Finances are something that we have to deal with everyday, but many of us don’t feel confident taking the next step on our financial journey. Without even getting into different account types or investing, there’s a lot to cover in the finance world that we tend to ignore. To help us learn more about our money and how to become financially literate, we’ve brought back Certified Financial Planner Jared Webb from Design Wealth!
Financial literacy starts with us learning what we want from our money, and how we can use it to help for the present and the future. In this episode we’re really looking at how to make money work for us, and the importance of paying ourselves first – something that Jared says is super important. Many of us might not think of finances as something interesting to learn about or manage, but Jared is here to really challenge our perception of money and wealth.
This episode takes a look into what financial literacy is, how to become financially literate, and how we can set ourselves up for a wealthy mindset. Jared is also here to help us find the right financial planner for us, and figure out where we fall on the scale of financial literacy. This episode is such a great starting block for your financial journey, and we can’t wait for you to listen!
Want to learn more? Join the UM Club and check out our previous episode with Jared! Every week brings us new topics and awesome speakers, so join now!
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Guest Expert
Jared Webb is one of the founding members of DesignWealth. A Certified Financial Planner (CFP) with over 14 years of experience, Jared brings a vast array of experiences and skillsets to help clients and the community. Jared’s passion for raising expectations when it comes to financial advice is surpassed only by his love for his family. Jared is married with 4 kids and a dog. He has a mortgage, works full-time and attends virtually all of his family’s extracurricular activities.
In This Episode We Talk About
00:26 – Who is Jared?
01:35 – What is financial literacy?
11:57 – The scale of financial literacy.
15:37 – Budgeting vs cash flow.
36:24 – Re-gifting and out of the box presents.
39:03 – Choosing the right financial advisor for you.
50:31 – Resources and final thoughts.
51:50 – Where to find Jared!
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Resource Links
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UM Club Facebook page
Design Wealth
Contact Jared: [email protected]
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FP Canada
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Read the Full Conversation
Hello and welcome to another episode inside the Unapologetic Moms Club. Today I am welcoming back Jared Webb from Design Wealth, who you may recognize from our Investing 101 Episode. And today we’re talking about financial literacy. Is it really that important to be financially literate? We’re gonna see today. So welcome, Jared, thanks for coming back.
Thanks for having me.
Yeah! So for those that haven’t listened to our previous episode together, who are you? What do you do? And why are you so passionate about it?
Well, thanks, Jannine. My name is Jared, I’m a father of four here in beautiful Victoria, BC. I’m the CEO and founder of Design Wealth. And basically what we are is a holistic, full-service financial firm. And what does that mean? Well, basically, we’re financial coaches, financial mentors, we like to call ourselves wealth mentors. Because at the end of the day, it’s kind of like having a coach, a fitness coach, for your money. You got to do all the heavy lifting, you got to do all the exercises, you got to put the time in, and the energy and the effort. But that coach is there to guide you along the way, give you proper techniques, proper exercises, etc, we just do that for your finances.
And so we guide you along the process and through your life. And really, it is something that we are very passionate about. And we want to extend our relationship with our clients for, you know, many, many, many years. It’s a long, long road, it’s a marathon, not a sprint. So that’s basically, in a nutshell, who we are and what we do.
I love it, I really like the coach perspective with it. Because we look to coaches for business, health, all different things. And finances are a massive part of our life. It’s how we do the different things that we do and consume. So it’s very helpful to be able to have professionals to help with that side of things. So what is financial literacy?
Well, I think the way that it is currently defined, is financial literacy is having a knowledge of finances, being knowledgeable in finance. The problem is, though, is that that’s the extent of the definition. Where’s that marker, that measure, that determines whether an individual is financially literate or not? That’s what we have failed to yet define for everyone.
Are you considered financially literate if you understand the difference between a checking account and a savings account? Or are you financially literate if you can measure the yield curve of a bond? Are you financially literate if you can look at analysts reports, etc, on different companies, and be able to make a determination on which company to invest in? That type of stuff is really where that definition is – I would liken it maybe to medicine.
So my example that I would use – first of all, we don’t insist that everyone should or can be medically literate. To the extent that I know the difference between Advil and Tylenol. So ibuprofen, acetaminophen, like I kind of understand the difference. That’s it. I can’t set a bone. I can’t diagnose a tumor or a fever, or if it’s just bursitis or something, I have no idea. Does that mean that I’m medically illiterate? And should I have more knowledge? No, if I need something, I go to the doctor or I go to physio or I go to any one of the disciplines that might be able to help me in their expertise.
But I find – and I don’t know if your audience finds that when we talk about financial literacy – we kind of put the onus back on the consumer. And I find that quite disheartening. And I find that it makes people feel, or could make people feel like, for lack of a better term, stupid. Like they don’t get or they don’t understand finance, or they don’t understand or feel financially literate, because it’s being portrayed as something that everyone should have be. It’s undefined. You need to know everything about finance to be considered financially literate. I just don’t think that’s the case.
Yeah, there’s so much grey area to it.
There is. And I think really, what I would love to see, is greater conversation around human behaviour. Because human behaviour has a significantly greater impact on our decisions with money than anything to do with financial literacy ever will.
So here’s an example. Most people would agree that if you could drive 10 minutes down the road to save $5 on a $25 item, we would. If we’re going to buy something for 25 bucks, and we can save 20%, we can save $5, we might get the car drive down the street for that $5. If we’re buying a $500 dress, suit, TV, and it’s $495 10 minutes down the road, how many of us are gonna get in the car? And five bucks is five bucks. But the fact is that we do what’s called ratio accounting. $5 on $25 is a great deal. $5 on $500 is not. But it’s five bucks.
And so human behaviour plays a much greater role than the logical, rational selves that we would like to think we are. Fantastic podcast for your listeners would be Hidden Brain, I’m just listening to it – actually this morning – on basically money habits, etc. And it’s all based more on human behaviour. Their last two episodes have been money scripts. So we all have a script on money, or multiple scripts on money. They can be changed, there’s good news. And the other one this morning was more about that mental accounting, ratio accounting, and behaviours that cause us to set budgets and bust them. So yeah, fantastic podcast.
Yeah, the behaviour piece is so true when I think about like my personal experience, especially through my early 20s with debt, and kind of the behaviour cycles that I would go into with spending and then wanting to just kind of like duck my head in the sand and kind of that different behaviour cycle. And even like paying down debt, and then repeating the same thing with the kind of like, deals on sales and things like that, and getting that bit of like shopping high, essentially. And I knew the concepts, like yes, you want to spend less, pay it down. I understood that financial literacy piece of it, but it was the behaviour patterns that I was really stuck in.
Absolutely, absolutely. And the funny thing is, is that no matter how financially literate you are, you’re human. And these are human traits. And they have – you know, I can’t stress this enough – such an impact. I’m even like that, you know, I can justify to the moon and back why I need to buy a new power tool for a one-off project. And I can back that up, I can have a list of 20 items, pros, absolutely I need this item. But, you know, it’s one of those things.
So, you know, the thing that I want people to start to question is to what degree is this whole financial literacy pursuit? How financially literate do they want to be? Not saying you don’t become knowledgeable, that you don’t apply critical thinking. If something doesn’t add up if someone’s talking to you – much like, hey, question your doctor, question your accountant, question your lawyer. Absolutely. I mean, we welcome questions, we want questions, it means you’re engaged and you’re actually listening to what we’re saying.
At the same token, we don’t spend time to become literate when it comes to dentistry so that we can perform our own root canal to save $3,000, you’re just not going to do it. You’re not even gonna get your spouse to become knowledgeable in that to perform that if that’s not what you do. You know, I’m sure doing your own root canal is probably pretty difficult with the reverse mirror image.
Yeah, I would not recommend attempting that.
I don’t know if you want to trust your spouse to do that, I don’t know. Does that hurt? Does this hurt? Is it this tooth?
But, you know, I really don’t want people to beat themselves up if it doesn’t make sense. My daughter, she’s 15 going on 16, and she’s going through math, we’re talking about math, and she’s writing graphs. And I mean, stuff that I probably used a graphing calculator for in grade 10. And, you know, I was talking to her going, it’s almost like – because she’s very smart, I’m very proud of her – but concepts, until those two nerves and those two synapses fire and connect. It’s not that someone is, again, unintelligent, or anything like that. But until those connections are made, they just don’t get it. The light bulb doesn’t go on.
And finance is mathematics and it’s mathematical. So it requires the right story, the right analogy, for an individual, for them to put those two pieces in, they go, “oh, I get it now,” and they could do it forever from that point. But until that connection is made, it can be very difficult to understand.
And so I think people taking some grace with not maybe getting all that they are being told that they should get from the industry and from media and from talking heads. And just understand that you know what, there are people like us, like myself, that you can ask a question and say, “hey, I just I don’t get this, how does this work? You know, is it important? Should I worry about it, etc?” And, you know, reach out, don’t be afraid to ask questions. I know most people in my industry, those that are – and majority of them are worth their weight in gold – are more than happy to just share our knowledge, almost sometimes to a fault.
But it’s definitely one of those things. So I think, yeah, I would encourage people to study finance to the extent that they want to, and that is enough. That’s the point of financial literacy that you need to achieve. Whatever is enough for you. The rest of it, hire someone. I mean, just because I know how to do plumbing doesn’t mean I’m going to do my entire house. We can come up woth all these analogies, but they’ll revert back to someone that’s more experienced. I’m paying not for their time but for their expertise. To avoid any pitfall or things that they may have gone through so I don’t have to. They can share that knowledge and that understanding and what they’ve lived through with me. So same with other people and professions.
Yeah, that makes a lot of sense. I like how you related it with the trades and things like that. So I’m thinking like for you, in an ideal world, if you were to kind of categorize that financial literacy scale, and kind of what the pathway could look like with say, like, you’d mentioned checking and saving, maybe personal budgeting and that sort of thing. And then where people might start to peter off, want to look for more help, or pursue their interest? What would that kind of financial literacy scale look like to you?
Yeah, yeah, great question. So I think that the basic stuff that we need to understand is cash flow. Cash flow is king: if you don’t have cash, you can’t do anything.
Yeah, you’re not buying groceries.
Yeah. You know, and, yes, credit, you know, credit is not a bad thing. It’s not evil, it’s not anything like that. Credit is actually a great tool and instrument. If you think about it, again, logically, remove the human side and think logically, I can use somebody else’s money, interest free for 30 days, and then pay it back. If I compound that over my lifetime, leaving my money aside, it makes sense. But we tend to spend when we don’t have the money, that’s what gets us in trouble.
But I think understanding their cash flow, what their expenses are, what their income is, understanding those things. One thing I will share with people with regard to this – kind of a little bit higher, but I hear so many people talk about taxes. Doing taxes and not wanting to work extra hours or whatever, because it all goes to taxes. Not the case. Okay, so in Canada, we have a tiered tax system. It’s basically like steps. Only the dollars that you make that are small on that step are taxed at that rate. It doesn’t affect anything.
Interesting, I had no idea. I was always under the assumption and I remember going through work, and kind of younger days, and people wouldn’t want promotions because they’d be working harder for less money.
But they’re not, right? So even at the top, even if you made enough money to be taxed at the top rate, which is almost 50%. Let’s say you were $1 into that tax bracket. That top tax bracket, only that dollar is taxed at 50%. Everything below that is at a tiered or graduated scale down. Okay. And basically the first – I don’t know if most of you know this – but the first 11,000 ish give or take is free and clear. So the first $11,000 you make every year is yours. Right? Everything from that point onward is taxable. So, you know, you make 70 grand, the first 11,000 is free and clear. You’re only paying tax on 59,000. That’s why they have what they call a – this is going a little bit down a rabbit hole – but marginal tax rate and average. Marginal tax rate is the top tax bracket your last dollar is in. The average tax rate is the average of the tax, the total tax divided by what you made.
So that’s the number one. That’s the one that’s more important, in many ways. Figure that out. So yeah, understanding cash flow, understanding the ins and outs of your money, your expenses. You know, setting up a budget or doing cash flow work. I much prefer doing cash flow work, I find budgets can be onerous.
What’s the difference between budgeting and cash flow work?
So I find that when we do budgets, any budget that I’ve ever seen out there, a couple of things that I have issue with. I guess it was a couple of years ago, I went on Google and searched free budget worksheet, personal budget worksheet, and I looked through oh, gosh, must have been two dozen of them. The problem with every single one of them was they were counterproductive or counterintuitive to creating wealth. If you read any book, blog, listen to any podcasts about wealth, any talking head, the principle for creating wealth is pay yourself first. Put money aside for yourself first, then pay everybody else and spend the rest.
Well, every budget worksheet I saw had the pay yourself first at the bottom. The first expense everyone had was rent/mortgage. Now, that’s a major, don’t get me wrong, and it should get paid. But with putting the savings at the bottom, people sort of aggregate their budget to zero. They look at their income they go “oh my rent, my utilities, my groceries, my car, this, my clothing, my gifts, blah, blah, blah. I’ve got 50 bucks left over. Okay, that’s my savings.” Well, no, you need your savings first, and then budget the rest.
The other thing that’s really difficult with budgets, and some people do like this and they do this. Despite my profession, I don’t. But you go to Walmart, or you go to Costco, or any one of these big box stores, and you buy a plethora of things, you buy gifts, something for summertime, you buy your groceries, some clothing, and a mixer for the kitchen, because you needed one. I’m not saying you’re overspending, necessarily, but you bought all these different items. You go home. Are you going to itemize your receipt from Costco or Walmart into the different categories for groceries and sundries and gifts? No. And calculate the taxes? No. Because nothing’s like itemized on your receipt, right? So it throws your budget off.
And again, using that human behaviour side, if you haven’t marked in colours, like red green, or plus minuses or whatever. You’re going to be over budget in your groceries all the time, and not accurately depicting your clothing budget or your gift budget, because you haven’t separated those out.
Now, for those that do, great, all the power to you, love it, fantastic. And there are people that that do, but most people don’t. So if savings is always at the bottom and if you do use a budget, put the savings at the top, please do yourself a favour and do that. If you’re going to Walmart and Costco and that type of shopping like my family does, itemizing receipts just doesn’t work. So what we do instead is we look at it from a cash flow perspective. What we do is we take what’s your income coming in? So what hits the bank account every month, okay.
Now what happens, we take money out, I recommend 12%, at least 12% towards financial planning. This is short-term savings, long-term savings, risk management insurance, like life insurance or critical illness, things like that, extra, at least 12%. Then take into account all of your fixed, recurring, measurable costs: rent, content or house insurance. If you do own property, property taxes, things like that. And take those off. Your car costs, the car costs, I use our finance, like leasing finance costs, insurance and average gas – gas is obviously really high right now. I just drove by and it’s like $2.20 right now. I’m gonna borrow my kids bike. It’s got streamers, it’s pink, it’s beautiful.
I’d love to see that.
If it ever happens, I’ll send you a picture. And then the last one is going to be personal cost. So like your cell phone bill. I mean, yes, you can negotiate that once every two years or whenever contracts up, but it’s pretty much steady. Right? So, subscriptions, gym memberships, things like that. Once you’ve taken those out, you’re left with what we call your variable spend. This is what you have for things that you have control over.
Things like groceries – now you can’t control the fact you have to put food on the table. But you can decide whether or not to shop at Walmart or more expensive, maybe Market on Yates or Millstream. You know, again, no judgment there or whatever, but just the dollar you spend, how far will you stretch it? That’s your choice. You can choose whether or not you buy a $50 T shirt at a trendier shop, or a, you know, $15 or $20 t-shirt at Walmart. Right? So I mean, you have a choice on how far that money stretches out of that variable spend.
And ultimately, what’s really interesting about that, is that’s just the math. This is the cash flow, the inflow and outflow. As the saying goes, if your outflow exceeds your inflow, your upkeep will be your downfall. So, inflow, less money already spoken for, plus savings, leaves you with your remaining amount. Take that amount. And what we like to do is divide that, because we’ve calculated on a monthly basis, but we break it down to weekly. Don’t divide by four, there’s two months in the year that have an extra payday. So what we always recommend is when you’re making these calculations, make sure you account for those two extra paydays. Because it does have a significant impact.
It’s like working for 13 months in a year, is what it’s like. But you break it down to 52, like the number of weeks, on a weekly basis, your variable spent. And I found that’s been the most effective for people to track that it gives them guardrails. They don’t find it limiting, because it’s not saying don’t buy coffee. I mean, I love my coffee. These things that we vilify, like, you know, a $7 coffee at Starbucks or buying a new pair of shoes or whatever. I mean, if you have the money, spend it, that’s fine, that’s great. But if you don’t, then don’t. But it kind of sets guardrails for people.
So we’ve gone down a bit of a rabbit hole, I know I haven’t really answered that spectrum question. So I’ll bring it back to that. So you’ve got your cash flow, you’ve got income and outflow as at that base understanding. The other base that I would really encourage people to do is just to recognize things like mental accounting, the fact that any purchase that we make, we can back it up with as much logic as we want to justify that purchase, okay?
Talking and communicating with their spouse about money, or their partner if they have one, is really, really important. I think that speaks to greater understanding of financial literacy than anything. When you start hiding that stuff or not sharing, it can cause a lot of issues. And then you know, to your point, maybe if you use retail therapy – which is a very real thing – you use that to feel better about yourself because other things in your life aren’t going well, you’re really just in that vicious circle of not talking about it. You’re having problems with money, so you go and spend more money to feel better, it just amplifies the issue. So that type of stuff is regular.
Now, you want to start expanding from there. So like, again, basic in and outs of money, understanding how credit works, understanding sort of the basics of debt, mortgages, things like that, so very, very basic. And understanding what a mortgage is, that’s the extent of it. Then you can start to move, and you want to start looking at things yourself. You can look at things like what is an investment? How should I view an investment – an investment is something that makes your money make money. Whatever that might be.
Understanding the difference – this is very important – between tax strategies, or tax planning accounts, and investments. I think we covered this last time, but you know, RSPs and TFSAs. As I’ve said many times, I’ve heard the “I don’t like RSPs, my RSP doesn’t make money. I don’t like RSP.” Well, what’s in your RSP? “Well, I don’t know, it’s an RSP.” An RSP is a tax strategy. It’s an account, it’s not an investment, it doesn’t make you money. It just tells the government how to tax it.
In fact, your RSP is exactly the same thing as your pension plan. So if you love your pension plan, you should equally love an RSP, they’re the exact same thing. Your pension plan is invested in something, which is why it’s making money. So you have retirement money down the road. You know, that sort of thing. So that would sort of be the next sort of step on a financial literacy scale, understanding investments, you know, there’s stocks and there’s bonds. And then there’s derivatives and there’s commodities, you know, commodities would be Bitcoin, oil, gold, wheat, that sort of stuff.
And then you can start to really get into, from that perspective, start to get up into financial knowledge around tax and estate planning. And now we’re getting into like, this is your career now, certified financial analyst, like looking at PE ratio reports and financial reports from companies, that sort of stuff. So I would say there’s almost very generally three tiers. Basic, you like to play dabble in that, it may not be your forte, but you have an affinity for numbers and math and finance, you like it. You read financial books, that will be sort of the do it yourself person that really likes it. And then you’ve made a career out of it, then you’re actually doing stuff.
But I would caution people to not conflate financial advice with investment advice. And we often do that. So don’t confuse those two, they are not the same. A financial advisor, it may or may not be a financial advisor, they may be an investment advisor, and advising you on investments. But that’s only one pillar of financial planning. And that’s really, really, really important.
Because, you know, when we do our cash flow, and we take that 12% out for financial planning, some of that money might be going to pay off debt. Like we’re just taking that out of the equation right now and saying, can you live on the number that ends up at the bottom of the equation? If yes, then great, we have extra money to do stuff with to get you on track. If it doesn’t work out, then you either need to make more money, or we need to figure out some other solution. But we’re trying to understand, is there even any money at all in your cash flow to pay down debt, create an emergency savings plan, you know, start investing long-term, put money aside for kids’ education, pay down that debt, take that trip, whatever they might be. So I would say there are sort of those three tiers.
Yeah, that makes a lot of sense. And I feel like when it’s broken down like that, it almost makes finances more approachable in a way. Because I know, personally, I shied away from learning about investments and all of that because it just seemed like so much. And like you had mentioned, like the PE reports and things like that, like, for me, I just don’t have time for that. I’m not going to be spending my time looking at all of these things and making the decisions for which one’s best and when to buy and sell. So I don’t have to. I can know the basics, what kind of return I want, different risk levels, and then look to a professional to handle all that other stuff.
Exactly. And you’re 100% right. But the problem is we – I say we, I’m talking about media – we made it seem like it’s something that should be so easy, everyone should be able to do it. And how often I mean, we’ve seen the ads, which are really just selling the marketing of a brand or like a product, you know, get your stock analyst software to do yourself on the side of your desk on the weekends and make millions. If it was that easy, the world would be rich. We’re not rich for a reason.
And I mean, again, other issues, social injustice, poverty, the disparity in income, yes, it exists. But we also haven’t had the amount of opportunity for the average person that we have today, we truly haven’t. In the last 100 years, it has only become the opportunity for someone who is a worker to participate in the profits of a company in the world. This is this is incredible.
In fact, it was a couple of years ago, I can’t remember the numbers exactly. But one of our partners that we do our investments through had pointed out that for the first time ever in the history of the human race more of the population in the world is above what’s considered the poverty line than below. So of the entire global population, more people are above the poverty line than below, first time in human history.
Oh wow. And that’s based on people, like per person rather than dollar.
Exactly, so whatever the global poverty line is, however they calculate it. But it was an amazing feat. We’re not saying that there’s not disparity, that there’s not a mass amount of poverty in the world and that it’s not it’s isolated or in a pocket right here, there’s probably pockets of poverty over here and wealth over here, etc. But as a general hold, the first time – and it’s not that it’s oscillated or fluctuated, this is the first time ever that more people are living above, maybe marginally, but at least above it. I mean, I find that positive.
Yeah, it speaks to an opportunity.
It’s there, right? It means we’re moving in the right direction, maybe not as fast as we want to, maybe not at the speed, maybe not doing the right things. We’re stumbling as we go. But I do think it speaks to the opportunity that we all have.
You know, the other thing about finance and money, it takes time. It’s the only thing that we have, we trade our time for money. We go to work, I trade my time at work for my time with my kids, I get a paycheck so I can spend time with my kids. I mean, it’s counterproductive and counterintuitive, but it’s what we do. Hopefully, you like what you do and so you can get paid to do what you love to do.
But, you know, we also don’t have the time – we can’t speed up our paychecks. They’re either every two weeks or every month. Even though we work more, we’re not gonna get paid for another two weeks. The bills due on Wednesday, and we don’t get paid till Friday. That’s stressful. That’s a cash flow issue, the cash in isn’t corresponding with the cash going out. It doesn’t mean you don’t have the money, you just don’t have it today. And so there’s various things like that that make it difficult for us, because we don’t really have control, the clock just marches on, steadily. And despite our best efforts, sometimes it can be very hard to just have to sit and wait for the next two weeks, for the next paycheck, next paycheck.
But time is also a really huge friend, for those of us that have it, as it will allow – even though now it takes a long, long time, but to amass wealth, to create wealth, is something that does take time.
There’s another podcast, the original podcast I was listening to last week, pointed out something very interesting that I think you might appreciate. We tend to hold in esteem, on social media particularly and all the influence, those that position wealth and a wealthy lifestyle as flashy ads, you know, designer clothes, nice restaurants, etc. But what they’ve actually found is that those people are simply marketing themselves and a brand and trying to sell you on that.
What they’ve actually found is – they did a study where they looked at those that had x amount and then those that had about 10 times wealth than their counterparts. But they found that the maximum that those that had 10 times the wealth of their counterpart actually spent was two times. So even though they had 10 times the wealth, not income, but wealth, they only spent a maximum of two times what their counterpart might spend on things. Not five times, not three times, you know, so we’re not dropping 50 grand on a designer watch. Maybe instead of spending 200, they’d spend 350, you know, 300, 350, maybe.
Interesting. So that’s on average?
On average, and what they were saying is that that’s how the wealthy create wealth. Mostly the wealthy people are the ones that you don’t know are wealthy. Your next door neighbor that’s got $3 million in the bank, and they drive, you know, a 1996 Toyota Corolla or something. You wouldn’t even know what to look at them, right? But that’s why they have wealth, they don’t buy things. They have true wealth.
And they could, they could buy things. And so I think that there’s this – what the world portrays as being wealthy and a wealthy lifestyle is in complete contrast to the way wealthy people actually live in this world. It’s a huge discrepancy. But yet we keep force-feeding everyone this idea that this is what life could look like, this is what the designer kitchen can look like. The flash and the palm and trying to keep up with that will make us all broke, it truly will. It’s not to say you can’t or shouldn’t – if you have the money, spend it, go ahead.
But for a lot of people, this aspiration that they have, is not really a reality of what it is to be and how most wealthy people live. It’s not that they don’t do well and they’re not worried about money. They take nice trips, they do what they want, but they’re not overspending. I thought it was very fascinating in that podcast as well, learning about that, because I never even thought of that.
Yeah, that’s really interesting. And another reminder to just not believe everything you see on social media, to be chasing those flashy things and flashy lifestyle, right? One of my business mentors, I remember interviewing him for college project. And he had said, like, buy used, like, if you want different things, buy used, save the money now, you don’t need to buy new. And that was one of his big tips for building wealth is do your research, shop around, and save when you’re spending.
Absolutely. I mean, doing that with kids. Anyone with kids. I mean, my wife, she goes on, you know, Facebook, you know, Varage Sale, all those ones. And mostly, almost all the kids have secondhand clothes. I mean, one of the deals she found last year was Blundstones for all the kids. I mean, those things are, I don’t know, I’ve heard they’re not cheap. But she bought them all secondhand for a fraction. They were lightly used, not barely. And the kids love them. They wear them all the time. But you know, doing something like that, you’re not buying brand new, you’re going on buying secondhand for kids that are going to outgrow them anyways. Yeah, and getting out of that trap of needing to buy your own or whatever. But yeah, no, absolutely, 100%. Yeah, it’s fascinating.
Yeah, and that actually touches on a thing I want to normalize is gifting used, gifting things that aren’t in the box. For Christmas last year, I actually went to a big consignment marketplace that I think was like in October, and I did most of our Christmas shopping there. And the kids like loved it. And like, yeah, it’s not in a box. But they’re still more than happy with it. And the same with gift-giving with friends, like something that’s maybe a book you’ve loved reading, you can write like a note of why you think they’re going to love it. You don’t necessarily need to be buying all these new things to impress or keep up with the Joneses.
No, no. And again, a lot of that amazing stuff comes back to human behaviour and our perception of what people might think about it. It’s kind of like, if you’re giving a speech, and you forget an entire page out of your speech, but you just keep going, you totally blanked out you. Not one person in that audience will know you left an entire page out of your speech. Only person who will know that is you. And unless you bring it up, no one’s ever gonna say anything. Right?
You know, if I’m doing a home renovation, I know where the errors are. I know where I made mistakes. It bothers the crap out of me because I was like, “oh, I can see it!” And yet, people come in, “oh, this looks really good.” And I have to fight going “yeah, but you see that spot over there?” That’s when they’re like, “oh, yeah, I didn’t see that before.” I’m like, good one. Yeah, I could have sailed right through this.
But your point, we do that with our kids, you know, especially when they like stuff that I grew up with, or that was older, and they don’t make the toys anymore, or whatever. My wife searches, moves heaven and Earth really, for finding stuff. Orders it in, on eBay or whatever. But yeah, in a box, the kid has no idea. It’s Christmas. They’re ripping it open, wrapping paper off, oh, my gosh, it’s such and such toy. Right? And they just start playing with it.
So I think it’s fantastic. I think keep going with that. Because it’s something that we need to do. And also it’s a larger environmental and social thing, we consume so much. And, you know, if we can sort of slow that down a little bit, I think it’s important. And find value in things, not become so disconnected from our items and our stuff that we have.
Yeah, I completely agree.
I support that endeavor. Go on!
I love it. So going back to the financial literacy, and in terms of working with professionals, how can we protect ourselves, make sure that we are asking those right questions, fielding people to make sure we’re with the right match for us, someone that actually knows what they’re doing, isn’t going to take us for a ride, all that sort of thing. Because there is a certain level of knowledge you need to have or know what kind of questions to ask to be able to have those good relationships and be good with your money and all that stuff.
Well, I think the number one thing, like we do with anybody when we’re meeting somebody for the first time, the number one thing is just that split second decision, “do I like this person or not?” We have a very ingrained ability in our system – and we may not necessarily be accurate all the time, but that instinctive when you look at someone, you instantly judge them, “do I like this person or not?”
And then you get to know them and that sort of thing. But I think listening to your gut, listening to does it make sense? How does the person make me feel? You know, I hear a lot in finance from people that sometimes they feel they were talked down to, or they were made to feel, again, stupid for decisions or things like that. And I don’t think it’s necessarily that the advisor or the professional intended to do that sometimes, I mean. But again, going with that gut feeling. Are there any alarm bells going off there, anything about this? That would be my first initial thing. And that goes for anybody, right? Your doctor, your accountant, your mechanic. Do they give you a sleazy feeling? Or does this person seems legit? That’s number one.
Number two is you want to look at credentials. So it’s like anything, things like the CFP, Certified Financial Planners designation, CLU, which is the Chartered Life Underwriter designation, which is an addition to the CFP, CFP courses plus a little bit more with tax and estate and insurance, and how that all sort of goes together. Those are really becoming the cornerstone for what separates, if you will, a true financial planner, someone that looks at things holistically, versus someone that is siloed to say investments, or insurance, etc.
Not to say they don’t do a good job, or they don’t try to, I’m not suggesting that. But as a CFP – so the way the industry is, right now to act as an investment advisor, I just need my securities license or my mutual funds license. To act as a life insurance agent and provide advice there, I need my life insurance license. Okay, that will take six months.
I’m glad that you’re touching on this because I know someone that was telling me that like they know someone that got a new job, immediately books a senior analyst position at a bank, and they don’t have experience. And their title is senior analyst.
Exactly. And titles – they’re trying to regulate this right now, Jannine, they’re trying to pull this back. It’s a step in the right direction. They have an Ontario, they’re trying to push it across the country, which is great. It’s still a far ways away because we have money and big banks and stuff really pushing an agenda. They don’t want to lose their salesforce.
Exactly, I love how you put that.
Well, it’s true. And I can say that, I’m speaking for myself, not my association. But they fought in Ontario for this because the term financial advisor is not legislated, which means anyone – you can call yourself a financial advisor, financial planner, you can call yourself whatever you want. In Ontario, they’ve now gone ahead and legislated that you cannot call yourself a planner, financial planner or financial advisor, unless you have a designation or an accreditation. So a CFP, CLU, etc.
However, a mutual funds license has fallen under the financial advisor realm, because all the bank people have their mutual fund license and are advisors. And if they suddenly have to get all of their mutual fund people to CFP status, they’ll lose half their workforce. So they fought very hard tooth and nail to have that included, which sort of negates it, but at least it’s protected. It’s one step at a time. And that’s Ontario only, but make no mistake, it’s coming across the country.
But yeah, I would say someone that has letters after their name would be a sign that someone has taken the time to study and expand their repertoire. And there’s a bunch of other designations too, I just gave sort of the two; CFP is sort of the cornerstone, the main one of that.
I would look at that, I would look at whether or not they belong to any professional associations. So I’m a member of Advocis, the financial advisors Association of Canada, it is the longest voluntary professional association in Canada. It’s been around for about 125 years, I think, 130 years. We voluntarily belong to it. And what’s really amazing about it is, because of my role, I only deal with clients, like directly. I’m not one degree or two degrees separated from what clients are talking about. They talk to me directly about the problem they’re having.
So being that Advocis is my association, in essence, is the technically proficient voice of the consumer, if that makes sense. Because I can advocate on behalf of the consumer as to what they want, what they need, as opposed to people outside not understanding the way that the industry works and how much it is dealing with people. I’m really a part-time therapist a lot more than I do finance, right? I manage people not money.
But I would say, how do they make you feel? I would say, their credentials or what experience they have, to your point. How long have they been in the business? That’s huge. You want someone to be in charge of your entire picture and give you advice. And if they’ve done this for a year. Maybe they’re capable. But, you know, there’s a lot of stuff. I’ve done this for 16 years now. I’m still learning things. There’s still things – “huh, I never thought about that, interesting.” I mean, that’s what’s so fascinating about it.
And then, you know, credentials, experience, I would also look at who they’re affiliated with, who they use, how they talk about things. Do they focus on charts? Returns? Numbers? Are they trying to impress you? That type of stuff, versus listening to you, letting you talk, understanding what it is you’re trying to achieve. Because what we attempt to do, what’s unique about our business or our practice, is that even if the solution isn’t – or the answer isn’t – investments or insurance, just tools in the industry, we can still work together.
If the answer is pay off your student debt. So be it, we’re there for you. Right? If the answer is something else, then that’s fine, we can still guide you and provide financial advice. Even if that advice does not constitute you doing investments at that time or insurance at that time. There are people that I know that there’s no point to do insurance, others that they desperately need it and should have it in place, you know, yesterday. Everyone’s unique. So that’s what I would say, sort of look for those things, be prepared for questions that you want to answer.
Questions that I would ask. Basically covering those, your associations, your experience, you know, are they contract? How do they choose their investment options or their insurance options? Like who do they represent, who do they work with? And why? That’s also a thing because, you know, one of the things again, is we have new rules called know your product. And one of the answers has been – again, not picking on the banks – but their big answer to that was, “we’re going to get rid of all third party suppliers, mutual funds on the docket, and keep only proprietary funds here.”
Which, okay, not necessarily bad, but there’s an inherent conflict of interest. You go to the TD advisor, he’s gonna recommend TD. And TD as a business is keeping all of that money and sharing none of it with you. Right? And they’re charging the same rate as a third party independent would, you know, in some ways, you should almost discount that because you’re in house, but they don’t. So anyway, that’s a whole other conversation. But it’s one of those things.
I would look at things like that – not to say that the person at the bank doesn’t have your best interest at heart. And I will say, if they get you to do something more than what you’re doing now, they’re doing you a service. If you’re not putting $100 aside, and they get you to put $100 aside, and it all works and everything else has been accounted for into a TD fund, so be it. You’re better off than not doing the 100. So I will say that, I can’t sit here and say they’re all bad and that you never do it. But yeah.
Yeah, absolutely. But things to be aware of, like with the refining of the products. It makes sense as a business model, but you as a consumer have less options available to find your kind of perfect fit. And I like how you touched on how much they’re talking versus listening. I know one of my personal indicators of a quality professional is what kind of questions they’re asking me, because that’s how I can tell that they’re really trying to, again, find that perfect fit for me. What’s my lifestyle like, like even with a hairdresser with mine, she’s like, “what kind of maintenance do you do? How do you take care of your hair?” And then she knows to kind of do a cut that doesn’t take an hour of getting ready in the morning because that’s not my lifestyle. So it’s similar for all different professions.
Yeah, yeah, the experience should be – the first meeting, really, in my opinion, there should be no conversation about fund options, what’s your risk tolerance, how much money do you make, etc. The first meeting really is, “hey, tell me about yourself. What do you like to do? What’s going on?” etc, just a get to know type of meeting. If you don’t get that, then you might be getting more of the investment advice, not financial advice, not the holistic picture. If they’re not going to ask you about your cash flow, if they’re not going to talk to you about things you like, what your goals are, your dreams, your interests, etc. Those are sort of flags that you’re getting investment advice, which is not financial advice.
That makes a lot of sense.
Yeah!
Perfect. Well, that was very informative, as usual. It’s always great talking with you. Do you have any kind of final thoughts, tips, or resources you might want to share before we close things up?
If you’re not in Victoria and you’re looking for an advisor, you can search Advocis. They do have a find an advisor tool that you can use. So if you wanted to find one, you know, start there and find an advisor or a planner that is part of the association.
And that’s Canada-wide?
Yep, it’s Canada-wide. Same with FP Canada, which is the certification body for CFPs, so certified financial planner designations, so you can also find an advisor on there. So you can start there for a search. If you’re not sure where to look. Reach out to me, I can reach out to my networks and that sort of a thing as well. I’m happy to try and help with that. Yeah, that’s why I say start there. If you’re not sure where to start, start there. It’s unbiased. It’s just here’s a list of people with that belong to an association and have their credentials. And then you just start doing interviews. Yeah, that’d be a really great place to start.
Fantastic. And where can people find you to chat with you?
Well, you might see me walking down the street.
Or riding your bicycle with the pink streamers?
Maybe! But yeah, you can find us at DesignWealth.ca. We’re there. Or if just want to stop by, we’re a little bit under construction right now. But we’re on Shamrock street right by the Nissan dealership. So, you know, we’re right sort of centralized on the island, between Victoria and Sidney and Westshore. But yeah, DesignWealth.ca is the website so you can check us out there. And if you want to book a meeting to have a chat with us, learn a little bit more about what we’re about and we’d love to meet you.
Fantastic. Well, thanks again. And thank you to everyone who is listening, you can go on and head over to our Facebook group or group chat and we can dig into things a little bit deeper. Till next time, take care!
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