5 Reasons Why Most Millennials Will Have A Late Retirement And The Steps You Need To Take RIGHT NOW To Avoid This .

I hate banks, probably as much as you do! Besides the fact that they don’t have Wi-Fi, they don’t really care about 95% of their clients (although they put on a good impression over the phone). Take it from this ex-banker who spent 25 years in the industry. The recent news about how they have milked Canadians with hidden fees, selling us products that we never asked for, and even forgery, hasn’t helped polish their bad reputation.

The reason I bring them up is because they are the #1 reason why it will be difficult for the 18-35-year-old generation to retire comfortably. Read on to understand my logic and firsthand experience, and to find out what the other 4 reasons are. Then read on to find out the 2 critical steps that you must take to make sure that this doesn’t happen to you.

Reason #1:   No one to get advice from

Money is a good thing, but it doesn’t come with instructions. The best source to get advice is from a Certified Financial Planner (CFP). The problem is, most are not interested in your business, (nor should you be) and here’s why. 90% of Financial Planners work for a bank or the bank’s brokerage firm. They’re all paid on commission. They get paid based on the product that they sell to you. If you don’t have several hundreds of thousands of dollars, chances are great that your bank will not even introduce you to a CFP.

You shouldn’t be interested in meeting with them because they sell incredibly expensive mutual funds or other products their firms create and you get creamed in hidden fees. Remember, they are being paid on commission which screams conflict of interest. Banks will provide a banker (not a CFP) to do your financial planning who barely has any experience, just a document saying he or she can sell mutual funds because they passed a course!

Reason #2:   No more fat pensions like the Baby Boomers have

Chances are you won’t have a company pension plan like your parents might have, or if you do, it will not be enough. In fact, only 30% of baby boomers have pension plans and the trend going forward will be much lower for the 18-35-year-old. How many people in their 60s and 70’s have you been served by at your local gas station, Tim Hortons or MacDonald’s?  Government pensions are also a joke. The average retired Canadian is collecting close to $14,000 in government pensions, (Globe and Mail Feb. 16, 2016).

Reason #3:   If your counting on an inheritance, well, don’t.

50% of Canadians are living from paycheque to paycheque (Globe and Mail Sept.7 2016). Everyone is paying (or will be paying) through the roof mortgages, $1,000 baby strollers, $7 “Smoka Boka Chokas” (or whatever they’re called) coffees at Starbucks, and trying to keep their head above piles of debt. If your expecting and big “gifts” from the previous generations you may be in for a surprise.

Baby Boomer’s and Gen Xer’s homes may have gone up in value BUT they have been using their homes’ value to by stuff (gotta impress the neighbours right?). Using lines of credit (in other words, debt) has made it very common to have an $800,000 home with a $750,000 line of credit on it. In fact, you’re lucky if you don’t inherit your patents’ debts!

Reason #4:   Your generation is also buying “stuff”, but not as much

The 50% of Canadians living paycheque to paycheque statistic applies to the 18-35ers as well. If you own a home you know firsthand how expensive it is to maintain it. If you have children, I’ll be surprised if you have anything left over in your wallet.  We are dsuckers when it comes to spending money on our children. If you’re thinking of opening a business (or if I had to do it all over again) I would DEFINITELY do something in the children’s industry! And then there’s the $7 Starbucks “Smoka Boka Choka” things

Reason #5:   Your saving, BUT…

Congratulations on your saving habits! You are outclassing your parents when it comes to saving. Your spending less on stuff, getting roommates for housing, not relying on cars as much, using credit cards less frequently, and are not falling VICTIM to the marketer’s message as much as your parents. You’re not putting as much emphasis on buying a home which really puts you at an advantage. You are also saving at a younger age and thinking about your golden years. However, banks are paying you less than 1% or tops 2% on your money.

Use these tools I use every day to get you on track towards financial freedom

I’ve come across websites or podcasts saying how they have figured it all out and how you can quit your job 5 years from now, pay your mortgage by the age of 30, yada yada yada. Sorry. There’s no magic bullet. Don’t fall VICTIM to another marketer on the internet. I have been a Financial Planner for 25 years and heck, I couldn’t quit my job until 2 years ago at the age of 47. That’s 25 years of full time work.

Below you will find great, and rarely mentioned advice and, most importantly, I will also share with you the 2 tools that I have used and continue to use for myself and for my clients over the past 25 years.

Alright, we all know that we need to spend less and save more right? Everyone will tell you this. Get rid of your most expensive debts first, start a monthly savings plan, etc… However here are some lesser talked about strategies that you need to start using immediately to get you on firm ground for a comfy retirement:

• Use a free spreadsheet I am providing you with to examine your cash flow (revenue less expenses), so you can SPEND LESS THAN YOU MAKE! “WOW, thanks for the amazing advice John. Spend less than you make. Who’d have thunk it?” We all know this right? But how many of you are actually do it? If you’re not doing it, you don’t know it. And if you’re not doing it because you are not keeping track of your cash flow. Use this spreadsheet! It will motivate you, keep you on track, and allow you to have money every month that you can put away for the future. Studies show that we are 85% more likely to act on things we want to accomplish if we write them down. In all my years as a Financial Planner, everyone who has achieved financial freedom without being handed a large inheritance, did it by keeping track of their income and expenses. The spreadsheet is available HERE BUT read on for the second most important tool below.

• Use a second free spreadsheet I am providing you with to examine your net worth.  Calculate your assets (house, RRSPs…) less your debts (mortgage, credit cards…). This will give you an idea of how much you may have already accumulated towards your future freedom days. The more you have accumulated, the less you’ll need to save. Trust me, use the spreadsheet to calculate these numbers. It helps motivate one to take action when you put things down on paper (did I mention that before?). You can get it HERE.

• Earn more than 1% to 2% on your money.  This is more difficult to do. This is where you need to get some guidance on how to earn more than 1% or 2 %.  Please, don’t fall VICTIM to banks telling you how to invest your money (explained earlier). There are many reputable web sites that give good, honest, and unbiased information about ETFs as a choice of investments. Some of the most seasoned and richest money experts use ETFs one of them being Warren Buffett, only one of THE most successful long-term investor in the history of human life. I also include a great website showing you the very best ETFs for Canadians available HERE, along with the 2 must have spreadsheets.