Yolo

Ian is coming up to his 70th birthday, “and my bride is 73.”

Married now for more than four decades

The kind of folks a lot of kiddos don’t understand and usually hate. Long, peaceful, stable relationships. Careers. Mortgage-free houses. Pension income. A couple of million accumulated.

Is this the last generation – ever – to live out the final decade or two of life in tranquil prosperity?

Some days you’d think so. The news feels that dire. Youthful optimism seems squished even though today’s twentysomethings have never lived through a serious recession, never seen 15% interest rates, were still in Huggies during Nine Eleven, barely recall the credit crisis and have more social support than any previous gen in history.

But we all live in the fog of our own perception and make choices based on emotion. Ian’s no exception – even with money, and the profound wisdom to read this pathetic blog daily.

First the good news. “Our combined net worth is $2.3 million,” he says. The bulk of that is in a RRIF, six hundred grand in TFSAs and a small amount ($50,000) in joint non-registered accounts. They also own a home worth nine large.

The could-be-better news is what they live on. “Our income is primarily OAS and CPP,” he says, “plus a $500 monthly company pension and recently a $3,000 RRIF withdrawal.” The total of that is close to six grand, or $72,000 a year.

The troubling news is where this net worth sits, and the risk being shouldered. “The dilemma (or not) is that 50% of the invested shares are in MAG7 stocks (44% RIFF and 62% TFSA) with the balance in blue chip shares.”

Ian asks for suggestions. Let’s pile on.

First, the Magnificent Seven stocks (Apple, Amazon, Meta, Microsoft, Nvidia, Tesla, Alphabet) have had a fabulous AI-inspired run that’s kicked valuations into nosebleed territory. Lately a lot of investors have been rotating out of tech issues – due to those crazy prices – and into old economy stuff. Like Wal-Mart. There are concerns now that AI spending may be out of control, hurting the bottom line of some of these outfits, impacting their share values and adding corporate risk. Moreover, it’s becoming clearer AI could end up stealing so many jobs that the overall economy is tilted. So, it’s risk-on for the Mag7.

Why would a couple in their 70s be almost 100% invested in equities with half of that exposed to one, volatile sector?

Bad advice? Avarice? Getting investment suggestions from the self-serving shills on BNN? (Except Ryan.)

In any case, it’s a mistake. The portfolio should be balanced, with 60% or so of the wealth in growth assets and 40% in more stable income-producing stuff. They need diversification, too. Across geographies as well as among sectors. Using ETFs instead of individual equities would cut the risk of Elon blowing up or Trump buying Nvidia. Plus, fund units inside a RRIF can be cashed and trimmed more efficiently than dumping shares in order to meet the minimum payout.

As a reminder: my snappy colleagues manage a very large pool of capital on behalf of families across the land. The returns are solid. And there are no individual stocks.

Now Ian must answer this question: what’s the plan?

A liquid portfolio of $2.3 million should pay out about $11,000 a month (6%, net of fees) and still retain its capital value. In fact, in recent years it would continue to grow. Historically a B&D portfolio can be self-sustaining over a lifetime, if properly managed to mitigate risk.

Ian says household expenses are minimal. But they like to travel. Without a doubt, adding a hundred grand to their gross income would afford a lot more of that. The nestegg would be left essentially intact (if leaving it to loved ones – deserving or not – is a goal), so long as the equity risk is dialed back.

Most important is time. The kids have a lot of it. The seventysomethings don’t. There is absolutely no point accumulating wealth for your after-work years, then hoarding it. It’s not a contest or a race. Nobody wins this one. Growth is not the point. Life is.

Dig in, Ian. You only live once.

About the picture: “Our grand dog Zoey stayed with us for her post op recovery,” writes Michelle. “She was not impressed with the cone of shame! Love your blog! Thank you.”

To be in touch or send a picture of your beast, email to ‘garth@garth.ca’.

Source: https://www.greaterfool.ca/2026/02/11/yolo/