Lucky?

After a few days of struggling through some awful headaches, fatigue and nausea, I recovered enough to get outside and enjoy a beautiful sunset by the beach with some friends.

This was our view.

As we left to return back to our coaches, my friend made a comment along these lines: we must have done something right to enjoy this kind of life in retirement.

Did we do something right or were we lucky?

I do not have the data for the United States but I suspect it is similar to the Canadian data.

The number of seniors in Canada is growing in absolute terms and as a proportion of the population. In 1986, there were twice as many children under the age of 15 as there were adults over the age of 65.

By 2018, adults over the age of 65 outnumbered children under the age of 15. The projection is for a dramatic growth of seniors over the next two decades.

At the same time that Canada’s population is ageing, most seniors are poorly prepared for retirement. Roughly 6 million working Canadians belong to a workplace pension plan. And roughly 13 million working Canadians do not.

Put another way, 65 percent of employed Canadians have to set money aside for retirement.

Those 13 million working Canadians must have some pretty serious savings. After all, it takes about a million to produce an annual income of $50,000. Two million or so for an annual income of $100,000.

Curious to know the median family savings for Canadians entering retirement without a workplace pension plan?

It is not a million dollars.

It is not five hundred thousand dollars.

It is not two hundred and fifty thousand dollars.

It is not one hundred thousand dollars.

It is three thousand dollars.

Three thousand dollars.

Half of working Canadians entering retirement without a workplace pension plan will do so with only three thousand dollars.

We did not get lucky in terms of saving money for our retirement lifestyle. We planned for our retirement lifestyle.

Perhaps we were lucky in terms of education and career opportunities.

Certainly we were blessed to be born in a country where we had a chance to build a good life for ourselves and for our family.

Very fortunate and truly thankful to be able to live well in retirement.

The Great Illusion

“No matter how you slice it, Canada has been entirely dependent on a debt binge to create the illusion of a strong economy.” That was how David Rosenberg put it the other day. David is the chief economist and strategist for Gluskin Sheff. David is one of the best minds in the investment industry.

In retirement, our standard of living is closely tied to the underlying performance of the Canadian economy. Although we could live solely off our pension income, our investment income allows us to enjoy a wonderful retirement experience roaming around the country in our Motorcoach and staying at some amazing resort properties.

An economic collapse, similar to what happened in 2008/2009, would not be much fun. And yet the Canadian government seems intent on pursuing a controversial economic policy known as Modern Monetary Theory (MMT). MMT is also being advocated by the left-wing of the Democratic Party in the United States.

MMT proposes that a country with its own currency, such as Canada or the United States, doesn’t have to worry about accumulating too much debt because it can always print more money to pay interest. The only constraint on spending is inflation, which can break out if the public and private sectors spend too much at the same time. As long as there is enough labour to meet demand without stoking inflation, a government can spend what it needs to maintain employment and achieve its spending goals.

The Canadian government will make no attempt at balancing the financial books of the government. Projections show that our government will remain in a state of perpetual deficit spending over the coming decades, compounding the overall debt of the country.

The Liberal party in Canada, having moved strongly to the left, has embraced the theory that deficits are harmless, healthy and promote economic growth and expansion especially when interest rates and inflation are low. Governments can just print money, distribute it fairly and people will spend more and create prosperity.

And yet, there are so many risks to this approach, especially the risk of unsustainable debt.

Canadian households are in no position to be exposed to the downside risk of MMT.

Canadian households are already at historic levels of debt.

Compared to U.S. households (note how Canadian households are now above the level of U.S. households from the great economic collapse in 2008/2009):

Uncharted territory and, sadly, most Canadians have little or no knowledge of the underlying economic theories being pursued by the politicians on the left.

This could end very badly for Canada. But there is a bright spot. Our housing market <sarcasm>. We have the least affordable housing in the world. Perhaps the Canadian government can also provide a house for every citizen. All they need to do is print some more money. And tax the so-called rich. But they already do a pretty thorough job on that front.

 

The RV Lifestyle: Fear, Uncertainty, Doubt

Something is always broken. This from a post that I came across on the Newmar Dutch Star Owners Facebook group:

For the last month, my wife and I have been planning our new RV life. We found a 2016 DS 4369 that was just what we wanted. There were a few things that needed repairs, nothing major, and the dealer agreed to take care of them and make sure we were ready to go. Being new and never having owned an RV before and just entering retirement we wanted to learn everything we could before heading out on our own. It has been a little over a month since we decided on the DS and while waiting for the repairs to be completed I have watched every Youtube video I can find and joined every online group related to Newmar and diesel pushers that I can find. Sadly, the more I watched and read the more concerned I became. It seems that something is always broken and that every dealer is poor at best. Almost to the man, everything I read is negative about the quality of the motorhomes no matter what brand or how much you pay. I realize that most posts will be about problems but there is no shortage of problems and no stories about being happy with the quality and reliability of the product. After postponing the closing twice because the repairs were not completed, I finally decided to walk away, thinking that if this is as good as it gets, when we are all alone broken down on the side of the road it won’t be the adventure we were hoping for. Not asking for anything just offering a perspective from a Newbee’s point of view.

We have owned our coach for over three years now. We have experienced many issues with the coach. You can read about some of them here. Aside from the random deployment of a Girard awning while the coach was in motion — that issue stranded us for almost six weeks — we have travelled extensively around North America without a breakdown on the side of the road. But it could happen. That’s just the way it is.

We love our coach and we love the RV lifestyle however the RV industry is nowhere near the automotive industry in terms of quality and reliability. My view is that there will always be issues with our coach. The only question is whether an issue is highly disruptive or merely inconvenient.

Aside from the awning issue, our problems have been minor and inconvenient.

We come across people that buy into the lifestyle without doing the research. They make a significant purchase of a motorhome only to walk away after a few months because of mechanical issues. Or they get angry and frustrated because they do not expect to have any issues with their motorhome and that anger and frustration distorts the wonderful adventures that most enjoy while being on the road.

The poster walked away from the deal out of fear. Fear that something could go wrong. That the RV lifestyle would be difficult.

This quote, from The Road Less Traveled, is relevant:

Life is difficult. This is a great truth, one of the greatest truths. It is a great truth because once we truly see this truth, we transcend it. Once we truly know that life is difficult – once we truly understand and accept it – then life is no longer difficult. Because once it is accepted, the fact that life is difficult no longer matters.

Regrets? I’ve Had A Few

13 Reasons You’ll Regret an RV in Retirement. Someone passed this over to me. And I clicked on the link. Perhaps you did as well.

Let me save you some time. Here are the 13 reasons.

  1. They are expensive
  2. They require upgrades
  3. They depreciate
  4. They are costly to fuel
  5. They have to be insured
  6. They require you to have extra health insurance
  7. They require you to manage your sewage waste
  8. They offer tight living quarters
  9. They are not easy to drive
  10. They are not easy to park
  11. They are expensive to repair
  12. They don’t have a lot of storage space
  13. They can make you isolated from people

Quite the list and certainly people should think carefully about the implications of embracing any type of major change in their retirement years.

Some retirees long to travel the world in a sailboat. I suspect the same 13 regrets would apply.

Some retirees long to relocate to a new country. At least a few of those 13 regrets would apply.

Some retirees stay planted in their hut. And a few of those 13 regrets would apply.

Regret is a negative emotional state that involves blaming ourselves for a bad outcome, feeling a sense of loss or sorrow at what might have been or wishing we could undo a previous choice that we made.

In other words, regret is a state of mind.

A colleague of mine had retired and passed away only a few months later after coming down with pancreatic cancer. He prepared his own memorial service before his death and he used a familiar song to make a point:

I’ve lived a life that’s full
I’ve traveled each and every highway
But more, much more than this
I did it my way.

Regrets, I’ve had a few
But then again, too few to mention
I did what I had to do
And saw it through without exemption.

I planned each charted course
Each careful step along the byway
And more, much more than this
I did it my way.

Embrace your dream, whatever that might be and make it your own.

No regrets. Especially in retirement. The clock is ticking. Death is not that far away now.

It could be an RV, a sailboat, or a log cabin in the wilderness. Whatever it is, no regrets.

And, if you do have regrets, make a change before the clock winds down.

It is up to you.

No Hut

Two years without a hut. We still get puzzled looks from some people when we let them know that we are currently home free. Home ownership is so deeply embedded in the Canadian culture that it almost goes without saying that, in Canada, a house is a wonderful investment. We always looked at housing as a place to live. Whenever I took the time to include all of the costs associated with owning a house, we never experienced a compelling return. Our houses did appreciate but overall there wasn’t much of a profit to be had when selling. Especially when moving on to the next house.

As we debated our plans for retirement, we knew that owning a house in the country was not what we wanted. What we did know is that we wanted to be south during the harsh Canadian winters. We did not want to own two houses, one in Canada and one in the southern United States. We wanted the freedom to move around.

That was part of our reason to buy a coach. We could have a wonderful condo on wheels for our travels stateside and downsize into a smaller property somewhere in Canada.

But then we asked ourselves why would we buy a house in Canada in our early retirement years if we were only going to live in it for, at best, 2 or 3 months of the year? Could we live out of our coach year round?

The short answer is yes, we can and yes, we did.

We do not miss owning a house. We currently rent an apartment. Our youngest son lives in it. And, after whatever period of time, when we decide to come off the road, we will find someplace nice for the latter part of our retirement.

We do not know what that looks like just yet. We will tackle that transition whenever it comes along.

Two years and I haven’t thought much about the house we sold. A distant memory from a different time.

I did take a look back on some of our photos of the house when I was prepping this post.

It was a nice place. We used it for a period of time and then the house went on to someone else. Eventually every house, like the many other things that we buy in life, will go to someone else.

Except my guitar collection.

Those guitars I will take with me when I leave for heaven.