November 5, 2024 • 41 mins
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EPISODE DESCRIPTION
Episode 83: Matt and Taylor are joined by Chris Matte, BBA. Chris is an Associate Advisor at Matte & Associates Financial Solutions from Kelowna, BC, a family owned and operated boutique wealth management firm that manage over $300M in assets for 2,500 clients. Growing up in the family business, Chris learned the industry from the ground up under the mentorship of his father and firm founder, Maurice Matte, accumulating almost 10 years of professional experience by the age 27.
Chris also gives back to the community by volunteering and fundraising for Freedom’s Door Kelowna, a non-profit addiction recovery program for men. Freedom's Door Kelowna is dedicated to helping men find hope, healing, and wholeness in a safe and secure environment. Their program is provided within their housing facilities where men are provided help and support to transition back to the community and everyday life.
Chris is here to discuss: → His family business and how he got into finance, the biggest financial mistakes people make, and how much kids actually cost. → Optimizing an FHSA & TFSA and down-payment saving strategies, planning for retirement, and the common problem retirees face with limited cashflow and high home equity. → Term vs whole life insurance, the cons of tying your life insurance to your mortgage, and why critical illness insurance is an absolute must-have.
Matte & Associates Financial Solutions Website: www.matteandassociates.com
Chris Matte's Email: chris@matteandassociates.com
Chris Matte's Instagram: @kelownafinance
Freedom's Door Website: www.freedomsdoorkelowna.com
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Kelowna Real Estate Podcast YouTube: @KelownaRealEstatePodcast
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CONNECT WITH MATT
Matt Glen's Website: www.mattglen.ca
Matt Glen's Email: matt.glen@century21.ca
Matt Glen's Instagram: @mattglenrealestate
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CONNECT WITH TAYLOR
Taylor Atkinson's Website: www.venturemortgages.com
Taylor Atkinson's Email: taylor@venturemortgages.com
Taylor Atkinson's Instagram: @VentureMortgages
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Welcome back to the Colonial RealEstate Podcast.
(00:01):
I'm your mortgage broker host,Taylor Atkinson.
And I'm your real estate agenthost, Matt Glenn.
What's happening today, Taylor?Yeah, man.
Just kind of like looking at someupcoming projects and stuff that's
being finished.
And there's one that you and I
were talking about, which ispretty cool out in Peachland.
Yeah.
Odeo Developments.
Yeah.
You're getting kind of like luxury
style living for a fairly goodprice, starting in the low
millions.
(00:21):
And they're running an event if
the listeners want to go check itout.
It's November 23rd, 10 to 3, 5300Buchanan Road.
They're doing a giveaway, $500gift card to Martin's Lane, which
we all love.
Yeah.
And you can come to the site.
One of the main things I love
about this is honestly, I don'tknow if it's just me or you as
well, but I always look for thedeposit structure.
So for a limited time, they'restill doing just 10%, which is
(00:43):
awesome.
You don't got to tie up a ton of
capital.
And everybody in Kelowna loves
their cars.
And every unit at Adeo comes with
a two-car private garage, which isquality and kind of unheard of in
the city.
Yeah.
Funny enough as well, AmandaHamilton designed it.
We had her on the podcastpreviously.
So yeah.
It's Yeah.
the podcast previously.
So yeah.
Yeah.
It's all coming full circle for
(01:04):
us.
Speaking about other cool people,
today's guest, Chris Matt withMatt and Associates.
So they do financial planning,life insurance, critical illness,
which we now know Matt definitelyneeds.
Yeah.
I had a bit of a moment on the
show.
Yeah.
Yeah.
But also Chris puts out quality
social media content.
It's informative.
It's well-produced.
It looks nice.
It's My God.
Before our episode, I was doing
(01:24):
some research, and I just wentthrough all his videos.
I swear I liked like 30 videos ina row.
Yeah, before the show started, wewere just like, how do you set up
your cameras?Like, why do we look so bad on
camera?You look so good.
Why do do we look like us, and youlook like you?
Yeah, yeah.
So he's pretty dialed in but yeah
puts out some awesome content goodeducational stuff yeah definitely
worth reaching out to him and hisbig thing is kind of get started
(01:48):
early get started planning early iguess all financial planners his
big thing is kind of get startedearly get started planning early i
guess all financial planners dothat but he was really kind of
drove the point home and made itcount for us yeah i think you
think you guys will like the youguys will like the show.
It's a good one.
Reach out to him.
He's got some good content comingout.
Like every show.
We're sponsored by Century 21
Assurance Realty, by Century 21Assurance Realty, the best
brokerage in the interior of theOkanagan.
We're in Kelowna, Vernon,Kamloops, Salmon Arm, Castlegar.
Moving up further east in theKootenays too, we are everywhere
(02:10):
you need to be when buying a housein the interior of UC.
If you're an agent looking to makea switch or if you're a buyer or
seller looking for an agent,Century 21 Assurance Realty is the
place to be.
All right.
Enjoy the show, guys.
Enjoy the show.
Okay.
Welcome to the show, Chris Matt.
How are you doing, buddy?Thank you.
Good, good.
Excited to share some stuff today.
(02:30):
Yeah, we've been excited to haveyou on for a while.
Yeah, we've been trying to get youon, but you've been busy, you
know, getting married and going toconferences and all the fun stuff.
I actually see you at like everyevent Emily and I go to.
The last one was OC and Elliot.
We were saying every time we go to
any concert, I always see Taylorand his wife there.
(02:51):
We were saying every time we go toany I concert, always see Taylor
and his wife there.
I feel like you guys probably go
to like 50 concerts and the threethat we go we see you to, there.
that we go we see you to, there.
Exactly.
they Taylor, probably think thesame thing about you.
Yeah.
You guys are pretty good musicians
as well.
I have seen a few of your videos.
I have seen a few of your videos.
We did a little bit of videos on
TikTok.
It's actually pretty crazy.
It went pretty viral.
(03:13):
We got 85,000 followers, over 14
million views.
I play guitar, she sings, people
love that kind of stuff.
It's crazy.
Oh my my God.
It sounds very similar to our
podcast, actually.
Super viral.
Similar numbers.
Well, yeah, a man of many talents,
but let's maybe start with what'syour perfect Friday look like?
What gives you energy,productivity?
Yeah, just walk us through a goodFriday day look for like?
you.
What gives you energy
productivity?productivity?
Yeah, just walk us through a goodday for you.
(03:34):
Sure.
Okay.
Ideal Friday would be I like towake up early.
I always wake up around 6, 630.
A little bit of a biohacking geek.
So I like hydrate before youcaffeinate on a bit of an AG1
kick.
Love that stuff.
Wait 90 minutes before I havecoffee and find that adds energy
into the office by 730.
A couple hours of deep work.
I'm way more focused in themorning.
I can do a whole lot more if I'mworking for those two, three
hours.
And then I take the meetings in
(03:55):
the afternoon.
After that, I just come home, we
make dinner, I do workouts andrelax, prep for the weekend.
Nice.
I love Nice.
I love it.
Yeah.
The 90 minutes before caffeine isa huge one for me as well,
actually.
Tell us about what is your work?
What do you do?What do you kind of specialize in?
Yeah, so I'm financial advisor.
We have a private investment
management firm in Kelowna, and wespecialize in holistic financial
(04:15):
planning.
We manage about a third of a
billion in assets underadministration for about 2,500
clients.
We also have about the same amount
in death benefit.
So not a small firm.
We know what we're doing.
I only share those numbers to show
some authority that we canactually speak on the matters that
we're talking about.
There's a lot of advisors out
there who don't have theexperience and they're just
talking about these things they'venever actually implemented.
(04:37):
Our firm was started about 30years ago by my father.
He grew it into one of the largestfirms for our brokerage in the
country.
And I always tell people I'm one
of the only firms for ourbrokerage in the country.
And I always tell people I'm oneof the only 27 year olds in the
country who has about 10 yearsexperience in the financial
industry.
I was doing paperwork since I was
(04:58):
about licensed really young 16, atand I was able to hit 19, the
ground running.
And it gave me a really good back
end for understanding the how itworks business, before I was
actually licensed and operating.
and operating.
I love Maybe let's start it, man.
you a bit of real estate with,
stuff.
know, Where do you see
opportunities?Like there's been a lot of
changes, let's say first homesavings account.
You guys obviously work withclients, coaching them on that
(05:18):
stuff as well.
Do you want to talk about anything
like that?that?
Yeah, absolutely.
FHSA is a beautiful account that
was brought in by the liberals.
We won't get too political, but I
think it's one of the only thingsthey've done really well.
It's a pretty amazing account.
So on the way in, it's like an
RSP.
You get $8,000 a year.
You get tax deduction on that.
So come tax season, if you put
that in, you're going to get a taxrefund.
On the way out, any growth thatyou have is going to be tax-free.
(05:41):
So it's very similar to a TFSA.
Take TFSA, RSP, combine them in
one, you have your FHSA.
Interesting ways you can use them.
We actually had a client who hadalready purchased a house and
people don't really know this, butthere's no minimum amount of time
that you have to have the money inan FHSA.
So it's even useful if you'vealready purchased a house and
haven't closed.
So what we did is we deposited
$8,000 into this account andliterally the next business day,
(06:02):
we withdrew it.
So what that's going to do, the
money is not invested.
He's not getting any growth, but
what it's going to do is he'sgoing to get that tax deduction
for the 2024 tax year.
He's going to get like three grand
back on his tax return just formaking that move.
And he had already bought thehouse, hadn't closed yet.
Yeah.
It's actually amazing how many
(06:22):
people aren't aware of thisprogram.
Like I feel like the governmentshould be out there, you know,
parading this because this is sucha powerful tool.
Totally.
Well, and one of the things too,
like people don't know that it'snot like a TFSA.
A TFSA, the second you turn 18,you start to acquire room every
year but with the FHS-8 youactually need to have an account
open to start acquiring that roomso I tell people even if you don't
(06:43):
have the money to deposit intothat account and you're planning
on purchasing a house in thefuture open that account before
the end of the year otherwiseyou're going to lose that eight
thousand dollars contribution roomyou otherwise would have had yeah
yeah super powerful you were alsoobviously working have had yeah
yeah super powerful you were alsoobviously working to coach people
to build up savings for their downpayment and stuff like that.
(07:03):
Do you have any good strategiesfor us to help people get into the
market?Like, obviously that's a big
hurdle that we face as well asjust how do people come up with a
down payment?Yeah, totally.
There's a couple of different waysthat I kind of coach people and
help them to come up with thosedown payments.
One is obviously, and you're goingto hear every financial advisor
talk about this, is automating thepayment.
So super important that, you know,once a month or once every two
(07:23):
weeks, you automatically havemoney pulled out of your bank
account and treat this like anyother bill.
And that gets deposited into,let's say the FHSA, or even
potentially we have somefirst-time home buyer RSP options.
If it's automated, you're goingRSPoptions.
If it's automated, you're going todo it.
If it's not automated, that moneyis likely going to get spent.
So that's one way that we helpclients with a little bit of
discipline and saving.
Another great way is if their
employer offers an RRSP matchingprogram, we say absolutely take as
(07:44):
much advantage of that as youpossibly can.
Because every dollar that you putin the RRSP, your employer is
going to match it up to a certainAnd percentage.
your employer is the, going tomatch it up to a certain
percentage.
And the government changed the
rules.
We can use up to $60,000 from an
RRSP purchase your first home.
So while we do have to pay that
back, it's still a great strategyto save at that tax deduction when
(08:06):
we need it, when we're coming upfor that down payment.
Yeah.
You know, it's funny.
I was criticizing that increasewhen it came out previously and
saying like, how many people havethis much as a first time home
buyer in RSP?And then like two weeks later, I
had a client that had exactly themaximum amount.
And I was like, all right, well,I'll put my foot in my mouth
there.
So yeah, it's just the thing,
like, like 60 grand and you haveto pay that back.
So I have to relook up the rules.
(08:28):
I think it's now they changed it
to four years after you take thatfrom the RSP, you have to pay that
back.
So I have to relook up the rules.
I think it's now they changed itto four years after you take that
from the RRSP.
You have to pay it back.
You essentially take the amount,split it up in 15 years, and
that's how much you have to payback.
So 60 grand over 15 years is ahuge amount for people who bought
(08:51):
a house.
They have these heavy mortgage
payments, and that's where theirdiscretionary income is going and
it's going to pay back the RRSP,probably not the most efficient
use.
And unfortunately, what happens
with the RRSP is most of the timepeople just take it as income.
So if you don't pay it back, youtake it as income for that year,
it's at your highest tax bracket.
So you're actually paying more
taxes on that than you would haveotherwise.
So, you know, we used to use RSPsa little bit more, but now that we
have those FHSAs, if you and yourspouse are able to do that, and
you have a five-year time horizon,that's 40,000 total each you can
(09:12):
put in there plus the growth onit.
So we have some serious room thatwe can put into the FHSA that we
don't have to pay back.
And then we won't have to end up
with that tax burden if we don'tpay it back.
that's such a good point.
Yeah, It's such a powerful tool,
but like we really won't see theeffects of it for a couple more
(09:35):
years, kind of like the TFSA, youknow, it started out like, wow,
this is great, but it takes awhile to build up.
Totally.
And that's the thing with the
TFSA.
Like it was open in 2009 and I
have to look back with the firstamount.
I think it was $5,000.
$5,000, yeah.
$5,000, yeah.
Yeah.
So for somebody who, you know, in2009, 5,000, 10,000, then
conservatives did another 10,000.
So we're adding up.
But many years down the road, wehave a huge chunk, like over
(09:56):
$95,000 worth of room if you wereover the age of 18 in 2009.
So you invest in a TFSA like that,you can invest completely
tax-free, build a huge retirementsavings and have all that tax-free
income in retirement.
So now it's becoming more and more
important to take advantage ofthat account.
Yeah.
Speaking about closing on a Yeah.
Speaking about closing on aproperty, this is something that
comes up in my conversations everytime.
As a mortgage broker, we have tolike present you know a type of
life insurance like a coveredmortgage obviously this is you
(10:17):
know your area of expertise so igenerally like make the
introduction off to a financialadvisor because i'm limited to
sell just a couple products andthen we were talking previous to
this show like critical illness aswell do you want to talk about the
types of products that you haveaccess to and why people need
them?So a lot of people, when they get
a mortgage, they're offered bytheir mortgage broker or their
(10:40):
lender a life insurance productthat's tied to that mortgage.
So they don't own it.
It's not there to protect them.
It's there to protect the bank.
Unfortunately, these products are
quite expensive because they don'tdo any medical underwriting.
They essentially pair everybodyinto one group.
And that's how they price out theinsurance where with a life
insurance policy that you own,it's going to be a lot cheaper if
(11:02):
you're healthier.
You can own that for a period
that's a lot longer than yourmortgage period.
And you're not essentiallysubsidizing the insurance for
these unhealthy people.
So it's a lot better way if you
can get your own life insurancepolicy that covers more than just
your mortgage, and it doesn'tdecrease over time.
So a mortgage insurance or theinsurance tied to your lender,
it's going to decrease in valuewith the mortgage over time, and
it's going to be more expensive.
(11:23):
But a policy that you buy on your
own is going to remain level forthe period that you own it, let's
say 10, 20 or 30 years.
And the price is not going to go
down or up.
It's going to remain level.
And the death benefit is alsogoing to remain level.
So if you have a $500,000mortgage, you're going to get
$500,000 of insurance.
(11:44):
It's going to pay out $500,000 in
the future.
And it doesn't matter what your
mortgage value is so i always tellpeople when they're getting a
mortgage don't take the policywith the lender or if you do take
that go and look at a separatelife insurance policy that you're
going to own and then you cancancel the policy with your lender
(12:05):
if you're approved for the cheaperprices yeah so what kind of
insurance people are getting sowhat kind of insurance people are
getting like 20 year terms?Like what about whole life
insurance deal?deal?
Yeah.
So I want to be really careful
with how we have thisconversation.
There's a lot of people and a lotof advisors out there who are
going to push whole lifeinsurance.
And I'll be completely honest.
(12:25):
It's because whole life insurance
pays advisors about eight timeswhat a term life insurance policy
would.
Now, for 90% of people who are
using most of their budget topurchase their home and all their
cash flows going to the mortgage,they need as much life insurance
as they can get to cover theirmortgage for as little cost as
possible.
So what we're typically doing is
insuring these people with termlife insurance.
(12:47):
So I'll give you an example.
A million dollar policy on a
35-year-old male is only going tocost like $42, $43 a month.
That's going to cover a millionbucks if they pass away in the
next 20 years, cover the need forthe time being.
Whereas a whole life policy,they're fantastic and exceptional
for the right use case.
And we can get deep into the weeds
on whole life.
And I don't think we need to here.
But there's a whole bunch of taxadvantage ways you can use them
(13:09):
for corporations, also planningfor children's education, a more
flexible way to save.
There's a number of different
ways.
But typically, when we're covering
mortgages for the lower incomefamilies, we like to see term
insurance.
You said 35-year-old male.
Is there like a steep declineafter that?
When's the most optimal time in aperson's life?
Matt and I are still active.
We're playing sports.
We're healthy.
I just mean Taylor and I Well,
(13:32):
both have young kids.
So I imagine right now would
probably be a good time to getterm life insurance to kind of
cover them growing up.
But I've heard of quite a few
people that are then they realizethat they don't have any and they
go to get more insurance.
retiring, insurance, And
obviously, way more expensive ifyou're 60. 60.
(13:53):
that's Yeah, exactly right.
right.
Is there a time where you shouldkind of advise people on that?
people on that?it all matters Well, on the goals.
And like I life insurancecompanies are private say,
companies.
They are for profit.
And the way that they price lifeinsurance is based on risk the
three of us you know we're youngwe're likely not going to pass
away in the next 10 20 years hencethe price we give 40 50 bucks a
(14:15):
month to the insurance company andthey guarantee they're going to
give us a million bucks so mostpeople don't use their term life
insurance products and that's whyit's so cheap it's just like car
insurance yeah yeah premium youdon't crash you don't use it if
you are older somebody in their60s your chance of passing away
goes up 50 50 the stats so mostyeah yeah premium you don't crash
(14:40):
you don't use it if you are oldersomebody in their 60s your chance
of passing away goes up 50 50 thestats of people who pass away goes
up and that's why the insurance ismore expensive so if we're needing
insurance later in life and weknow that that need is going to
still be there that's somebodywho's a good client for a
permanent product, who we can dosome more planning on the cash
value side.
A permanent product has an
investment side.
And plan to make that insurance a
lot cheaper.
There's actually a crossover
(15:01):
period.
Permanent insurance is quite
expensive.
And then term insurance crosses
over, and it becomes moreexpensive the older we get.
So if you can get that permanentproduct in place, you can actually
have it paid up and not need topay any insurance yeah so it
really depends guys we have to sitdown with the any yeah so it
really depends guys we have to sitdown with the client see how long
are they going to have thatinsurance need yeah there are
certain term products that you canconvert over to yeah there are
(15:22):
certain term products that you canconvert over to whole life when
that expiration comes up like ifyou do a 20-year term did the
insurance companies reach out ordo you guys facilitate that and
say like you know do you get adiscount on the whole life if you
transition over or how does thatlook?
Yeah.
So it's not a discount.
It's actually almost all terminsurance products have the
ability to convert.
Now, if we are going to
potentially be converting that inthe future, we want to make sure
we're in a company that has goodpermanent products.
So I'll use myself as an example.
(15:44):
I got 2.5 million of term 20
insurance that has the ability toconvert to any permanent product
that I want in that 20 years.
The cool thing about that is I can
convert it without any medicalunderwriting.
So if anything happens to me, if Iget cancer, heart attack, stroke,
anything like that, that wouldmake me uninsurable.
I can still get that permanentproduct, lock it in and make sure
(16:04):
that I'm still insured in thefuture.
If I come to the end of theperiod, we can reapply for a new
product before my current producthas expired.
If I don't get approved, then wecan look at converting.
But again, it all matters what thegoals are with the insurance.
There's a ton of different ways wecan set them up.
a ton of different ways we can setthem up.
If you did that there'd probablyjust be no cash conversion, value
to transfer right?over, Yeah.
over, Yeah.
exactly.
No, Because like I the terminsurance is super cheap.
say, You're not building cashvalue.
It's just there to protect yourfamily for the time being.
(16:24):
Yeah.
Before we just continue to bore
listeners, one more insurancequestion.
Sure.
I've always been fairly passionate
about this, but I'm curious tohear your point on it.
First off, congratulations.
I know you guys are expecting a
new addition pretty soon.
Thank Thank you, yeah.
So with with that, yeah, welcometo the chaos of Matt and I's life
with kids.
But with that said, is this one of
the first points of review withclients when they're talking about
(16:48):
having kids or have young kids?Like, hey, maybe we should set up
a whole life policy early becausewe can build that cash value and
it's cheaper and the medicalunderwriting isn't there?
Or do you just say like, we're notgoing to worry about building
wealth?And I know it depends on cash flow
and, you know, clients planning,but is this an asset or a tool
(17:09):
worth exploring right off the bat?I's Yeah.
So if we run the numbers and thisis going to be for the upper
middle class, I'll be honest, itis a little bit expensive.
But if the client can sustain thelevel of premiums for the duration
of the policy, which is normallypaid over 20 years, it's an
exceptional way to save and aflexible way to save for your
children for either education.
And if they don't use the cash
(17:31):
value for education, it thencontinues to grow and they can
pull it out for a down payment ontheir first house.
If they don't need that, itcontinues to grow and they can use
it in their retirement.
So yes, it is a super exceptional
way to save for your kids futureand build wealth.
And the earlier you can startthat, the cheaper the insurance is
going to be, because thelikelihood of a child passing
insurance is going to be becausethe likelihood of a child passing
(17:51):
away is next to zero.
The insurance companies price
their insurance based on that.
So most of the premium that you're
paying is going to building thatinvestment portion.
So it's more of an investmentproduct than an insurance product.
But the beautiful thing about itis that it grows tax-free yeah
awesome sorry i have to askthere's one more insurance
question so like hey talk aboutcritical illness or like me
getting sick so last night i wasgoing through your instagram liked
(18:12):
all your photos you probably sawtwo million likes this morning i
was thinking last night like wehave a lot of life insurance becca
and i like we're totally coveredthat way but like if i don't die
like we're in a situation hereright so like what do people have
to do that like almost like if idon't die like we're in a
situation here right so like whatdo people have to do that like
almost like if i have a stroke orsomething like it's like becca
(18:36):
like just push me over the edgelike push me down the stairs
finish me off like well push methe stairs me off me off like well
here's the thing disability orcritical illness can actually be a
lot more the thing disability orcritical illness can actually be a
lot more of a financial impact onyour family than a death and it's
crazy to say that but think aboutabout it.
You still have your mortgage.
You have increased financial
(18:56):
strain because you have newmedical expenses and you're there
more, you know, as a burden to thefamily.
So the other individual in thehouse can't take care of you.
And it's unbelievable how manypeople actually, you know, get
these things.
So three main ones, cancer, heart
attack, stroke.
We're all young guys.
You know, we'd never think that wehave any risk of that.
So why would you get criticalillness insurance?
2020 thyroid cancer.
I got my thyroid taken out.
(19:17):
You have got to be kidding me.
Last thing that I was thinking
about was, do I need to continueworking?
Am I able to continue to work orshould I focus on healing, to be
recovery?Unfortunately, I didn't have
critical illness I was young and Ididn't think I needed it I should
have had it and it would have paidout I probably would have had a
two hundred thousand dollar policyit would have paid out I could
(19:39):
take a couple years off and restand recover make sure that I'm
healthy and then go back to workso insurance hierarchy life
insurance disability critical, butin reality, it should be critical
illness, life insurance anddisability kind of on the same
level there.
It's so important to have that
coverage.
Okay.
Yeah.
That's a wildly impactful Okay.
Yeah.
That's a wildly impactful story.
I mean, it sure makes it easy forthe conversation when I'm talking
to clients.
Yeah.
I was stressing for the rightreasons last I was stressing for
the right reasons last night.
Sweet Jesus.
Matt just had the just had thesniffles, thought he was going to
be out of work for a week i didn'teven have that i was perfectly
healthy thinking jesus actually ihad a shoulder injury that's
(20:00):
bothering me thought he was goingto be out of work for a week i
didn't even have that i wasperfectly healthy thinking jesus
actually i had a shoulder injurythat's bothering me like just the
most minor possible thing but itgets you thinking you know so
absolutely well that's very coolso have that i well very cool so i
think we should all look into thatespecially me you don't need it
(20:21):
till you need it i guess yeah yeahabsolutely that's a yeah
absolutely a pretty good segueinto other like do's and don'ts so
for just financial planning ingeneral, like what are you seeing
kind of the biggest mistakespeople are making?
Cause that's obviously one ofthem.
Yeah, so people are taking on debtto buy depreciating assets.
And I can't scream this from themountains loud enough.
You know, we have two types ofdebt.
(20:42):
We have good debt and bad debt.
People are taking on good debt.
This is what the wealthy do.
Good debt is when you take on debt
to buy an appreciating asset.
So let's say you're buying real
estate, take on a mortgage, buy anappreciating asset.
Even better debt is when you'retaking on a mortgage to buy an
appreciating asset that's a rentalthat you can then write your
interest on the mortgage on.
(21:03):
So that's building your net worth.
On the flip side, we have thingsthat destroy your net which is bad
So this and you know, worth, debt.
is, I hate to say it, everybody
has it, vehicle loans.
You buy a brand new vehicle,
you're paying interest on thefinancing.
The second you drive it off thelot, it's depreciated 30%.
You can't sell it for what youbought it for.
And it continues to depreciate.
So what does that do?
That destroys our net worth overtime.
So I keep trying to tell this toclients and people, try to stay
(21:25):
away from those types of things.
I understand some people need to
use lines of credit when times aretough, credit cards, things like
that.
But if you can stay away from
those depreciating assets that arepurchased on debt, do that as much
as you possibly can.
Yeah.
I mean, from the mortgage side tolike car payments, just kill
mortgage applications.
So yeah.
Yeah.
And it's a lot easier to get
approved for the car payment afteryou get the mortgage.
You might not get approved forYeah.
And it's a lot easier to getapproved for the car payment after
you get the mortgage.
You might not get approved for the
mortgage payment though, if youhave the car payment first.
Totally.
Yeah.
And don't buy a car like a weekbefore closing either.
(21:47):
Exactly.
I know you laugh.
you laugh.
We always talk about that, but do
people do that a lot?Yeah, I've had that and a boat.
And both times almost killed thedeal.
Most of the time, boats, you getinto negative equity in the first
few years.
Yeah.
Yeah.
And they cost like $300 a day in
gas.
Yeah, it's unbelievable.
So do's and don'ts from afinancial advisor, don't buy a
boat.
(22:07):
Actually, we've been the numbers,
you're better off to rent a boatfor the amount of time.
You end up much more ahead.
Yeah, we were part of the boat
club a couple of the boat club acouple times like it is the best
service you can get.
And like the cost is nothing in
comparison.
Yeah.
And it's also Yeah.
(22:29):
And it's also nice.
You don't have to, you know, doyour oil know do your oil changes
maintenance all that kind of stuffthey clean it they put the gas in
it you just take it out and bringit back yeah or better yet just
have a friend that has a boat yeahthat's usually my strategy yeah
better yet just have a friend thathas a boat yeah that's usually my
strategy yeah yeah yeah i meanmatt and i are in a standoff who's
getting the boat okay what aboutlike average cost of retirement
(22:52):
right now?And I know it's probably been
super volatile for you, but likeI'm assuming you're planning with
clients basically every weeksitting down saying, you know,
here's where you are in your age.
Here's kind of your life
expectancy.
Here's your average spending
limits.
What do you generally see?
Like, are there any rules of thumbpeople should be planning for?
Like, yeah, how do we quantifyretiring?
The question retiring?The question is, where are you
(23:12):
used to living?What's your current standard of
living?And if you want to continue that
standard of living how do we getyou there so what we do is we sit
down we put all of theirinformation into a financial plan
because one of the biggestquestions i get is i have a lump
sum of money i'm 45 50 how much isthis going to give me in
retirement and is my retirementgoing to look similar to how I'm
currently living with my cashflow?
Or am I ahead or behind my goal?So what we do is we sit down and
(23:34):
put it all into the plan.
If we're ahead of the goal,
fantastic.
If we're behind the goal, we can
then show you the differentstrategies that we can use to get
you to that point.
Retirement income varies person by
person based on how they're usedto living.
So we can't put a number on that.
In terms of how much investments
(23:54):
you should have, a general rule ofthumb is if you can sustain your
retirement income with a 4%withdrawal rate from your
investment account, yourinvestments will never run out if
they're managed appropriately atlow risk, you know, retirement
income style investing.
So we sit down, we come up with
that number, we show the clients,and then we track that over time
and make sure that they hit that.
And then for retirement, like
there's different stages ofretirement too.
We find once people retire, theygo gung-ho, they travel, they have
high expenses, they're going outfor dinners, all this kind of
stuff.
And then, so we're at a high stage
and then we slowly go down as weget away from the traveling, it
(24:15):
becomes a little bit moredifficult.
We're still living on our own, sowe don't have those high expenses.
And then over time, it slowlyramps up near the later parts of
retirement as we need assistedliving.
That's incredibly expensive if youaren't on a subsidized program and
things like that.
So it's a little bit of a moving
target.
So we have to make sure that
(24:36):
clients have enough money to beable to sustain that.
Yeah, it's got to be a stressfulgot to be a stressful job, hey, to
be the one to be like, yes, youcan retire, like you'll be okay
for the next 20, 30 years.
Like, that's a lot of pressure,
man.
The even harder thing man.
The even harder thing and what Ihate doing, unfortunately, some
people come too late.
They come to me in there when
they're 45, 50, 55, and they wantto retire at 60, 65.
(24:58):
And I have to sit across the tablefrom them and tell them that they
can't retire when they want toretire.
They either have to reduce theirstandard of living or work later.
And that's a tough conversation.
How I don't enjoy having that
conversation.
Yeah.
Okay.
I have a point Yeah.
Okay.
I have a point here.
So the reason why I bring this up,cause I run into this like way
more than I thought I would when Istarted this business.
(25:20):
A lot of people I've helped themthat are retired.
They own a house that's likearound a million dollars, like
either low mortgage or no mortgageon this house.
But the people have virtually nocashflow.
Like they're living on pension.
What should I be telling people
like this to do because i feellike it's almost like a swear word
to some people to even mentionthat they have like a ridiculous
(25:40):
amount of equity in their homeyeah but like they've owned a home
for 50 years so they're not goingto rent or they're at least not
immediately open to that but theirstandard of living is going down
but they are sitting on a milliondollars i've struggled with what
to do on this like Like for just aquick story here, like I had
people exactly like this.
They wanted to buy another house.
(26:01):
We sold their house, unconditionaloffer, and we went to go buy
another house.
So the house hasn't closed yet.
We were still waiting for theproceeds, but we went to go buy
another house and I was like, Hey,we need to put a deposit on this
house.
So like, do you have $10,000 to
put it on?no five thousand no like one
thousand no do you have fivehundred dollars no you don't have
(26:22):
any money but you're sitting on amillion dollars what do i say to
people like that right so mostpeople have majority of their net
worth in their primary residenceand one of the things i don't know
if you guys would agree with thisor not but i'd say your primary
residence isn't a super greatinvestment when you look at it.
i But what I tell clients is itmight save your retirement.
So we see this all the time.
People have a million dollar house
fully paid off and no income.
So the beautiful thing about the
(26:44):
house is they've been forced topay it down over the years.
the thing about the house isthey've been forced to pay it down
over the years.
If they were renting at were
renting at a lower amount thatmoney would likely have gotten
spent i love that this is why itell people too is owning your
personal residence they say it'snot a good investment but it is
like a forced savings account itold absolutely yeah and the
amount this is why i tell peopletoo is owning your personal
(27:05):
residence they say it's not a goodinvestment but it is like a forced
savings account i told and theamount of people who i've seen
that that strategy has saved theirretirement is unbelievable if
i'm'm being quite honest, it'smost of the people that come to
us, they have a huge house, alittle bit of investments, enough
to sustain them for a while, butthey need some strategies down the
(27:26):
road to tap into that.
There's a number of different
strategies we could get deep intothe weeds.
We don't need to, but you canreverse mortgage.
I'm sure Taylor can talk aboutthis for a long time.
You can sell and downsize.
You can sell and invest that
money, live off the income andrent, and actually end up way more
ahead, depending on what type ofinvestments you're in.
So a bunch of differentstrategies.
For some of these people, it isvery difficult.
They don't want to sell theirhomes, but some of them do need
(27:47):
to.
And we do have to have those hard
conversations with clients.
can If you want to live the way
you want to live, you want tocontinue with your lifestyle, this
is what we need to and we do haveto have those hard conversations
with clients if you want to livethe way you want to live you want
to continue with your lifestylethis is what we need to do and
sometimes that means selling yourhouse and downsizing or pulling
some of that equity out with uhleverage strategy ways that you
(28:10):
know taylor can speak more to likepeople don't don't even have to
downsize most of the time iexperience like they just live in
areas where the property valuesare so high like the house isn't
especially big just expensivebecause it's like downtown or
something right so yeah it's funnyto have this conversation like
maybe i just need to throw themyour way or throw them taylor's
way like i am biting like i ambiting my tongue here yeah throw
(28:31):
them my way you freaking idiotbecause that's a hard conversation
to have the three of us and i justi see this like so of us and i
just i see this like so much,right?
Like it's here's why it's a toughit's here's why it's a tough
conversation.
Like I've had similar clients as
well because their mindset overthe past 20 years was pay off
debt, right?Like debt was quite expensive in
the late eighties, early ninetieskind of thing.
So I understand where they'recoming from.
(28:51):
And the whole goal to retire waspreviously like wipe out debt,
live off a CPP, OAS, a bit ofsavings.
It just doesn't work right now.
So yeah, with those clients, they
don't have income to access theequity is one big issue.
So yeah, you can go on the reversemortgage side, which obviously
you're giving up equity to thelender over time.
Nothing wrong with that product.
Alternatively, there are like
equity programs where you canqualify to tap into equity just
based on the loan to value of yourhouse.
And there's high net worthrequirements.
So you can also use like any otherliquidity that you have to
(29:13):
qualify.
So there's a lot of ways to
qualify for liquidity in yourhouse that generally banks don't
like advise on, right?It's always, what's your income?
What can we approve you for?So we have that conversation and
then we just lay it out and say,okay, this is going to cost you,
you know, 2000 bucks a month ininterest.
Are you okay with that?Because we're going to take now
the liquidity and put it in aninvestment that's going to service
(29:36):
that debt.
If it's structured correctly, you
know, there's also tax benefits tothat.
You can write off the interest onyour primary residence if set up,
right?Here's the main question I usually
say right off the bat is like, doyou have any estate planning?
Like, do you care if, you know,your kids or anyone has equity in
your home?Cause at this stage it's costing
you the lifestyle that you want.
So like, does it really matter if
you pass on an extra couplehundred thousand dollars to your
kids or not?Or can we, you know, chew up some
of that equity, leverage it,reposition it elsewhere and allow
you to live in the house you wantto live in for the next 10 or 15
(29:58):
years, but maybe you don't passdown as much in the estate when
you do kind of pass on.
Because yeah, the downsizing is a
real thing, but like propertytransfer tax, legal fees,
commission, you're giving up a lotof cash just in that transaction
to live in a smaller place to tapinto that equity anyways to
basically hold on to net worth topass on to your kids so i think
that's the big question is likehow much do you want to pass on to
your kids or not and then tocircle back is well if they had
(30:21):
any kind of life insurancepre-planning they wouldn't have to
worry about that so much therewould be a benefit to that yeah
absolutely i got yeah absolutely ia question which may be very
difficult to answer but maybeyou're thinking about it now is
how much do kids cost?And like, well, I'm about to find
out, right?Yeah.
So find Taylor, you could probablytell us a little better on this.
Taylor's got a little guy, youknow, we do financial plans and we
build some of that into the plan,but I did look up the numbers here
(30:44):
let me take a peek and again thisvaries by demographic like my
personal experience so far it hasnot been that much money but like
experience so far it has not beenthat much money but like i want
them to play hockey so i've got areally good really good friend
they were looking at a privateschool for their kids he's got
three kids the duration of thatprivate school from you know grade
(31:07):
one to twelve not post-secondary,was going to be $900,000 per kid.
What school is that?$900,000 per kid?
per kid?Aberdeen?
Yeah.
Okay, Aberdeen is like $12,000 a
year for grade one and like$20,000 a year for grade nine.
How would that work?$900,000?
I got the number here.
And I think this is way
underwritten.
And it also depends on
demographic.
But Stats Canada says about
$293,000 from birth to age 17 fora two-parent middle-income family
with two children.
(31:27):
So average of $17,235 per year.
We need a bigger home.
So a lot more mortgage payments.
We need the bedrooms.
We need a bigger vehicle.
Bigger depreciating vehicle.
Yeah, absolutely.
A vehicle that you own.
If you're sending your kids to a
private school that adds upthere's so many things sports like
you say hockey i have clients whoare spending over 30 000 40 000 a
year yeah i heard that they'relike nine year olds and i know i
(31:48):
heard that completely depends ithink you can do it fairly cheap
but well yeah i mean like daycareright now sure there's some ten
dollar a day well yeah i mean likedaycare right now sure there's
some ten dollar a day daycare.
If you can get in the 2000 person,
those nine spots.
But otherwise, yeah, it's like
1200 bucks a month.
Yeah.
So you have a couple of kids.
Yeah.
The trade-off is like, Oh, okay.
Well maybe like somebody doesn't
(32:08):
work so much.
So they're staying home with the
kids.
Now you're losing that income.
So I think there's like also aloss of income to it.
Hey, love my kids.
They're worth every penny, but
just curious of a stat.
Like those are just obviously
changing numbers.
those changing numbers.
So it's like for a two parenthousehold when both parents are
working, typically they're like,it depends how much one of the
(32:29):
spouses are making, but it'snormally a wash if you send the
kids to daycare or if you stayhome.
So if that's the case, do you wantsomebody else raising your kid or
you raising the kid and doing allthat work for free?
So I don't know it's a tough thingit's uh i guess up to each parent
to decide i guess you know like tocircle this conversation right
back if one parent's you you knowlike to circle this conversation
right back if one parent's notgoing to work and stay home and
(32:51):
the other person needs to get somedamn insurance like some insurance
yeah like this is the situationi'm going to be doing a whole
bunch going to be doing a wholebunch of videos on this because
it's a big thing in my life rightnow everything with financial
planning is triggered by lifeevents marriage children home
purchase which have all beenthings that have happened in my
life in the last couple years hereso i understand how all this works
i'm a financial advisor but yeahi'm trying to spread the knowledge
(33:11):
out there for people who don't whodon't in my life right how all
this works i'm a financial advisorbut yeah i'm trying to spread the
knowledge out there for people whodon't who don't understand and so
they can make the right moves andmake sure their family's protected
you have to start to startthinking about this because you're
right there's so many things youdon't know like you don't know
(33:32):
what's going to happen so you justgot to be prepared well here's a
question to ask yourself if youwere to die in the next 30 seconds
you're in the last 30 seconds ofyour life how big of a check would
you have to write your family tomake sure that they didn't have to
worry in the future if you weren'tthere to uh to help them live and
(33:56):
if you don't have that saved worryin the future if you weren't there
to help them live.
And if you don't have that saved
up in an account and you can'twrite that check today, you need
life insurance.
There's no questions about that.
Well, like I was saying before, ifI die, we're okay.
If I'm like halfway there, we areup the creek, bro.
So we're going to talk after theshow then.
(34:17):
I'll do it with Taylor.
We're coming over, Taylor.
We're never leaving.
All right.
Well, maybe we'll leave it thereand dive into some of our wrap-up
questions sounds good you got mescared i've got 30 seconds left in
my life okay if you could buy oneproperty in the okanagan in the
next 12 maybe we'll leave it anddive into some of our wrap-up
questions sounds good you got mescared i've got 30 seconds left in
my life okay if okanagan in thenext 12 months what would it be
top one my family's always been areal estate family we have a bunch
(34:39):
of different investment propertiesi'm actually in the next four days
here closing on we got a townhousefor an Tough My family's always
been a real estate one.
We have a bunch of different
investment family.
properties.
I'm actually, in the next fourdays here, closing on, we got a
townhouse for an investmentproperty.
So I'm going to say, I'm going togo on the other side, go to the
recreational side.
I would love a place at Big White.
(34:59):
I think that's just such anexceptional area, even long-term
opportunity for growth.
I don't know if you guys have seen
Big White's plan for the next 40years.
I'm They're going to expand them Iout.
think it's a pretty cool spot ifyou can purchase something up
there.
I don't know if you guys have seen
big whites plan for the next 40years.
They're going to expand them Andout.
I think it's a pretty cool spot ifyou can purchase something up
there.
going to expand I agree.
We actually had an episode aboutthat on here.
(35:21):
Oh, really?Yeah, we did.
There's a lot going on up there.
So that's pretty cool.
Yeah.
If you can give your 20 year old
self any piece of advice, whatwould it be?
Instead of buying the $1.3 millionhouse at $25,000, buy the $700,000
house at $20,000.
Yes, right.
Yeah, absolutely.
Of course, if you have the savings
to afford it.
The other thing I would say is
automate, automate, automate.
Make sure that you're paying
yourself first into yourinvestment accounts.
Treat it as a bill.
If it's not treated as a bill,
you're going to spend it on otherthings.
So make sure that you'reautomating your investments.
Yeah.
And I'll tack on that.
(35:42):
Even if people are intimidateddoing that, like do it for six
months and then reassess.
Cause I guarantee they'll forget
about it after six months.
Totally.
Okay.
What's your favorite charity or
how do you get back?Yeah.
So we're at, I'm on the board ofdirectors for a charity in Klonica
called Freedom's Door.
So they're a drug and alcohol
rehabilitation home for men.
Amazing program.
These guys come in and they'rehurt.
They've been through the mostunbelievable stories of growing up
without parents on the streets,addicted to drugs and alcohol.
And within the 90-day program thatthey're there, they completely
transform.
(36:02):
It's unbelievable.
And we help them transition intosociety.
So there's two different parts toit. 90 days where it's like the
first 90 days of being clean.
It does run through the 12-step
program.
Then they go through the
continuing program.
And one thing that we're trying to
do now, we're actually addinganother 54 beds.
So currently we have 98 beds.
We're doing townhome projects to
add another 54 beds because thebiggest issue that Freedom's Door
is having is the bottleneck ofpeople on the wait list.
There's a list of 50 people at anytime who are trying desperately to
(36:24):
get into the program to get cleanand we don't have it.
So we've raised about 1.6 millionfor these townhomes.
We need about another 1.6 millionfor the next phase of the
townhome.
So if anybody wants to give for
something that's an exceptionalplace and a local place that's
helping a lot of people.
That is awesome.
Where are the townhomes beingbuilt?
Can you say like, is it?Yeah, it's on Beller Avenue down
in Kelowna.
Okay, awesome.
And so you guys are fundraisingmoney.
Like, do you do any events?Or obviously there's probably a
website.
Yeah, so if anybody wants to go
and donate, you can just go to theFreedom's Door website and they
(36:44):
have a bunch of different ways.
Super easy.
We also run a car wash every year.
My family used to own the Mission
Superwash.
So we started that annual car wash
that supports Freedom's Door.
We've been making about $40,000,
$50,000 a year every year withthat program.
Then there's also a banquet everyyear that makes the same thing
around $40,000, $50,000.
Cool.
That is amazing, man.
I love it.
Yeah, it's very good.
That is just awesome.
All right, Chris, how can Tayloror I or our listener help you?
It's more more like, how can Ihelp you?
People want to go and follow myInstagram.
I have a bit of a passion projectthere.
(37:05):
As you can see, I love makingvideos.
You put out quality content.
Yeah, thank you.
There's a lot of people, you know,financial knowledge is not widely
dispersed.
It's not taught in school.
So I kind of set out on a bit of amission to help people.
So I do videos about three times aweek.
I post them, financial tips.
If people want to go and comment
or DM the word grow, I'll add themto my email list.
I send out two times a month,which is just educational emails
with tips, just like we're talkingabout the FHSA or insurance.
So it's So it's always top ofmind.
(37:27):
If you comment I'll send about theFHSA or So it's guide, always top
of If you comment insurance.
mind.
guide, I'll send you the link tomy free guide.
It goes over how to get out ofdebt, how to build an emergency
fund, how to grow your retirementsavings.
So great resource for people whoare just starting out.
And if people do want to work withme, I'm absolutely happy to do
(37:49):
that.
I normally start out with a 10
minute conversation, just see ifwe're a good fit, see if we can
help.
If we can, and we agree that we're
a good fit, then we can discussnext steps and moving forward.
So if people want to do that, theycan just reach out to my email.
They can search us up online, Mattand Associates Financial
Solutions, and just go book ameeting.
(38:10):
Wicked.
Yeah.
We'll put all that info in theshow notes Yeah.
We'll put all that info in theshow notes as well.
Yeah.
I appreciate your time, man.
Yeah.
Your social media has been
awesome.
Thanks so I appreciate your much.
Yeah.
your social media time, has man.
been Yeah, awesome.
Thanks so much.
Yeah, great time talking to youtoo.
Welcome back to the Colonial RealEstate Podcast.
(00:01):
I'm your mortgage broker host,Taylor Atkinson.
And I'm your real estate agenthost, Matt Glenn.
What's happening today, Taylor?Yeah, man.
Just kind of like looking at someupcoming projects and stuff that's
being finished.
And there's one that you and I
were talking about, which ispretty cool out in Peachland.
Yeah.
Odeo Developments.
Yeah.
You're getting kind of like luxury
style living for a fairly goodprice, starting in the low
millions.
(00:21):
And they're running an event if
the listeners want to go check itout.
It's November 23rd, 10 to 3, 5300Buchanan Road.
They're doing a giveaway, $500gift card to Martin's Lane, which
we all love.
Yeah.
And you can come to the site.
One of the main things I love
about this is honestly, I don'tknow if it's just me or you as
well, but I always look for thedeposit structure.
So for a limited time, they'restill doing just 10%, which is
(00:43):
awesome.
You don't got to tie up a ton of
capital.
And everybody in Kelowna loves
their cars.
And every unit at Adeo comes with
a two-car private garage, which isquality and kind of unheard of in
the city.
Yeah.
Funny enough as well, AmandaHamilton designed it.
We had her on the podcastpreviously.
So yeah.
It's Yeah.
the podcast previously.
So yeah.
Yeah.
It's all coming full circle for
(01:04):
us.
Speaking about other cool people,
today's guest, Chris Matt withMatt and Associates.
So they do financial planning,life insurance, critical illness,
which we now know Matt definitelyneeds.
Yeah.
I had a bit of a moment on the
show.
Yeah.
Yeah.
But also Chris puts out quality
social media content.
It's informative.
It's well-produced.
It looks nice.
It's My God.
Before our episode, I was doing
(01:24):
some research, and I just wentthrough all his videos.
I swear I liked like 30 videos ina row.
Yeah, before the show started, wewere just like, how do you set up
your cameras?Like, why do we look so bad on
camera?You look so good.
Why do do we look like us, and youlook like you?
Yeah, yeah.
So he's pretty dialed in but yeah
puts out some awesome content goodeducational stuff yeah definitely
worth reaching out to him and hisbig thing is kind of get started
(01:48):
early get started planning early iguess all financial planners his
big thing is kind of get startedearly get started planning early i
guess all financial planners dothat but he was really kind of
drove the point home and made itcount for us yeah i think you
think you guys will like the youguys will like the show.
It's a good one.
Reach out to him.
He's got some good content comingout.
Like every show.
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(02:10):
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Enjoy the show, guys.
Enjoy the show.
Okay.
Welcome to the show, Chris Matt.
How are you doing, buddy?Thank you.
Good, good.
Excited to share some stuff today.
(02:30):
Yeah, we've been excited to haveyou on for a while.
Yeah, we've been trying to get youon, but you've been busy, you
know, getting married and going toconferences and all the fun stuff.
I actually see you at like everyevent Emily and I go to.
The last one was OC and Elliot.
We were saying every time we go to
any concert, I always see Taylorand his wife there.
(02:51):
We were saying every time we go toany I concert, always see Taylor
and his wife there.
I feel like you guys probably go
to like 50 concerts and the threethat we go we see you to, there.
that we go we see you to, there.
Exactly.
they Taylor, probably think thesame thing about you.
Yeah.
You guys are pretty good musicians
as well.
I have seen a few of your videos.
I have seen a few of your videos.
We did a little bit of videos on
TikTok.
It's actually pretty crazy.
It went pretty viral.
(03:13):
We got 85,000 followers, over 14
million views.
I play guitar, she sings, people
love that kind of stuff.
It's crazy.
Oh my my God.
It sounds very similar to our
podcast, actually.
Super viral.
Similar numbers.
Well, yeah, a man of many talents,
but let's maybe start with what'syour perfect Friday look like?
What gives you energy,productivity?
Yeah, just walk us through a goodFriday day look for like?
you.
What gives you energy
productivity?productivity?
Yeah, just walk us through a goodday for you.
(03:34):
Sure.
Okay.
Ideal Friday would be I like towake up early.
I always wake up around 6, 630.
A little bit of a biohacking geek.
So I like hydrate before youcaffeinate on a bit of an AG1
kick.
Love that stuff.
Wait 90 minutes before I havecoffee and find that adds energy
into the office by 730.
A couple hours of deep work.
I'm way more focused in themorning.
I can do a whole lot more if I'mworking for those two, three
hours.
And then I take the meetings in
(03:55):
the afternoon.
After that, I just come home, we
make dinner, I do workouts andrelax, prep for the weekend.
Nice.
I love Nice.
I love it.
Yeah.
The 90 minutes before caffeine isa huge one for me as well,
actually.
Tell us about what is your work?
What do you do?What do you kind of specialize in?
Yeah, so I'm financial advisor.
We have a private investment
management firm in Kelowna, and wespecialize in holistic financial
(04:15):
planning.
We manage about a third of a
billion in assets underadministration for about 2,500
clients.
We also have about the same amount
in death benefit.
So not a small firm.
We know what we're doing.
I only share those numbers to show
some authority that we canactually speak on the matters that
we're talking about.
There's a lot of advisors out
there who don't have theexperience and they're just
talking about these things they'venever actually implemented.
(04:37):
Our firm was started about 30years ago by my father.
He grew it into one of the largestfirms for our brokerage in the
country.
And I always tell people I'm one
of the only firms for ourbrokerage in the country.
And I always tell people I'm oneof the only 27 year olds in the
country who has about 10 yearsexperience in the financial
industry.
I was doing paperwork since I was
(04:58):
about licensed really young 16, atand I was able to hit 19, the
ground running.
And it gave me a really good back
end for understanding the how itworks business, before I was
actually licensed and operating.
and operating.
I love Maybe let's start it, man.
you a bit of real estate with,
stuff.
know, Where do you see
opportunities?Like there's been a lot of
changes, let's say first homesavings account.
You guys obviously work withclients, coaching them on that
(05:18):
stuff as well.
Do you want to talk about anything
like that?that?
Yeah, absolutely.
FHSA is a beautiful account that
was brought in by the liberals.
We won't get too political, but I
think it's one of the only thingsthey've done really well.
It's a pretty amazing account.
So on the way in, it's like an
RSP.
You get $8,000 a year.
You get tax deduction on that.
So come tax season, if you put
that in, you're going to get a taxrefund.
On the way out, any growth thatyou have is going to be tax-free.
(05:41):
So it's very similar to a TFSA.
Take TFSA, RSP, combine them in
one, you have your FHSA.
Interesting ways you can use them.
We actually had a client who hadalready purchased a house and
people don't really know this, butthere's no minimum amount of time
that you have to have the money inan FHSA.
So it's even useful if you'vealready purchased a house and
haven't closed.
So what we did is we deposited
$8,000 into this account andliterally the next business day,
(06:02):
we withdrew it.
So what that's going to do, the
money is not invested.
He's not getting any growth, but
what it's going to do is he'sgoing to get that tax deduction
for the 2024 tax year.
He's going to get like three grand
back on his tax return just formaking that move.
And he had already bought thehouse, hadn't closed yet.
Yeah.
It's actually amazing how many
(06:22):
people aren't aware of thisprogram.
Like I feel like the governmentshould be out there, you know,
parading this because this is sucha powerful tool.
Totally.
Well, and one of the things too,
like people don't know that it'snot like a TFSA.
A TFSA, the second you turn 18,you start to acquire room every
year but with the FHS-8 youactually need to have an account
open to start acquiring that roomso I tell people even if you don't
(06:43):
have the money to deposit intothat account and you're planning
on purchasing a house in thefuture open that account before
the end of the year otherwiseyou're going to lose that eight
thousand dollars contribution roomyou otherwise would have had yeah
yeah super powerful you were alsoobviously working have had yeah
yeah super powerful you were alsoobviously working to coach people
to build up savings for their downpayment and stuff like that.
(07:03):
Do you have any good strategiesfor us to help people get into the
market?Like, obviously that's a big
hurdle that we face as well asjust how do people come up with a
down payment?Yeah, totally.
There's a couple of different waysthat I kind of coach people and
help them to come up with thosedown payments.
One is obviously, and you're goingto hear every financial advisor
talk about this, is automating thepayment.
So super important that, you know,once a month or once every two
(07:23):
weeks, you automatically havemoney pulled out of your bank
account and treat this like anyother bill.
And that gets deposited into,let's say the FHSA, or even
potentially we have somefirst-time home buyer RSP options.
If it's automated, you're goingRSPoptions.
If it's automated, you're going todo it.
If it's not automated, that moneyis likely going to get spent.
So that's one way that we helpclients with a little bit of
discipline and saving.
Another great way is if their
employer offers an RRSP matchingprogram, we say absolutely take as
(07:44):
much advantage of that as youpossibly can.
Because every dollar that you putin the RRSP, your employer is
going to match it up to a certainAnd percentage.
your employer is the, going tomatch it up to a certain
percentage.
And the government changed the
rules.
We can use up to $60,000 from an
RRSP purchase your first home.
So while we do have to pay that
back, it's still a great strategyto save at that tax deduction when
(08:06):
we need it, when we're coming upfor that down payment.
Yeah.
You know, it's funny.
I was criticizing that increasewhen it came out previously and
saying like, how many people havethis much as a first time home
buyer in RSP?And then like two weeks later, I
had a client that had exactly themaximum amount.
And I was like, all right, well,I'll put my foot in my mouth
there.
So yeah, it's just the thing,
like, like 60 grand and you haveto pay that back.
So I have to relook up the rules.
(08:28):
I think it's now they changed it
to four years after you take thatfrom the RSP, you have to pay that
back.
So I have to relook up the rules.
I think it's now they changed itto four years after you take that
from the RRSP.
You have to pay it back.
You essentially take the amount,split it up in 15 years, and
that's how much you have to payback.
So 60 grand over 15 years is ahuge amount for people who bought
(08:51):
a house.
They have these heavy mortgage
payments, and that's where theirdiscretionary income is going and
it's going to pay back the RRSP,probably not the most efficient
use.
And unfortunately, what happens
with the RRSP is most of the timepeople just take it as income.
So if you don't pay it back, youtake it as income for that year,
it's at your highest tax bracket.
So you're actually paying more
taxes on that than you would haveotherwise.
So, you know, we used to use RSPsa little bit more, but now that we
have those FHSAs, if you and yourspouse are able to do that, and
you have a five-year time horizon,that's 40,000 total each you can
(09:12):
put in there plus the growth onit.
So we have some serious room thatwe can put into the FHSA that we
don't have to pay back.
And then we won't have to end up
with that tax burden if we don'tpay it back.
that's such a good point.
Yeah, It's such a powerful tool,
but like we really won't see theeffects of it for a couple more
(09:35):
years, kind of like the TFSA, youknow, it started out like, wow,
this is great, but it takes awhile to build up.
Totally.
And that's the thing with the
TFSA.
Like it was open in 2009 and I
have to look back with the firstamount.
I think it was $5,000.
$5,000, yeah.
$5,000, yeah.
Yeah.
So for somebody who, you know, in2009, 5,000, 10,000, then
conservatives did another 10,000.
So we're adding up.
But many years down the road, wehave a huge chunk, like over
(09:56):
$95,000 worth of room if you wereover the age of 18 in 2009.
So you invest in a TFSA like that,you can invest completely
tax-free, build a huge retirementsavings and have all that tax-free
income in retirement.
So now it's becoming more and more
important to take advantage ofthat account.
Yeah.
Speaking about closing on a Yeah.
Speaking about closing on aproperty, this is something that
comes up in my conversations everytime.
As a mortgage broker, we have tolike present you know a type of
life insurance like a coveredmortgage obviously this is you
(10:17):
know your area of expertise so igenerally like make the
introduction off to a financialadvisor because i'm limited to
sell just a couple products andthen we were talking previous to
this show like critical illness aswell do you want to talk about the
types of products that you haveaccess to and why people need
them?So a lot of people, when they get
a mortgage, they're offered bytheir mortgage broker or their
(10:40):
lender a life insurance productthat's tied to that mortgage.
So they don't own it.
It's not there to protect them.
It's there to protect the bank.
Unfortunately, these products are
quite expensive because they don'tdo any medical underwriting.
They essentially pair everybodyinto one group.
And that's how they price out theinsurance where with a life
insurance policy that you own,it's going to be a lot cheaper if
(11:02):
you're healthier.
You can own that for a period
that's a lot longer than yourmortgage period.
And you're not essentiallysubsidizing the insurance for
these unhealthy people.
So it's a lot better way if you
can get your own life insurancepolicy that covers more than just
your mortgage, and it doesn'tdecrease over time.
So a mortgage insurance or theinsurance tied to your lender,
it's going to decrease in valuewith the mortgage over time, and
it's going to be more expensive.
(11:23):
But a policy that you buy on your
own is going to remain level forthe period that you own it, let's
say 10, 20 or 30 years.
And the price is not going to go
down or up.
It's going to remain level.
And the death benefit is alsogoing to remain level.
So if you have a $500,000mortgage, you're going to get
$500,000 of insurance.
(11:44):
It's going to pay out $500,000 in
the future.
And it doesn't matter what your
mortgage value is so i always tellpeople when they're getting a
mortgage don't take the policywith the lender or if you do take
that go and look at a separatelife insurance policy that you're
going to own and then you cancancel the policy with your lender
(12:05):
if you're approved for the cheaperprices yeah so what kind of
insurance people are getting sowhat kind of insurance people are
getting like 20 year terms?Like what about whole life
insurance deal?deal?
Yeah.
So I want to be really careful
with how we have thisconversation.
There's a lot of people and a lotof advisors out there who are
going to push whole lifeinsurance.
And I'll be completely honest.
(12:25):
It's because whole life insurance
pays advisors about eight timeswhat a term life insurance policy
would.
Now, for 90% of people who are
using most of their budget topurchase their home and all their
cash flows going to the mortgage,they need as much life insurance
as they can get to cover theirmortgage for as little cost as
possible.
So what we're typically doing is
insuring these people with termlife insurance.
(12:47):
So I'll give you an example.
A million dollar policy on a
35-year-old male is only going tocost like $42, $43 a month.
That's going to cover a millionbucks if they pass away in the
next 20 years, cover the need forthe time being.
Whereas a whole life policy,they're fantastic and exceptional
for the right use case.
And we can get deep into the weeds
on whole life.
And I don't think we need to here.
But there's a whole bunch of taxadvantage ways you can use them
(13:09):
for corporations, also planningfor children's education, a more
flexible way to save.
There's a number of different
ways.
But typically, when we're covering
mortgages for the lower incomefamilies, we like to see term
insurance.
You said 35-year-old male.
Is there like a steep declineafter that?
When's the most optimal time in aperson's life?
Matt and I are still active.
We're playing sports.
We're healthy.
I just mean Taylor and I Well,
(13:32):
both have young kids.
So I imagine right now would
probably be a good time to getterm life insurance to kind of
cover them growing up.
But I've heard of quite a few
people that are then they realizethat they don't have any and they
go to get more insurance.
retiring, insurance, And
obviously, way more expensive ifyou're 60. 60.
(13:53):
that's Yeah, exactly right.
right.
Is there a time where you shouldkind of advise people on that?
people on that?it all matters Well, on the goals.
And like I life insurancecompanies are private say,
companies.
They are for profit.
And the way that they price lifeinsurance is based on risk the
three of us you know we're youngwe're likely not going to pass
away in the next 10 20 years hencethe price we give 40 50 bucks a
(14:15):
month to the insurance company andthey guarantee they're going to
give us a million bucks so mostpeople don't use their term life
insurance products and that's whyit's so cheap it's just like car
insurance yeah yeah premium youdon't crash you don't use it if
you are older somebody in their60s your chance of passing away
goes up 50 50 the stats so mostyeah yeah premium you don't crash
(14:40):
you don't use it if you are oldersomebody in their 60s your chance
of passing away goes up 50 50 thestats of people who pass away goes
up and that's why the insurance ismore expensive so if we're needing
insurance later in life and weknow that that need is going to
still be there that's somebodywho's a good client for a
permanent product, who we can dosome more planning on the cash
value side.
A permanent product has an
investment side.
And plan to make that insurance a
lot cheaper.
There's actually a crossover
(15:01):
period.
Permanent insurance is quite
expensive.
And then term insurance crosses
over, and it becomes moreexpensive the older we get.
So if you can get that permanentproduct in place, you can actually
have it paid up and not need topay any insurance yeah so it
really depends guys we have to sitdown with the any yeah so it
really depends guys we have to sitdown with the client see how long
are they going to have thatinsurance need yeah there are
certain term products that you canconvert over to yeah there are
(15:22):
certain term products that you canconvert over to whole life when
that expiration comes up like ifyou do a 20-year term did the
insurance companies reach out ordo you guys facilitate that and
say like you know do you get adiscount on the whole life if you
transition over or how does thatlook?
Yeah.
So it's not a discount.
It's actually almost all terminsurance products have the
ability to convert.
Now, if we are going to
potentially be converting that inthe future, we want to make sure
we're in a company that has goodpermanent products.
So I'll use myself as an example.
(15:44):
I got 2.5 million of term 20
insurance that has the ability toconvert to any permanent product
that I want in that 20 years.
The cool thing about that is I can
convert it without any medicalunderwriting.
So if anything happens to me, if Iget cancer, heart attack, stroke,
anything like that, that wouldmake me uninsurable.
I can still get that permanentproduct, lock it in and make sure
(16:04):
that I'm still insured in thefuture.
If I come to the end of theperiod, we can reapply for a new
product before my current producthas expired.
If I don't get approved, then wecan look at converting.
But again, it all matters what thegoals are with the insurance.
There's a ton of different ways wecan set them up.
a ton of different ways we can setthem up.
If you did that there'd probablyjust be no cash conversion, value
to transfer right?over, Yeah.
over, Yeah.
exactly.
No, Because like I the terminsurance is super cheap.
say, You're not building cashvalue.
It's just there to protect yourfamily for the time being.
(16:24):
Yeah.
Before we just continue to bore
listeners, one more insurancequestion.
Sure.
I've always been fairly passionate
about this, but I'm curious tohear your point on it.
First off, congratulations.
I know you guys are expecting a
new addition pretty soon.
Thank Thank you, yeah.
So with with that, yeah, welcometo the chaos of Matt and I's life
with kids.
But with that said, is this one of
the first points of review withclients when they're talking about
(16:48):
having kids or have young kids?Like, hey, maybe we should set up
a whole life policy early becausewe can build that cash value and
it's cheaper and the medicalunderwriting isn't there?
Or do you just say like, we're notgoing to worry about building
wealth?And I know it depends on cash flow
and, you know, clients planning,but is this an asset or a tool
(17:09):
worth exploring right off the bat?I's Yeah.
So if we run the numbers and thisis going to be for the upper
middle class, I'll be honest, itis a little bit expensive.
But if the client can sustain thelevel of premiums for the duration
of the policy, which is normallypaid over 20 years, it's an
exceptional way to save and aflexible way to save for your
children for either education.
And if they don't use the cash
(17:31):
value for education, it thencontinues to grow and they can
pull it out for a down payment ontheir first house.
If they don't need that, itcontinues to grow and they can use
it in their retirement.
So yes, it is a super exceptional
way to save for your kids futureand build wealth.
And the earlier you can startthat, the cheaper the insurance is
going to be, because thelikelihood of a child passing
insurance is going to be becausethe likelihood of a child passing
(17:51):
away is next to zero.
The insurance companies price
their insurance based on that.
So most of the premium that you're
paying is going to building thatinvestment portion.
So it's more of an investmentproduct than an insurance product.
But the beautiful thing about itis that it grows tax-free yeah
awesome sorry i have to askthere's one more insurance
question so like hey talk aboutcritical illness or like me
getting sick so last night i wasgoing through your instagram liked
(18:12):
all your photos you probably sawtwo million likes this morning i
was thinking last night like wehave a lot of life insurance becca
and i like we're totally coveredthat way but like if i don't die
like we're in a situation hereright so like what do people have
to do that like almost like if idon't die like we're in a
situation here right so like whatdo people have to do that like
almost like if i have a stroke orsomething like it's like becca
(18:36):
like just push me over the edgelike push me down the stairs
finish me off like well push methe stairs me off me off like well
here's the thing disability orcritical illness can actually be a
lot more the thing disability orcritical illness can actually be a
lot more of a financial impact onyour family than a death and it's
crazy to say that but think aboutabout it.
You still have your mortgage.
You have increased financial
(18:56):
strain because you have newmedical expenses and you're there
more, you know, as a burden to thefamily.
So the other individual in thehouse can't take care of you.
And it's unbelievable how manypeople actually, you know, get
these things.
So three main ones, cancer, heart
attack, stroke.
We're all young guys.
You know, we'd never think that wehave any risk of that.
So why would you get criticalillness insurance?
2020 thyroid cancer.
I got my thyroid taken out.
(19:17):
You have got to be kidding me.
Last thing that I was thinking
about was, do I need to continueworking?
Am I able to continue to work orshould I focus on healing, to be
recovery?Unfortunately, I didn't have
critical illness I was young and Ididn't think I needed it I should
have had it and it would have paidout I probably would have had a
two hundred thousand dollar policyit would have paid out I could
(19:39):
take a couple years off and restand recover make sure that I'm
healthy and then go back to workso insurance hierarchy life
insurance disability critical, butin reality, it should be critical
illness, life insurance anddisability kind of on the same
level there.
It's so important to have that
coverage.
Okay.
Yeah.
That's a wildly impactful Okay.
Yeah.
That's a wildly impactful story.
I mean, it sure makes it easy forthe conversation when I'm talking
to clients.
Yeah.
I was stressing for the rightreasons last I was stressing for
the right reasons last night.
Sweet Jesus.
Matt just had the just had thesniffles, thought he was going to
be out of work for a week i didn'teven have that i was perfectly
healthy thinking jesus actually ihad a shoulder injury that's
(20:00):
bothering me thought he was goingto be out of work for a week i
didn't even have that i wasperfectly healthy thinking jesus
actually i had a shoulder injurythat's bothering me like just the
most minor possible thing but itgets you thinking you know so
absolutely well that's very coolso have that i well very cool so i
think we should all look into thatespecially me you don't need it
(20:21):
till you need it i guess yeah yeahabsolutely that's a yeah
absolutely a pretty good segueinto other like do's and don'ts so
for just financial planning ingeneral, like what are you seeing
kind of the biggest mistakespeople are making?
Cause that's obviously one ofthem.
Yeah, so people are taking on debtto buy depreciating assets.
And I can't scream this from themountains loud enough.
You know, we have two types ofdebt.
(20:42):
We have good debt and bad debt.
People are taking on good debt.
This is what the wealthy do.
Good debt is when you take on debt
to buy an appreciating asset.
So let's say you're buying real
estate, take on a mortgage, buy anappreciating asset.
Even better debt is when you'retaking on a mortgage to buy an
appreciating asset that's a rentalthat you can then write your
interest on the mortgage on.
(21:03):
So that's building your net worth.
On the flip side, we have thingsthat destroy your net which is bad
So this and you know, worth, debt.
is, I hate to say it, everybody
has it, vehicle loans.
You buy a brand new vehicle,
you're paying interest on thefinancing.
The second you drive it off thelot, it's depreciated 30%.
You can't sell it for what youbought it for.
And it continues to depreciate.
So what does that do?
That destroys our net worth overtime.
So I keep trying to tell this toclients and people, try to stay
(21:25):
away from those types of things.
I understand some people need to
use lines of credit when times aretough, credit cards, things like
that.
But if you can stay away from
those depreciating assets that arepurchased on debt, do that as much
as you possibly can.
Yeah.
I mean, from the mortgage side tolike car payments, just kill
mortgage applications.
So yeah.
Yeah.
And it's a lot easier to get
approved for the car payment afteryou get the mortgage.
You might not get approved forYeah.
And it's a lot easier to getapproved for the car payment after
you get the mortgage.
You might not get approved for the
mortgage payment though, if youhave the car payment first.
Totally.
Yeah.
And don't buy a car like a weekbefore closing either.
(21:47):
Exactly.
I know you laugh.
you laugh.
We always talk about that, but do
people do that a lot?Yeah, I've had that and a boat.
And both times almost killed thedeal.
Most of the time, boats, you getinto negative equity in the first
few years.
Yeah.
Yeah.
And they cost like $300 a day in
gas.
Yeah, it's unbelievable.
So do's and don'ts from afinancial advisor, don't buy a
boat.
(22:07):
Actually, we've been the numbers,
you're better off to rent a boatfor the amount of time.
You end up much more ahead.
Yeah, we were part of the boat
club a couple of the boat club acouple times like it is the best
service you can get.
And like the cost is nothing in
comparison.
Yeah.
And it's also Yeah.
(22:29):
And it's also nice.
You don't have to, you know, doyour oil know do your oil changes
maintenance all that kind of stuffthey clean it they put the gas in
it you just take it out and bringit back yeah or better yet just
have a friend that has a boat yeahthat's usually my strategy yeah
better yet just have a friend thathas a boat yeah that's usually my
strategy yeah yeah yeah i meanmatt and i are in a standoff who's
getting the boat okay what aboutlike average cost of retirement
(22:52):
right now?And I know it's probably been
super volatile for you, but likeI'm assuming you're planning with
clients basically every weeksitting down saying, you know,
here's where you are in your age.
Here's kind of your life
expectancy.
Here's your average spending
limits.
What do you generally see?
Like, are there any rules of thumbpeople should be planning for?
Like, yeah, how do we quantifyretiring?
The question retiring?The question is, where are you
(23:12):
used to living?What's your current standard of
living?And if you want to continue that
standard of living how do we getyou there so what we do is we sit
down we put all of theirinformation into a financial plan
because one of the biggestquestions i get is i have a lump
sum of money i'm 45 50 how much isthis going to give me in
retirement and is my retirementgoing to look similar to how I'm
currently living with my cashflow?
Or am I ahead or behind my goal?So what we do is we sit down and
(23:34):
put it all into the plan.
If we're ahead of the goal,
fantastic.
If we're behind the goal, we can
then show you the differentstrategies that we can use to get
you to that point.
Retirement income varies person by
person based on how they're usedto living.
So we can't put a number on that.
In terms of how much investments
(23:54):
you should have, a general rule ofthumb is if you can sustain your
retirement income with a 4%withdrawal rate from your
investment account, yourinvestments will never run out if
they're managed appropriately atlow risk, you know, retirement
income style investing.
So we sit down, we come up with
that number, we show the clients,and then we track that over time
and make sure that they hit that.
And then for retirement, like
there's different stages ofretirement too.
We find once people retire, theygo gung-ho, they travel, they have
high expenses, they're going outfor dinners, all this kind of
stuff.
And then, so we're at a high stage
and then we slowly go down as weget away from the traveling, it
(24:15):
becomes a little bit moredifficult.
We're still living on our own, sowe don't have those high expenses.
And then over time, it slowlyramps up near the later parts of
retirement as we need assistedliving.
That's incredibly expensive if youaren't on a subsidized program and
things like that.
So it's a little bit of a moving
target.
So we have to make sure that
(24:36):
clients have enough money to beable to sustain that.
Yeah, it's got to be a stressfulgot to be a stressful job, hey, to
be the one to be like, yes, youcan retire, like you'll be okay
for the next 20, 30 years.
Like, that's a lot of pressure,
man.
The even harder thing man.
The even harder thing and what Ihate doing, unfortunately, some
people come too late.
They come to me in there when
they're 45, 50, 55, and they wantto retire at 60, 65.
(24:58):
And I have to sit across the tablefrom them and tell them that they
can't retire when they want toretire.
They either have to reduce theirstandard of living or work later.
And that's a tough conversation.
How I don't enjoy having that
conversation.
Yeah.
Okay.
I have a point Yeah.
Okay.
I have a point here.
So the reason why I bring this up,cause I run into this like way
more than I thought I would when Istarted this business.
(25:20):
A lot of people I've helped themthat are retired.
They own a house that's likearound a million dollars, like
either low mortgage or no mortgageon this house.
But the people have virtually nocashflow.
Like they're living on pension.
What should I be telling people
like this to do because i feellike it's almost like a swear word
to some people to even mentionthat they have like a ridiculous
(25:40):
amount of equity in their homeyeah but like they've owned a home
for 50 years so they're not goingto rent or they're at least not
immediately open to that but theirstandard of living is going down
but they are sitting on a milliondollars i've struggled with what
to do on this like Like for just aquick story here, like I had
people exactly like this.
They wanted to buy another house.
(26:01):
We sold their house, unconditionaloffer, and we went to go buy
another house.
So the house hasn't closed yet.
We were still waiting for theproceeds, but we went to go buy
another house and I was like, Hey,we need to put a deposit on this
house.
So like, do you have $10,000 to
put it on?no five thousand no like one
thousand no do you have fivehundred dollars no you don't have
(26:22):
any money but you're sitting on amillion dollars what do i say to
people like that right so mostpeople have majority of their net
worth in their primary residenceand one of the things i don't know
if you guys would agree with thisor not but i'd say your primary
residence isn't a super greatinvestment when you look at it.
i But what I tell clients is itmight save your retirement.
So we see this all the time.
People have a million dollar house
fully paid off and no income.
So the beautiful thing about the
(26:44):
house is they've been forced topay it down over the years.
the thing about the house isthey've been forced to pay it down
over the years.
If they were renting at were
renting at a lower amount thatmoney would likely have gotten
spent i love that this is why itell people too is owning your
personal residence they say it'snot a good investment but it is
like a forced savings account itold absolutely yeah and the
amount this is why i tell peopletoo is owning your personal
(27:05):
residence they say it's not a goodinvestment but it is like a forced
savings account i told and theamount of people who i've seen
that that strategy has saved theirretirement is unbelievable if
i'm'm being quite honest, it'smost of the people that come to
us, they have a huge house, alittle bit of investments, enough
to sustain them for a while, butthey need some strategies down the
(27:26):
road to tap into that.
There's a number of different
strategies we could get deep intothe weeds.
We don't need to, but you canreverse mortgage.
I'm sure Taylor can talk aboutthis for a long time.
You can sell and downsize.
You can sell and invest that
money, live off the income andrent, and actually end up way more
ahead, depending on what type ofinvestments you're in.
So a bunch of differentstrategies.
For some of these people, it isvery difficult.
They don't want to sell theirhomes, but some of them do need
(27:47):
to.
And we do have to have those hard
conversations with clients.
can If you want to live the way
you want to live, you want tocontinue with your lifestyle, this
is what we need to and we do haveto have those hard conversations
with clients if you want to livethe way you want to live you want
to continue with your lifestylethis is what we need to do and
sometimes that means selling yourhouse and downsizing or pulling
some of that equity out with uhleverage strategy ways that you
(28:10):
know taylor can speak more to likepeople don't don't even have to
downsize most of the time iexperience like they just live in
areas where the property valuesare so high like the house isn't
especially big just expensivebecause it's like downtown or
something right so yeah it's funnyto have this conversation like
maybe i just need to throw themyour way or throw them taylor's
way like i am biting like i ambiting my tongue here yeah throw
(28:31):
them my way you freaking idiotbecause that's a hard conversation
to have the three of us and i justi see this like so of us and i
just i see this like so much,right?
Like it's here's why it's a toughit's here's why it's a tough
conversation.
Like I've had similar clients as
well because their mindset overthe past 20 years was pay off
debt, right?Like debt was quite expensive in
the late eighties, early ninetieskind of thing.
So I understand where they'recoming from.
(28:51):
And the whole goal to retire waspreviously like wipe out debt,
live off a CPP, OAS, a bit ofsavings.
It just doesn't work right now.
So yeah, with those clients, they
don't have income to access theequity is one big issue.
So yeah, you can go on the reversemortgage side, which obviously
you're giving up equity to thelender over time.
Nothing wrong with that product.
Alternatively, there are like
equity programs where you canqualify to tap into equity just
based on the loan to value of yourhouse.
And there's high net worthrequirements.
So you can also use like any otherliquidity that you have to
(29:13):
qualify.
So there's a lot of ways to
qualify for liquidity in yourhouse that generally banks don't
like advise on, right?It's always, what's your income?
What can we approve you for?So we have that conversation and
then we just lay it out and say,okay, this is going to cost you,
you know, 2000 bucks a month ininterest.
Are you okay with that?Because we're going to take now
the liquidity and put it in aninvestment that's going to service
(29:36):
that debt.
If it's structured correctly, you
know, there's also tax benefits tothat.
You can write off the interest onyour primary residence if set up,
right?Here's the main question I usually
say right off the bat is like, doyou have any estate planning?
Like, do you care if, you know,your kids or anyone has equity in
your home?Cause at this stage it's costing
you the lifestyle that you want.
So like, does it really matter if
you pass on an extra couplehundred thousand dollars to your
kids or not?Or can we, you know, chew up some
of that equity, leverage it,reposition it elsewhere and allow
you to live in the house you wantto live in for the next 10 or 15
(29:58):
years, but maybe you don't passdown as much in the estate when
you do kind of pass on.
Because yeah, the downsizing is a
real thing, but like propertytransfer tax, legal fees,
commission, you're giving up a lotof cash just in that transaction
to live in a smaller place to tapinto that equity anyways to
basically hold on to net worth topass on to your kids so i think
that's the big question is likehow much do you want to pass on to
your kids or not and then tocircle back is well if they had
(30:21):
any kind of life insurancepre-planning they wouldn't have to
worry about that so much therewould be a benefit to that yeah
absolutely i got yeah absolutely ia question which may be very
difficult to answer but maybeyou're thinking about it now is
how much do kids cost?And like, well, I'm about to find
out, right?Yeah.
So find Taylor, you could probablytell us a little better on this.
Taylor's got a little guy, youknow, we do financial plans and we
build some of that into the plan,but I did look up the numbers here
(30:44):
let me take a peek and again thisvaries by demographic like my
personal experience so far it hasnot been that much money but like
experience so far it has not beenthat much money but like i want
them to play hockey so i've got areally good really good friend
they were looking at a privateschool for their kids he's got
three kids the duration of thatprivate school from you know grade
(31:07):
one to twelve not post-secondary,was going to be $900,000 per kid.
What school is that?$900,000 per kid?
per kid?Aberdeen?
Yeah.
Okay, Aberdeen is like $12,000 a
year for grade one and like$20,000 a year for grade nine.
How would that work?$900,000?
I got the number here.
And I think this is way
underwritten.
And it also depends on
demographic.
But Stats Canada says about
$293,000 from birth to age 17 fora two-parent middle-income family
with two children.
(31:27):
So average of $17,235 per year.
We need a bigger home.
So a lot more mortgage payments.
We need the bedrooms.
We need a bigger vehicle.
Bigger depreciating vehicle.
Yeah, absolutely.
A vehicle that you own.
If you're sending your kids to a
private school that adds upthere's so many things sports like
you say hockey i have clients whoare spending over 30 000 40 000 a
year yeah i heard that they'relike nine year olds and i know i
(31:48):
heard that completely depends ithink you can do it fairly cheap
but well yeah i mean like daycareright now sure there's some ten
dollar a day well yeah i mean likedaycare right now sure there's
some ten dollar a day daycare.
If you can get in the 2000 person,
those nine spots.
But otherwise, yeah, it's like
1200 bucks a month.
Yeah.
So you have a couple of kids.
Yeah.
The trade-off is like, Oh, okay.
Well maybe like somebody doesn't
(32:08):
work so much.
So they're staying home with the
kids.
Now you're losing that income.
So I think there's like also aloss of income to it.
Hey, love my kids.
They're worth every penny, but
just curious of a stat.
Like those are just obviously
changing numbers.
those changing numbers.
So it's like for a two parenthousehold when both parents are
working, typically they're like,it depends how much one of the
(32:29):
spouses are making, but it'snormally a wash if you send the
kids to daycare or if you stayhome.
So if that's the case, do you wantsomebody else raising your kid or
you raising the kid and doing allthat work for free?
So I don't know it's a tough thingit's uh i guess up to each parent
to decide i guess you know like tocircle this conversation right
back if one parent's you you knowlike to circle this conversation
right back if one parent's notgoing to work and stay home and
(32:51):
the other person needs to get somedamn insurance like some insurance
yeah like this is the situationi'm going to be doing a whole
bunch going to be doing a wholebunch of videos on this because
it's a big thing in my life rightnow everything with financial
planning is triggered by lifeevents marriage children home
purchase which have all beenthings that have happened in my
life in the last couple years hereso i understand how all this works
i'm a financial advisor but yeahi'm trying to spread the knowledge
(33:11):
out there for people who don't whodon't in my life right how all
this works i'm a financial advisorbut yeah i'm trying to spread the
knowledge out there for people whodon't who don't understand and so
they can make the right moves andmake sure their family's protected
you have to start to startthinking about this because you're
right there's so many things youdon't know like you don't know
(33:32):
what's going to happen so you justgot to be prepared well here's a
question to ask yourself if youwere to die in the next 30 seconds
you're in the last 30 seconds ofyour life how big of a check would
you have to write your family tomake sure that they didn't have to
worry in the future if you weren'tthere to uh to help them live and
(33:56):
if you don't have that saved worryin the future if you weren't there
to help them live.
And if you don't have that saved
up in an account and you can'twrite that check today, you need
life insurance.
There's no questions about that.
Well, like I was saying before, ifI die, we're okay.
If I'm like halfway there, we areup the creek, bro.
So we're going to talk after theshow then.
(34:17):
I'll do it with Taylor.
We're coming over, Taylor.
We're never leaving.
All right.
Well, maybe we'll leave it thereand dive into some of our wrap-up
questions sounds good you got mescared i've got 30 seconds left in
my life okay if you could buy oneproperty in the okanagan in the
next 12 maybe we'll leave it anddive into some of our wrap-up
questions sounds good you got mescared i've got 30 seconds left in
my life okay if okanagan in thenext 12 months what would it be
top one my family's always been areal estate family we have a bunch
(34:39):
of different investment propertiesi'm actually in the next four days
here closing on we got a townhousefor an Tough My family's always
been a real estate one.
We have a bunch of different
investment family.
properties.
I'm actually, in the next fourdays here, closing on, we got a
townhouse for an investmentproperty.
So I'm going to say, I'm going togo on the other side, go to the
recreational side.
I would love a place at Big White.
(34:59):
I think that's just such anexceptional area, even long-term
opportunity for growth.
I don't know if you guys have seen
Big White's plan for the next 40years.
I'm They're going to expand them Iout.
think it's a pretty cool spot ifyou can purchase something up
there.
I don't know if you guys have seen
big whites plan for the next 40years.
They're going to expand them Andout.
I think it's a pretty cool spot ifyou can purchase something up
there.
going to expand I agree.
We actually had an episode aboutthat on here.
(35:21):
Oh, really?Yeah, we did.
There's a lot going on up there.
So that's pretty cool.
Yeah.
If you can give your 20 year old
self any piece of advice, whatwould it be?
Instead of buying the $1.3 millionhouse at $25,000, buy the $700,000
house at $20,000.
Yes, right.
Yeah, absolutely.
Of course, if you have the savings
to afford it.
The other thing I would say is
automate, automate, automate.
Make sure that you're paying
yourself first into yourinvestment accounts.
Treat it as a bill.
If it's not treated as a bill,
you're going to spend it on otherthings.
So make sure that you'reautomating your investments.
Yeah.
And I'll tack on that.
(35:42):
Even if people are intimidateddoing that, like do it for six
months and then reassess.
Cause I guarantee they'll forget
about it after six months.
Totally.
Okay.
What's your favorite charity or
how do you get back?Yeah.
So we're at, I'm on the board ofdirectors for a charity in Klonica
called Freedom's Door.
So they're a drug and alcohol
rehabilitation home for men.
Amazing program.
These guys come in and they'rehurt.
They've been through the mostunbelievable stories of growing up
without parents on the streets,addicted to drugs and alcohol.
And within the 90-day program thatthey're there, they completely
transform.
(36:02):
It's unbelievable.
And we help them transition intosociety.
So there's two different parts toit. 90 days where it's like the
first 90 days of being clean.
It does run through the 12-step
program.
Then they go through the
continuing program.
And one thing that we're trying to
do now, we're actually addinganother 54 beds.
So currently we have 98 beds.
We're doing townhome projects to
add another 54 beds because thebiggest issue that Freedom's Door
is having is the bottleneck ofpeople on the wait list.
There's a list of 50 people at anytime who are trying desperately to
(36:24):
get into the program to get cleanand we don't have it.
So we've raised about 1.6 millionfor these townhomes.
We need about another 1.6 millionfor the next phase of the
townhome.
So if anybody wants to give for
something that's an exceptionalplace and a local place that's
helping a lot of people.
That is awesome.
Where are the townhomes beingbuilt?
Can you say like, is it?Yeah, it's on Beller Avenue down
in Kelowna.
Okay, awesome.
And so you guys are fundraisingmoney.
Like, do you do any events?Or obviously there's probably a
website.
Yeah, so if anybody wants to go
and donate, you can just go to theFreedom's Door website and they
(36:44):
have a bunch of different ways.
Super easy.
We also run a car wash every year.
My family used to own the Mission
Superwash.
So we started that annual car wash
that supports Freedom's Door.
We've been making about $40,000,
$50,000 a year every year withthat program.
Then there's also a banquet everyyear that makes the same thing
around $40,000, $50,000.
Cool.
That is amazing, man.
I love it.
Yeah, it's very good.
That is just awesome.
All right, Chris, how can Tayloror I or our listener help you?
It's more more like, how can Ihelp you?
People want to go and follow myInstagram.
I have a bit of a passion projectthere.
(37:05):
As you can see, I love makingvideos.
You put out quality content.
Yeah, thank you.
There's a lot of people, you know,financial knowledge is not widely
dispersed.
It's not taught in school.
So I kind of set out on a bit of amission to help people.
So I do videos about three times aweek.
I post them, financial tips.
If people want to go and comment
or DM the word grow, I'll add themto my email list.
I send out two times a month,which is just educational emails
with tips, just like we're talkingabout the FHSA or insurance.
So it's So it's always top ofmind.
(37:27):
If you comment I'll send about theFHSA or So it's guide, always top
of If you comment insurance.
mind.
guide, I'll send you the link tomy free guide.
It goes over how to get out ofdebt, how to build an emergency
fund, how to grow your retirementsavings.
So great resource for people whoare just starting out.
And if people do want to work withme, I'm absolutely happy to do
(37:49):
that.
I normally start out with a 10
minute conversation, just see ifwe're a good fit, see if we can
help.
If we can, and we agree that we're
a good fit, then we can discussnext steps and moving forward.
So if people want to do that, theycan just reach out to my email.
They can search us up online, Mattand Associates Financial
Solutions, and just go book ameeting.
(38:10):
Wicked.
Yeah.
We'll put all that info in theshow notes Yeah.
We'll put all that info in theshow notes as well.
Yeah.
I appreciate your time, man.
Yeah.
Your social media has been
awesome.
Thanks so I appreciate your much.
Yeah.
your social media time, has man.
been Yeah, awesome.
Thanks so much.
Yeah, great time talking to youtoo.
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