Ambitious Adulting: How to Reach Financial Security in Your 20s

Ambitious Adulting with Liz Enriquez: Managing Your Finances and Elevating Your Life

This video episode talks about how you can manage your finances, make worthwhile investments and reach financial security in your 20s.


Welcome to The Glass Is Half Full Talk Show. Let’s face it, life can be tough in many ways. Here on The Glass Is Half Full we focus on how life is tough financially. Dealing with these financial realities can be a challenge. Essentially, we have to find ways to do more with less, less money that is. The show is focused on helping you discover ways to achieve that goal, even if you don’t have a lot of money to work with. We’ll be meeting people from many different walks of life. They’ll share their stories and expertise, looking to do more with less and maintain a positive attitude while you’re doing it. Welcome to The Glass Is Half Full. Now let’s join Sean and his guest in the studio.


Sean Hi everybody, Sean Killen here from The Glass Is Half Full channel, we’re here with Liz Enriquez, who has a fantastic story I was reading about, and thought nothing better than to get her on and let her fill in the blanks for us and help us understand how to be as successful as she has been able to become. Hi Liz, how you doing?
Liz I’m well, thank you Sean for having me.
Sean Of course, thank you for coming. So, I’m not even too sure where to start, I mean, there are so many different aspects to your story that are interesting, I’m sure of interest to everybody. Do you want to tell me where you’d like to start telling us about your story?
Liz I guess we can start from the beginning.
Sean Well, way back when you were five.
Liz Yeah, way back to then. I think it’s really important when we talk about finances to kind of understand where people are coming from. Their money blueprints and kind of what happened in their childhood or growing up to frame them and shape them into the adult that they are. And so many people like to spend the way they do and save the way they do based on kind of what they saw their parents doing. I think that’s, that was like a really important realization for me because I watched my parents, you know, we moved from Mexico and I watched them like work really hard to stretch a dollar. And I saw how hard it took, like how much work it took to make money so that drive is really what is instilled in me and I really give a lot of credit to my parents for showing us a really strong work ethic. That’s a little bit of how it all began. I started two businesses. I quit my full-time job, and I’ve been really hustling for a long time. But it really started because I watched my parents hustle.
Sean So was there any just, as a point of curiosity, was there any particular thing when you were so young? Most kids don’t even start conceiving of the idea of money until they’re much older, I would expect. Is there any particular kind of kick-started your drive other than the general?
Liz Definitely moving from Mexico. I think one of the earliest memories is going into like a thrift store and having to buy all of our clothes from scratch because, you know, we came from Mexico. We didn’t have winter clothes. We didn’t really have anything to keep us warm and never been to a thrift store before. So that was kind of an interesting experience for me. I was still really young, but I just remember all these things like seeping into my mind and into my memory when I think back I’m like, oh, I definitely remember going to the thrift store and yeah, and then also being in school and then having definitely not the latest brands in the latest fashions. Everyone else had way warmer clothes, way cooler looking things. And I felt yeah, just kind of comparing myself to everybody else was really impactful. And I definitely didn’t feel like I belonged, I felt really behind everybody else. So all of those feelings help me, you know, kick start all the stuff that I wanted to do because I didn’t want to feel like that.
Sean Your parents brought you into the equation as far as that we only have a certain amount of money here, so we want to stretch it, you know, getting you on board with how to help with that, or you just picked that up on your own?
Liz Well, they pretty much said no to everything. Anything I wanted to do. Yeah, so there was no choice, really. You know, I also remember, like, not really going on field trips when everybody else got to go on field trips because we didn’t really have money to pay for the extra $20 ticket or all that stuff, so I’d have to skip out on those. So all that was really important for me, that, you know, to shape the way I am now.
Sean Right. Got to find motivation where you can, right?
Liz Yeah, and I never blamed my parents. Like I always knew that they worked really hard, so I didn’t really, like, obviously, I felt a little bit out of place and resentful that everybody else got to do things. But I always knew that my parents were working hard, so I just thought, OK, this is temporary,
Sean Right? But also may have opened your mind up to the responsibility side, right?
Liz Yeah, I mean, it definitely put a spark in me that said okay, if I want something, I have to go work for it because I can’t really ask my parents for money. So I started working when I was, like, 11, I got my newspaper route, and you don’t make a lot of money delivering the newspaper, but
Sean I did that myself. I do know what you mean, absolutely.
Liz Yeah, you know, you’re not really making money, but, you know, just starting that getting into those habits and seeing a little bit of pocket change come my way. I was like, Okay, this is what I have to do. And this is one of the steps that is going to help me make money. And then from there, I just kept building up and building up,
Sean Right? All right, and so then what happened next?
Liz Well, really, I wanted to get out of the house because even though I have a great relationship with my parents, you know, I was 18, they were super, super strict. They wouldn’t give me any money and I thought I just need to get out of here, so of course, I couldn’t. I couldn’t afford to move because I was still, like 17 or 18. This is really when I started having anxiety attacks because I didn’t know how I was going to afford my life. I wanted to go to university. I wanted to move out. I wanted to live on my own. And I looked at how much everything costs. And I was so overwhelmed with the tuition costs alone. I think I had $500 to my name and tuition was, like $6,000 plus rent plus food. I was looking at, like $8,000 that I needed. And I could not conceptualize how I can go from $500 that I had to get $8,000 that I needed. Like that is a huge gap that I did not understand how I could even close that gap. So those thoughts were super overwhelming. So after, you know, some anxiety attacks, after kind of working through what was really going on, I made my first budget and made my first plan. I thought, OK, I obviously need to get a higher paying job because I was just babysitting, so I was not making enough money to do anything. And I thought, OK, what job was going to pay me this kind of money to help me go to school? Then I started realizing that there were scholarships and bursaries, so I thought, maybe this is the direction that I should focus my energy on because I had good grades. I was an active volunteer, so I thought, OK, let me just focus on this. So I started applying. I actually dropped my math class in grade 12. Yeah, I just was like this is too hard. And I dropped it. And I used that period for full-time scholarship hunting. So instead of you know, most people would drop a class and then go home and I don’t know, do what?
Sean Go to the mall.
Liz Yeah, go to the mall. I dropped that class, went straight to the guidance counselor’s office and treated that as a class and then wrote essays, submitted applications and by the end of the semester, I had my first year covered of University and then the next half of second-year covered. So you know all of that I thought, Okay, that really taught me to look at creative solutions instead of just getting defeated because I had to figure out how I was going to find this money quickly. I had to really look at creative solutions and then dedicate a lot of time. Nobody just handed me these scholarships because my grades were good, but definitely not, you know, amazing that I was just handed these scholarships like they were high, low eighties, mid-eighties. Just like good enough.
Sean Well, hard for anybody, hard to conceive of anybody not being able to look at you and say there is definitely a fire in you, as far as motivation.
Liz I mean, that’s the thing. A lot of these scholarships weren’t even based on marks. They were based on how much you wanted to go to school and you’d have to write essays and applications. I had to get letters of reference like it was a full package of like, and I’m like I want to go to university and I can’t afford it. So that’s what a lot of the scholarships look for, and if you’re willing to put the time in, then your chances are higher of getting that scholarship.
Sean Right, but it also taught you the absolute benefit of always looking outside the box, to make sure that you learn all these things that are out there in the world that aren’t necessarily mainstream for lack of a better expression.
Liz Absolutely. Because if I had been working full time, I still wouldn’t have been able to get that amount of money. So it was kind of this, like, a backdoor entrance that helped me accelerate that, and because of that, because I was able to pay for school with mostly scholarships that helped me accelerate my wealth. And so when I graduated university, I graduated debt-free when at the beginning of university I didn’t even have tuition funds. So in four years, well, it actually took me five years to finish my degree because I was working full time. But I paid off school. And then two years after that, I bought my first house. So it all just kind of piles up. But it’s been a decade in the work, and it all started because I felt super trapped and I didn’t want to feel like that.
Sean The value of hard work, right? So what was your degree in?
Liz Well, I actually graduated with a geography degree, which it’s kind of, that’s a whole other story, too, because I applied for school for English and linguistics, and then I just switched a bunch of times, I did not have a clear direction. For people, especially young people who are super stressed about their life and their money, I’m like, you know what, who knows what’s going to happen? Just try to enjoy the rides. Because looking at my history, especially my education, like I moved to the West Coast, I took four months off to travel, I was kind of all over the place. Then I graduated with a Geography degree and now I have a marketing business and then do financial coaching, so I can kind of go on a lot of different tangents and it’ll be okay.
Sean Well, definitely the story of life, you have to kind of go with the flow too, right?
Liz Yeah
Sean But that gives a good understanding as to why you traveled to so many countries because of your interest in geography, right?
Liz Yes. And I took a bunch of time off to travel. I’ve been to over 20 countries, and I actually also used my degree as an excuse to go travel. So I found a poster at the university saying apply for this experiential education grant and you can use it for traveling. And that’s what I did. I wrote an essay. Again it took a lot of the skills from when I was applying for scholarships. I chose to apply for this grant and because I had a geography degree, it was really, really easy to say I need to go on this trip because I am studying tectonic plates or I’m studying geothermal energy in Iceland and I would just write crap. And so I had a few of my trips paid for using grants. And then I used those experiences for some of my classes so that I was able to get credit, so I really just was always looking for different ways of getting what I wanted.
Sean Right. Well, put. But yeah, that you even got to do all this traveling without necessarily or using all that knowledge you’ve learned about the grants and wish and everything else to be able to further your passion for travel, learning about other countries first hand.
Liz Yeah, I also traveled on a budget. As a university student, it’s pretty normal to stay at hostels, it’s pretty normal to backpack. So if people really want to travel, sometimes you have to make a little bit of compromises. What kind of travel you’re going to do, because if you go to an all-inclusive
Sean Get together with other people,
Liz Sometimes I would meet up with people, but I just kept my expenses really, really low when I traveled.
Sean Okay. And then what? What happened next?
Liz I mean, I still travel every now and then, but most of my traveling happened in university. I guess after university, I bought my house a few years after I graduated in 2014 and then bought my first place in 2016. And that went really well. And three years later, so in 2019, I bought my first duplex. So I’m still trying to figure out if real estate is going to be the majority of my portfolio or if I should, you know, focus a little bit more on the stock market, which is actually where I’m more comfortable because I started in, say when I was 18. So I’m in this little transition period right now what my portfolio is going to look like.
Sean Well, the first portfolios are more valuable than anything.
Liz Right, especially now with what’s happening in the stock market. I’m definitely feeling it, but having so much of my money tied up in real estate, I don’t think I’m feeling it as much as other people right now.
Sean They say real estate is the second best to gold only, right? That gold sets the standard and real estate follows the standard, and everything else trails along behind somewhere, right?
Liz Yeah. So I guess you just gotta wait and see what happens.
Sean Right. So what do you think is next for you? Where you found your thing and this is the focus that you can see yourself sticking to for some time where you have new ambition in your heart?
Liz Well, I always have a lot of ambitions. My website is called Ambitious Adulting, because I started documenting how I’m paying for things, how I can travel, how I can buy property, really sharing the ins and outs of all of that, how I started investing. So I’m always, my mind is always racing with ideas. Right now I’m focusing on maybe getting a third property. I want to ride it out for a year, being a landlord of a duplex and see and understand tenant dynamics before I jump into the next property.
Sean So what’s going on with your website with your business there?
Liz Yeah, so Ambitious Adulting, I work with mostly Canadian millennials, and right now the focus is on helping them learn how to invest. So most of the millennials that I work with are actually pretty good with their money. Surprisingly and maybe not surprisingly because so much of the news says that millennials are, you know, not doing well. We’re all living in our basement or our parent’s basements while wasting money on avocado toast. But the reality is there are actually a lot of people out there who were doing quite well, but they don’t know what to do with their savings. They just save and save and save and then don’t know what to do. So there’s a gap because financial literacy and financial education wasn’t available when we were in school, so a lot of people don’t know the basics of investing. So that’s what I spend a lot of time just letting the people know the different kinds of investments that they can have, the basics of how the stock market works. So, yeah, I have a mentorship program and a boot camp that people join to learn.
Sean Tell me about the boot camp. I want to hear about this.
Liz Yes, so I have this investing boot camp and it’s definitely not like the physical boot camp, it’s two weeks of constant communication with everyone who signs up. They got newsletters, we do live videos, we have discussions, and it’s really just to help people get more comfortable with the idea of investing. In the end, they either find a financial professional because now they know how to look for them and what credentials to look for and how the industry works or they take the [] adviser path and kind of do a semi-passive approach. Or they start doing their own direct investments based on the basic foundation work that they learned with me. So it’s really this kind of that stepping stone to help them understand how to invest and where to go.
Sean Right. What about the creative end of it? Do you find it hard to teach them how to kind of pick up the ball and run with it themselves, or they’re all just kind of looking for you to tell them how to do it?
Liz Yeah, a lot of them just want the answers for everything that I do. They’re like, Well, just tell me how to do it and I’m like, Well, that’s not really how it works. And my whole mission is to empower people to figure it out on their own and to kind of know where to look. So I’m not saying do your own investments, but I’m asking them if you don’t want to do your own investments, this is how you find a certified financial professional who has fiduciary duties and who can look out for your best interest. These are the kind of questions that you should ask a financial professional if you’re meeting with them. So, it’s a little bit of hand-holding, but I don’t mind.
Sean Yeah, well, that is what your advertising that you’re going to do a little bit of, right?
Liz Yeah. Yeah. I don’t feel like I’m that friend that is good with their money, and then people come and ask me for advice. That’s exactly what I do but to a large audience.
Sean I can see that being one of the burdens you’ll bear for some time. But
Liz Yeah, the biggest people were already, I was always that person to my friends, and people were already asking me all those questions, so I don’t mind extending that to the public.
Sean Right. And what’s the website that they can look this up on and learn more?
Liz Yeah. It’s
Sean Okay, I’m sure we can probably, you know, put that in down here somewhere.
Liz Yeah. And they can also find me on Instagram at ambitiousadulting as well.
Sean Got to commend you for all the budgeting and everything. These are things that were perpetually trying to teach people about in our business. So many people in the bankruptcy industry, they have trouble because they lost touch with the organization of things. Where overwhelming comes into play very often, right? But too many too often into too many situations it comes down to the fact that they are more turned away from it than really I didn’t know how to do it.
Liz Absolutely. Budgeting is so important. I feel like my life, my financial picture changed when I started a budget because I had so much more clarity. And instead of feeling overwhelmed, which is exactly how I felt, I just had a little bit more of a direction. So a budget is totally the first step for anybody.
Sean Thank you very much for coming on the show and for sharing your story. All the success in the world to you and keep going. Good luck on your next property as well. Thanks for coming on the show.
Liz Thanks for having me.

Raising Your Vibrational Frequencies and Changing Your Life with Dawn James

This video episode talks about how you can raise your vibrational frequencies and change your life.

How to Raise the Vibrational Frequencies Within You, Around You, and Between You and Others

Here is the transcript of the video:


Welcome to The Glass Is Half Full Talk Show. Let’s face it, life can be tough in many ways. Here on The Glass Is Half Full, we focus on how life is tough financially. Dealing with these financial realities can be a challenge. Essentially, we have to find ways to do more with less, less money, that is. The show is focused on helping you discover ways to achieve that goal, even if you don’t have a lot of money to work with. We’ll be meeting people from many different walks of life. They’ll share their stories and expertise, looking to do more with less and maintain a positive attitude while you’re doing it. Welcome to The Glass Is Half Full. Now let’s join Richard and his guest in the studio.

Richard Hi, I’m Richard Killen, welcome to The Glass Is Half Full. A program that tries to get you a better bang for your buck, sort of. Even if your bucks aren’t all that plentiful. We, today we’re going to talk about how to raise, I’m going to read this now so I don’t get it wrong, how to raise the vibrational frequencies within you, around you and between you and others. To explain why this is important we have as our guest, Dawn James. Hello Dawn, welcome to our show.
Dawn Hi, a pleasure to be here, Richard.
Richard Dawn is going to, I’m going to read this to so I get this right. Dawn is the best selling author of three books which have been translated into French, Spanish and Hindi. She’s a mentor, a music performer, and a transformational leader. She provides people with the tools and inspiration to shift the reality of their inner and outer wealth. Did I get that right?
Dawn You did.
Richard So Dawn, before we get into the vibrational frequencies, which I know you’re here to explain to us, I’d like to find out how you learned about all this? I say this. I understand that in 2003 you had a near-death experience, which seemed to be the catalyst that brought all the rest of it about. Tell the audience what happened.
Dawn Absolutely. So, Richard, you know, I had a very traditional life. I grew up in Toronto, actually, and went to school, got married, got into my career, and I kind of fast track. My whole life was a fast track. So I kind of climbed the ladder quickly in the corporate world. And, before you knew it, in my thirties, I was already a general manager of a corporation. So a lot of stress, a lot of responsibility. And a young family. I had three young kids, my husband and I. Many times we do what we’re good at, it doesn’t mean we’re doing what we are here to do. And so, at some point in my career, there was a separation between doing what I’m good at and this feeling I was missing something. As we approached the spring of 2003, I actually lost my appetite. That was the first sign I was not doing what I was supposed to do. And for a three month period, I basically did not eat, did not want food. I was not even hungry, I really lost my appetite. And towards the end of that 90 day period, I actually stopped speaking. And to help people understand my mindset, I knew I wasn’t doing the right thing, but I didn’t know what the right thing was. But I started to withdraw from everything and on that last day that I wasn’t talking, I just felt I listened to my last heartbeat. Everything just stopped. My body shut down and everything stopped. So for me, that was my first realization that there’s more to us in this physical show. And I had what most people would describe as a spiritual awakening experience, i.e. the physical self ceased to exist, and I experienced what it was to be non-physical, i.e. spiritual. That is a profound, unbelievable experience. There was no physical. Yes, whatever that the soul is, the spirit is. And at that moment I realized that there was something much bigger I had to do than my corporate day job. Two days after that experience, I quit my corporate day job, and I know we’re here to know about money and management, but yes, without a plan, I said goodbye. Click. No plan. So, yeah, I went from six digits to zero in 72 hours, but…
Richard I’ve met people that happened too, but not quite the same way you described.
Dawn It was very quick. I tend to move quickly, but the spirit moved even quicker than I used to move. And within two days, I made some major changes in my life within two days. I think sometimes when we’re not on the right path, we start getting signals. And for me, my body shut down and my appetite disappeared. I stopped speaking, and after that experience, it seems like I stopped the 40 years of being in here. I started to live in here. That was the second most profound thing that happened. This woke up. And when I refer to my heart space, I’m talking about why am I here? How do I find joy in my life? I never had joy until I woke up and I began looking for ways to enjoy life, not get the job, to get to this, to get to that we were sort of caught up in this paradigm dream of making money to have more stuff. And my spiritual wakening taught me. It’s not about the stuff we acquire. It’s about the quality of the experiences that we have while we’re here. So that was a whole different shift going on.
Richard Is it in tune with something like…
Dawn Totally.
Richard Like is far more rewarding to give than to receive?
Dawn That’s part of it. And the other part of that message is, what do you have to share with the world? What did I already have? And so I had to look at what I came here with, and how I was going to use it, as opposed to go get the degree, go get the job, go get that this, go get that and keep collecting. So my whole perspective of being here shifted in two days. So that was a short answer.
Richard That was a long one.
Dawn I know.
Richard So Dawn, what is vibrational frequencies?
Dawn So the scientific definition, and then I’m going to give you what I call my spiritual definition because there’s really, there are two messages I share in my first book. Vibrational Frequency is a measurement of how energy moves. So bio-electricity is something that we have. All living things have it. It’s electrical energy that runs through everything, ourselves, our muscles. The measurement of how that energy flows, it’s measured in something called vibrational frequency. So, for example, if I was to look at a, I’m not picking on fast food, but if you look at a hamburger, it’s pretty dead. There’s nothing living in there, right? The lettuce still isn’t in the ground, the tomatoes, not on the vine. You’re looking at this thing with no life. So this vibrational frequency is zero. If I go to a tree that has an apple, there is life, life force energy moving through that tree still connected to the apple. There is a measurement of frequency in living things. So, Bruce Tanio in the 1980s created a device that measures vibrational frequency. So we know the vibrational frequency of our heart, our spleen, our liver. We know the vibrational frequency of the brain when we’re actually awake versus when we’re asleep. All of these things now we can measure. So the flow of energy, that measurement is a vibrational frequency. On a spiritual definition or metaphysical definition, everything in your body, our bodies, are designed to flow. Everything must be flowing. If it’s not flowing, we’re going to get sick. So on a metaphysical level, how do we keep the energy flowing at an optimal rate? Not just, you know, your lungs, the lymphatic, the blood, the oxygen, but even on a conscious level, how do I stay in the flow of life? Because the moment we become stagnant or we become very stressed, and I know we talk about financial stress, but there are all sorts of stress in the world. The moment we become stressed, we actually stop the flow of energy. We get tense and so flow, having flow, is a good thing when we’re stagnant or we’re stressed, we restrict energy, which means we are attracting disease into the body. And there is a bit of a parallel, even with money.
Richard It’s a subject I know something about.
Dawn I know. Yeah.
Richard Or the absence of.
Dawn Exactly. While the absence of money causes stress, right? So what happens when we spend more than we receive?
Richard Not necessarily.
Dawn Really?
Richard Really. The absence of money causes stress only when you need the money to do something. If you don’t need money to do anything, not having it doesn’t matter.
Dawn That’s true. That’s true, which would be…
Richard One must take a little more philosophical approach to all these things. However, I’m actually digressing here.
Dawn That’s okay.
Richard Go ahead.
Dawn Yeah. So no, when we’re in the flow of life, things we’re able to manage ourselves with ease. There’s a wonderful, wonderful native scene that when we live in the giving and the receiving of life i.e. when we live in balance, stress cannot exist.
Richard Very yogaish.
Dawn Very yogaish, yes. But think about it, when we give and receive, we’re not out of balance. If I spend more money than I’m earning, I’m out of balance.
Richard Not if MasterCard lets you. I don’t want to pick on MasterCard.
Dawn I hear you. I hear you. Scratch that.
Richard We might leave it in. But given all of this, how do people make note, how do people grasp this?
Dawn Sure. So the concept, I would say is, and you know the reason why I found the courage after seven years of living this….
Richard Yes, we don’t want everybody to go through everything you went through.
Dawn No, by all means. I lived through this for seven years, and then I found the courage to start writing because I wasn’t a writer by profession. I had a very different life before 2003. My second life started 2003 and for me, I had to live it. So I’ll give you a few examples. Living a high vibration life means that I begin to pay attention to things that are positive and negative. How will it impact my life? I start to make choices based on whether this is going to be rewarding or detrimental. You start to consciously make a choice. Don’t just live as if there is no consequence. So you start to weigh things differently. And then for me, if my goal is to stay in the flow, to not have that tension, that stress and do not create drama in your life, I’m going to make very different decisions. One of the things that a lot of people relate to in my first book is the vibration of food and recognizing things that are, have frequency life and things that are dead. And paying attention to what you’re putting in your body because a lot of East Indian in Eastern philosophies say you are what you eat. So if you eat food that is dead, you’re eating death. If you look for things that are lively and alive and nutritious, then you’re putting life into your body. So that’s one way to start looking at vibration. Am I bringing things into my home that’s beneficial for me? Am I interacting with people that are positive and supportive? Am I doing things that are not going to put me in harm? So you start paying attention to your choices. That’s how you get into a high vibration life. So that’s what I’ve been teaching for almost 18 years. How to stay in that flow.
Richard It’s interesting, it’s true, among other things. Yeah, when something is true, it tends to have an interest of its own. But as an Insolvency Trustee, I run into people, not just a few, many people, who by their own admission, have developed very questionable bad habits, you might say, in the use of their credit cards, credit cards being the most…
Dawn Accessible?
Richard Everybody’s got them, let’s put it that way. So they basically get into trouble through the mismanagement of, and this is essentially something that people tend to do without a great deal of conscious thought. So I understand that you’ve already approached this problem. You have your own views on it, call it Shopping On Autopilot.
Dawn Shopping On Autopilot, yes.
Richard That’s got a nice 21st century ring to it. So, want to explain it?
Dawn Yeah, this topic is near and dear to me because, you know, to me, it’s the difference between living consciously and sleepwalking through life, literally sleepwalking. One of the things that I observe and I think a lot of viewers can relate, many times you go into the grocery store and I see this all the time, people have the shopping cart, they go down the same aisles and they pick up the same brands and they put the same brands in the buggy and they head to the cash and they don’t even look for anything new, there not checking anything new. They’re not curious. They’re not inquisitive.
Richard That’s not me by the way.
Dawn That’s not you. Okay, so you’re probably 2-1/2 hours there.
Richard My wife is always saying, come on, let’s go.
Dawn So this is what I refer to as Shopping On Autopilot, and I’m even going to say, living on autopilot, We do the things that we do because we’re used to the things that were used to do, and we don’t really deviate much, and it’s kind of like living passively. That’s the right word to say, automatically. However…
Richard It goes to being comfortable. If things are reasonably good for you. Why think about it?
Dawn Right. But if you don’t question what you’re putting in the shopping cart, like, you know, do we even look at the labels? I don’t know. Some people do. Some people don’t.
Richard Some of us have high blood pressure too.
Dawn Exactly. And so what, the phrase that I coined is, Shopping On Autopilot because we are living as if we don’t have a choice. And one of the things I learned when I died and came back, is you always have a choice. So how about we start making better choices? A quick example would be, you know we can buy processed food or we can buy fresh food. We can shop at a farmer’s market. Each one of those decisions, you are going to have a higher, lower vibrational frequency going into your body. So if we’re not aware of that, we’re going to be not healthy. But when I look at the whole premise behind it, if you truly believe you will not be happy until you’re driving that car, or you’re not going to get the guy until you wear that perfume. If you truly start believing that, then yes, you’re going to go out and buy this and buy that and buy this. So how do we reverse that? So some of those bad habits you talked about with the credit cards is, there’s a belief that we need something. Some of those beliefs are based on what we’ve been fed through the media. And that’s where I say, How do you break that chain? I mean, you’ve trained you help people break that in different ways.
Richard Yeah, but I’m one of the few people in my business who goes back far enough to actually know an era that didn’t have this overly weighted advertising, driven society. When I, I’ll tell you my story a little later.
Dawn Yeah, I’d love to hear that.
Richard When I started working, long before you were born, the business I got into was the consumer loan business. And the idea was at the time that we were the only place you could go to borrow $500. It’s called a finance company. Household finance and…
Dawn HFC. Yes. Yes, I remember those.
Richard Anyway, it was very, very effective. People would phone up and they’d say I need $500 or $1,000 for this or that. They would come in and get a loan. They would sign a contract and come in and get a loan. But in the process of doing that, what they had to do is they knew they were going to have to show up and convince me to approve the loan. So they had to sell it, sell the idea that I should lend them the money. Before they could do that, they had to sell it to themself. They have to justify it in their own mind, so they could prove it to me. I wasn’t onerous. In fact, I was willing. I was there to do that. I wasn’t going to say no. I was going to kind of default to yes, unless otherwise right. But then along came credit cards. And credit cards totally removed that little process where they had to justify to themself.
Dawn I see.
Richard From that moment on, you have today’s world. Exacerbated now by online lenders.
Dawn It’s totally changed. I didn’t realize that there was a precursor to that because it’s unfortunate.
Richard It’s in my book.
Dawn Okay, great. Because I need a copy.
Richard I will give you one.
Dawn Thank you. I’m a readaholic. That’s amazing.
Richard But if there’s one major thought or message you would give somebody from your visit today, what would it be?
Dawn If I had to give one message, I would say, in order to change our behaviors, we have to start looking at what we truly value in life and what we truly believe about ourselves. I’m a firm believer that if you begin to change your inner dialogue and recognize you are rich, you have what you need. You came here fully loaded. If you start to believe that you’re not incomplete, you’re going to have less attraction to shop till you drop. That is going to not be important to you because I went through it. And so when you start owning your own value, your own worth you start feeling good about what you already have. All this stuff becomes less important to you. So my message which is the first sentence I heard when I opened my eyes and I came back to life, was all you need is within you. All you truly need is within you. Let’s start owning that message, looking at what we already have so that we’re not so attached to external stuff. That, guess what? You can’t take it with you. What you take with you is in here.

How To Rewrite Reality and Destroy Your Limiting Beliefs

In this video Richard Killen talks with Shiraz about how to rewrite your reality.

Shiraz believes in the premise that our beliefs create our realities and he helps people to destroy their limiting beliefs. He is the author of the book “How to Rewrite Reality” and hosts the Energetic Magic radio show.

Shiraz- How To Rewrite Reality and Destroy Your Limiting Beliefs



Richard Welcome to The Glass Is Half Full talk show. Let’s face it, life can be tough in many ways. Here on The Glass Is Half Full, we focus on how life is tough financially. Dealing with these financial realities can be a challenge. Essentially, we have to find ways to do more with less, less money, that is. The show is focused on helping you discover ways to achieve that goal, even if you don’t have a lot of money to work with. We’ll be meeting people from many different walks of life. They’ll share their stories and expertise, looking to do more with less and maintain a positive attitude while you’re doing it. Welcome to The Glass Is Half Full. Now let’s join Richard and his guests in the studio.

Hi, I’m Richard Killen, welcome to another episode of The Glass Is Half Full, the show that tries to give you some ideas of how you can get a better bang for your buck, no matter how limited that buck might be. Today my guest today is Shiraz, founder of Energetic Magic. Shiraz is a life coach and energy facilitator. I’m reading this Shiraz, so I don’t miss it. Who believes strongly in the premise that our beliefs create our reality, not the other way around. He helps people destroy their limiting beliefs, thereby moving to a more positive reality. Welcome to The Glass Is Half Full, Shiraz.

Shiraz Thank you. Thanks for having me.
Richard Our pleasure. I’m interested in finding out about this is, I believe that everybody out there will be too. Shiraz is the author of a book called How to Rewrite Reality and hosts The Energetic Magic radio show every Tuesday. So, Shiraz, I understand that the biggest lesson that life has taught you is that beliefs create reality. Your beliefs create reality.
Shiraz Yes.
Richard Not the other way around. And in accepting this premise you could get to a place where you can start actually changing your beliefs so that you can actually make a positive change over your reality to a positive situation. However, you haven’t always understood about this and believe in this right? You, the young adult, I think, you underwent some kind of epiphany or something through that sent you on this journey. Can you tell us how this happened?
Shiraz I don’t think the epiphany was at it, as a young adult, but the problem started as a young adult. At 22 years old, I got rheumatoid arthritis.
Richard Really?
Shiraz And it was severe. I ended up being bedridden most of the time and lots of pain, all the joints inflamed and deteriorating. And we tried different things. But the problem just persisted, would sometimes go into remission, then come back full-blown. Finally, after years going through this, I had a discussion with my dad and I said, I’ve had enough. Something has to change. And he recommended this program called Combined Therapy that was being done over in India. And he said they’ve had success with various illnesses, not just arthritis. Okay, so next thing I know, I’m on a plane. I’m going to India. I went to this place where they’re doing it and because it was in India and my father was a spiritual kind of person. I expected some guy to be doing this heal kind of thing on me and ended up talking to this guy for two weeks, and he went through my entire life story and it felt like I was with the psychiatrist, except he wasn’t trying to solve any issues. He was just gathering all this information, and finally, he said, OK, so here’s the problem. You feel you’re responsible for everyone in your life. I’m like, No, I don’t, and he said. Yeah, you do. From the stories you’ve told me and the stuff that’s happened in your life, you feel you’re responsible for everyone and you may not feel it consciously, but it’s there on a subconscious level. I said Okay, and I said So let’s say that’s true. What does that have to do with arthritis? And he said, Well, you don’t want to be responsible for everyone, I’m like, obviously. He said, so if you’re lying in bed and pain, you don’t have to be responsible. It’s a solution for a problem you don’t know you have. And I’m like, that’s crazy. But that’s what chronic illness is. It’s a solution for a problem, people don’t realize they have. I’m like, Okay, so then all I have to do is say I’m not going to be responsible for anyone but me and this should all go away? He said Yeah. Okay, I’m not going to be responsible for anyone but me. Of course, nothing happened. But then I woke up the next morning in the arthritis was gone. And like, when I got up it was just crazy because I was just moving my hands, I’m checking my joints. There’s no pain, everything’s fine. And I’m like, what just happened?
Richard They didn’t inject you with anything while you slept?
Shiraz No. So and that’s when I got to that point that, wow, your beliefs do really create the reality. And I started seeing this with other people and I started playing with it. There was one time I had, I got a notice from CRA, you owe $40,000 in back taxes.
Richard I’ve seen those notices.
Shiraz Yeah, so you know how that just “Ah”. And for three weeks, I was trying to fix it physically, going to my accountant, talk to financial advisors, and they’re all telling you I’m basically screwed. And then finally I thought, Well, wait a second, it’s all around beliefs. So let me look into the belief of why I have this debt. And I managed to shift the belief. And then after I had that epiphany shift with belief, I went over to see my accountant. And I’m like, Okay, let’s get this solved. And he goes, We’ve been talking about this, we can’t get it solved and but deep down I know I’ve changed the belief. I know it’s about to shift, and he looked at me goes, Why are you smiling? This is a serious matter. You owe $40,000. And then it was just like the awareness hit him. Oh, my God. If we file this form, we’ve got a paper trail for this. And he started going into all this accounting jargon, and he goes, So if we do that, then you’ll have to pay $500 late filing fee. But you want to pay the $40,000? Are you okay with that? Yeah. Thank you. And so with just 10 minutes, it just went away.
Richard You know how many of my customers would like to have that same accountant?
Shiraz He’s actually a really good accountant,
Richard If not, the beliefs. Yeah, that’s amazing.
Shiraz And so then I found out this applies to your health. This applies to your income, this applies to your career, this applies to your relationships. And it’s once you find out what that belief is, which is usually not what you think it is. And you change that belief. Reality just changes around you.
Richard And the glass becomes half full.
Shiraz Yes, actually becomes full.
Richard I meant without adding any water.
Shiraz That works, too.
Richard How do we change our subconscious?
Shiraz You look at the results. All right, so if there’s a problem that is not getting fixed at a subconscious level, you want that problem. And there are all sorts of reasons for it. For instance, let’s say you’re living paycheck to paycheck, and it’s a struggle to you don’t know if you’re going to be able to pay the rent with the next paycheck. You don’t know if the next paycheck is going to last the whole month. Now here’s the hard part. At some level, you’re getting a benefit out of that, and you have to figure out what the benefits are for living paycheck to paycheck. And I’ve gone through this with many clients and some of the reasons they’re just incredible. So one of my clients, her daughter, whenever there was extra money, her daughter would spend the money. She would just go on the spending spree. And so at a subconscious level, she figured, if I minimize the amount of money we have, then I minimize how much my daughter spends. So that’s what caused her to live paycheck to paycheck. Another one was…
Richard That’s not necessarily a subconscious level excuse, actually.
Shiraz And well, it can happen.
Richard I’ve had people explain that one to me. Okay, Okay. But I get it. Yeah, normally, it might be subconscious.
Shiraz Another one is if people are asking you to do things you don’t want to do, I can’t afford it, right. That’s a wonderful excuse to have. And the only way to make sure that you’re not lying about it is to make sure it’s true. And this is a thing. The subconscious works to make things as true and as comfortable for you at that level. But it feels horrible at a conscious level.
Richard But how do you find out what that is? Because it’s easy enough for a therapist or anybody to identify these things from the outside looking in?
Shiraz Yes.
Richard It’s when you’re looking from the inside, it’s very difficult to see.
Shiraz You have to get into introspective. You basically have to ask, Okay, I know I hate the situation, but what are the benefits of being in the situation? And see what starts to pop up into your mind. When I’m working with my clients, that’s one of the questions I ask them. And then they start coming up, Oh, I get to do this, or Oh, I don’t have to do this. And that reason can be more powerful than having money.
Richard So the secret really is to ask yourself the positive reason why this negative thing is happening.
Shiraz And one of the biggest ones is being right. People love to be right, and people will choose being right over being wealthy, over being healthy, over being in a wonderful relationship, because being right feels so good. And whenever you’re right, you actually get a hit of dopamine in your brain so you can build the dopamine addiction on being right. And you just have to look around to see how people function that way. How many times when, even if the person knows they’re wrong, but they just want to win the argument and somehow get some sort of being right in there? They just keep going.
Richard What do people learn in your program about the energy of money?
Shiraz They learn to, well, it’s called the aligning to the energy of money. They learn to align to it, they learn that money isn’t a bad thing, which is been ingrained in a lot of people. We hear phrases like money is the root of all evil. Right?
Richard Money can’t buy happiness.
Shiraz Money, can’t buy happiness. Rich people are evil.
Richard But you enjoy being unhappy more.
Shiraz And if you and this is another way to find out that if you’re living in these beliefs is what cliches come out of your mouth, the things you’re saying even if you think you’re just using a cliche that subconscious programming or else it wouldn’t come out of your mouth. And so, we get into these…
Richard Most cliches are.
Shiraz And so you end up saying things and you just have to watch some of the things that come out, because one of the cliches that I will never use except in an example is, you’re damned if you do, you’re damned if you don’t. I think if that’s coming out, what kind of a life are you creating for yourself?
Richard Something called a Catch 22?
Shiraz Yeah, and with money, when you start to shift into better money beliefs and get out of the negative money beliefs, then your life starts to change and money starts showing up. And in the classes I do, like Aligning the Energy of Money, it’s not just teaching you how to work with money, in the class I work directly on the participants changing their beliefs in that class, so they come out different. The first time I ran that class, one of the girls called me, it was two days after the class and she said I got a 10% raise at work because I didn’t know we could get 10% raises at work. And I said, Cool, What else can you get? What do you mean, I just got 10%? I said No, you’re in that energy now, go get another raise. I just got a raise and I said, You can believe that you’re stuck at that point or you can believe you can keep going. It’s up to you. And she was happy, she was in the zone. She’s like, Okay, let’s just do this. Two weeks later she calls me, she goes I got another raise. And, then six months later, she called me, I got another raise and it just went from there. It was just amazing for her, but she started playing with it.
Richard You also say that 8% of the time, our problems are not even about money.
Shiraz Yep.
Richard Can you expand on that?
Shiraz Similar to what I said with the girl, well, that was kind of money with the girl, her daughter spending money. But one of the most profound ones I had, and I believe this is in the book, a woman came to me she was making, she had been making $250,000 a year in her business, and now she was down to $30,000 and she couldn’t figure out what was going on. I know how to run a business. I know what’s going on, like what’s going on financially, but I don’t know what’s happening with the money, where the clients are going, just it’s crazy and one of the things I do when I work with people, as I could really just sort of tune in to what’s going on inside them. And when she was talking, just the phrase “rich bitch” came up over and over again. So I asked her. I said, What’s wrong with being a rich bitch? And she said, her jaw dropped, the color drained from her face, Because that’s what my friends always used to call me. I said, So what happened is you made a subconscious decision. I’m never going to be called a rich bitch again and your subconscious looked at it, said, Well, I can’t do anything about the bitch part, people are going to have their opinions, but I can do something about the rich part. So in order not to be called a rich bitch she lowered her income to where she felt it was comfortable, and no one would ever say that to her. And this is, it’s like it’s all about that relationship. And it’s our relationships with our families, and it’s our relationships with our friends. It’s how we want to be seen by the world.
Richard It’s all about understanding the underlying reasons why whatever’s happening to us, is happening. And in terms of what our contribution is.
Shiraz Yes.
Richard Interesting. The book you wrote, what’s it called again, How To Rewrite Reality?
Shiraz Yes.
Richard What prompted you to write, or was there anything specific?
Shiraz There were a few things. I wanted to get a book out there, and I also, I go through the same sort of talk with people when I start working with them over and over and over again, and it’s easier for me to look read this first, and then we’ll start working together so I don’t have to go through all this. And it isn’t actually even what I expected to write, because I started writing it and I came up with, I’ve always talked about things in terms of stories and what story you’re stuck in, whose story are you believing and trapped in? And the whole book turned into a metaphor of stories. So we talk about your backstory, we talk about your genre, we talk about your character archetype, dealing with plot holes, driving the narrative. These are all the chapters in the book, so it makes it so simple. So it’s kind of a practical kind of a spiritual book. But because of the metaphor, everyone can relate to stories. The book becomes completely relatable.
Richard So in a sense, it’s a bit of an introduction to what you do.
Shiraz It’s an introduction, but it also, people have read the book, and it’s only been out a month and I’ve already been getting calls and emails from people saying that their life is changing as a result of reading the book because they look at the world a different way now.
Richard A big change from the get-go, basically. Okay, how do we get this book?
Shiraz You can get it on Amazon. And if, I always bring copies to any of my events, so if you come out to one of my events, you’ll be able to buy a book.
Richard I understand you brought some here.
Shiraz I did. And I left them in the car.
Richard I do it all the time, too. It’s a good thing Barb brings these for me here. You have various programs and it’s not just one type of thing that you do? Maybe it’s just one type of thing, it just isn’t one application? You have a wide range of pricing on this thing.
Shiraz Yes.
Richard You go from $0 to $6,000.
Shiraz I do.
Richard Can you explain that? Other than wanting to make it available to everybody,
Shiraz But that is it. I have a free monthly call the last Tuesday of every month online. You just log in and I work on as many people as I can and because I want to be accessible to everyone, these are tools that everyone should use and they’re available for everyone on YouTube. You can get those free monthly calls are actually audio recorded. And so I found that if I offered all my programs for, say, $50. People will come in and they’ll create $50 worth of change for themselves. But the people that come in for the $6000 program create $6000 or more. At that point, they’re ready to say, I’m paying $6000 but I’m expecting $100,000 or a $1,000,000 worth of change. So that’s how it works. But until you get past that initial part where first of all you’re, if it’s a money thing, you’re in lax, I can only go to the small programs. You get those beliefs moved, shifted, so how you can go to the bigger programs, and then it just amplifies. But my recommendation, if you’re listening to any of my videos or coming out to my workshops, it’s the same energy. The thing that shifts is you. So if you can get into a state that I’m going to one of Shiraz’s $10 workshops, but I’m going to get a $1,000,000 worth of value out of it, that can happen, and that has happened for people. But most people, they automatically associate $10, ten dollars worth of change.
Richard So in a sense, they’re letting reality, dictate their belief.
Shiraz Exactly.
Richard But when you get them, you change that?
Shiraz I don’t change them. I facilitate their change. And this is what a lot of people don’t get. Some people come to me, it’s like, please help me, please help me. And I will say, no to those people because I’m not trying to save anyone. The people I want to work with are the people that say, I’m sick of this, I need to change. Can you help me to change, as opposed to, can you save me from this life I’m in? And those people that are in that space, that I am going to change, I’m just asking you to help me along. Those are the ones that get the big change.
Richard We have a lot in common with that. In my business people come to me with major, most of the time, major financial problems, debt problems. And I think they come in very much what you’re describing it and that I will solve their problem for them when in fact, I spent some time explaining this to people, No, I don’t. I just provide you with the tools, you know, the understanding if you want to. That allows you, empowers you to solve your own problem. And when they finally get that, actually, I think they re definitely take the, not just the immediate step that needs to be taken to solve the debt problem itself because that’s easy, that’s a legal technical process, really. It’s what goes on inside them and how they walk out the other end of the process is finished, and, it’s over. Beliefs changing reality, actually not changing reality in that case, giving them the reality that they didn’t realize they were seeking. The thing you’re doing is in a sense, it’s very easily understood, readily understood. It’s using words that, well, everybody can understand. Buying into it is a different thing completely. And then this year, seeing every day, I’m sure, but if there’s one thing that you can tell everybody about what you do about this whole thing, one message if you want, what would it be?
Shiraz It’s really about resistance. The less resistance you have to creating something, the easier and the faster it gets created. But most people don’t get how resistance works. So, if you look at it that you’re here, and this is the best possible outcome, and this is the worst possible outcome, most people say, Okay, you know what, I’m willing to have anything along the scale all the way to here, but I’m only willing to go about this far. And the thing about resistance is it, this is like duality, this is bad, this is good, this is bad. It doesn’t actually exist. So if you’re only willing to go this far in the bad stuff, you’re creating enough resistance, you’re only going to get this for in the good stuff. And when you get that and you say Okay, you know what, I’m willing to go through a whole bunch of crap in order to get the wonderful stuff. The willingness is what’s important. So when you’re willing to go both ways, you tend to get what’s over here because the resistance disappears. And I found this out myself because there was a point in my life where I was, you know, I was happily doing a six-figure lifestyle for most of my life. And then I said, You know what, I want to go to seven figures. So I started watching movies like, The Secret, learning stuff from Bob Proctor, doing all these things and thinking, Okay, now my income’s going to go seven figures. But the anxiety kept building, so I know what that feeling is like. But it was at that point where I’ve done that last payment, there’s nothing left, there’s no room left, there’s no money coming in. And I said, You know what? There’s nothing I could do right now, right? Whatever happens, happens. And I just let all that stress could I let all the resistance go? And I didn’t, like, crawl up into a ball and just like, you know what, we’ll just see what happens. And it just felt so much easier. And as soon as I did, that money started coming in again. And it was such a profound lesson to me that when you get into that place, just relax and get into more of it’s all going to work out. I don’t know how, I don’t know what’s going to happen, but it’s going to work out. Then it does. It’s crazy.

Understanding the Financial Products You are Buying with John Shmuel

Financial Literacy : Understanding the Financial Products You are Buying with John Shmuel

This video episode is about financial literacy. John Shmuel talks about understanding and comparing your options before making your financial decisions on insurance and mortgages.

Richard Hi, I’m Richard Killen, welcome to The Glass Is Half Full. We’re going to have a very interesting discussion today about financial literacy. And with us, prepared to do that, is John Shmuel. Who, I’m going to have to read this John, because my memory really is not that good anymore when it comes to the details. John is Managing Editor and Senior Writer for Is that correct? Before that, he spent seven years covering investigating economics for the National Post, which I still subscribe to, by the way.
John Wow, thank you.
Richard In other words, I’ve read you. His reporting has taken him around the world. And, John’s a graduate of Ryerson University and a board member of Society of the Society of American Business Editors and Writers. So, welcome John.
John Thanks for having me.
Richard Pleasure. Now, your company, I understand, has just completed a financial, financial literacy survey. It plays right into the main topic of conversation here. In this survey, you asked 10 questions and many of the finds, of responses, your company found, very, very surprising and interesting. Can you share with us some of those questions and perhaps more, especially some of the answers.
John Yeah, definitely. I’ll start by saying that the goal of this survey wasn’t to confuse or confound people, it was just to really get a sense of how well people understood the financial products that they’re buying. We ask questions like, do you know the difference between a mortgage term and amortization? Which is really important, right? And we found that the majority of people didn’t understand that question. We asked people whether they knew that, whether they were aware that there is no-fee checking accounts available to you, right? Because some banks will offer you checking accounts we have to pay every month. Some do it for free. Most people didn’t know that, that there were free checking accounts. So the questions really were to say, did you know that these kinds of financial products are available? Or do you know what these financial products do? And we didn’t ask, do you know what an E. T. F is or anything complicated? We asked about products that essentially almost everyone needs to use every day. And, we found that a lot of people didn’t know the answers to them. This wasn’t surprising because we’ve done some research into financial literacy, and we found it’s quite low in Canada. And we also found some other interesting stats like people in Canada are more averse to going online and using online products, especially when you look at other countries like the U. S or the U. K. Where there are a lot more comfortable and those marketplaces are a lot more competitive. You can get, there’s a lot more choice for you, there are a lot more customized products. So, we found not only is there a limited understanding of financial literacy and how the products work, but that people are also, for lack of a better word, more conservative when it comes to finances here. They’re afraid to try new things, and that costs them money.
Richard Online is much more popular in the States and then the United Kingdom.
John But by far, those two countries, by far
Richard I wouldn’t have thought there was a difference, maybe it’s part of the Canadian psyche, or something like that?
John Yeah, well, I think one of the reasons is, you know, here we have the big five banks and most people are most comfortable with going to the big five banks. And the U. S. and the UK, you just see a ton of variety. It’s so many small regional players that you can tailor to those regional and local needs. Where it’s here, it’s five banks, five big banks, six to some extent. Yeah, yeah, and you know you’re with them for life, and your parents were probably with them for life and your grandparents were probably with them for life.
Richard That’s interesting. Then, you wrote an article in which you said that there was 40%, let me read this right here, 40% of Canadians don’t realize that mortgage rates are negotiable.
John Yeah, yeah. So this ties into
Richard That’s a staggering statement to make to a lot of people, right?
John Huge. I mean, yeah, it’s almost one in two people that walk into a bank, walk out having never known that they could have negotiated the interest rate they’re paying. Yeah, they had no idea. Right? And that’s such it’s not a level playing field at all. Because if one person goes in, they know they can negotiate, and the other person isn’t even aware that it’s an option. That’s categorically unfair, right? So, yeah, we asked Canadians, did you know that when you get a mortgage, you can do this? And so it’s quite shocking because we’ve run the numbers. I mean, if you get, you know, especially in a city like Toronto, right? The average price of a home here is so expensive. If you get a $1,000,000 mortgage, and you’re talking about 1% point difference in the interest rate that you’re going to pay, I mean, not a lot of people are going to have a $1,000,000 mortgage, but this is just an example, to show you the huge amount of money, just a single percentage point makes, you know you’re talking three versus four every year. Then we’re talking essentially $10,000 a year, right? I mean, it’s huge, it’s a massive amount of money that you’re saving.
Richard Because that will be $10,000 a year for 30 years.
John Yeah, yeah. I mean,
Richard That sounds like about $300,000.
John It’s a lot of money. It’s a lot of money. And even, even a smaller mortgage. Even $400,000. Even $200,000 right? I mean, the percentage points count.
Richard Divided by whatever, right?
John Yeah, Yeah, exactly. And because mortgages, a lot of people spend 25 years paying them, right? So even if you’re saving $1000 a year, that adds up to $25,000 over 25 years.
Richard This goes back to the initial thing said about the people understanding the difference between mortgage term and mortgage amortization, right?
John Yeah, exactly.
Richard If you ask a lot of people when is your mortgage finished? Oh, in five years.
John Exactly.
Richard But it’s not, it’s a 30-year deal. You just have to renew this thing. Renew the rates and renew details of it every five years.
John Exactly. And I think it’s pretty common that people don’t know the difference. I don’t think that’s, I think you could ask anyone, most people you know and they couldn’t tell you the difference, right? So, that all plays into just, you know, it’s good for financial companies when people don’t know, it’s good for them, right? I mean, they don’t want to give you a lower interest rate. Whether they’re renewing or buying, right, they walk in and if they can make that $1000 extra a year, that’s great for their bottom line, right, so they have no incentive to look out for consumers. And so this is one thing where you know, we have to ask, How do you make people aware that when you get a financial product, you could negotiate something like a mortgage, right? So that’s something we’re looking into and trying to help with financial literacy.
Richard Insurance is an integral part of financial planning in the first place, and basically, for anybody, especially a family person, it’s a necessity for the future of your family.
John Absolutely.
Richard How do people see this? Am I right, in that? And secondly, how do they get over that?
John Yeah, well, you’re absolutely right. I mean, we’re, you know, we’re a rate comparison website, that allows you to compare auto insurance and home insurance. And, we find that there are a lot of people that visit, but we also find that there are a lot of people that will follow up and say, wow, I had no idea that this was so important, or I had no idea that I could even do this. And then when we ask people you know what, why didn’t you know that you could compare auto insurance? And it’s like they tell us because it’s the bottom of the list, you know, if they have a to-do list, insurance is on the very bottom. For people, it’s just for them. There’s a couple of things working against insurance. Number one. it’s often optional, right? So you don’t have to get home insurance, right? You don’t have to get life insurance if you’re traveling, you don’t have to get travel insurance. But, it’s also one of those things where you know, if you don’t get a checking account today, you can get a checking account tomorrow. But when you need insurance, if you get into a car accident or something happens to you when you’re traveling, you can’t call your insurance company and say, can I actually get insurance? Yeah. Yeah, right. That’s it.
Richard By the way, the accident happened 40 minutes ago.
John Yeah, exactly, right? No, that’s it. That car is totaled, and you’re going to have to pay out of pocket. Or if you’re traveling and you get sick, that hospital stay, which I mean, you know, you hear the horror stories of $200,000 or $300,000, the hospital bills from traveling overseas without insurance that you’re stuck with that. You know, all of a sudden you’re talking about bankruptcy. You’re talking about, you know, a situation you never want to deal with.
Richard Yeah, I see that in my business.
John Yeah, absolutely, right. I mean, you could probably speak to that more than anyone. And so insurance is one of those things where, unfortunately, you know if you do need it, you don’t have it, it’s too late. And but because of the optional nature, I think a lot of people don’t think about it, and the fact that it’s just, it’s convoluted. It’s complicated.
Richard That’s where I was. My mind was going there, thinking about some of the issues involved. People fighting insurance, basically, I suspect that just an insurance contract, just what you have to look at to sign and all that, just confuses the heck out of people.
John Definitely. It’s this huge text of 1000 situations that it covers.
Richard Written by the lawyers, kind of thing.
John Yeah, it literally is fine print. All of it is fine print. Your entire insurance booklet is fine print, and that scares people. That’s daunting. And that also is
Richard Is there a shortcut to that? Can people, say, look, I can’t read all this stuff? I get lost?
John Absolutely.
Richard But is there something that I can learn and know, that takes me to the part that matters?
John Yeah, I would say, if your getting insurance you need to have, you know, you need to talk to the insurance company or the broker that you’re getting insurance from and say I don’t understand this, can you take me through it? And if they say they don’t have time and you can read it yourself, you know that you’re dealing with a person you don’t want to be getting insurance from, right? So, that’s the first thing. Whether it’s a broker which is essentially someone who will sell insurance from various providers and try to find you the best deal. Or, you know, whether you go directly to an insurance company, like one of the big insurance companies. When you’re buying, you have to say, I don’t understand this product, I would need you to help me understand it before I buy it, can you do that? That’s the first thing you should do.
Richard You mentioned a broker, who does the broker work for?
John I mean, the broker works for themselves, right? Essentially there,
Richard Is he working for you or the insurance company?
John So, brokers on our website, particularly, in general,
Richard We will come back to your website.
John Yeah, definitely. Okay, so I mean, a broker essentially makes commission on insurance policies they sell, right? They need to sell those insurance policies to make commissions. Yeah, exactly. But at the end of the day, they want
Richard You provided the money?
John Our company? As an individual, yeah.
Richard The buyer provides the money.
John Yeah, exactly. So, as a buyer, you pay the premium and the insurance company pays the commission. Yeah, exactly. But at the end of the day, brokers, you know, they thrive on word of mouth, right? They have to have good word of mouth. They have to have a customer that says, Hey, I have a great broker like you should use him, right? So I think intrinsically brokers, they’re driven towards good customer service, right? But insurance companies, to an extent, but at the end of the day, it’s about the bottom line, right? They have to make more money than they pay out in claims, insurance companies have to be profitable.
Richard So you’re, to keep it really relatively simple, maybe overly simple, you’re better off with a broker.
John I think if you don’t understand what you’re doing with insurance, definitely, because you’re paying the broker for advice, right? I mean, that’s the
Richard And the broker can shop.
John What it comes down to is that they can shop for you. And, you know, you can call them up and say, I’m really, I don’t understand this policy, can you help me with it? Yeah. The big advantage of brokers is that they essentially shop for you. They find the best deals for you. Whereas the insurance company you are getting that one price, right?
Richard Who you’re dealing with, is locked into whatever product they have.
John Exactly. Yeah, exactly. Yeah, I was going to say, you know, when we talk about insurance being extremely boring and people not wanting to deal with it, I think a big problem that arises from that is the fact that this is actually a product that you need to really understand, that, because if you’re buying home insurance and your basement floods, most people don’t know that home insurance actually doesn’t include overland flooding. So you have to buy extra coverage to protect your basement from flooding. So you find people in these situations where they think they’re protected and they’re not. And in some cases, from the most common thing that you’re hoping to insure yourself against, right? Because I think between fires and floods of a home, those are the two most common things.
Richard You’re not likely to have an airplane fall on your head.
John Exactly, right? I mean, you’re not insuring yourself for a missile hitting your house or something in Canada, right? I mean, you’re hoping to protect your home from probably flood or fire, it’s the most common thing.
Richard Unless the Russian aim is off.
John Yeah. Who knows with the geopolitical situation today where things are going to go, but yeah, I mean, you would hope that you would think you have home insurance. My basement floods, you call up your insurance company, my basement flooded. I’m going to have to do a lot of repairs. I hope I’m covered. And then all of a sudden, they tell you, “No, you’re not. You don’t have overland flood insurance”. And it’s because all you had to do was take the time to ask a question, right? What’s covered? Exactly, because you don’t know.
Richard You don’t appreciate that it might not be included. Make assumptions. House insurance is house insurance.
John You would think. And that’s misleading in and of itself, right? While it almost seems random that one of the most common things people hope to ensure for, is not included in a base package.
Richard Incredible. Are there any other pitfalls? Let’s go back to mortgages for a minute, if you don’t mind, John. We’re talking about shopping for mortgages. The same subtleties apply in mortgages?
John Yeah, absolutely. There’s so many different kinds of mortgages. We got a fly in the office. Yeah, absolutely. There’s so many different kind of mortgages. There’s an open mortgage, a closed mortgage, a variable, a fixed. You have mortgages that charge different penalties for canceling early, and that’s an interesting fact. You know, we did a study that says most people break their mortgage before the five-year terms over right, because you might buy a small home, a starter home, and all of a sudden you have a kid and you need to move up, right? So, a lot of people don’t know some mortgages will be very forgiving for breaking early. Others will be very punitive. They’ll hit you with a lot of interest charges for canceling early.
Richard Does this affect the rates?
John Yeah. Yeah, absolutely. So, you know, whether you’re getting a fixed or a closed, that will affect the rates.
Richard If it’s wide open?
John Excuse me, an open or a closed, that will affect the rates.
Richard So if you were to break a mortgage at the three-year mark, on a five-year term, on a friendly mortgage, you’re not going to pay anything. No penalty.
John You probably will, but it will be, well, if it’s open you won’t. Yeah. Okay. So if it’s a closed mortgage you will.
Richard It’s a mortgage that you can do it and not pay a penalty, but you are going to pay a higher rate for that mortgage.
John Yeah. Yeah, you’re essentially paying for the luxury of freedom, right? But you might want it if you know that, Oh, I might be expecting children in the next few years, and I might want to go up to another house.
Richard You have to give anybody with a mortgage, especially if its the first mortgage when their new to the whole thing, is give a little thought to what the next five years is likely to bring.
John Exactly. And that could be hard, but yeah, I mean, a lot of people aren’t even aware of the differences right? I mean, we were not taught about mortgages in school.
Richard And, this is what financial literacy is.
John Yeah, absolutely. It’s the most, it’s the biggest decision you’re going to make. And most people have a crash course in mortgages when they’re about to bid on a home or in there in a bidding war, and all of a sudden they need to get a mortgage, and they have, you know, 24 hours to decide, and they have to learn everything they can in that 24 hours for the biggest financial decision they’re going to make, right. That’s so common. It’s so common. People find themselves in a situation, and that’s a terrible situation. Being 24 hours to make a $400,000 decision or whatever your home costs.
Richard A lot of things, most people would get much more foresight, too, whatever it is. And here is the biggest thing, and there’s no forethought given.
John Absolutely.
Richard Why is that?
John Well, I think it’s an industry problem. I think it’s an educational problem. I mean, you know, in school we’ll learn, as useful as it is, you know, my sister’s an engineer, but we’ll learn algebra in all these theoretical forms of math. But what’s stopping us…
Richard Nobody teaches you basic budgeting.
John Exactly. Why isn’t there a course right in school that says, here’s what you need to know about your mortgage, here’s what you need to know about your first credit card, here’s what you need to know about getting auto insurance when you’re 16 when you’re most likely in an accident? You know, I wonder if young drivers would be more responsible if they just got sat down and said, you know, here’s what’s going to happen your insurance rates and how mad your parents are going to be when you know your monthly, they have to pay $600 a month or whatever it is, to ensure you because you got into an accident, right? Just taking people through these things because they don’t think through them. Exactly. Yes, and I think because we’re not prepared for it, we don’t think about it. And when you’re buying a home you’re thinking about a mortgage, the home decision itself is so stressful, right? That’s where your laser-focused on what’s a good neighborhood. It’s emotional. There’s so many things going on and playing. You have two people. If, I mean you might be buying by yourself, but let’s say you have two people trying to make a decision on one place to live right, and that can be contentious. And so the mortgages almost you know, the money part is almost an afterthought. Yeah, exactly. And so that’s why we just, you know, I think a), there’s a role for schools to play. Where their part of being an adult is learning about how to manage your finances properly, and you know, it’s good to see that the Ontario government, I think they’re doing a pilot program now. Yeah, for financial literacy. But why, in 2019 is this finally happening, right? Why wasn’t this done 30 years ago? We have so many people in debt as you’re more than aware, you know, people struggling with bankruptcy, because, you know, in some cases, it had nothing to do with financial literacy. In other cases, if they had only known right? If they had only known the repercussions of taking on something you can’t afford.
Richard On the plane of telling people about options that they might not appreciate that they have, is that if you come and see me, you don’t necessarily have to go bankrupt. We have this other product called a proposal that allows you actually pay your way out of the problem, right? Half the people we see nowadays actually prefer that, to use that option.
John And they probably don’t even know what a proposal is, right?
Richard They might see a bit of it on TV, advertisements, and all that.
John About it.
Richard I’d like to go back to something that we discussed just a few minutes ago. We talked about it, but perhaps didn’t focus enough on this, the idea of renewing and probably the rest of the world is something like me, my car insurance has been with the same company for the past 50 years, 51 years I think, and the insurance comes in, we sign, send it back, and that’s it.
John Pretty common.
Richard I didn’t even read it.
John Pretty common. Yeah,
Richard Look at the money, what the premium is going to be, and if it doesn’t differ too much, or perhaps even doesn’t differ at all from last year, sign here, and away she goes. Partly is, we’re fairly happy with the people, although I don’t think they know who we are anymore, but the other thing is that it’s more trouble than it’s worth to do anything about it. We think. But I think you have a different view on this?
John Yeah, definitely. I would like to start by saying it’s, that’s absolutely a very common situation. I think most people when you get insurance, you remember all the paperwork, all the time that went into it, and you just don’t want to relive that, right? In your mind, if you’re switching a provider, you’re going to have to go through all that again. So I think people see that renewal in the mail. Like you said, if the price looks good, why do anything about it, right? But it’s one of those situations where you don’t know what you don’t know, right? So you don’t know whether that price you’re paying is actually good.
Richard I’m going to find out what I don’t know here.
John Yeah. I hope so, yeah. I mean, hopefully, I’m casting.
Richard Some of the folks out there will be finding out something.
John Yeah, hopefully, I’m shining a light on insurance, but, you know, you might think $1400 a year is great. But then there might be other providers out there who, you know, may offer you a discount for, you know, working for a particular company or going to school at a particular school, right? Alumni discounts. They might offer you discounts for X amount of years of safe driving. There might be senior discounts, their might, and not every insurer does this right. Certain insurers offer certain discounts whether they’re targeting a particular demographic or what have you and you don’t know unless you compare your options, right? So even though you think you might be getting a great rate, there might be an even better rate out there, right? And I think….
Richard But, that sounds like a lot of work.
John Well, I think up until recently it was a lot of work. But with the dawn of the Internet, and I mean our website, you get 30 plus quotes in three minutes.
Richard On your website?
John On our website, you fill out your information, tell us what car you’re driving and then you get the quotes and it’s free. It’s quick. You can see the quote. You don’t actually have to go with the quote, but you should be doing that every year. I mean….
Richard I’m going to interject something, or interrupt you with, I’m sure there’s a lot of people going, and what’s that Website again?
John So that’s something again because it’s free and because it literally takes three minutes, there’s no reason why before your renewal comes up, you wouldn’t go on the website and compare, right? There’s no obligation to get, you might compare and say, Well, I actually am paying the best rate, and then you have the comfort of knowing that you are. But auto insurance is one of those spaces where it’s so competitive where we find, for instance, if you get a quote on our website between those 30, sometimes the difference between the cheapest and the most expensive can be over $1000 a year. Yeah, it’s incredible, right? You’re talking about serious money that you can save. And again you might find that you are, you know, paying the cheapest. But you don’t lose anything from comparing, right? So that’s something that we try to really educate people on because the renewal letter coming in and people just being like, That’s great. I’m renewed, you know, for another year. No problem. Very easy. It’s it feels so simple.
Richard The renewal comes in and you look at it and you say, it’s not going to change my lifestyle.
John Yeah, you just. That’s it, right? I mean, you don’t have to say yes, right? They take no response as default. Yes, you’ve agreed to another year with us. That’s how easy they’ve made it, right?
Richard Sometimes I wonder if I can be pushing for that in my business.
John I mean it’s a great thing to have in a business. But it’s not, it’s not right for the consumer, right? I mean, it literally lulls consumers into a sense of complacency, which is what any company wants. So they keep using the product, right? So that’s why this all plays into financial literacy. It’s just being aware of what you can do and what you should do to ensure that you’re saving money. And this is not small money. As I said again, it’s like that difference I said, $1000 right between the top and the bottom one. We’re talking about a lot of money here, and just knowing this is just a simple thing.
Richard It’s not just car insurance, it applies to other forms of insurance as well?
John It does. Yeah, it applies to home insurance. Home insurance is an area where we’re seeing prices rise significantly because, you know, we’re seeing these massive storms keeping Toronto flooded basements. That’s one area where your basement floods….
Richard Climate change.
John Climate change. And the home insurance industry there, you know, saying that home insurance rates are going to go up. You know the forest fires in Alberta that, you know, almost burned down Fort McMurray. Rates are going up for everyone. Just because nothing’s happened to your home, if an insurer is ensuring a lot of people in your province that’s something, if a huge flood hits the province, they’re probably going to raise rates for everyone to compensate for those claims they’re paying out. So you can’t have your head in the sand, you need to be aware of stuff like that. You need to be aware of what you can do, which is comparing and ensuring that your rates don’t go up, and just see what everyone else is offering you.
Richard So
Richard Most of those questions, in fact, most of those questions will be asked on your behalf? Just when you dial in, the answers will be there.
John Essentially, yeah, try to make it easy.
Richard I don’t want to make it sound too simple, but simply the better for most people.
John Yeah.
Richard It helps people understand insurance, if I’m any example, and naturally, the illiterate when it comes to finances and insurance, and all that… and for a period of time I tried selling life insurance…
John I think that’s the default position that most people don’t know about insurance. Yeah.
Richard It was certainly a fault for me, but that’s why I don’t do that anymore, hard job. But people do have a tendency to be flummoxed a bit by the whole concept of insurance, we talked about this earlier. Yeah. But start off at the beginning here, when I mentioned that we were going to talk about financial literacy, what you’ve done is you’ve given us a ton of examples of financial literacy, okay, but let you talk about the term itself, financial literacy?
John Yeah, I mean, it just comes down to understanding how to manage your money, right? How to make smart decisions with the financial products you get, understanding what they are and what they do.
Richard Is it kind of like a recognition that no matter what your financial, what you’re dealing with, doesn’t matter, could be dealing with something at WalMart, that there’s always another point of view on this particular price, or product. Yeah. Or sometimes it might be worth investigating.
John Yeah, exactly. I mean, I think more people know that you can get coupons from superstore flyers or, you know, grocery store flyers on and save money on your groceries, and they know that you can essentially do the equivalent of couponing for financial products, right? I mean, there’s, it’s just understanding that you know, you can negotiate certain things that you can get better deals. Yeah, most people. And I think there’s also this preconception that the financial world is so complicated. You know, we always hear this thing. I’m bad with money and, but that’s, you know, don’t make that your default mindset, right? Take the time to say, Well, maybe I don’t understand this, but I can learn about it, right? Just like you can learn about couponing, and you can go through and see what the best deals are. You can do the same thing very easily with financial products, so I think for a long time, and, you know, financial companies don’t want people to know. They’re in a better situation when people don’t know because they can charge more. They can charge more, they can keep consumers complacent. As we said with the renewal situation. So anything that I think especially, you know, Canadians can do to educate themselves about money and finances and financial products. It’s, you know, maybe you’re in a situation where financial literacy isn’t gonna help you, right? You’ve had bad luck in your life and it doesn’t matter if you understand about mortgages, you can’t get yourself out. But the one thing we say about financial literacy is it will never hurt you to learn more, right? And it might not necessarily help you depending on your situation but will never hurt you. And for a lot of people, it will help them. It will help them before you know they renew their car insurance or when they’re getting a credit card, to understand what the best product is or what the best deal is out there.
Richard You mentioned credit cards, we’ve been talking about insurance and mortgages, and all that, but it almost applies to credit cards as well?
John Absolutely. We had a customer the other day email us and say they had no idea that they could, you know, that they were paying 20% in interest, and there was a credit card that allowed them to pay 0% a promotional offer for 12 months, and it was a big game-changer for them. So again, and maybe that’s not right for everyone. But just you’re surprised at how many people will reach out to you when you’re talking about financial literacy and say, I had no idea I could do that. And, wow, that was so big, that was a game-changer for me.
Richard You made a comment about the tendency, put it that way, the tendency of institutions, companies to prefer the buyer, their customer, to be relatively ignorant of the facts of life, if you want, of their product and what they do. It’s an interesting thing, because in my business, the whole point, if you want my being here, is to make sure that people do know everything that they can know before they go ahead and make a decision about what to do about their financial problems.
John Which is how it should be. And I don’t want to say that, you know, banks are actively trying to pull wool over our eyes and keep us ignorant. But you know they don’t have any incentive. Yeah, they don’t have any incentive to educate or say, you know, maybe it’s not a good idea if you take out this line of credit, right? I mean their entire businesses is built on, hopefully you will take that line of credit.
Richard In fact, I would suspect that for a lot of their employees, getting too deeply into all the nuances of things is enough to scare a customer off.
John Probably. Yeah, it goes back to that insurance example, right? It’s…
Richard Like the guy across the street who doesn’t explain anything.
John Yeah, exactly. And you know what? These products are so complicated where customers probably if you haven’t taken it some time to, you know, educate yourself on financial or see they don’t even want, you know, the adviser or whoever you’re dealing with to go too deep, right? It’s going to scare them.
Richard Very, very interesting John. Very interesting. One more thing. I want you to repeat this. Where can people go to get these answers, and in fact, the questions, too, to help themselves become financially literate?
John Definitely. Yeah. Again, that’s
Richard Sounds great.
John Thanks for having me, Richard.
Richard Thank you. Thank you for being here.

Tracy L Clark – How To Listen To Your Intuition And Change Beliefs

Episode 9 Clark Final

This video episode is about listening to your body and getting in touch with your intuition.

Richard I’m Richard Killen, welcome to The Glass Is Half Full program where we try to show people some really interesting ideas about what they can do to make life better for themselves, without necessarily having to spend the bank. I’m joined today by Tracy L. Clark.

Tracy, I’m going to have to read this Tracy, I’m sorry. I’m going to put my glasses on because at my age you need things like that. Tracy is a remarkable leader and pioneer in the field of Body Regeneration. She is the Founder of TLC Community of Extraordinary Living and Creator of The Body Regeneration Method. Did I get it all right?

Tracy That’s correct.
Richard Tracy serves on a global level as a Facilitator, Soul Specialist, Teacher, International Speaker, and Humanitarian. Now I’m going to introduce you properly here and beyond these things.
Tracy The semantics.
Richard Let’s talk about the real you. Tracy came into this world sick, riddled with physical ailments and disease. She was born with legs and hips detached, a hole in her chest, stomach valve closed shut and an extremely damaged nervous system. That I truly believe must have caused you excruciating pain. At the tender age of five, on top of all this, Tracy was kidnapped. I think we’re going to want to hear about that one. This terrifying event acted as a catalyst that began opening Tracy to her gifts in a unique way. It took several years for her to be able to understand what was happening to her. Now she teaches people to unleash the power within themselves. She teaches that “Whispers of the Body” are telling you so that you can fall in love with your life. Not many people fall in love with your life. I certainly want to hear about that one as well Tracy. Tracy holds many transformational events both here in the Toronto area and online. So, Tracy, welcome to The Glass Is Half Full.
Tracy I’m so happy to be here.
Richard Now, much of what you do revolves around teaching people how to interact with their body, basically?
Tracy Their intuition.
Richard And, changing basically, their beliefs, their approach to all of this. Now, before we get into that, I think we have to really ask you to tell us your story?
Tracy Yeah. You know, you said it really well, with the introduction there. I have to say it was trauma after trauma. And before I was kidnapped, it was interesting because my sister, my mother and I at midnight, we’re also kicked out of our home. As our father moved in with his girlfriend and we were on a bus and ended up in a women’s shelter the next day. So we had a lot of pain, suffering, trauma, and that was life, I thought that was normal. A lot of you can imagine there was a lot of fear around my mother with poverty and welfare and living in a, we lived in…
Richard This was when you were pre-school?
Tracy Yes, I was three, when we lived in a very small apartment. We had a mattress on the floor and my mom would pretend we were camping because it was that bad. So it was trauma after trauma after trauma. So I know when I tell people to live a really good life. My whole life, I walked around like a pezz doll and my whole body shook like those people thought I was having seizures. I had many, many experts tell me you’re not going to change your body. You’re not gonna be able to shift it. You’re going to live in pain. I lived on a mask to breathe because my asthma was so bad. I had croup and bronchitis all the time constantly coughing stuff up. I actually almost died when the doctor came in and said, Wait a minute, we were in a small town, Flynn Flawn, Manitoba, if anybody knows where Flynn Flawn is? I always say I was built. It’s a gold mining town. So back then I said I was born on a pile of gold. Time money born on a pile of gold. But just before, I had thrown up a lot, I couldn’t keep food down and a Doctor came in and said, I think I know what’s wrong with your child. He wasn’t from the community, and he did, it was very rare for a girl like that, you know, early 70’s to have their stomach valve sealed shut. So he opened it and I was actually ready to go at that time. I’ve had three near-death experiences. So when I can say I kept saying the other side was a lot better than this side. And I know what it’s like when you’ve struggled, you know, physically, mentally, emotionally, financially. And you just think there’s nothing. I was miserable. I was miserable until I hit 32. Complete misery.
Richard And now you teach people.
Tracy Yeah, and now…
Richard To overcome what they’re going through.
Tracy What they’re going through…
Richard To make their life better.
Tracy Yeah, because I can relate. I understand. I know what it’s like when you’re at the bottom? I know what it’s like to have your last $1000 in the bank. I know what it’s like when doctors constantly are telling you you’re never going to fix that. You’re never going to get over that, you’re going to live with it. I was really the youngest kid in Canada, five, diagnosed with ulcers, diverticulitis, and irritable bowel syndrome. That’s how much stress I had in my body, just from life circumstances that were going on. And then just before I got kidnapped, I got hit by a car and almost died because they ran over me and I was into the hospital and I was like, Yeah, on the, I remember these. So I’m like, it was thing after thing after thing and people look now and they’re like, How can you have this beautiful life? I had to get up and I had to make some changes. Get out of my victim mode, get out of my stress.
Richard Explain the kidnap? I can’t leave that subject.
Tracy Yeah, a lot of people say what happened? Especially in Canada, right? Oh, when my parents were like, Yeah, very different in Canada. And so this is about going back to your intuition. I was a very sensitive kid, and there was a gentleman that would be in the area. And I kept saying to my mom, that man scares me and I remember saying, Scares me, I was five, scares me. No, no, no. It’s okay. No, you’re just being, then oversensitive. Well into the park one day, sister, long story short to fast track it, will get all the details. He grabbed me. He had a gun. He had his dog and he grabbed me and I screamed and my sister and friend came. And thank God the girl that was with my sister was an afterthought, raised by bikers, so she was seven, but her brothers were in their 20’s and she was a biker. She saved our butts. Took us to a dugout, wanted to have his way. She eventually got out and then my sister couldn’t get me out because I was too small. So she ran. They got help. All I know is, when he came back, he was so angry, he pulled me up by my hair. Now I’m a frail kid who could barely breathe, to begin with, and he threw me on the ground and put the gun to my head and all I have I just heard sirens. That was it, blacked out. But it actually became a catalyst to other things because I started seeing things, feeling things and I just thought it was some crazy child PTSD, right? Yeah, that’s the short version Yeah, yeah, it’s pretty scary. Yeah, but when you actually start to go back and realize, wow, I was told money doesn’t grow on trees. I was told you don’t deserve that. I was told that’s for somebody else. I was told that was greedy. When you start to listen to people, that programming starts to come up and you automatically are in it. So you start to function with what you know. So they’re not going to school teaching you, How are you a steward of your money? That’s a relationship. So the only programming that you pick up, it’s like your computer. You have programs on your computer. You have to remove the ones that don’t work anymore. But people keep running them and running, they all complain. Everyone’s going to tell you they want $1,000,000. But I was teaching a class last night. If you got a $1,000,000 today, how would you handle all those problems? Most people will lose it all. Right away, because they’re just going to, Oh, I got a $1,000,000 it’s a lot of money. Well, nowadays $1,000,000 doesn’t go very far. You and I know that it really doesn’t.
Richard Some people out there
Tracy They will disagree. They will. But look at a house where we live. A house, a shoebox, is $700,000 right? So if you start to look at that, if…
Richard By the way, for those of you who don’t live in the Toronto area, she’s talking about Toronto.
Tracy Oh, sorry. Yes, the Toronto area. A shoebox is like $700,000. But if you start to look at the fact that if you give someone a $1,000,000 tomorrow, they have never dealt with it. They don’t have the education, the right frame of mind. They don’t have the habit. They’re not a steward of it, and they can get rid of it. I’ve seen people come to me. I asked last night how many people know lottery winners? I know four, they knew two. We’re talking millions of dollars. And the one lady who knew her friend, she said they made $10 million. I think she said it was 10 years ago. They’re down to $2 million. That shouldn’t have happened. But the frame of mind, the habits, was that’s what it was. It was like, Well, I’m just going to do what I was told.
Richard If you make it, it’s a little different, because you’re learning the stewardship as you make it. Henry Ford once said that, to turn $100 into $110, it’s hard work, to turn $100 million into $110 million is inevitable. That’s the person who made it.
Tracy That’s the person who made it.
Richard He didn’t have it handed to him.
Tracy No. When you make it, there’s that you start to learn to have more respect for it. But a lot of people, if they’re just going to their job, the way jobs are structured, most people, that’s why people need to hear this. Because if you go to the job, a lot of times people complain about their job, but they only give you just enough so you’re going to come back, right? You have to keep coming back. So, they keep coming back, coming back, but that paradigm just, okay, I’ll go to my job, I have a little bit more and a little bit of a nugget, I got a little bit of a bonus, and then we just sit in this space. And what are people waiting for? Their golden nugget, which is a pension. It’s a habit.
Richard We were talking before about the idea of a comfort zone. A comfort zone that you have now, you’re an exception, by the sound of it. But up to the age of seven, most people live in a very comfortable zone.
Tracy 100%
Richard First of all, they’re not aware of the outside world. Therefore, they’re not aware of the dangers of these things. So the memories they have of those first 7 years are usually very comfortable memories. So what was implicated in that time by the people around you, your family?
Tracy And if your family you saw, if you saw them, just get up, go do a 9 to 5 job and that’s how you make your money. That’s your pattern.
Richard So how do people shift this perception?
Tracy Of making their money?
Richard Well, just their perception about money?
Tracy Yeah, the first start, really.
Richard Really break the habits, I guess.
Tracy Yeah. I say to people, the first thing you have to do is you have to start actually, really start to build a relationship with it. Money’s energy. That’s all it is. It’s like everything right. It’s a relationship. So I love giving people this exercise. I say to them, You go out for 24-48 hours. You have to be very aware on that day. So most people are on autopilot, and every time you spend some money, how does it feel? Where are you spending it? And really see.
Richard Do you make them write it down?
Tracy They can write it down normally, then they can look at it differently. Some do, some don’t. But they’re like you know what? I have this one great, great lady. She came to me and she said I was going to Starbucks every day. But when I was spending the money, she said, I realized I actually didn’t even like the coffee. I was going out of habit because my friends would go. So, she says, When I actually had that realization, we’ll do the math. Okay, if you’re spending $5-$6 a day on coffee, that adds up in a year, right? That’s money you can put on a credit card or somewhere else. She said, I actually looked at it and she said, Yeah, she said Tracy looked at it and I went, I don’t even like going there. This is just a bad habit I’ve created. Do you know, when she had that awareness, she stopped and she moved the money into another area.
Richard Now I ask you about people shifting their perception of money and then you explain that to me, Tracy. But I’m interested in and I think most people would be interested in, how does this conversion happen and how long does it take?
Tracy To shift the paradigm? You know, it’s really interesting. Awareness is 90% and then changing the habits, the other 10%. Some people, literally, I’ve seen this, we always say those are those miracles. Some people literally shift the very next day. That’s how quick. Like I’ve had a lady walk in….
Richard Is it commitment?
Tracy It is a commitment. I always say, commitment, dedication, like you have to have that through. I wouldn’t be where I am today if I didn’t step up every day and say, What do I need to shift? What do I need to look at differently? What’s a different choice I need to make? People you got to forgive yourself too, for all the past choices you made with your money. You have to. And people say Really? I said so many people are still beating themselves up. I did a bad investment. You did it 10 years ago. Okay, it’s over. Get rid of it. Or you had to go through bankruptcy. Okay, fine. You now learn from that.
Richard Don’t say any bad things about bankruptcy.
Tracy No, no, but I’m saying that people beat themselves up, but they go through it. I say to people, forgive yourself that you went there. But now look at why you went there.
Richard Bankruptcy is a bad word.
Tracy Well, not if you’re certain people in the world. Certain people, they’re okay with it.
Richard Practically just as a mild aside as to what I do, all the people that have come in to see me over the past almost 30 years, and that adds up to 16,000-17,000 people, I don’t remember one of them who didn’t say something along the lines of, I don’t want to go bankrupt.
Tracy Yeah.
Richard Horrible thing.
Tracy No, but it’s true. But then people hold these emotions or it’s a stigma, right? Talk to someone who’s gone. And I’ve had many clients who’ve gone through it. They show up like I’m going through this and I’m like, Okay, one, we’re going to get rid of the guilt around it. The fear. We got to look at why you got there and shift those habits and those thought processes, so you don’t go through it again. Work with the people you’re working with, and it’s OK, you’re starting again. It’s part of your journey. But they hold so much emotion.

How do they hold that? Or, how difficult is it to get them to unhold it?

You know what, I can say that everyone I’ve worked with probably within about six months, they don’t have that anymore. And I can tell you everyone, that we’ve shifted this, they now own their own homes. They have really good jobs. They are like and they’re clean and they don’t even look at it. They said that was the best thing I ever did. Because I said, What happens with people energetically that they don’t get? And this is why tell some people, go declare bankruptcy. And they’re like, What? Oh, that’s a sin. The energy of all of that debt literally weighs on you physically. It makes you sick. And I say to them, You will feel so free, your mind will become uncluttered and now you’re free to make a new choice. Some of them have started successful businesses. I know one lady, she’s like all I want to do is go into sales. And she was so scared she was being an assistant. Her, you know, husband, they had their situation with their marriage, whatever. I said. Okay, declare it let’s move on. And she goes, Oh my gosh, Tracy, the weight is lifted. Well, now she’s in sales. She’s making $250,000 a year, she’s got her kids. She’s like sky-high. Single woman having a great time,

Richard You know, the number of cards we get from people, thanking us?
Tracy Yeah, exactly. Because the energy naturally lifts off. And then if you look at it, you’re like, I’m not going to do that again. What can I create now? And they get excited. It can be weeks, as long as you have that right. That right adjustment to see that it doesn’t have to carry the guilt, the shame, and the fear, is what locks everyone up, in every area of their life, especially money. Because money in some families, don’t talk about it or it’s a taboo, that creates problems.
Richard You left out one word there, pardon me, I think we are being joined here.
Tracy We have some friends.
Richard Shame is what accompanies all of this. One of the things we tell them, I’ve been telling people for years that way because we’re on the same wavelength, is the idea that making mistakes is part of life. We all make mistakes, and probably I’m going to put some money on this, each of us makes at least one mistake a day.
Tracy Easy.
Richard At least.
Tracy Easy
Richard And the whole point of it is that making mistakes simply qualifies you for membership in the human race. And all of these things all depend on what you’re going to do about these so-called mistakes, let downs and all that, and you seem to have the answer.
Tracy But that’s how you grow. I learned…
Richard You should come over and talk to the people who come in and see me. Except for one thing, you would be telling them to go bankrupt, and I’m not allowed to tell people to do that.
Tracy Well then, they can come to my Soul Sundays, where it’s just this place where we have fun. Yeah, it is just Soul Sundays. Just show up, have fun. But that’s what it is, and they don’t have to have shame. And the reality is if we don’t fall down…
Richard But it’s human nature to have that.
Tracy It is because of society, though, and you don’t want to feel like you’ve done something outside of somebody else’s paradigm or what are people going to think? Who cares what people think? It’s your life. You have to decide. I’ve been called crazy and weird my whole life. I didn’t know what that was. Because imagine a little kid, and literally, too, I was born without eye-teeth and permanent teeth and like, I looked like a little kid that walked like that, I was called everything under the sun. So when you have that come through, I was weird. You’re crazy. What’s wrong with you? Only to realize that Oh, I’ll be weird all day long because if weird means that I can fall down, have a great community of people that want to lift you up and support you and get you going. I’ll be weird all day long.
Richard And look at what happened to you?
Tracy Look what happened, exactly from being weird. So be weird. That’s a good thing.
Richard So the stress and the illness and all that, that accompanies these negative thoughts and perception of your situation can all be dispelled through application basically.
Tracy It can be.
Richard How important is the commitment to it?
Tracy Commitment is huge. It’s a way of living. It’s a way of being. Like people say to me, Do you do this every day? I said, Yeah, I look at different things that come up every day, and you have to like a lot of people who don’t know that your body is always telling you what’s going on. So by the time we have an illness, you have missed it on the emotional level, the mental level, the psychological level. So a lot of people carry a lot of pain in their lower back because it’s actually related to their money stress and people don’t realize that. But you need to every day say, I’m going to get up. What can I do differently today?
Richard So if somebody wants to make a change, here’s a call to action kind of thing. Okay? Somebody wants to make a change Tracy, what do they do?
Tracy Where do they start?
Richard Other than just call you?
Tracy Come to Soul Sundays. I’ll tell you what that is in a minute. Here is what I’m going to tell you about what happened to me, and this was my epiphany and people could really hear anything today. I joke, and I call it my Come to Jesus moment, cause literally was a doctor saying you’re going to die. There’s nothing more we can do for you. Manage it. We’ll see what happens. Basically, that was the last. Yeah, figure it out. We’ve done everything we can. People wait until this. This is their moment where they decide I got to do something different. I got a very bad illness or something’s going to happen. My money is now run out. Huge debts. The relationship ends. Then they decide I’m going to make a change. That is not the best time to make a change. When you make it at that point, you’re digging out of the hole, like I was, and you’re literally crawling out. You’re very deep when you’re I was deep I knew like all this stuff that happened. So say to people If you can be in the space right now to say Okay, take a look at your life. Say, what parts do you really love about your life? I get out of bed, I love getting out of bed and I get out of bed because I’m like, I got to the other side. I’m like, Oh I’m out of bed today. This is awesome. Happy, fun. Never used to be like that. I say to people, look at your life right now and say, What part stresses you out the most? And ask yourself, not what part, this is the key, truthfully, what part is the biggest stress right now? Truthfully. You got to say that word.
Richard How do you know it’s truthful?
Tracy This is why. I’m going to tell you so, when people start saying people don’t talk like that, right? If I came to you and said, truthfully, how do you feel about that versus how do you feel about that? You’re going to think twice. I have a lot of businesspeople I teach this to and they say, Truthfully, can you get that assignment done? Can you get that report done on time? And they tell me 100% my CEO has come back to me and said my staff’s telling me the truth. They’re like, I can’t meet that deadline. Before they would say Okay, Yeah, I’m going to meet the deadline and they wouldn’t meet the deadline. Because when you start to learn how to talk to the body and yourself, the body, the mind, and the brain start to do this really cool different chemical reaction. So words affect the body. So if people get up and they’re stressed about their money and every day they’re saying to themselves, I’m so stressed about my money, I can’t make any more money. I’m so broke all the time. I’m so poor all the time. Your body goes okay. We’re broke. We’re stressed. We’re poor, we know how to function. Were good. And they start to pull that in. So then you have more friends to start time. I’m broke. I’m stressed if that’s your talk, that’s the first thing. So you say, Truthfully, what is it right now that I need to change? And I would say to people You want a quick tool, and I teach this all the time, people say it changes so much, they say. I actually caught my words. I went out today and said, I’m so tired and so stressed, I’m so broke. The body, your body’s brilliant like your heart is a very first organ to be formed and everyone says it’s a miracle and then the baby comes out. It’s like Yeah, OK, see you later. I teach this that when people learn this, I say it’s like a baby learning to walk. You have kids? I have kids right. They are in their twenties. Because I’m only 25. So they have this…
Richard Everything happened to you young.
Tracy Really young, really young. So I say to people, when a baby learns to walk, this is how you start to look a change in your life when a baby learns to walk and your baby first. So your son first learns to walk and he falls down. What do you say to your child?
Richard Get up.
Tracy Yeah, keep going right? Wow! The first step. You’re like, Yeah, keep going. Everyone’s cheering. Then the baby turns and then the baby runs. It’s the same thing as adults. We want to shift our thought process. We want to say Truthfully, what do I need to change? What isn’t working? I fell down. You’re the baby, ah you fell down. What’s wrong with you? You start telling yourself I made that mistake. I’m really stupid. I shouldn’t have done that. No, you need to be the baby. You need to be around people and yourself going, you know, I fell down, but I’m going to keep going. Because the only way I got to where I am today, was there a lot of tears? Absolutely. Was their frustration? Absolutely. Was I pissed off sometimes at myself and wanting to blame everybody else for why I was there and blamed the man that kidnapped me and blame my dad for kicking us out? I could have sat there, which a lot of people do, and they said, Well, I can’t make any more money. I’m only educated this far. That’s a bunch of garbage
Richard You’re letting circumstances, events of your life dictate…
Tracy Where you are.
Richard It kind of forms a real unbreakable picture.
Tracy It does.
Richard Of your self-image.
Tracy But if people stop, if they stop and if I challenge everybody that watches this, stop for one day and listen to what you tell yourself in your mind or to your friends.
Richard Now, that’s easily said.
Tracy Sure it is. But when you are conscious to do it for a day,
Richard People are going to ask you.
Tracy Yeah, they do.
Richard Talk is cheap and I don’t mean that flippantly.
Tracy No, but it is.
Richard But people have a tendency to look and say, Well, fine for you. Look at you. Nevermind what happened to you. Look at you.
Tracy They do. They look at you right now. They say that’s easy.
Richard That’s all they see.
Tracy Yeah, 100%.
Richard And they don’t transpose that into something realistic for them. So how do they get over that hurdle?
Tracy That is the first hurdle. When I actually. I sold a company when I was 26. I had all my family telling me, it must be nice to have this, it must be nice to have that, it must be nice to have this. Yeah, well it was what it was. But then I felt guilty. Shame all things you’re talking about. So I gave all my money away in the divorce. Now it’s your stupid what were you doing? So I had all these programs. How dare I have that. When I actually had that last $1000 in the bank and it’s Christmas time. So we all know that’s the worst time to have only $1000 in the bank with my two little kids who I’m now fully financially responsible for. I had to sit there and I’d say, Okay, what am I afraid of? What’s the worst thing that can happen here? Because we also don’t know, and when I started to dissect that out myself because I didn’t have anyone to ask, I had to figure it out. I’m like, What is truthfully, that’s what I was asking myself, what needs to change? And I had all these Ah ha moments that came in around what people were telling me, and I was like, So what’s the worst thing that’s going to happen right now? You have to ask yourself, What’s the worse thing? Because that is the fear. So, for me, my worst thing was am I going to be out on the street? Am I going to be in poverty? And people don’t realize this, energetically, naturally, everybody has a ceiling of what they’ll make and how low they’ll go. And when you get really low that’s when people start to move, right? But if they start to actually look and say that it sounds so simple and so crazy. And yes, you can say talk is cheap. But I promise this is saying, truthfully, what is it I need to change? What is it I’m afraid of? What is it I need to look at differently? That’s step one. Step two is you have two then do the action on it. So I fire clients all the time. And then I piss people off all the time because I’m like, You’re not being truthful because you just want to sit here and complain about it. What are you going to do about it? So it’s like when someone goes through…
Richard You’re doing that because you can’t work with them?
Tracy I can’t cause they don’t want to change. But the ones that do want to change, that’s where you hear these incredible testimonials of transformation. So for people who went through bankruptcy I said, Are you truthfully ready to get over the fears about what bankruptcy is? Yeah, it was just a mistake. You get to reset everything. Can we get in the fun of resetting? We get to start to play with it. Literally within a matter they go, they get ready, they file, they’re good, they’re doing their thing. They change within months because they’re like, I’m not and they get afraid. And that little monkey, what are you doing? What you’re doing? And I said I was teaching a class last night on money, and I said, When that fear comes up and there’s a very powerful, the monks have been using it forever, I always say, you rob her, you tip your heart because we’re all in our brain. We’re all trying to figure it out. You’re trying to figure out what that solution is. You’re not looking for creative solutions. You’re like, I gotta figure it out. Well, I don’t have to figure everything out. What if I come to you? You can help me figure it out. But I say when you get…
Richard But people put that pressure on themselves.
Tracy They do because they’re not stopping and they’re not, they’re panicking, they’re in fear. Rather than take a step back, connecting and say, how can they help me with this? The best word, I always say to people, Not only truthfully, I say, Ask yourself, What’s a creative solution that I haven’t thought of here? And be very grateful. Be so grateful to everything around you and people throw that out there and I can’t stand it. Oh, gratitudes and attitudes. I said No, no, you can say all day long, gratitudes and attitudes. If you don’t feel grateful, that’s not going to do anything for you.
Richard If people want to get a hold of this, where can they go?
Tracy Where can they go? One of my favourite things I do in the GTA, we have a huge outreach fund. People don’t know, you’re going to see more of it. I do what’s called a Soul Sundays. It’s a donation only. You can come. You can learn.
Richard Open to everybody.
Tracy Open to everybody. I always say, Thank you to God, a lot.
Richard Is that sort of an introduction to it?
Tracy Yeah, you know it is. But I’m actually teaching you how to shift and work with your body, and we talk about different things.
Richard Where do they go for this?
Tracy Mississauga Living Arts Center or online. You can do both. We do a lot of things online.
Richard I’m sorry, Mississauga…
Tracy Living Arts Center. Free parking.
Richard That’s the physical thing on Sunday?
Tracy That’s it.
Richard What time is it?
Tracy 11am to 12:30pm. They can find it under the “Attend” section. We have one on November 10th and…
Richard Online?
Tracy Yeah, online.
Richard What is it called?
Tracy Soul Sundays under “Attend”. Soul Sundays. But we always do a lot of things to give back to the community, to help people. So if people are open to meeting people, because I say how can we serve you? There are people there that can help you get to know what other people are doing, whether you need another connection, a job. I say, Come and meet people that have been where you are to support you.
Richard So why don’t you folks go and meet Tracy L. Clark at the Mississauga
Tracy Living Arts Center
Richard Living Arts Center on Sundays at 11:30am
Tracy 11 o’clock. It’s 11am to 12:30pm. It’s once a month right now.
Richard They have to listen better than me.
Tracy They have to listen. They have to show up is number one? Yes.
Richard Thank you.
Tracy Thank you.

How To Achieve Your Financial Goals In Less Than A Year

How To Achieve Your Financial Goals In Less Than A Year with Alanna Abramsky

In this episode of The Glass Is Half Full, Richard Killen a Licensed Insolvency Trustee interviews Alanna Abramsky who saved $20,000 is less than a year. She will share the secrets on how to achieve your financial goals in just a short time. She is now a Money Coach who is based in Toronto helping people on how to budget, save and invest.

Richard Today my guest is Alanna Abramsky.

She has a very, very interesting story because she was able to save in the space of a little over a year, a little under a year, $20,000. And I’m going to ask her to share with us how she did that, and perhaps what motivated her to do it as well.

Wow, saving $20,000, Alanna, in under a year on a reasonably good, but not humongous, salary. Pretty amazing stuff. But before I ask you how you did it, tell me what motivated you?

Alanna I’ve been living in Toronto for about five years at this point, and I was working in the production industry in a lot of live events, and I thought I was kind of ready for a change. So I decided to go travelling, and I wanted to do this big trip around the world, and that really was my main motivation to save all of this money because I had heard of people who had travelled before, and they had to come home early from their trip because I had run out of money. And so I had this goal in mind where it was like, I didn’t, I don’t want to be one of those people who had to cut their trip short because ran out of funds. So I had this, you know, I did some research, and I had this idea in mind of where he wanted to go and how much it was going to cost. And that number that $20,000, like that was my end goal. So that really was my motivation. It was time for me to get out of Toronto and see the world while I was still young enough to do so and yeah, I just kind of,
Richard So you had the motivation?
Alanna Yeah.
Richard The desire to travel and see things and all that and you had an actual target.
Alanna Yes.
Richard $20,000
Alanna That was the big thing. It was that goal. I think everybody has financial goals. Mine in that particular year was to save the $20,000, so I didn’t have to stress out while I was traveling.
Richard And you did it.
Alanna I did it. Yeah.
Richard Many of our viewers, perhaps most of our viewers since they’re tuning into a TV program, put on by an Insolvency Trustee, may not have a heck of a lot of money, so the thought of creating a budget and managing their money the way you had to, they might think that’s beyond their reach. What would you say to people in that position, thinking like that?
Alanna So I’ve been living in Toronto for about five years at this point, and I was working in the production industry in a lot of live events, and I thought I was kind of ready for a change. So I decided to go travelling, and I wanted to do this big trip around the world, and that was my main motivation to save all of this money because I had heard of people who had travelled before, and they had to come home early from their trip because I had run out of money. And so I had this goal in mind where it was like, I didn’t, I don’t want to be one of those people who had to cut their trip short because ran out of funds. So I had this, you know, I did some research, and I had this idea in mind of where he wanted to go and how much it was going to cost. And that number that $20,000, like that, was my end goal. So that was my motivation. It was time for me to get out of Toronto and see the world while I was still young enough to do so and yeah, I just kind of,
Richard So what’s the best way to create that budget? What mechanical logistical way would you go about it?
Alanna Yes.
Richard What did you do?
Alanna This is yeah, this is something that I think everybody should do, it doesn’t matter where you are in life, but the first thing I think you need to do is to get real with what you’re spending right now. I think it’s a really important thing to do.
Richard What do you mean by get real?
Alanna So I always suggest to the clients that I work with to print out the last 2 to 3 months of their debit and credit statements and then go through all of those debit and credit statements and highlight them per category. So let’s say you have RBC MasterCard or something like that, print out the last 2 to 3 months and highlight all of your dining out expenses and then add up all of those dining out expenses over the last three months and then find an average of what you would be spending in that dining out category. I think that’s number one, and you want to do it for every category that you’re spending money in. So you want to figure out what kind of fixed expenses do I have first? So those fixed expenses are the expenses that don’t change monthly, and you want to figure out what kind of variable expenses you’re spending. So these would be, you know, those expenses that fluctuate like our grocery bill. Our grocery bill’s never going to be the same every time we go to the grocery store. Unless, of course, we’re buying the same thing every single time. So, like dining out is typically
Richard That sounds like a boring diet.
Alanna I know, doesn’t it? Yeah, chicken and rice every week.
Richard Good chicken.
Alanna Maybe, I don’t know. So then you want to figure out what your variable expenses are on average, so and that’s where you’re going to figure out, that’s where the credit card and debit statements come into play.
Richard So you’re dealing with facts.
Alanna Facts. You want to analyze your real data because I don’t think enough people do that. And I think you know, I have a lot of clients myself, who every month they have no idea where their money goes, and it’s because they don’t understand what they’re spending.
Richard That’s, I was going to ask you that, when you’re doing this with some of the people, families, what not, how surprising are those initial results?
Alanna It’s crazy. It’s, I’ve had clients before who, you know, they, they’re dealing with a lot of credit card debt. They’re dealing with big lines of credits, and I take them through this activity where I just say, all I want you to do is just go take the last three months and figure out your averages in each category. And I have some clients who are spending $10-$11,000 a month and they’re not making that kind of money. And a lot of it is on these items we don’t necessarily need, but they’re living this lifestyle that they can’t really afford. So I think this is step number one really is to analyze the real data that you have, get real with your numbers because that is going to make you a lot more aware, moving forward of maybe areas you need to cut back on. Maybe there are things in your life that you could do differently to increase cash flow, so that what I say, that’s step number one. And you also want to account also for those irregular expenses that we have. So maybe they’re not monthly expenses, but something like property tax if it’s not included in your mortgage.
Richard Car insurance.
Alanna Car insurance. If you’re paying an annual fee.
Richard You get an annual bill.
Alanna Yeah, an annual bill, and sometimes people pay it monthly. Vacation is typically, you know, the summers are usually a lot more expensive for a lot of us, because whether we go to cottages or hang out with friends or whatever, so you want to incorporate those irregular expenses and be aware that they’re coming. So December, for example, is a really expensive month for everybody, and we all know that December is coming. So if we sit down and we get real with our numbers, you know, what did we spend last year for the holidays? Well, I need to incorporate that into my upcoming expenses, those regular expenses. So when January hits, we’re not all of a sudden freaking out, and we’re in masses amounts of debt like we need to prepare for these expenses in advance.
Richard So getting into the specifics it’s been using what you did, as the template for all of this, how did you manage this? You’re talking about groceries. You’re talking about eating in eating out, your own food preparation. All the money that goes into it, just putting something in your stomach kind of thing, is, it can get complicated, get convoluted a lot. Right? And there’s other things, like travel. You mentioned travel, all kinds. There’s a domestic day to day travel, there’s the, you know, the reason why you did all this in the first place, kind of travel. How did you do it? How did you break it down for yourself?
Alanna So the first thing that I did actually was, I was, you know, I started reading all of these different blogs about, I kind of had an idea of where I wanted to go. So I started reading blogs about, realistically, how much was it going to cost every single day to live in, travel and live in some of these areas, in the way that I wanted to travel? I wasn’t an 18 year old backpacker like I didn’t want to stay in hostels all the time. So, you know I had to incorporate a couple hotel stays and car rentals, that kind of stuff. So that was step number one was actually figuring out how much I was going to spend on a daily basis in some of these places that I was going to. So then I had my number. That’s how I came up the $20,000. That’s what I wanted. Like all flights, that was my target. That was like all my flights, hotels, food, you know, going out, tourism. So from there, what I did was I sat down and I went through that exact activity, looked at exactly what I was spending now. So I went through my credit and debit statements. I looked at everything I got real with my numbers. And then what I did was that I created a budget for moving forward where I could cut back in certain areas. So for me, I loved dining out. I still do, but I was spending way too much money and dining out that I didn’t need to be spending because my priorities had shifted. So now my priority was travelling, so I cut back in dining out. That was a big one. I ended up saving about $200-$300 bucks a month in dining out. I got rid of my cable bill. I just stopped. It was like, I don’t need cable. I went out and I actually bought, the old school bunny ears, those digital analog boxes. And that is like it’s a $15 charge at Best Buy, cut my $60 cable bill, and I could still get, you know, all the big
Richard It’s a $15 one off charge
Alanna That’s what, that’s once, it’s a one thing plug, screw it into the back your TV and you get your, like, Global and CTV and CBC. And now with Netflix, you can pretty much watch anything that you want.
Richard So you’re talking to somebody who grew up with that?
Alanna Yeah, exactly. I can still remember that at our cottage.
Richard Not that I want to talk about age.
Alanna Yeah, and then, I never had a car at the time, but, I stopped taking public transit as much because, you know, $3 every time you ride, $3.25 every time you ride, it really started adding up. So I went out and I invested in a bike. And it wasn’t a nice bike. It was about a bike. I bought a bike and it got me to and from or I would walk everywhere. The biggest thing that I actually found the greatest impact on was grocery shopping. So what I did and I still do it to this day, but I usually grocery shop on Sundays and what I do, usually when I go to the grocery store, there’s typically a 50% off produce cart that they just usually restock.
Richard Make sure you eat it today.
Alanna Yeah, well, yeah, or just like, make sure you prepare it today kind of thing, but even still, like it lasts 3 to 4 days. It’s not the freshest stuff in there, obviously, because they’ve had to make room for the new fresh stuff coming in. But all of the produce I’ve ever had there was perfectly fine. So on Sundays, I would go out, I would spend about $30 in produce for the week, which was more than enough to last me the whole week, and I would just go
Richard Compared to what have you been spending?
Alanna Oh, previous to that? I was probably spending closer to, like, $70 or $80. Yeah. Yeah, and It depends also where you go grocery shopping, I like shopping at No Frills. I think their produce is good, but I find Loblaws to be quite expensive. But all of those grocery stores typically have some kind of 50% off cart. So I started going to that cart, and then I would go home, and I would food prep for the week. And that saved me a ton of money. One of the big things I always
Richard So instead of going out and spending money to pay somebody else, to prepare your food, you were investing in the, what do we call that?
Alanna Investing in myself.
Richard Sweat equity.
Alanna Yeah, exactly. Yeah. And I mean, for me, I like cooking. And I like, you know, I can follow a recipe, and I could basically create anything. Yeah, well, I mean, it takes time, though, right? You have to, like, you have to weigh, like, you know, time value for money. So for me, I like my priority was like I wanted to save this money. So it was okay.
Richard Again, you had your target.
Alanna Yeah. I had my target. And there was nothing.
Richard A goal in your target.
Alanna Yeah, exactly. So the transportation was the big one. The dining out was a big one. I always say to clients like, look at how much you’re spending at your bank. I think there’s a lot of the major financial institutions right now are spending their charging way too much money on bank fees and there’s a lot of no fee banks out there, now.
Richard Did you start investigating all these little nooks and crannies?
Alanna It was like everything, I was like, where can I start to save money? I called my telecom companies like I reduce my cell phone bill by about $40 a month. Like I said, I got rid of my cable. Same thing with my internet. I just switched my internet provider, saved myself about $20 a month, and it doesn’t seem like a lot at first. But when you have, you know, when all of a sudden you’re cutting back by, like, $500 a month and you can put that into, you freed up in cash flow to put into your travel fund, it added up.
Richard To about $1,600 a month or something?
Alanna Yeah, it was, it was like, it was probably, it was probably cut back.
Richard $20,000 a year.
Alanna Yeah, I probably cut back around, I would say, $1,000 bucks a month, and then whatever extra I had and from work, it would throw into savings.
Richard It wasn’t all savings.
Alanna No, but the biggest thing for me, I think was dining out. That was like I was going out. And it’s easy to do in Toronto. It’s expensive. And so easy. There’s six restaurants for every eight buildings or you know, every eight shops or whatever. So
Richard So I got a question for you because I know that people are listening to this and, yeah, fine, it’s all well and good, but did you think you were depriving yourself of anything during all of this, or was your goal so strong that it compensated for and any negative feelings you might have had over these changes?
Alanna Yeah. No, I didn’t. I never felt like I was depriving myself. There were times I would say that some friends, you know, would ask me to go out for drinks or food or whatever. And, you know, I just said no.
Richard Or you said, you buying?
Alanna Yeah, I said, why don’t you guys come over instead and I’ll make something here.
Richard I would have said, you buying?
Alanna Yeah. Yeah. So I didn’t go that far, but, I never really felt like I was depriving myself. There were sometimes in the winter when I was biking to work where I was like, I should just jump on the streetcar. But I was, like, so motivated to just save that money. That, I think that winter actually was a pretty harsh winter, I think I only took the streetcar twice in the whole winter. I was that crazy person, that was outside on my bike, like with my parka on
Richard Yeah, I think I saw you.
Alanna Riding, riding to work.
Richard Alanna, can you explain to me, about this mindset, mindful spending, what do you mean by that?
Alanna So I think now, especially in our day and age, it’s really easy to spend money. And, you know, I blame a lot of the credit card companies for that because they created that tap system where people don’t even have to think twice about the money that they’re spending. And I think that’s a huge issue
Richard Do you know what the big thing about that is, you don’t have to remember your PIN.
Alanna Yeah, like you don’t have to remember anything. You can go to
Richard Just remember where your card is.
Alanna Any store and swipe it on this machine and you’ve made a transaction. So people haven’t been mindful of how much money they’re spending because it’s so easy now to spend money with technology. They’ve made it so simple. I think now, even on your Apple Watch, you can, you know, with Apple pay, which is like, I haven’t even tested that one yet, but I think now the biggest problem that a lot of my clients see when they, when I work with them, is that they just they don’t know where all of their money goes, and it’s because they’re not being mindful of where they’re actually spend spending their money. They kind of have an idea of how much money they have coming in, but they have no idea where it goes. So I think that first, you know, when you, you know, first step is analyze the data. The second step is to be mindful about spending moving forward because, yeah, because I think once you start to, you know, think about like, is this something that I really need or is this something that I really want? And if it is something that I want, do I want to get out of debt more than me wanting this thing that I’m about to purchase. And I think that’s kind of that mindfulness those, you know, creating new habits where you think, is this the absolute priority?
Richard Mindful spending.
Alanna Mindful spending. It’s and it’s hard. It takes time. But, I do think that when you actually start to track your spending, it just kind of naturally starts occurring because then you start to see where all your money starts going.
Richard I firmly believe in that as well. I’ve heard you mention that you equate spending to a gym membership and you’re the personal trainer in that particular gym membership?
Alanna Yeah, so I like to consider myself a personal trainer for your finances. You know, I think financial health and, our everyday health are very similar in a lot of ways. So for me, if I’m not aware of the food I’m putting into my body, I’m not going to feel good, and I have to be mindful to be healthy inside. Same thing goes for your wealth. And so what, when I work, when I work with my clients, you know, all of those all of the people that I work with, they need that accountability. They need somebody to talk to, to be like, well, maybe instead of doing it the way you have been doing, why don’t we try it a different way and the same way that if you went to a gym and got a personal trainer, they could sit down with you and say, look, you have this. We need to change this and do this. We’re going to give you these exercises. Maybe don’t eat this food, Maybe eat this instead. So when I refer to myself as a personal trainer for your bank account, I do a lot of the same things with clients that I feel like personal trainers do with their clients in the gym. Just looking at what you have and say, look, this hasn’t been working for you so far. Maybe we should do this instead, or, you know, maybe try doing this and moving this around. So that’s kind of where that came from.
Richard One of the things important things that goes with being a personal trainer in a gym context and physical context like that is, the relationship that develops between the trainer and the trainee is going to be a sympathy, and if you want, a trust.
Alanna Yeah. And the accountability, to people, need that accountability partner sometimes. Because if there’s nobody there, you know, at the end of it being like, hey, did you do this, this week, then a lot of people just won’t do it.
Richard Do what?
Alanna Anything
Richard And now you’re a money coach, you helped over 300 people.
Alanna I have so far. Yeah, in the last year and 1/2 I would say two years.
Richard Now, this you say, 300 people, does this represent a real cross section of humanity or particular type or age group?
Alanna No, I have a lot of clients. My clients range in age from, I have some clients who are just getting into, like, they just are, you know, finished university and now they’ve got a lot of student debt. I’ve got a lot of clients who have very high net worth. And they have a lot of investments and need help. I have clients who you know, have medium incomes and they just don’t have any money and they’re in debt. So, my clients range from anywhere I’d say, like 25 years, all the way up to 70-72 years old.
Richard That old, eh?
Alanna Yeah, yeah. So I basically as a financial coach, what I do with them is accountability. I look at what they have currently and think about different ways that I can help them and not it’s not doing very, it’s not going out and getting new products necessarily. It’s looking at what they have now. And how can we be
Richard Modify.
Alanna How can we modify what you have now, too, you know, create a really solid foundation, create a really solid budget, look at your cash flow, so moving forward we can, you know, we can help you. If they struggle with that, we can help you get out of debt. I can help you do that. But we need to, first of all, educate you on what you have, how that works, and then from there, you know it’s moving forward and it’s really coaching them through the process and educating them. I think education. I think the lack of financial education in Canada’s it’s really creating a huge issue for most people because I have clients who have a lot of credit card debt and they don’t understand how their credit card debt is calculated or they don’t understand compound interest or they don’t understand, you know, why am I, why is my credit card debt not going down if I’m just paying the minimum amount due. Like they don’t understand how all those things are calculated. So as a financial coach, I help to first look at it and then educate them so they could make better decisions moving forward. And then it’s that accountability to be better moving forward and have those checking points because when they have those that accountability partner, they typically get the work done.
Richard Alanna, it was great having you on the program. You have a savings guide that is available to people, tell us what it is and how to get it?
Alanna Yeah. When I got back from my trip, I created a blog called and I had a lot of people in my trip who were asking on how I saved all the money? I then started writing blogs about saving money. If you go onto that blog, there is a little e-savings book guide that shows how I saved all that money in there. On top of that, I am the head of financial, the head of a financial coach with a company called Enriched Academy. And we empower Canadians to be better with their finances and educate them with their finances, so you can go to, to check out more. We have a 12-course system on what to do with your finances moving forward.
Richard That’s great. So that’s how people get it? This is the book I wrote, which you’ll find that, talk a lot about much from the same things from a different angle.
Alanna Thanks, Richard.
Richard Thank you for being here, Alanna.

The Big Secret of Financial Success with Robert Gignac

The Big Secret Of Financial Success with Robert Gignac

In this episode of The Glass Is Half Full, Richard Killen a Licensed Insolvency Trustee interviews Robert Gignac, a speaker, writer and author talk about The Big Secret Of Financial Success. He is featured in many publications, including The Globe & Mail, Money Magazine, Private Investor and has his own TV show called “We Talk Money:

Richard Hi, I’m Richard Killen. Welcome to a very interesting show we hope we have for you today on The Glass Is Half Full. We’re joined by Robert Gignac, am I getting it right, Robert?
Robert Perfect, Richard. Thank you.
Richard Good. Today we’re going to learn about the big secret of financial success, right Robert?
Robert Yes. Absolutely.
Richard Robert is a very, very highly sought after speaker who combines knowledge, passion and visuals to encourage people to take control of their personal finances and to live what you call a richly imagined future, right?
Robert Absolutely.
Richard Robert delivers keynote speeches and interactive workshop programs to International organizations, financial industry and private clients, right? He also featured in many publications, including the Globe & Mail, Money Magazine, Private Investor and you have your own TV show on, what is it? We TV?
Robert We TV?
Richard What’s it called?
Robert It’s called We Talk Money,
Richard And, one of the more interesting things, if you think anything is more interesting than TV, is that you’ve written a Canadian bestseller called Rich Is a State of Mind.
Robert I did, accidentally by chance. I did. I’d never intended to write a best selling book on personal finance. I was trying to help a friend create a marketing brochure.
Richard Some of the best things come from things like that?
Robert Absolutely.
Richard Well, I’m going to get back to your book in some depth little later on Robert. I personally found it very interesting, but I’d liked to ask you, you spend a great deal of time speaking to Canadians about concepts of personal finance and taking control of their financial future, and I’m sure you’re often asked, what is the big secret to financial success? So what is the big secret?
Robert I get asked that a lot. And people are generally incredibly underwhelmed with the answer, which is that there’s no big secret. There’s no magic pill, there’s no silver bullet. There’s no one thing that if I only knew what that one thing is. What it is, is with many things in life, it’s a series of small, little, incremental things that we do over and over and over that allow us to get better with whatever it is, including managing our personal finances. If I were to pick one thing and I was asked this recently in an event because the person was adamant that there must just be the one thing it would be this, marry the right person and stay married. That would be the one thing, right? If anybody’s ever been through an asset-ectomy, i.e. divorce, and lost half their assets, it’s a huge impediment to being successful financially and the….
Richard Not to mention being a bit of an emotional letdown.
Robert A huge emotional letdown and lots of other issues to deal with there, but If people are looking for that one thing, they’re going to be really disappointed to find out that there just isn’t that one thing.
Richard So essentially you brought marriage counselling to the table?
Robert No, absolutely not. But at the end of the day,
Richard It’s important.
Robert It’s important and it’s important that we do a number of things better than we’re doing today to have a better future tomorrow. There’s a line I’ve heard that I like that said, If you’re willing to do the things today that other people won’t, then tomorrow you can have the life that other people won’t be able to have. If you’re willing to do those things today.
Richard But it has to be today.
Robert But, if not today, certainly tomorrow or next week because we all believe we have huge, vast amounts of time at our disposal.
Richard Especially when we’re young.
Robert When we’re young, certainly. When you’re 25 the concept of being 50 seems ancient, right?
Richard If you think about it at all.
Robert If you think about it at all. But we think about it because we look at our parents and we look at our grandparents and we go, yeah, I’ll get there, but I’ve got lots of time. And the reality is that time disappears before we know it.
Richard You wrote an article called, It’s Possible, and in that article you talk about giving a speech, I guess it is, to a group in Timmons, I think it is, on the subject of, you call, richly imagined future. I understand that an audience member commented, confronted you if you want, to go with his own thought on the matter, saying, basically that this was all well and good for you, but there’s no way that it’s going to be possible for him. Can you explain what happened next?
Robert So it was during the Q and A portion, and the gentleman came up and he said, “he thoroughly enjoyed the presentation”, he said, “but this concept that you talked about won’t work for me”. And I said, “Okay and tell me more?”, because that’s always my favourite question to someone. Tell me more and he said “well, you don’t understand. I just have a high school education. I never went to university.” That’s great. He said, “why is that great”? I said because too many people confuse education with the ability to do better things with money. You don’t need a university degree to do great things with your personal finances. The fact you didn’t go to university is great If you had gone, sure, that’s nice. But don’t let the fact you didn’t go to university determine your financial future, and I drew his attention to a quote that I had put up during the presentation by a British entrepreneur named Brad Sugars. And the quote, I use it all the time, is the quality of your life is determined by the decisions you make, which is determined by the questions you ask, which is determined by the quality of your education. But don’t confuse that education has to come from a school system. It comes from the books we read, the things we watched, the people we associate with, and as long as we’re willing to learn something new and change your behaviour, then we get educated. When we’re educated, we ask better questions. Those better questions could be to financial professionals, the peers around us, and when we ask better questions, we make better decisions. And that’s what determines how successful we’re going to be. Not whether or not you went to University, college or even graduated high school.
Richard In fact, some people will say that your education only really starts when you leave school.
Robert Oh, absolutely, But, many leave the educational sphere, and I’ve actually heard people say this when they were done with school, it’s like, “Oh, thank God I’m done with that, now I don’t have to read any more books.” No, reading books is excellent. It’s a phenomenal way to gain the education to help you do better things.
Richard You could be describing my father, who had a 7th-grade education, but it was possibly the, certainly the most everyday man I’ve ever known.
Robert That’s great.
Richard But he read a lot, quite a bit.
Robert It’s important.
Richard Can I ask you? People are always looking for, easy or shortcut answers to think about that. I’m gonna see if you can provide one here. What is the biggest single thing that somebody can do to improve their financial situation?
Robert If I were to boil it to one thing, Richard, I’d probably boil it to one word. And the word is no. It’s a word that most people in today’s day and age or incredibly unfamiliar with because they’ve never said no. They’ve never had no said to them. Sometimes as parents we don’t say it enough to our kids. Right? Can I have the new Xbox, XYZ killing video game? No. Do I want to go out and buy a new Lexus GS450? Yes, but no. Because the more often we say no to ourselves, the more successful we will be in the long term. That doesn’t mean I’m against spending money. Spending money is a great thing, right? We work hard. We earn money. We should spend some and enjoy what we’re doing. But the reality is, the more often we say no and delay the gratification, the more successful we can be with our finances.
Richard Yep. I’d like to talk to you a bit about your bestseller, Rich Is A State Of Mind, right? Just a comment I’d like to make about the book, is I found it very interesting that you wrote it is a novel instead of the usual how-to-book, which is almost a manual, right? You have very good writing skills, I’ll tell you that.
Robert Thank you.
Richard When I was reading it, I found that I was, it was a page-turner.
Robert When it comes to books on personal finance, I’m flattered to hear that.
Richard And that’s the thing that impressed me the most on it, is that it is very thorough, but because it had it was a novel, had a plot, storyline, characters, that you get involved in, personalities if you want. But using that as a vehicle, what you did is, you brought in everything that I could think of it as a factor in personal finances, personal finance management, everything from how to save to the effect of inflation on things and what not? And because you wrote it as a novel, it all started to kind of make sense. It was explained and explained in a very, very easy, to, understand way. I think anybody could read that, you don’t have to be an MBA to be able to understand.
Robert Oh, and absolutely. And one of the things I tried to do with the book when I picked this format, is I knew if I created a personal finance book that read like a high school or university textbook, nobody would read it, right? But, if I could craft a story of a slightly dysfunctional Canadian family trying to come to grips with everything related to personal finance, if I was lucky, I could create characters that people would read the book and go, “That’s exactly how I feel.” Or that’s my kid sister. That’s my older brother. And if I could do that, then maybe I could keep them turning the pages in order to actually get from one point to the other. There is an email that I received from a reader of the book that I keep posted in my office, right on my filing cabinet. I can see it every day, and it was a reader, who said “Robert, there’s one thing I needed to tell you about your book. I own many books on personal finance. Yours is the first one I actually finished, and I was so grateful to see that, that it’s in a prime spot where I see it every day.
Richard Well, I’ll send you an email that says the same thing.
Robert Thank you.
Richard I want to ask a few questions about the content of the book, the thing that you discussed, if you don’t mind? In it, you talk about the importance of saving. That should be obvious to anybody that if you want a plan for your financial future, it’s going to incorporate an element of savings, and it has to be released. But for somebody living paycheck to paycheck, it’s really hard to see how you can do this. And I know in the book, you do deal with that eventually and so on. But maybe you could talk a little bit about that now.
Robert One of the things that is difficult for all of us to grasp, is that if we want a better or different tomorrow, then we have to do different things today. And as it relates to money that generally the first basic building block is saving money, spending less money than you earn. Now there are a number of different ways, we can attempt to do that, but at the end of the day, taking that first step saving dollar one or dollars one through five can be a significant challenge in today’s economy, and but at the same time there are some simple things we can do. I think that will help us along that path. So, for example, one of the examples I used in the book if any of us were to go through a salary reduction if our employer came along and said sorry times are tough, we could keep the business open. But we’ve got to reduce everybody’s salary by 5%. Our first reaction generally wouldn’t be, “Hey, I’m out of here, and I’m looking for a new job” it would be like, “Wow, this really sucks. But okay, what do I do now?” And one of the things I encourage people to do is if you’re having problems saving dollar one pretend you just got a 5% reduction in pay. You get to spend all the rest, but that 5% has to be set aside for things that you’re going to do in the future. And while you’re doing that, you may go look for a new job. You may create a side hustle that brings in a few extra dollars. There’s a number of things you can do on that front, but it’s taking that first step, that is the most critical piece, Richard.
Richard And by essentially treating it as a fait accompli, where the thing is done, you just don’t have that 5% anymore, right?
Robert And, put that 5% in a bank account that’s not linked to your debit card, because we all know what it’s like. You’re out on Saturday night, you’re out with some friends, it’s like, I need $50, wait a sec, I’ll take it out now and I’ll put it back in on Tuesday. No, it’s not going, it’s gone. So make sure that it’s in an account that is not easily accessible.
Richard Didn’t Wimpy buy his hamburgers like that?
Robert Sort of like that. So, yeah, I’d gladly pay you next week for a burger I can have today.
Richard That’s right. Mind you, that showing my age, you’re not supposed to have heard of them. You say in the book that people, everybody’s interested in money, I find that fairly easy to believe. But you also say that people are afraid of it.
Robert There’s a lot of emotion around money, and it’s not just a Canadian thing. I think it’s more of a global thing. That money tends to make us feel like we’re not successful. I tell people all the time. Money is a crappy way to keep score in life. But the reality is for many of us, it’s the only way we’ve got to keep score or we think we do because we’re always comparing ourselves to others. We compare ourselves to the people we live next door to. People were related to, the people we work with, and we’re always critical of people who look like they have more money because we wonder, what did they do to get this money? Was it illegal or immoral or some other thing? Or somehow, if I don’t have enough money, however much that is, then somehow I have failed and done something wrong.
Richard Would that be because, like it or not, money is one of the very, very few objective things which we can measure things?
Robert It is.
Richard Hard to measure how much love you are receiving or giving?
Robert Absolutely. When you know it’s numbers, it’s paper. We write it down, we add it up, we divide it and we can see it in black and white. But the emotion that goes along with that is where most of us get pretty messed up as it relates to the money. And it’s where the fear comes in because we always think we’re not good enough. And what if I don’t measure up?
Richard If I can’t do it?
Robert But the thing that I always tried to caution people is when you’re making that comparison, make sure that you’re comparing reality to your reality. So, you know, in the age of social media, I try to convince people all the time. Social media is not real, so when you’re seeing your neighbours or your cousin vacationing in….
Richard So what President Trump says all the time is not real?
Robert Uh, no, I know. But the reality is when we see people we know vacationing in Mexico or they stand beside a new car or we go like, holy crap, they’ve got it all figured out. They never post the picture of them on social media at 2:45 in the morning, curled up in the fetal position in bed, can’t sleep because their visa bills due Friday and they don’t have the money? No. They post the picture of their meal dining out, or a sporting event or on vacation, and their life looks great. We then feel bad about ourselves going, “Why can’t I do all of that?” Well, we could. We just have a different plan.
Richard So, Robert, you talk about the word rich. It’s in the title of your book, right?
Robert It’s in the title.
Richard But you have a very interesting definition of the meaning of that word.
Robert Well, rich means different things to different people. And if you do look it up in the dictionary and I know the younger viewers watching go, what’s a dictionary? If you look it up, the very first Google, very first definition has to do with depth of colour, and hue has nothing to do with money until you get down to the fifth or sixth definition. I chose the title, Rich Is A State Of Mind, because nobody could tell me what rich is or was to them. They didn’t, they quote me a dollar figure. They didn’t say it’s 2,738 something. But they told me how they would feel, what their life would look like, who they’d spend their time with, if they ever answered the question, yes. Which made me think that it’s really a mental thing. It’s how we feel, not what the balance of a bank statement or mutual fund statement says. And the characters having the discussion in the book about the concept of the word rich, Richard, the mentor in the book, went to the whiteboard.
Richard Very good name.
Robert He wrote down one word. Freedom. Now, it was interesting that he chose that word because the other characters in the book in that discussion were freedom from what? And Richard just kind of smiled and said, “Not freedom from, freedom to. Freedom to create the life you want, spending time with who you want to spend it with, doing things that bring you enjoyment, not freedom from something.” And when we look at money is the ability to provide experiences in our life, then I think we get a much deeper appreciation for it.
Richard In your book, you’re also, by definition, if we’re talking about building a better financial future for ourselves we’re going to be eventually talking about saving money.
Robert Yes.
Richard And in the process of that, discussing that in your book, your characters mentioned that, for most people, perhaps, saving is seen as a form of punishment, where you deprive yourself.
Robert It’s denial.
Richard Spending. Yes, denial. And spending is a form of reward.
Robert Yes.
Richard You don’t agree with that?
Robert I don’t agree entirely, because what happens is sometimes we get things reversed when we need to do better things with our money. Saving is actually the rewards side and think of spending it is a little bit of punishment because we’re destroying the wealth we’re creating by doing so. Now, we all need to spend money, right? We have to pay rent. We have to buy gasoline for a car and a metro pass and some groceries. All of these things. But the end of the day is we’re trying to plan a long-range financial future. The savings aspect is actually the reward that we’re going to get later. But in today’s day and age, the concept of delayed gratification doesn’t exist. Where those who came before us? My parents, my parents before them? You didn’t buy things if you didn’t have cash in order to pay for it, you save money for a rainy day. You waited until you could afford to do something. But in today’s day and age where we have this kind of frictionless spending, you know, he used to be with a credit card used to make that noise, like when they actually ran your card. Now it’s tap and beep, the money’s gone, right? We don’t have any physical relationship to it. And that’s what I think messes us up about money today.
Richard Well, you’re not going to get any argument from me. I’m an Insolvency Trustee, as you know Robert, and the whole concept of credit cards, although it has had a very positive effect on this overall standard of living, the economy in general, the size of the economy and
Robert And there are people who use credit cards very well.
Richard In fact, probably the majority.
Robert I think the majority do.
Richard Because it’s not the majority that to come and see me. But in any case, I have to agree completely with you. What you’re talking about there is essentially the difference between short-range thinking and long-range thinking, right?
Robert Yes.
Richard So the idea of instant gratification is that you can’t see beyond right now. A child thinks that way. He sees that he wants that and so on. Where, as an adult is supposed to come along and say, “So I don’t know. What am I gonna have to give up next week or next month or next year to
Robert Right, and we can do a pro and con list if you want. If I do this today, what can’t I do tomorrow? If I’m willing to forgo this today, what will I be able to do tomorrow? And it’s that kind of decision-making process that hopefully allows us to make better decisions financially.
Richard And it kind of leads into my next question, which is you’re referring to savings as something that is essentially, it has become a habit for it to be effective, basically or if you want. If you can get into the habit of doing it, it will really pay dividends.
Robert And it’s the habit that drives us from a financial perspective. But we get into habits all the time, both good habits and bad habits. But when we’re trying to start that saving money process for somebody who’s always struggled with it, or never, ever saved a dollar, saving dollars, one through five is the beginning of a habit, and we do it this week and we do it next week to do it the week after, and the week after that and the lot more we do that, we ingrained the habit, it becomes second nature, and then we don’t even have to think about it anymore. It just happens.
Richard And in your book, you essentially saying that the way to look to achieve this, when you move into this is to start small. So you use the example, one of my favourites that I think I learned when I was about 13 years old or something, I don’t know why, but I learned it, that little example, we’ll call it that of the value of a penny, double daily?
Robert Yes.
Richard Not one cent double daily?
Robert Right.
Richard The value of a penny double daily. So if it doubles tomorrow, you got two pennies, now double two pennies, you’ll have four. So by the end of the month, how much money do you have?
Robert You have approximately $2.7 million now, realistically, there is no investment out there in the world.
Richard But when you tell me where that was.
Robert That will do that for you. But the reason I used the example in the book is to get the characters understanding the concept of time and compound interest in order to help your savings and investments grow over time.
Richard And compound interest is what you call?
Robert The Seventh Wonder of the world. And I didn’t I guess, seventh or eighth right, depending on your perspective, that you know. But the reality, I didn’t think that it was some guy named Baron de Rothschild’s in this 1800’s who eventually coined that phrase. But if you don’t start saving dollar one today, then 38 late days later or 38 months later or 38 years later it won’t matter. You will have lost that time and compounding opportunity in order to make your personal finances better.
Richard I think you mentioned in your book that if used the example, that if a 20-year-old, give or take, is able to save $2000 a year and does it only for 10 years and stops saving at that point but allows it to compound at whatever rate of interest, whatever rate of compounding. But just to keep things simple, we’ll use 10% which is way higher than what you’re going to get today, probably on average, but for the sake of the example, that 10% how much money is a person had by the time they are 65?
Robert Approximately $1.2 million.
Richard And all they’ve saved his $20,000.
Robert Right. But if their friend, who says I’m not going to do this from the time I’m 20 to 30, I’m going to start when I’m 30 and they save that same $2000 a month for 10 years for all the way to 60
Richard Oh, all the way.
Robert For the next 30 years, they will still not catch up to their friend, who started earlier and stopped.
Richard It’s pretty graphic.
Robert It’s the value of time. Now to a viewer or listener to the podcast, they may go, I’m 48 years old, I’m screwed because I’ve never saved dollar one. No. Start now. The best time to have planted a tree in your backyard if you want to sit in the shade is 35 years ago. The second best time is today, because if you don’t do it today, 30 years from now, you’re still not going to have any shade to sit under. So it’s the point where, regardless of where you are in that spectrum, if you’re 22 and starting it, great. If you’re 32 and starting it, great. If you’re 42 and starting it, great. The key is you have to start.
Richard And along with that starting, goes the idea of goal setting, isn’t it?
Robert Goal setting is
Richard Start, but start what? You can’t just flail around?
Robert No you
Richard I mean you could, I suppose.
Robert You could.
Richard But it’s not smart.
Robert But goal setting is important because it’s what in many cases drives our behaviour in the decisions we make. Why are we doing this? Because I want to accomplish X Y and Zed. “X” in the next year, “Y” five years from now and Zed 10-15 years from now. But without those mileposts out for us to work towards, we don’t see the reason why we are doing this in the first place? So we need to get very clear about that.
Richard Keeps us on point. And keeps us essentially on target.
Robert And one of the cool things that happens about goals is once you start crossing them off the list, you get incentivized to go, cool, how do we get more of these? Well, then we create more of them, and we keep trying to accomplish them.
Richard I’m going to throw an acronym at you, Robert, you may have heard of it before because it’s in your book. Smart. S M A R T. Tell us what that is?
Robert It stands for specific, measurable, achievable, realistic and time-based. It’s the I’ll say, the backbone of goal setting. Everybody talks about goals, talks about this, and what it is creates a structure for you to set goals. Your goal has to be specific. I’m going to lose 36 pounds. It has to be measurable. Already had measured that when you get on a scale every once in a while, is it achievable? Well, it depends on your time frame if you said by the end of the calendar year, but we’re already in October, 36 pounds in a month and a half, may not be really may not be achievable or realistic?
Richard Give up eating.
Robert Well, exactly. But, then here’s what happens. We give up eating for like, three days, and on day four, we head to Tim Hortons for a couple of you know, sour cream doughnuts and a large double-double because after three days we have, we’ve committed ourselves to fail by not setting a realistic goal.
Richard So that’s what SMART is?
Robert Yes.
Richard Okay, now you also mentioned something else. I’ve heard this before, but missed to see it in your book, nice to be reminded of it, the phrase called, Pay Yourself First.
Robert When we think about the concept of money and saving dollar one, we have to, particularly for those of us who get a regular paycheck from an employer, take the money right off the top. So if you received $500 that week, is your paycheck the first X amount? Whether it’s $5, $10, $50 or $100 goes right off the top. You don’t see it. You don’t get it. You can’t spend it.
Richard You don’t put it into the same account that you’re
Robert Exactly. It goes into that account not linked to any of your debit cards, so that you have no access to it without maybe physically going into a bank branch in order to do it.
Richard So this is a bit of takeoff on something you said earlier about, we’re talking about pretending that you have a 5% pay decrease.
Robert Right.
Richard Basically, you’re paying yourself that 5% first.
Robert Right, and that once you do that the rest of the money you get to spend without ever worrying about it. The problem is, many of us try to do the reverse. How much money do I make? Here’s my bills, add all the bills up, and we draw that big line, say, I’ll save what’s left.
Richard Right.
Robert There’s none left. Because our unexpected expenses and our ability to go and hang out with our friends on the weekend and only eat into all of that residual income and then the amount at the bottom is zero, I don’t have any money to save. No, take it off the top and once it’s gone, the rest of the money, go ahead and spend the rest of the money. And I didn’t invent this phrase. I think it was the guy who wrote the book, The Richest Man In Babylon, in 1904, who actually coined the Pay Yourself First.
Richard Nothing new under the Sun.
Robert There really isn’t.
Richard But, are munificent Government invented a couple of things for us, one is called on RRSP and the other one is called a TFSA, registered retirement savings plan, and the tax-free savings account.
Robert Right
Richard Now, you’ve got some ideas on the benefits and, to some extent, the detriments, of one against the other.
Robert There are, I think there are certainly pros to both. The RRSP is thought of as a much longer-term vehicle for saving money. Because, you put money into the account, you get a tax break today, and then that income will be taxed back to you 10, 15, 20, 25, 30 years out.
Richard Presumably at a lower rate because your overall income,
Robert Presumably at a lower rate, because we make hopefully a decent living while we do that when we’re retired, our income falls. We’re taking money out, it should be taxed less. It grows compounds over all that time. And then we can tap into that later. The tax-free savings account, and I guess it’s a decade old now, so but it’s still relatively new in the grand scheme of things, allows us to put money away, and all of the growth has never taxed, in that account. We don’t get a tax break for contributing the way we do with the RRSP, but all of the growth that occurs in the account comes out of it, none taxed. I think, the one thing I wish they had given it a different name because they called it the tax-free savings account, so we tend to think of it as a savings account, like it’s transactional. We put money in this week, take it out two weeks now. Put money in next month, take it out two months from now. It wasn’t designed to be transactional that way, and you can invest inside it and hold stocks, mutual funds, ETF’s. It shouldn’t just be thought of as a savings account. Why? Because you can’t get compound interest when you’re only using, getting 1% on your money, using it as a savings account.
Richard Yeah, and not surprisingly, and not that many people are terribly converse in with what a TFSA is and how it works, the way you’re describing. A lot of people, maybe most people understand what they’ve been, just a retirement savings plan, because CPP is that there’s always talk about providing for yourself when you’re as you get older. Generally, some concern and anxiety that comes into play for probably most people that, what will they be able to live on? Are they going to be totally dependent upon CPP and OAS? Or will they be able to provide for themselves completely, or maybe supplement themselves?
Robert And, do some Canadians have a pension plan? Some of it’s a defined contribution plan based upon what you contributed through your employer and automatic deductions and what they might match. Others are defined benefit, which is more of an older style, which my father had because he worked for the same company for 35 years. But, all of these things, to me, go along with having a conversation with a financial professional because there’s lots of decisions to make, lots of options to have, and sometimes it helps to have another person help walk you through the process. Here’s the pros and cons. You’ve got 15 options. How do we sort our way through that? Yet, sometimes we try to convince ourselves that, I’m smart enough to figure this out all by myself. And, yes, some people are smart enough, but, going right back to where we started this conversation, how you work with your personal finances, has nothing to do with how smart you are it’s how,
Richard What education is.
Robert Or what education you have. It’s what are you willing to learn through the process to make better decisions?
Richard Well, on that note, Robert, I think that wraps it up pretty good. You don’t have to be a PhD or anything like that to be able to manage your finances well.
Robert Absolutely not. You just have to want to.
Richard And, I know a little bit about how, and I can’t think of a better way for anybody to, for anybody to, find out how and to read your book, Rich Is A State Of Mind. Rich Is A State Of Mind. And highly recommend that anybody pick it up. Where can they get this book?
Robert The best place to get a copy of the book is from my website, which is So it’s the book title, just as one word. If they’re interested in the other work I’m doing, It’s, and they both link to each other.

How To Save Money On Credit Cards And Travel With Barry Choi

How To Save Money On Credit Cards And Travel With Barry Choi

This episode is about smart ways to use credit cards and consolidation loans to help you pay off your debt. Barry also discusses how to get more bang for your dollar when it comes to vacations.

Barry Choi is a Toronto-based personal finance and travel expert who frequently makes media appearances. Richard Killen is a Toronto Licensed Insolvency Trustee and author of the book “The Glass Is Half Full”.

Richard Hi, I’m Richard Killen. Welcome to the Glass Is Half Full. The show that tries to get people to get a better bang for their buck, even if they’re kind of short on the bucks. So today we’re joined by Barry Choi. Welcome, Barry.
Barry Thank you for having me.
Richard I have to read this Barry to make sure I get it right. Barry is a Toronto based personal finance and travel expert who frequently appears on City TV, Global, CTV and other TV programs. He is also a regular contributor, to many financial and travel publications, and his blog “Money We Have” is one of Canada’s most trusted sources when it comes to both finance and travel. So once again Barry thanks for joining us.
Barry No problem.
Richard Today I’d like to cover both of the aspects of finance and travel. Okay, so I’d like to start with personal finance, maybe on the basis that if you don’t have any money whatsoever and no credit cards you are not going to travel very far anyway. I think you’ll agree with me when when I say that credit cards are the most ubiquitous, the most common form of personal credit in Canada.
Barry Definitely.
Richard And with everybody 18 or over has at least one.
Barry They should.
Richard If not 12. I don’t agree with 12.
Barry Don’t ask me how many I have.
Richard So I’d like to start off with credit cards. One of the things about credit cards, if you’re in the credit card business, to promote the card, to push your product, use many gimmicks, shall we say?
Barry Sure, yeah.
Richard Special offers. One of the most common ones, certainly that I’ve heard of, is the balance transfer usually based on interest. Can you explain that to us?
Barry Yes, so the thing about balance transfers, it seems like a gimmick, but I think it’s one of the best options out there, especially for people who have run up debt on their previous credit cards. Because usually when you look at an offer you are talking about points, cash back, benefits for airports or whatever, but what the balance transfer options, you’re basically guaranteed a lower interest rate when you sign up by transferring your previous balance to this new card. One good example is, and MBNA tree line gold card. It has a 0% interest rate for nine months. It comes with a $39 fee and 1% bounce transfer fee. But you know, 0% obviously is much lower than, say, the 19.99% that you’re currently paying.
Richard Yes, I know there is a difference.
Barry Yeah, huge, huge difference right? And even then, there’s the nice thing about that. even if you can’t pay off the entire balance right away, the balance or interest rate goes up to 8.99 or 12.99 depending on what you have. Which is still lower than what you’re paying before. The key thing is to understand that if you’re going to do this balance transfer it’s not just to, like constantly balance transfer to avoid paying your bills. The whole goal is to pay down your balance, right? So if you are to continue picking up debt with your new credit card, it doesn’t matter. You’re going to run into a whole eventually.
Richard Now, obviously, this depends how you handle your cards. There’s nothing…
Barry That’s right.
Richard Like if you’re paying your card off the end of every month, you’re getting down to zero of every month. You really don’t have a credit card there, do you?
Barry You have no debt, right? Like that’s a beautiful thing about credit cards when used responsibly. Not only do you build a good credit score, you can reap all the benefits from the points you earn or the cash back that you earn.
Richard So, on whole, it’s good to take advantage of these things, depending on what it is you’re transferring, and how much…
Barry 100% depends on the situation.
Richard We’ve all kind of pretty well, everybody, I hope has heard about the term consolidation loan, but it may not be 100% sure how that works. Can you flush that out for us?
Barry Yeah, generally speaking, is you get one big loan at a lower interest rate, I’m going to make up this number. Let’s just say you get that loan for 7%. Well, then, with that loan, you pay off all your other debts. So if we are talking about those credit cards that have 19.99%. Maybe your car financing is 10%. So you’re getting this loan with a lower interest rate to pay off all your other loans. The key thing to remember this, these loans are kind of open ended, so you can continue to pick up debt if you’re not careful. So you can’t just accept this loan thinking that well, I’m going to do this. You really need to have a plan to pay off your debts.
Richard So, you have seven or eight credit cards, and you owe a grand total of $30,000, will say $40,000, so you would go and you would get a loan from a bank, from finance company or whatever, that is offering you an interest rate, which is going to be better than what the credit cards are.
Barry Presumably. Exactly. You take that amount you get, pay if off. But you also really have to pay attention to the terms of that loan because it may be 7%, but it might be a floating rate where it could change at any time. Or, keep in mind, sometimes they may call that loan back and you don’t have that money handy, you actually end up with more debt.
Richard But in this you’re changing from one type of credit to another. You’re changing from revolving credit to a fixed credit where you’re paying both interest and principal down over a scheduled period of time.
Barry Exactly. So that’s where you had to really read the details. There are all these different types of loans you can get. Sometimes people get an interest only loan, for example, and they don’t realize that they’re making the minimum payments, but in reality, they still haven’t paid back anything.
Richard That’s for sure. If all you’re doing is paying the interest.
Barry Exactly. People just don’t realize that.
Richard Yeah, but one of the things that I’ve found, in my business, is that people get a consolidation loan. But, perhaps the lending institution that gave him the loan didn’t insist on cutting up the credit cards or something like that. Or maybe they did and the credit card company sent him new ones and things like that, and within a couple of years or something, the consolidation loans still has three years to go, but the credit cards have gone back up to perhaps even as much as what they owed when they got the consolidation loan.
Barry I think secretly, that’s the goal of the lenders, right? They want to make money off you. They’re not just…
Richard Well, we shouldn’t be cynical about these things.
Barry You know? Okay, let’s just say that’s right.
Richard It’s unfortunate.
Barry It is definitely unfortunate, that’s why I was saying, you need to have that plan of attack. That right.
Richard That’s what you were talking about.
Barry Exactly. So you take that loan and pay off your highest interest debt first, so you can just reduce the amount of interest you are paying, and maybe right away you lower, or either maybe cut up the card. It’s a good thing to do right away. You can’t spend it if you don’t have access to the card or you lower your limit. If you know you’ve had spending issues and problems or close some cards. Maybe just get down if you had 7 or 8 cards may be going down to one or two of the lower limit. Just get some self-control and educate yourself, and I think even gotten as far as getting this consolidation loan. You’re smart enough to realize that you might have a problem and you want to learn from it.
Richard Hopefully, but the thought process will have started to move in that direction anyway.
Barry Exactly.
Richard Hopefully, yeah. Just to segway a little bit into the travel side of things that we’re going talk about a little bit later, Barry. I understand you’re a bit of a fan of travel rewards.
Barry I like travel rewards, with credit cards, yeah.
Richard I don’t fully understand them, but maybe it’s because I don’t take advantage of them like perhaps I should, I don’t know, educate me on this.
Barry Yeah, it’s pretty straightforward. You know, when you sign up for a new credit card to travel when they offer you a nice generalized sign up bonus. But there’s always conditions you got to spend “x” amount before “x” date, usually three months, right? And, then you earn points on all your purchases, which can then be redeemed for a discount on travel. The key thing is, as we already discussed, is, you have to pay off your balance in full every single month because what good is earning 3% in travel rewards if I’m paying close to 20% in interest, it makes no sense. But quite often people can just fool themselves into thinking that no, I deserve justification. When it’s a good deal, it’s quite often not, right?
Richard Let the emotional side of decision making take over.
Barry There’s no doubt a lot of people suffer from (fomo) fear of missing out. They see on social media what their friends are doing, and they know they can do it, too. But they have to put it on credit. And unfortunately, you know, sometimes you think its people who don’t have any money or low income. They’re taking (wrenches). But you know you could have a good salary and just abuse or credit cards at the same time.
Richard I see that a lot. In fact, that’s one of the reasons people get a lot of credit is because they have a good salary and they’re able to make the payments.
Barry Well, that’s the key thing we’re talking about travel rewards. The higher salary you get, you qualify for better credit cards, which better benefits, better rewards. It’s really easy to get more debt if you don’t pay it off.
Richard That’s for sure. On the subject of all of the travel and that, would it be advisable, and there are credit cards that lend themselves to this to have one or a couple of credit cards that are designed for travel and others for domestic use?
Barry Yeah, for me, it’s like it’s not like a travel credit card that you’re using just for travel. It’s just the type of rewards you’re earning, right? So you can use them domestically or internationally. There again, it’s the type of rewards you want to earn. And so you know, the West Jets got their own credit card, Aeroplan has theirs. But then each bank has their own travel program where you can earn points. That said there are certain credit cards that may are designed specifically for all in one use. Scotiabank released the passport credit card a few years back, which gives you no foreign transaction fee. So it saves you a minimum of 2.5% whenever you make a purchase in a foreign currency. So, yeah, you could argue that that is a great card to be using internationally
Richard Now that you mention foreign currency. I was going to ask you about are there cards that are advantageous in terms of what we call it currency exchanges?
Barry Yeah, definitely. So I mentioned that 2.5% in a lot of people who are watching us right now might be like, what are you talking about? I don’t get charged that fee. What they don’t realize is that it’s baked right into your exchange. So if you’re buying something in U. S. Dollars when you see the Canadian amount, the extra 2.5% is already in there unless you have a credit card that doesn’t charge foreign transaction fees. Fortunately, over the last couple of years in Canada, it’s become a big issue. So there are more and more credit cards available. There’s almost like 10 credit cards now that in Canada has no foreign transaction fees. But if you go back three years, there’s only two, so there are more and more options, and just each card is different so you got to do a little bit of research.
Richard I guess that the whole idea of transaction fees is another question, too, isn’t it?
Barry Yeah, it’s crazy how many fees we pay, right?
Richard How crazy is it?
Barry Well, I guess the foreign transaction fee is just 2.5% right, But it’s on any foreign currency like these days. People are buying things online, US dollars. So why pay a premium when you don’t have to? You just apply for one credit card that doesn’t charge you the fees and you save every single time. So it’s not like a huge amount if you’re buying something small. But over time it definitely adds up. The way I look at it, let’s just say I looked at all my trip expenses. If I was going to Italy, the amount in fees I pay could be the same as one nice meal while I’m there. So I’d rather have that nice meal than pay fees.
Richard Now you mentioned Currency exchange fees on that. But what other kinds of transaction fees should we guard against if we’re thinking of using credit cards?
Barry Well, you know, it depends like a lot of people you know, there are cash advance fees right where you don’t want to get into that because that’s where you’re paying to access money that you don’t have and you pay a higher interest fee, as far as credit cards are concerned….
Richard When you get a cash advance, usually you start paying interest on that money, right?
Barry Right away. Right? And yet pay a higher interest fee.
Richard And higher interest.
Barry That’s right.
Richard Is there a separate fee on this?
Barry There might be. It just depends on the terms of conditions of your card, every card is different. Generally speaking, most credit cards don’t have a fee when you use them, unless it’s a cash advance and international. But again, it really depends.
Richard So Barry, I said we’d eventually get into the travel side of things, right? Because our audience presumably is looking for some information and let us call them tips, on how to get that better bang for the buck.
Barry Sure.
Richard So, now I’m going to ask you for some tips.
Barry Yeah.
Richard But we’re going over to travel side of things.
Barry Okay. All right.
Richard So most of the people watching are probably are family people, have children and all that. What tips can you give us about getting more from, you know, a single family holiday, we’ll say?
Barry It really depends on your budget. So that’s where I like to start more than anything else. If you want to make travel part of your family life, you got to set money aside for it. You know a good example, and I’m throwing out a random number here, right? If you were able to put aside $500 a month, that would give you $6000 a year. That may seem like a lot of money for some people like, to put aside that amount. But, you know, I’m just throwing out these numbers there, just as an example. You have to remember that you can’t necessarily travel every single year. So if you don’t have that much amount saved, wait for next year, right? I didn’t try every single year when I was younger. But once you’ve got that money set aside, you could do whatever you want with it, right? Because the key thing is, you’re not dipping into your credit cards or any lines of credits to pay off for your traveling, and that’s where I like to start it and then, you know, based on what your budget is, then you start descending where you can go so If you’ve got a lower budget, maybe you take think about closer to home, road trips, right? Or taking advantage of the things that are going on where you live. A lot of events in the summer, you know, we’re based in Toronto. The city of Toronto throws on tons of events. You could spend every single weekend doing something within this city and not pay a penny.
Richard I know of some of those, you know, that’s part of the action, right? The idea that you’re trying to end your vacation with less debt or there’s no more debt than what you started with, right?
Barry You should never go into debt for vacation as far as I’m concerned.
Richard How do you like that straight line, Barry? Are there some things you can tell us about saving money on air travel?
Barry Yeah, well, the easy thing and this is really hard for families are the offseason travels obviously the quickest way to save money. You know, a good example is you to try to fly to Europe from Canada; you’re looking at, probably $1000 right. But if you were to go like, you know, right now, September or October, it may not be September or October when you guys are watching this, but the point is, it’s off season. A flight might cost you anywhere from $600 to $800, so you think about that’s 20% savings right there. On top of that, because you’re traveling during offseason hotels are typically 20 to 25% cheaper, also. Another easier way to save, in my opinion, is to literally sign up for every single newsletter out there, airlines, and tour operators. And the reason I say that is because they let their readers know right away when there’s a sale. So if you know there’s a sale and you can see discount another good example, Air Canada vacations quite often rent promotions where kids stay for free, right? That’s a great deal, but you just got to know about that promotion.
Richard And then they bombard you with this stuff.
Barry They totally do, because they want you to buy, they want you to spend with them, right? You do have a problem with those things is you got to have some self-discipline. There are some people out there who will see these deals and be like, why I got to go because it’s such a good deal. Well it’s not a deal if you got to pay back later and you don’t have the funds available
Richard It never is, is it? Combination bookings?
Barry Yeah, packages could be good. It depends on how you look at it. If you’re doing an all-inclusive resort, quite often, it makes more sense to go through, say, Air Canada vacations, Sun Wing, West Jet vacations. But if you’re also looking to book your flights, hotels and say, a car rental, is probably one of the best solutions. Yeah, they openly advertise it and I’ve read the numbers in the past and it works. And nice thing about Expedia is you don’t need to book all three things at the same time. So, let’s say, you book your flight and you decide a week later, you know, I’m going to get a hotel, and then another week later, you’re like, oh, I need a car rental. If they give you, like, basically a window where it’s as long as you book everything, eventually, you still get the savings.
Richard So you’re not locked into having planned everything.
Barry That’s right.
Richard Right down to the….
Barry Exactly. And they remind you, right, they’re like, hey, you know, you have two more weeks to save on X amount. So they want you to book with them, right?
Richard Really? Would they say that?
Barry They do.
Richard How do you feel about cruises and tours?
Barry Tours, I actually think are really good value. People don’t like tours because this is like, I don’t want to get on this big giant bus with, you know, 100 other people. And it’s not fun. Well, it’s an insane way to think about it. There are literally probably 1000 different tour operators out there, so it’s a matter of finding the right tour that makes sense for you, your lifestyle, and the type of adventure you want. I did a tour with Intrepid Travel a couple years back, and there are only eight people on the tour. It’s fantastic, right? And when you break down the cost of everything, meals that are included, which isn’t always included the guide, the accommodations and the transportation, it’s a pretty good value. More importantly, I hadn’t spent any time planning. Cruises are a little bit trickier because each cruise is so different. And what I don’t like about cruises is the fact that you basically pay a base price. You pay for every single upgrade, but you got to pay for gratuities. You got to pay for the nicer restaurants. Obviously, if you’re going to go to casino on the ship, you have to pay there.  There’s every day excursions to, right, so you could avoid all that if you wanted, but most people will spend a little bit extra on cruises.
Richard I’ve had a couple of people work for me who very, very, into tours, practically every year, the cruises, much the same thing because the big selling point to them was, they unpack once and they pack once.
Barry That’s right.
Richard It’s like their hotel moves with them.
Barry It’s experience, right? There’s no doubt some cruises like, you know, you think about the cruises that go through Scandinavia or the Mediterranean like, just think about planning that on your own, say, you pack once to take you there. It’s great. So I do actually think cruises can have a lot of good value. People just got to realize that it’s not necessarily just the base price you are paying. There will be extras you’re going to pay because you’re not going to sit on the ship the entire time while docked in some new exotic destination. You’re going to go explore, right? You’re going to go buy. Go shop.
Richard What you’re saying? Basically, is there two types of tours, right? Is the tour that essentially is focused on you just having fun. It’s almost like the casino tour where the casino goes with you and you dock here in there and you want to go off and buy some things at the local market or something? But then, the essence of the tour is what the ship can provide. I’m sorry, the cruise.
Barry Yeah. You’re basically paying for access to the cruise.
Richard The Mediterranean cruise that you mentioned, you’re going from here to there, and then you get off and you visit and you come back to your hotel. Your hotel moves over to the next place.
Barry That’s pretty much it. That’s exactly it.
Richard They’re different tours.
Barry It’s a unique experience. Where cruising it, is great. It can be fun, but not everyone’s into it.
Richard This kind of difference is between a cruise and a tour.
Barry Well, I’m talking about cruise ship versus a bus tour, right?
Richard Yeah. I know what you mean. The one the Mediterranean one that I described. There is more of a tour than a cruise.
Barry Well, no, it’s a cruise. If you’re on a cruise ship it’s a cruise, right? It’s not a tour, it’s a cruise.
Richard One lady I’m thinking about used to always say, I’m going on a trip.
Barry She’s going on a cruise, assuming she’s on a boat.
Richard I used to argue about that, too. Interesting. Is there any particular Garden of Eden out there for us? Is there any particular place that you recommend people to set their eyes on for in terms of this tour, cruise?
Barry Well, every time with destinations, it depends on what you are looking for. It’s so hard. Different budgets, right? Like I said, if you’re flexible, you can get a lot of deals out there as far as I’m concerned. Cruising, again, flexibility. Good examples, I was talking to my mother the other day and she found a cruise coming out of Vancouver about six nights ending in Los Angeles, including airfare. It was $1200. That’s like actually really cheap when you think about it, cause the flight alone was about $600. So, you know, 6 or 7 nights on a ship, some stops. It’s like you said, basically a hotel for a week that travels with you and all the meals. I’m like, that’s a pretty good price, right? That’s because she’s retired and she can just jump on a plane next week and it won’t matter, right?
Richard But for $1200 for a week. Most places you’ll stay will charge you close to that.
Barry Yeah, exactly, right?
Richard And it doesn’t move.
Barry But I also like to look at other destinations. To me, it’s kind of like, what’s trending and what has good value. It sounds a bit crazy, but, 5-6 years back, after Egypt was going through the Middle East crisis and Egypt uprising, as soon as they elected a new president, I was like, I’m going because it’s like they got a new president and everything’s safe. And more importantly, everything was like 50% off still. So sometimes you got to look at the situations around the world.
Richard Did you write about that?
Barry Take advantage. I think I did. I don’t remember.
Richard I think my sister in law must have read it.
Barry I’m not saying, like, you know, put yourself in any danger going. You were crazy, but you could be smart about your travels
Richard With credit cards, since they’ve replaced the traveler’s checks, what can you tell us about, number one is avoiding the devastation of losing all your cards and the inconvenience of things?
Barry Yeah, it’s tricky. You just got to be smart about your surroundings. Just be smart about how you use your credit card. Number one whenever you travel most of the times, you still need to let your credit card provider know that you’re traveling so you don’t get locked out when you make purchases. And being smart, you know, if you’re going to a heavy tourist area that’s known for pickpockets, you know, maybe you’re wearing your wallet in your front pocket or you put your bag in front of you. You can’t make yourself a target, right? I know it’s easy for me to say that, but you don’t need to be aware of your surroundings, and also people forget, is that when you go home, what you should also do is change your pins right away. Because in the event that used terminal that was compromised, they still usually need your pin to actually make a transaction. So even if they cloned your card, you change your PIN, it’s no good to them anymore.
Richard Right. Prepaid cards. How do you think of them in terms of travel?
Barry Depends on how you look at it, right? Like the old traditional prepaid cards that people are probably thinking in their heads right now, is where you could be able to take advantage of an exchange rate early, which is not bad, but prepaid cards, as weird as it sounds, it’s not always accepted everywhere. These days there are better prepaid options in the sense where you just, loadable credit cards like Stack and CoHo, that use a Visa and MasterCard networks that are more internationally recognized. I like them, but, you know how we’re talking about credit cards without foreign transaction fees. I still think that’s the cheapest way. So why would you go with the prepaid when you’ve got a credit card without foreign transaction fees?
Richard So in terms of travel, you’re not a big fan of them?
Barry Prepaid cards, not at all.
Richard For domestic use, so certainly, in my world, that prepaid cards are a very positive thing to have. I won’t explain why. This is about you talking about travel. But speaking of that, I understand that you publish or you have a guide called The Cost Of Travel. And my God, Barry, it’s free
Barry It is free.
Richard How does one get that?
Barry Just go to my website, and a box will pop up, saying sign up for my newsletter.
Richard Sounds tricky to me. Tell us what the guide covers?
Barry Literally, everything you need to know. A few things we already talked about, setting up your budget, how to save on flights, how to save on hotels, travel insurance, picking your destination. It’s just like a little guide I wrote. I don’t even remember how many pages; I think it’s like, 50 or something. Of all the travel tips I’ve learned over the years that have helped me save money. And funny thing is, once you know these tips, it’s like they’re just in your head. There’s nothing really special. People just don’t know how to take advantage of things that are right in front of them.
Richard And keep your back, back on the front.
Barry I guess technically, that saves you money.
Richard In the crowd. And on subways.
Barry There you go.
Richard So thank you very much for joining us.
Barry Yeah, no problem.
Richard Here’s a little gift. Put it this way, so that folks can see it. It’s a book. This is why we call this, The Glass Is Half Full. It was written to emphasize the value and the importance of attitude in turning whatever negative situation may find yourself in whether it be somebody stole your backpack or something when your Geneva or you just run out of, you’ve overspent on your credit card here in Toronto, doesn’t matter. A negative situation could be turned into a positive opportunity with the right attitude. I’m sure I tried to put that into print. Thanks again for joining us!

How To Save Money On Recurring Expenses With The Cash Flow Cookbook

How To Save Money On Recurring Expenses With The Cash Flow Cookbook

In this episode of The Glass Is Half Full, Richard Killen, a Licensed Insolvency Trustee interviews Gordon Stein, author of The Cash Flow Cookbook. Gordon is a keynote speaker and a writer with a passion for helping people build financial wellness.

In this episode, Gordon outlines how to save money on recurring expenses such as car expenses, pet services, alarms, transportation and more. Forget about budgeting and concentrate on building wealth and net worth, even if you are living paycheck to paycheck.

Richard So today we’re joined by Gordon Stein Gordon, and I’m going to read this to get it all right because there’s a lot here to talk about. Gordon is a keynote speaker and writer with a passion for helping people build financial success. Canadians are struggling with high levels of personal debt and higher levels of stress over money. In his book The Cash Flow Cookbook, he shares dozens of low effort and low sacrifice ideas that can free up cash for paying down debt, investments, savings. Applying these simple recipes can build millions of dollars worth of incremental wealth over a typical career, which I find pretty impressive. So, Gordon will share some of these strategies with us today. And I understand you should probably grab a pen and paper here so you could make notes. Welcome.
Gordon Good to be here. Thanks so much, Richard.
Richard In your in your book. It’s called Cash Flow Cookbook. I’ve got it right that you have 60 strategies, but like any other good book, you don’t call them strategies. You call them recipes, right?
Gordon Right.
Richard And they’re all designed to save money in one form or another. So I understand this was written after a conversation you had with a friend about a $13 car wash, and I think I’ve run into that same car wash. I’m intrigued to know how this led to your book.
Gordon Well, I had no intention of writing a book until this incident happened. Like many things in life it sends in a very different path. And I was driving a friend home from a barbecue, and he spotted a $13 car wash receipt on the console of my car. And he, you know, berated me for it. So why would you spend $30 on a car wash? I said, Well, you know, I’m not going to wash my car with my suit on. I said you know, what do you recommend? Well, at the time he said why don’t you go get an Esso extra points card? And you put that on the pump before you put in your credit card. And then you track your points online, you fill in a form and you take it in and you get a free car wash. So I thanked him for the idea, dropped him off, and I made sure I was down the road. I thought to myself, This is the silliest idea I’ve ever heard of to go through all this for $13. And in a couple weeks later, someone had one of the little Esso speed past dongles. They touch it to the pump, easier than a credit card, automatically tracks their points and they get the free car wash. That is ok, that’s cool, because it’s actually easier to pay for the gas, so I haven’t actually paid for a car wash in four years. Not a huge thing, you know, $25 a month. I thought well I wanted to get one for my spouse. So now, it’s $50 a month. And then I heard the idea on a radio ad for one of these discounted home alarm monitoring systems. So I compared and it was $25 a month cheaper. So now I’m up $75 which isn’t a huge amount of money, but none of this took any effort. I started to wonder what else is there and, you know, my background in engineering and an MBA. You know, I got focused and made a spreadsheet. Before I knew it I had 120 Ideas. I set a minimum of $25 and in total there’s $13,000 of monthly savings. So that’s really how it got started.
Richard That was an interesting car ride.
Gordon It was for sure.
Richard I have one of those speed passes too. I’ve never been that smart about it yet. I think I’m gonna learn a lot here today. The driving principle behind your book Gordon is that those, even those living paycheck to paycheck haven’t got what they think to be any spare money floating around can reduce their spending, but with minimal sacrifice. And they could use the money. Then, of course, to do like you just described. All of a sudden there’s a $50 free hasn’t gone out. It’s still in your pocket kind of thing, right? Can you give us any other examples and why this is possible?
Gordon Well, I think the thing is really what I learned in the book and doing the research. It’s all about recurring monthly expenses, and these are things that are coming out of your chequing account every month, typically there on pre-authorized payments. You set something up. Maybe it’s a gym membership. It’s a storage locker, and these things just keep coming out. You sort of take that as your new normal. And if you’re in a situation where you’re in debt or you’re headed for insolvency, you need some help. Certainly go see a professional such as yourself, Richard, but what can you do in the meantime, to prune down that monthly spend to get out of this thing where your living paycheck to paycheck and you’re struggling, and most people are in that situation, but they really haven’t taken a good look at their expenses. So you know, some examples would be things like storage lockers. You drive typically in the suburbs, and people have their garage doors open and they’re filled with stuff. And the storage locker business as an example, is booming because people just won’t prune down the stuff that they’ve been saving. Their spending $100, $200 or $300 a month on a storage locker somewhere. So pretty obvious point here is let’s go through Marie Kondo style. Now let’s prune out all that get the stuff back in our houses and save on the storage locker. So whether it’s in the book, the recipes, everything from thoughts on dining out and how do you reduce those costs. Ideas on housing, ideas on transportation. So 60 in total. There’s actually a little anecdote of the beginning, adds another 60. So actually towards 120 ideas that go from about $25 a month to $200 to $400 a month. And the idea is anyone can start today and start to free up that cash and apply it to paying down debt. If debts your issue. Or if you’ve got some savings, you’ve got some net worth. Let’s apply more to investment to build and grow that well. Also, we don’t have to worry about money.
Richard In your book.  You very clearly don’t believe in budgeting, as such. Your approach is really, They can do rather can’t do approach. Budgeting tends to be restrictive. Somehow you cut back with budgeting. You have a tendency to think that way? What you’re doing really is talking about spending smarter. We’re getting a lot more for whatever it is that you are spending.  So is it psychological? Is this the intent behind this?
Gordon Yeah. Well, first of all, I’m amiss. I didn’t give you cash flow cookbook. So my apologies.
Richard You came armed?
Gordon So yeah, the budgeting is interesting. You know, if you think what you want to do, you’re driving your car. And you don’t want to go too fast, you look at the speedometer, you want to lose weight, you look at the scale. So if you want to build wealth and building wealth includes getting out of debt. You know, even if your goal is to get up to zero or to be less in debt. What are you trying to do? Well, you’re trying to increase your wealth. Maybe it’s been going from negative $200,000 to negative $50,000 maybe going from 0 to $100,000. But what do you want to look at? You want to track your wealth, not your budget. Because if you think about it, you could set a budget. You can follow your budget every month for your entire life and retire. And not have enough money. So far smarter, I think, is the whole core of Cash Flow Cookbook. And let’s get it out of the closet. Let’s dig out the bills. Where you at right now? What is your actual wealth position? Some people call it net worth position, so let’s take everything that we own. Let’s subtract everything that we owe, and let’s say, Hey, how much wealth do we have? And some people say well I can’t do that because it’s negative. I’ve got student loans, so whatever the number is, let’s actually understand that number. And I want to see how we do month after month. I think that is a critical step for people because then they can see. Am I better off in September than I was in August.  And am I tracking better in October than I was in September? Are you increasing that wealth by $50. Increasing it by $500 or $5000? Is it moving in the right direction? So you’re building some wealth. I think with budgeting particularly in the case of a couple, It’s gonna lead to arguing. , Oh, you blew you’re a part of the budget. Why’d you spend so much? But then things happen. The kids need new hockey gear. Well, that wasn’t in the budget. I think it’s an artificial approach. When you track your wealth, you start making smarter decisions about everything that you do in your life.
Richard Your way of understanding it is you’re focusing on the positive rather than a negative. Right? Coincidentally, Let’s see your book again?
Gordon Yeah, sure.
Richard I’m going to show you my book too.  But I think that in it we talk about a very similar type of thing. I’m talking about an approach, the mindset if you want. In mine, it’s called, The Glass Is Half Full, the positive side of debt relief. And the person could say, Well, what’s the negative side of debt relief? And I’m not sure that anybody knows the answer to that one as such. But what I meant by it was very similar to what you’re talking about. That the people who get into trouble tend to allow the trouble to define them and it tends to constrict them and restrict them. My idea is that they should be taking with the right attitude, they can take that and turn it into that opportunity. Okay, that starts thinking forward. And what you’re describing seems to be all about forward steps rather than looking to see if there are negative steps.
Gordon Well, I think that’s it exactly. I’ll give you a really basic example from the book. One of the simple recipes really makes the point you can start today. So the average Canadian or American they retire with about $200,000 of net worth. That’s the average, not a very big number, $200,000 a lot of money, but not if you have to live on it for 35 or 40 years with inflation. So here is a very simple example. If you went to Home Depot everybody can do this. You buy a 10 pack of led light bulbs. You replace the 10 most used lamps in your house. You’ll save about $20 or $25 a month on electricity. The side benefit of being a little bit more green. Now, over a 30-year career, you’ll end up with $25,000 more net worth. So it’s about 1000 times a monthly amount, compounded over the period of time by the through debt reduction of investment. So there’s $25,000. That’s more than a 10% increase in the Net worth you retire with for the average Canadian or American with a 15 minute trip to Home Depot. So there’s a very simple example.

And, yeah, you know, maybe, let’s say it’s 10 light bulbs, so very simple. But what are all those other things to do? So we literally in a day or two, you know, taking a look at your cell phone bill, you know, taking a look at different things. Clothing expenditures. The book is chock full of these ideas, and would everyone use all $13,000 worth of monthly savings? No, because people don’t typically spend that much. But could you get a handful of ideas to free up? Let’s say, $200 a month. If you could free up $200 a month and put that to good use. I.E. paying down debt or investing it wisely in blue-chip kinds of things. You’re gonna retire with another $200,000. You’re gonna double the average Canadian or American. So, you know, to me, that’s what it’s all about. These are simple, simple steps.

Richard Over what period of time are you seeing this?
Gordon I’m using the example of 30 years. People go for 30 years? Well, you know what, when you think about it. You know, I worked in the corporate world for 35 years. I still have lots of energy to go. Hopefully, statistically, I’ll live another 30 years. So I’ve got the same opportunity in the whole road ahead of me. Sometimes I have people who say, Well, I’m retired I’m 71. How does this help me? Well, it helps because they probably have a fixed amount of money that they’re working with. So now it’s not about producing debt. It’s probably not about building wealth. It’s about lowering that monthly burn rate, still beneficial for them to make them more comfortable about making ends meet.
Richard You mentioned the age factor in all this. In my business, I see more and more I suppose, because my generation, the baby boom generation. There’s not a lot of people out there who have gone through the working period and now of course their in retirement. But things haven’t changed for them in the way they live their lifestyle. If you want and all that. So, if you take what you’re talking about, having these positive approaches is to doing something more efficient with this and more effective with that and so on. When you get into this period here now there, they find themselves in a position where there’s not that much leeway anymore. So they find themselves much more restrictive. What do you tell these people?
Gordon Well, again, I think it’s just about being a little smarter and not giving up anything at all. So, I’ll give you an example.  I needed a new pair of glasses, so I went to the optometrist in the neighbourhood and, you know, sized it all out in a few different pairs price range was about $600 to $800. For a pair of glasses. Progressives, you know, coated lense, whatever. It’s kind of a lot of money so, you know, I could have just bought them,  not that big of a deal, but it’s a chunk of money.
Richard That would’ve been the easy thing.
Gordon There’s Bob’s optometrist, There just down the mall. I’ve driven by them 100 times. So I did a little bit of online research. How long did I spend? Maybe an hour. So then I looked at some of these online glasses places, so I already had my detailed prescription from my optometrist. So ended up with a great pair of glasses from one of the online providers. $109 I spent and there fabulous.  The lenses are great. They’re exactly the prescription that came in the mail. I didn’t have to get leave my house. I didn’t get in the car, they delivered right to my door. So you might not have thought about that. I give you another one. Our dog needed to get spayed. A 15-pound dog.
Richard Did you ask his opinion?
Gordon No, I didn’t, hers. So anyway, you know, we looked at the neighbourhood veterinarian $1500, no problem they can spay the dog. And that’s great. So it’s the dog getting spayed, you know? And so I thought just before we do this for $1500,  I called a friend. What did you pay for your dog’s spaying? He said about $800,  and a different neighbourhood and in a way, I thought that’s pretty interesting. Half the price to get the dog spayed. Call the second friend. One more phone call, another 10 minutes and he says well, actually had mine, I spent about $800 but a friend of mine had it done at the Humane Society. I thought, Well, that’s interesting. So I called them up. Yep. We do the spaying. How much? $150. So you had to call in on the second Thursday of the month. It’s like a phone lottery. Um, and you know, you burn an hour on the phone call, but who makes $1500 an hour, right? $1350 or whatever. Anyway, the dog gets spayed. So just those two things. Nothing changed in the lifestyle, the dog still got spayed. Dogs perfectly healthy. He’s fine. Got a great pair of glasses, but the total of all that was, you know, $250 versus what would have been, you know, $2300. What was it? Half an hour’s worth of calling around. So just getting a little bit smarter for a retiree getting a little bit smarter on each thing they do. A little bit of calling around a little bit of research.
Richard So when you speak to large groups. I don’t know why this is common to large groups, but when you do speak to large groups, the subject of clothing comes up when you’re talking about managing the household expenses. I’m intrigued by that, why clothing?
Gordon Well, it’s been fascinating. It was one of the things I learned as I did the research on the book. I started with a few ideas of things I saw then really dug in to find out what the other ways of people can free up some cash flow for investing or debt repayment. And the clothing one is fascinating because the research shows over and over again. People only ever wear 20% of the clothing that they buy and when you serve that up to people they go, no no, that’s not the case at all. But I’ll tell you, when you go if you watch Marie Kondo with her tidying up show. And you see her on TV and she’s on Netflix pulling these huge garbage bags of stuff out of people’s homes to give away to charities and what have you. And the bulk of this is clothing. And what happens is, you know, people sort of tend to go shopping and they see a blue sweater. Oh, it’s on sale, and so they quickly grab it. And off they go when they get home and not realizing they have four other blue sweaters because they weren’t, you know, shopping mindfully, there were just shopping. So they found this. Please, let’s say the blue sweater is a little bit baggy, so, you know, you go in the closet when you’re gonna be on an interview, you’re gonna go have an important meeting. You don’t get the ugliest thing out of your closet. You don’t get the baggy sweater, you don’t get the pants that are too short or the one with the sleeves that are too long. You always put on your best stuff. This means the other 80% which we shop for not mindfully, tend to sit in the back of the closet. So if you combine that, you take a look at the average. Canadian expenditure on clothing tends to be around 6% of the gross income. So someone, let’s take someone making, say, $70,000 a year. 6% is $4200. Call it $4000 but they’re only gonna wear $800.

20%, $800 which means $3200 a year of after-tax income

Richard Sits in the closet.
Gordon It sits in the closet, and then it gets sold in the yard sale for about five cents on the dollar. If you’re lucky before the hagglers come.
Richard Or given away to Value Village
Gordon Or given away to Value Village, which is great from a charity perspective. But, you know, maybe you want to get a tax receipt for your $3200 contributions. If you think about that person, so let’s just change that up a little bit. Let’s shop a little bit more mindfully. You know, you’re brown belt buckle breaks. Maybe get it repaired. Maybe you want to go buy a new brown belt to replace the one that you lost. So that’s great. So now you’re shopping much more mindfully, but you could double you’re spending on the clothing that you’re actually gonna wear going from $800 to $1600. That now frees up your going to have $2400 a year freed up now. So twice as much clothes and $2400 freed up. What do you do with it? You pay down debt if you’ve got debt to pay down instead of paying interest on it or maybe getting invested in an exchange traded fund.
Richard You’re not the first person who’s been on our show talking about paying down debt. Truth is, I do a lot of talking about that too with my customers. But, talk about that if you would please. The idea of paying down debt. Maybe you can quantify or make it a little bit more real to people. How much this really helps. What’s the advantage?
Gordon Yeah, I think what happens is again. We’re not mindful. So we tend to just go when we buy and we go to restaurants and actually think about what’s happening. But if you’re in a situation where you owe some debt, I think the first thing is to get it out on the table. How much do you owe? And people tend to have 3, 4, 5 credit cards. They’ve got Banana Republic, Canadian Tire. This one has a discount on that. So they get talked into these things and they might have five of them. And some cards have a couple $1000 balance on each. And then there’s sort of insidious. They just keep creeping upon us. So if he owed that $10,000 that’s about $200 a month in interest. Easily, if not more so that $200 now is pushing us back. So we gotta make our payments on it, and they got this headwind of another $200 a month. It’s no value to you. In fact, it’s pulling you backwards, and so what happens that debt starts to grow? There’s something that you want and your adding more credit cards. So paying it down is the first step to really starting to get the money working for you. So instead of working for the money and you know, I always feel like you’re like this and which bills to pay, if you can just start by getting a little bit smarter? Get that debt paid down. Now, you don’t have this headwind hitting you. You get to a zero point and then you can actually start to build some wealth by building some of these great habits. Minimal effort, minimal sacrifice. But now, once you’ve got some money, that money can start growing for you and you start to get a nice portfolio built.
Richard And you’ve described something that I certainly wouldn’t call it a sacrifice. Paying down debt is not a sacrifice.
Gordon Not at all.
Richard Not in itself yet. Now you may have to forego something else in order to do it this month. But then I suspect that for most people, but they would have to forego would be very, very low on the sacrifice totem pole.
Gordon I think.
Richard You’re not going to sacrifice important stuff,
Gordon Right? I think initially when writing Cash Flow Cookbook, it was really focused on Hey, what’s the minimal effort? Minimal sacrifice, things that people can do. And if you think about that and there is, you know, $13,000 of ideas that I’ve built into the book. People can use some or maybe even all those. But all of the book and cash flow cookbook was written without actually giving up anything. But there’s this whole movement now about frugality and, you know, living with less. And I think what happens is that actually leads to more happiness. So if you saw the movie the Fight Club, they have a great quote in there and they say “the things you own end up owning you”. Which is very true because they think about a car, it needs maintenance and car washes. And you need new mats for it and so on. And you want to get a motorcycle as well. But it has the whole service schedule that goes along with it and a cottage. It needs work.
Richard Or you could just start your own business. It ends up owning you. One example of that we’ve mentioned before off the air about an American fellow that I guess was responding to your blog or something like this, and you showed him how he could save something like $10,000.
Gordon Well, it actually ended up to be a lot more than that. What happened was this gentleman from Kansas. He had sent me an email and it was one of my favourite ones. And he said, you know, I’ve read the book and he says, I’m really excited about all this and, you know, here’s my situation. He is 46 years old and he had zero wealth, was earning six figures a year. All of this hard work, gets to 46 years old, he actually has no wealth because he read about the concept of what your net wealth. And so he sent me a note and that led to a phone call, had a great chat, and so his situation was you know, what he owned, which was pretty modest, was effectively cancelled out, by what he owed on it and he hadn’t put much thought into money. This is not at all unusual with people. And so I said, well, what about your (he in the U. S.) 401k from your company? Which is like a company RRSP in Canada And I said, do you have one of those? He said, well, the company offers one. I said oh, great. What’s the balance? How much do you have in? And he says none.  Well, what do you mean none? He says I don’t have any cash. It’s the usual problem he has no cash to invest in there. And I said, well, is the company contribute? He said they will contribute up to $5000, a $5000 a year matching plan. $5000 of free money, no strings attached. And I said, Well, why wouldn’t you put in it? He said because I don’t have the cash. So we did the math it was about $400 a month, which would give him $5000 a year. So if he could free up $400 a month, his company matches that with another roughly $400 a month, so they’d be $10,000 year contribution. And of course, that can grow over time. So we use some of the concepts in Cash Flow Cookbook somewhere in the book, and there’s others available at CashFlowCookbook .com. And we applied that to free up the $400 from simple changes to his lifestyle. He made those changes signed up for the full amount of the 401K, $400 a month. And then we did the math on it. Um, that retirement, I think you would have an incremental of about 350,000 or $400,000 of incremental wealth of retirement. It was things that he didn’t miss any way. So. That, I think, is the beauty of this cash flow cookbook approach. One of these simple things that you can free up. And then get that working for you. In particular, if you have something like a company matching deal, that’s way too good to give up, that’s free money.
Richard And he was satisfied that he wasn’t making any serious sacrifices?
Gordon No, they were simple things. We looked at things like his clothing. There were some things around storage lockers. We had a couple of changes in his transportation. Just generally getting smarter, more mindful about his money. He had the identical lifestyle he had before. But now he was going to retire and take that financial pressure off and stop worrying about living paycheck to paycheck.
Richard Gordon, The question may be, and perhaps I assume it would be on the tip of most people’s tongues after watching this. I hope there’s somebody watching us. Would be, especially the ones who are living paycheck to paycheck and you know, are like you say, just barely nose out of the water. Any little wave that comes along and all of a sudden they have trouble breathing and things like that. But they’re gonna perhaps be skeptical about the whole idea of building wealth for themselves and wealth, whats that. We’re actually looking at from the other end of the telescope? But you disagree with that, and it’s quite obvious to disagree with that. That’s what your book is about. But just to be practical for these people, what would be the first step in changing direction moving that way?
Gordon Yeah, I think it’s a great question. I really think it sounds a bit unusual. I think the first step is to calculate your current wealth, which I mentioned before could be negative. So you know, what do you own? And maybe all you own is a couch in your rented living area. That’s the only asset that you have. You’ve got student debts and credit card and everything else.  But there’s still a number there. So what is that number right now and set up, you could do it on a cocktail napkin or a spreadsheet. What’s your net worth? You know, we sit here in September. What’s your net worth in September? You’ve got a couch and you’ve got all these student debts. And then can you free up some cash and start to focus on it? It may be hard to look at that number because it might be negative. And you can say we’ll I’ll never have any wealth because I’m strung into this debt. Well, I’ll disagree. I think there’s an opportunity here. So what can you free up using the ideas in Cash Flow Cookbook or other ideas? So you’re sitting there in this negative number, and then, you know, in October can you just increase that wealth from zero? Moving it up, here is the zero line. Just keep doing that, and I think you’d be surprised how quickly it goes.  Because it tends to accelerate. As you get out of that, you don’t have those interests slowing you down. Now it can start to get more rapidly up to zero. Once you get to zero. Now you’ve got some things working for you. Maybe you have investments, paying out dividends, and then it also tends to accelerate. So there was a great piece that I’d read about a janitor, in the Eastern coast of the U. S. And he retired with it was about $5-6 million dollars. He was a janitor, a career janitor. He was just smart about his money. He didn’t even have to live that frugally. But he actually saved something, and then it just kept building and building. He donated the money in his retirement, right, So fabulous story. I think it really proves the point that anyone can get out of these financial handcuffs and enjoy a happier, more comfortable life. Go on the website as well, there are some other goodies. They’re all free, and you can subscribe, blog posts. There’s things called utensils, which are tools to help with your planning. There’s ingredients so ideas, little things that you could buy that actually save you money. And then the blog posts will give you some incremental ideas. The book itself, $25, I think is the first great investment you could make. Because it’s going to show you some ways to really start freeing up the money and its the sort of thing that you can actually start today.

Crushing Debt – Why You Should Pay Off Your Debt

Crushing Debt why you should pay off your debt
Richard Today we’re joined by David Trahair.

David Trahair is a Chartered Professional Accountant (CPA, CA), and a personal finance writer, trainer and e-Learning content developer. He is also an author of six books on personal financial issues including three national bestsellers. He was a columnist for CPA Magazine from 2014 to 2018.

His book Crushing Debt: Why Canadians Should Drop Everything and Pay Off Debt outlines the evils of debt and how easy it is for debt to spiral out of control with examples of real-life stories of debt disasters. If you are a Canadian who is already struggling with debt, Crushing Debt will motivate you to face your financial problems and will show you step-by-step the most appropriate solution to getting out of your personal debt hell. Filled with proven advice, Crushing Debt is a call to action on an urgent and debilitating problem for far too many Canadians.

In your book, Crushing Debt, you say that not all debt is the same. Can you provide us with an overview of that and perhaps just maybe pay some special attention to the type of debt that gets more Canadians in such financial trouble?

David Sure. Well there’s two basic types – there’s installment debt and revolving debt.  Installment debt is any debt that requires a partial repayment of principal. So, a mortgage is an example of installment debt, a car loan is an example of an installment debt and what that means is that if you just stick to the payment schedule you automatically have paid off the debt at the end of the term for a car loan and the end of the amortization period for a mortgage. So, by definition, you’re forced to pay it down.
Richard This includes both principal and interest, and everything gets paid off?
David That’s correct, both principal and interest. So you’re paying the cost of borrowing as well as the original amount that you borrowed.

Revolving debt is different than that. Revolving debt just requires you to pay usually a small amount every month to cover the interest. So, for example, a line of credit, even if it’s a home equity line of credit, you get a certain amount of credit that you can borrow and all you have to do is make the monthly payments or whatever the payment terms are and you’re good. If you stay below the total amount you can borrow, you’re not required to pay down the principal. Credit cards are another example. You can borrow up to your credit limit and then you only have to pay the minimum payments every month and in some cases that’s not even enough to cover the interest, let alone pay down the actual debt. So, I believe that the real problem is with the ease of availability of this revolving debt, the ease of availability of getting credit cards, for example, because people aren’t forced to pay it off, they end up just trying to cover the interest, just paying the minimum payments, bumping up to that credit limit and then just staying there.  I think that’s the main distinction is those two types – the ease of availability of the revolving credit is the big problem today as I see it.

Richard You mentioned in your book, the concept of “borrowing binge,” it’s the way you refer to it.
David Yeah.
Richard It would appear to me that the revolving credit as you described it, it lends itself more to this idea of a borrowing binge than fix credit.
David For sure. For sure, because it’s essentially cheaper to get. You think about your cash flow you’re allowed to go and buy something that you don’t have the money to afford to buy and then all you have to pay is a small monthly amount thereafter. if you bought a car or a house, your payments are much larger because a good chunk of that is the principal that you’re required to pay back. The other interesting thing I find is that this concept of good debt versus bad debt. I guess it’s similar to the revolving and installment in some ways. I mean, good debt is generally seen as installment debt, for example, a reasonable mortgage to buy a home is usually considered good debt because you’re acquiring something that hopefully is going to appreciate in value, so you’re making a good investment as long as you can afford it. Another example of good debt is often student loans, you know, you’re borrowing to get educated so you can make more money in the future.  Bad debt often is revolving debt. So you get a credit card, you know you can’t afford to pay it back, and you go on a great vacation down the Caribbean that you want to go on but you can’t afford to pay off that credit card when you come back. It’s expensive revolving credit, without any associated assets, no investment that you’ve got, it’s just — just fun.
Richard You mentioned in your book that the Canadian Bankers Association did a survey that indicated that 56% of people using credit cards pay them off monthly, leaving 44% that don’t. Which means they’re carrying debt from one month to the next, right?
David That’s exactly right.
Richard Do these numbers surprise you in any way?
David Yes, I would say they surprised me. I would have thought fewer people pay it off.  The problem with that statistic from Canadian Bankers Association, which is the spokespeople for the big banks, is that it’s based on survey data. So, they’ve surveyed people and asked them whether they pay off their credit cards. So, you must take it with a grain of salt. What I would like to see is, I would like to see the banks’ general ledgers showing me what the receivables are, and the banks will obviously know – it’s their business.
Richard You want to see what produced those numbers.
David Exactly I want to see the raw data. How many credit card revolvers are there? But if we assume that number is right, then 44 percent is a terrible number. I mean that’s approaching half the population can’t afford to pay off their credit cards. You know I’ve been writing about and thinking about personal finance for almost a couple of decades now and I can’t think of a worse investment than revolving credit card debt. It’s often at 20 percent or even more than that, it’s the worst investment you could make because that interest is compounding against it.
Richard If it’s if it is debt. In other words, if it is not paid off.
David Correct.
Richard If it’s paid off at the end of every month, most credit cards don’t pay any interest at all.
David That’s right. I mean, you know, if you can afford to pay it off every month, the credit card is a great thing. You buy something, you don’t have to pay for it for three weeks, there’s no interest charges. But if you can’t afford to pay it off, the table is totally flipped into, I would say, one of the worst investments you could possibly make. Great investment for the financial institution that you owe the credit card debt to because they’re recording interest receivable at 20% or more and compounded usually monthly. So compounding is great for them, it’s great for the investor- the person who’s advancing the money, but it works against you when you owe.
Richard Perhaps because I’m a simple country boy and all that, you could explain the idea of compounding to me.
David Sure. I investigated this for an article I wrote for CPA magazine a couple of years ago and basically what it means is, say you’ve got a 24% interest rate on your credit card. Many credit cards use an average daily value method of calculating the interest. What they’ll do is, at the beginning of this credit card period, say you owed $1,000, then they literally calculate how much you owe them every day during that period. So, you buy something for a hundred bucks then your balance goes up to eleven hundred, you make a payment, it goes down.
Richard Right
David So, they get the average daily balance for that month, then they multiply by the twenty four percent interest rate per year, times whatever the number of days and the period is, say, thirty thousand.
Richard Essentially a month’s worth if you’re right, two percent.
David Yeah, two percent or thirty divided by three hundred and sixty-five and they add that to the amount you owe at the end of the month. So essentially this method means that interest is compounding monthly, because the interest gets added to the balance and in that next month it’s included in the balance that you’re paying further interest.
Richard And this becomes the famous story of paying interest on interest.
David It’s interest on interest. It’s terrible when you owe, it’s great when you invest. Compounding interest is great when you invest in, like a GIC. In fact, you want a more frequent compounding period when you invest, but when you’re on the other side, it reverses. That’s the worst thing.
Richard The GIC is where the bank’s paying you rather than you paying the bank.
David Exactly
Richard Many of the people listening to this might very well be baby boomers like me and are more than a little interested in what happens with retirement. If during your working life, you’re in the habit and you actually over that time spend more than you’ve made, what’s the effect on retirement?
David Well the projection for retirement for people who are spending more than they make while they’re still working is a horrible thing to consider because if – I mean personal finances are pretty simple, right? You’ve got your take-home pay, that’s the money you get to put in your bank, and then you’ve got your spending. So, you’re offside if your spending is greater than your take-home pay and that results in credit card debt. If you’re in that situation and then you think about when your income gets cut off, i.e. when you retire, your income is going to go down significantly, often spending doesn’t automatically go down significantly when you retire. Many people continue to spend a similar amount after they retire or it might even go down a little bit, so if you haven’t saved anything then really you’re banking on the two main pension plans in Canada – Canada Pension Plan and old age security. So, let’s throw some numbers out right, Canada Pension Plan pays about thirteen thousand dollars a year if you’ve paid it enough over your max in your life.
Richard The maximum.
David Right. But most Canadians come nowhere near that.  The average amount for people who turn 65 in 2019, beginning of 2019, was only about 7,000 from Canada Pension Plan.
Richard That low, huh?
David Yes. People can’t bank on the max because they might not have paid in enough for the required number of years. Let’s say seven thousand dollars from CPP.  Old age security, six hundred and seven bucks a month, right now, about seven thousand a year, so an individual must live on…
Richard  thirteen hundred a month?
David Yes, about fourteen thousand a year combined CPP average and old age security. If it’s a couple you double that. If you haven’t saved anything else you got to live off that, okay, and most people, it’s insufficient, it’s not enough money.
Richard So, the part-time job at Walmart.
David Then that’s when you end up having to go back to work even if you didn’t want to. So I mean that’s why I think people like you and I need to try and educate people about the dangers of spending more than they make now and try and bring in how bad this is going to be in the future if they don’t get things back on track.
Richard That’s very hard for us to truly imagine the future.
David That’s the problem.
Richard Or make it real first.
David That’s the problem.
Richard And if we don’t then I suppose it’s very hard to overcome the habits of a lifetime.
David That’s right.
Richard I see this as you probably understand in my business, I see this a lot. People coming in to see us in their seventies and eighties and it’s largely because their lifestyle hasn’t changed. They may be able to change their lifestyle that much. Sometimes I find it’s beyond their control totally,  you know there’s all kinds of family demands and you know things like that still happen to people whom in spite of the fact that they’re now senior citizens. If their habits have been different earlier, they might be in better shape.
David You know, it’s very much a personal thing. I like to say that you know we all lie on this big scale. We’re either very cheap and frugal, the other end of the spectrum are those that spend a lot of money. So all of us lies somewhere on this scale.
Richard Like any other bell curve.
David Exactly like a bell curve. So you know, I think the best thing we can hope for is some sort of happy middle ground because the people, the ultra-frugal people who never spend a dime, never borrow, don’t have kids because it’s too expensive, don’t go on vacations, they’re going to die with a multi-million dollar portfolio.
Richard How many kids do you have, David?
David I’m not on this end, I have two kids. What’s the point of that life, that’s too extreme? But the other end of the scale, which I used to think was really an American problem, it’s not. As you probably know better than me, there are lots of Canadians that are spenders.
Richard Oh yeah. Let’s call it a universal problem.
David Okay the universal problem. So I think the best we can do is try and get these spenders to loosen up a bit and try and move up the scale closer to it, to this end. They don’t have to become this.
Richard Maybe like, maybe you mean tighten up a bit.
David I guess tighten up a bit with the finances.
Richard It’s very very difficult to do.
David I know it’s difficult.
Richard Today’s world, we’re bombarded with everything and hardly anybody is bombarding us with the idea of saving money.
David No, no I mean it is keeping up with the Joneses, advertising, this, you know, social media I think is the worst thing ever invented almost for personal finance because you see this ideal life of all these people who are perfect and rich who can afford all these things and you try and do that by borrowing.
Richard So if a person is in financial trouble, what steps can you take to turn the situation around?
David Well the first thing I recommend is that the person or maybe the family we’re talking about is to start to track where their money is currently going. In my opinion, whatever you track tends to improve, like for example, your Fitbit or your fitness tracking watch, if you’re aiming for 10,000 steps in a day you’re much more likely to do that because you know how many you have done. Similar thing with personal finances, because we aren’t required to do this, there’s no government authority requiring us to track our personal spending. We’ve got to track our business expenses for tax purposes, but not personal spending and because we don’t have to do it, most people don’t. I think that’s a big mistake. I think if people just took the time to track even for a few weeks or a one-month period, ideally you do it ongoing every month, but just for one-month track where the money in your family went. Now this is harder for those people with multiple accounts, multiple credit cards, multiple bank accounts, that makes it very difficult because you’ve got so many different sources that you have to summarize.
Richard And you have to do this together too.
David That’s right. You want a comprehensive summary. You don’t just want what you spent cash on, but what did you spend with your credit cards, your bank accounts and cash. I know its labor intensive, and most of your viewers aren’t accountants, but that information is golden because that’s your personal fingerprint, that’s very personal to you or whoever is doing the tracking. I think that’s step number one to try and convince people to sort of tighten up. Because if you see where the money’s going then you’ll know, okay here’s the big money drains then the next time it comes to spend that, it might twig you to say oh actually that’s going in this category this is an area we should cut back. So personal financial tracking whether it’s doing it manually, if you’re lucky enough to have a computer with spreadsheets maybe download your banking information. There’s a website called that I have no affiliation with, owned by Intuit, where you link your bank cards and your credit cards and it does the tracking for you. Any method you can use to get a summary of where your money’s been going, I think is step number one.
Richard Essentially in doing that you’re making it real for yourself, right?
David Exactly.
Richard Numbers to a lot of people probably are just that — numbers. They become real when you translate the number into a large coffee at Tim Hortons or something like that.
David Yeah and you know I’m all for cutting out the small things but really if you want to make significant progress it’s the big things that you should really be thinking about if you can cut them back. For example, those people that have a house with a mortgage, it might make sense to consult a mortgage broker to try and get a better mortgage deal the next time when your mortgage gets renewed. Think about the big expenses. Think seriously about your car strategy, cars are huge cash pigs for most people. Whether you buy or lease, they’re going to suck money out of your pocket for the rest of the time that you own that car. Think seriously about the car that you’re going to get. Do you need a car? Can you use the alternatives – ridesharing, things like that?  So yes, I’m all for thinking about the small things but personal financial tracking or detailing your spending will show you where the big opportunities are.
Richard Don’t you think that for a lot of people, perhaps to a lot of our viewers here, the concept of for instance, do I need a car? That’s not something they’re going to ask themselves. In a real way I think I understand this. If you’ve you got to get to work and you got to get there at 7:30 in the morning, I’m not saying it can’t be done by bus or anything like that. The reality is, if you’ve got kids and sometimes just doing the shopping and things like that, you may not need a Mercedes Benz to do it. But to say do I need a car? Most people are going to come away saying yeah, I do. Now if you live downtown and everything is generally footwork if you’re in the center of a city, that’s often a strong argument because of the cost of maintaining it. But if you’re in the semi-suburbs or suburbs and all that, having a car is almost a necessity.
David That’s right, but then it becomes, okay well what car am I going to get? I think that that’s where a lot of people I think get into trouble. They need a car, no question right, then it becomes, well, how are they going to buy that car? Most don’t have $25,000 or whatever’s sitting around so it’s either a car loan to buy it or leasing.  I deal with this in one of my other books – the car lease versus buy decision. Leasing is not necessarily bad, it’s just more complicated than buying. There are more factors that you need to consider. I think the problem that people get into with leasing is if they go through the calculation they say okay I can afford a car with a car loan of say four hundred and fifty dollars a month and I’m going to pay that car loan off over four years, keep the car for eight years, they get four payment for years, brilliant, So they don’t go and lease that same car for say $300 a month, they go and lease a more expensive car for what they could afford to pay for months and then sentence themselves to lease payments for the rest of their life. That’s what I think gives leasing a bad name. But yeah, no doubt about the fact that for many people a car is a necessity, but it is a big item. If they track their spending and all the costs associated with owning and maintaining and running a car – oil, gas, maintenance, insurance – it’s often a big chunk of cash for most people and the bigger the car the bigger the cash outflow.
Richard It certainly is one of the major items in a family budget, a monthly budget.
David Yeah.
Richard One of the things you are here about, let’s just segway off to something else here for a minute, the idea of a reward card or reward cards. You have some thoughts on them.
David Yeah, well, basically for non-credit card revolvers, for people who pay off their credit cards every month, then as a myriad of options, a cash back card, travel card and you might as well get the card that’s best for you.
Richard In other words, use the rewards.
David Use the rewards, right. It doesn’t cost you anything because you’re paying off that balance.

But the value of a rewards card is often around 1% of the amount that you spent. For a credit card revolver that is paying interest at 20% or more, that’s a terrible trade-off. My suggestion for credit card revolvers, if you can’t afford to pay out the credit cards, just get rid of any kind of, you know gold card or any kind of benefit card. Call the bank up and say replace my gold card with a base card, no bells and whistles. Often the interest rates are half or less.

Richard Is it?
David It often is yeah because you know you’re getting tricked essentially by thinking you’re getting all these rewards right there.
Richard And you’re accepting the idea that the interest rates are offset by rewards and probably not paying any attention to it.
David Probably not, but if you sat down and did a pure mathematical analysis, a rewards card where you must pay them the twenty percent is a terrible investment. It just doesn’t make any sense.
Richard The math doesn’t compute.
David The math does not compute, no, no.
Richard Another thing we hear a lot of and see some of certainly in my business is the balance transfer and offers.
David A balance transfer offer and the first thing with respect to that is it’s a very competitive market, these deals are always changing but a balance transfer offer will come from another credit card company. You might get junk mail from your credit card company asking you to transfer balances from another credit card and essentially what the new company will be doing is saying,  look you owe $10,000 on your other credit card and if you transfer that to us we’ll charge you 0% for six months. Sometimes it’s better at 12 months, sometimes it’s two percent. You immediately reduce the interest you’re paying, say it used to be 20 percent on the previous credit card is now down to three years zero percent. The problem is that period expires and that’s why these other credit card companies are offering that to the person because they know the person is unlikely to change their attributes, change their ways, their habits. After that six-month period that credit card company is going to be the one that’s charging twenty four percent. That’s why they will be willing to take that financial hit of offering them this seemingly great deal.
Richard We just hit on something there – the idea of getting into that rut. I have had the same car and home insurer for the last 52 years; do you think I’m in a rut?
David Well, it may be worth shopping around once in a while.
Richard Yeah but I have a tendency not to be interested in shopping around. I’m reasonably satisfied with everything. I don’t think I’m overpaying; I may be, I don’t know.  Some amount of inertia sets in, the same thing must happen with credit cards, right? And this is why the credit card company can afford to offer six months no interest because once you’re there for six months you’re not going to move.
David That’s right yeah because I mean life is busy people have kids to raise and then driving everybody all over the place going grocery shopping and most people at the end of the day they’re beat. They don’t want to sit down in front of a computer and search for different credit card options or whatever it is and that’s the advantage the financial institutions have is this inertia among consumers.
Richard Sneaky Devils
David Well, they know how to make money, right.
Richard We’d like to hear your views on HELOC – home equity line of credit.
David Home equity line of credit are becoming very popular. Essentially it means if you own a house it’s worth one amount and you have a mortgage amount that is lower, there’s room that you could borrow on a home equity line of credit. Because the financial institution is lending you money and they have a claim on your house, if you default, the interest rate is lower than a regular unsecured line of credit. This is almost irresistible for many Canadians obviously. Because the housing markets been doing pretty well, they’ve got room and they borrow for who knows what. House renovations, maybe trips.
Richard It seems to me very attractive to the senior citizen types, like me.
David Well for anybody with cash flow issues, it’s very attractive.
Richard But it seems to me that as you get up in years that maybe you’d want to take those trips that you’ve never had a chance to take.
David Well, this brings up the whole area of reverse mortgages.
Richard Which is the same thing, isn’t it?
David Well it’s not technically a home equity line of credit, it’s a different product. The problem is that it’s very expensive, interest rates are high, there’s many fees you have to pay and there’s no competition. It’s the home equity home equity bank, I think it is, is the only one that offers a reverse mortgage so you can’t shop around. The problem is, while it’s attractive to get that money up front, they’re charging you a higher amount of interest so that when you move or pass away that reverse mortgage is often a very high balance. It’s a very ineffective way or an expensive way to get cash out. It’s much better to apply for a standard home equity line of credit at a much lower interest rate, and again this gets into your credit score and your income and all that.
Richard Have you run across people beyond the age of 65 who likely have retired or about to retire. Certainly, their income is going to be heavily based on their pensions. These people seem to have a great deal of difficulty in getting any kind of credit, even with equity in a home. Have you run into that?
David Yes, I know because the banks have their checklists and their ratios to look at with respect to your income usually according to your tax return. You got to conform to these ratios. I mean if we can recommend to people, I recommend to people, even before they retire while they still have a job is the best time to apply for a home equity line of credit. Then that’s much easier because as you say you go into retirement your income goes down you might not be eligible for it.
Richard I think there’s more to it than that. There’s the negative side of lending, not every loan will work out the way it was intended to. People will run into problems and all that, and the lender very often has to take action to recover his money which will take the form of collection calls and lawsuits and things like that. This is what I see every day when people come to me when these things are happening. One of the things that I’ve seen is the difficulty people have had to solve their problem through some form of consolidation. Because now they’re on the fixed income pensions and creditors are very reluctant to lend money to somebody with only that kind of income because that kind of income can’t be seized.
David Gotcha, okay that makes sense.
Richard Probably not something that you see all that much at your end of all of this, but it does affect how people might look at a home equity loan type of thing or reverse mortgage or something, it may be the only place they can get money.
David Yes, I think reverse mortgages even though it’s expensive and there’s many fees, if it means being able to afford groceries then go for it.
Richard Or that trip to Spain.
David Perhaps.
Richard David thank you very much. It’s been very, very informative and I’d like to remind everybody that you can get much more of this, you can find out all about David’s other books – Crushing Debt, which you didn’t explain to me – Are we crushing the debt or is debt crushing?
David You can read it both ways, so it depends who you are whether debt’s crushing you or I’m telling you in the book how to crush your debt
Richard A lot of double entendre. I’m sure the rest of the book is just as good.
David Yes, I think
Richard Also, you operate a blog?
David I have a website, it’s
Richard I never talk about hair. But anyway, thank you very, very much for all the information you’ve imparted to us and, well, thank you
David Thank you.

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    Since 1992, Richard Killen & Associates, a Licensed Insolvency Trustee, have helped thousands of people resolve their financial problems. With 25 years experience in this industry, our president, Richard Killen, and the rest of our team understand the difficulties that honest people can sometimes find themselves in. This expertise makes it possible to provide you with a service that effectively deals with the issues.

    Serving the GTA for 25 years