Ep. 5 Case Conference: Debt, Saving, Investing

Jan 19, 2024

A recent graduate with significant debt seeks advice on saving and investing. The podcast discusses building financial security, controlling spending, and making informed decisions. It explores the dilemma of paying off debt vs. investing in the corporation and emphasizes personal perspectives in financial decision-making.

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ANECDOTE

Common Postgraduate Debt Story

A recent Ontario graduate had $200,000 on a personal line of credit at 6.5% and no investments or savings.
They felt overwhelmed despite expecting to reach $300,000 annual income as they built their practice.

ADVICE

Control Spending To Build Security

Build financial security first by controlling spending and keeping lifestyle modest while income is uncertain.
Live like an average-income Canadian initially and reward yourself modestly aligned with values.

ADVICE

Use Extra Income To Shrink Debt And Create Liquidity

Use earnings above lifestyle needs to pay down high‑interest line-of-credit and create liquidity room.
Maintain line-of-credit capacity to bridge low-income months and upcoming tax installments.

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Today's show features our first case conference supplemental episode. We've built several cases, complete with figures, to expand upon our primary episode's discussions on debt, saving, and investing. These scenarios reflect common queries and challenges we frequently encounter from our audience. While we hope you can draw parallels to your own circumstances from these cases, it's crucial to understand that this isn't personalized advice. We aren't offering specific recommendations. However, our goal is for you to find elements in these cases that resonate and assist you in navigating your own financial journey, whether independently or with a consultant. Our first case study is one that many people will be able to relate to. We focus on a recent graduate, with a substantial amount of debt, with no investments or savings, and break down how they should go about navigating their financial wealth journey. Tuning in you'll hear a breakdown of the numbers for this case study, how to build competence and a financial plan, how your tolerance for debt will influence your financial decisions, plus a whole lot more. Join us for our first in-depth case study as a supplement to our main episode!

(0:00:17) Introducing our first case conference supplemental episode.

(0:00:50) An overview of our first case study concerning a recent graduate with a lot of debt.

(0:02:13) How to go about building competence and a plan in this scenario.

(0:05:05) A breakdown of the case numbers after earning some revenue.

(0:08:25) The next steps to take after shrinking debt and stabilizing cash flow when you start feeling the pressure to invest.

(0:11:09) The mid-career mortgage dilemma and advice on how to manage it.

(0:17:01) Guidance on taking advantage of the ability to get money out of your corporation tax efficiently.

(0:20:50) The psychological effect of debt and the importance of taking this into consideration.

(0:21:36) How your individual perspective should impact your financial planning decisions and the financial advisor you partner with.

Links From Today's Episode:

Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/

Benjamin on X — https://twitter.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Dr. Mark Soth (The Loonie Doctor) — https://www.looniedoctor.ca/

Dr. Mark on X — https://twitter.com/LoonieDoctor

Money Scope Episode 5 — https://moneyscope.ca/2024/01/12/episode-5-debt-saving-investing/

Rational Reminder Episode 226: Colonel Chris Hadfield — https://rationalreminder.ca/podcast/226

Medical Student Debt Repayment in Early Practice — https://www.looniedoctor.ca/2022/12/30/medical-student-debt-repayment-2/