By now I expect a lot of you realize that our monthly article has turned into a weekly one. During this time of COVID-19 we want to make sure that we keep our communication lines open.
Let’s start with some good news. The federal government has reduced all RIF minimums by 25%. At this time if any of you are receiving RIF payments or know of people receiving money from their registered plans but not really needing this money to live on, you may want to consider stopping or reducing the payment you receive during this time of market volatility. When markets normalize you can make the decision to restart or hold off as long as you take the minimum annually. The federal government will be monitoring to see whether or not they need to make more concessions towards retirees and their registered money.
Those of you that normally make annual contributions to your RSP may want to consider setting up a pre-authorized contribution and start to dollar average in on a weekly or monthly basis. We don’t know how long the sale will last but we believe that we are getting a good long term discount right now.
As a reminder we view investing as having a long term outlook. In fact this is our preference. We are often asked how long is long term. Long can generally be defined as greater than 7 years. But since we don’t know how long we’re going to live, we believe we should invest as if we will live to 100. Saving is more of a short term goal usually with a definite purpose (vacation, car etc). Any money that is needed within 2 to 3 years should be saved in shorter term vehicles such as daily interest savings, GICs, bonds and bond funds.
With so many people having to work from home the time that you save from commuting is a great time to devote that extra time to your family and your long-term goals. This year since I will be in self quarantine for a couple of weeks and working remotely, I plan on using some of my extra time doing some of the projects I’ve been putting off around the house. Between dusting off my home gym (I plan on using it) and cleaning out some of my cupboards, I may actually get back in shape. Getting older and sitting at a desk has made me quite lazy. Having some extra time for myself may be a good thing in the long run. I do try to look at the positive side of everything because if you look hard enough you realize there is always some upside. We would like to suggest that we also use this time to reflect on what’s important to us. Many of us are caught up in our busy, often frenetic, lives. Maybe slowing down isn’t such a bad thing.
Until next week. Stay positive.