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But say you invested $10,000 in mutual funds and then lost $4,000 in the economic crisis. To get back up to the $13,468 you would have had if you played it safe you would need to earn at least five per cent interest - a reasonable return for a so-called safe investment - for almost 17 years! To get there in 10 years you'd need to earn close to nine per cent interest, which is theoretically possible if you take some huge risks but pretty unlikely for a safe investor in this climate.
I've been duped. Deceived. De-pantsed. My money is gone, maybe forever, as well as all the safe money I could have earned if I'd banked it or invested my RRSP income into something safe and boring like GICs.
I knew there were risks going in, I read the small print, but somehow I don't feel like accepting all the blame along with all the consequences. The economic collapse is something that was done to us by praying on our hopes and dreams, and gullibility.
I was assured by my bank, and other financial experts, that I was young and could afford to risk my money, especially if that money is for my retirement 35 years from now. Take a few risks now, they urged, and get more conservative over time.
I was also encouraged by government to get an RRSP through a system of tax breaks, and like most people I invested that RRSP money in the market. You kind of have to do that if you want to get ahead.
Here's the thing: RRSPs aren't really tax-free, they only defer paying taxes until you retire and start withdrawing money. Therefore the real value of an RRSP is the ability to earn interest tax-free, which is why people accept higher risk for an opportunity to earn higher interest. Without that interest there's no real point in getting an RRSP, other than the fact that they encourage you to put money away.
I'd also like to blame the banks for playing along with the bubble and for losing billions of our dollars, governments for trusting markets to be self-regulating, and every social Darwinist out there who assumes I'm completely at fault for every cent I've lost. I'd feel a little more personally responsible if my mistake wasn't trusting banks and government to do their job. Fool me once...won't get fooled again.