“I have discovered the secret to successful career reinvention,” confides Alan Gratias, the former trade negotiator for Agriculture Canada who negotiated his own retirement from public service at age 49 to pursue a second life as a private investor and bon vivant.
“Avoid golf, bridge and sailing.”
It’s a basic principle that the one-time Ottawa mandarin who helped establish the Office of Public-Private Partnerships at Agriculture and Agri-Food Canada, among other government agencies, swears by.
Instead of teeing off, he restores vintage real estate, writes books and newspaper appreciations for dearly departed friends, runs an art gallery and markets a trivia game called Gravitas –“the little box of big questions” – which the 66-year-old invented a few years ago in time left over while developing his own Prince Edward County winery. But that’s another story.
For a guy on the go, Mr. Gratias (sounds like “gracious”) takes his financial decisions slow.
The founder of Beyond Government Inc., a non-profit foundation dedicated to the development of alternative ways of providing public goods and services, draws inspiration from what he calls Buddha investing, “the realization that everything is one and interconnected. Any one unpredictable event anywhere in the world – the euro collapse, terrorist attacks, oil spills – can trigger consequences in the market which no one can anticipate or control.”
If there’s one thing Mr. Gratias can’t stand it’s not being in control – of his money, that is. Call it a learned reaction.
His late father, Orvald Arthur Gratias, a physicist with a PhD from Oxford, parlayed an MBA into a second career as a research analyst with the Montreal blue-chip firm MacDougall, MacDougall & MacTier, becoming in-house guru of market movements.
His father’s investment mantra was buying stocks that paid dividends and offered growth potential, and holding them long term, says Mr. Gratias, who has always followed his advice when possible.
His other mentor in the game of investment has been his twin brother. “He’s a star accountant, banker and tax adviser. But twins being twins, we have tended to be competitive and singular, so often I ignored his counsel in a bid to be independent.”
That independent streak has sometimes cost him.
Even though armed with a master’s degree in political economy from the London School of Economics, the sociable, stalwart and still handsome former bureaucrat stumbled badly when playing the stock market in the late 1980s.
Straying from his father’s investment advice cost him dearly. “For a number of years I took lots of flyers on equities and projects I had little knowledge of, or control over. And I lost my shirt on most of them,” he says.
“Increasingly put off by the fees, self-servicing greed of the financial services industry – in which almost anything, as long as it is convoluted and profitable, can be securitized or commoditized – I wanted out,” he says. “There is so much capital chasing unrealistic returns that there never seems to be a shortage of sucker investors for such products as mortgage-backed securities.”
After a number of expensive failures and high-tech collapses, Mr. Gratias left the stock market altogether and focused on what he thought would yield a better investment income – real estate.
This led him to adopt a simpler life in Ontario’s Prince Edward County, where in 1998 he began investing in income properties and vacant land: “things I could see, walk and harvest wood on.”
His mania, what he describes as a weakness bordering on obsession, is crumbling houses, which he fixes up and sells at a profit. But that’s not the only reason he does it.
“Somewhere along the way,” Mr. Gratias says, “I became a believer in the notion that if we save our built heritage we save ourselves because what is past is prologue.”
Over the past 15 years, he has restored dozens of dilapidated buildings with character in Ottawa, Lunenburg, N.S., and parts of Quebec.
In Prince Edward County he owns a 200-year-old Loyalist farmhouse on eight acres, which he has painstakingly been renovating himself over a 12-year period, stripping the floors, repairing and painting the walls and furnishing it with elegant antiques and eclectic art.
“I enjoy it tremendously,” says the unmarried self-starter, “because there’s a direct correlation between input and output.” The property overlooking Lake Ontario has a boutique vineyard yielding a Chardonnay called, cheekily, Deo Gratias.
By combining his passion with his investment interests, Mr. Gratias has negotiated his retirement well, says Arpad Komjathy, a certified financial planner with Equity Associates Inc. in Toronto.
“This is usually a good recipe for success,” Mr. Komjathy says.
“As a retiree with a need for income, he mainly invests his time and money in areas that he knows and controls. At this stage of his life, it is appropriate to focus on debt elimination, to adopt a conservative investment strategy when it comes to the stock market, and to derive regular income from real estate investment properties.
“That he does it while living an active lifestyle in a heritage home surrounded by a gorgeous vineyard in the peaceful countryside is the cherry on top. It reads like a life dreamed up by a Hollywood movie.”
But Mr. Gratias isn’t done yet.
Having written about life as a trade negotiator in 1989’s The Completely Civil Servant, he delights in writing about his investment strategies as developed through a lifetime of experience.
“I have settled out on what I call ‘GQ’ (stands for Gravitas Quotient) investing,” he says, “based on an accumulation of observations about how people and the markets behave.”
The key message of GQ investing is to focus on paying down debt and initiate “sensible, cautious returns to the market with stocks in banks, insurance, the resource sector and mortgages as well as equities, bonds and convertible debentures.”
RRSPs are part of the strategy, “but because of my years with the federal government, and now receiving a defined benefit pension which I regard as a safety net, my contributions then and now are less than the maximum,” he says. His total RRSPs, he continues, add up to less than $500,000.
Still, it’s not a bad little nest egg. It helps him do what he wants. And that includes travel.
On a recent vacation to Puerto Vallarta Mr. Gratias sent the following e-mail, direct from the beach, sharing more of his retirement secrets:
“Though not part of my investing strategy,” he wrote, “standing on my head and skipping rope, which I do every day, means never having to join a fitness club, a savings of $100 a month.”
Goodness Gratias yes, infinitely better than golf.
Alan Gratias’s home-grown investing tips:
1. Money is not turned into capital until it is invested.
2. Ignore the ads and promise of drooling returns.
3. You have accumulated wisdom. Use it.
4. Sprinkle growth in your dividend mix.
5. Open a tax-free saving account (TFSA).
6. Give as much as you can afford to your heirs and beneficiaries while you are alive, and then the rest to your charities. There is nothing wrong with a zero probate.
7. Treat personal debt as a first obligation. Make the sacrifices because getting rid of debt is always smart.