After almost three decades, Globe and Mail personal finance columnist Rob Carrick is retiring at the end of this month. He will continue to write for The Globe in different capacities.Fred Lum/The Globe and Mail
For almost three decades, The Globe and Mail’s personal finance columnist Rob Carrick has been writing about everything you need to know about managing your money in Canada – from investments, real estate, mortgages and taxes to retirement and much more.
Through his Carrick on Money newsletter, he’s interacted with countless readers who share their thoughts on his reporting. And after 29 years at The Globe, Carrick is retiring at the end of this month. But, don’t fret, he’ll continue to write for The Globe in different capacities.
On June 25, he answered reader questions about his career, his reporting and a myriad of personal finance topics. Readers also asked about building wealth, the Canadian economy and the best tips for retirement planning.
Here are some highlights from the Q+A.
Questions and answers have been edited for length and clarity.
Personal finance tips
What is your advice for someone trying to pay off credit card debt? Is it worth it to get a loan to pay off the debt?
Rob Carrick: Credit card interest rates are right around 20 per cent. If your loan rate is, say, 10 per cent, you could save a lot of interest. The key to success here is not adding to the credit card debt.
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In the current economy, is renting or buying a more economical or financially advantageous strategy?
Carrick: This is a tough one. Rents have soared in recent years, though they are coming off their highs in some cities by a bit, and mortgage rates are still a handful. I don’t see lower fixed mortgage rates coming up, though variable rates could come down. Generally, renters have more financial flexibility. They pay only rent, not property taxes, insurance and maintenance. Also, you can negotiate lower rents if the economy tanks, and you can easily move if you need to for better job prospects. Owning gives you the satisfaction of having your own space, and you build equity, of course. But home ownership will dominate your finances.
To what extent have you personally used these all-in-one ETF portfolios? And, do you find many readers have trouble transitioning to them for reasons such as tax issues on existing assets?
Carrick: I have not used them. But one of my sons has used them, and I have suggested them to other people. The #1 reason why people have trouble transitioning to these ETFs is that they think they should be doing more. They – mistakenly – think investing has to be more complicated than simply buying a diversified portfolio in a single package. I think all-in-one ETFs are a gift to investors.
While mutual funds have earned a reputation for being limiting over the years, their close relative, exchange-traded funds — ETFs — have risen in popularity among everyday investors.Spencer Colby/The Canadian Press
A look at the Canadian economy
Where do you see the Canadian economy in five years?
Carrick: Call me a dizzy optimist, but I see the economy on a stronger footing than it is now. For the first time in as long as I can remember, there is a feeling in the country that we need to focus on building the economy in a way that generates prosperity for all. Hard choices are ahead. Like, how do we afford all this spending on national defence? But if we can produce more growth, more and better-paying jobs will result. That’s the missing link in personal finance. Higher incomes as opposed to cutting and making sacrifices.
Building wealth
What’s your ‘secret sauce’ for building wealth? Especially for young people starting out in their 20s.
Carrick: I have to admit that in my 20s I was a spender and not a wealth builder. I had the good sense to avoid debt, other than car payments, so I didn’t do too badly. What I learned eventually is that investing on a regular, “every payday” basis is huge in building wealth slowly but steadily. Suggestion: Pick a digital investing app with no commissions and keep adding money to an all-in-one ETF.
Personal finance columnist Rob Carrick recommends getting a digital investing app with no commissions to help save money in your 20s.LPETTET/iStockPhoto / Getty Images
If you were unexpectedly given $100k (without debt, without a mortgage, with a healthy emergency fund), what would you do with it? How does the answer change if you were 18? 30? 65?
Carrick: This is a fun question. At my stage, age 62, I would think along the lines of a trip somewhere and then sharing the money with our two millennial age sons, perhaps as FHSA or TFSA contributions. I’m the kind of person who likes to divide up windfalls rather than use them for one thing. So at 18, I might have put some away for post-secondary etc., and spent some. When I was 18, I’m sure I would have had a car in mind. At age 30, I’m sure a home would swallow much of that $100K – either as a down payment or for improvements.
Lessons learned
What was your biggest and most worth-it splurge, something you don’t regret even if it meant your savings took a hit?
Carrick: Biggest, most worth-it splurge was taking the family to South Africa on a trip several years ago. I used the entire advance for a book I was writing. So worth it. Never looked back.
Do you have a biggest investing regret? If you could go back to a younger self, what would you undo or do differently?
Carrick: My biggest investing regret is that I didn’t pile money into the markets after the 2008-09 financial crash and after the brief pandemic crash. I did invest some money then, but not enough.
Retirement tips
Can you describe your retirement plan? Will it be DIY, self–planned? Are you working with a fee-only advisor?
Carrick: I’m going with planned after many years as a DIY investor. I have spent my career writing about personal finance, financial planning and investing. I will continue to write on these topics going forward, but I want my free time to be focused on other things. I am really enjoying having a planner. Everything is taken care of.
After almost three decades of giving financial advice, how has that helped or shaped your financial situation for your retirement? If you were to pick one piece of advice for retirement planning, what would it be?
Carrick: Here’s one piece of advice: Start thinking about your retirement around age 50. See how your savings are tracking, and what kind of retirement income you can expect. At 50, you have many years ahead to make any needed adjustments in your retirement planning.
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What are the sensible financial strategies you used to plan for a prosperous and healthy retirement?
Carrick: Here’s a sensible financial strategy I used…. I made contributions to RRSPs and TFSAs every payday through automatic transfers from our chequing account to our investment accounts. Over the years, these automatic transfers really piled up.
I’ve been retired for 15 years and have never second–guessed the decision. I believe a big part of my enjoyment was going into retirement debt–free. Can you share the one single piece of financial advice you could offer us seniors?
Carrick: A piece of advice for seniors is that, hard as it is, you need to find a way to co-exist with stock market ups and downs. Seniors who hope to keep their investments growing at a rate that beats inflation need at least some exposure to stocks, which have been incredibly volatile in recent years. I have seen some scary dips for stocks over the years, but they always come back. Seniors have told me, ‘I’m not sure I’ll be around long enough for that recovery,’ but that’s often guesswork. Have some cash or GICs and/or bonds to cushion your portfolio and have some exposure to stocks for dividends and growth. Get the mix right and stop worrying about how every news headline will affect your finances.
What are the most important things to consider if you are a year or less away from retirement? What are the most pressing needs to focus on that would affect the quality of retirement before you take the plunge?
Carrick: When I was a year away from retirement, I wanted to know what kind of retirement income I could reasonably expect from our savings, and how that would match against our expected spending. My wife and I tracked our week-to-week spending, and then imagined the changes that would come in retirement. One massive difference: No more saving for retirement. My pre-retirement planning focused on minimizing the inevitable surprises that occur when you stop drawing a regular paycheque.
They say the best things in life are free — even if we have the financial means to do what we want. In retirement, which activity will you undertake on a regular basis that won’t cost you a dime but still bring you much joy and a sense of purpose?
Carrick: My number one free activity that brings me joy is running. I have a friend who is retiring at the same time and we have a run in Gatineau Park scheduled for next week.
