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Old 05-07-2014, 12:51 PM   #1
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Hi to all who's reading this post and thanks for the wonderful site thats giving me the chance to get advise here.

I am a Canadian Expat been working in the middle east for the past 20 years now, I am 47 years old guy divorced and no kids. I own a house worth around $450.000 debt free in the middle east which i plan to sell when i retire and saved up so far $400.000 in cash with zero interest. I earn yearly $170.000 and save from that after rental and expenses around a $100.000 . My only pension is when i leave my employer and would get around $200.000
I plan to work for another 10 to 13 years and then retire. I have been dreaming of retiring in Vancouver but have never been their yet. I am planning to visit this year BC and check the place out but contemplating about the trip since I know know one their for advise.
Would appreciate any advise that can help on my financial status along with any BC advise.
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Old 05-08-2014, 07:13 AM   #2
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Welcome bsailkali; I have no advice for your BC question, but regarding your financial plans, it seems like your LBYM's approach will position you to retire with ample retirement funds. One question though: why is your $400,000 current accumulation earning zero interest? Your current and future savings will last a lot longer and keep up with inflation if you select an investment plan involving some percentage of equities? Perhaps I've misunderstood your current portfolio. If it were me, I would identify my appetite for risk, conservative, moderate or aggressive, from there select an AA, invest regularly in Index funds and rebalance annually. With 13 years left to work and saving over 50 percent of your salary, you will have a pile. Oh and are you maxing out your Roth/401K/IRA options?
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Old 05-08-2014, 10:50 AM   #3
Confused about dryer sheets
 
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Hi Sunsets, thanks for your reply. I have never entered in investment plan cause I don't feel confident in them and don't trust paper, thats the reason i get zero interest on my cash savings account. The only real investment that makes me confident which i did not mention in my previous mail was Gold which I have started a year ago in buying real swiss pamps. I probabley have worth of gold on hand a kilo so far. I also do not have any options in Roth/401K/IRA since i have always worked outside Canada. So my only retirenment money that I will rely on is what i have now and will have after future savings.
My plan now and please correct me if i am on the right track, is to put a down payment on a house in BC, maybe rent the place out since I don't live their for a period of 10 years and then either sell it to purchase another unit or just retire their with the savings that i will have.
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Old 05-08-2014, 11:11 AM   #4
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You ask for advice, so here it is: you badly need to read some introductory books on basic investing strategy. You have substantial assets, but don't trust any investment but gold. That means you are doomed to live or die with the ups and downs of the gold market, or allow most of your substantial savings to sit completely idle. That's no way to provide for a comfortable financial future, even if you happen to be right that gold will do well in the future. You need to overcome your prejudice against other types of investments, and get your savings properly invested in a diversified portfolio.
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Old 05-08-2014, 11:24 AM   #5
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If you can save $100,000 each year for the next 10 years you will have a very nice nest egg, but it will likely not keep up with inflation. Perhaps some of our Canadian members can tell you what investments they found to be available to them?

You could do a search here for Canada or Canadian and might find some comments that could be enlightening.
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Old 05-08-2014, 11:35 AM   #6
Confused about dryer sheets
 
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Thank you, will do the search
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Old 05-08-2014, 12:28 PM   #7
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How has that gold done for you over the last 2 years? No need to answer because I already know. I bought into some gold mining funds two years ago and it has been the worst investment of my entire investing lifetime. IMO gold is okay but only for a small part of your total investment portfolio. The only thing cash is doing and likely will do in the future is lose value due to inflation. A great place to start your search for investment information is the bogelheads forum.
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Old 05-08-2014, 12:42 PM   #8
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Hi JC, I have been buying Pamp Suisse bars 100gr each bar on monthly basis. My previous years purchases were good before the boom, now prices are up but still for me I feel very safe and its the best Gold bars to buy.
I do agree that cash will lose value due to inflation, but i try to stay safe at all times and put my money in property, cash, and small amounts of Gold which I don't need to touch for another 15 to 20 years.

Will check out bogelheads
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Old 05-08-2014, 04:49 PM   #9
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Basaikali;

1). If it were me, I would not purchase RE in BC when you reside halfway around the world. You would be an absentee landlord. I presume the reason you want to own now is you want to experience the RE appreciation in that market and in order to do so you feel you must own the asset. There is merit to that argument but you are not around to manage your asset with its inevitable maintenance needs and occasional vacancy. A management company could mitigate this somewhat but the fees will diminish your return.



2) Regarding holding Gold, Commodities are quite volatile and those wiser than I will tell you that commodities should represent only a small portion of one's investment portfolio, typically not more than 5 percent. You haven't said what the value of your Gold is relative to your assets so it's possible that it doesn't represent a concentration of risk. In any event, commodities(gold,etc.) are a hedge against inflation. That is precisely what equities represent, over the long term. To say that equities are just paper is not really true. Equities represent shares in a real company that makes things or provides services. You own a share of the profits. Yes you have no control, but neither do you have control over the price of Gold, which fluctuates wildly at times in both directions.

I believe that your greatest risk at present is inflation risk and perhaps too much concentration of risk, vis a vis gold. Read up on these two areas. I suggest you read The Four Pillars of Investing.

3) Regarding your inability to use Roth/401K's, how does your tax reporting currently work if you don't mind sharing? Do you file a tax return now in Canada? If not can you bring all of your investments back with you when you return without The Gov't laying claim to some of it? If you owned RE in BC would the Government tax your investment income? Have you spoken with a Canadian CPA regarding tax planning for your retirement? Just curious.
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Old 05-09-2014, 01:00 AM   #10
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Quote:
Originally Posted by Golden sunsets View Post
. In any event, commodities(gold,etc.) are a hedge against inflation. <>
I believe that your greatest risk at present is inflation risk and perhaps too much concentration of risk, vis a vis gold. Read up on these two areas.
Assuming for moment that you are correct, wouldn't these two risks be reasonably self cancelling? Gold pretty reliably goes up during price inflation, so if that is his risk, gold would seem to be a pretty good answer to it.

Ha
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Old 05-09-2014, 07:26 AM   #11
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Ha; I think owning Gold in small amounts is fine although I prefer to own a basket of commodities through a mutual fund or ETF and keep the ownership to 5 percent of Investments. My feeling is a portfolio with no exposure to equities is an inflation risk. A portfolio with too much exposure to a single commodity represents a concentration of risk even if it mitigates inflation risk. The other asset the OP prefers is real estate, which in theory is a fine asset to have exposure to, again as long as it doesn't become a concentration. As most of us have experienced over the last 5 years RE can depreciate precipitously and is highly illiquid. I believe I saw an article by Schiller recently indicating that RE is a poor investment and on average appreciates at only 3 percent/yr over the long term. Aside from my home, which I don't view as an investment, I keep our exposure to RE to 5 percent and achieve that through REITs and US and Int RE funds.

Of course we are all different. That's what makes the world go round. I was just sharing with the OP what his subject line requested.
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