Personal Finance

LIFE AFTER WORK

KATHERINE MACKLEM tries a new way to get her retirement plans in order

November 10 2003
Personal Finance

LIFE AFTER WORK

KATHERINE MACKLEM tries a new way to get her retirement plans in order

November 10 2003

LIFE AFTER WORK

Personal Finance

KATHERINE MACKLEM tries a new way to get her retirement plans in order

ONE MORNING,10 businesswomen gather for a breakfast meeting in a small conference room of a downtown Toronto office tower. We are there at the invitation of Ruth Bastedo, an investment adviser with RBC Dominion Securities Inc., and we are drawn by the tantalizing prospect of getting our retirement plans in order. The other women are polished and bright. Cheery even. I’m feeling nervous and slightly claustrophobic. I’m sure everyone else is either younger or better paid than I am, or they’ve somehow saved more for their retirement. How did they do that?

The fact that I have to ask that question is of course the best reason for being here, and, after hearing the others talk, it’s why they’re here as well. Bastedo, a newcomer to the investment business, offers a novel twist to financial planning. She sets her clients up with a life coach and helps them figure out what they want out of life before helping them devise an investment strategy. A dotcom refugee, Bastedo co-founded an Internet services firm in 1997, then left the company in 2001—after it was gobbled up by a bigger fish. At her mother’s suggestion, Bastedo, a compact 35-year-old who laughs with a great ha-ha-ha, plunged from the funky world of tech into the staid—some say uptight—corridors of finance.

She has part of the look down. This particular Thursday, she wears a crisp navy suit, but her hair, short and spiky, has traces of the tech scene. In an era when investment advisers all seem to have a niche—some specialize in Asian markets; others target specific kinds of clients such as dentists—Bastedo, bless her, focuses on professional women between 35 and 55, particularly women entrepreneurs. Not only is she following her own personal interests—she’s an active member of Women Entrepreneurs of Canadabut, pragmatically, she’s got a growing market in her sights. There are record numbers of new women entrepreneurs, whose ranks are growing at twice the rate of their male counterparts. And of course there are plenty of working women in Canada who, just as I do, need financial advice.

Before I’d heard of Bastedo, I was already fretting about being late to the retirementplanning game—by now, I should have put more money aside. But as a mother of three, most of my earnings (like most of my time) have been gobbled up by family life. I’m envious of a fellow I know who, like me, is in his mid-40s. “I’ve used the retirement calculator-most financial institutions have this—to find out how much money I’ll need,” he says. He knows he can retire at 55, because he’s set up a fund that will act as a bridge until he is 65, when “other stuff”—government support, company pension—kicks in. He makes it sound easy. Is he gloating? He claims not.

Another friend, who just turned 50, says she’s been aggressively paying off her house and soon will be mortgage-free. “Is that enough?” she asks. “It’s scary,” she admits.

My planning style is closer to hers than his, and according to an unscientific poll of friends and acquaintances, we’re not alone. Smart people have a slice hived off each paycheque for regular RRSP contributions. The truly brilliant contribute the max to their RRSPs. But many still scramble at the last minute to slap together some dough for the March 1 deadline. A Royal Bank survey found that 42 per cent of Canadian adults don’t even have an RRSP. Some may have superb pensions (think teachers), but I bet most don’t. The bank also discovered that only eight per cent of Canadians rate their knowledge of investing as sophisticated, yet threequarters of them still make investing decisions either completely on their own, or with just a little advice from a pro-

fessional. “What you have here is a loaded gun,” a bank spokesman says.

For Bastedo’s session, we’ve been asked to list 25 things we’d each like to accomplish in the rest of our lives. Three or four or even five goals are easy to write down. More requires serious introspection. It’s not as if you’re just making up a Christmas list, which for me starts with a little something made by the kids, or a promise to keep their rooms clean. And then maybe some lovely bath things and a bottle—no, make it a case—of nice wine. My life-goals list is vastly more complex, but as the thought of sipping wine while soaking in the tub sinks in, I get on a roll. I hit the extravagant stage after Rebuild the Back Fence and come up with Six Months in Tuscany and Major Trip With Each of My Kids. That’s after Pay Off the Mortgage and Invest Enough for Comfortable Retirement.

LATER, I TALK WITH the life coach. The thing I want help with is time management, specifically putting aside a couple of hours to go for a solo stroll on weekends. She tells me it’s all about perception. “I’m hearing, T have no time,’ ” the coach says. “I’m suggesting another perspective. Try this other one on.” Like it’s a little black dress that will bring new swing to my life. She says: “My life is full; and I have time for myself.” As if.

Once our lists of 25 are done, Bastedo wants us to prioritize the items into categories of short, medium and long term. To help, we are guided in the breakfast session by the life coach through a series of exercises that are like group therapy—awkward, uncomfortable and a bit revealing. The point is to establish a time frame for one’s ambitions, so Bastedo can recommend investments that might fund those dreams in that timeline. Too often, she says, people decide midstream they need to tap into money they’ve been socking away to support them after they stop working. “The temptation to raid the kitty is pretty great, especially if you haven’t planned for short-term goals,” Bastedo says. She wants clients to think about, as she calls them, the chunks of money they’ll need or want in the next five to seven years. The kids’ university fees, a sabbatical maybe, or a cushion to help launch a new business. “A lot of damage is caused by taking out too soon the money that’s been designated for long-term objectives,” she says.

I’m not sure the coaching is for me; it seemed a bit simplistic, frankly. But the exercises force me to think about what I want out of life. Not everything on my list of 25 is expensive, necessarily. Exercise and eat better, or read more fiction, for instance. But there are things that will need mediumterm financing, including university fees. The backyard fence is short term and Tuscany is long. As I’m writing it all down, I know my finances won’t cover it. No matter, Bastedo says. She suggests I make monthly payments to a non-RSP investment account to fund mid-term objectives.

ONE survey found that 75 per cent of ill-informed investors make decisions on their own or with little advice from a professional

Bastedo works closely with her mother, Alice, who preceded her into the investment business. Alice, now 64, followed her father, R. Bruce West, who was president in the 1960s of A.E. Ames & Co., prior to its takeover in 1981 by Dominion Securities, which is where both Alice and Ruth are employed and which is now owned by Royal Bank. The reason for getting clients to write down their goals, says Ruth, is to separate out the planning process from the investing strategy. The exercises and the life coaching are a structured way of doing what her mother has been doing for decades, she says. “What Ruth is doing is getting all the tortuous stuff out of the way,” says Alice in her no-nonsense way. “You know why it’s tortuous? It’s because you have to look at reality. Unless you do, you’re living in a fantasy world.”

Bastedo, a mother of two, admits one of the most challenging parts of her job is to help clients get past the fantasies and get realistic about their financial security. “I help them work on how to stay in the game and still have a satisfying life,” she says, followed by one of her trademark ha-ha-has.

I like that. Might as well laugh at the absurdities of life. I mean, I’m still trying to figure out how to live my dream life when I know I’ll never be able to afford it. It’s like seeking that slippery quality called balance in a life that barely can squeeze in a quiet walk. Bastedo gives me a little clue, something I’ve known all along. “Sometimes you have to start looking at trading off things,” she says. For some crazy reason, that thought doesn’t make me unhappy. Not with her laugh, that ha-ha-ha that says we’re all mucking about these murky waters together.

katherine.macklem@macleans.rogers.com