In social settings, most friends only share their success stories in investing. This may or may not be the full picture.

Had dinner with a bunch of ex-colleagues. Two of them did very well in their careers and are now happily retired. They are both well to do and are private banking clients.

The conversation invariably led to investments and what each of us are doing in terms of investment. Mine is boring, using RSP (regular saving plans) to buy broad ETFs and multi-asset income funds and hence did not share much.

A started speaking about currency pairing and borrowing money in swiss francs to purchase instruments in another currency. It sounded complex. I am trained in corporate finance and it took me a while to understand exactly what he is doing or rather what his private banker advised him to do.

B, whom I know is a risk taker, was sharing about structured products…using loans to purchase bond funds. At one time, she was sharing that she is earning dividends of US$20,000 per month. Basically, her ideal retirement income every month.

I am sure many of us have such friends and social settings like this could be common. Many of us are even tempted by their investment strategies. We are keen to find out how to earn a pretty penny during retirement and participate in them.

Since we knew A and B for more than 20 years, we could also start putting the pieces in place.

A was in the company the longest and benefited from the company stock option plan when it had a big ramp before it crashed (unfortunately, I joined the company after the ramp and did not benefit as much). He bought physical investment real estates and earned a significant amount of retirement income from rental. He is only using a small portion of his wealth on risky instruments. We know that he bought Bitcoin at US$60,000 (it is about US$24,000 currently) and lost money in risky corporate bonds when oil price crashed. In a social settings, he was only sharing “exciting” investments he is making. Boring investments are not good conversation topics in social settings.

B comes from a wealthy family. She is a risk taker. We have no doubt that some of her investments made her good money but we also knew that she lost money together with A on risky corporate bonds.

So while we may be tempted to look for sophisticated investment vehicles to earn us higher returns for our retirement, please be mindful that the higher the returns, the greater are the risks. There is always a common saying that there is no free lunch on Wall Street (or for the matter, anywhere). Please do your due diligence and if in doubt, walk away. Bankers are keen to push sophisticated products to their clients as they make more fees and commissions from them.

Tri-O Retirement Plan is boring. We are proposing that you buy broad based funds or ETF on a RSP (regular savings plan). A good case is you can make 10% per annum on this strategy although we tell our readers that even 5% to 6% is good (assuming risk free rate is 3%-4%). We like it boring and safe.

We proposed two portfolios in your INVESTMENT “O” – income portfolio and growth portfolio. Keep your income portfolio boring and safe. If you like, you can take a portion of your growth portfolio to participate in riskier instruments. You could be one of the lucky ones who bought Bitcoin at US$100 or Apple shares at US$17 (pre split) many years ago and find the next big thing.

TRI-O RETIREMENT PLAN is a simple way to help you get started on your retirement planning. Learn the FUNDAMENTALS and HOW TO GET STARTED. There is also a spreadsheet to help you CALCULATE your monthly savings and your project monthly income at retirement. You can check out our BLOGS on topics pertaining to retirement planning. Feel free to CONTACT US if you have any questions or comments.