“If You Can” by William Bernstein
- William Bernstein is a well know personal finance writer who tries his best to convince people to save for retirement using low cost broadly diversified index funds. He has written a few books on the topic but recently released a short e-book for young people who need help investing. You could read this book and learn quite a bit on how to DIY.
The book’s advice in incredibly easy to follow and it works. Here is really all you need to know.
The book is written for an American audience so I’ve changed it to meet a Canadian’s needs.
1. Save 15% of your pretax income, each and every year from your first year of working until retirement. So if your yearly salary is $60,000, save $9000 per year.
Remember our Canadian experts Fred Vettese and Malcolm Hamilton think 15% is too much to save. It means you will have more money to spend in retirement than when you were busy working and raising a family. But, the decision is yours.
2. Now that Vanguard has introduced their all in one product, you can purchase 1 etf and forget about investing until next year. Vanguard does it all for you. Your job is to set up a self directed trading account with any of the big banks and save. Once a year, buy some VGRO or VBAL or VCNS and forget about it .
Do this every year for 40 years, and you should have a superb retirement.
If your company offers you a pension plan and together you contribute at least 15% of your pay to it, you don’t have to save anything more for retirement. Just make sure you are out of debt before you retire.
I’m a department head for a high school in Toronto. I graduated from the Ivey School of Business at Western University and have been a DIY investor for over 20 years.