In the real world

Enough Trump. Gaza. Greenland, Mexico. Panama. Canada. Enough drama and politics. All the erudite, well-padded old farts (and the young ones, too) who come to this pathetic blog need a reminder of how many people live.

Hand to mouth, actually. But trying for better. Hoping. Like Cyrus.

“I have been a reader of your blog since I immigrated to Toronto back in 2017,” he says, “and unfortunately, been trying hard to settle in for the first 4 years followed by a business failure (Persian restaurant) which took $150,000 of my savings away. I am now on my feet once again, with a $82,000/year salary working as an aircraft maintenance engineer for WestJet (no pension, but a 4% investment deduction per paycheque and if I opt in, I’ll be short $800 every month and I can’t even pay my bills).

“Now, I would like to start properly. I would like your advice in regards to my future financial plans and having a balanced portfolio. How to start and where to begin as I have no cash and everything I make goes to rent ($2,200, $1000 car lease and $1000 groceries and gas per month) Is there any hope left to even think about having a balanced portfolio to begin with?”

One little step at a time, Cy. Assuming you’re with WJ in Calgary, that salary after tax will net out at a few bucks over $61,000 a year. That’s $5,080 a month. After rent, car and food, there’s a scant $880 left over – and you didn’t mention the cell, clothes, booze or dog food (you deffo need a dog). So, yeah, signing up to buy the airline’s stock is not on the table at the moment – besides, this is a volatile sector and you shouldn’t add investment risk to employment risk by financing the people you work for.

Options? Cut back on expenses (maybe dump the lease, buy a beater car or bike and hope for the best), or augment your income. Yes, another job. It sounds like you know how to wrestle up Persian cuisine, so a restaurant gig at night after you fix the jet engines might be an alternative. And maybe this could be a way to cut down on your food costs? Most resto employees get at least one free meal a day.

So, what to do with, say, five hundred extra bucks a month?

First, as mentioned, forget the stock purchase. That’s not balanced. It’s not diversified. It’s linked to an unstable industry in a weird time. Much better to invest in an exchange-traded fund that can provide both B and D, with low fees and good liquidity. There are a bunch of them on the market, from the big banks, Fidelity, Vanguard and others.

So you’ll need to open a trading account. Your bank probably has one, or pick an indy outfit. You can get by with one balanced (whether 60/40 or more growth-oriented) ETF until your holdings swell. That’ll be a few years, so in the meantime just chunk the savings away routinely, don’t fret over market volatility, downturns, rebalancings or the orange guy. Just keep at it.

And do this inside a TFSA. You’ve been in Canada for eight years now, so you should have accumulated contribution room of more than $55,000. This is the most flexible account, since withdrawals (if an emergency hits) can be replaced in future years, and there’s zero tax on withdrawals. Contributions are not deductible from taxable income as with an RRSP or that crazy first-home account. But RRSP room is never lost so you can use it later in life when your income is higher. As for the FHSA, withdrawals must be used to buy a house or transferred into a retirement plan, and you can only make up one year of missed contributions (of eight grand). So open an account (costs nothing) and it can sit there for possible use next year, if things go well.

Other stuff to remember: stay the hell out of debt. Borrow nothing. Finance nothing. Where you can, barter. You know food and cooking, so there may be opportunities to use that skill in return for something you need, like reduced rent in new digs. And speaking of food, don’t eat out. It’s expensive, not to mention unhealthy. You’ve also got mechanical skills, so see if you can trade those for transportation.

Don’t be proud, either. Used clothing is perfectly fine for rough work, and can be had for free. You might find free rent in a building by agreeing to janitorial or maintenance or super duties. And, as strange as this sounds, consider being an influencer. TikTok is free to use with a gazillion viewers, many of whom would be happy to share your journey from failed entrepreneur to happy, stable, GreaterFool B&D success story. A phone, ring light, Wifi and, presto, you’re there. Followers = cash flow.

You asked, “is there hope?” Of course there is. In abundance. In your hands. In this great land.

About the picture: “Thank you for for providing a measured, informed and intelligent view on the way things work in these interesting times,” writes Ben. “Here is a photo of our pups, Koda Golden Retriever and Nano Border Collie hailing from North Vancouver, BC. Perhaps you’ll find it appropriate for an upcoming article.”

To be in touch or send a picture of your beast, email to ‘[email protected]’.