The Money Scope Podcast
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.
23:06
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Quick takeaways
- Start by focusing on building financial security through controlling spending and living within one's means, while also using earnings to pay down debt and create room on their line of credit for low-income months.
- Consider personal preferences and psychological factors when making financial decisions, such as whether to prioritize paying off a personal mortgage or continue investing with money in a corporation, and consult with professionals to create an optimal plan.
Deep dives
Case 1: Managing Debt and Saving for the Future
The first case discussed in the podcast focuses on a recent graduate with significant debt and financial uncertainty. The graduate has $200,000 of debt and is unsure of how to start saving and investing. It is advised for them to focus on building financial security by controlling spending and living like an average-income Canadian. They should reward themselves with reasonable expenses that align with their values, rather than making extravagant purchases. As their income grows, they can use their earnings to pay down debt and create room on their line of credit for low-income months. The podcast also suggests analyzing the benefits of contributing to their RSP or their TFSA depending on their current and future tax rates.
