The Retirement Myth & Things That Are Expensive

“Baby boomers who are counting on the stock market are in trouble.” – Robert Kiyosaki

As I write this I am on a plane returning from the gorgeous island of Turks and Caicos. When I find myself on a tropical island enjoying the company of my wife, the warm temperatures, and stress free, carefree, lazy days, retirement is always at the top of mind for me.  Ah yes, freedom 55! Remember the TV ad? The good looking 55 year old couple sitting on a tropical beach, drinking umbrella drinks, and never working another day of the their lives. Reality or myth? Looking at the last century, numerous innovations have changed the way we live. Transportation, food supply chains, electricity, TV, internet, and retirement are some of the most radical changes. Yes, retirement! Think about it. 50 years ago retirement was not common and not even in the vocabulary of the average person. In fact, it is only common today in thriving, first world countries. The idea that people can stop working in their fifties or sixties and then go on to enjoy the good life is a rare and unique world concept. 50+ years ago we would have filled a lifetime with work until we were too old to work or we became ill and passed away. How things have changed.

Today we are repeatedly hit with marketing campaigns that tell us to work hard, carefully save, and invest in funds that will make our retirement happy and healthy. Let me remind you that these funds that we are sold are dependent on the growth of the economy. Without growth, the retirement dream becomes a myth. Or does it? No problem you say. I have a huge savings account that will fund my retirement. And yes it wasn’t that long ago that you could earn 6% on savings. In fact, I can remember my parents earning as much as 12% on their savings. The interest on a million dollars went a long way back then! This was when retirement was risk free. However, those income streams don’t exist today or if they do, they are very risky – not what most retirees are looking for. Zero and negative interest rate policies that are appearing around the world are killing the idea of living off the interest earned by your savings.

Retirement can still be risk free; with real estate as the retirement vehicle. Owning positive cash flow real estate is the most solid retirement fund that you can own. It a real asset, not a document filled with promises of X percent yield. It provides dividends, or monthly income. You can self-manage the asset, you are hands on, and nobody can manage your money as well as you can. It is an appreciating asset and is a hedge against inflation. It is a commodity that is needed; everybody needs a roof over their head. And it can be leveraged over and over again, making it one of the most versatile wealth building assets that an investor can own. I know each and every one of you that reads this monthly market update gets it. Do your family members, acquaintances, business partners, and anybody that will listen to you to put their hard earned money into real estate? I can guarantee that they will be thanking you in their fifties and sixties, with an umbrella drink on their very own retirement deck.

The Vancouver and Fraser Valley market continues to set records for sales, dollar volume, price appreciation, and low inventory levels. And while vacationing in Turks and Caicos, I was reminded of the incredible Vancouver and Fraser Valley market and a statement I heard a few weeks ago. The statement is this, ‘Expensive items continue to become more expensive and items that are cheap become cheaper’.

We stayed in an incredible villa on one of the most exquisite beaches that you will ever see, Long Bay Beach. The villa was built on a 2 acre lot with over 250 feet of beautiful, white powder, soft sand and had the stunning Caribbean turquoise-blue ocean as a back drop. Of course, I needed to know what this lot was worth, and with a little research I found similar lots were selling in the $1.6 million range! Wowzer! However, a 2 acre lot directly across the street with no beach access was selling in the $150,000 range, and a block further away, lots were only in the $75,000 range. The Vancouver and Fraser Valley market is like the exclusive beach lot; we are limited in the available land to develop and considered an exclusive area to live, not only to Canadians but the wealthy from around the world. The statement holds true; things that are expensive continue to become more expensive.

Don’t hesitate to call me for all your real estate questions and needs and remember when in investing in real estate you only know what you know.

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By Randy Dyck
Personal Real Estate Corporation
604-807-4366 or randy@eximus.com

STR (Sell Through Rate) Formula = Sales ÷ Active Listings + Failed Listings + Sales  ​