Yifan: All right, so to everyone watching, my name is Yifan. I am the CFO of CYIS and today we're here with Eduek. She has over 14,000 followers on Instagram and is a really, really prominent finance influencer in the area. So today we have a couple of questions to ask her and without further ado, let's jump right into it. So the first question I have to ask you is what made you interested in a career in finance and entrepreneurship?
Eduek: Yeah, thank you so much for having me and doing this interview. My, how I actually stumbled upon finance because that's the word. It was never something that I ever thought that I was going to do. It was never something I thought I was going to be interested in. But when I started my journey of paying off debt, I decided to do what everyone else does and make a page about it and publicize it and share my journey of paying off debt. And when people started following my Instagram and seeing my journey and saying, Hey, I'm inspired by what you're doing. Can you teach me what you're doing? How are you doing it? And people were asking me what I would consider to be very basic questions. And for me, it really showed me that there was that gap that needed to be filled where there's so many people that go and get a credit card and end up in credit cards at or even student loans. And they don't even know the basics of how these loans work. They don't even know that I've heard a conversation with someone that didn't even know that they were supposed to pay off their credit card in full, they thought that as long as it just made the minimum payments, they were fine. So these were all these issues that I saw and I was like, there isn't really anywhere where you can go and you can get this information where it's not only easy for you to understand, but you're able to implement it. And a lot of the times we go into banks and the bank is going to give you a credit card, but they're not going to tell you how to use it and how to not get yourself into debt. And all of these basic things, they don't even tell you what a credit score is, how you can improve your score and the things that you can do with that credit card that could jeopardize your credit score. So these are the things that you would not typically get from a bank if you go into a bank. No one is going to educate you. So for me seeing that gap, I knew that that gap needed to be filled. So I started posting a lot of educational content on personal finance. And that really gained a lot of interest from people. And that's just how I just decided that, you know what, I just found a lot of joy in doing it. I've heard so many people tell me that I'm really good at explaining complex topics at something that someone had told them over time and time and time again. They never understood it. But the way that I broke it down, they were able to understand it and apply it. And for me, I was like, this is something that I enjoyed doing. So I was like, yeah, let's make a business out of this.
Yifan: Yeah, that's very inspiring.So moving on to the next question. What is one piece of advice if you can only give one that you would give to your young Canadians to demystify finance and set them on a path towards financial literacy?
Eduek: I honestly say that money is a tool. And if you think about your wildest dreams, the any goal that you want to achieve, what is the one thing that you would need to get you to that goal? It's money. And when you start to take your finances serious(ly), meaning you know how much you're getting paid and every month, you're telling your money what it needs to do. You're okay, I got paid like $3,000 this month. So this much is going to go into housing. This much is going to go towards my investment. This much is going towards my savings. This much is going towards that goal that I'm saving for me. I'm trying to go on vacation. This much is going to go towards the credit card that I just spent on to pay it off. When you become serious about your money and you become intentional about telling your money where it needs to go, you will be able to achieve pretty much any goal that you have. And when you become serious with you're money. Let's say one of the problems that you have is I don't make enough money. One of the things that has really helped me advance really fast in my career is knowing how much I need to get to my goal. But if you do not put pen to paper and figure out how much that is, you will never know. I ask you for all the time, how much do you want to earn, don't tell me six figures, but how much six figures do you need? You don't know exactly. But if you know that, okay, for me to live this lifestyle, it's going to require this much amount to pay off my mortgage or to pay my rent. I'm going to need this much to feed myself. I'm going to need this much to travel. You can put that to get into like, okay, this comes out to $120,000 every year. That's the income that I need to aim towards. But if you don't sit down and calculate that, you're never going to know. So money is always going to be that tool that you need to get to your goals, but you need to be intentional about what you are signing that money and telling it what to do for you. If not, you're always going to be playing a guessing game. It's like, okay, we got paid how much today. We don't know if you're going to pay rent. We don't know if you're going to be able to pay the light bill. It's just like paying whatever you pay and whatever is left over, we'll see what happens. That's not the way to go. Really become intentional with your finances. And you will find that you are able to achieve your goals a lot faster and a lot easier.
Yifan: Mhm, interesting. So it would be like to use money as a tool and to really know how much money you need and how much it's going to spend in order to make a plan.
Eduek: Yes.
Yifan: That's very nice. All right. Moving on to the next question. What is your educational background? Would you recommend people follow a similar education path to you?
Eduek: So I have a masters in chemical engineering. So I primarily work in the automotive field. So I never really worked as a chemical engineer apart from when I did my internships. But engineering as a whole has been such a fulfilling career for me. And yes, I would advise any young person that was considering engineering to follow it because I just found that it's a lot more.. you have a lot of autonomy in terms of the work that you do. Well, I guess it depends on the company that you work for. But it's just so much joy for me seeing immediate results whenever I put something together, you being able to really problem solve and design things and being able to create things out of pretty much from paper and seeing that being fleshed out. It's been such a rewarding career for me. And the pay is not bad. And you don't have to go to a lot of schooling for it. So yeah, definitely recommend.
Yifan: That's wonderful. So anyone listening to this engineering, of course, beautiful, beautiful career path to follow. All right. Moving on to the next question. How did you pay off your debt? And would you have done anything different if you were to do it again?
Eduek: Yeah, so I had $47,000 of debt as at 2018. And a lot of my spending just came from not being intentional. Where my money was going. I felt like, oh, I'm earning a decent salary. So I could buy whatever I wanted. And when my paycheck comes, I'll just pay it off, right? But what happened was the spending was becoming very more than the paychecks. So that started to accumulate. And over time, I was like, OK, oh crap, we need to pay this off. And for me, one of the things that I really had to work on was finding out how I got into the debt that I got into in the first place. Because a lot of people, they run to the mathematical aspect of, oh my gosh, OK, let me pay up the high interest debt first or let me pay up the highest balance first. But you can do that and pay up the credit card. But you might be good for a couple of months. And then what happens is you end up going back into debt because you've not really addressed the things that got you into debt in the first place. If you're someone that typically overspends, you’re an impulsive spender, you have to ask yourself, what is the thing that happens that makes me overspend? What's the thing that happens? What are those triggers that would make me overspend? For me, I identified certain situations in my life where I know that, OK, when this is happening, it's going to be really hard for me to stay disciplined. One of the biggest things is stress. Whenever you're stressed out, you, people typically spend on impulse because it's like, oh my gosh, I've worked so hard. I had a stressful day. Maybe I'm going to go out for a drink, certain friend, or maybe I'm going to go to the store and buy something that will make me feel better. So for me, identifying those things and knowing that these are the things that make me typically spend, and what can I do being proactive in saying, what can I do in advance to make sure that when this happens, because some of these things are not avoidable. Sometimes you cannot avoid stress in your life. Sometimes you just have bad days or bad weeks. How do you make sure that you're not using money to overcompensate for these things and ask them, I tell, what else can I do when I'm feeling stressed? Maybe I could exercise more. Maybe I could go for a walk. Maybe I could journal. Maybe I could talk to a friend. Maybe I could consider therapy. There are other things that you can do where it's not you spending outrageous amounts of money. So identifying those triggers was one of the things that really helped me build that self awareness when it comes to your finances, so that when it happened, I was avoiding the situation because the hardest part isn't paying off the debt. It's staying out of debt. So it's easy because we all know, just put extra payments towards that credit card you paid off. How do you make sure you're not going back into that cycle? Identifying those triggers was one of the biggest things that helped me. And being intentional about how I started spending my money, creating a spending plan, every time I got paid, before the paycheck even entered my bank account, I could see how much I was getting paid if I log into my payroll thing. So I know I'm getting paid this much. I already allocate where my money is going. So as soon as the money is entering my bank account, it's already a sign. It already goes to where it needs to go. And then I was putting that extra money towards my debt, working a lot of extra hours just so I could get that extra money to pay off my debt. There's so much that you can do, but if you don't have the extra income, it's going to be hard. So really making sure that you, for me, I did not want to decide how so I just worked a lot of overtime. So getting those overtime helped me pay off my debt a lot faster. In terms of what I would do differently, for me, I don't think there's anything that I would do differently. The only thing that for me I would have considered would be, so when I try to paint up debt, I kind of paused all of my other goals. So I paused my investing, like I invested at different intervals, but I was not investing every single month. So I was kind of waiting to be debt-free before I did anything else. So looking back, that's what I would do. I would consider paying off debt alongside my other goals as well.
Yifan: That's very helpful, very helpful. And, next question for an investing portfolio, what are some key essentials that young adults should have?
Eduek: So every person that is starting out investing, one of the mistakes that I see a lot of young people do is that they run to the interesting, shiny objects. They run to the stocks, they're on to the crypto, whatever is hot right now, whatever is creating a lot of buzz and a lot of noise. And for me, it's like, you are, it's, those things are nice to have, but those are not the essentials that you need. So the key thing you need is to build a foundation. So building the foundation, you need to invest in broad based index funds or ETFs. So what index funds or ETFs are basically, let's see, I would say they're the, they're the hampers, the Christmas hamper that you get at Christmas where you get this box of different assortments of chocolate, wafers, cookies. They have all of these different nice treats that are great, but instead of just buying someone a cookie and you're not sure that person's allergic to that cookie, you're not even sure if they're going to like that cookie, they get this assortment of different variety of treats and they could try them out. And each of these treats, one might be really great, some might not be that great, but the ones that are great make up for the ones that are not so great. So this is what index funds and ETFs are. Essentially this hamper of different stocks from different companies where instead of you as an investor trying to figure out, do I need to invest in this one stock? You don't know how that stock is going to perform, especially if you're not advanced to the level where you can do proper financial analysis where you're actually going through the company's financials to see that company is a good investment. If you're not at that level, it's going to be difficult for you to know if this company is going to be good. They might be creating a lot of buzz in the news and you could invest, but two years down the line, you could lose all of your money. So instead of you going and picking individual stocks where you don't have that confidence that that company is going to do well, you can invest in all of the different companies, all of the different great companies, all of them contained inside that one basket called an index fund or an ETF. So when you are building your foundation as a new investor, you want to start there because what happens is these index funds and ETFs, they give you that safety net because now you have all of these companies that are doing well in the economy. If one company falls, you still have several other companies that could make up for it inside of that portfolio rather than if you just had one, then that really elevates your risk as an investor, if that company doesn't do well, you will lose a lot of money. So I always say investment is like building a house. When you want to build a house, let's say you were building a house from scratch, you're not going to go buy a couch when you've not even laid the foundation, you haven't even broken ground. So the foundation are those broad base ETFs. Those are the things that will keep your portfolio sturdy when there is market volatility because you would notice that if you have an index fund and ETF in the market crashes, you might have a 10% or 20% loss as opposed to a particular stock that you bought and you might be experiencing like a 90% loss. With those ETFs it really lowers your risk. So building that foundation, once that foundation has been set, then you can consider adding the embellishments, like the individual stocks, you can start adding like the crypto and all those things because even as you're investing those index ones and ETFs, it really builds your muscle as an investor. You start to learn how the market works. You start to learn all the different companies. You are becoming more experienced as an investor rather than just running out and trying to do more advanced investing, start with a foundation. Once that's done, then you can start to add on top of that.
Yifan: That's beautiful advice and even I am going to note that down later. And next question, what would you say is the easiest way for young people, young adults, teenagers to start investing?
Eduek: Yeah, so once you start investing, the first thing you need to do is to determine which account that you need to use. In Canada, we have two major accounts, which is the RRSP, the registered retirement savings plan. And how this account works is that whatever money you put in, you don't get taxed because your taxes are deferred. So if you say you put $1,000 inside of that, you can afford to put that $1,000 into account, invest in it, it grows. But then when you take money out of it, whatever you take out of it will be taxed. So that's why it's tax-deferred. You don't get taxed now, you get taxed later. And then the second account is your TFSA, tax-free savings account. So with tax-free savings account, whatever money you're putting into it, you get taxed first. So just like when you get your paycheck, whatever is your take home pay, you put into the account and then that money grows tax-free. You can invest the funds inside of that account. When you withdraw money out of it, you do not get taxed. So based on your situation, usually they say if you're a high earner and you're earning above $70,000, you can start putting money into your RRSP. If you are not earning up to that, you can start with your TFSA. To me, I say it doesn't matter, just pick one. It really doesn't matter at the end of the day. Just pick one account and start putting money into it. And then the second thing you would need to do is to find a self-directed brokerage. So the brokerage acts as the person that would help you buy those ETFs, those index funds, those stocks, whatever you need to buy in the market, they are the broker that will buy that for you and you essentially have an account with them and they hold those investments on your behalf. So you, when Canada, we have two main brokerages. Wealthsimple and Questrade. Questrade usually requires a $1,000 minimum. I don't know why they still have that. They need to take that out. They require a $1,000 minimum when you start, but if you feel like you don't have $1,000 and you don't want to wait, you can go with Wealthsimple because they don't have that. And typically, the big 6 banks, they all have a self-directed brokerage. But the thing is, you have to pay commissions to buy stocks, to buy ETFs and stuff like that. And that just adds up as an investor. So I usually just recommend either Wealthsimple or Questrade.So once you open an account with them, now you have access to basically any stuff that you want, any ETF that you want. So you need to understand, okay, what types of ETFs am I going to invest in? Let's say you're starting with ETFs. I recommend four ETFs to start. You want to look for an ETF that is invested in the entire Canadian market. So just look for anything that says “Canada”, “equity”, something like that. And then you want to look for something that is in the US market because we partner with the US a lot. A lot of our trade is in the US. If the US economy is down, the Canadian economy is going to be affected as well. So you always want to be investing in the US market because it is one of the strongest markets out there. So once you have Canada and US, now you want to go international. International is anything that is outside of the US and Canada. Once you have an international ETF based on how young you are, I say for younger investors, most of them might not need fixed income. But if you're in your 30s and upwards, you might need to add fixed income to your portfolio. So fixed income is basically bonds. So once you have those four, you have Canada, US international, fixed income, you basically build your foundation. Once you just start investing, putting buying and trading amount of each of those four every single time you invest. Once you build that foundation, you're pretty much set for life. You're pretty much good to go. You just keep doing it with investing is longevity, always making sure you're consistent and continuously investing. If you put $100 today and wait 20 years, it's pretty much not going to amount to anything. But if you put $100 every month consistently for the next 30 years, you will have something substantial.
Yifan: All right, that's a great response. I am noting that down as we go. For the next question: What stigmas do you feel surround women spending money compared to men spending money?
Eduek: Oh, my gosh. Yes. So I think that a lot of it came from, if you go back in time to how traditionally the man has been seen as the head of the household and he has been the breadwinner and the one making the money. So typically, men were the ones that went to work and with the money they came back and the wife stayed at home and took care of the household. So I think that society as a whole has grown up thinking that men are more trusted with money instead of women because they never really were the ones managing the finances from the beginning. Or, they were never really the ones earning the money. Sometimes the men who bring the money and give it to the woman to manage. She was the one managing the finances, but it's always been like, okay, the man that is making the money deserves to say how that money gets spent. And then as society has evolved, I think that that stigma has continued to stay now, that even when women are making their own money and they purchase things that they consider things that they enjoy and things they like, society still frowns upon it. A good example would be, let's say a woman is interested in vintage purses and she goes and buys a purse that is worth $10,000. People are going to be like, oh my gosh, you just spent $10,000 on the purse. That is stupid. That is crazy. That is such, you could have used that money for something else. People are dying in the world. You could use that money to take care of your kids. You could have used that money. They want to tell women how to spend their money and anything that she spends her money on, if it's not her kids or if it's not in the household, anything outside of that is frowned upon. But a man that could be interested in, let's say, vintage cars could go and buy a car worth $80,000. And people who are like, oh my gosh, nice ride. What a hot ride. Two of those things are not necessary. Like no one, like the purse is not a necessity, the car, a vintage car is not a necessity. You need a car that you can drive that works, but the car that you're going to drive once every year is not a necessity. So both of these things are not a necessity, but with the woman, even though what she spent her money on is way less, the value or the value that we put on it is so much less because it's something that a woman enjoys, more than something that a man enjoys. And I always have to debate endlessly with people. And it's always like, what's the difference though? If someone spent or maybe a man spent money on a gaming system, he spent $10,000 on a gaming system and then a woman spent $500 on a shoe. People are going to be like, oh my gosh, why would you spend $500 on the shoe? But a man that spent $10,000 on a gaming system, they're like, well, you probably really enjoy doing that. That's why he spent that money. It's a hobby for him. Why can’t it be considered a hobby for a woman? So these are the things that we are still battling every day as women is whatever we spend our money on, because we have historically not been the one handling the money in the home, it's like we are automatically not trusted with finances. That, oh, whenever a woman is handling money, it's like, oh, she's not good with money. She's going to spend it all buying things that are not important. But it's like the same can be said for a man. It really does not matter if it's a woman or it’s a man. Each of these people could be careless with spending money or be really good with how they handle money. So that's just one of the stigmas that we have and are trying to combat that every day.
Yifan: That is true. I, me myself, I've noticed this all around, actually. It's really a problem and we really should get to solving it as soon as possible.
Eduek: Yeah.
Yifan: All right. So that is the end of the questions that I have for you.
