Getting away from my recent real estate investment reading kick, I read a book titled “Why Swim with the Sharks? An unconventional guide to early retirement” (ISBN 0-9737060-0-7) written by Diana Salomaa and Henry Dembicki. The authors had a goal of retiring in their early 50s. Their thinking is that life is too short and, instead of waiting around until retirement to start enjoying it, they wanted to start as quickly as possible.

Although this book carried a similar message as “The Naked Investor” , it had a different angle.

“Don’t make the mistake of basing your future plans solely on the advice of retirement experts. More often than not their advice is one-sided. That’s because it is driven by their self-interest, and it’s unlikely their self-interest will coincide with yours.”

The authors feel, just like John Lawrence Reynolds, that there is a conflict of interest within the wealth management industry. The industry constantly bombards us with ads telling us that we will need $1 million dollars in order to retire. If we don’t start saving for our retirement in our 20s, we will only have ourselves to blame when we can’t afford to retire. In order to retire well, we need to invest with financial advisors who will take care of us so that we can retire rich.

The authors don’t blame the industry. After all, these financial advisors are just trying to make a living themselves. Instead, the authors want people to take an active role in the management of their retirement funds.

The authors list 7 retirement myths. I am sure you all know them: need 1 million to retire comfortably, need 70% of your current salary to retire, public pension system will be bankrupt by the time you need it, etc…

Instead of taking this conventional wisdom as gospel, the authors have created exercises so that you can determine for yourself exactly how much you will need in retirement. There are several exercises to run thru such as looking at your current expenses. The authors suggest that, in retirement, you will not have many of the large expenses that you incur today. For example, you should no longer have a mortgage payment. Nor will you be putting aside money for your retirement (whether RRSP or taxable investment accounts). Your children will be grown and on their own. Once you remove these large expenses, you will be surprised on how much income you are actually living off!

Once you have determined how much cashflow you would need to live off during retirement, the authors then take into account how much of that cashflow will be covered by the public pension system. The shortfall of cashflow will then be made up from your personal savings. They calculate how big your lump sum investment needs to be to generate the cashflow to make up for this shortfall.

The book ends with the authors encouraging you to think about what is really important to you: health, physical fitness, close social relationships with family and friends, etc… You will probably notice that most of the things that are most important to you do not involve money.

I thoroughly enjoyed this book. It was well written. I enjoyed going through the many exercises designed to show me how much I need to save for my retirement. I highly recommend picking up this book and working through the exercises. It will help focus your retirement goals.

Table of Contents

Part 1: You Can Retire Early

1. If You Won the Lottery
2. Beware the Wealth Management Industry
3. Ignore the Seven Retirement Myths
4. You Need a Lot Less Than You Think
5. Where Will It Come From?
6. Tips on Crunching the Numbers
7. Four Strategies for Saving
8. Tax Planning doesn’t Have to be Taxing
9. Taking Control of Your Fears
10. Before Storming Into the Boss’s Office
11. Getting a Life

Part 2: Walking the Talk

12. Where does Your Money Go?
13. A Penny Saved
14. A Shift in Attitude
15. Keeping Track of Retirement Savings
16. So, What are You Going to do?

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