Category Archives: Interviews

People behind the scenes at SPP.

Krystal Yee blogs her way to financial independence

By Sheryl Smolkin

24Apr-krystal_yee.jpg.size.xxlarge.letterbox

 

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Hi,

Today we are continuing with the 2014 savewithSPP.com series of podcast interviews with personal finance bloggers. I’m talking to Krystal Yee who blogs on “Give me back my five bucks” and the “Frugal Wanderer.”

With over eight years of professional experience in marketing, communications, and writing, her career has spanned a variety of different industries. From ghost writing in the provincial government, event coordinating for a professional hockey team, to marketing cold water survival gear – she’s done just about everything.

In 2012 Krystal lived in Stuttgart, Germany. There, she worked remotely for clients such as the Toronto Star (moneyville.ca), Canadian Living, and Flare Magazine. In her spare time, she loves travelling, hiking, tweeting, and analyzing baseball statistics.

Hi Krystal. Thanks for joining me today.

Thanks for having me.

Q: When and why did you start your blog “givemebackmyfivebucks”?
A: Well, I started that blog back in February 2007, because I was finding it hard to relate to my friends in real life about the money issues I was having. I was uncomfortable bringing up a topic that, at the time, seemed really personal.

So once I found that personal finance blogs existed, I became really inspired and motivated, knowing there are other people out there like me who wanted to change their lives. That was the reason why I started my own blog.

Q: Seven years ago you had over $20,000 in student debt and no money. Now, you are a debt free homeowner. How did you do it?
A: It was a lot of hard work and sacrifice, but I knew that I needed a life change. And I decided not to hide from my debt any longer, and that was really, really scary. The first thing I did was calculate how much I owed. I gave myself one year to get out of debt. So I started building budgets, saving money any way I could, and increasing my income. And actually attacking my debt from all of those angles helped to speed up the process.

Q: What are some of the mistakes you think that you made along the way before you got on your debt repayment plan, and what would you do differently if you had it to just do all over again?
A: I think one of my biggest mistakes was not creating a realistic budget. I wanted to get where I wanted to be as fast as possible, but I didn’t take into account how unsustainable that would be. After taking that year to get out of debt, I thought I could keep up with this bare bones budget to save money faster but I started to get really tired of what I perceived as constant deprivation.

As a result I found that I was rebelling against myself and my goals, and that was a really strange feeling. It actually took me a few months to realize what was actually realistic in the long term. And even today, I really have to question the budgets I make for myself and the goals I’m settings, just to make sure they satisfy the saver in me, but it also lets me live the kind of lifestyle that I want.

Q: Now, in “givemebackmyfivebucks,” you discuss your financial goals, your successes and failures. You put up weekly and monthly budgets. That’s really baring your soul. What reaction have you had from family and friends and your readers?
A: Well, for the first few years I started my blog, I was actually anonymous, so I felt safe. I was scared of what my family and friends would say about how much I was sharing on the internet, but once I actually started writing for The Toronto Star’s website moneyville.ca, I realized that speaking frankly and opening myself up, was really empowering.

Q: In 2012, you moved to a very small apartment in Stuttgart and worked remote. What were some of the challenges you faced and how did you overcome them?
A: It was really liberating moving to Germany and working for myself. You know, everyone dreams about quitting the 9-to-5 routine and becoming your own boss. I imagined sitting in European cafes all day long people watching and writing for clients. While I did that almost every day, because of the time zone difference, I also had to work a lot of late nights since my clients were all in North America. It was a really big adjustment for me.

But I think the biggest challenge was the isolation. Not only was I in a country where everyone spoke a different language, but working for myself. So when I moved back to Vancouver, I went back to a corporate job because I needed that daily interaction with other people.

Q: You love to travel and you manage to travel economically. You write about your experiences on the “frugalwanderer.” What has been your favorite trip to date?
A: Oh, my favorite trip was the one I took in November 2013 to Morocco. It was a mix of the people and the landscape and the food that made it so exciting. And I never thought I’d get the opportunity to travel to Africa, sleep under the stars in the Sahara, drink tea in Marrakesh or go hiking in the mountains. It was fantastic. And once I took the time to budget out how much everything costs and how I could save money on the trip, it quickly became a reality.

Q: How many hits do you typically get when you post a blog?
A: Well, it really varies depending what the content is and whether other websites pick up the blog posts. If it’s just my traffic on a daily basis, you know, it can be anywhere from 2,000 to 5,000 visitors a day. When I get picked up by another website, it can go up to 10,000 visitors a day or higher.

Q: What have some of the most popular blogs been?
A: Surprisingly, over the last seven years, my most popular posts have been about how to upgrade ramen soup to make it taste better and how much you’ll need to save up in order to move out of your parents’ house the first time.

Q: Oh, that’s interesting.
A: Other popular posts have been a comparison of prices at Target Canada to Target USA; what your net worth should be by the time you’re 30; and a post about the myth of having to travel when you’re young.

Q: What have some of the spin-offs from blogging been for you?
A: Having my blog has opened up a lot of doors for me that I never would have thought possible. What started out, essentially as an online diary to help me stay accountable for my goals has turned into this vehicle that I can actually use to make money and help people at the same time.

You know, through blogging, I’ve been offered writing contracts with moneyville.ca, The Toronto Star, Canadian Living, Flare Magazine, Metro News and other publications. I’ve spoken to the media on different topics and I get to partner with really fun companies at the same time. Recently I finished a campaign with H&R Block and I’m a regular Twitter contributor for RBC.

So I think that those kinds of partnerships make blogging fun and make it more interesting. In the future, I hope to continue blogging about my journey towards financial independence. And I really love how my hobby and what I’m passionate about has turned into a part-time job for me

Q: If you had one piece of advice for Canadians trying to get their finances in order, what would it be?
A: Oh wow, just one piece of advice. If you’ve never taken a good look at your finances, my advice would be to create a budget and stick to it. I mean, it’s fun to spend money. So we convince ourselves that it’s okay, because we have a better job around the corner, a bonus that will cover the shortfall, or because we think we deserve it.

But the truth is no matter how much money you make, there’s always going to be something you can’t afford. When I first started budgeting, I saw it as a restriction. It was a way to stop me from having fun. I didn’t understand that it was helping me manage my money, so that I could have even more fun with my life.

And by choosing where my money went and how I spent it, and by living below my means, I was creating a really stress-free lifestyle which I never had before, and a better future. So I think budgeting is the number one thing that I would tell people to do.

Thank you very much Krystal. It was a pleasure talking to you today.

My pleasure. Thank you.

This is an edited transcript of the podcast you can listen to by clicking on the graphic under the picture above. If you don’t already follow Give Me Back My Five Bucks and Frugal Wanderer, you can find them here and here. Subscribe to receive blog posts by e:mail as soon as they’re available.

Kevin Press – BrighterLife.ca

By Sheryl Smolkin

27Mar-Kevinpress

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Hi,

Today we’re talking to Kevin Press as part of our continuing 2014 series of SavewithSPP.com podcast interviews with personal finance bloggers. Kevin is the Assistant Vice-President of Marketing Insights at Sun Life Financial in Toronto.

His blog, Today’s Economy has appeared on Sun Life’s Brighter Life platform since 2009. Kevin started his career in 1998 at Rogers Healthcare and Financial Publishing; where he had several editorial and marketing positions, including over 3 years as editor of Benefits Canada. He has also volunteered for the Canadian Pension & Benefits  Institute for almost 15 years in many roles, including as National Chair.

Thank you so much for joining me today, Kevin.

Sheryl, thanks so much for the invitation. It’s good to talk to you again.

Q. A blog is a major time commitment. How often do you blog? 
A. These days, it’s just once a week. I’m up every Wednesday but over the years it’s been sometimes twice a week, sometimes even three times a week in the early days.

Q. Why did you decide to start blogging in addition to your more-than-full time job and your volunteer activities? 
A. I love my job. I’m so proud of the team that I lead. But, the truth is – and I think you can relate to this – I don’t think I ever stopped being a journalist. I was asked to launch the Today’s Economy blog back in early 2009, right in the heart of the financial crisis, and that was really a very easy decision.

Q. I can understand that. You can take the man out of journalism, but you can’t take journalism out of the man! What are some of the topics you cover in your blog?
A. As I say, my chief goal is to help readers understand what is happening in the global economy, and here in Canada. So, in that sense, Today’s Economy is not a personal finance blog in the way that some of the others are. I certainly post a lot on personal finance, but primarily what I’m trying to do is focus on explaining key economic trends to a broad audience.

The Eurozone has been an amazing story to follow, and, more recently, emerging markets – what’s happening there now as the U.S. government slows down its quantitative-easing program. That’s a fascinating story. If I’ve helped Canadians understand these big stories, even just a little bit, then I think the blog is a success.

Q. Since you’ve started blogging, the Brighter Life platform has been expanded to include a number of other blogs covering a broad range of subjects. Tell me a little bit about a couple of the other bloggers and what they write about.
A. One of my favorites is Dave Dineen. He writes a blog called ‘Dave’s Retirement Journey’. Dave was actually a member of my team years ago, before he decided to take early retirement I think he’s helped a lot of Canadians make the transition to retirement successfully – just writing in the first-person about his experiences, making that transition himself.

Anna Sharratt does really good work for us on the health beat. She has a blog called Living Well. Gerald McGroarty writes about work issues, but I have to tell you, he’s written a piece recently about an extraordinary story. Last year, Gerald experienced a sudden cardiac arrest, and his wife, who is a registered nurse, saved his life.

Q. I’m going to have to look for that one.
A. It’s called ‘Could You Save a Life?’

Q. How many hits do you usually get when you or the other bloggers post?
A. It’s a really wide range. I’ve written posts that get no more than a couple of hundred visits and others have got well into the six-figures. I can tell you that after years of being a journalist, this blog reaches a larger audience by far than I’ve ever been able to connect with before.

Q. So what have some of your most popular blogs been?
A. The economic forecasts attract a lot of readers. Any of the retirement research we do like our Unretirement Index always scores well. Specifically, what we expected to learn from that research was that many Canadians will work past the traditional retirement age of 65 for lifestyle reasons. But because what we’ve actually ended up tracking are the evolving views of Canadians post-financial crisis it’s turned into even more of an interesting story.

Q. Poll after poll, particularly during RRSP season reveals that Canadians are not saving enough and that they’re worried about how they will live in retirement. Why do you think so many people find managing their finances so difficult?
A. We really believe that the way we can help Canadians most is empower them to act. So research shows, time and again, that adults want to do the right thing – they recognize that lifetime financial security is achievable. It’s just hard for them to get there, it’s hard for them to start. So our goal is to educate.

Q. You published 20 Smart Money Moves at the beginning of the year and you suggest that people maximize their employee benefits. Can you give me one or two examples where you think Canadians are really leaving money on the table?
A. First, a lot of employers sponsor capital accumulation plans – or defined contribution plans as they’re sometimes called – and match employee contributions up to certain limit. So, lesson number one – if you’re lucky enough to have one of those plans, take full advantage.

Lesson number 2 is if your employer offers a group registered retirement savings plan, do what I did. Move your individual RRSP funds over to the group plan – you save a lot in terms of management expense ratios.

The difference between the group environment versus individual RRSPs is quite dramatic. You still realize all the same benefits from your registered savings and you’ll get a better return in the long run.

Q. Interesting. I know the Saskatchewan Pension Plan has employer-workplace programs, and they also offer similar advantages.

Employers and insurance companies spend a lot of time and money communicating with benefit programs – why do you think so many employees are still not getting the message?

A. I think that a lot of folks struggle with the technical nature of the subject, and it really is incumbent upon financial institutions to keep working at finding ways to present information, in the most understandable fashion possible.

Q. If you had one piece of advice to help Canadians better manage their finances, what would it be?

A. One of the best things I ever did was take the Canadian Securities Course. The textbook alone is worth the price of the program. People who are interested in working in the industry very often take that as an early-stage educational opportunity. But what I took away from it was so much more. It’s just such a valuable learning experience. I think it will help you to understand your finances in a very meaningful way.

Q. The federal government is not interested in expanding CPP. A few provinces, Saskatchewan included, are rolling out the new pooled registered pension plans. Do you think PRPPs will be the carrot that helps more Canadians to save what they need for retirement?

A. I’m a big fan of PRPPs. I think they have that potential. The fundamental idea behind the PRPP is that too few Canadians (43%) have workplace pension plans. But even that number is misleading because so many of those folks are public sector workers. In the private sector, fewer than a quarter of workers work for an organization that sponsors a plan. So, the idea is that PRPP can fill that gap. And I’m very hopeful about their ability to improve the pension system in this country.

Q. Youth unemployment is a huge issue. Your Unretirement Index shows that older workers are working longer. Are seniors clogging up the pipeline? How do we get more young people into good jobs? How do we give them a good start?
A. This is such a tough story. I have to say this one of the stories, since I started blogging, that bothered me the most. The unemployment rate among young adults in this country has been stuck at about twice the national average since before the financial crisis.

But of course, this is not a new story. Youth unemployment hit 17.2 percent in the ’92 recession. It hit 19.2 percent in 1983. What’s interesting and what was a surprise to me is  that there actually is no evidence to support the notion that young people can’t find work because older workers are retiring later.

There are lot of good ideas out there about how to help young Canadians. I think the best relate to the choices that young people make in terms of their careers and their education.

There are certain areas of the economy that are more dynamic. There are certain skills that are more marketable. And I think if young people are as strategic as possible, and as parents, I think if we can help our kids be as strategic as possible in making education and career decisions, then they will be well positioned to transition more easily to the workforce. 

Q. So, one of your New Year’s resolutions was to write a Today’s Economy e-book. How’s that going for you?
A. Oh, I love you holding my feet to the fire. What I’ve done is I’ve put together a collection of posts that are not quite so time-sensitive, that still stand up over time.

A lot of what I write is about what’s happening right now and probably won’t have relevance a year, two years down the road. I think that we can help to tell the story of what’s been happening in the economy since 2008 and I’m targeting the second half of the year to pull that together.

Q. You’re ahead of me on that one. Thank you very much, Kevin. It was a pleasure to talk to you today.

A. So good to talk to you again, Sheryl. Thanks for talking to me today.

This is an edited transcript of the podcast you can listen to by clicking on the graphic under the picture above. If you don’t already follow BrighterLife.ca, you can find it here and subscribe to receive blog posts by email as soon as they’re available.

Jim Yih – retirehappy.ca

By Sheryl Smolkin

27Feb-retire happy with Jim

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Hi,

Today we are continuing with the savewithspp.com 2014 series of podcast interviews with personal finance bloggers by talking to Edmonton-based financial educator and author Jim Yih.

Jim’s blog Retire Happy was recognized as the 2011 Best Personal Finance Blog in Canada by the Globe and Mail. He is very active in social media and also made MoneySense’s 2013 list of the top 10 financial tweeters.

While he has been blogging for just over three years, Jim is well known as a personal finance columnist in the Edmonton Journal and other Canadian media for the last 14 years. He also has written eight books.

His company Retirement Think Box consults with innovative employers to incorporate financial education and wellness into their benefit programs using the full spectrum of communication tools including workshops, web-based learning, audio/video presentations and electronic newsletters.

Thank you so much for joining me today Jim.

Thank you very much for having me. I’m excited about this Sheryl.

Q. Jim, you are well known to Canadians as a result of your column in the Edmonton Journal for over a decade, your books and your speaking engagements. Why did you also decide to also start a blog?
A. Good question! Originally, the blog was simply a place to host all of the articles that I have written over the past 17 years. I never realized what blogging would evolve into and how interactive it can be.  At the end of the day, the reason for RetireHappy.ca is to help Canadians retire to a better life and make retirement the best years of your life. I hope that does not sound too cheesy but RetireHappy is a major Canadian resource for retirement, investing and personal finance. We really focus on timeless information.

Q. Tell me the topics that are covered in your blog?
A. Retirement is a big topic and we try to cover issues around things like investing, taxes, money management, estate planning, government benefits (very misunderstood) and really any issues around general finance.  We even cover lifestyle issues like health, working in retirement and psychological issues.

Q. How often do posts appear? How frequently do you personally post?
A. We publish new content 3 to 4 times a week. I used to write 2 to 3 times a week but it got to be too much.  I have a fulltime business as you mentioned. Now I only write once a week and I have brought on a team of other writers to provide opinions and content.

Q. Tell me about the group of other bloggers who post regularly and the added dimension they bring to the blog on a day to day basis.
A. I’ve been around for over 23 years in the financial industry. I’ve got lots to say and opinions to share but I also believe there are many different ways, ideas and strategies to achieve success. So I’ve brought on some great writers in the last 18 months with lots of experience and ideas and I think it makes for a better experience at RetireHappy.ca.

  • Donna McCaw is retired and travelling the world and sharing practical retirement experiences. She has also written a retirement book called “Its Your Time”
  • Sarah Yetkiner has built a nice following with her articles on money personalities and the psychology of personal finance.
  • Doug Runchy is very active and specializes in writing about government benefits.  He responds quickly to all comments and he’s just a tremendous resource for our readers.

I’ve assembled some successful great financial advisors like Scott Wallace and Wayne Rothe. And we’ve got some other writers coming aboard this year like Chad Vinimitz, Sean Cooper and Meagan Balaneski. So we’re increasing our contingent of writers and I think it’s proven to be a good strategy.

Q. How many hits does your blog typically get?
A. We get 5000 to 10000 page view per day. We have thousands of people on our newsletter and email list and following us on Twitter. I’m humbled by how quickly this has grown and the size of our following.

Q. What have some of the most popular blogs been?
A. Since inception, my articles on CPP and taking CPP early have been consistently popular.  And now with the addition of Doug Runchey talking about it, all the articles on CPP and OAS continue to grow in popularity.

But we also have some Online guides that are designed to be great resources for readers. The most popular is our Online Guide on RRSPs, next would be the one on RRIFs, others include one on RESPs, Government Benefits and Financial Advisors. We are currently trying to update all of these.

Q. If someone is checking out your blog for the first time, should they just dive in, or do you recommend a place to start?
A. There is so much there. We often talk about how to make it easy for readers when there is 17 years of content on the site. So I have 3 suggestions:

  • Use the search bar at the top. Type in anything related to retirement and personal finance and we’ve probably written about it.
  • There’s also archive page where we’ve organized every article by category.
  • Or if you have no idea what you are looking for, start at the bottom of the home page with the must read articles and the most popular articles.

Q. What have some of the spin-offs from blogging been for you? 
A. I think its interacting with awesome people online that is the most rewarding. I’ve met a lot of cool people across Canada and even around the world.

I’ve connected with great Media personalities like Rob Carrick, Gail Vaz-Oxlade, Bruce Sellery, etc. I’ve met awesome bloggers like Frugal Trader, Preet Banerjee, Blunt Bean Counter, the Canadian Couch Potato, Boomer and Echo, Tom Drake and so many others.

I also love interacting with readers who write in and tell us how the site has helped them.

Q. I recently read that Scotiabank found that 31% of Canadians planned to contribute to their RRSP for 2013, down from 39% last year. And BMO said 43% of those surveyed planned to contribute, down from 50% in 2013. Why do you think these numbers are dropping?
A. We live in a world that’s all about spending. Every major holiday has turned into an excuse to have a big giant sale. Saving money is simple but not easy. Spending is easier. Spending is more fun. There are more opportunities to spend than to save. That’s led to too much debt and I think for all of us, this can led to lower savings.

Q. What role do you think participation in the Saskatchewan Pension Plan can play in Canadians’ retirement saving plans?
A. What I like about SPP is that they have tried to make savings simple, easy and affordable. I think a lot of people need that. SPP has simplified investment options, the fees are lower, the returns are decent and the process is streamlined and easy. You can even contribute using your credit card!

I think the easier we make it for Canadians to save, they more likely they will do so. More choice sometimes paralyzes people from making decisions. So I think simpler options are necessary and SPP has done that and it’s available to all Canadians.

Q. How can people calculate how much they will need to retire and the amount of money they need to produce that income stream?
A. The average Canadian will need $2.654 million dollars by the time they retire . . . .

That’s a fictitious number of course, but we are all seeking a number. There are millions of calculators out there to help people find it.

However, for most people, the calculation is less important than their savings rate.  The formula is so simple. This is not rocket science. Save 10% of your income for as long as you possibly can. Start as early as you can. The more you save the more you will have in retirement.

Q. What do you think the biggest hurdle is for Canadians who want to get their financial affairs in order and save for retirement?
A. For most people, the hurdle is themselves. You need motivation, action and discipline. Eighty percent of what you need to become financially successful and retire happy you already know:

  • Put together a game plan
  • Set goals
  • Spend less than you earn
  • Pay off debts
  • Pay yourself first
  • Know your spending

Q. If you had one piece of advice to help Canadians get over this hurdle, what would it be?
A. Do something but not too much. Make small changes one step at a time. Find some like-minded people to support your goal. Try to make it fun. If you are competitive try to compete with someone to meet or exceed your savings goals.

Thanks Jim. It was a pleasure to talk to you today.

I really enjoyed our discussion, Sheryl.

This is an edited transcript of the podcast you can listen to by clicking on the graphic under the picture above. If you don’t already follow RetireHappy, you can find it here and subscribe to receive blog posts by email as soon as they’re available.

Squawkfox takes the country by storm

By Sheryl Smolkin

Squawkfox aka Kerry K. Taylor on Parliament Hill
Squawkfox aka Kerry K. Taylor on Parliament Hill
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Today we are continuing with the 2014 savewithSPP.com series of podcast interviews with personal finance bloggers. Kerry K. Taylor aka Squawkfox is one of my perennial favorites.

Kerry started blogging in 2008 and has since been voted Canada’s Number One Money Blogger by the Globe and Mail.  She also wrote a book called “397 Ways to Save Money.” In Kerry’s own words, “Squawkfox explores frugal living topics that are sexy, delicious, and fun.”

Thank you for joining me today, Kerry.

Thanks so much, Sheryl. It’s a pleasure talking to you.

Q. How did you end up writing a personal finance blog?

A. I grew up in a very thrifty family. When I started my first job in an IT firm a lot of the engineers I was working with were just blowing through their paychecks.

Meanwhile, I was riding my bicycle to work and bringing my own lunch. They wanted to know how I managed to max out my RRSP every year. So I started creating little emails about how biking was great for your butt and good for your bank account. I also wrote about really earthy, fun things like how soaking dried beans could change your life.

They loved it and repeatedly forwarded my emails. My email list became so big that the engineers said I should have a blog so they could check it regularly and comment.  So I started the blog and my audience kept growing.

At some point I was just overwhelmed with how many readers I was getting.  And then I was voted Canada’s Top Money Blogger at the Globe and Mail and HarperCollins offered me a book deal.

Q: So who is your audience?

A. That’s a great question. I’m always overwhelmed when I see who is emailing me and commenting on my Facebook page or my Twitter posts. And it’s really people of all ages. Internet savvy seniors email me and say, “I wish my daughter or my son were more thrifty like you,” and then they forward my posts to them. I have college students who read my site because I write a lot about my student debt days.

Q: How frequently do you post? 

A: I don’t really keep a posting schedule and I think that surprises a lot of bloggers. However, the average length of my blogs is probably anywhere from 1600 words to 2100 words. And I usually include a lot of photographs or descriptions and an infographic to explain my frugal approach. So I generally aim for a few posts a month.

But, you know, if I don’t really have anything I think is worth saying to a large group of people, I just don’t say it. Because I don’t want to bug people I want to make sure I only put my really good stuff out there.  And it seems to have worked for me so far.

Q: Tell me about the range of topics you’ve blogged about. 

A: Well, anything from cutting your costs on groceries, to the cost of childcare, to the cost of raising kids. It’s really varied. I think money can touch every aspect of your life if you open your eyes and you see it.

For example, I was in a Starbucks a couple of years ago, and people were buying frappuccinos and I thought, what are they made of? I can probably make that at home. And, sure enough, I made a $4 tall frappuccino for something like 32 cents. That was a post idea right there that just happened by keeping my eyes open.

Sometimes it’s a career post; sometimes it’s a food post; sometimes it’s a tough love post. I wrote one about the real reason you have no money.  I did that kind of tough love thing because I was tired of people emailing me that they’re broke. And I said, “Well, then, do something about it.”

Q: So, how many hits does your blog typically get?

A: It depends. I’ve been on the front pages of Yahoo. I get a lot of social sharing on Facebook. I don’t usually give out the number but I’m not a teeny, tiny blog. I’m currently probably one of the higher traffic personal finance blogs on the internet.

Q: Tell me about some of your more popular blogs.

A: Well, the frappuccino one was unusually popular with readers. Anytime I knock off a product and make it cost less, it really strikes a nerve.

I wrote an article in my first year of blogging, called “Six Words That Make Your Resume Suck,” and that’s been hugely popular with people because it’s got a strong voice and a sense of humour.

People also love the tough love stuff when I kind of dish it out because I’m mean, but I’m kind of a friendly mean.  I think one popular blog that really surprised me was “how keeping your fridge well stocked and clean can really cut your costs.”

Q: What about your wedding blog?

A: Oh, my wedding blog. How to get married for 239 bucks. It was insanely popular.

I basically started with the premise, what do you need to get married? You need a marriage license and the services of a commissioner of sorts. Add those two together and it costs under 250 bucks.

So anything over that cost is really adding to your wedding expenses needlessly because the bubble machine and the horse-drawn carriage aren’t going to do diddly to get you hitched. Then I explained how I bought my wedding dress at a huge discount on eBay. I think I spend a hundred bucks on it.

I called around to see how much wedding cakes cost and discovered that as soon as you say the wedding word, you’re paying the marriage mark-up. I think my post about how I had a very frugal wedding really hit a note with people because rather than blow all that cash on one day, I saved it and bought a house. People either loved or loathed it, so it was a fun post to share.

Q: So you previously lived in rural B.C. Where exactly were you located?

A: I was in an area called Vernon, British Columbia and I lived on an organic farm with my husband’s family. We moved just recently to Toronto. I’m from Mississauga, and I wanted to come back home to live in the big city again.

Q: I understand you and your husband decided that Carl would be the primary, weekday caregiver for your daughter Chloe. Why was that decision made and how is it working out?

A: Both my husband and I work full time but for the first year when Chloe was home, Carl went on parental leave because he qualified for it at work. Because I’m self-employed, I don’t qualify, so we looked at the budget, we looked at the benefits he got at work, and we just decided that one of us is going to stay home with the baby and why not Carl? He loved it and it turned out he was the first guy in his office to take parental leave and after he did this, two other fellas from his office did the same thing.

Q: So what are some of the spin-offs from blogging? How has it changed your life?

A: Well, I never knew I had a voice that people connected to and I think that was a really big surprise for me. As a result of the blog I was asked to write books for a big publisher, which I really enjoyed.

I love talking about money in a really down-to-earth style that is very accessible to people. And I think it’s just fun to put up a post that is so different from what everyone else writes, because I kind of look at things sideways and try to be a little sassy about saving money.

Q. So how long do you think it will go on? Do you ever run out of ideas?

A: No. I have a book that’s so full of ideas it makes my head spin. It’s just a matter of finding the time to write. Ever since we became parents, writing has been really tough in the evenings and on the weekends.

Q: If you had one piece of advice for readers who want to better manage their finances so they can meet their financial objectives including a well-funded retirement, what would you say?

A: Well, I think a lot of people say focus on the small stuff, but I say you should focus on the big stuff!

Look at where you live, how much house you own, and how much house you owe to the bank. How much rent do you pay a month? All these really big decisions add up to a lot of money. The car you drive, or the car you don’t drive, that’s a lot of money as well.

We need to be more careful about these really big decisions because a couple of hundred extra bucks a month off your rent or your mortgage means that you can put that money into your RRSP or tax-free savings account. That’s real money you can retire on later.

Thanks Kerry.

It was my pleasure Sheryl.

This is an edited transcript of the podcast you can listen to by clicking on the graphic under the picture above. If you don’t already follow Kerry K. Taylor on Squawkfox, you can find it here and sign up  to receive an email each time a new blog is posted.

If you do sign up, Kerry will send you a free ninety-two page e-book, called ‘Frugal Food and Fitness.’

Talking to personal finance blogger Tim Stobbs

By Sheryl Smolkin

Tim Stobbs and his sons on their cross-Canada trip
Tim Stobbs and his sons on their cross-Canada trip

With this post, we are kicking off a 2014 series of interviews with personal finance bloggers. Many of the people we will be talking to are known to you already because we’ve linked to their blogs on our weekly edition of “Best from The Blogosphere.”

Our first guest is Tim Stobbs, a thirty-five-year old chemical engineer and father of two who lives in Regina and works for SaskPower. He was also a Regina School Trustee until the end of 2012.

Since 2006 Tim has blogged on Canadian Dream: Free at 45. He has also authored a book called Free at 45: How to Retire Early and Happy. In addition, in his spare time, he wrote a series of articles for the Toronto Star and has been interviewed by virtually every media outlet in the country.

Thanks for joining me today, Tim.

Thanks for inviting me Sheryl.

Q. You’re one busy guy. When do you find time to sleep?

A. I’m almost embarrassed to admit that I regularly get about eight hours of sleep. My young children go to bed early so I still have a couple hours every night to work on personal projects.

Q. So how old were you when you decided to aim for early, early retirement at 45?

A. I first came across the idea of early retirement back in my early 20s about 2001. But I really didn’t do much of anything with it until several years later in about 2005 when I did a series of online calculations and realized that I might actually be able to retired at 45. So I took that idea and started to blog with it.

Q. What response have you had to the blog? How many hits do you get?

A. Each blog post gets maybe about 600 or 700 hits. It works out to about 20,000 page views per month or so, give or take. It’s been an odd experience because I’ve had a lot of interest from various media outlets. I did a bunch of radio interviews.

The Toronto Star contacted me and asked me to write a series for them. One opportunity that was really out-of-this world was when CBC, The National, contacted me for a story on early retirement.

Q. I can understand that would be quite cool. So what blogs have resulted in the highest number of clicks or the greatest interest?

A:  I think the highest amount of interest I’ve seen on my blog has been in regards to the early retirement calculation series. About every couple years or so, I’ll dust it off and re-do the calculations just to keep them updated. People question my assumptions and share the basis of their own calculations with me.

Q. So that’s your own calculations, as your projections evolve towards your own retirement?

A. Yes. Realistically everyone can make assumptions, but inevitably life happens and things kind of veer off a little bit. So you’ve got to go back and correct them periodically.

Q. So how much do you and your wife figure you need to pay your bills after taxes?

A. Well, we kind of did an odd thing with our retirement planning. We actually aimed for a very barebones kind of basic spending level of $27,000 a year and then we figured we’d probably, for incidental income and other things,  that we would pull in another $5,000  for more fun stuff.

Q. What lump sum savings do you think it will take to support your lifestyle once you retire?

A. A grand total of about 1.1 million net worth, but the majority of that is going to be investments. So about $700,000 in investments, I figured would probably pull that off.

Q. Is the rest the value in your house?

A. Yes, the rest would be the equity in the house.

Q.I see that your mortgage is paid off and you figure you’ll be able to retire at age 42 now. The numbers dropped again?

A. Yes.

Q. How did you do it? What did you give up in order to meet this objective?

A. Everyone is always asking that but I’ve never actually sacrificed anything. I could have decided to spend more money or do other things. But instead, I kind of ended up doing a little exercise and went through my life and my spending and went, “What things do I really not care about?”

Like, my power bill, I really, really don’t get excited paying off my power bill every month. So what I decided to do was to see, “How low can I make that?” So I looked at ways to save energy around the house and dropped that bill down and repeated that across all of my various bills.

As a result, what I managed to do was really customize my spending to be heavily tailored toward my particular interests. So I’ll spend money on books or DVDs that I like, but I don’t spend a lot of money on gas or power bills.

Q. I presume your wife is on board with the program?

A. She is, but in a different context than me. I’m more driven by the freedom to do what I’m interested in. She’s more about the whole concept of security. For example, we had a car accident last week and she knows without any doubt that we’ll have the money for the deductible for the car. So, she just loves that as a result of our financial plan that we are financially secure.

Q. Do you still go on vacations, go out to restaurants and upgrade your phone every now and then?

A. Oh yes, we still do all that stuff. Like, for example, this summer, my sister-in-law moved out to Newfoundland. We decided to go out there for a visit. So we took a month long vacation and spent over seven and a half thousand dollars. We drove all the way out and back. Seven provinces with two little boys in the back seat, but we survived.

Q. So what does retirement mean to you? How do you plan to spend your time once you don’t have to go to work?

A. Well, as I talked about earlier, we aimed for bare bones because I really think I’m retiring too early to stop working entirely. It’s just nice to be able to work on what interests me rather than what pays me most. Right now, I’m doing engineering because, well, it’s my degree and I’m quite good at it. As an engineer I also make quite a bit of money. However I enjoy writing a lot. But unfortunately, unless you’re really good at writing, it’s pretty hard to earn as much as I do as an engineer.

Q. Are you saying that might at some stage leave your engineering job and take a chance at working on something else?

A. Yes. I’ll probably switch over to just writing novels or non-fiction projects, stuff where I don’t have to worry about a profit margin, as long as I do it because I’m interested in it.

Q. Your wife currently operates a home daycare. I understand she has some ideas about what she’d like to do when you are more financially secure.

A.  She kind of has her hobbies she enjoys and is looking forward to expending those a little bit or even maybe going back to school and learning a bit more about a few other topics that interest her rather than having to go get a degree because it’s something economically viable to do.

Q. If you had one piece of advice for readers who want to manage their finances so they can retire early, what would it be?

A. I think the biggest piece of advice I’d offer people is don’t worry about what everyone else is doing about spending. Look at your own spending habits and kind of customize your budget . It’s really possible to live on a lot less than people think if you’re not so caught up in doing what everyone else is doing.

So if you don’t really care about the newest phone, don’t drop the money every three years to get it. It’s sort of as simple as that in some regards. By minimizing your spending on stuff you don’t care about, you’ll have more spending money for future things like retirement or even just things that interest you more.

—-

You can follow Tim’s progress on his blog and also read interesting posts from several regular guest bloggers.

This is an edited transcript of an interview conducted on November 25th.

Talking to Alison Griffiths

Alison Griffiths podcast
(We apologize for the quality of this recording.)

Hi, my name is Sheryl Smolkin. I’m a lawyer and a journalist. Today I’m pleased to be continuing the Saskatchewan Pension Plan’s series of interviews with financial experts. My guest is Alison Griffiths.

Today I am going to ask Alison to share with us the answers to some questions about retirement savings she has written about recently.

Alison is an award winning financial journalist, best-selling author and broadcaster. She has hosted two acclaimed television shows, Maxed Out for W Network and Dollars and Sense for Viva.

For many years she wrote a a popular financial column for the Toronto Star and her  weekly column for the Metro chain of papers “Alison on Money” continues. In addition to her frequent speaking engagements and workshops, she has just released her ninth book: Count on Yourself. It’s a wonder she ever finds time to sleep!

Q. Financial institutions would like us to believe that every Canadian who is earning even a few dollars should save in an RRSP or pension plan for retirement. Do you agree? Can you give me examples of cases where this may not apply?

A. Ideally it’s good to save for your retirement one way or another. However, there are a couple of situations where people should examine that automatic RRSP contribution.

Situation 1

A post-retirement net income of less than about $16 000 is about roughly the cut off for a single person with a guaranteed income supplement. There have been a few cases that I’ve come across in the last few months where individuals who were getting the guaranteed income supplement after age 65, get to the required RIFF withdrawal age in their 70’s and suddenly they’re bumped out of that supplement payment which they’ve been relying on. If you think you’re going to be on the edge than it might be better to put it into a tax free savings account or a non-registered account

Situation 2:

Those who may face a claw back from government programs because of higher income. After the age of 65 you get an age amount personal exemption in addition to your existing personal exemption, but that exemption starts to get clawed back after a net income of only about $33 000.

It’s worthwhile looking at that post-retirement income, looking at the government benefits you’re going to get and for higher income people you might be better off and have more flexibility if you deposit to a TFSA or a non-registered account.

Q. What’s more important – paying off debt like a student loan, or starting as early as possible to save for retirement?

A. Students with carry forwards of tuition deductions and a student loan should take the first three or four years post-graduation and really hit that student loan instead of making RRSP contributions. It’s very worthwhile. Then they are in a situation where they can start contributing to their RRSPs without having to decide whether to pay off their student loan or or contribute to RRSPs.

Q.Is it better to contribute monthly or to deposit a lump sum one or more times a year?

A. For most people contributing monthly is a good idea. Investing every month, you’re going to sometimes invest at a market high but you’re going to also invest at a market low, so you smooth out those bumps via dollar cost averaging. Also the discipline is important.

Q. You recently wrote a column advising readers not to take out a loan to max out their retirement savings every year. Can give our listeners a few reasons why you don’t think that’s a good idea?

A. The reality is that rarely do I see it work out even when interest rates are low. It’s not just because the investment return plus the tax deduction has to be higher than the borrowing cost. You also have to pay the money back. The fact is it gets loaded onto the general debt individuals carry for three or four years and they never ever quite pay it off.

Q. How can people find out how much their investments are costing them?

A. The best way to do it is to look at the mutual funds you have. On Morningstar.ca you can easily type in the name of your fund. A report pops up that gives you a snap shot. You’ll see your MER – management expense ratio figure there, and that’s the percent you’re paying.

One thing you need to remember about mutual fund fees is that they have to be considered as a hurdle. The mutual fund has to jump over the hurdle of that 2.5% fee before you even start making money.

Q. How important are fees? If I’m investing $100, a 2.5% fee of $2.50 doesn’t sound like much. How much difference can paying say 1% instead of 2.5% MER on an investment make in terms of accumulated retirement savings over time?

A. It makes a huge difference – in small amounts of money it doesn’t seem to be too much. However, the difference between 1% and 2.5% over 15 years on a $10,000 investment is $5,000 in lost return. The other issue to think of is that not only do high fees reduce your gain, but they maximize your losses – in times of market volatility your losses get magnified.

Q. In your latest book you relate some humorous anecdotes about how people are more ready to discuss intimate details of their sex life than money. Why do you think finances and financial planning so hard to talk about?

A. Not only is money personal, but it also seems a lot of our self worth revolves around money, how much we have, how much we earn. When you poke at people’s self worth by revealing what might make them appear to be negative compared to somebody else, then they start to get very uncomfortable.

We also worry about getting ripped off by the people we’re in a relationship with. But as a result we don’t develop the confidence or the language skills to discuss money when it becomes necessary.

Thanks Alison. It was a pleasure to chat with you. I know Saskatchewan Pension Plan members will be eager to read your new book Count on Yourself and they will also want to check out your articles in the Toronto Star articles and other media.

Talking to David Chilton

David Chilton podcast

Hi, my name is Sheryl Smolkin. I’m a lawyer and a journalist. Today I’m pleased to be continuing the Saskatchewan Pension Plan’s new series of financial expert interviews with the Wealthy Barber himself…David Chilton.

The Wealthy Barber has sold more than 2 million copies in Canada, and last year — some 20 years later — The Wealthy Barber Returns was published.

I recently heard David speak at the Human Resources Professionals Association conference in Toronto and was delighted when he agreed to do an interview for the Saskatchewan Pension Plan Financial Expert podcast series.

Welcome David.

Q1. In your first book The Wealthy Barber, the well-to-do barber Ray Miller’s first and most important rule is take 10 per cent off every pay cheque as it comes in and invest it in safe interest-bearing instruments. Why do you think so many people have so much difficulty overcoming their inertia and taking that first important step?

A.1 It isn’t necessary to invest only in interest-bearing certificates. If you are a long-term investor building for retirement, Miller was fine with allocating some of the money towards growth-oriented vehicles like equities or mutual funds that have equities in them, but the basic thrust of saving 10% of every pay cheque is absolutely the key.

The problem today is that we love to spend, and so we resist any savings technique that limits our ability to go out and buy things. Also, society has taken on so much debt that it has squeezed our ability to save. It’s tough for people to set aside 10% of their net or gross income because they’re servicing debt now. We love to spend we love to keep up with the Jones’s, but to some extent, we’re sacrificing our future.

Q2. You acknowledge that it’s only human for the desires of Canadians to run well beyond our stream of “needs” into our pool of “wants,” but still maintain that many people have too much stuff. Do you think people should be making sacrifices today in order save for the future?

A.2 I do. And I hate the word “sacrifice.” It has such a negative connotation. I would argue after seeing thousands of people and their personal finances, that people who are saving successfully are happier, because they’re less stressed about their financial future. They are not caught up in that race to consume as much as they can.

Remember, nobody is suggesting massive cuts to your spending and an austerity budget. Let’s be realistic here, let’s set aside at least 10%, hopefully more. It’s doable. It doesn’t require major cutbacks – just spending a little less here and there to force savings.

Q3. How can people resist the temptation to buy more clothes, or jewellery or electronics – whatever discretionary spending is distracting them from saving for the future?

A3. It’s interesting. People who read my book say even reading about the psychology of spending has helped them have a little bit of a mind shift. But there are some safeguards that you can put in place. The problem in the last 20 years has been the ubiquitous availability of credit. It’s so easy to mindlessly swipe your credit card or write a cheque against your line of credit. If you want human nature to have less ability to sabotage you, take it out of the equation.

So you are seeing more people staying away from lines of credit now and I notice a lot of people going back to a cash-based spending system. They are taking out cash on a Monday and saying, my budget is $450. That money is in their wallet for everything from groceries to gas. When the money runs out, so does the spending. I love that approach because when the money leaves your wallet you feel a little pain and realize it is a finite resource.

When you are swiping debit or credit cards mindlessly, it’s too easy to spend and hard to keep track of. Spending quickly increases to an unacceptable level.

Q4. Tell me about the four liberating words of advice you give to people who come to you for help because they are overspending. Do they really work?

A.4 That is the chapter I hear the most about in the book and it’s a very simple concept. People really expect deep advice from me, but what I say is you’ve got to start saying to yourself and to others, “I can’t afford it.”

It’s hard at first, but when you start saying it then you realize, it’s not admission of failure it’s just accepting the reality. In fact it’s stress reducing because you are accepting the reality, you’re no longer stretching beyond your needs.

I cannot believe all the letters and phone calls I’ve had from people across the country who say they love the chapter. They’ve become used to it, they are embracing it and they are actually enjoying it.

Q5. Home renovation is a bottomless money pit that many people get sucked into in the hope of improving their property value or keeping up with the Joneses next door. When it comes to renovating or anything else, what are the four most expensive words in the English language?

A.5 Since the book has come out, I’ve come to think that I understated the case of excessive home renovation. We’ve received so many emails and letters from people saying if you think your examples are bad, look at mine.

I am not against home renovations. I renovated my own home a few years ago. The problem with home renovation is you do one room like your kitchen or your basement and the rest pale in comparison. And all of a sudden the cycle of renovation rolls on. With lines of credit making cash available, it’s very difficult to resist the temptation. I think of all the people I see who have line of credit problems, about 50% got that way through excessive home renovations.

Q6. The cost of housing has gone up tremendously over the years in Canada. Can homeowners depend on the value in their homes as a source of income in their retirement?

A.6 Well, not really. Seniors don’t necessarily want to sell their home in retirement. They like the neighbourhood. Many don’t move because they want to have the extra space at home so the grandkids can come and stay over. These are the kind of real life things that enter into decisions that so often are forgotten in financial books.

Many people do have a fully- paid home that has in fact risen significantly in value, but they can’t turn it into a financial asset or split an income off from it. They could take out a reverse mortgage, they could take out a line of credit but of course, those have their risks. You’re turning compound interest into your enemy instead of your friend, and a lot of people are hesitant to do that even when it does make some sense.

You have to be well diversified. And I am not against home ownership. In fact I’m very pro home ownership. But I think it is unfortunate how many Canadians I cross paths with who have emphasized home ownership exclusively as they built up the asset of their net worth statement and that’s a tough one because they don’t have any other assets to fall back on or to generate an income in retirement.

Q7. I know from your talk at the HRPA conference and your book that you live in a modest 1300 sq ft. home and granite counters don’t turn you on. What do you like to splurge on?

A.7 Probably more experiences than stuff. I am not a stuff guy at all. I can’t remember the last time I bought anything significant on the stuff front. But I do like to go to sporting events and playoff games, especially of my beloved Detroit Tigers and I’ll take the odd trip and bring my kids along.

I tend to be not a big spender, not because I am cheap. In fact I am quite the opposite. It is more because I don’t get a big kick out of stuff. I like relationships. And my hobbies are relatively inexpensive. Golf, is a little bit expensive, but I’m into a hockey pools and I love to read.

When I do splurge it’s probably on a trip. A second big weakness I have is that I eat out often because I travel so much. I am always on the go, and I don’t know how to cook so I eat out a tremendous amount. I did a spending summary in the process of writing the second book and I went “holy smokers.” It’s not just the sodium content that’s killing me here, it’s the cost too.

Q8. When do you plan to retire?

A.8 Never, I love what I do. I like to travel. I don’t want to travel as much going forward as I get older because it’s a bit of a burden being in an airport every day. But I really do enjoy my career. There are a lot of new things I want to try. I honestly don’t see ever retiring, particularly from speaking. Speaking is a favourite part of my job and I don’t know why I would ever leave it.

Thanks David. It was a pleasure to talk to you today. I know our listeners will be delighted to hear your common sense advice. And if they haven’t already done so, I’m sure they will want to get their hands on a copy of your new book, The Wealthy Barber Returns.

My pleasure. Thank you for having me.

Talking to Gordon Pape

GordonPape podcast

Hi, my name is Sheryl Smolkin. I’m a lawyer and a journalist. Today I’m pleased to be continuing the Saskatchewan Pension Plan’s new series of interviews with financial experts. My guest is Gordon Pape.

Gordon is an author of over 40 books, a newsletter publisher, journalist and all around financial guru. He writes regular columns for the Toronto Star and moneyville.ca among dozens of other media publications.

At age 75, he has just released a new book called Retirement’s Harsh Realities and it doesn’t look like he is planning to retire anytime soon. Today we are going to talk about annuities, and why an annuity purchase can be an important strategy for making your money last as long as you do.

Q. Everyone contemplating retirement has two key questions. How much will I need and how can I be sure I won’t run out of money? How would you answer these questions?

A. How much you need depends on the individual and the type of lifestyle you want to lead after retirement. A study done by Statistics Canada a few years ago found that people in their 70’s were spending about 95% of what they spent when they were in their 40’s. Yet conventional wisdom says you only need about 70% of your pre-retirement income if you want to maintain your standard of living. Based on those numbers it suggests that in fact you need more.

You need to look at your expenses in retirement and your sources of income such as CPP, OAS, an employer-sponsored pension plan if you have one and personal savings. There is no magic number.

You need to plan for the fact that people are living longer. Something to consider especially after the age of 80, is putting some money into a life annuity. It’s not a great place to put your money right now because interest rates are so low, but once the economy starts to pick up again and interest rates start to rise that’s the time to lock in a life annuity that guarantees you an income for as long as you live.

Q. Tell me how an annuity works.

A. You’ve saved money in a RRSP, you’ve converted it to a RRIF at 71 and the government requires that you draw down a minimum amount from that fund each year. As the years go by, unless you’re able to invest at a rate that keeps up with the rate of the minimum withdrawals, the value of the fund is going to eventually drop.

By the time you get to your early to mid 80’s, the depletion rate is too fast. You might consider using a chunk of you RRIF or all of it to purchase a life annuity from an insurance company, in exchange for a flow of income for the rest of your life.

The down side is you don’t have the money anymore. You won’t have an estate you can leave but it will be cash flow for the rest of your life

Q. Why have annuities fallen out of favour recently?

A. Low interest rates and the fact that people don’t like the idea of giving up their capital. They like to be able to control their money, so they can leave something behind for their children. When you buy an annuity you lose that possibility. However, you can buy annuity that guarantees the income for a certain period of time so if you die within the period your children will get some money.

Q. When is the best time to buy an annuity? Why?

A. The longer you wait, the more money you’ll get from the annuity. The company will pay you less money at 65 than 80 because your life expectancy is longer. If you can maintain a rate of return in your RIF around 6% then the optimum time would be within your 80’s.

Q. What questions should retirees and prospective retirees ask when they are shopping for annuities? What different kinds of annuities are available?

A. Research the amount of money that the various insurance companies are offering. There are tremendous variations in the rates that they are offering for the same kind of plan. There are annuity brokers who will do this for you and find you the best offer. There is no one company that consistently pays more than others. Desjardins has come up quite often, but not all the time.

It also depends on the type of plan – i.e. one company may offer money for a straight annuity with no guarantees, where as another company may offer a better rate for a joint and last survivor annuity which means it carries on until the last spouse dies

You also need to give some thought to the company itself – the solvency of each financial institution. There is an insurance fund that covers people in the event that their insurance policy goes belly up, but the fact is that you don’t want that to happen and don’t want to be forced on a fund that has limitations on it.

Q. What does it cost to use an annuity broker and who pays them?

A. The fee will be paid by the insurance company that you eventually do the business with. It’s like a mortgage broker.

Q. If someone came to you for financial advice, what portion of his assets would you advise that he put into an annuity?

A. It will depend on the individual and how large an estate they want to leave.

Q. What are the downsides of annuities?

A. The solvency of the company. Also, if you don’t get inflation protection, over a length of time obviously the purchasing power of the income that you receive is going to decline.

Inflation protection is expensive, in the sense you will get a lower monthly payment than if you do not have inflation protection. On the other hand it will guarantee that as the rate of inflation rises over the years, so will the annuity.

There are also “impaired annuities” for annuitants with a terminal illness. The annuity pays more because the purchaser has a shorter life expectancy.

Q. Would you invest in one yourself?

A. No, not at this point. I am managing my money well enough, and my wife and I have sufficiently large RRIFs that we don’t feel we need to buy that kind of insurance at this time of our life. Down the road when I am in my 80’s I may take a look at it.

Thanks Gordon. It was a pleasure to chat with you. I think Saskatchewan Pension Plan members will be very interested in your comments about annuities. They have the option of purchasing a competitively-priced annuity from the plan until age 71.

Talking to Jonathan Chevreau

Jonathan Chevreau podcast

Hi, my name is Sheryl Smolkin. I’m a lawyer and a journalist. Today I’m pleased to be continuing the Saskatchewan Pension Plan’s series of financial expert interviews with Jonathan Chevreau.

Jonathan was the personal finance columnist for the Financial Post from 1996-1998 and then for the National Post since its launch in 1998 until this year. He has recently been named Editor of MoneySense magazine.

Although he has authored or co-authored seven non-fictional financial books, his most recent work is “a novel about one couple’s turbulent journey to financial independence” called “Findependence Day.” And that’s what we are going to talk about today.

Welcome Jonathan.

Q. Is the expression “Findependence Day” a Chevreau original or has it been used before by others?

A. I would say it is a Chevreau original although at one point there was an unrelated film called Findependence Day. I just looked at the American Independence Day, played around with financial independence and came up with “Findependence Day.” The title came first, and then I thought I should write a book to go with it.

Q. You are known as a financial writer who writes serious articles and books about complex financial matters. What made you decide to write a novel?

A. I think like a lot of journalists there was always a secret closet novelist lurking because it seems like a more creative, long-term project than bashing out daily columns. Then there is always the example of David Chilton’s The Wealthy Barber.

Q. Although Findependence Day is clearly fiction, some of your characters and concepts seemed very familiar to me, so I have to ask you:

  • Is Didi Quinlan of the television program Debt March based on Gail Vaz- Oxlade’s show ‘Til debt do us part?

Well like most fictional characters it’s a composite, I would say she’s was certainly one of three or four people, keeping in mind the book was also written for the US market. We have a lot of financial reality TV shows now. When I talk to American journalists they’re convinced I am talking about Suze Orman. But I would say that Gail is probably the single closest model.

  • Were you thinking of Stewart McLean’s Vinyl Cafe when you created “The Vinyl Cave?”

Actually, that was based on Kate Dunn’s Vinyl Museum around the turn of the century. Then Peter Dunn had two Vinyl Museum stores in Toronto – one was close to where I lived on the Lakeshore.

  • Did you draw on Finance Professor Moishe Milevsky’s characterization of people as either “stocks” or bonds” as discussed by the financial advisor Theo in the book?

I think I actually did credit Moshie’s book in the fine print or in “Theo’s library”at the end of the book.

Q.  In the opening chapter, television host Didi Quinlan tells the young couple Jamie and Sheena Morelli that she is going to drill two words into their skulls: guerilla frugality. Is this phrase also a Chevreau original and what does it mean?

A. Yes it is original. I came up with that expression in a column long before I wrote the book. To me it’s like guerrilla warfare. In order to save and invest you have to first get out of debt, and then you have to continue to be frugal in order to build wealth. What I mean by the term is “guerrilla warfare on the economic consumption front.”

Q. Another thing Theo, the financial planner in the book advocates is developing different streams of income on the road to financial independence. Does that mean moonlighting or working at more than one job? Is that practical for hard-working, busy parents?

A. Ideally you can always give yourself a raise. You can get a raise from your boss or change jobs and earn a higher amount. You can aIso take on extra work to earn another $10,000 or more on nights and weekends but this may be stressful and perhaps not the optimum approach if you have a young family.

Ultimately as you know anybody who is a retiree probably does have multiple streams of income – two or three pensions, government benefits and private savings in a RRIF. But when we’re in the wealth accumulation phase, if both partners are employed we tend to be dependent on one or two different sources of income.

You have to go from one or two salaries to these multiple sources of income when you become financially independent and ultimately when you are in full stop retirement.

Q. If you could identify one or two key messages in the book for people striving to achieve financial independence, what would they be?

A. If your goal is financial independence or findependence, the means is guerilla frugality. The two go together. So be frugal first to get rid of your debt and second to build wealth. These are the key takeaways in order to achieve what I call Findependence day.

Q.Have you reached your Findependence day, and if not what is the magic number?

A. I used to put anywhere from 57-64 on my blog, the Wealthy Boomer. Right now I’ve joined MoneySense magazine at 59 years old. I guess my partner and I have achieved financial independence of sorts, but we want to achieve a higher level. I am at the stage of working now because I want to, not because I have to. And as you know everything gets better the longer you wait.

I enjoy what I do and I don’t find there’s a big distinction between what I do evenings and weekends and what I do during the day. I’m up reading all this stuff on twitter and social media and I might as well get paid for it as long as I enjoy it and I’m healthy. The thing is, at some point, I may not have a willing client, or a willing employer even if I want to work to 70 or 75. At some point we all must have financial independence because our body or our minds won’t permit us to earn the single employment stream that most people rely on.

Thanks Jonathan. It was a pleasure to talk to you today. I read your book cover to cover and learned a great deal. I actually joined the SPP to get “another stream of income” although I have an employer-sponsored pension plan. If they haven’t already done so, I’m sure many SPP members will be interested in ordering the book from your website.

It was a pleasure Sheryl. There’s actually a question and answer about the Saskatchewan Pension Plan in the June issue of MoneySense.