Saturday, May 15, 2010

Another Pension Cheque

I turned 65 in April so that means my Old Age Pension starts in May. The cheque will be automatically deposited on the 28th of each month. Not much, $450 or so but it all adds up. We are now getting six cheques a month (three each). Not bad! My financial adviser thinks we should be spending a little less of it and saving more. He did not come right out and say that but I could see his mind working. I disagree with him but I guess that is his job. We have a stockpile of mutual funds for emergencies, home repair and replacement vehicles and we pretty much spend everything that comes in. Why not?

I was in to see my "Money Guy" yesterday. The market has been very good to us lately and we have way more than recovered everything we lost over the downturn. When we bought the new motorhome two years ago we (I) made a strategic decision to carry the cost of it as a low interest Line Of Credit loan rather than to sell funds for less than we paid for them. One fund was not performing as well as the rest at that time so we moved it into a precious metals fund (basically a gold fund) and hoped for the best. Talk about market timing! In a year and a half this investment almost tripled! Yesterday we decided to take some of the profits out and pay off the Line Of Credit. Putting the motorhome money into that fund instead of giving it to the RV dealer turned out to be one of the very few really smart financial decisions I have made recently. Norma hated it because she considered it a debt where I looked at it as a 4% interest loan to buy an investment that paid close to 100%. Norma thought it was like putting a ton of money in a slot machine and hoping a motorhome came out. In this case it did so thanks Dow, thanks Jones, thanks TSX (Toronto Stock Exchange). It could have gone the other way but in the end I was right. I probably developed an ulcer over it but I won. There is still some left in there as I do not think gold and other precious metals have finished their run. The bucket is filling again. It is a smaller bucket but lets hope it overflows. We made some other changes to get back onto the safer side of investing life as we think things might start retreating a bit. We shall see what actually happens but it does feel good to have my "umbrella" firmly in place.

I may be able to stop doing a weekly Quicken update on my funds and switch to monitoring them monthly.

1 comment:

  1. Congrats on the extra pension check. (looks like next Christmas' party will be bigger :) ).

    Our financial advisor wanted us to save more and put it into funds. We finally backed out. He hated our idea of real estate but that is where we have always made money.

    Needless to say, we got out of the market six months before the collapse.

    I still keep my eye on the market and would still like to get back in.