Why is the middle class and retired falling apart? No Cash flow from investments and placing money into the wrong asset classes at the wrong time. Watching T.V yesterday the news was talking about the impact of Property tax assessments by MPAC ( a non for profit company working for the City of Toronto). First they go and talk to a retire 70 year old man in a single family home. This is why I am not buying residential real estate for the next 3 years. His property was assessed for $330, 000 and he told them he couldn't even sell it for $300,000. Since the 15% plunge in house values ( which is the buy and sell of your house not the value of the house) go and read http://www.greaterfool.ca and find out what I mean. He complained about his retirement fund being drawn out to cover expenses and he doesn't know how much more he can take of the increases.
The middle class dream of living off buying non cash flowing investments is starting to turn downward. The mutual funds have failed to bring real returns, their bonds have lost pace with inflation, the RRSP account are losing value every time the bank of Canada lower rates, and house resale prices are falling because of the supply on the market.
What I can learn from all of this? Start learning how to buy great dividend paying stocks, learn how to protect your stocks with option contracts, buy Gold and Silver to hedge against inflation and protect wealth, and start or buy business for retirement. I have learned from that retired man Savers and Losers, and Cash is Trash.