The Canadian Investor - How we Spend and Save Money - Going Over Our Monthly Budget

Episode Date: November 13, 2023

In this episode, Simon and Braden talk about the importance of a budget and go over their own monthly budget. They talk about what items they try and save the most money on and what they splurge on from time to time. This episode was perfectly timed for Financial Literacy Month in Canada. The episode finishes with Simon discussing open banking with Faye Pang from xero.com.    Check out our portfolio by going to Jointci.com Our Website Canadian Investor Podcast Network Twitter: @cdn_investing Simon’s twitter: @Fiat_Iceberg Braden’s twitter: @BradoCapital Want to learn more about Real Estate Investing? Check out the Canadian Real Estate Investor Podcast! Apple Podcast - The Canadian Real Estate Investor  Spotify - The Canadian Real Estate Investor  Sign up to Stratosphere for free 🚀 our platform for self-directed stock investing research. Register for EQ Bank, the seamless digital banking experience with better rates and no nonsense.See omnystudio.com/listener for privacy information.

Welcome back into the show. This is the Canadian Investor Podcast, made possible by our friends and show sponsor, EQ Bank, which helps Canadians make bank with high interest and no fees on everyday banking. We also love their savings and investment products like GICs, which offer some of the best rates on the market. I personally, and I know Simone as well, is using the GICs, which offer some of the best rates on the market. I personally, and I know Simone as well, is using the GICs on a regular basis to set money aside for personal income taxes in April of every year. Their GICs are perfect because the interest rate is guaranteed, and I know I won't be able to touch that money until I need it for tax time. Whether you're looking to set some money aside for a rainy day or a big purchase is

coming through the pipeline or simply want to lower the risk of your overall investment portfolio, EQ Bank's GICs are a great option. The best thing about EQ Bank is that it is so easy to use. You can open an account and buy a GIC online in minutes. Take advantage of some of the best rates on the market today at eqbank.ca forward slash GIC. Again, eqbank.ca forward slash GIC. This is the Canadian Investor, where you take control of your own portfolio and gain the confidence you need to succeed in the markets. Hosted by Brayden Dennis and Simon Bélanger. The Canadian Investor Podcast. Welcome into the show. My name is Brayden Dennis, as always joined by the prudent Simon Bélanger and the man who carries this podcast network on his back, doing back-to-backer episodes since i'm only here half the time hey hey we appreciate you

you're holding it down the show goes on yeah it was a fun recording so back-to-back just did it with dan for the news and earnings you will have heard this last thursday when you listen to this it was a fun one if you haven't listened to it we actually discussed the bip short report so for people interested in that, have a look. We had a pretty good discussion. But today, I think it's going to be great. It fits well with Financial Literacy Month in Canada. So we'll be going over what we spend money on, essentially, what our budgets look like. Yeah, we're going to get real personal. And last two episodes, we did a part one, part two of what we have out of our investment portfolios.

But here we're going to go in like, how do we actually spend our money? How do we have money left over to aggressively put into the market, deploy in the market? And more importantly, where we ball out, where we will kind of without compromise spend money because it makes us happy. And where we'll like pull back a little bit where we don't find a lot of value or we just try to save a little bit here and there. So we're going to go, we're going to break it down into a few different buckets and it should be good. So we're getting deep into the personal lives of Brandon and Simone today, but we do it for you, the listeners. Yeah, exactly. And if you stick till the end of the episode, you'll see that I'll be doing an interview with Faye Pang from Xero.com talking about open banking and some proposed legislation in Canada to get open banking available to Canadians. I think that's been

in the work for a couple of years. So for those of you interested in learning about that, stay until the end and you'll have a 10-15 minute interview i did with fey speaking of spending money as you can see here i'm drinking an afternoon nespresso and oh yeah my girlfriend's got me addicted to these things like it's full-on crack in here i'm convinced i don't know what you what do you do for coffee at home we have a machine but we are like we refill it pretty sporadically so we'll go like for three four months without any nespresso pods but for the most part i do either regular drip coffee like brewed coffee or i have a little kind of a container to make homemade cold brew which i like oh nice oh that's good okay because yeah i've just been a drip coffee

from the coffee maker i'll just buy like beans from or like i'll buy the ground beans from like kirkland or something or or whatever or like some really nice coffee from out west i like the kicking horse stuff but i just got into the nespresso game and i'm fully addicted so talk about spending money because those those pods are not, bro. Yeah, there's like $1.52 depending on the one. So it's not like it's cheaper than going to the coffee shop, but it's more expensive than brewing your own or even if you have a espresso machine that you do on your own. The machine might be a bit more expensive, but Indian will be cheaper doing that. But it's an in in-between so it's not as expensive as it yeah exactly and i'm fully hooked so we're in now we're in for the long haul uh before we get into it on the episode today i have a quick announcement a very actually

important announcement it's been a hard decision but it's it one that we've made. And I think it's going to be amazing for everyone involved. So this is regarding Stratosphere and FinChat. On November 30th, every single feature inside of Stratosphere, all of the financial data, all the terminal, all the graphing, everything, the dashboarding, everything is going to be moving over into FinChat. boarding, everything is going to be moving over into FinChat. So you can think of it like Stratosphere plus the AI assistant in one nice interface, really like it's a one plus one equals three situation. So if you subscribe to Stratosphere before November 30th, I'm recording this on November 7th, you'll get bundled in and grandfathered in everything on FinChat. So it's a

really good deal. So if you subscribe to either platform before November 30th, you'll get bundled in and grandfathered in everything on FinChat. So it's a really good deal. So if you subscribe to either platform before November 30th, you'll get bundled in. It's going to be a good deal. And no worries if you're subscribed to both, we will auto unduplicate your subscriptions for you. So you will not be paying for both starting November 30th. You're already automatically ported over and sometime in the new year, somewhat bittersweet, but exciting time. The Stratosphere brand will actually be retired, which is kind of crazy to say, but it is a hard decision, but one that we think is the best. So we're rolling with the brand here. One plus one equals three. These things work better together.

And I recommend if you haven't and you've been thinking about subscribing to one of them, do it before November 30th. And then also use code TCI for 15% off at checkout. And you'll get a great deal grandfathered in when both the platforms merge into FinChat later this month. So big decision. Or maybe if we start a new podcast as part of the network,

maybe Braden, I'll throw it into the new host for free. We'll try to convince him for that. That's right. Yeah. Yeah. Free, free platform. All right. Let's get into it.

So what we spend money. I thought today's episode would be awesome for listeners. How we spend, how we save, what we like to ball out, where we pull it back. Both of us are pretty frugal, I would say. I would say money conscious. Remember that conscious conscience discussion last week? We're money conscious. And we've been running an investing DIY podcast. So I think that's kind of obvious. But I was 18 when I opened my self-directed brokerage account. I'm 28 now. I opened my self-directed brokerage account. I'm 28 now and 17 year old me being the math nerd and engineering student doing some quick realization about the wonders of compounding and how just a

few thousand bucks I could put together each year in the markets, what it could become if I stayed with it and compounded it for decades. And so in April of 2021, which feels not that long ago, and also feels like a lifetime ago, career wise, I quit my comfy six figure a year engineering job and had to be really smart about my spending. And I'm going to get into that stage of my life as well. The weird kind of relationship I had with money during that time, and how I spend money now, now that I don't eat dirt and ramen, and what I would recommend to people who are in a similar situation. So without further delay, Simone, you kick us off. And then I'll chime in. Let's break this down into kind of our one need slash budget, and then to like,

kind of a discretionary vibe. Yeah, so I've talked about how we kind of budget, my wife and I. So essentially we kind of do it in a, I guess, dual fashion, I would say, or kind of break it down that way. So we have our common expenses. So everything that we share, so essentially our budget, we look at that and then each pay, or let's just say each month we each put the same amount to cover all of those expenses and then whatever is left we can spend however we see fit so if there's certain things that you know i buy that she may not necessarily agree with or vice versa well it's my you know extra money so I can really do what I want. And same goes for her.

And we found that's worked really well for us. We've been together for over eight years now. So it's really, it works for us. I know it's not everyone. It doesn't necessarily work for everyone. But we actually just updated our budget because I think that's really important, especially right now with the cost of living rising so quickly. I think at the very most, like you should really updating your budget at least once a year, probably several times a year to make sure that it's up to date,

because obviously we've seen that let's just take food, right? Price of food has increased so much that, you know, you have to factor that in for higher costs. Now, our family budget, it's broken down. So I did percentages and dollars, but I'll just kind of go into dollars here. So the top item is our mortgage. After that, that's thirty to fifty a month. And then our food slash household items. That's fifteen hundred dollars a month.

And then we have our daughter so the expenses that are more specific to her so daycare clothes diapers things like that for those who don't have kids clothes is basically a monthly expense when you have a young child because they grow so quickly out of them um so and i'll later i'll talk about how like we've been able to save some money as some tips and tricks that people can do as well. The next expense is kind of one that's not really an expense, but it is in my view. So it's our emergency fund. So because my wife was on maternity leave for a year, obviously, our income dropped because she was on employment insurance. We had money that we set aside,

but we had a bit more expenses that we thought, so we had to dip in a little bit in our emergency fund. So we're putting $1,000 every month to replenish that until we have, at the minimum, three months worth of expenses to be covered. The next one, people may put that one with their mortgage of their homeowners, but I like to separate them just because I like each thing kind of grouped this way.

Property taxes, $625 a month. All of our insurance costs. So we have two cars and our home insurance, $510. Our car costs, obviously I kind of put put those separately but the car cost is gas plus repairs because we we don't have any payments on our cars you don't do a do you do a whole lot of driving i don't i don't feel like no you do no i don't you work from home a lot of the time right so yeah so i work from home i mean we really got a second car because of our daughter yeah being able to pick her up from daycare but that's one of the things right where people can save money like there's so many people that get caught up in you know having the nag the bmw audi mercedes but that can barely afford it and they have payments and they're struggling to make those payments the amount of people i see that cannot afford

an a thousand dollar car lease for the fancy Mercedes, but have the $1,000 car lease for the fancy Mercedes is out. Like, dude, it's so, so common. Yeah, and we ended up buying a new used car. So it was a 2017 Jetta, pretty low mileage, like 110,000 kilometers, pretty respectable for that age. And we paid $13,000 for it. So it was really reasonable overall drives quite well. I mean, gets me point A to point B. So I can't complain. Yeah. Yeah. Perfect, dude. That's, that's the way to do it, man.

Yeah. And then in terms of costs, so in bridge is around $350 a month. That includes, because we lease our water heater and boiler. A boiler is like a furnace. It's just like these old radiators because our house is a bit older. So it's all in like that same bill. So I just put it all in one here. We have $200 allocated for our dog per month.

Obviously doesn't cost that much because you've seen, you know, his name is Leroy. So you've seen him. He's a pretty small dog and he doesn't eat 200 worth of food a month but we kind of level off the vet bills and all that and it that's a reasonable amount for monthly i was wondering there i was like is leroy getting steak tartare every night or what like tuna sashimi for dinner every night no he uses a big dog food the dental for big dogs because he swallows it too quickly if not yeah so we have uh we have that we also have cleaners that we have once a month we used to have it twice a month but to reduce our expenses we went down to once a month

and i do the cleaning the rest of the time. We have internet, that's $100. Water billing, that's $100. Hydro, $100. And then we have a budget of $85 per month for streaming services. That includes Netflix, Spotify, plus one other service that we use on a rotating basis. So if we want to watch something on Disney+, we'll have it for one month or two months, whatever. But if we want to watch another show on another streaming

service, we have to cancel Disney+, to be able to get that other one. And that makes sure that we actually don't end up, you know, paying 150 or 200 bucks in full on subscription, which I've heard people do because they they end up like not really keeping track and you know when i talked about that to them they're like oh yeah you're right like for sometimes we'll never watch like anything else than netflix for a month or two well you know just cancel it and resubscribe if you're watching one series too like you're not how many people really watch like multiple series at the same time like to me that is insane that is that is a psych psychotic behavior to be

watching like multiple shows at the same time yeah and i just don't have time to do that so yeah so that's essentially how it lines up for us um that's kind of our family budget and then i'll go over what i spend things on the extra money that i have kind of the simone budget yeah the simone budget so so you and your wife kind of you guys have your your combined budget and then you guys have your own own piggy banks that's exactly that's the best way to do it i mean i'm not married so i can't say anything but like this is the best way to do it. I mean, I'm not married, so I can't say anything, but this is the good way to do it. But it probably, to be fair, it probably works best for us because we have similar income. So, you know, it's not the exact same, but I would say they're like around 10% of each. So, obviously, if you have someone that's making like, you know, a couple that's making like 200K and the other person like 70, then maybe you'll want to use a slightly different approach. But for us, it does work well. Yeah. Yeah. Yeah. So I'm just looking at your list. And I mean, a lot of similar items and similar costs too. I mean, I don't have the

daycare and diapers, but my girlfriend and I live together. And so we do split a lot of this stuff. Yeah, this is good, man. ETFs, not just a few select ones, all commission free so that you can choose the ETFs that you want and they charge no annual RRSP or TFSA account fees. They have an award-winning customer service team with real people that are ready to help if you have questions along the way. As a customer myself, I've been impressed with Questrade's customer service. Whenever I call or email, every support rep is very knowledgeable and they get exactly what I need done quickly. Switch for free today and keep more of your money. Visit questrade.com for details.

That is questrade.com. Here on the show, we talk about companies with strong two-sided networks make for the best products. I'm going to spend this coming February and March in an Airbnb in South Florida for a combination of work and vacation and realized, hey, my place could be a great Airbnb while I'm away. Since it's just going to be sitting empty, it could make some extra income. But there are still so many people who don't even think about hosting on Airbnb or think it's a lot of work to get started. But now it is easier than ever with Airbnb's new co-host network. You can hire a local quality co-host to take care of your home and guests. It's a win-win since you make some

extra money hosting on Airbnb, but can still focus on enjoying your time away. Find a co-host at airbnb.ca forward slash host. That is airbnb.ca forward slash host. All right. So I'll go into my kind of basics now list, and then we can go into our kind of discretionary and where we spend, where we save. So first off, I can speak for both of us. We were both very lucky. That's for sure. I think both of us are very grateful. I remember the first time too, this is a side topic, but I remember the first time you and I were like, yeah, this podcast has become pretty big. It's going to do several million listens this year. And we knew it was big. We knew we were onto something, but we didn't really know

it was a good business until we got our first ad. Paul, Do you remember what our first ad was? Was it Nord VPN? Was it that? I think it, yes, it was, it was, but that was not a lot of money.

That was our first, like that was our first taste of like a few dollars. Yeah. I remember when we signed like our first, like four or five month, like contract for an ad deal. And we're like, dude,

this one ad slots, like, you know, almost, almost worth a hundred grand, like, whoa. And so I consider myself very lucky, not only on my upbringing, but just the timing of that. Cause when I did leave my job, I was like, oh man, I'm going to have to just eat dirt and ramen and be like really frugal. And it was basically the month after you and I realized, dude, we have like a half a million dollar business here from the podcast that we haven't been monetizing. So let's monetize it. And that was a pretty awesome, like, I'm so grateful for that bridge that it gave me. Cause I did, it would have been a lot more stressful if we didn't kind of unlock the value of the podcast at the same time. So, yeah, that was cool.

Yeah. Yeah. And it came after. It wasn't an interview we did for one of the guys from Millennial Investing. Yeah, that's true. Yeah. Shout out to Robert. Thanks to him. Yeah, to Rob. Let's go. I was looking for his name. Yeah. Didn't sleep much last night so i've been looking for the terms quite a bit but uh yeah the big shout out to him because we talked to him about our numbers and he said oh well you guys could definitely be monetizing that so

that's kind of what kind of woke us up i would say or yeah me and him i was i was on his podcast and by the way i've hung out with him a bunch in person since then in Berkshire, and I think in Austin as well. And yeah, shout out to him. He was just like, oh, dude, you have a pretty big business here. What are you doing? And so that was a huge moment for us. All right. So now into where we spend money. None of this is supposed to be some sort of humble brag, by the way. It's a show I'm incredibly frugal in some areas to make up for some areas I want to spend a lot of money and then still be able to invest. Like with like there's no compromise on my ability to invest a few thousand dollars a month, basically, in my DCA plan. And so I grew up what I'd say comfortable.

Yeah, but maybe very comfortable, but certainly not rich. Like I want that to be like, there's a big distinction. I grew up in Oakville with a lot of very rich people and we were, you know, statistically very comfortable, had a great upbringing, but we were not like mega rich. My parents were grinding and we had this family cottage, which is the thing that I by far cherish the most, but certainly not rich, rich. So every dollar I've earned in the past years has been from my business, this podcast and the two software companies. And I started them with literally nothing, no capital. I didn't get some small loan of a million dollars. That didn't happen. I didn't know anything. And so I'm also going to do a segment on this on tips for people who want to start their own business and how to manage personal finance as an entrepreneur. Because you get all these tips about how to be an entrepreneur, but you get no tips on how to do personal finance as an entrepreneur because they're get no tips on how to do personal finance

as an entrepreneur because they're so different. All right. So rent, we spend $3,400 a month. It's a nice two-story loft. It's not huge, but it's really nice in Toronto. And so dude, rent's just expensive in this city. Insurance is 150 bucks. I own my car, which is nice. I don't drive much. So gas and repairs around 200 bucks a month that goes down to like zero in the winter. Cause I don't go to the cottage and I don't play golf. That means my car doesn't leave the garage. Like literally, like I don't drive downtown. I just take transit. So if I'm not driving to the golf course or driving to the cottage, my car can sit doing nothing for months

in the winter. And then food, I'd have to audit now because now we're cost goers and I have to do some like really kind of audit on how much we're spending, but probably just a little over a thousand bucks a month if you include everything. And then internet and phone, like all this kind of utility stuff, I run it through my company. So I don't consider it onto my personal finances. Now I have two more buckets, which are discretionary, but what I call non negotiable. And those items are my gym membership, which I spend 250 bucks a month on. The reason that it's more expensive than a good life, like 40, 50 bucks is there's classes every day that I can go to. And those classes are like heavy lifting nonstop, like a trainer pushing you and you get rocked. And in one hour I get so much

out of it. So I do that other health stuff. Like I just bought a new pair of lifting shoes. I spend a lot of money on like vitamins supplements that kind of stuff dude protein powder talk about inflation man i just bought a new bucket of protein powder yesterday i used to buy for 80 or 79 dollars for the five pound optimum nutrition chocolate it's now 129 on amazon so i I started shopping around and buy some at Costco. Yeah, dude, I can't get off this brand of people who are like, you know, no protein. Ultimate nutrition is the best travel. So the reason I have this is like 500 bucks a month, but around six grand a year.

Now, of course, lucky to be able to do that and stuff and like work from anywhere and travel. But I don't look at that as like this. Like this is something that I need to spend money on. Like it just it is just provides so much happiness for me. And then my golf membership is like forty two hundred dollars a year. So five hundred bucks a month for that. Plus the membership, plus like other stuff, you know, equipment clubs, doing some indoor stuff this off season, date nights and gifts, roughly like 150 bucks a month if you if you average it all

out. So that's in the non negotiable bucket. And then the discretionary bucket of going out like 300 bucks a month dinner bars, concerts, cottage toys, which is around 10 grand a year. And I bought a sea do this year. I bought it used, but like filling up the boats, the gas in the boats, just stuff up there. And then clothes. I don't spend a whole lot, man. I buy most of my clothes from Winners and the workout stuff I buy from Lululemon. So I really don't spend that much money on clothes. So we worked that out to around seven and a half ish grand a month. But some of it is offset by my girlfriend. No, that's good.

I mean, you went more detailed than I did on some of them. So good for you. I'm going to say I was surprised by the cottage toys, 10K a year. They're expensive. My CD was 12 and a half grand but it had like almost no it was you're amortizing it's over several years so you're using uh accounting yeah yeah i'm using some uh straight line depreciation here no the reality is is that there's just like stuff up there that you like yeah Yeah, yeah. And like, I don't want, yeah.

Like when I have my buddies come up and we spend a bunch of money on the boat, filling up gas and stuff, I don't want to just like have my parents soak that. You don't want to do like, you know, you're first starting to drive and like, oh yeah, sorry, the car needs to be filled after you've used it for like five hours yeah yeah you just leave it on empty every time like yeah such a scumbag move no so i mean yeah i went in a little bit more detail but i wanted to break it out into like things that are kind of discretionary and then what i'll call like discretionary non-negotiable no that's good that's good for me i mean so in terms of this Simone budget,

first thing is I always pay myself first. So I have a set amount that I put towards my investment for investing every month. Obviously, this is excluding my DC pension would work. That's an automatically. So on top of that, I want to do a minimum of $500. Usually it's much more than that. But just depending if, you know, something a bit unexpected, I don't want to dip into the emergency fund, for example. So the strict minimum is $500. But I would say on average, it's probably be between $1,000 to $1,500 that I put in my savings every month. Last couple months was a bit less, again, just coming back, my wife returning to work, she was on that leave with employment insurance. So a lot more was kind of depending on my salary towards the

last few months. And having a kid is pretty expensive. So daycare starts and stuff like that. So you know, there's some more expenses. So that's a minimum of 500 a month. But like I said, I'll typically put more than that clothes i try i don't buy clothes very often and typically when i do i will buy you know i'm good i'm okay with paying for good quality i don't really care for brand names as long as it's good quality so that's why i do buy a lot of my stuff at lululemon it's not the cheapest even my work clothes but you know the stuff i have this hoodie i have on from lulule, I probably have had it for like four or five years now and I still wear it. So I don't mind paying more if I know it's going to last. And that's how

I view things. And I would say on average, that's probably one hundred and fifty a month if I average it out. And then the last thing that I really spend a lot of extra money on, it's hard to say the actual amount. I'd probably would say like, I don't know, four or 500 bucks a month on average. So it would be mountain biking. So for those who are into mountain biking, it's not cheap. Mountain bikes, I mean, you and I like our expensive hobbies. Yeah, exactly. So just so people understand, like, let's say you have a three thousand dollar road bike well if you want the same level of mountain bike you're probably looking at like five thousand dollar plus just because of the suspension is quite expensive

on mountain bikes so yeah it is expensive and the other thing with mountain bikes is you end up doing some pretty rough terrain. So stuff breaks more often than a road bike. So you have to repair, buy replacement parts. And recently I bought a new front suspension, a fork, because my old one was busted. I could have had it repaired, but the new one actually helps the angles and actually makes my back more comfortable. So I ended up spending $1,200 plus tax on the new suspension. So I should have done it a while back because it is comfortable for my back, but it's something that, you know, like I'm, I'm happy to do at the end of the day,

when I go mountain biking, it's the, the one thing where I, and I'm assuming is the same for you when you're golfing, where I kind of forget about anything else. I'm just solely focused on that. I just, you know, it's kind of nice to disconnect. No screens, just. No screen. Yeah, I'm with you, man. I'll usually have some music, but if you've, people who have done mountain biking before, if you're distracted, you're not going to have a good time because you're probably going

to end up crashing. And I like the adrenaline that it gives me so i'm more than happy to pay and do that sport because i find it does you know i just mentally it's just great for me that's that's the easiest way to put it no it's so true man like the times when it's just like me and my buddies out on the golf course no phones like there's only a few you gotta find the few places where you're able to like not even have like not think about other stuff you know and just focus on the people that you're with and those four hours on the course like i just forget that i even have a cell phone and that's like the best, like, I just forget that I even have a cell phone. And that's like the best feeling. Like someone who's, you know, I'm in software. So I'm literally staring at a computer

screen all day long. And then, you know, there's so many distractions, your phone's going off. And I'm always listening to music or podcasts in my ear. It's just kind of like never ending, right? So you need, you need something where you forget those things exist because as much as those magical devices are in your pocket, like they can create a lot of stress if you're always on them. And they're designed to do that with these applications, man, like the constant news cycle, the like constant comparing yourself to others. It's these things are literally meant to do that. These algorithms are built to make you feel bad and keep coming back for more. Yeah, no, I think that's great.

And, you know, I think I encourage everyone to find whatever it is for them. And, you know, I understand some people may have very limited amount of time, but I do believe that it's worthwhile, even if it's just an hour to a week to do whatever that activity is that lets you disconnect from everything, whether it's yoga, meditating, another kind of sport and, but just find what it is. And I find I'm more productive after mountain biking, for example, because I'm kind of, I feel refreshed. So definitely encourage everyone to find whatever it is for them. So I'm doing this to work out a day thing right now. And, you know, yeah, it's really hard. Like it's kind of draining and demanding, obviously, but you get so much energy after. I do some of my best focus time right after a workout. Once I've showered, got cleaned up, feel good, and back

to work. Those are some of my best focus times. As do-it-yourself investors, we want to keep our fees low. That's why Simone and I have been using Questrade as our online broker for so many years now. Questrade is Canada's number one rated online broker by MoneySense. And with them, you can buy all North American ETFs, not just a few select ones, all commission-free so that you can choose the ETFs that you want. And they charge no annual RRSP or TFSA account fees. They have an award-winning customer service team with real people that are ready to help if you have questions along the way. As a customer myself, I've been impressed with Questrade's customer service. Whenever I call or email, every support rep is very knowledgeable and they get exactly what I need done quickly.

Switch for free today and keep more of your money. Visit questrade.com for details. That is questrade.com. Here on the show, we talk about companies with strong two-sided networks make for the best products. sided networks make for the best products. I'm going to spend this coming February and March in an Airbnb in South Florida for a combination of work and vacation and realized, hey, my place could be a great Airbnb while I'm away. Since it's just going to be sitting empty, it could make some extra income.

But there are still so many people who don't even think about hosting on Airbnb or think it's a lot of work to get started. But now it is easier than ever with Airbnb's new co-host network. You can hire a local quality co-host to take care of your home and guests. It's a win-win since you make some extra money hosting on Airbnb, but can still focus on enjoying your time away. Find a co-host at airbnb.ca forward slash host. That is airbnb.ca forward slash host. All right. So let's, this is going to the how I save part. So the overarching theme is I don't buy stuff and stuff is in like quotations and in brackets because a lot of people acquire stuff and I don't care about material luxury or what I'll just call stuff or crap. I drive a pre-owned used Nissan SUV that I bought for pennies on the dollar.

I don't care about fancy watches, fancy shoes, buying bottles at a club like an absolute chump. Pre-drink. Just pre-drink. Pre-drink. That's the most cost effective. By the way, my young kings who are listening to the podcast, my young distinguished gentlemen listening to the podcast,

don't buy bottles at a club. Just if your friends like doing that, don't go. Like just go and don't go in the booth and you'll have way more fun. You'll like, you know, I think young, I think young men go do this because they think that there's some sort of like flexing or status or like thinking that they'll like attract women. It does the exact opposite. So my young King do not buy bottles like an absolute chump. All right. Remember that for next time, buying bottles at a club makes you a chump. All right. Designer clothes. Don't care.

Flexing material stuff. Don't care. Like if that stuff makes you happy, don't let me be the one to tell you that, you know, it shouldn't. But for me, that stuff doesn't actually not make me happy. It makes me miserable. And so I rarely eat out at fancy restaurants. Unless it's like an anniversary or some sort of milestone or celebration. Those things are actually better when they're done less frequently because then they're more memorable. And on travel, although I make sure I always budget for travel, I travel pretty on the cheap if I can. I'd rather go see more places and stay longer or do working vacations like I did for Costa Rica this year and stay in some basic bare bones, just no frills type place than fancy hotels you know, just no frills type place than fancy hotels, because that's where you can really like destroy your travel budget. Whereas like a place for a hundred dollars a month won't necessarily

materially make your trip worse than a place that's 600 a night at the Fairmont. You know, I don't see a lot of value in that. You know, it's just a bed at the end of the day. The stuff you want to go see is outside of the hotel room. I traveled for four months with only a backpack and not a lot of money. So I've learned how to spend and when to save and things that I find worth spending money on when you are on the road. Yeah, I think that's a great tip. Yeah. So really quick, health, golf, travel, these things I like, you know, I spend a lot of money on. I didn't have a lot of this in the budget, especially like, you know, the expensive gym membership and all this stuff, even just 18

months ago. So, you know, it's come along, it's come a long way. Like these are things you can kind of look forward to as you increase and scale your income as like things that you don't, you want to spend money on and not compromise, but make sure you pick what you design is like, I think it's the Netflix show. What is your rich life? Like if you design kind of like in five years from now, and I'm making X amount of money, what are the things that I'm not going to want to compromise? I am going to want to spend a lot of money on. For me, it's those things. And it's not the least Mercedes-Benz, right?

So just figure out where you want to not compromise and where you want to pull back. And I think that that's the recipe, in my opinion, anyways. Yeah. Yeah. And I think it varies obviously for everyone but i think one thing that i've as i've gotten older i'm just you know i really think about myself like in terms of like what makes me happy you know and when i was younger i was more concerned and i think especially when people are teenagers you're more concerned with other things about you but at the end of of the day, I've always, you know, as I got older, I'm like, look, they can think whatever they want about me, as long as you know, I don't care, it really doesn't impact you. I think that's, that's the way I see things now. And so many people are concerned with

what other things and then they end up making these bad financial decisions just to impress them. And I think a lot of people get themselves in trouble because of that. No, totally right. Like never underestimate, like it's the LVMH investment thesis. Never underestimate people's willingness to spend money they don't have to impress people they do not know. That's the LVMH investment thesis. Never underestimate that. But if you can break out of that is where I think that you actually have a good time. Yeah, exactly. And now in terms of I just wanted to add a few more points for where we've found some savings in our budget. And I know it's not possible for everyone. You know, I'm not going to necessarily, you know,

brag about us cutting our Disney Plus subscription, you know, as certain politicians have done in the past. Do you remember that? Wait, someone bragged about that? Yeah. So obviously I'm just joking around and we don't get into politics, but when inflation was really high christy freeland was like oh even our family were like we're cutting expenses we just try to make

yourself like a commoner yeah exactly we're just we just cut our disney plus subscription and she got a lot of flag because people are like we're having to choose between like heating our home and food and stuff like that yeah yeah so i mean it was yeah definitely not um dude you can't win i don't know why anyone would want to be holding any of those jobs you can't win i don't know yeah you get roasted for cancel your disney plus subscription that sucks dude uh you know whether you like these people or not like that's that's just shitty to be in a position like no matter what you say you get roasted no exactly i mean obviously i think there's ways that people can save and i'll just go over some of the things that work for me and i'm like i said i

like you said earlier i'm really fortunate that i'm in a situation where i can, you know, still enjoy all the things that I want. Yes, I may have to reduce slightly expenses, but I'm still eating the same kind of stuff. So there's no impact there. First thing going less often to restaurant and ordering in via like something like Uber Eats. We still do it from time to time, but definitely less often because I mean, it's crazy, like, especially like if you order food like it pretty commonly like ends up being over a hundred dollars for two people which is just I mean I know food has gone up in prices but that's just crazy in terms of one meal when you can probably find you know cook a meal yourself when you can have like a full meal between five and ten dollars

per person so you're saving a whole lot of money by not going to a restaurant or ordering from uber eats or you know doordash whichever one it is especially if you go out and they flip over the ipad and it's eight the lowest percentage tip on a highly inflated bill is 18% on the total amount. Like you're not going out for two people to eat for less than a hundred dollars. So you're just not. No, you're exactly right. You're not like, I don't know if you, if you are, you're at McDonald's like literally. Yeah. And I think a lot of people have done that too, is a good tip too. If you want, you still like to go to a restaurant once in a while.

Well, have you considered going for breakfast more? Cause breakfasts are less expensive and especially, or brunch, depending on the brunch, but breakfast definitely, and sometimes lunch are less expensive than dinner. So that's a way where you can still enjoy going out for, to the restaurant, but still reducing the bill a little bit i've seen i've heard a lot of people doing that have you i've no i've never heard of that but i think that's a good point like going out for brunch is a lot cheaper and dude i could smash some waffles and pancakes eggs all in one meal is one thing i really like about going out for breakfast because we can make all those things,

but I never make them all at the same time. So when I go out for brunch, oh, dude, I smash all of them at the same time. It's incredible. Yeah, exactly. And now the second thing is, again, this could be, you know, it may not be accessible to everyone. So going, we try to go to Costco once a month to buy household items and food obviously for food like frozen food non-perishable but also produce that we know that we'll eat quickly because obviously there's pretty big quantities at costco toilet paper paper tissues obviously diapers for the baby we found we saved quite a bit of money by going to Costco versus stores that are nearby. So it's definitely worth the trip.

And I guess the biggest tip here is just make sure you have a list because it's really easy to buy stuff you don't really need at Costco. So make sure you have a list and you stick to it. Minimize food waste. So if you can't go to Costco, that's fine. Try to minimize food waste because if you're not throwing much stuff away, by default, you'll probably end up saving some money. And a lot of people, I know we've done it ourselves, is you kind of forget that something's in the refrigerator.

And then two, three weeks later, you're like, oh yeah, that's not good anymore. And you have to throw it out. So whatever that item was, $5, $10, whatever it is, you could have saved that if you've eaten it before it went bad. So that's an easy way. Another one would be like something like Dollarama. So if you don't have the flexibility to go to Costco,

Dollarama can actually offer some decent value on a lot of items in smaller packages, especially for those who are single. Obviously setting a max streaming budget, like I talked about. If there's a subscription that i want to try oftentimes you'll get deals like try it for three 30 days 60 days whatever it is i will try it but i'll cancel it right away so that way it doesn't auto renew when it ends the

deal so most of them will allow you to do that. So you sign up, you get the free 30 days, and then you cancel right away. If they don't allow you to do it, just put a reminder a day before on your phone. So that way you'll be able to go and subscribe again if you do want to and find it useful. Again, buying a car, I would say look at used option versus a new car that can save you a whole lot of money, especially now with prices of used cars actually going down. And the last couple of things here, if you have babies, buying used toys and clothes for babies, that's definitely a really good option. Clothes, it will vary. Some of them are not cheap, the used clothes, but baby toys are super cheap if you buy them use and the big question i always ask myself is do i really need it because oftentimes i'll find that when i ask that question either i don't really need it or i have something already that

does it just fine i don't need to have the most up-to-date thing yeah i think that that's a good call like i forget what the rule of thumb is. I was listening to a podcast the other day and he's like, if I can't use it or enjoy it, there's a third thing. It's a really good framework for kind of spending money because the things that cannot be like used, worn or enjoyed, I think that's what it is.

Used, worn or enjoyed. Like, what do they do for you you know like some shiny like and and again if you like fancy watches that's your thing then go for it uh you know but like for for me it's it really has to have a lot more utility than that i won't be able to know the time unless i have a Rolex on my hand. I have an Apple Watch, which I bought used for $250 last year. Oh, boy. I got an Apple Watch 7 from a friend because she's a personal trainer and gets it, you know, passes it as an expense every year. So, she always gets the newest one.

She's like, and I know her well. She's like, yeah. She's like, if you want it $250 and they were still selling for like 500 450 500 bucks a piece so that's that's another way you can you know you can get something that you need and i use the apple watch all the time i use it for all my workouts i track every single one on it uh bro facebook marketplace is awesome if you want to grind you know it's a little bit of elbow grease and you have to deal with some wacky people sometimes, but dude, Facebook marketplace is legendary. If you know what you're doing, you can get some sick deals. All right. We got two more segments here before the interview. We'll fly through these. I have a really short one on advice for those who are

thinking about starting their own business. So for my opinion, you need to do one of two things. You need to, on day one, have raised capital in excess of $250,000, probably US, from investors, family, friends, or angels on day one, or be able to not pay yourself for 16 months and be okay. or be able to not pay yourself for 16 months and be okay. That's how long it's realistically going to take to figure out traction, have paying customers, have some resemblances of product market fit, and be able to scale your team. Because guess what? You're going to eat last in terms of pay. I paid myself up until last year, $27,000. Bro, that's not a living wage. Everyone's making way more money than me at the company. You eat last. That is what happens because you have the upside, so you eat last. And so you got to be able to sustain that long because that's how long it's

going to realistically take. Or you have raised outside capital from day one and sold a bunch of equity. So I think it has to be one or two. I don't know how you don't because say you only have a six month emergency fund to go off and do this. You're probably not going to have any sort of real traction product and sustainability until the following months after that i think at the 16 month point you'll have enough of what i talked about before or know enough that it's not working and make the hard decision to quit so that's why i that's why i picked that. Or you'll be one of those people on Dragon's Den or Shark Tank or whatever that have been doing the same business for like five years and it's barely been working and they do not want to quit. That's the worst. Yeah.

Yeah. It's always, it's, it's actually heartbreaking when you look at them. Cause it's like, it's so obvious to everyone but them. Maxed out credit cards yeah yeah they've used they tapped out their their home equity if they have a house like they've used all their life savings and they just keep going thinking that the next five years will be different than the last five or ten whatever it is yeah it's that's the worst situation, right? Like of, of, or option three, do this for so long. It doesn't work and, and be failing slowly is the worst. That's, that's worse than any of the other

options. So, uh, I think 16 months is a good rule of thumb. I know that that's a really long time to not have an income. And if you crush it and you guys find product market fit in the first six months, beautiful, amazing, perfect. But that's just kind of what I think about is realistic. And if you don't give yourself enough time, then you won't have enough real, you won't have learned enough and iterated enough in the market to figure out where the problem is and where you exist so well i mean that's what it took for the podcast too right it took us about 18 months to start monetizing and we probably could have done it a bit sooner had we known better but it was still a pretty nascent industry but that's i would say yeah that was kind of the mark yeah last one last yeah this i'll make super quick I had a bit more detailed notes, but, you know, we talked about emergency funds.

You mentioned six months. I said, you know, we have to get ours back to at least three months. We're not quite there yet. If you have cash and you need to have cash, get some interest on it. A lot of the big banks, they kind of sell these like high interest savings account that give you like barely one or 2% or they'll have this kind of promotional introductory offer for like three months at 5% and then it drops to 1%. It's not hard to get 5% now on cash. So if you do have cash, there are safe ways to invest it and getting at least 5%. So whether you do a ladder GIC, cashable GICs or a money

market fund that technically is a bit more risky because they're not insured like CDIC, like a GIC would be. Regardless, there's really no reason why you can't get 5% or at least at the very least 3%. I think that's if you want a more traditional savings account i think you can get that pretty easily if you're below that you're missing out and that's free money that you're not you're not getting and especially if you have it in a tfs if you have extra room a lot of room to be able to park a little bit of cash there for an emergency fund then it's tax free if not it adds to your income, but still, it's still additional income. No, I think that that's a great point. Dude, this is finally an opportunity to get some interest on your cash. Dude, my whole life,

I just talked about this. I opened my brokerage account when I'm 18. I'm 28 now. I have lived in a era of accepting that you don't get returns on cash. And that's changed now for the first time in my investing career. And for many people, because it's basically been since 06, 07, right? Roughly before rates flew down. So for most, based on our analytics, good amount of the listenership as well no no exactly so i think that that kind of wraps it up for a little uh financial literacy month uh episode and uh you know stay tuned keep listening if you want to learn more about open banking and what it could offer in terms of future for banking services in Canada. It's not a long conversation, and Faye was great at answering my question.

I do encourage people to listen to it because I was somewhat familiar with it, but it was a great discussion just to ask her some questions and some of the concerns that I think some people have. Thank you so much for listening to the pod. We appreciate you, And we are here Mondays and Thursdays. This is kind of wrapping up our deep dive into our personal portfolios and how we spend money. We are back with the usual investing content, deep dives. I was thinking, we got to look back into a bunch of names on our watch list that I've been... I was looking at like, if I just bought the stocks on my watch list segment over the last two years,

I would be heavily outperforming and I own none of them, of course. Do you remember Windmark? Oh, yeah. The Play It Again Sports? Yeah, I remember that. Yeah. Plato you remember Windmark? Oh, yeah. Played against sports. Yeah, I remember that. Yeah. Plato's Closet. Dude, that stock's been ripping. Absolutely ripping and very recession proof. Thanks for listening. We'll see you in a few days. Take care. Bye-bye. So, I'm here today with Faye Pang from Xero Canada, I believe, right? That's, I think you're the Canadian division. How are you today, Faye? I'm doing great, Simone. Thank you for having me.

Well, it's my pleasure. And the reason I have you here today is to talk about open banking. But before we start about open banking, can you just tell us a little bit about Xero? I wasn't super familiar with it, so I browsed a little bit. And it sounds like your company is kind of trying to compete into it in terms of QuickBooks. Do I have that correct? Yeah, so you're right in the sense that we are a small business platform. So Xero was founded 17 years ago in New Zealand, and today it serves over 3.7 million small businesses around the world. So our aim through our accounting platform is really to help those small businesses and their advisors, such as accountants and bookkeepers, better manage their business, right? So ultimately, that's our vision is to help small

businesses not just survive, but thrive. Oh, that's great. Definitely have a look into it because we are a small business. So that's definitely interesting. But obviously, the main purpose here is to talk about open banking. So for those not familiar with open banking, I know a little bit about it. I had heard about it quite a few years ago, and then did a bit more research for this interview. But do you want to sum it up for our listeners that wouldn't be aware of what it is, and some of the potential benefits for them as well? Yeah, for sure. And I think that I'll probably start off by saying open banking probably needs a bit of a rebrand. It's a pretty scary term. You know, when you ask Canadians, they're like, I don't want my bank to be open, right? I want to be closed and secure. But ultimately, the idea is open banking is around the notion of your financial data being shared between your bank and third-party service providers, often referred to as fintechs, through APIs. So historically, banks have seen that data as their data. But open banking is about putting the power and the control back in the consumer's hands and saying, actually, no, that's the consumer's data.

control back in the consumer's hands and saying, actually, no, that's the consumer's data. So if they want to share it with another service that they're paying for, whether it's an accounting platform or credit scoring platform, they should be able to do that. And they should be able to do that safely, securely, and without hassle. Okay. Oh, go ahead. Yeah, I don't want to interrupt you. No, that's all good. I was going to talk a little bit more about some of the benefits of open banking, Simone, if you think about it. And by the way, this is a regime that has been launched in other markets, such as the UK now since 2018. So we have a pretty good crystal ball about some of the benefits that can occur. When you think about it from a consumer perspective, right, it gives you access to a wider range of services. It allows you to have one service talk to another and provide you with more choice, more options, lower fees.

Canadians pay some of the highest fees in the world today when it comes to our banks. And so really, the notion of open banking for a consumer is giving them more choice, giving them more options, and ultimately putting that power back in the consumer's hands. I can speak for small businesses as well, right? And so the example I might share with you is a world where a small business has their bank or multiple banks that they bank with interacting seamlessly in real time with their accounting software, right? So that data is now coming into their accounting software, that small business and their account or bookkeeper can aggregate, analyze and make decisions off that in real time. And that can flow to another app that's accessing that data to say, well, does that small business need access to capital? How might we fund that? What invoices are outstanding? And how might we use that data to tell, you know, how apt they might be for a loan or a micro loan, right? So the notion that all of these things are speaking to one another in real time is really powerful when you think about a small business owner having real time access to their data, insights, and then ultimately, like more tools and resources to make them successful.

Okay, so am I correct thinking that it would allow essentially third party fintechs to be able to gather information from banking institutions here in Canada, and be able to offer you better services potentially because of that? Is that the gist of how it would work? Yeah, it's a great summary, Simone. And I would even say it's not just about fintechs getting information or data from banks. It's even about banks getting data from other banks, right? What we see in our data is on average, Canadian small businesses are using two and a half plus banks, right? So they're diversifying their own portfolio and who they're leveraging. This would allow those banking institutions to actually benefit from that and have more information

on their shared customer to be able to tailor their offerings. Okay, that's interesting. And in terms of whenever I think about third party or having more, you know, people involved with my data or my business's data, there's always kind of that, involved with my data or my business's data, there's always kind of that, I guess, reflex for me for, okay, well, is it going to increase security risk, potential information breaches, because you have another party involved, not that there's no risk with the current system. If you even if you have a bank, I mean, we've seen financial institution, you know, have security breaches as well. But just that additional layer, is there an increased risk? Am I kind of correct of seeing that? Like, what are your thoughts on that? Yeah, it's a bit of a commonly held misconception.

It might help for me to share with you how things are today. Right. So in the absence of open banking in Canada, what we have is millions of Canadians are using third party credential sharing, commonly known as screen scraping today. It's an imperfect solution, ripe with its own security issues and challenges. I have many accountants and bookkeepers that we work with here at Xero that tell me, oh, I just have my client's password and login here because they trust me with that as a way to get access to their information. Talk about security risk and concern.

So this is one of those rare instances as a way to get access to their information, right? Talk about security risk and concern. Yeah. So this is one of those rare instances where actually the entire fintech community is asking for regulation. And we're saying, hey, we want open banking, we want a really clear set of standards. So we're all singing from the same song sheet and operating in that way. And that's going to actually offer more security, right, more consistency for the Canadian consumer. So commonly held misconception, it's actually done right open banking. Again, we can point to the UK, you know, to my knowledge, no major breaches in the five years since they've launched open banking. And what it's done is it's offered this platform for innovation and customer benefit as a result of it.

Yeah, and I'm over here. So when I was doing my research for this interview, I, you know, just search a little bit. And I'm on this federal government website that is touting the benefits of open banking. So just my question, so why don't we have open banking in Canada right now? What's you know, what are the next steps? I know, I think there's been a big push to get that ahead in Canada. I think Australia is also a country that implemented it in recent years. So sorry, it's a pretty big questions. I'll just let you answer. So yeah, why don't we have this in Canada? Just Yeah. Yeah. So it's probably the question of the hour, Simone.

There, there are people that have been working both in the fintech and financial institution space on this file for north of five years. And Canada is one of the last OECD countries to not have an open banking regime in place. So suffice to say, there's quite a bit of frustration in the system right now around why we don't have open banking. The government commitment had been to release guidance at the start of this year that has been delayed. And so there's really a confluence of factors, right, in terms of prioritization and where the file sits. I don't want to get too deep into some of the nitty gritty on the government side. amongst all parties that we need to move forward with this and actually more agreement than disagreement around what some of those standards might need to look like, you know, some of the like governance that needs to be put in place. And we have the benefit of markets like Australia, Brazil, the UK that have really shown us the way here. And so at the end of the day,

it feels like we just need to get on with it, release the guidance from the group and actually just start implementing open banking in Canada. There have been some recent announcements in the last week, the US, you know, that was a pretty hard fought file for many years. And they've, in some ways, leapfrogged Canada recently, by announcing open banking set of standards and guidance that they want to implement asking for consultation over the next few months. But they'll have a system before we do, despite the fact that in many ways, we've been working at it longer than they have. So there's an element of, you know, needing to just get on with it, versus trying to build the perfect system here in Canada, and really favoring progress over perfection.

the perfect system here in Canada and really favoring progress over perfection. Yeah, the U.S. is an interesting one. I had noticed that they were working on it, but wouldn't it be like quite the feat in the U.S. when you're considering just the sheer amount of volume of financial institution? Because we're, you know, I think everyone knows at the point Canada is very concentrated in terms of banking. So I've, you know, maybe my last question is, if the US is doing it, why can Canada do it even quicker? If, you know, there's less moving parts, that would be my outsider perception on that. Yeah, you think that would be the case. And but that being said, they are moving faster than we are. So just last week, the Consumer Financial Protection Bureau or CFPB, released its draft

rule effectively around open banking. So establishing personal financial data sharing and protections. It's a really detailed framework. In fact, here at Xero, we're still sifting through all 300 pages to understand exactly how that's going to play out, but addresses a lot of things that I touched on already and will serve to really turbocharge their progress in this space. So our hope is that it's a bit of a wake up call for the Canadian players to say, hey, if the US can do it, to your point, much more complicated market in a lot of ways,

we should be able to do it too. Okay, no, that's great. And if people want to learn on more on open banking, some, you know, some resources. Are there any things you can share with our listeners? And if they do want to voice their opinion, whether they're for or against that, I'm assuming most people would be for that. But what steps can they take? Yeah, I think if you're listening to this podcast, my encouragement would be don't be overwhelmed by this notion of open banking.

Fundamentally, it is about your data being your data. And I think we can all agree that, you know, that is that is a really good thing. So if you want to learn more about open banking, perhaps we can link in the comments of this podcast, Simone, the website that you're referring to, which is the federal government website on what is open banking, it's got some really nice detail in there around everything that we've touched on today. The other website I'd point listeners to is choosemoreforyourfuture.com. This is a campaign that Xero was part of it. We recently released it in concert with FinTechs Canada, which is a consortium of financial tech providers across the country, such as Flinks, Wealthsimple, EQ Bank,

BorrowWell, we've all come together to urge the government to action. And so if you go to that website, there's a lot more information about some of the benefits of open banking, and an opportunity for you to email your MP and get them to understand that this is a topic that really matters to you. So I encourage you to check out that website as well. a topic that really matters to you. So I encourage you to check out that website as well. Well, this is great. Well, thanks a lot for joining us, Faye. And hopefully people will just learn more about it, pique their curiosity. And from my understanding, I do hope that we move towards that sooner rather than later. But it was great having you on the podcast. Thanks again. Thank you, Simone. Thank you for having me.

The Canadian Investor Podcast should not be taken as investment or financial advice. Brayden and Simone may own securities or assets mentioned on this podcast. Always make sure to do your own research and due diligence before making investment or financial decisions.