#Clockedin with Jordan Edwards

#210 (HIW #10) - Strategies for Financial Stability and Well-being

• Jordan Edwards • Season 5 • Episode 210

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What if the weight of your debt is more than just a financial burden? Join me and our insightful guest, Sang Kim, as we unravel the complex ties between debt and personal well-being. We peel back the layers of our own financial journeys, from Sang's early entanglements with high-interest credit cards to the shock of my student loans after graduation. Our stories underscore the mental and physical toll debt can impose and highlight the critical need to address high-interest debts head-on with a strategic plan.

You'll discover practical debt management strategies that prioritize high-interest liabilities like payday loans and credit card balances, setting the stage for long-term financial stability. We delve into the benefits of debt consolidation to efficiently handle multiple debts, and the importance of keeping living expenses within a sustainable percentage of income. By forming good financial habits—think automatic savings for retirement and cutting unnecessary daily costs—you'll find yourself on the path to reducing financial stress and opening doors to new opportunities.

But financial well-being isn't just about debt reduction. We also shed light on the significance of building a robust financial safety net. From creating an emergency fund to increasing your income through side gigs or part-time work, we offer actionable insights into securing your financial future. By diversifying income streams and understanding the nuances between good and bad debt, you'll be better equipped to maintain a debt-free lifestyle. Our goal is to provide you with the tools to not only manage and eliminate debt but also to enhance your overall financial stability, leading you toward the ultimate goal of financial freedom.

Disclaimer: The information shared is for general informational purposes only and does not constitute financial advice. Please consult with a licensed financial professional before making any financial decisions.

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Speaker 1:

Hey, what's going on, guys? I have a special guest here today. We have Sang Kim, and we are here for episode 10 of Health is Wealth, and what we're focusing on today is we're going to go on a journey. Sang's going to share a little bit about his debt journey. I'm going to share a little bit about my experience with debt as well, and then we're going to dive in to the top four most Googled financial questions. I'll give you a little hint here. They're all about debt, and then we're going to give you an action plan, an action plan of how to get out of debt if you're in debt, how to stay away from debt and then, if there's any good or bad debt, and how we can kind of work through that. So, seng, how are you doing today?

Speaker 2:

And where did your journey with debt? Where did this all start for you? Well, jordan, thanks a lot for having me on again. I'm having a great time with you talking about health as wealth, and today we're talking about the wealth part and, as you know, when the wealth part isn't working well, you're stressed, so it's affecting your health, so it's very interrelated, as you know, when the wealth part isn't working well, you're stressed, so it's affecting your health. So it's very interrelated, as we know. And today we're talking about debt, and I would say you know a little bit about my experience with debt. Obviously, when I was in university having a credit card and then realizing that the interest was 30 percent annualized, you're thinking, oh my god, you make zero percent if you put money in the bank and it's 30 percent, you know, on the money, only on your credit card.

Speaker 2:

So you know, hopefully you learn pretty quick to pay that off fast yes, right.

Speaker 1:

Well, the thing is, you're never going to have anything that ever beats 30%. Sometimes you do. People will say all these different one-offs, sure, but a majority of things like on the day-to-day are not going to beat 30%. So paying off the high interest debt is definitely one of the best strategies. What was your experience with purchasing your first home?

Speaker 2:

Yeah, yeah, I mean purchasing my first home. It was a very modest home, right, and I think it was like $146,000 back in the early 90s, a little bungalow. You know, I didn't have a lot of money, my ex-wife didn't have a lot of money, my ex-wife didn't have a lot of money, and we bought a cute little bungalow. We put 20% down, I believe, and then we got our first large debt, which was the mortgage. Was the mortgage.

Speaker 2:

And then we thought, oh my gosh, you know it's just her and I. I thought, okay, you know, maybe we can rent out the basement. We talked about this in the past. So a buddy of mine was in teacher's college, uh, whom just visited me fairly recently, which is kind of uh, kind of cool, and he, um yeah, so we rented the basement for like 400 bucks a month back then and that helped us to pay down the debt faster, right, so you know. So that was my first experience with debt and the whole idea was to pay down that debt as fast as possible. And I forget what the interest rate was back then, but it was probably 4% to 5%, 6% kind of thing, you know for the mortgage payments right.

Speaker 1:

Yeah, absolutely, I mean. And then for me it was, I remember I got an accounting degree so I should know about this stuff. And I, for me it was, I remember I got an accounting degree, so I should know about this stuff. And I graduate college and I just start getting these emails from these different platforms and they're like FAFSA and all these different things. And I literally had loans and I was like I remember vividly opening it up and being like oh so, that's how much I owe, because I didn't even realize it was borrowing. Like I remember having the discussion with my parents and being like hey, you're going to take on a little bit of loans, blah, blah, blah.

Speaker 1:

But then you see it and you're like whoa, like where'd that come from? And you would have, and I would meet with people and we would all like I remember that first year out everyone's like how much do you have? How much did you end up? How much did you? And I would hear some people who are like I'm at zero because my parents paid it all. And then you have some people where it's hey, it's over $100,000 and I'm only making like 50 grand and you're like what, how are you supposed to pay that off, like that's like almost an unconceivable debt in the current, like you'll never be able to pay it off in the role you're in. So you start to realize here that for me, I ended up paying it down to like $10,000. And then I started to realize I was like oh, wait a second. I heard the government's going to pay this off and it's like eventually you start to realize that's not happening because that doesn't really make sense for everyone.

Speaker 1:

And my whole point here is that you have to take on your own responsibility. You have to take priority in the life that you want to create. So I wanted to create a life where I was like I don't need this debt and I don't want this debt. So I started to create a life where I was like I don't need this debt and I don't want this debt. So I started working on it and paying it down and I eventually paid it off.

Speaker 1:

And the whole point being here is like you can sit there and go, oh, it's just that, it's just whatever, it's fine, it's not a big deal. But then you start to realize you're like this does have a little bit of stress on me. This is something that I'm thinking about. This is something that I don't want to be thinking about. And how do I eliminate this? Because when you start eliminating these debts, you start thinking clearer, because you're like no one's going to take my stuff, I can afford it. All Doesn't matter, I own it. And then also a lot of these like pre-payment plans. They're good, but you just got to be so on top of that. And it's so challenging because otherwise, if you miss something, it all goes and it's like yes.

Speaker 1:

Yeah, we try to pretend that everything's easy, but it's just. It can be more challenging than you want it to be.

Speaker 2:

So you know yeah 100 percent, 100 percent. So you know, yeah, 100 percent, 100 percent. And you know one of the challenges of having credit cards is that it's it's out of you know, it's out of your immediate space and your immediate way of thinking and you?

Speaker 2:

sort of push it off into the future and you sort of like sort of forget about it. You know you're pushing it away from you instead of dealing with it Right, and so so I think I think that's where it's really important to you know, assess your financial situation Right, Know where all your you know, create, create a budget Unfortunately, you know this word budget is not, it's frowned upon, probably but know how much money is coming in, how much you're paying in taxes and all your expenses, and figure that out, Because if you do it, you'll know how much money you have extra. And if your debt's too high, you're going to be more inclined and more motivated to pay that down because you don't have the cash flow to do all the fun things that you want to do.

Speaker 1:

Yes, and this is literally what I ended up doing back in 2019, because I made a budget for myself and then I sent it to a friend. He's like dude, you got to have my buddy check this out and that's how Edwards Consulting it was Edwards Financial Consulting I was literally helping people out with these one-off financial meetings where we would sit there and we would help people like, hey, you make $5,000 this month, your rent, your this, your everything is at $2,000. That means you have $3,000 to play with and we would work through that together, because most of these people had no clue. And it's terrifying when you don't know. And the other big thing is like there's a lot of numbers that you want to keep your numbers at, but this isn't the show, isn't about budgeting today, it's about debt. Budgeting might be a solution, but it's about the debt. So I wanted to dive into. We looked up the most Googled financial questions by Liberty Bank. This is just one of the popular ones.

Speaker 1:

The most Googled question, with 2.4 million searches, was student loans. It was how do student loans work and what is FAFSA? And the reason that we wanted to look into this is because we wanted to see what the people were interested in about. The second one was the mortgage calculator. So it's what's a mortgage? Is a mortgage the same as a home loan? And then it was a car loan calculator. Which what is a car loan? How does an auto loan work? And for the mortgage there was 2.3 million searches. And then for the car loan it was 568,000. And then there was payday loans, which was how do payday loans work and do I qualify? And that had 368,000 searches. So the reason we wanted to bring this up is because student loans, mortgage calculator, is because student loans, mortgage calculator, car loan and payday loans these are on everyone's mind. So saying how do you think about these different debts in ways of, should we just pay them off immediately? What do you think of when someone looks up student loan? Because I'll tell you what I think about.

Speaker 1:

When I learned this, I learned that student did you know this thing? Cause I know you're in Canada in the U S, student loans are given out to almost everybody, right? So there's government loans and then there's um private loans, like the public sector can give out loans. So those private loans have no limit. They're not at four or 5%, they're at like 8%, 10%, 13%. The other big thing about student loans is that they're the only debt that doesn't go away, like literally every other debt you die, it goes away. The student loans don't go away. So it's this whole idea of like, oh my God, they just keep clasping on everybody and it's like how do we get out of this mess? So what do you think about student loans? How do you think about this? And the reason we have Sang on is because financial advisor for 20 years.

Speaker 2:

Yeah, 24 years 24 years CFP. Yeah, cfp, and a portfolio manager, cim, we call it All of it.

Speaker 1:

All of it. So my point being here is that Seng has been there, done that for thousands of people, seen it, so that's why I think he's super qualified to be answering some of these questions here.

Speaker 2:

Yeah, yeah. So first of all, I'm just going to reiterate assess your financial situation, look at where you are financially. I'm just going to reiterate assess your financial situation, look at where you are financially, understand how much money you're bringing in and what's going on on the expense side, and then the third step is prioritize your high debt, high interest debt debt. So let's say, you've got a student loan at four or 5% and you've got a payday loan at 35, 40% and you got a credit card at 30%, right? So, so obviously you know if money is tight. Well, just common sense, right? You got to knock off the highest interest debt first. Right, you got to knock off the highest interest debt first Right.

Speaker 2:

I mean that's what you want to do Tackle that as much as you can, first, and then prioritize and work your way down to the lowest debt. So, having said that, you know you may want to go to a financial institution to say, listen, I've got three of these debts that I want to get rid of, and then you can negotiate a consolidated, like a debt consolidation loan. To say, I've got these three debts Collectively it's 50,000, right, and if I paid them at each level at their interest rates at 40, 30, and 6, to say, but the debt consolidation loan is at 7.5%.

Speaker 1:

Oh, wow.

Speaker 2:

Take the 7.5% and they will pay off. You know you'll have money to pay off the other loans and now you have the one payment that you pay each month and on average the interest rate is much lower than the collective of the two or three loans that you have got you right. Does that make sense?

Speaker 1:

yeah, that's awesome, because when you think about it, I mean obviously it's never good to think about debt consolidation, but the thing is you have to do whatever you can to get that interest in check, because the interest is the part that's going to hurt you. That's going to be the most challenging thing, that's going to hold you back from the success that you want. So it's how do you eliminate that as quick as possible? And if debt consolidation is it, it's it.

Speaker 1:

The other thing I wanted to add in is you brought up a point about looking and assessing your situation. So when you do this for the first time, you might not realize, but your house and car are two of the biggest expenses. And when I say house, I mean apartment, condo, anything, your living quarters, that and the car are usually a big expense. And I'm not saying big is like the number's large, but the number's large in conjunction to your current amount you're making. So if it's over a 50%, they say like 50% if it's over 50%. So maybe it's $3,000 and you make 4,000, that's 75%. That's not a good place to be at and you're going to feel a lot of financial stress because of that.

Speaker 2:

Correct, correct, yeah, and you want to be around. Let's say, around 30% of your take-home income is attributed to your living orders, or your mortgage payments and or rent, et cetera. You know, and then you've got a lot more buffer room to to breathe a lot more buffer room to to breathe a hundred percent.

Speaker 1:

Because what I learned, and like what I've always heard, is that when you remove, when you have food, shelter, clothing, you can think so much better like, and when you limit your debts and you limit your liabilities, then you're not so reliant on these different things and you might not have to go to the job that you don't like, you might not have to go to all these different things because you can get out of there and you can do these different opportunities. So it's super important to realize this, because if this is what people are looking up, that means they're sitting at home trying to figure out these answers. Like it's not an easy trying to figure out these answers. It's not an easy process to get out of debt or to overcome debt. You know what I mean. It can be one of the most challenging things because it really comes down to our habits.

Speaker 1:

The biggest one for me was I sat there and I heard this one video where the guy was talking about it and and he goes basically, if you were going to do an example, it was like he was talking to a car guy and he's like how much, how old are you? And the guy's like 35. And he's like how much are you worth? Like what's your net worth, which is your assets minus your liability? And the guy goes 3000. And he goes 3000 thousand.

Speaker 1:

How many years have you been working? The guy's like 35. He's like 20 years and he's like, okay, three thousand divided by 20, what is that? 150 a year. He's like so, 150 a year you saved. And the guy's like yeah, and you start to hear something like that and you're like that's so sad. How can someone not save more? It's because they haven't developed the habits and they haven't set up these habits where they're automatically pulling from their accounts. They don't have someone help them do these activities, because if they did that then they wouldn't even be thinking about it and it will just happen Because a lot of us see the money in our account and we want to spend it, because we're so stressed out sometimes.

Speaker 2:

Yeah, yeah, and those habits, I, you know, I love that word, right, we have good habits and bad habits, so a good habit would be an automatic deduction out of your other, you know, either payroll to invest in your retirement account, like your 401k or RRSP in Canada, right, so it's for savings, right you know so that's a good habit, right.

Speaker 2:

And then a habit to consider. And, you know, consider maybe not spending $8 a day on a Starbucks, coffeebucks coffee, right, and you add that up on, you know, let's say you do that for 30 days, that's 240 bucks a month, right, that's your investment money yeah, that's. That's a lot. So you know, um, david chilton up here in canada wrote a book called the wealthy barber and I remember reading that as a young kid and I thought, oh, it said pay yourself first.

Speaker 1:

Yes.

Speaker 2:

Right, and I didn't know what it really meant until I started working and it was like oh yeah, it's automatic, so that if the money is coming automatically on your bank account, so it's really not there for you to spend, right, so it's for savings, and that that creates a really good habit.

Speaker 1:

A hundred percent, and it made me think about when I read the Millionaire Next Door, yes, and Richest man in Babylon. And the thing is that what they don't, what most people miss, is this whole pay yourself first. If you're in debt, paying yourself first is paying your debt first. And as you go through this process, you start to pay more and more and more and you start to realize that you're going to snowball and pay these things off like no one's business.

Speaker 1:

And you start paying them off quicker because you're not even thinking about it. And you're just going even faster and you're starting to see the momentum, because now, when you put that tidal wave into now investments, it's going to spiral upwards.

Speaker 2:

Yeah, absolutely, and one of the things I recognize with high net worth clients clients that had $5 million plus and one of the things that I saw them do is they had different bank accounts for different goals. So they had a bank account for vacations, so they had a joint bank account for household expenses.

Speaker 1:

Yes.

Speaker 2:

And another bank account for savings, like we'll talk about an emergency fund, like three to six months of an emergency fund, and because it was segregated and each month they had their main bank account. They had their main bank account and then, from the main bank account, and it could have been a company account or their personal joint account with husband and wife, and then they split up the money into the different pockets and accounts. So you know, and it was really interesting, because that way it wasn't in like a slush fund, because that way it wasn't in the slush fund. You know, right, it was away from that mentality and that was a real smart thing that I've seen people with significant amounts of money do.

Speaker 1:

I love that. The reason I do is because I actually did it with Madison and that's how we were able to travel for seven weeks. Because what we did was we were like, oh, we'll spend the money regardless, but if the money's already in your account, you feel like you have ownership of it, correct? So we just started transferring money and now it auto pulls every month. And the thing is that when you do it for a vacation, everyone wants to save for retirement. Everyone's like retirement savings, retirement, and that's cool. I like that. There's no issues with that. But no one ever saves for a vacation Like some people do. But some people are just like I have extra money I'm going to go spend. That doesn't mean that you know that you can spend $1,000 on the vacation, or $5,000 or $10,000 or $25,000 or $50,000. My point being, because we had that automatically pulling, we knew exactly how much we wanted to spend, Because there's a habit in the spending as well as there's a habit in the savings as well.

Speaker 1:

And a lot of us don't do that because they're contradictory ideas. So it's very challenging for a lot of people to see the spend, the saving, and then also the spending by creating memories, et cetera, et cetera.

Speaker 2:

Yeah, yeah, and maybe for some people, they have to think about saving money as an expense you see what I mean so that it comes out and it's. It's spent, but it's invested for the future and it and invested for your travel, but it's gone you know what I mean? It's been allocated. Well, that's what.

Speaker 1:

Yeah, that's what I do with my one account because I'm like if I leave it in the account, the account will do nothing, but if I put it in these different areas, then we're actually seeing this happen and it's like yeah, and we've been doing it the past five months and you're like oh, like I didn't even notice that that money's gone. Yeah, that's right.

Speaker 2:

Yeah, yeah, yeah, that's awesome. I mean, yeah, if we look at some of the other principles to follow, you know we're on principle number five. Number five would be if you are, if you have a lot of loans and maybe some creditors and you're looking for ways to reduce your payments, well, you can actually negotiate. You can go back to these creditors and negotiate a lower interest rate, because that way they'll get their money right, because a lot of these creditors are afraid that you're not gonna pay, or you have personal bankruptcy or something.

Speaker 2:

So there is some wiggle room there to go and and, to create a plan and work out a deal with them.

Speaker 1:

Absolutely, and especially for those like I. Just checked out my mortgage and since my mortgage company knows that we're located in Florida and we were just near the hurricane zone, I didn't have to request. But there are a lot of opportunities they're offering for financial hardships because there was a lot of damages from the storms and there was a lot of people they're offering for financial hardships because there was a lot of damages from the storms and there was a lot of people who lost power and there was a lot of people who went through this, this and that. So it's just you have to realize what you're doing and there are usually opportunities for you to create, um, a much better situation than you might not, than you might be in, which is why we're doing this podcast in the first place, because people are interested in debt, so we want to provide debt solutions.

Speaker 2:

Yeah, yeah, absolutely. And number six, you know avoid taking on any more debt. You know, maybe that's not possible, but you've got to really focus in on limiting that until you get these higher interest rate debt obligations paid off.

Speaker 1:

So a hundred percent, yeah. So it even says, like one of the things that we wrote down is use cash for purchases under if you're trying to get in debt control. So basically that means go to the bank, take out your 200 bucks a week, or a hundred bucks a week or whatever you want to do, cause when you spend the cash, you'll feel the pain and you won't be going like, oh, I can afford that, like $70, whatever jacket, when you're in, when you're going through a debt cycle, like it takes a few months, but you got to stay focused on it correct.

Speaker 2:

Correct, and point number seven is yeah, and we talked about this a little earlier is uh, build an emergency fund, so once again that becomes an expense item into another bank account for an emergency right. Right, and you know, typically, if you could, you know the goal would be somewhere between three to six months of money and, let's say, in T-bills in the US or money market funds. So it's liquid but still earning some interest, right, so you're probably earning around 4% right now, roughly, and at least it's earning some interest. But that's your emergency fund in case something happens, right, your car breaks down. You know, maybe you want to help out a sick relative or whatever, but you've got something there as a cushion in case you're really sick and your benefits run out. Whatever, it is right.

Speaker 1:

Yeah, it'll give you a lot of peace of mind and I think that's super important. And the biggest thing for me that really helped me with this is transferring it to an account that's not linked. This is transferring it to an account that's not linked. So most people want to do if you have a savings account, so they'll have like a chase checking and a chase savings and they're like my emergency funds in my savings account and they're like a lot of money this month I have to spend some more and then they're like the savings is gone. I'm like you have to set up an account that it might take a day or two to transfer in between, so that you're not your beaver to like get into it, and it forces you to want to utilize it If it's out of state.

Speaker 2:

Yeah, I like that. I like that. I like that strategy. There's a, there's a stop gap Right. So maybe it's your fidelity or your Charles.

Speaker 1:

That's what I do.

Speaker 2:

Yeah, I go to the fidelity and I'm like it takes a day exactly I need my money like exactly it gets you the pause, think and and you know, ask yourself right, do you really need to encroach, or do I really need to buy this thing, or can I defer it?

Speaker 1:

yeah.

Speaker 2:

Yeah, Anytime you can defer buying something that's money in your bank and interest for you.

Speaker 1:

Absolutely. And then, even as we hop into the next one, eight is increasing income through part-time jobs, freelance work, gig economy, selling unused items. I know we all have a closet full of stuff where it's like just why do we have things that are in the box? Just sell them. So the point of being here is that like, okay, now you owe $200 and you're short on your credit card. Maybe go make $200 and then pay that thing off.

Speaker 2:

Yeah, I love that. You know as soon as you said that I was thinking about Gary V. You know how Gary V talks about garage selling. Yeah, yeah, yeah. Garage selling Right and then reselling it Like it's unbelievable.

Speaker 1:

There's just so many ways to make money now, and it's like drive Uber do something like yeah, you can literally do anything nowadays to make a few bucks. It's not, yeah, I don't have a job, and it's like dude, just literally go up to someone who has money and say I want to work for you, like yeah, yeah, absolutely like.

Speaker 2:

Like you know, I, I follow, uh, some people on social media and and these youngsters are talking about different ways for side gigs, right, yeah, the freelance work, like it's. It's unbelievable what you can do, like, like. Here's an example you know, borrow, borrow your dad's pressure washer, or buy a pressure washer, right, and go around, because there's a lot of baby boomers that don't want to do that. They get the money to pay you.

Speaker 1:

Right, you could make a couple hundred bucks pressure washing their driveway in their debt, right, and it's like a hundred percent or there's even I, I have a guy who's an assistant and he like he lives in pakistan and he just dude, he just, yeah, no, he does this thing, he does reach outs, he's on linkedin and it's just like, whatever you can do to help people, yeah, like I do the coaching, people pay for that, like we do one-on-one, like any way you can help people.

Speaker 1:

There will be a value exchange there absolutely, you just need to start putting out what you're good at helping people for free. Then start to charge and then they'll stay if it's good yeah, great, absolutely right.

Speaker 2:

And you know, you and I we talked about the gig economy in the past. You know and you have these skills and why not go to upwork, why not go to Fiverr and post your skills and people will find you on those platforms for gig work 100%, 100%, absolutely.

Speaker 2:

A great example is let's say you're looking for gig work. You don't know what to do. You could use ChatGBT right and become like a copywriter and you could work on procedure manuals. You know writing different articles and you've got ChatGBT helping you to write these things right. So that costs you 20 bucks a month and all of a sudden you know you can charge 40 bucks an hour or what have you. And there's, you're going to get some value out of that.

Speaker 1:

Yeah, I mean, regardless of what it is, there is people that will pay for your services. You just have to expand your mindset and be open to these opportunities, cause it's not just going to be like where's my money, like it's not just going to be like where's my money, like it's not just going to show up, but you got to like look for it and really talk to people and share what you do and see how that can work out, see how it can be a win-win for everyone.

Speaker 2:

Yeah.

Speaker 1:

What else do we have? I know we got two more in this list.

Speaker 2:

Yeah, yeah, number nine you know if your debt situation is pretty bad and you're going to maybe need to seek professional help, so you might talk to a certified financial planner to help you create a debt repayment plan. You might go to a credit counseling agency. You might be talking to the creditor to figure out a payment plan, right, you know there are professionals that can help, whether you're a small company or personal. And you know, and you're going to get some good advice there, and maybe you've got to declare bankruptcy. Let's hope that's not the case, but you're going to get some good advice there and maybe you've got to declare bankruptcy. Let's hope that's not the case, but you're going to get the advice from all angles and I think it's important to get out of your head and talk with somebody that has experience that are professional absolutely, but it's also super important to start changing your habits like change these habits that got you there.

Speaker 1:

You got to do basically the complete opposite that got you there to get you to the new place. And then the last part is. Number 10 is stay committed and be patient you know what I?

Speaker 1:

mean it takes time and it takes discipline. You got to celebrate the small wins along the way and you got to set realistic goals and then hold yourself accountable to those goals, because the thing is, whenever you do, the funny thing is that debt repayment is like investing it's just the opposite, and you know the return, and the returns against you instead of the return being for you. So the same habits you use for this debt payoff are the same ones you're going to use for investing and building wealth. And it's super important to realize that, because you're starting to realize that those are the requirements it takes to be successful in the financial capacity. Because the real thing is, no matter how much you make, it's all about how much you keep, and that's what will distinguish you and that's what will make a huge difference in your life down the line. And saying can speak to that much better than me. But yeah, so saying what? What did you see for people? Were there some people where you're like, how did this person do that? Like they're literally like.

Speaker 2:

You know what I mean yeah, yeah, you know, you know this is a great segue. Uh, you, we can talk about good debt and bad debt, because what we were mainly talking about was the bad debt being overspread, having high interest payments at a ridiculous annualized rate of interest versus. You know when is a good time to take on some debt. And we talked about the first type of debt Anytime you invest in yourself, like an education loan, a school loan, right, I mean, education is generally a good idea, right, and not that it's the be all end all, because we are in a digitized economy and there's a lot of successful people that have become creators without university or college, but I think you find your passion. But, generally speaking, more education is is generally a good thing, but it's not the be-all and end-all, and I think that's, but it's also when you invest in that education stuff.

Speaker 1:

I think the big component is realize, like we think it's debt or no debt, and it's not always that simple. Like some people come out with $5,000 of debt, some people come out with 100. Massive difference, massive mindset change. So the point being here is that you want to be in a place where you feel good about yourself and you're not scared to go out and be who you want in the world, because you feel like you have this crippling debt that you have to pay off. You want to create a world, and if you did feel like one of those people that do have a crippling debt, then we talked about it already.

Speaker 1:

The 10 steps are assess your financial situation, create a realistic budget, prioritize high interest debt. Consider debt consolidation. Negotiate with creditors. Avoid taking on new debt. Build an emergency fund, increase income. Seek professional help and then stay committed. And stay committed and be patient, because that will make a huge difference for you. And if you really need any help, you can reach out to me, you can reach out to Sang, and I'm sure we'd be happy to have that quick conversation and see if maybe there's some tips or tricks we can share with you.

Speaker 2:

Yeah, yeah for sure.

Speaker 2:

And you know, when we go back to talking about some of the good debt, right, investing in yourself, I think, generally speaking, it's a, it's a, it's a very good idea in the form of education, I mean, mortgage loans, I think.

Speaker 2:

I think you know everyone needs a place to stay Right and you know, generally speaking, right, it's a, it's generally going to be a good investment for the long term and I wouldn't be looking at it as a short term flip, especially right now. It's a tough game. We've got business loans right, additional investing in real estate, so there's good forms of debt, but I think you've got to be really smart about it, right, and and I would use the principle of what's the upside, what's the downside to that decision, and then can I live with the downside Right, and I think I think that's important. You know, when we're talking about a business and taking money to grow a business or grow an asset, I think asking those questions are a good way to start, because if you can't handle the downside of it, you know, maybe it's too risky for you.

Speaker 1:

Okay, something to contemplate.

Speaker 1:

Yeah, sang, you bring up a really good point that, like when you think about any of these things that they basically said payday, student loan, car loan, home loan we make these decisions as quick as we put on T-shirts, like if we want to buy a shirt, like we literally take the same amount of time if we're at a store debating about whether we want to buy a shirt as we do a car out, whether we want to buy a shirt as we do a car. So the reason I say that is you should probably ask yourself a little bit more questions, because the shirt might be a one-time purchase, but the car is going to be a monthly payment and if you choose something different, that's the difference between $200 a month and $800, $1,000 a month, which is just one choice you made where you signed it. So it's just super important to realize that. Like Sang was saying, whenever you're making any of these decisions, sit on it for a little bit, ask the questions and see where the opportunity lies Absolutely.

Speaker 2:

Yeah, yeah, and I'll give you another example of what's happening in real estate right now. So if you think about almost five years ago let's say around 2020, 2021, we had interest rates hit a low. So up here in Canada you could locked in a five year mortgage for under 2%.

Speaker 1:

Oh, wow.

Speaker 2:

For five years Now, a lot of 2%.

Speaker 1:

For five years Now a lot of those people overextended themselves and bought a bigger house.

Speaker 2:

But guess what? The five years are almost up. Yeah, interest rates are much higher now. Now, upon that renewal. And let's say they get a mortgage for 4% or 5%. Well guess, what. It's double, their mortgage payment is double double and there's a lot of people that can't afford a double mortgage they didn't get anything, yeah so they're forced to sell their house.

Speaker 2:

So what we're seeing in canada in the us as well, because our interest rate um have pretty much mirrored themselves. Okay, there's a few differences, but it's very similar. So we're in a period where there's more sellers on the housing market than there are buyers. Therefore, prices will drop, and we are at the beginning of that cycle and each month that comes by we have these sellers, unless the interest rates drop fast enough. So so, thank goodness in canada they they're dropping interest rates um fairly, uh, fairly regularly, right? So, yeah, the interest obligations are not as high as they were, like even a year ago. So you know, hopefully the governments get this right, the feds and Bank of Canada get this.

Speaker 1:

No, absolutely Absolutely. So. I hope you guys all received a ton of value from this regarding how to get out of debt, received a ton of value from this regarding how to get out of debt, how to move towards different avenues and just realizing where our true opportunities lie. You know what I mean. We have so much in our lives and it's important for us to try to remove the downsides of a lot of these things as much as possible, because then we'll think a lot clearer and we'll be able to show up a lot better. And saying has seen that with thousands of clients where it can be a scary situation.

Speaker 2:

And, um yeah, saying you got any final words for the audience yeah, I think, I think, um, you know, think about, about these principles that we talked about, right, and if you're feeling stressed, you're not comfortable with the existing situation, so really pay attention to that and dig a little deeper, ask for help and it's okay to ask for help because somebody has already solved this problem many, many times. And I would go from there Absolutely Pay yourself first.

Speaker 1:

Pay yourself first. I love it. And one more time through them all. Number one is assess your financial situation. Create a realistic budget. Prioritize high interest debt. Consider debt consolidation. Negotiate with creditors. Avoid taking on new debt. Build an emergency fund. Increase income. Seek professional help. Stay committed and be patient. This is what I guys want you to remember. If you guys have any questions, comments, reach out to us and we'd be happy to talk with you guys. I hope you guys all keep clocking in and we'll talk very soon, thank you.

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Jordan Edwards

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