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Check Yourself Before You Wreck Yourself, IMHO

1 September 2023

My kids tell me I’m too old to be using common texting acronyms like BTW or BRB when I’m speaking in everyday life (or IRL.  Lol 😊).  When I try and rehash some old-school terms from back in the day, like “Choice”, “Rad” or “Not even”, I’m accused of decreasing my cool dad factor (CDF), which was pretty low to begin with.

Maybe my CDF with my daughters would improve if I could introduce a new acronym to the vernacular: ROT?  “ROT” is my proposal for the sometimes-dangerous term: Rule of Thumb.

In the investment and financial planning world, rules of thumb are prevalent.  And not only on general internet forums and websites.  I’ve had conversations with many investment and financial advisors offering common rules of thumb, or ROT, advice.  (See how ROT could be considered an appropriate acronym in this case?)

Examples of general financial ROT:

  •       It’s never too early to start saving for retirement.
  •       You should have an emergency fund to cover 6 months of expenses.
  •       Pay off your debt as fast as you can.
  •       Not all debt is bad debt.
  •       Take your CPP and OAS as soon as you’re eligible.
  •       Delay taking your CPP and OAS to age 70.
  •       You should always commute your defined benefit pension plan if given the opportunity.
  •       You should never commute your defined benefit pension plan.
  •       The equity weight in your portfolio in percentage should equal your age in years.
  •       Maximize your RRSP contribution limit each year to capitalize on tax-deferred compounding.
  •       Don’t start withdrawing from your registered plans until age 72.
  •       Try and deplete your registered plans before you’re forced to at age 72.
  •       Gift an early inheritance to your children while you are still alive.
  •       Everyone should have life insurance.



The list of ROT financial advice is endless.  Some rule-of-thumb advice might be beneficial to you and your family’s financial well-being.  But, I have seen the effects on families of inappropriate ROT advice offered to them by the financial industry, and the effects can be damaging and irreparable.

I’m aware ROT advice in the healthcare and fitness industries is potentially even more dangerous, but I don’t have any expertise in these fields to comment.  However, if you sensed that your loved one was seriously ill and needed help, you would seek expert, unbiased, professional advice from the best medical professional you can find.  Why not do it for your financial well-being as well?

I don’t know if an ill-advised, ROT plan is better or worse than no plan at all.  I do know having a financial plan developed by an objective professional that captures all your family’s goals and outlines the specific action steps to get you there, will make all the difference in your world.

To boost my CDF, I will leave you with a lyric from the godfather of Canadian hip-hop, Maestro Fresh Wes:

“I’m simply spectacular, smooth like an Acura

Yo, check my vernacular”

Dave Martin…Out.

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