Where Supply intersects with Demand is where an ideal price will lie. We learnt on that first day that as demand increases or as supply decreases, price will increase. And if demand decreases or supply increases, prices go down if form of sales discounts. That makes sense. If I sell generators and there is a power outage, the demand increases, or as the supply decreases, price of the generator will go up.
With mutual funds, it's much more complicated so the financial advisors tell me. But the law of supply and demand still hold true. The baby boomers bought a lot of RRSP's. The baby boomers will capitalize the most on these products. But as they move out of their financial holdings, supply goes up, which drives down price. And as long as supply stays high, prices stay low. For a 40 something, RRSP's suck.
I always thought corporate and government pension plans were the best method for retirement planning. The companies I worked for didn't have any of those plans, so I was sh*t out of luck. But then I met someone really interesting yesterday.
I read that if you ever want to see where you'll be financially in 20 years, just look at someone doing what you're currently doing that is 20 years older than you.
Yesterday I had to go to a local hardware store to pick up some building materials. I was served by an older gentleman named Dave.
Dave was awesome. I could tell he had a really great memory. He was memorizing product code numbers that were 9 digits long. His math skills were impeccable. I could tell that this wasn't a career choice for Dave. Dave struggled with the computer and one colleague came along and totally disrespected him by deleting all of his inputted information, just so the colleague could get a price check. I couldn't help myself. I thanked Dave for the great level of service and attention I was receiving. He thanked me as any good customer service agent would do. Then I took one step further. I said to him, "I can tell you're a really smart guy. This doesn't look like a career choice for you. Why are you here?"
Dave informed me that he had been a public servant for 35 years teaching children the laws of physics and mathematics. Not surprising given his ability with numbers. What did surprise me was the fact that Dave doesn't have enough in his pension to support him and his wife into their retirement. He explained that his pension was being governed by his previous employer and things looked mighty bleak.
Dave worked hard his whole life. With the exception in July and August, I have never envied teachers. Dave continues to work hard today despite being sold an illusion of retirement that today he cannot afford.
You want to look into a crystal ball all you have to do is look at some of the people that are already there and start analyze what's going on. My new friend Dave is no different than anyone of us. I thought guys Dave's age would be protected from the financial mess that my generation is going to go through. Aspirations of a pension is an illusion. We need to get financially intelligent. Our country, our province and our lifestyles are in trouble. If we don't watch out, we're going to end up just like Dave, working in a hardware store dealing with young punks who think that we're stupid because we don't know how to operate the newest technology.
Here's how we parted ways. He said my company thanks you for your business. I thank you for your patience. I shook his hand and said to him, "Dave, I thank you for your story".
Investments are a very personal decision. But think about Dave. How are we not going to end up like him?
Ta ta for now.
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