John Barabe is a Trusted Regina Financial Management Consultant and he has an unwavering commitment to quality and service which has enabled him to build and retain a successful practice in Regina. He and his team of Regina financial professionals and support staff believe that planning with honesty and integrity are cornerstones to improving their clients' quality of life. He applies his knowledge to help clients make the right choices when considering all the product and service options that exist in today's marketplace. In his latest Trusted Regina financial expert article, he shares information on investment strategies and how to keep up with the pace of inflation.
If you need $1000 per month for expenses and you have $1,000,000 in deposit accounts (for example a guaranteed investment certificate, term deposit, or savings account) earning 1.2% you are set, right? Well, if inflation is 2% the expenses will increase from $12,000 to $14,628 in 10 years and to $17,831 in 20 years. Your investment falls short of the income you need so you end up spending your original capital to make up the shortfall.
What you need is a return that will allow you to draw an income that keeps up with the cost of living.
Let’s simplify further with an example of the poor current deposit account returns:
In 1991 $150,000 invested in one year GIC’s earned enough to purchase a new Ford.
In 2011 $150,000 invested in 1 year GIC’s earned enough to purchase the same 1991 Ford.
Despite record low interest rates, you still need an income from your investments. If your investment return is coming from a guaranteed deposit account currently, you may not even be keeping up with inflation.
What if there were a way to get a better return, a reasonable return, and still remain low risk?
Unfortunately many people that need income for retirement or even just an investment return that is reasonable are not getting this direction. I will provide you with access to unique methods to reduce risk, while allowing you the returns you deserve with the objective of maximizing your returns. I want to assure you there are investment strategies that can outpace inflation and provide you with reasonable retirement income.
I thank you for reading this article and would like to offer you a value-added service for your time. I will make myself available to act as a sounding board. Please understand, you do not need to become a client to take advantage of this service. The reason I do this is because I became a financial advisor to help people make informed choices with their financial future. It’s very gratifying. One of two things typically occurs when going through this process; either I validate for you that your current approach is fundamentally solid, or I reveal a few minor flaws that you might want to consider adjusting. As you know, minor adjustments can often lead to major improvements down the road. Either way, I will make myself available and ensure that this is a great investment of your time.
John Barabe, Madison Schenher and team.