Meet Millennials Series with Jay from Simple Money Living
My name is Jayson Bastien, CPA, CA and I founded Simple Money Living in 2015 through a ten article series. I want to live in the now (which is tough), in a simple manner, with money! In 2016, I took the next step, set up the website, and have been building content ever since. Currently I am looking for clients to take on in one-on-one coaching environments to help other people achieve their goals.
Knowledge, habits and confidence is what defines me financially. I started developing financial literacy in my early teens; I took that knowledge and converted it into fantastic financial habits, both in terms of saving and investing which has translated into financial confidence. I keep it simple and easy to do. Financial success and success in life, I truly believe, is achieved through simple habits like earning more than you spend, invest your money that suits your life goals timeline and your personal risk tolerance.
My current financial situation
Over $200,000 in wealth at the age of 26. I save over 70% of my after-tax income and budget monthly. The majority of my investable assets are in individual companies and I hold a large portion in liquid assets; bonds and cash. I have made finance a game; for me it’s fun to see how much money I earned whether it be interest or dividends and how much I am able to sock away. Budgeting takes me minimal time to do. I rip through my expenses, categorizing them and inputting them into my spreadsheet. Because of my accounting background, I reconcile between the accrual method of accounting and the cash method in record time. My budgeting is based on quality of my analysis and not the quantity of time I spend. Do you want to spend less time budgeting and more time seeing your money grow? Count me in.
Here is one of my favourite things: I can get paid three (3) times before I pay one (1) cent for things I bought a month and a half ago! I can buy something early one month, earn three (3) paycheques and not have to pay my visa bill after that! Oh and I have earned a ton of interest as well. That’s the power of delaying your payables and maximizing the power of compound interest!
I am money-savvy
I hold two designations, the Chartered Professional Accountant and Chartered Accountant (CPA, CA as it is known), and am a teacher at heart, so yes I consider myself highly financially savvy. Not to mention I have built over $200,000 of wealth by 26 years old. Signing up for the Simple Money Living newsletter will score you a copy of how I did that and how I continue build wealth. A few tips for folks out there, start early and do not spend more than you make. Super simple strategies work and all it takes is the first step.
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Quick advice: start early and make it fun
I have been very fortunate that I sought out advice very early on in life and put in a lot of effort to figure out the financial world. Some advice I think you would be wise to take is to start early; make some money and save it. The money does not have to be returning a lot; it is the habit of earning more than you spend and earning the power of compound interest. Find ways to make saving or paying down debt fun. Reward yourself when you have hit your goals, SMART goals I will discuss a bit later.
The financial achievement I am most proud of
The pivotal movement in my financial success to-date all started when I opened up a saving account at PC Financial many, many years ago. I learned they did not charge a single fee for banking and paid much more interest than any other bank out there. So I took some money out of my account, at one of the Chartered Banks, and moved it over to PC Financial. Then the game begun. I had fun moving the rest of my money over, seeing the interest payments coming in each month and I did not have to do anything to earn it! Any time I earned money or received a gift of cash I immediately went to the bank to deposit it; it was fun for me knowing how much I’d earn for not doing anything.
That moment I realized the power of compound interest and eliminating unnecessary fees turned my actions into fantastic money habits. Rarely did I spend money on unnecessary things seeing the power of growth I could get with a simple savings account. When I went to go buy a 5-year GIC I shopped around until I found the absolute highest yield, worked out well, got 8% in the final year! Long gone are those days!
What expense can you not live without?
Like many other millennials it’s Netflix and that’s because it is so cheap for the value. Where else can you have unlimited entertainment for under $10 a month? I am a big Adam Sandler fan and if they (Netflix and Sandler) keep releasing movies, I will be a customer for life!
What expenses could you cut down on?
If I had to pick it would be eating out, not that I do that a lot. I am not as cognizant about my eating out spending as I’d like. This expense always is higher than I expect in my mind, despite my budget. My food expenses rise and fall depending on the season. During the summer the food cost rises because I am eating out more, enjoying food and drinks with friends and family out on patios while the winter food costs drop because well it’s winter, us Canadians are playing hockey!
My long-term goals
Live home and transportation minimalistically. By that, I mean live in a home that suits my needs and that is comfortable. I can live with so little in a home, when I studied in Europe it didn’t even look like I moved into my apartment; no throw rug, no artwork, nothing. The place was comfortable enough to sleep, study, eat and stay clean in. A tiny home would be perfect, something with decent living space with character. I do not plan on being house rich and life poor and besides the larger the home the more upkeep and I rather be doing other things!
When it comes to transportation functionality is most important. Having a safe, good handling, fuel efficient and modern vehicle is important to me. My current car was purchased a year and a half ago and what I bought fit my needs and did not break the bank. I know of people earning less than me, with much less wealth that have bought cars that are far more expensive. I do not intend to be car rich and life poor.
Financially speaking my goal is to live off investment income from my portfolio. Eligible dividends have a great tax rate and for me it is fun to invest. I am building the portfolio base with larger cap companies that provide growing dividends and consistent growth in the underlying value of the company. Sprinkled in are pure growth and aggressive companies every now and again.
Top tips for paying off debt
1. Make sure the debt you are taking on is SMART.
- It must have a Specific purpose: education, home, transportation
- How will the outcome of whatever the debt is financing be Measured? Do you know much total debt and interest you will have to pay back? If you do not, find out!
- Is the outcome of the action the debt is financing Attainable? Will you be in a position to secure a job or career at the end of your education?
- Is the outcome Realistic? Will you be able to achieve your goal?
- How Timely is your goal and debt repayment? How long will it take to achieve your goal and how long will it take to repay the debt? Can you afford to repay the debt over that period?
2. Make a budget for yourself and plan out your debt repayment schedule. Plan out each week and each day if necessary of how much you will be paying down debt, how much you will be spending on you other expenses such as food, transportation, etc. and how much you are saving.
3. Use debt elimination strategies like accelerated payments, shorter repayment period, anniversary payments. A super easy way to reduce debt is for instance instead of paying $120 at the end of the month on the debt, pay $30 every week. Over a short period, you will see the interest cost of the debt decrease giving you more money.
Not all financial advice is created equally; seek out the best advice and if you must pay for it, then pay. I’ve seen in my profession people cheaping out on financial advice or not getting it at all, even people doing their own taxes are at risk; the result is cheap results which does not help you. Find people who are not only qualified professionally to give advice but those that are professionally and morally obligated to provide exceptional advice; this is hard to find however once you find someone like that, they can set you on a platform like no other.
Interested in obtaining knowledge, building fantastic habits and gaining great financial confidence? Join us at www.simplemoneyliving.com/blog.
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