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“ Go to: www.retire-rite.ca and Like/Share @: www.facebook.com/retireritelifestylesolutions MONEY
Do You Know Someone Retiring in 2021 and Can Use The Advice of a 32 Year Experienced Retirement Specialist?

Can the Rule of 72 impact your Retirement?

The Rule of 72 is a mathematical clients who followed our advice,
formula, which, allows you to YES, IT CAN! Before we take the required took their profits from their
calculate the timeline for your surging portfolio, and redirected
capital to double; at various steps to address the Rule of 72’s impact that capital (profit) into a calmer,
interest rates... on your retirement; let us take one step steadier blend of balanced and
Therefore; any interest rate, income funds.
divided into 72, will give you the back and explain the mysterious As we conclude this week’s article;
required years for your capital to mathematical formula. the lesson here is to pay attention
double. As an example, if I invested to your portfolio's projected rate of
$10,000 @ a 6% rate of return it will return and continuously monitor
take 12 years to double; therefore, your retirement*. I will dive into an Based on 2021’s low-interest technology sector. Fortunately, I the impact the Rule of 72 will have
$10,000 invested at 6% will grow to actual example, later in this article, environment, we are projecting a lived thru that era, and I saw clients on your journey. Staying too long
$20,000 in 12 years. which will further explain the conservative 5% annual rate of who took my advice and clients into a low-interest fund or not
The Rule of 72 has a direct significance of the Rule of 72. return; however, when you add an who didn’t take my advice, allowed getting out when advised can work
correlation to your retirement, for * At this point, I would like to add a inflation rate of 2%; your new their greed factor to set in and against you.
starters, if you are betting on the few key points on timelines. targeted rate of return should be suffered for it. So, the next time you discuss a rate
wrong horse (your investment Canadians cannot project their 7%. Therefore, if you are staying WORD OF CAUTION: Do not of return; quickly do the math and
portfolio) your expectations versus mortality; thankfully, we are living put with a 7% rate of return; you chase last year's returns and expect calculate the number of years in
your reality will be vastly different. longer and healthier and instead of now know your capital will double the same in the current year. I which your capital would double;
Example: Say you started a your retirement horizon lasting 10- in 10.28 years (72/7% = 10.28 years). would run out of fingers and toes of have some fun with it, but be aware,
monthly RRSP contribution plan 15 years, it's now closer to 15-20 or The last thing you would ever want clients who insisted on going make sure your risk tolerance is
with a blended portfolio mix that more... in your investment portfolio is to against our recommendation and reflected in the blend of your
doesn’t correlate to your risk When you create your long-term build it on hope or winning the greedily dumped more money into investment mix; in order to satisfy
tolerance; your retirement funding retirement plan; make sure your lottery. a bullish sector. I can also point out your Rule of 72 calculation.***
may realize a shortfall; especially, if future income (indexed of course) Yes, at times, some sectors beat the
you were not aggressive. will provide you with income for 15- market, which produces a
Let us expand further; at age 35, 20 plus years after turning 65. temporary higher annual rate of
most Canadians have a 30-year The Rule of 72 also applies to return, however, my advice; that’s For more information, or to create your post covid recovery plan
investment timeline to their inflation; at a 2% inflation rate; the the gravy, do not focus on these please drop me a line at:
prescribed retirement age of 65; cost of goods and services will bumps. riyadm@themoneycafe.ca and or contact me via Linkedin or Facebook.
however, when the portfolio was double in 36 years (72/2% = 36 Bonus: if in the next 12 months, You can also check out my websites: www.themoneycafe.ca |
constructed, it projected a years). Why is this important, your portfolio generated a 12% rate www.retire-rite.ca | www.facebook.com/retireritelifestylesolutions
compounding rate of 8% annually; when you are creating your of return due to a couple of stocks
at an 8% annual rate of return, you portfolio, you must factor in a within your investment mix taking Article; courtesy;
can predict what your retirement minimum inflation rate of 2%; off; say thank you, and quickly The Money Café Corp/Retire-Rite Lifestyle Solution™
nest-egg would look like. (If you some advisors may even go higher revert to your 7% target. Never; re-
are not sure how to calculate your and peg inflation at 3%? calibrate your projected retirement Kindest Regards
numbers; reach out to us, we will The primary advantages of numbers after a banner year! Riyad K Mohammed FA; PWA; RMS
help you). factoring in a 2% or 3% inflation For those of you who are old Advanced Case Specialist/Financial Advisor
However, if your risk tolerance rate, would be; a) to ensure your enough to remember the 1998 The Money Café Corp
changed and those changes were portfolio outperformed the rate of technology runup (before its 1-813 Dundas Street W. Whitby; On; L1N 2N6
not reflected in your investment inflation and; b) your future severe correction), everyone and C: 647.554.2307
mix, your long-term projected nest account values would have been their mother were making money E: riyadm@themoneycafe.ca W: www.themoneycafe.ca
egg may not be sufficient to sustain indexed for inflation. if they were invested in the

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Durham Region reminds drivers
Du Durham Region reminds drivers Ajax Fire reminds families about
r
egion r
eminds driv
ers
to slo
to slow down in school zones back to school safety for
to slow down in school zones
w do
wn in s
ones
chool z
as students head back to school
as students head back to school
as stud ents head back to s chool students living off campus
Whitby, Ontario – As Durham Region students gear up to go
back to school next week, the Region of Durham is reminding buildings and student residences operated by the
road users to keep safety top of mind in school zones. school may also have a building fire alarm system.
“During the 2020/2021 school year, many students were learning Make sure the landlord, administrator or
from home so there was a decrease in the number of children superintendent identifies and explains the fire
walking or riding bikes to school. alarm and detection features in the building and
As in-person learning starts up again, drivers need to slow down, unit.
stay focused, and watch for cyclists and pedestrians; and Ontario law requires all homes and apartments to
pedestrians must ensure they always cross the road at a have a working carbon monoxide alarm outside all
designated crossing or signalized intersection,” says Ramesh sleeping areas if there is a fuel-burning appliance or
Jagannathan, Director of Transportation and Field Services for attached garage.
the Region of Durham. “With more people on the roads, please If security bars are installed on windows, they
give yourself extra time to get to your destination and drive with should be equipped with a quick-opening device on
care to protect the safety of our children.” the inside so the bars can be removed quickly.
Through the Durham Vision Zero strategic road safety action Every room or apartment requires adequate exits
plan, Durham Region is taking steps to reduce the number of that will permit unobstructed escape from the
fatal and serious-injury-causing collisions on our roads. building. All windows and doors should open fully
Automated Speed Enforcement (ASE) cameras are currently and easily, and stairways and hallways must not be
operational in school zones and designated community safety used for storage of any kind as this can seriously
zones in Durham Region. Cameras are rotated between these As summer comes to an end, many students will be impede an evacuation.
sites. For a list of locations in Durham Region, and to learn more leaving home and heading back to college or In a fire emergency, everyone must know what to do
about ASE, visit durham.ca/ASE. university. If you or a loved one is living off campus and where to go. Large apartment buildings and
Durham Region also uses a speed radar feedback sign program to this year, Ajax Fire has some important fire safety student residences require a fire safety plan, which
improve driver awareness of speed limits and reduce aggressive reminders. informs the occupants about emergency
driving in school zones and Community Safety Zones. In The following are safety tips that every parent and procedures. Ask the building administrator or
Community Safety Zones, fines for traffic offences—such as post-secondary student should consider: superintendent to explain the procedures in the fire
speeding or traffic signal infractions—are doubled. It’s the law in Ontario to have working smoke alarms safety plan.
Durham Vision Zero is a long-term plan to ensure a safe on every storey and outside all sleeping areas. Smaller apartment buildings and houses that have
transportation system that sees no lives lost or serious injuries on Rooming houses have specific regulations about been converted to apartments or lodging rooms
Durham’s roadways. Learn more at durham.ca/VisionZero smoke alarms or fire alarm systems. In addition to may not have a fire safety plan. It’s a good idea to
smoke alarms within each unit or suite, apartment ensure there are two ways out of the unit.