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Enough Bull: How to Retire Well without the Stock Market, Mutual Funds, or Even an Investment Advisor, 2nd Edition by David Trahair

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Chapter 5Forget RRSPs Until Your Debt is Paid Off (The Opportunity Zone)

Yes, that’s what I said, and yes, it goes against traditional retirement planning advice. You know, the “start early – the earlier the better” and “pay yourself first” type of advice. The truth is that it may really be better to start late.

When you work through the numbers and consider the risks involved with investing in the stock market while you are still in debt, you may come to the same conclusion I have: you are much better off to focus on buying a home and paying off all debt, including the home mortgage, before you start to save for retirement.

Pretend the Stock Market Does Not Exist

I think a strong case can be made to ignore the stock market altogether when it comes to saving for retirement. The risk of stock market disaster is simply too great. This is especially true if you start saving late, because there is less time to recover from a stock market crash. So how do you ignore the stock market? Pretend it doesn’t even exist.

That’s correct – every dollar you invest from now on goes into 100% no-risk government-guaranteed fixed-income GICs.

The RRSP Fallacy

During our spending years when we are in debt, they ask us to make RRSP contributions, don’t they? In fact, they want us to start as early as possible. You know, to realize the benefits of “compounding.”

The truth is that these clever word plays make the product-pushers rich . . . and you poor.

How so? Well since we are in debt, the only ...

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