Lesley Scorgie, ’05 BCom,
financial consultant, business analyst and bestselling author of Rich by Thirty and Rich by Forty, talks with fellow alumna Bridget Casey about smart spending, investing wisely and being more than just financially wealthy
You’ve been saving and investing since a young age. What inspired your interest in money so early in life?
Getting started early was the result of my mom and dad taking the time to explain how money works. I bought my first Canada Savings Bond with $100 that my grandparents sent me for my 10th birthday. My mom took that opportunity to talk to me about compound interest, telling me, “You can buy a bicycle or you can invest that $100 and in seven years it will be worth $135.” She told me the earlier you start [investing], the more money you’ll have.
You already knew a lot about money before you started university, so what did your education in business teach you about finances that you didn’t already know?
My marketing classes at the U of A are where I got inspired for Rich by Thirty. We were talking about market niches, and it drove me crazy that there was no niche out there for young people when it comes to money. So my schooling at the U of A directly supported my business plan for my first book and the frameworks that I used to look at personal finance.
What has been your biggest financial mistake and what did you learn from it?
When I was 18 years old, I opened my first stock account. Within a week, I went to the hairdresser to get my hair done, and my hairdresser suggested I buy a certain tech stock. I purchased this stock and I lost everything. At 18, I had a lot less to lose, but it impacted me because that was my tuition money and suddenly it was gone. It was a really hard lesson because I knew that rich people don’t do that — they take time to research good investments and they take time before they make any type of big purchase. (And, to this day, I still can’t find a great hairdresser.)
How should someone who’s inexperienced in investing get started in the stock market?
First, it’s just about getting out there — reading blogs, the Financial Post and good books. Second: get some advice. Our generation is really prone to not asking for advice because we can download everything we need to know online. Go to your local financial institution and set up an appointment with a professional advisor. And third, just do it — open an account and start investing. Watch your investment go up, watch it go down and you’ll learn a tremendous amount.
What’s your advice to post-secondary graduates for dealing with student debt?
Having student debt is the norm, and it’s not considered “bad debt.” Bad debt is used to fund things like Prada shoes; good debt is used to buy an asset. Your earning ability as a graduate of any type of program is anywhere from one-and-a-half to three times greater than if you did not pursue any type of post-secondary studies. You’ve made an investment in your education and investments are long-term; they pay off down the road. You just need to figure out to whom you owe money, what the interest rates are, and focus on getting rid of the debt with the highest interest rate first. The faster you can get rid of debt, the sooner you’ll be financially free.
What advice do you have for people who’ve delayed saving for retirement?
The older you are, the bigger the focus on your bottom line. Prioritize, rein in spending and save, save, save more aggressively than if you’d started when you were younger. The most powerful tools to save for retirement are the RRSP and the TFSA [tax-free savings account], which are government-sponsored, tax-advantaged savings plans. Most Canadians have access to these through their employer, and every time you get paid, a portion of your paycheque can go directly into these savings plans. The benefit of being in your 30s, 40s or 50s is that you’re typically earning more and can hopefully prioritize your savings and invest larger amounts.
What are the biggest barriers to becoming financially secure?
Limited budgets and debt. People over-extend themselves, they earn less than they thought they would, or perhaps there’s unexpected unemployment. We have a million different priorities for our money these days, so unless you make saving a number one priority before anything else, it will never happen.
What does it mean to be wealthy?
We often associate richness with a dollar value and I don’t think that’s the case. Truly wealthy people have a balance between wise spending, investing for the future (usually 15 to 20 percent of their income) and giving others in the community what I call “time, talent and treasure.” Doing those things makes people rich personally and financially, and also gives them the flexibility to do what they truly want to do in life.
For more of Lesley’s wealth wisdom, visit www.lesleyscorgie.com, or follow her on Twitter, @Lesleyscorgie.
, ’10 BSc, graduated with a degree in chemistry and biology, and now works as a recruitment and student liaison specialist for the U of A’s Faculty of Engineering. Her personal finance blog, Money After Graduation
), chronicles her ongoing journey from student debt to financial security. Click here
to read more about Bridget and her adventures in personal finance.