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By Tony Martin
Excerpt from The Globe And Mail
Net Worth Section
"Me and My Money"
Saturday, April 28, 2001
Don Evans takes the big-picture approach to investing,
big time.
The 53-year-old Vancouver man can talk intelligently
and at length on the subject of money with only
the occasional reference to mutual funds, and
nary a mention of Nortel or Nasdaq.
Not that he couldn't easily get up to speed on
all the latest tech talk and market mumbo-jumbo.
Mr. Evans joined B.C. Tel straight out of technical
school at the age of 19, where his first job was
buffing telephones. He soon made the leap into
management, and he rose to the executive level,
managing a 1,000-person division, which culminated
in his employers sending him off to do the three-month
Advanced Management Program at Harvard.
That experience made him realize his skills were
universal, not industry specific. He had wanted
to try working in a different industry, so acted
on his urge to run his own business, and at 49
left B.C. Tel and set up his own consulting firm.
Half of his week is devoted to community work,
including serving as president of the West Coast
Railway Association, a non-profit society dedicated
to the preservation of British Columbia's railway
heritage, which built and operates the West Coast
Railway Heritage Park heritage attraction in Squamish,
B.C.
How he does it
In the first 20 years of his working life, Mr.
Evans had few dollars to invest. He was busy raising
a family, and his company had a defined-benefit
pension plan, which left him with minimal contribution
room in his registered retirement savings plan.
Around 1990, though, his salary had risen to
the point where there was some extra money on
hand. He was also getting concerned about the
level of income tax he was paying.
Part of his executive compensation at the time
was a stipend for a financial advisor. He made
the rounds, and landed with Adrian Mastracci,
a fee-only planner who then worked for another
firm before opening his own company, KCM Wealth
Management. "I chose them because I felt they
were looking at my individual goals, and not trying
to fit me into a cookie cutter solution," Mr.
Evans says.
Under Mr. Mastracci's guidance, Mr. Evans laid
out a plan to both build the base needed for his
long-term financial needs and to reduce his short-term
tax bills. The result was a portfolio that is
heavily weighted toward equities, as well as a
handful of limited partnerships. Mr. Evans held
a number of the latter in a variety of industries.
Some did prosper, but some were dogs.
"I wonder if just going with more conservative
investments might have got me to the same place,"
he says. "Diversification is definitely the saviour
of my experience with limited partnerships."
The next big step came in 1997 when Mr. Evans
took an early retirement package, much of which
he was able to roll-over into his RRSP. He also
made another real estate investment, buying a
suite in a new Whistler hotel that opened last
year. Similar to a time share, he pockets any
profit on the room rental. He can also use the
suite, the cost being the lost income.
The property is two-thirds financed with a loan
on which he can write off the interest, and he
expects it will likely be profitable in the second
year of ownership. "We hope to pay if off in the
next five years, and then keep it as an income-generating
investment."
More recently, Mr. Evans has begun rebalancing,
shifting toward more conservative investments,
as well as diversifying the money he will leave
in equities further by taking advantage of the
higher foreign content ceiling for RRSP's. His
advisor is also moving Mr. Evans out of the actively
managed deferred-load funds he picked up on his
own, and moving him into low-free, passively managed
investments such as capped index stocks and index
funds.
His target mix is now 55-per-cent equities, 35-per-cent
bonds, and 10-per-cent cash. "I'll be 55 soon
and will likely want to draw some cash from my
investments in the next 10 years."
And yet so far in our discussions, Mr. Evans
has still to mention the name of a stock or mutual
fund. In part this is simply because he's not
all that interested. "Playing the market is not
something I want to spend my time on. I'd rather
be out chairing a board or driving a train than
sitting in front of a computer moving numbers
around."
He's also not convinced he would be better served
by being able to name the week's top traders.
"It's my observation that people who play the
market haven't done all that much better than
I have."
His best move
When he was transferred to Victoria in the early
eighties, the Evans family held onto their Vancouver
home as well as buying a place to live in the
B.C. capital. Mr. Evans knew there was a good
chance he would later be transferred back to Vancouver
and didn't' want to find himself priced out of
the market.
"I'd seen so many people move out of Vancouver
and not be able to afford the same size home when
they moved back."
While it was a stretch carrying both properties,
the move paid off in a big way. When the expected
transfer back materialized, the Evans' sold their
Victoria property and used that money for the
down payment on a second Vancouver home, renting
out their original property. While their Victoria
house didn't appreciate much over the four years
they owned it, their Vancouver house benefited
from the big surge in that city's real estate.
His worst move
Even after pondering the question, Mr. Evans can't
recall a major financial catastrophe. He does
say he could have started saving aggressively
earlier in life, but given the slim gap between
his income and his expenses -- including raising
two children, there wasn't much left to spare.
Savings would have meant lifestyle sacrifices
his family just wasn't willing to make.
"We would have had to compromise our lifestyle
and we didn't want to do that," he says.
"We lived comfortably - not extravagantly - took
driving holidays with our kids, and we didn't
want to give those things up."
Advice
"Don't underestimate what you can do. I spent
a lot of time in my younger years avoiding looking
ahead. You should choose significant goals and
go after them."
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