Turning to her computer, she crunches some numbers. If I want to retire in 10 years with an annual income of $40,000, I need to put $4,900 into an RSP each month, she says, assuming an annual rate of return of 8%. Finally, I realize what I should have been doing with that extra five grand I had lying around each month. Good to know.
What if I had access to $50,000? I ask. (I don't want to reveal what scenarios would allow me to come up with such a princely sum on short notice.) Could I turn that into $750,000 in 10 years?
If that's what I want to do, I'm in the wrong place, she says. I need to find a money manager.
Wolfgang Klein, a senior investment adviser at Canaccord Wealth Management, is willing to help me out. Sitting in his office overlooking downtown Toronto, Klein turns to one of the three monitors on his desk, each displaying enough information to make my head explode, and explains that in order to turn $50,000 into $750,000 in a decade I need to achieve an annual rate of return of just over 31%. Not even Warren Buffett gets returns like that, he adds, helpfully. It can be done, he says, but at a level of risk that would make most investors queasy.
"You need to be able to put it all on red," he says. Blue-chip stocks are out, as are bonds and mutual funds, since none of them will come anywhere close to generating an annual compounded return large enough to reach my goal.
Klein suggests investing in one or two junior mining stocks. Several such stocks have been known to go from pennies a share to 10 times that amount in the course of a year. "The problem is, it fails more often than it happens," he says. "You have to have luck and do your homework and know the company inside and out."
Had I come to see him last year, Klein would have suggested I look to commodities. For instance, had I known Ventana Gold Corp. even existed, I could have invested at 14 cents a share in November, 2008, and watched it climb to $9 by early December, 2009. These days, however, the gold market is overheated. As is the market for lithium, which apparently everyone in the world but me knew was the hot commodity of 2009. "You've got to buy it when it's quiet, and sell when it's a riot," Klein says. His knack for turning investing maxims into nursery rhymes is appreciated.
Sensing my desperation, or perhaps my cowardice, he tells me to invest in myself. "If a person wants to make a lot of money quickly, the smartest way to do it is to start up their own company and hope they're successful," he says.
Unfortunately, I lack an idea for said successful company. I scratch my head for a few days, coming up with nothing. Then it hits me: Instead of starting my own company, maybe I can find a guy who already has one-preferably the guy developing the next Rubik's Cube-and who just happens to be looking for $50,000 of seed money. How do I find that guy?
The key is to pick companies that have management you are confident in, and then be patient. Brett Wilson
If anybody has a line on the next million-dollar idea, it's Brett Wilson. As anyone who's ever seen an episode of CBC's Dragon's Den knows, this is what he does for a living. And Wilson is stinking rich. In 1991, he co-founded a successful Calgary-based investment banking advisory firm. Then, two years later, he added some more dough to his pile when he co-founded FirstEnergy Capital Corp., a firm that provides financial advice to Canada's energy sector. Now,
he's the chairman of a private merchant bank, and uses his keen ability to sniff out the next big thing to make some change on the side. Over the phone, I beg him to tell me his secret of success.