manager, Ontario at Nicola Wealth on the show to talk all about how to plan for retirement in Canada and as a millennial. Here are some things we discussed. Where Do You Even Start? A common question I get, because planning for retirement either seems too simple or too complicated. Where you start is determining what your retirement will look like. Everyone’s retirement is different, but essentially you need to answer what kind of life do you want to lead after you’ve finished your full-time career. Retirement may still include working, or maybe you want to volunteer, travel the world, or help raise your grandkids. Whatever it is, write it down then figure out how much in today’s dollars you’ll need as an annual income in order to afford that life. TFSAs Don’t Get Enough Attention For years, RRSPs were given all the attention. Although they are great vehicles for housing your investments for retirement, TFSAs are great too. They may even be better depending on your situation. You see, with RRSPs, you get that wonderful tax deduction that lowers you tax bill while allowing your money to grow tax free. But, once you withdraw funds from your RRSP, that’s when you’ve got to pay tax on that money. That also means you need make sure you’ve included income tax in your retirement budget. With a TFSA, you don’t get a tax deduction when you contribute, but when you withdraw those funds, you don’t have to pay tax either. Things to think about when considering what account type to put your investments into. Real Estate Investing Is Great, But Diversification Is Better I recently did a talk on investing for a retreat, and many people there voiced how they were more comfortable with real estate investing because it made more sense to them. You were investing in something tangible and they could wrap their heads around the concept better. Real estate investing is great, but you should never put your eggs in one basket. Real estate should be a portion of your overall retirement portfolio, not the entire thing. Don’t Set and Forget Your Retirement Plan Once you’ve built a retirement plan, it’s not something you just put somewhere to gather dust. Your life and goals change, and so will your retirement plan with them. Make sure to revisit your retirement plan every 6 to 12 months. For full episode show notes visit https://jessicamoorhouse.com/194 Learn more about your ad choices. Visit megaphone.fm/adchoices

Hello, hello, hello, and welcome to episode 194 of the Mo Money Podcast. I'm your host, Jessica Morehouse. I'm so excited to have you back for another episode. And this one is going to be a good one. So I am interviewing Ron Haake. He works at Nicola Wealth. He's the Senior Financial Planner and Regional Manager of Ontario at Nicola Wealth. So Nicola Wealth has their own podcast. I was a guest on their show. We had a great time talking about just millennials and money because typically their clients are not really millennials or maybe the parents of millennials. So it was a really interesting chat just about the different generations and how we think about money and manage money and

how we can communicate better. So I wanted to have Ron on the show here so we can talk more about specifically millennials and retirement planning. Because, you know, I've had a few guests on the show recently and, you know, in the past about retirement planning, but I still feel like whenever you're looking for information about retirement planning, it really is geared to people that are, you know, Gen Xers, baby boomers, things like that. I feel like it's kind of hard to find information specifically for people like us. And it is something that we all need to start thinking about. We need to start saving for retirement because, you know, we don't have the luxury of all those, you know, pensions that our parents or grandparents have. I mean, if you have one, good for you. But most of us, we'll have to basically self-fund our entire retirement and obviously get some

supplementation through government programs. And it's just like a lot to know. And we need to start thinking and planning right now while we're young-ish. And so that's why I've got Ron on the show to talk about all things retirement planning and also specific to Canadians, which is going to be great. So you're going to love this episode. But before we get to that interview with Ron, here's just a few words about this episode's sponsor. This episode of the Momenty podcast is sponsored by the Scotia Momentum Visa Infinite card. What kind of cash back are you getting with your credit cards?

Not sure? Let's review and see if you could be earning more. The Scotia Momentum Visa Infinite card is offering new cardholders 10% cash back on everyday purchases for the first three months, up to $2,000 in total purchases, plus the annual fee waived for the first year. That's a value of up to $299 in your first year. After the first three months, you'll earn 4% cash back on gas and groceries, 2% cash back on drugstore purchases and recurring bill payments, and 1% cash back on everything else you spend on your card. This is why this card received MoneySense's Best Cash Back Card with Fees award for two years in a row. Want to learn more about the Scotia Momentum Visa Infinite card and this limited time offer? This offer expires April 30th, 2019. Just visit jessicamorehouse.com

slash Scotia or visit the show notes for this episode. Once again, that's jessicamorehouse.com slash Scotia or check out the show notes for this episode. Once again, that's jessicamorehouse.com slash Scotia, or check out the show notes for this episode. Thank you, Ron, for joining me on the Mo Money Podcast. I'm excited to have you on the show after I was able to get on your show and we had such a wonderful chat. Absolutely. Thank you so much for having me and I'm looking forward to following up on our great chat of a couple of weeks ago. Yeah. So for people just listening, and I'll include this in the show notes, I was on your podcast. What's that podcast called and where can people find it just if people want to do some snooping before they dive into this episode? So that podcast will be on the Nicola Wealth channels and we'll be happy to send you a link to you, Jessica, so that you can include it on

your website as well. Absolutely. So for that episode, we largely talked about how to kind of talk if you're, you know, Gen X or a baby boomer, how to talk to your millennial children about money management or, you know, just how to set them up for success when you are kind of in that older generation and trying to understand the minds of young people. So I'm glad I could have, I hope that I kind of shed some light on that. It was an interesting conversation. I don't think I've ever really talked to anyone about lots of that stuff. So it's nice to have you on the show. So we can kind of talk more about the other side of things. You know, a lot of my listeners are younger and they want to prepare. They of my listeners are younger and they're listening

because they actively want to do something about their financial situation. They may not have necessarily learned all the steps to do that. But I definitely want to dive in specifically about more talking about investing in retirement planning because I think a lot of us, especially when you're in your 20s and 30s, you're very much focused on kind of those present needs such as, you know, home ownership, saving up to buy your first home, paying off your student loans or your consumer debts, maybe have a line of credit or credit card and you just need to crush that and starting to kind of build up some savings like an emergency fund and some things like that. It's usually

once you've kind of dealt with all those things, you're ready to kind of start thinking about your future plans, investing for the long term and retirement planning. But what I have noticed by talking to a lot of people my age is they have no idea what the heck that means. They don't know what retirement planning really looks like. So to start, I'd love to learn a little bit more about you and your kind of experience, because I know you're kind of an expert in this field. And then we can kind of chat about what overall does retirement planning mean kind of from your perspective, I suppose. I think I do have a little bit more experience. I'm not of the demographic that's probably

listening to this podcast. I'm a few years older, but I'm a Gen Xer. And so I'm not that far removed from my 30s and understanding in my 20s and understanding, oh, that's what I should have done, right? Or what could I, you know, had I been able to write a note to my future self, this is what I would have said. And so when you talk about retirement planning and investing, I think it's really about investing the time. Retirement planning really is about taking action to reach your retirement income goals. But what the heck does that mean, Ron? I mean, simply put, it's thinking about something so far down the road, you can't even think about it today. It's an intangible thing. John Lennon, and I know that despite my age, I know everybody listening should know who John

Lennon is. Oh my gosh, yes, they should. And if they don't, they should listen to some of the music after we're done. But in the, I think it was 1982, he came out with an album called Double Fantasy. And there was a lyric in one of the songs, Beautiful Boy was the name. And one of the lyrics said, life is what happens when you're busy making plans. And it's so true. It's like, think about our listeners, ourselves. Our plans are, I'm going to go to school, and I'm going to get a job, and I'm going to pay off my debt. And then maybe I'll get married, or maybe I'll find somebody to live

with and maybe we'll have kids in the house. Whatever that plan is, life then throws, you know, curve balls at you. Some good and some, you know, not expected. And it's about making some purposeful planning decisions along the way. And knowing that you are going to get derailed sometimes. And it's by planning ahead that you can invest the time now to make sure that some of the outcomes are ones that you can control. As opposed to allowing life to dictate to you, you're dictating to life. Yeah. And I think, yeah, like you mentioned, it's so far into the future. And you can read so many books and so many articles that say, start investing early because it will eventually lead you to a big amount of money that you do need to retire on, $1 million or $2 million. Those numbers sound crazy. And I think a lot of us have never, because we haven't maybe started investing yet, or we have, but it's only been a few years, So we don't really see, you know, Oh, we haven't made that much money off our money yet. So it just, it almost seems

like, yeah, sure. Like it's, it's, it's something that it's hard to really grasp or visualize. I guess the only way to really do that is to maybe talk to your parents or your grandparents and look at, you know, where did they start from and how did they end up to where they were? But it's, it's, I feel like for younger people, it's very hard to really believe. You're like, yeah, sure. I'm sure this, you know, me, you know, starting with $1,000 and then putting a couple hundred dollars in my investment account every month, we'll eventually get to a million dollars. Yeah, we'll see about that. I doubt that very much. And that's really born out of the experience that, you know, this generation has had, right?

Remember the great promise. You're going to go to school. You're going to get a career. And then you're going to graduate. You're going to get this fantastic job. And then something called the Great Recession comes along. And people are like, wow, what do you mean? I can't pay off my student loans like you promised me.

Will the Canada pension plan be there for me? All these things are going through your head. And that's because we as humans, we're not wired biologically to think about 40 years from now. If you think about us as human beings, the fundamental of whether you come from Adam and Eve or whether there's creationism, take that aside. Millennia's ago, we had immediate needs. And that was, we want to feed our families, we want roof over our head, and we want peace and security. And what that meant was not thinking about the future, but thinking about the immediate needs. And so the idea of sacrificing today for something so intangible far down the road, where they may not have even measured time, right? Time is a human construct. So when you look

at those things, how we now in today's 21st century, plan and ensure that we have what we need in the future is really important. So you mentioned it at the beginning of that piece, which was, you know, look to your parents, look to your grandparents. And that's one way of doing it. And that's traditionally the way it has been done. But we're so lucky that we live in an age where today, there is a lot of information out there and some of it is better than others. You had a wonderful fellow on one of your podcasts that I had an opportunity to listen to. And those who are listening today who haven't heard it, I would encourage you to go back to episode 180 and listen to the episode with Tim Thompson from Fisco. There are a lot of great resources. Some of them are unbiased like Fisco

and Government of Canada, the Canadian Financial Planning Standards Council, the Bank of Canada. These are all great resources out there. So the question is, where does one start? Yes. Yeah. Where does one start? Where should we start? So if we take the analogy of a marathon or any long-term race, you don't run 42 kilometers or any significant distance without taking that first step. The first step is just asking questions and know that there's no such thing as a dumb question.

And any advisor that looks at you like you're, you know, you're foolish for asking that question, that's not an advisor you should be working with. Because all of us, whether we're seasoned professionals as myself or whether I'm, you know, a new person learning about investing and financial planning, all of us, we're newbies and have to ask these questions. So it's important that you reach out, get the kind of information that is customized to you early on. Ask those questions. So some of the questions that are important are, what are my goals? Well, you talked about earlier, saving for a house, vacation, kids, do I want to go back to school?

And maybe retirement at some point. Some people may want to retire, but that's, again, a 40-year plan that we want to put in place here. And so while the first step is we want to save, the questions really is for what? What purpose? Because you have, like all of us, every single one of us, we have multiple competing priorities. So what's important to you might be very different than the person sitting to your left who might make the same amount of money doing the same role, come from the same background, but it's you as an individual and it's your uniqueness. That's what has to shine through in whatever plan you put together, either on your own or with the professional's help.

Yeah, absolutely. I think from all the people I've talked to on the show, it always does kind of seem to go back to just a prime example. Recently, I did a workshop at one of the Toronto Public Libraries. And one of the questions I got at the end was, I didn't really have anything to do with what I just talked about, but someone just had a question like, I have some money. How can I double it? How should I invest it? I'm like, let's unpack that because I think a lot of people may not even be asking the right questions, but I can kind of see where their logic is. So like you said, it's like, let's start with figuring out what your savings goals are first, and then figure out what's a good strategy for all of those goals to reach,

you know, to attain retirement at 65 or 55 or whatever the case is. But I think a lot of us jump kind of a few steps or several steps to be like, I don't know, I just know I need to invest and I want to make as much money as possible. So what would you recommend to invest? I'm like, it's not as easy as just saying invest in this product and you'll be just fine. No, you're absolutely right. It's about customizing it to your priorities. There is no one size fits all. Risk is a four letter word, and how you define that risk really comes down to your experience. Think about going to Starbucks, for example. If I want a cup of coffee, there's lots of great coffee places, but what makes Starbucks as good as it is, is you can have the drink any

way you want it. For me personally, I like a venti chai latte, nonfat, seven pump, extra foam. So I'm going to pay... Wow. That's a lot of caffeine. But it allows that customization. I'm willing to pay a little bit more for it, right? Or I could go down the street to my diner, you know, give me a coffee, double, double. I'll pay a little bit less. And there isn't one that's right or wrong. That's not the approach here. You know, you can really see that that customization is what makes the experience unique. They listen to me.

They hear what I want. They might make a suggestion. And ultimately, I'm going to come out with what I want with the guidance of a professional. It's no different in any service industry, including wealth management, financial planning, and investment management. If your goal, as you said, is, hey, I want to double my money. Okay, my job then as a planner is to say, okay, sure, let's look at that. And let's look at what the attendant risks are with that. So if you're willing to double your money, are you willing to lose half of it as well?

It's the inverse correlation. In 2008, when the stock market went down on average 50%. So think about an individual who had $10,000. If they wanted to double their money, and they went from 10,000 to 5,000, because the market halved, they would then need to get 100% on their 5,000, they would need to double just to break even. So a lot of people, they want, give me all that juice on the upside. I'm happy to take the risk on the upside. It's, are you cognizant and comfortable to take the risk on the downside? Because whether you have 10,000, 100,000, or a million, the number is irrelevant.

It's all you've got in the world. Then you want to make sure that you're putting it towards that goal. And there is no – yes, we have those Cinderella stories, those unicorns as we call them, where people will double their money overnight or they get into different segments of the market and they're lucky. I call them cocktail discussions. You go around and you're at the bar and people say, yeah, hey, I doubled my money. No one says, guess what, Jessica? I had an awful year last year.

I lost half my money. No one tells you that. So what we want to do when we are working with professionals is make sure they understand what we think is risk. It's different for everybody. For one person, risk might be stock versus a bond. And for some people, just investing in any stock might be a risk, whereas for some people, there are different elements of risk. So we can get comfortable with basic terminology. That's one way to start. Investopedia, for any of those who were interested, Investopedia is a great way to start. Just to get the basic terminology, what's the difference between an RRSP and a TFSA or a RRIF? I mean, sometimes in the investment industry, we tend to talk in acronyms

and that's not really doing anyone a favor. So we want to customize it. And one of the areas that you talked about and come back to is getting that information from those who've gone there before us. Right. And it might be our parents, it might be our grandparents, it might be our parents it might be our grandparents it might be our peers it might be the internet if you were going to a great trip in bali you'd probably do a lot of research and spend some time finding all the best spots to go to and and the maybe the cheapest way or the most unique experiences it's the same thing when it comes to your investments what works for you and getting that information. So start small would be my first suggestion to anybody. Yeah. No, like you said, I feel like honestly, if you talk to anybody, they probably do way more research on their next trip than their investment portfolio. Because I

mean, I work with clients all the time and what I can provide is doing an audit of what they're currently doing with their investments, what kind of mutual funds they have, what kind of stuff is in their portfolio. And most of the time they have no idea. And I'm like, how could you be investing thousands of dollars in something you don't know? And yet I know for a fact that you've done a ton of research on your next trip. So you have the best, you know, you're on budget and you're going to have the best time ever. I don't know whether it's just because doing research for a trip is more exciting or more accessible, because more people talk about that kind of stuff. Whereas investing just seems like this whole other world and it's scary. And there's just a lot of emotion involved.

Do you feel like when you are talking with clients that it's just the heart when it's especially if they're just kind of getting started or they want to do something completely different with their portfolio because even though they've invested they never really completely understood what they were doing there's just a lot of emotion involved and a lot of fear and a lot of a lot of psychology. I think you're absolutely right behavioral triggersal triggers, if you will. When you think about all of us, we live in an age and a time of what we're looking for immediate gratification. I want to turn that 10,000 into 100,000 overnight. I bought X stock and it doubled. Most successful companies, most successful businesses are built over 10, 20, 30, 40 years.

And it takes that same approach when it comes to investing for your retirement. The clients and people that I have seen who can retire comfortably, whether that's at 38, 58, or 78, whatever that number is, they were very purposeful in their approach to retirement. They treated it no different than any other goal and objective. And it's important that, first of all, that you write it down. What is your objective? Yeah. Do you want to retire, but retire making, you know, do you want $100,000 a year on your portfolio or do you want $50,000 a year? If you want to live in the city of Toronto, or do you want 50,000 a year? If you want to live in the city of Toronto or do you want to live in a small town in Ontario or do you want to retire somewhere exotic? These are all factors that will play into it. So by writing down the goal and having someone to hold you accountable, now that could be an advisor, but it could also be your partner, your colleague, your

spouse, girlfriend, whatever it might be. And by sharing those discussions, I think by having two people working towards that goal, there's a lot of buy-in. It's sort of like, you know, how many of us have started New Year's resolution and said, oh, I'm going to go to the gym, you know, and at first we can do it on our own because we're so motivated. But to continue to go on a regular basis or any resolution requires sometimes a trainer or a partner, someone to help us. And really, that's the role you play, Jessica, and the role that I play, which is we're your personal trainer for your financial assets, if you will. We'll keep you on the straight and narrow. And so when you're looking at, I've done some research and looked at some of the statistics of your cohort. And it's not surprising that about half don't have an RRSP. And when it comes to deciding between an RRSP and a TFSA, about half opt for a TFSA. Now, that is something that I want everybody

listening to understand that a tax-free savings account is an amazing way to start saving and actually provides different benefits. It's also for retirement, but it's a way to start small and it's very accessible. So I think anybody who's thinking about retiring, thinking about saving for a long-term goal, there are benefits to both an RSP and a TFSA. And they're not alone. As I said, over half of the cohort haven't started saving. And it's no different than many boomers or Gen Xs would have been at your age. So, you know, it's easy to look at a boomer today and see the trappings of affluence and say,

oh, they're driving this kind of car or they're living in this kind of house. But I can tell you that in the 1970s, they were living in apartment buildings, no different than people living in condos. You know, they were, maybe they had one car in the family. So these are the things that every generation has faced before them. And working with the cohort of Gen X and millennials is very

similar. So it's get those resources, get the advisors like yourself on board, engage professionals, ask questions, and take ownership. It's okay to delegate, but do not abdicate your financial well-being. Yeah, absolutely. I got a question recently, and I wonder if actually you can shed some light on it. Someone asked me, and I actually find this pretty frequently sometimes when I talk to people about investing, they're like, you know what, I'm actually more comfortable with real estate investing than investing in the stock market for whatever reason. But I'm not sure what's a good ratio, how much should I be investing in real estate and how much percentage the other portfolio or how much liquid investment should I have in retirement?

Basically, they were just wondering, am I stupid for investing most of my portfolio in real estate? Is this something that you've ever come across? That's a great question. And it speaks to people's comfort level. Again, I've seen individuals, both my cohorts, older, younger, only invest in real estate. But it was a risk that they were comfortable with. They first understood the risk. They said, okay, well, what's the worst case scenario? Always start with that. What's the worst case scenario? Because once in a blue moon, that will happen. And there was a recent article, a news story about cryptocurrency and what was the worst case scenario, unfortunately transpired, which was people can't access their cryptocurrency. So in effect, at this point, they've lost everything. Now, I'm not saying

that that's the case with real estate or on any other investment. The story is really to highlight what is the worst case scenario and can I handle that? Forget the upside because certainly we all want that. So real estate is a great way of investing for wealth. I mean, many of our clients and in fact, the way we invest for our clients, about 23% of our clients' portfolios are invested in real estate as part of an overall financial plan. But it always started with a plan. It's not, we're going to invest in real estate and then let's do your plan. It's, what are your goals and objectives? So whether you're, you know, what we'll consider an affluent investor or whether you're an individual starting out, the wonderful thing about technology today is the democratization of investing. And you don't need to have a million dollars to invest in, like a millionaire.

You can invest in a lot of these pools in an online format. But again, do you understand the risk you're taking? Are you working with someone to help you understand that? Or have you acquired the resident and required knowledge to be able to manage it on your own? You can certainly do it on your own if you're comfortable with that. But it's the behavior when people panic, when the market's correct, and people don't have that sort of guidance that sometimes holds them back. Another question I get pretty frequently is, I think, and this kind of is tied into just the fear of investing your money, especially for retirement, is how do I know if I've saved up enough? People are worried that they'll save up an amount that they believe was the right amount, but they're like, what if I live to 100, but I only saved enough money to live to 90?

Because we're living a lot longer. Do you ever get people kind of panicked, being like, what if I run out of money? It's, the important thing is to plan and not set it and forget it. So if I met with someone today, regardless of what age they were at, whether they were 85 or 25, we would put together a plan.

And then we would revisit that plan every six to 12 months. Things change. Remember I said earlier, life is what happens when you're busy making plans. John Lennon said that. He's much smarter than I ever was. And so when you look at that, it was about, okay, we set a plan in motion and things change. And I think maybe I'll tell you a quick personal story here. I was 20, I just remember how old I was.

I was 30 years young and found out my wife and I were going to have our first child and went through the same anxieties. I'm sure everybody did. Oh my God, how are we going to pay for this? Is the house big enough? What about if we want to go to private school? And all these things, am I going to be a fit parent? And you go to the first ultrasound and you see the heartbeat and you get all that information. But my wife and I found out something a little different. And that is we were expecting twins.

Oh, gosh. So if you can imagine that all of a sudden, this anxiety that I might have had around having one child is, holy moly, I don't think that's the word I used. But in case there are young children listening, holy moly, how am I going to pay for two kids at once? And today I fast forward, I have four children, two of which the two oldest are in university right now, and I'm paying for it. And it was, you know, once the shock comes through, it was, okay, here's the goal and the objective. The goal and the objective is to raise these kids well, maybe give them an opportunity to go to post-secondary if that's what they want, any other things along the way that we may have budgeted for. But it meant sacrificing.

And when I say sacrificing, it doesn't mean that I stopped going out to restaurants or we sheltered down and never ate anything but ramen noodles. There's nothing wrong with ramen. I still eat them today. But we've heard the words live within your means. And I believe that people should actually live below their means. And what that does is creates a cushion. It means that I've saved a little bit in the event of an emergency or, you know, twins or anything like that. But it means you are saving. If you're living within

your means, that's great. You're on budget, you're on track. But it means you are saving. If you're living within your means, that's great. You're on budget, you're on track. But it's important to live within your means. And a key component of that is saving right off the bat. So most of us, if we're working on any salaried or commissioned or variable gig economy or whatever it is we're doing, when we get paid, we should put 10% away right away. Without even we get paid, we should put 10% away right away. Without even thinking about it, we should put 10% away into an investment strategy, a savings strategy. Whether it's a TFSA or an RRSP, you can discuss that with your advisor. But I guarantee you, we're not going to miss that 10%. Because if it's in the bank account,

we'll see it and we'll say, okay, I can afford X or I can afford Y. And we won't think to automatically put that away. So a great strategy is to have your bank or whomever you deal with, take 10% of your earnings on a regular basis and just put that aside. And then you work with your planner, your advisor to put a goal together or a strategy together around your goal in terms of savings. When you say it, it sounds so simple. It could be just because you've been doing this for a while, but a lot of the time I feel like, and sometimes even me when I feel overwhelmed by information, I just feel like is everything that I think, am I doing it right? And that's actually one of the most common questions I get from millennials think, am I doing it right? And that's actually one of the

most common questions I get from millennials is, am I doing it right? What is your answer when someone, like no matter what the age, you know, you feel like you've been working with them, they've got a plan and they still kind of don't have that sense that they know what's going on? I would say that if you're asking me that question, am I doing it right? Then my answer is automatically yes. Because it means you're asking me that question, am I doing it right? Then my answer is automatically yes. Okay. Because it means you're doing something. Yeah. So can you be doing it differently? Maybe. Can you be doing it better? Perhaps. But you're doing it. You're doing something. You've taken ownership. You've taken the first step, which is the most critical step, you know, going back to the gym analogy, you know,

someone going to show you how to run properly for 42 kilometers, not until you've actually taken that first step on the treadmill or out on the pavement, then we can work with little mechanics. Everything else is DTIPS. But, you know, that's a great question to ask people, whether it's an advisor, but, you know, ask your parents if you've got parents and grandparents, because I'll guarantee you, you know, sometimes we think our parents have their act together. My parents got it all figured out. I know as teenagers, we never thought our parents had their stuff together. But as we age, we all appreciate the maybe that our parents,

hey, you know what, they didn't do such a bad job. Because, you know, you're alive, and you're, you're breathing. So they must have fed you. Okay. But our parents don't always have their act together. But what it allows us to do, you know, is start to see our parents as infallible, which is fine, which is okay. Not just when it comes to their finances. Parents also don't want to appear uninformed. So you can ask in a non-threatening way, hey, dad, I need some help planning for my retirement or a house purchase. What are you doing? Who are you using? What that will do is help you and them build a shared sense of a goal. Oh, my God, I'm so happy, Jessica, that you're looking to save for your retirement.

Yes, let me introduce you to the firm I use. You might not end up using the same advisor. You might not even use the same firm, but you've started that conversation. And over time, you'll be able to slowly become a partner in this with your parents and again doesn't have to be a parent it could be a mentor work it could be a friend it's about sharing the journey and recognizing that others are going through this with you or have gone through this in advance or maybe even if they're older, maybe they're just going through it right now because they didn't have the guidance maybe that you do.

Yeah. No, I feel like definitely we probably don't talk to our elders, not elders, but people that are parents or older mentors or stuff enough about these things. I feel like a lot, I mean, I'm guilty of this too, talking to my peers, which is helpful, but it's also good to know what other generations, like I never talked to my grandparents about how they were able to, you know, live in retirement. And they were retired for decades.

I never asked them. And now I'm like, now I wish I had. So my kind of next question is, and I think this is because we talk a lot about saving for retirement, but a lot of us younger people don't really know what that life looks like. For me, my parents are still working. They are not retired yet, so I don't quite know. What does retirement look like? And how does, like, let's talk about some of the mechanics. Once you are ready to retire,

how do you get that money out of your accounts? I think these are simple things to you, but I think a lot of people have never really thought about it. So two great questions, both interconnected. What does retirement look like? And how do I fund it essentially? Right? So the first question, what does retirement look like? The answer is it depends. And it depends on the individual. So for some people, retirement means I want to travel the world and I want to do so first class. And I'm going to go to every continent, every country, and I'm going to cycle. So I had a former client many years ago. His retirement was literally getting on a bicycle and cycling the world. And he cycled at one point from Istanbul

to Shanghai over several, several months. I think it might've been something like eight months through some very inhospitable terrain, we'll call it. But that was his life goal. So he had planned for that for years in advance. He knew what it was going to cost. He did the research. Going back to what you talked about earlier, you know, you're planning a vacation. Planning for retirement is the same thing.

What do I want to do when I don't, quote unquote, have to work? And retirement could mean I'm still working because I love what I do. Many people, and I think a lot of the boomers are not retiring, not because of financial limitations, but because they said, okay, well, what do I do? Canada pension plan was set up initially with the idea of people living until, you know, 69 years young. So they retired 65 and they'd get collect CPP for about four years. And then Stats Canada said that's when the average person was going to pass away. into their 90s well and healthy and this younger demographic, this generation of millennials and Gen Xers and so forth, they have the information, the knowledge to know, hey, if I take care of my body, whether it's to eat right, whether it's to be mindful, whether it's to exercise, if I take care of my body, my body is going to be around for a lot longer. And so to your last question, which is how do I fund retirement through multiple sources? So there will be the Canada

pension plan, which for most millennials will be expanded by the time they retire. So it is not that the government's going to take care of us. There will be some social safety net, but don't rely on them to 100% take care of you. Exactly. But in addition, how else are we going to fund our retirement? And that is the same question that is in front of every individual, regardless of their age, their demographic. And it is, what do I need to live in retirement in terms of what my retirement looks like. And then it's your savings are going to fund your retirement. So what you do today is going to greatly impact your lifestyle 40 years from now. And again, that's hard to see today. The choices that we make today will impact us. Now, the funny thing is, it's not the choices of investments that typically will impact us. Now, the funny thing is, it's not the choices of investments that typically will impact us. It's the choice whether we invest or not. Because 92% roughly is the asset, what we'll call the asset allocation, the determining factor of where you put your money is less important than actually getting the money in.

And so you're going to have retirement savings plans, you're going to have TFSAs. If you're lucky enough to work in a company that has a group contribution or a group benefit pension plan of some kind, that might help. But ultimately, it's going to rely on you, you might end up using your real estate as an investment. So what I've seen with a lot of people is they've been fortunate to live and own a home in Toronto that's depreciated in value. They've sold it and they've retired to a an area which is is less costly and they can still fulfill their needs in maybe a smaller town outside of Toronto because maybe they don't need to go to the opera, you know, and they're just fine. And with the global travel that we have, with the health care

that we have in Canada, there's lots of opportunities to decide where you're going to retire. The real thing is how you're going to fund it. And that starts with today. And that starts with just put 10% of your paycheck away. Every time you get that, start to ask the question, start to accumulate. And then over time, your planner, like yourself, Jessica, you're going to work with these people. And you're going to say, okay, based on your needs, you should be drawing a little bit here, a little bit there in retirement. And always updating that plan is quite important. Yes, yes. I think a lot of'm just kind of realizing that it's so kind of anxiety inducing is because it's so important.

It's like, if you don't do something now, you will, well, you won't have enough to save on. Just like you said, it's like, who's going to, how are you going to fund retirement? Well, it's up to you. You have to do it. And I think some people don't realize that it's like, it's not your mom and dad that's going to help you or it's not the government that's going to save you. It's like, no, it's literally up to you. If you don't save enough money, you're going to be living on a very low income in retirement and no one really plans or wants to do that. So let's, let's not do that. Let's plan right now so we don't have to do that. Right. I mean, you think about, you know, did you ever have a project in high school or an essay

in university or anything like that in college and nobody was writing it for you? Here's the deadline, you know, and the deadline was three weeks from now or three months from now. You got your syllabus. You got all the information. It's all in front of you. Now go out and do the research in order to write that essay. And the deadline is three months from now. And Jessica, if you don't finish that in three months, the consequence will be X, whatever that consequence is, a low mark,

failure. And you sometimes with hindsight can say, oh, had I done that earlier, had I started earlier, I might have, you know, come out with a better outcome. Maybe I wouldn't have had as much anxiety. I think ultimately, we all go through, we have to go through our own learning process ourselves. And you can read all the books, and you can, you know, study all you want. But until you take ownership of this, and this being your financial well-being, not just retirement, but your financial well-being, no one can own it for you. The analogy I often will use is think about your medical care or your dental care, whatever it is. You can go to your dentist and he or she will tell you, you know, you got to brush three times a day and floss and come see me every three months. And, you know, you're going to get all these things done. Ultimately, it's still within your hands to do that. And if you don't do that, the consequences aren't going to be one that the

dentist will feel. It's the one that you will feel either physically or financially somewhere down the road. Yeah, absolutely. I feel like this is, even though it's like obvious, you know, it's sort of obvious when you put it that way. Obviously, this is I feel like this is, even though it's like obvious, you know, it's sort of obvious when you put it that way, obviously this is what adulting is all about. I think a lot of us are kind of feel unprepared because this isn't something that's given much focus or priority in our entire education, like from, you know, kindergarten all the way to university, like no one really talked to me or there was never really any, I don't know, too many programs or anything that talked about this. So I think a lot of people, especially my age, are realizing as they're getting more bills and getting more financial

responsibilities that are like, oh, you mean I have to basically educate myself on this and this is something completely, a new subject that I've never really thought about. And so it's, I don't know. I hope this just becomes an easier thing and this is more integrated into the education system. That's what my hope is. But until then, this is why I have the podcast and people like you on it. So we can, you know, make it a little bit less scary and introduce people to these subjects and hopefully make them less scary and more digestible. Well, thanks so much for taking the time to chat with me. Where can more people learn about you and Nicola Wealth and the podcast that I mentioned earlier? Thank you so much for having me today.

If you want to learn more about Nicola Wealth, you can go to that website, nicolawealth.com. And my bio is underneath there under the investment team. And the podcast will be up on our podcast channel there. And again, we'll send that link over to your page as well. So some great resources there. Continue doing what you're doing, Jessica, because I think it's such important work. You touched on it at the end, which is the education.

It does have to start in the schools and in the homes, but it starts with us demanding that education. Absolutely. And I think what you're doing is yeoman's work. So thank you so much for all you do. And that was episode 194 of the Mominy Podcast. And that was my interview with Ron Haake. He is the Senior Financial Planner and Regional Manager of Ontario at Nicola Wealth. You can find out more information about Nicola Wealth at nicolawwealth.com or follow them on Twitter. You can also connect with Ron on LinkedIn if you so will.

As we mentioned throughout the show, I was on his podcast. I'm going to link to that episode if you want to listen up me on another show being a guest, which is kind of fun, in the show notes. And to go to the show notes, you just go jessicamorehouse.com slash 194. So if you ever want to go to the show notes of any episode that you ever listened to, it's literally just my website, jessicamorehouse.com slash whatever the number of that episode is. So this one, j house.com slash 194. I've got some important things to share with you in just a few seconds, including a bonus episode for tomorrow. But first, here's just a few words I want to share about this episode sponsor. This episode of the Mo Money podcast is sponsored by the Scotia

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So the guest is Devin Fidler. She is the creator, the founder of She Native Goods. I met her when she spoke at the QuickBooks Connect conference back in the fall. And I just thought her story was so amazing and fascinating. And she's just like a very inspiring young entrepreneur that I want to have on the show. So I think you're going to love it. So make sure to check back here tomorrow and make sure to subscribe to the podcast if you haven't already. Aside from that, as I've been sharing throughout the past couple of weeks, I am doing an event.

It's coming up very soon on Tuesday, May 7th in Toronto with my pal, Erin Lowry, the author of Broke Millennial. And the new book that just came out, Broke Millennial, takes on investing. We still have some tickets left. I last checked, there were less than 18. And I'm pretty sure we're going to sell out because usually she's told me for all of the other events she's been doing for her book tour, they've all sold out, especially in the last week leading up. So if you don't have your tickets now, go get them. If you want to come, you get a free copy of her new book, Broke Millennial Takes on Investing. We're going to have food and drinks,

a photo booth, a panel discussion on investing, and a lot of other goodies too. So you're going to not want to miss it. You can find out more information in the show notes for this episode or just go to jessicamorehouse.com slash level up to grab your tickets before they are gone. All right, what else? Yeah, so well, lately, I feel like I've been trying to do, just get my life a bit more organized. I feel like sometimes, you know, when you get so busy, you run on autopilot and

you're like, what am I doing? What am I, what am I even doing? So I've been, uh, trying to get my stuff together and just like focus on what, what am I working so hard towards? And so, um, I have, uh, you know, there's so many things that I want to do, but I get distracted pretty easily. So I'm trying to keep things a little bit more focused. So one thing that I'm going to kind of put the pause button on just for a few months is taking on new financial counseling clients. I have worked with so many amazing people this past year and I love it, but I'm not taking any new clients for the time being because I want to move forward with basically finishing a course that I enrolled in and never finished, which is the big Canadian securities course.

If you don't know it, it is a beast and it's going to take some time to study and take those exams. So that is like something that is on my dream board, my vision board, and I want to get it done. So that's what I'm going to just cram and get things done hopefully this summer. Because basically I'm kind of hoping to either pursue getting another designation, either a CFP or a PFP. I don't know what. I love learning. I love getting designations. So that's just what I've been up to lately. I haven't really shared with anybody, but that's what I've been doing. Beyond that also too, I'm working on my second investing course. So if you don't know, I already have one. It's called Investing Foundations for Canadians. Highly recommend it.

But I'm kind of basically doing a part two to that course, which is called Passive Investing for Canadians. So if you've ever wanted to use robo-advisors, but you really want to better understand what exactly goes into that, what does that mean? Or if you want to be a DIY investor, make your own portfolio, buy your own investment products, be your own investment manager. How the heck to do all of that? So that is what I'm working on.

And again, it's like, I need to kind of pause certain things so I can focus more on getting these two big things off my, not off my plate, but just like get them done, like just get it done. So that's what, if you're curious, what do I do? What am I up to these days? Those are the two big things I'm trying to pursue right now, besides the podcast. And speaking of the podcast, we've got another good about a month, month two and a half of episodes, and then I'm going to take my summer hiatus. So if you want to shout out on a future episode, this is the time to give me an iTunes review so I can make sure I edit you into a future podcast episode this season. And also one last reminder, I still am running my book contest. I'm going to wrap it up, I think fairly soon. I'm going to have to take a

look at the guests. I think I may be done with having authors on the show, I believe. So if you want to win one of the books that was featured on this episode, you know, because I've had a lot of authors on the show, not episode, this season, sorry. Go to jessicamorese.com slash contest or again, just check out the show notes for this episode and you can enter to win a copy of one of the books that has been, you know, talked about on this show. So that's it for me. Thanks so much for listening. I'm going to see you back here tomorrow because I have a bonus episode, as I mentioned. Thanks again for listening and yeah, have a great day. This podcast is distributed by the women in media podcast network. Find out more at women in media.network.