We would all be very wise if we could act on hindsight. I am not too dissatisfied about the way I’ve handled our finances over the years, but here are three things I wish I had done differently knowing what I know now.
1. I would have joined my company pension plan.
When I started my banking position, the pension plan was mandatory for males and optional for females. The vesting period was seven years.
I declined the enrollment because I thought there was no way I’d stay working there for more than a couple of years, and, besides, the employee contribution amount was quite a hefty amount in my opinion. I needed that money.
Twenty-five years later I was still there and had missed out on a good future pension.
Bottom line: Studies show that most employees today will change jobs/careers at least seven times. It will become increasingly unusual to find a worker who stays with the same employer for his or her whole working life.
Most companies offer some type of pension plan and contributions are often matched by at least 50% up to 100% by the employer. Also, vesting time has been reduced to 2 years, so the employers’ contribution is more accessible. Where else can you get a guaranteed return like that?
Even if you end up with seven (or more) different LIRA’s and they start out as relatively small amounts, it’s worth it in the long run, especially if invested prudently – and you can’t be tempted to take withdrawals ahead of your retirement date.
2. I would have stocked my RRSP with US Dividend Aristocrats
I have done well with my Canadian dividend payers but they are mainly focused in financials, telecoms and utilities. Sectors like health care and consumer products are not well represented in an all Canadian stock portfolio.
Many US companies are multi-national so you can build a really diversified portfolio by industry and geographically.
Now that I think of it though, foreign content used to be limited to 20% of RRSP book value so I would not actually have been able to use this strategy at the time of opening.
However, if I would have purchased something like Colgate-Palmolive with my allowable portion instead of an International Mutual Fund and then branched out as my RRSP increased, I think I would have been better off in the long run even with the low (at that time) Canadian dollar.
Bottom line: I am not recommending that everyone hold US stocks in their RRSP. I’m just stating that I, personally, would like to have held more. I didn’t buy US stocks because I was uneducated about them at the time.
When you learn about different investments and strategies you become more comfortable with them and can more easily determine what’s right for you.
3. I would have worried less about money
There is no joy in your life when you’re constantly worrying about your finances. Worry makes it difficult to assess a situation calmly and determine a course of action. Worry does not allow you to seize a good opportunity when it appears.
Worry keeps you at a life-sucking job because you don’t think you have any other alternatives. Worry makes you depressed and cranky with your loved ones.
Related: Learn From The Boomers’ Mistakes
Bottom line: No one has a perfect life and the road can get rocky from time to time. Don’t let it beat you down. Talk it out instead of keeping your feelings to yourself. Accept help from others. Change your attitude and be grateful for what you do have. A clearer head allows you to think of solutions to your problems.
Is there anything you would have done differently in hindsight?