Ben McCabe Of Bloom Finance: 5 Things Retirees Say They Wish They Were Told Before They Began Retirement
Invest in real estate early. Many of our clients never made more than $35k a year throughout their careers, but today have seven figures in home equity. The long-term marriage of rising home values and an amortizing mortgage are incredible in terms of building retirement wealth.
As a part of my series about the “5 Things Retirees Say They Wish They Were Told Before They Began Retirement,” I had the pleasure of interviewing Ben McCabe.
Ben McCabe is the founder and CEO of Bloom Finance, a reverse mortgage company helping Canadians 55+ live responsibly, securely and worry-free during retirement.
Thank you so much for doing this with us! Our readers would love to “get to know you” a bit better. Can you share with us the backstory about what brought you to your specific career path?
After finishing school, I started my career in traditional financial services, working for one of the big banks and then a large private equity firm, before transitioning into the more exciting world of fintech. From there I began working for one of Canada’s first online lending businesses, which focused on providing capital to Canada’s small business community.
What I learned was how a company with a rigorous focus on creating comfortable, simple and pleasant customer experiences could go up against the big banks. With those learnings in hand, and looking at different areas of opportunity in Canadian financial services, I started thinking about our home-equity rich retired population who were still struggling to make financial ends meet — and that’s how Bloom Finance started.
Can you share the most interesting story that happened to you since you started your career?
Starting a business has definitely been the most interesting experience. One of my biggest learnings thus far is the power of saying yes — which doesn’t always come naturally to me. Saying yes to doing something differently, saying yes to meetings and introductions that didn’t initially seem worthwhile, saying yes to a little bit of risk, saying yes to uncertainty. I know that whatever happens next, I can’t imagine I’ll ever regret taking this plunge.
Can you share a story with us about the most humorous mistake you made when you were first starting? What lesson or take-away did you learn from that?
While studying abroad in Southeast Asia and anxious to land a job closer to home, I flew around the world from Singapore to New York for a job interview that the interviewer forgot about. I showed up at their office and their assistant informed me that I wasn’t in their calendar, and the interviewer was offsite that day. The meeting had been scheduled a couple weeks earlier and I hadn’t followed up to confirm. It was a harsh lesson learned.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?
I couldn’t agree more with the premise of this question. I truly believe that the idea of “self-made” is preposterous. No one gets anywhere without many, many assists and lucky bounces .
I have been fortunate enough to collect some very important mentors along the way, several of whom were former bosses: Ken MacKinnon gave me my foot in the door to the industry with a summer internship, Brent Belzberg taught me so much about humility and the value of forming meaningful (and not superficial) relationships in business and Stephane Marceau was an amazing teacher of leadership through challenges and the importance of mindfulness.
What advice would you suggest to your colleagues in your industry to thrive and avoid burnout?
My wife might suggest I’m not the best person to ask for advice on this topic! The reality is, I don’t think there is a way to start a business from scratch without riding the line, but I have a few things I do to avoid crossing it.
I enjoy daily exercise, ideally outside — I live in Quebec City most of the time which makes for a nice backdrop for this and it gets me out of the house and away from my computer. Another one is to remember not to define yourself or your self-worth by what you do for a living. If they take your business card away from you — make sure you truly believe what remains, is still the complete “you”.
What advice would you give to other leaders about how to create a fantastic work culture?
People are happier at work when they feel both empowered and protected. The best bosses throughout my career have been the ones that gave me lots of leash to run, but not quite enough to run off the cliff. They kept just a close enough eye on me that they would be able to support me if I needed it.
Ok thank you for all that. Now let’s move to the main focus of our interview. Retirement is a dramatic ‘life course transition’ that can impact nearly every aspect of one’s life. Obviously everyone’s experience is different. But In your experience, what are the 5 most common things that people wish someone told them before they retired?
I learn so much from our clients — some of the things I’ve seen that seem to creative positive financial outcomes in retirement include:
Invest in real estate early. Many of our clients never made more than $35k a year throughout their careers, but today have seven figures in home equity. The long-term marriage of rising home values and an amortizing mortgage are incredible in terms of building retirement wealth.
Start planning early. With every passing year through someone’s career and life, their financial option set get narrower and narrower. By the time you’re retired, that option set is only a fraction of what it was 30 years prior. Many of our clients in favourable financial positions started putting away their nest egg quite early in their careers.
Beware of investment fads. I’ve been really saddened on a number of occasions by clients who come to us because they’ve lost a lot of their savings investing in volatile assets or ‘hot stocks’. While younger folks can responsibly allocate some small percentage of their savings to more high-risk investments, that gets less prudent the closer we get to retirement. Personally, I prefer boring, highly diversified index funds as I know over the long run, it’s very tough to beat the market.
Avoid bad debt. Often we see folks whose retirement income is less than they were earning while they were working, and this gap gets bridged with things like unsecured loans and credit card debt. Once you start on this cycle, it’s very tricky to get out. Avoid this at all costs.
Bake in rising living costs. This is a more recent one. We see a lot of folks who had a retirement plan that worked just fine two years ago, but are having a tougher time now that a basket of groceries costs 20% more. This is something to consider.
Let’s zoom in on this a bit. If you had to advise your loved ones about the 3 most important financial issues to keep in mind before they retire, what would you say? Can you give an example or share a story?
Know what’s coming in, and what’s going out. Not everyone can afford a fancy financial advisor. But knowledge is power, and having a good understanding of how much income you’ll have once you retire, and what life is going to cost, is critical. But I think this is important at every stage of life. I like to take a look at my bank statements every couple months and see what my expenditures have been, and ensure that I have a good grasp of what’s “need to have”, what’s “nice to have”, and what I could have left on the shelf.
Slow and steady wins the race. Compound returns are so powerful, even at a low rate. What obliterates wealth is a big interruption of that process — investing too much of the nest egg in something super risky hoping for a quick win.
The ability to buy a home with a mortgage is an incredible thing. When you think about it, this is a fairly new phenomenon. I’m sure they existed before, but in terms of near-universal use, we’re talking only the last century or so. We have a client in Little Portugal in Toronto who worked as a housekeeper her whole career.
Her husband was a handyman. They’re proud people of modest means. And every month for 25 years they paid a little bit of their monthly earnings to the bank. Today their home is worth nearly two million dollars.
They decided to take a little bit of that out to help their two children afford down payments on their own homes, so they can repeat that journey.
If you had to advise your loved ones about the 3 most important health issues to keep in mind before they retire, what would you say? Can you give an example or share a story?
I can only speak from what I see and hear from our older clients, but it’s clear that for most people, health will decline, and when it does, it’s expensive. Annual out of pocket expenses for long-term care homes can exceed $30,000 per year. Even in-home care, where you’re not paying for housing in addition to care, can easily exceed $20,000 annually. Just recently we worked with a client whose husband had been diagnosed with dementia and requires fairly intensive care. This couple chose to tap into their home equity to help cover these costs, because (1) their home equity is one of the only sources of wealth large enough to cover these expenses, and (2) it will allow both of them to remain in the home they’re comfortable in for as long as possible.
For married couples, there is a good chance that one spouse will meaningfully outlive the other. While it’s difficult to think about, it’s important that financial plans take this dynamic into account. While many pensions and other retirement income sources may provide survivorship benefits, it’s not always enough to keep things in balance. A few weeks ago, we worked with a client whose wife had always managed their family’s finances. After she passed from cancer 3 years ago, he found himself falling behind on some payments, and building up a credit card balance. Luckily, he had a financially-savvy daughter who eventually stepped in and helped him get back on track. But having a plan on how to manage finances once either partner passes is an important element to ensuring financial security.
We talk a lot about lifespan, but we talk less about healthspan. With all the advances in medical care, retirement can be long — 20, 30 years or more — and the quality of those years depends so much on health. Staying active and fit in early retirement will dictate more than anything else about the quality of life later in retirement.
If you had to advise your loved ones about the 3 most important things to consider before choosing a place to live after they retire, what would you say? Can you give an example or share a story?
I think one important thing I’ve learned from several years of talking to and working with retired homeowners is that this really isn’t anyone’s business but their own. The right place to live is the place they want to live — the home they love. So many financial commentators discuss downsizing as a one-size-fits-all solution. The reality is that it’s not a simple dollars and cents decision for most people. People love their homes, they’re proud of their homes and they’re comfortable in their homes. Their homes are in the communities that they’re a part of, they’re probably close to friends and family. I’m happy that we can play a role in helping them stay there if that’s what’s important to them.
You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
One simple thing I try to encourage in myself and others is to apply the principle of charity wherever possible. This is the idea of defaulting to assume the best possible intentions from others, and the best possible interpretation of the things they say. So much unneeded offense is taken and conflict created by choosing to assume malicious intent where none existed.
Is there a particular book that made a significant impact on you? Can you share a story?
I’m fascinated by the scope and breadth of human experience, both now and over history, and I enjoy reading memoirs by people whose lives are dramatically different than my own.
Ryszard Kapuściński is a Polish journalist who spent much of his career covering events in Africa through the mid 20th century, and spending decades discovering so many diverse corners of the continent in doing so. I’ve read his book The Shadow of the Sun a few times over.
Can you please give us your favorite “Life Lesson Quote”? Do you have a story about how that was relevant in your life?
Befriend time.
It resonates with me in its simplicity, and in how many different ways it can be interpreted. I use it to remind myself that the way I feel about something today is very likely to change. I try to avoid making important decisions too quickly, unless they need to be made quickly. If I still feel the same way in a week as I do today, for me, it’s more likely to be the right call.
What is the best way our readers can follow you on social media?
Readers can follow @bloomfin.ca on Instagram, and Bloom Finance Company on LinkedIn and Facebook.
Thank you for these fantastic insights. We wish you only continued success in your great work!
Ben McCabe Of Bloom Finance: 5 Things Retirees Say They Wish They Were Told Before They Began… was originally published in Authority Magazine on Medium, where people are continuing the conversation by highlighting and responding to this story.