103: Erica Alini, author of "Money Like You Mean it"

I’m joined by Erica Alini to talk about her new book: Money Like You Mean It - Personal Finance Tactics for the REAL world.

Erica is the personal finance reporter at Global News, where she writes about all things personal finance, business, and economics. She’s also the author of Money123, a popular weekly newsletter on money matters. Her writing has also appeared in the Wall Street Journal, Maclean’s and the Globe and Mail, among others.

You can also follow her on twitter here. 

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Transcript

Preet Banerjee: 0:00

Can you tell that story about the David Letterman Show and the guest who was on that show and what they talked about?

Erica Alini: 0:08

Yes, and I am blanking out on the guest.

Preet Banerjee: 0:12

Well, you know what, I kind of didn't mention the name because like, because I would feel really bad because I am Indian and she is Indian IT and that I'm not 100% Sure, and that a pronounced I'm pretty sure it's a Shuar URI. Yes, that's right. This is so bad, that I'm an Indian, and I'm like. This is mostly money, and I'm your host, Preet Banerjee, and on the show today, I am joined by Erica aleni, to talk about her new book money like immediate personal finance tactics for the real world. Erica is the personal finance reporter at Global News where she writes about all things personal finance, business and economics. She's also the author of money 123, a very popular weekly newsletter on money matters. And her writing has also appeared in The Wall Street Journal, McLean's and the Globe and Mail among others. Erica, welcome to the show.

Erica Alini: 1:22

Thanks so much for having me.

Preet Banerjee: 1:24

No, it's my pleasure. I've been looking forward to our conversation. I've been a big fan of your work at att global. Always enjoy reading your pieces. So very excited when I heard that you had a book coming out to encapsulate all the knowledge that you've been, you know, imparting to the people in bite size content, but now put together in one place. So let's start with the title of this book money like you mean it personal finance tactics for the real world? So what what do you mean by money? like you mean it?

Erica Alini: 1:58

That's a That's a great question. I'm glad you asked. It took me forever to come up with that title. But I had the idea from from the beginning. And the idea was that personal finance is becoming more complicated. And so you kind of need to level up. And you need to know more in order to make good decisions. And you need to think outside the box. And so it kind of needs a bit of a feisty attitude. And that's how I landed eventually on on money, like you mean it. And that's why I also use a word, tactics. Because it's kind of like the whole idea is, it's getting tougher out there. And you need to learn to fight smarter and not harder.

Preet Banerjee: 2:42

Right. Okay. So I like the premise already, because I think it correct me if I'm wrong. But so what I'm hearing is that, you know, if you take a more passive approach, and we'll talk about investing, if you take a more passive approach with your money, and just watch the world go by you, you're probably going to fall behind because the world has gotten so much more complex, there's a lot of noise. And so if you're going to be serious about achieving your potential, when it comes to manage your money, you have to meet it, right, you can't just hope for the best and hope that things work out is that basically the premise of this book.

Erica Alini: 3:17

So what I was thinking about, and this is something that I've been thinking about for a very long time, but my, what I'm thinking is, personal finance is becoming more and more DIY, they, there are more and more choices out there. So investing, for example, right? Like there's been this great democratic session of investing, which is great on one end, because it's so easy for everyone to access the stock market, which used to be a very elite thing. On the other hand, it also means it's super easy to make really costly mistake with a few thumb strokes and lose money, you really can't afford to lose. I'm thinking about, you know, spending and borrowing, right? There are armies of people out there very smart, very well paid, whose main job is to get used to spending more and more even when it comes to insurance, for example, right? Like, getting home insurance used to be this like very regular thing. You know, you buy a house, everyone knows you get home insurance, and Bob's your uncle. But now, you have to know that, you know, you have to look you know, is the house you're buying into a flood zone in a flood zone. What's the sewer system? Do you need flood insurance? And if you do, it's an optional thing that you usually have to ask for you have to now to ask for flood insurance. And those are just some examples. And that's why I've been thinking like no to get by and this is true of every generation. Like you really need to know more than knowledge base the standard just to be able to make Good decisions is higher than it used to be. And I feel like if you are a millennial like me, an ancient millennial, or a Gen Z, it's even more. So you have to be nimble, you have to know more you have to be, you know, you have to go out and get what you want you want to get. We're facing an absolutely bonkers real estate market. And we're getting out of the gate we have most of us have student loans, which, you know, weigh you down just when you're supposed to take off in life. So, no, I feel like that that was the spirit of the book, like it really, it is a fight. And this is a book that tells you, you know, a few tactics that will improve your chances of reaching the financial goals that that you want to reach.

Preet Banerjee: 5:50

Okay, I think I think I get this now. So I 100% agree with you in sort of the premise that you set up, which is that it's the access to different things, in general, is a lot higher than it has been. And that's a double edged sword. So it's so much easier for people to start investing with lower amounts to invest. It's easier to go around and get insurance quotes. But do you know you're getting the right insurance for all your needs, and you just don't know what you don't know. So on one hand, because of technology, and just the change in business strategy, people going directly to the consumer, there's all this great choice. But there's also all these opportunities to make decisions that maybe aren't optimal. Alright, so I get that. So who is the the audience that sounds like this is skewing younger? So Gen Zed, and Gen Y, which Gen Y is the same as millennial. So Gen Y and Gen Zed? Is that? Is that the target for this book?

Erica Alini: 6:49

Yeah, if you say, you know, I, Gen Y is what people used to call Millennials before the millennial terms are became prevalent. I think you kind of Dating Yourself.

Preet Banerjee: 7:02

Right? The context of you know, where does the Zed come from for generations? Zed? Well, it came after y, which is what we used to call millennials. So maybe I am dating myself, but

Erica Alini: 7:15

I gave myself an introduction. I was like, back in the day is to be Gen Y. And I remember that.

Preet Banerjee: 7:22

Right? Right. When was uphill both ways to school, blah, blah. Right. So anyway, so So is that the audience? Those generations, Gen Zed, and whatever the other one is, that was before them.

Erica Alini: 7:35

Yeah, so it's, it's it's millennials. And like I said, I'm one of the older ones. And then Gen Z. And I would say, you know, Gen Z is, is generations that are huge, right? I think my six year old is at the tail end of Gen Z's by Gen Z. I mean, the older ones, the ones are, you know, everyone who's finished school and is trying to get into the world of work. So basically, like, I'd say, 20 year olds to 40 year olds, right, man.

Preet Banerjee: 8:00

Okay, and so when you say that you are an ancient millennial, so is that mean? Like, are you like, bordering like you like a Xenial? I think it's called it's which is straddling millennial and Gen X, I am solidly in Gen X. So that makes me super ancient. So choose your words carefully.

Erica Alini: 8:18

I always call them x annual. Okay, see,

Preet Banerjee: 8:21

I don't I've only ever seen it in print. I don't know how it's pronounced. But yeah, that makes sense. Okay.

Erica Alini: 8:26

But yes, I am one of those.

Preet Banerjee: 8:28

Okay, so now you've been at global covering personal finance for how long?

Erica Alini: 8:35

Come on, yeah, almost five years, five years? And

Preet Banerjee: 8:37

what are the big, big mistakes, or the big stories that you've seen while on this beat that just makes you you know, your eyes pop out of your head, covering personal finance.

Erica Alini: 9:29

So one of the ones that I kind of used in in the book sort of indirectly. I am not going to say, you know, I don't see crazy stories about people spending, you know, crazy amounts or taking on enormous amounts of debt or anything like that, but it's mostly about sort of naivete what I what I see a lot. And so for example, I had this story about this guy, really, really smart guy who just got an fantastic job. It was right out of university already making more and wiener to buy a house and had always been very strict. And he he was always using a debit card and had been saving up and had saved up you know, had bought a car in cash and motorcycle and cash and, and now he wanted to buy a house from from the home. He'd never been using a credit card. So yeah, no credit. So he had to get his parents to, you know, to co sponsor the mortgage. And this was shocking to him and to his Parents. And that's a story that I kind of used in my, in the book when I when I explain how, you know, credit scores work, I was like, you know, like this guy reminded me of, at the time I was reading my son was obsessed with Captain America's you could be Captain America, you know, like the young kid doing the right thing and

Preet Banerjee: 11:02

didn't crack file for Captain America right because that if

Erica Alini: 11:05

you do not use credit, the banks do not care.

Preet Banerjee: 11:09

Okay, so this is a I think a good segue to talk about, I think one of the most, the issue that will get the most amount of clicks, the most amount of podcast downloads is anything to do with real estate. And so in the last five years, Have you have you seen this, this divide between the haves and the have nots in terms of the ability to buy a house? Like would you say that we are in a housing crisis? Oh, definitely.

Erica Alini: 11:40

I honestly, I've heard that we were in a housing crisis since I started covering the housing market, which back then was 2010. I've been on that beat since since then. I mean, Maclean's. I was on McLean's at the time. I don't know if you remember, but we had this issue with like a house going up in flames. That we know.

Preet Banerjee: 12:02

Years later, yeah, it actually meant housing is on fire. Right. And it continued to be on fire for the next 11 years. And even the last six months, it feels like it's even accelerated. And so you know, money's cheap right now to to rent, which is, you know, that's one factor. But we also saw that the average gift of a downpayment is, you know, six figures for someone in Toronto. And so they're relying on so much help. And so if your parents weren't on the housing ladder, and they don't have equity to tap into it, it's almost like a sure bet that you're not going to get a house. If your parents don't own a house. How do you feel like this is affecting the perspective of the next generation of financial consumers?

Erica Alini: 12:51

It's a it's a huge issue, I would say it's the number one issue facing millennials and Gen Z. And frankly, even even among millennials, right, like millennials, who were a little bit older, kind of some of us gone in just in time, like I bought in 2015. With help from my parents, and my in laws, and we've already dodged to huge housing loans since then, and we wouldn't have been able to get in even with help. Had we waited even, frankly, even a year, because the housing market started heating up. We just like lucked out that 2015 was like we had the crisis, the energy crisis in Alberta, and things kind of cooled off for a little bit. And that's just why we won. We happen to buy a house. So there's an enormous and not only a generational divide, but a huge divide even within Yeah, the younger generation.

Preet Banerjee: 13:45

Yeah, starting to hear people with homeownership guilt. And, you know, so for a while we're there, people were talking about buyers regret buyer's remorse, they get a house and like, wow, these big, big mortgage payments and property tax, and all this other stuff to pay for maintenance. And so they were house rich and cash poor. And now you're starting to hear stories about people who have guilt about being able to buy a home, when a lot of people around may be frozen out forever, you know, people in their friends circle. So the psychology behind housing is really I like I agree 100% that it's been, you know, crisis levels for a long time. But do you feel that? Do you feel any guilt of being ones who got in sort of before things ran away?

Erica Alini: 14:37

Totally. Yeah, absolutely. And not just that, but there's also all this shame around getting money from your parents, this is like this, this notion, right? That your your your chances financially depend on on your parents. That doesn't doesn't feel good at all. I think it's a it's a huge issue. There's a lot of anger out there, which is completely understandable. And the book is sort of addresses that, you know, whether you should get money from from the Bank of mom and dad. And one of the things that I that I tried to do is the same time acknowledge that this is a huge problem, and it is fostering income inequality and we are going down a path. We probably don't want to go down as a society. And at the same time though, you need a house to live in. And if your family lives in a big city and you want to be close to your family and your family can help you. My position is get that help you need the house you know you're not speculating you you're occupying a house like you would in a normal in a normal situation and shame. The only thing that shame does is, you know, it makes you hide it not want to talk about money within your family, sort of like kids, adult kids and parents kind of do things hush hush, without acknowledging what's going on without having an open conversation, like pretending it didn't happen, which then usually breeds misunderstanding and family conflict. And on the other hand, shame leads people to not want to talk about the fact that they got this help from their parents, which in turn, you know, makes people wonder how miraculously you have a house and they don't, and maybe you know, something that they don't, right. And I feel like you know, like, get the help if you need the house, but be very open about it with your friends, that you got help. And it doesn't mean you have to spill your guts and, you know, say exactly how much you got and how much your parents gave you. You're not Donald Trump, but no one needs to see your tax returns.

Preet Banerjee: 16:47

But they will. Like still like his presidency, and hopefully, well, hopefully, it's just the one term, we're still never gonna see it. Right. And he's probably gonna run again, and we probably still won't see it.

Erica Alini: 17:04

But, you know, but do do acknowledge that help.

Preet Banerjee: 17:07

Right. Okay. Now, one of the stories right at the end of your book, I think is is interesting to tack onto this part of our conversation about shame, you know, living with your parents getting help from your parents. Can you tell that story about the David Letterman Show and the guest who was on that show and what they talked about?

Erica Alini: 17:26

Yes, and I am blanking out on the

Preet Banerjee: 17:29

guest. Well, you know what, I kind of didn't mention the name because like, because I would feel really bad because I am Indian, and she is Indian IT and that I'm not 100% Sure and that to pronounce. I'm pretty sure it's a Shuar URI. Yes, that's right. This is so bad, that I'm an Indian. And I'm like,

Erica Alini: 17:53

I checked, I checked the spelling, you know, million times. And then there was the issue that she changed her last name since that Letterman clip and which one were we going to use? discretion? But yeah, sorry, I was also uncertain how to pronounce it. No, I think you've got it right. Save one more time. And then I'll try to say the same.

Preet Banerjee: 18:11

Well, sing it twice the same time is almost as hard as getting it up the first time. I think it's ash warrior, right?

Erica Alini: 18:18

Yes, I think so too. That sounds really

Preet Banerjee: 18:22

gotta hold my mom isn't listening. She's gonna like throw a shoe virtually through the airwaves. Okay, so anyways, tell the story.

Erica Alini: 18:29

Okay. Yeah. So I had I'm sorry, I've seen I used to, there was a period of my life where I used to watch David Letterman clips at night. Long distance, my husband was, you know, teaching California and I was in Toronto. And that was my pastime. And I stumbled upon this clip, and it has stayed with me for decades, until I actually wrote the book. I knew I would use it someday. And I love that clip. And I have to say, I full disclosure, I'm Italian, and not I don't mean Italian Canadian, I was born and grew up in Italy. And so I have that kind of cultural background. And I have to, I think, you know, Indian families and Italian families have a lot in common. So that clip really spoke to me. And it was, it was her on on Letterman, and she was promoting her, he should just sort of had a bit the view on the Hollywood scene. And and so she was promoting her her latest movie, and then, you know, Letterman throws her one of his signature curveballs and was like, Is it true that you still live with your parents, and I love that she would not have it. And she came back and him and was like, Yeah, I'm still leaving my parents. And in India, it's totally acceptable. And we don't need to make an appointment, you know, weeks in advance, have dinner with our parents. And she and she drew the applause and I was like, way to go. Right. Yeah. And, and so one of the argument, you know, I use that, that clip and I mentioned that clip it in the book and I and I, you know, use that to to argue that you know, we have this enormous stigma in the US in North America in US and Canada against you know, getting help from your parents and living with your parents past, you know, a certain age or at you know, are 22 or whatever it is. And it's it's very it's a North Americans in the Anglo Saxon thing, you know, like there are so many cultures in which this is not true. A leaving one Indian mean, and now they're, you know, really if you go around the world, this is like an In my opinion, it has a lot to do with, with wealth, you know, like there was a period, it didn't used to be the case that people would get out and strike out on their own necessarily, even in North America, it became a thing when it became possible economically to do so. And in a lot of countries, it's so not so easy to do. So a living one has a humongous youth unemployment. And so people still live with their parents. And it's much more more acceptable that you're going to need to stay and sit tight and live in your childhood bedroom for much, much longer to build yourself up financially until you're ready to finally break free. And it's not always an ideal situation. But we have to get rid of the stigma even in North America and recognize that it was tied to a very specific historical context and economic context of opportunity, right? Like the the the baby boomers, had enormous economic opportunity, and were able to strike out on their own early on. And that's fantastic. But we're not in the same situation. And it should be completely fine for someone to, you know, live in their parents basement, if they are saving up to two for a big downpayment. And you know, and the parents can afford to, you know, to do let them leave event free, for example,

Preet Banerjee: 22:07

yes, certainly around the world looking at cultural differences. And some of that is sort of imported into Canada being such a multi generation, multi cultural sort of melting pot of a lot of different immigrant groups. But you know, having two, three, sometimes four generations in the same house is not uncommon around the world. But I want to touch upon something else related to cultural differences and you having growing up in Italy. So I know that in Europe, there's some things that are just you know, people's perspectives are quite a bit different. So for example, in Berlin city in Germany, the rate of renter's is like 80% 80% of people in Berlin rent. And so they don't have the same sort of stigma with homeownership. But a lot of people are renters. But another thing that I think is a little bit different is the use of credit cards. I think in Germany, this was a couple years, years ago, when I looked at the stats, but something like only one in six people use credit cards in Germany. But I want to ask you about credit usage here in North America and in Canada. What are you seeing, for better or for worse when it comes to the different types of credit tools, apps, services that are out there and any traps that people should be aware of?

Erica Alini: 23:29

So obviously, we're very fond of credit cards in North America, and I have to say, like my Italian background really served me well there because it was like, what not paying your credit card in full the end of the day, like at the end of the month, like what are you talking about? It was completely unthinkable for me, so I have that to be grateful for. But so in terms of the pandemic, there's been some some positive trends there. Right. As you as you know, the especially the income support programs for COVID-19 have helped a lot of people pay down debt. And this is something that I was hearing early on when I was interviewing sort of low income Canadians who are receiving the Serb and then the CRB though some of the things that they're doing is like finally I can pay off my credit card bill. On the other hand, we've been racking up mortgage debt and obviously because of the tremendous real estate boom that we've had HELOC that that's home equity lines of credit and lines of credits that are backed by the the equity in your house. And we've been racking up those balances as well. And then the boom in home renovations and now I've heard of people using HELOC to place Bitcoin bets and to you know, to buy real estate with with leverage seems to be the new one the new big trend. Another trend two other trends I guess one is one is credit debt and the other one isn't really debt but I sort of during Sidious little things that make it in my opinion, harder to to budget and Stay within your limits. When is the Buy Now pay later apps which seemed to be everywhere, and they really exploded during the pandemic. And the other one is what Robin talb called subscription cream creep, which I thought was was a great term, the fact that everything is becoming a subscription. And so, the BNPL probably most people know at this point what It is. But it's basically it comes into in two forms. So perhaps you're you're shopping online and you get to the checkout. And now you see that you have an option to pay for whatever it is you're buying in full as usual. Or you can pay for it in installments, a tiny little payments over several months, right. And we're not talking about the old Buy now pay later, like buy a mattress and, you know, forget about it for six months, and then pay in installments, we're talking about you buy a pair of shoes for $150 and paying 50 $50 installments for three months, kind of that kind of thing. And then you also have BNPL apps now where you can download the app and shop within the app with partner, retailers. And then you can pay for everything in installments. And so these are tiny little loans, and they're often interest free, if you pay in time. But what I find is really insidious about BNPL is that they they anchor in that there's quite a bit of, you know, behavioral economists that will tell you this, that they, they anchor your brain on the smaller amount of the installment payment, rather than the full amount, whatever it is, you're buying. So you're kind of thinking, you know, rationally you know, the pair of shoes is under $50, of course, but emotionally, you're thinking like 50 bucks a month, I can afford that. Let's do it. And that solves a huge problem for retailers, right, which is people abandoning their digital cart, right? Like, he was like, oh, maybe I'll need to buy these shoes. And then when you have to put in your credit card information, like Yeah, can I really afford? Maybe not, you know, and people abandon the cart, right? Like they, they they put the stuff in, and then this day, they get cold feet. terrible pun after issue, analysis. But you know, so it helps you overcome that sort of that moment of doubt. And the other thing it does is, if you keep using BNPL, you will end up with a bunch of small payments. And we're extremely bad at keeping track of small payments. I'm the first one like I, you know, what happens to me mostly is, I'll sign up for some trial thing, and then forget to, you know, cancel it. And then I have the wideness, like, $10 come out of my account, right. And so it plays on that it's sick, people are very good at keeping track of their big, big bills, they're not very good at keeping track of small things. But they really add up. And, and the other thing that happens with this, and with subscriptions, which is another category of small little payments that eat away your budget every month, everything is becoming a subscription. And between BNPL and subscriptions. More and more of what used to be your discretionary expenses are now turning into fixed expenses.

Preet Banerjee: 28:37

Yeah, very, very interesting insights. Okay. So another thing that you talked about in the book is this, there's a chapter titled The Big Fat retirement myth. So just so we're on the same page, which myth is that?

Erica Alini: 28:54

So the reason I call it retirement retirement myth is so that the argument that I, that I make is that the concept of retirement is kind of fading away,

Preet Banerjee: 29:05

to be retired.

Erica Alini: 29:08

That's the line from your book, which I remember

Preet Banerjee: 29:11

is it I didn't even remember that I just thought it was clever. Now, it is a line from your book. Shit, it's been a while since I've even crack that open.

Erica Alini: 29:25

So I think it's, it's kind of like becoming a more, it's less of a sort of black and white switch, you know, from like, working all the time to suddenly you're, you know, doing Aquafit classes in Florida, or, you know, something like that. It's, it's becoming more of a gradual shift from working all the time to working less. And I think that's how I see, you know, like, if you're, it's interesting, because there's, the people tend to think about different phenomena. And in my opinion, it's all the same thing, right? You have the news coverage about, you know, baby boomers who aren't really retiring or like, or they pretend to retire, and then they come back to work or they become consultants. So, you know, they keep working on on the side a little bit. And then you have Gen X is very fond of, you know, the concept of financial freedom, which usually comes a little bit before 65 And then you have millennials who came up with fire, which is really financial freedom 2.0 and the extreme and the idea of working like a maniac and saving like Amenia until you know, you're 30 or 35, you know, whatever or whatever super ambitious goal you want to even set, and then you quote unquote, retire. But when you talk to most sort of people who pursue fire, they're not really talking about never working again for the rest of their lives, because frankly, what would you do with yourself for that long, they're talking about having the luxury of not worrying about paying your bills, and being able to work less being able to pursue your dreams, you know, it's still working, it's just doing the work that you really want, a lot of the time and traveling and all of that. So all of that, in my opinion, is just like this idea of that there's a phase of your, of your life in which you need to work super hard and, and save, and you're kind of in the hamster wheel that you were saying. And then there's a phase of your life in which you're still working, but you're doing what you would like to do. And, you know, and, and you can stop and smell the roses and and enjoy life a little bit more. And frankly, only very gradually, you get to the point where you're not working at all.

Preet Banerjee: 31:45

Right? Yeah, I think there's definitely the the concept of balance, I think is has always been important in terms of figuring out how do you live for today, while also planning for tomorrow? I think it's more top of mind today, because I think there's maybe an entire generation maybe to who, you know, come into the workforce. And the deck just seems so incredibly stacked. In terms of alright, you did everything you were told to do you you went to school, you studied hard, you got into college, university, study hard, took on a whole bunch of debt graduating, and on day one, you've got a lot of debt, your income is maybe a little bit less than you thought it would be or the work is more precarious. The you don't have those, you know, careers where you stay at the same place, you know, the entire the entirety of your career. So you're you're maybe moving jobs or careers multiple times, there's no, no sense of loyalty in either direction. Because why would they be if no one's going to be loyal to your career, and high house prices, you know, maybe moving in with someone before getting married, because you grew up seeing your previous generation, everyone got divorced or 50% of people. So he takes a little bit of a different perspective. And then you see, you know, Wall Street, the financial system getting bailed out on the backs of the little guy, and it feels like there's this this pent up angst and I don't. And I don't think that's unreasonable, given what they sort of come into the world sort of experiencing. And I wonder if I'd like to get your thoughts on this. I wonder if this is part of what explains why we seal why we see maybe more what I'd say Hail Mary strategies with investing. Whether it be you know, going to cryptocurrency, you know, full bore, or trading meme stocks or looking at Community Based advice, as opposed to sort of traditional models of advice. I'd like to hear your thoughts on on, you know, the plight of the younger financial consumer, and how, again, that that the hand that they've been dealt, do you feel that is leading to some of these behaviors that I think a lot of people still trying to figure out? Why are people going, you know, 90% of their portfolio in cryptocurrency and 10%. In you know, stocks? Seems like it's kind of like backwards of what a traditional model of advice would sort of recommend?

Erica Alini: 34:30

Yes, for sure. I think that there's this idea, especially if people feel like they can get into the real estate market that they have to, they have to get used to the stock market or crypto and it's their only chance to grow their wealth. And also, there's more and more people are more and more disillusioned about work. You know, like wages mostly for, for a lot of people aren't moving very fast, even now that we have the highest inflation we've had in about two decades. I was looking at some employer surveys and they were looking at for existing employees. Raises of to 2.5%, which at this point, it's false. Short. Yeah, so

Preet Banerjee: 35:18

you're actually making less money in real terms. Exactly. Hey, thanks for another great year. We're gonna pay you less.

Erica Alini: 35:26

Yes, yeah. Thanks for being a loyal employee. Here's your word. Yes, no, these these Yeah, some hail mary strategies. You know, like, I gotta like my Bitcoins. My only my only show hands to make it or you know some some stock you know being GameStop or whatever it's It's my only chance to make it and accumulate wealth and I you know I I am not on Tik Tok only done one video which I need to work on my Tiktok skills. They're

Preet Banerjee: 36:01

You and me both.

Erica Alini: 36:04

But I am following you know, a lot of a lot of FinTech finance on Tik Tok. Oh, is

Preet Banerjee: 36:10

that what's called fintech.

Erica Alini: 36:14

And there's a lot of this concept that you know renting your brain to an employer like working basically is not the way to go on the in the only thing that will work is accumulating wealth and so there are all these ideas about how you can do that.

Preet Banerjee: 36:34

Interesting, interesting stuff. Now, I just want to ask you just because I'm just curious, but do you or anyone your household own cryptocurrencies or anything exotic like that? We do.

Erica Alini: 36:48

And because I, we bought I bought some I asked my husband to buy and he's actually more into the ins and outs of how it works. But I wanted when I was covering cryptocurrency in the 2017 You know, like when it started going, and not so I was like, you know, I can write about this stuff without actually buying a little bit of it and figuring out how it works. So we bought like, I don't know 150 bucks

Preet Banerjee: 37:21

and what is your experience been with it? And you know, I'm you know, you talk a little bit about cryptocurrency and a little bit about you know, kind of like defining what non fungible tokens NF T's are in your book, but what is your what, what do you tell people because the the audience of your book, The the level of interest in cryptocurrencies and decentralized finance is pretty huge. So So what is your what is your advice to people? Because these, I would say that next to real estate, cryptocurrency is one of the biggest questions I get from younger generations, what do you tell people generally? And what are they asking you about?

Erica Alini: 38:03

Yeah, so, you know, despite the crash, the latest of Bitcoin crash? No, we've done really well with our 150. What I what I tell it so as you know, there are, you know, there's pretty different opinions out there, even among financial planners and investment advisors, I like a lot have very different opinions about weather. Honestly, the range of opinions is from whether you should touch cryptocurrency at all, and a lot of people that I know and trust includes advice I'd like say absolutely not. And there are some people who, you know, some some experts I've been talking to for a long time, who I consider to be very good and who say, yes, maybe a little bit, you know, between anywhere between one and 5% of your portfolio, so no one that have ye no advocate, you know, putting more than 5%.

Preet Banerjee: 39:06

So, what you're saying is do not use your HELOC to buy a portfolio of just Bitcoin.

Erica Alini: 39:13

Do not use your HELOC to buy any investment.

Preet Banerjee: 39:19

Yeah, you know, I was I was actually I was just prepping a video, because I have been getting tons of questions on the cryptocurrency, specifically from people who are not following or researching or studying at all. And the reason that they're interested is purely FOMO. It's purely They've seen what other people have been talking about in terms of returns and some session all this stuff. And so I wanted to sort of, you know, give some thoughts on it and disclosure, I'm a part owner of this company, but there's a company called wealth scope, and they it's a portfolio analytics company, you can actually model these what if scenarios to see, you know, what would happen to your portfolio if you added in allocations to various things like cryptocurrency, so I created this typical 6040 portfolios 60% equities index funds around the world 40% short term bonds, and then I compared it side by side to a portfolio which was the same except it had a 2.5% allocation to Bitcoin, a 2.5% allocation to ether and that 5% weighting to cryptocurrencies, the risk attribution, the risk that it accounted for was 46% of the portfolio's risk came from 5% The holdings. And it's not to say that it's volatile is an understatement. But it is absolutely wild. So I'm just putting together some thoughts on that. But it's yeah, it's it's I think it's one of those questions that you get every day these days when it comes to personal finance.

Erica Alini: 40:59

And go ahead, sorry, Preet. Now if I can add a little bit more about crypto and where I land on there, so really, I feel like the only thing I can say about crypto, as you just said is what we know for sure. It is it is extremely volatile, will they get a little bit less volatile in the future? I've certainly heard those arguments, but I don't know.

Preet Banerjee: 41:23

Yeah, I think one of the I think one of the challenges is also when you look at the different sources of information, there's just so many I'll call them characters out there that who, you know, they don't come across as credible, but they have these very strong opinions. And I think, you know, there's, there's a certain amount of shaming that that goes around, when it comes to oh, I can't believe you're not invested in Bitcoin. And I think this to a certain extent that actually Ward's off some people because they're like, Nah, my red flag indicators kind of going up, because you're just getting kind of like you're in a cult. But I would definitely say if the only reason you're interested in it is because you've been hearing about the returns that some people have made, and you don't know anything else about it. At the very least, you should do some research before you make any investment. And this ties into the last sort of chapter I want to talk to you about about your book, which is learning about investing is not optional. Right? That's your sort of perspective. So can you talk a little bit about that?

Erica Alini: 42:22

Yeah, and that's the in the sort of money like you mean it theme of like, well, you know, maybe for a long time, I think there's been this idea of personal finance is like sort of divided into groups. So right, there's like, there's budgeting and, and day to day money management, and everyone can get in on that and spend Leslie you make it real, everyone can can get on board. And then it was investing, which was like the advanced stuff, right? That though you kind of like would only get into if you were interested or you feel confident, or you thought you were going to math and whatever. And now I'm like, Oh, you absolutely need to learn about investing, it is as essential as having basic budgeting skills. And it's also difficult, because they obviously they don't teach investing in school, and I can completely understand why they don't I think the lobbying industry would be crazy if they did.

Preet Banerjee: 43:19

The only the only teachings that I see in schools are the stock market competitions, which is like the, if someone came to me and said, Hey, we want you to design a curriculum for teaching people about investing that is the absolute worst, as they Oh, let's do a stock market competition. That is the worst way to teach someone about investing.

Erica Alini: 43:41

Yes. And so by learning about investing, so, you know, as I they make clear in the book, so I'm not talking about, you know, sophisticated strategies, or, you know, knowing what options and derivatives and what have you, like, all what you really need to understand, I think that the basics for me, as you know, as someone who learned about investing, frankly, as an adult, I it's not something like in my mid 20s Say, It was a political science major, this is not where my head was, in my early 20s is his risk, right? Like, what you're doing, how it works. And and the very real risk that if you don't invest, you will not have enough for whatever it is that you think about when you think about retirement, right. And we can all argue about whether we we want to retire to what age and doing what, but I think everyone agrees that they would like to, at some point have the ability financially to scale back. Right. And if you don't put money in the stock market these days, unless, unless you're very lucky. And you have a career in government and that public pension is well funded. You You gotta you gotta invest and you have to know what you're doing. And there are fantastic options these days to, you know, there are very low effort and low cost to invest. But they usually don't involve, you know, a training app and new sort of trying to figure out which stocks are going to go up and down. It's very important to understand how passive investing index investing works, and why that's a good solid strategy for the long term that can carry you from sort of when you graduate school, to when you're finally ready to retire. Whatever

Preet Banerjee: 45:40

Yeah, I think anyone who's graduating from college and university today forwards, the proportion that will use a traditional model of advice is pretty close to zero, it's not zero. But it's pretty close, I mean, just the world that they've grown up in, they are used to having things available at their fingertips on an app on a on a tablet, what have you. And the Financial Services has not kept pace with that those changing consumer preferences. And I think to your point, you know, learning about investing is not optional, whether you do it yourself or not, because I would say to people, you can't just delegate without having any effort put into learning about how to speak the same language, you don't need to know everything. But you need to be able to, you know, be at that table and meaningfully have a conversation about things like risk, asset allocation, goal setting. And just the very basics, at the very least, and then some people might find it, you know, it's not as difficult as I thought it was going to be to grasp these concepts. And we're older and more, and I want a little bit more time, whatever it is, you know, people want to do it themselves or use advice, whatever form of advice that is, you still have to put in some time to sort of figure out the basics. I think that's great advice. Okay, so Erica, we're going to wrap up here, but as you know, everyone gets a commercial. So the last, you know, two minutes, the floor is yours, promote, share the links, where you can get the book when it goes on sale, if you want to sort of make a plug that, hey, it's December 9 is when it's coming out what a great stocking stuffer, this book would be, you know, feel free to do that. Whatever you like.

Erica Alini: 47:24

Absolutely. So yeah, so I just wrote a book. So that's what I want to pitch. So I would say, so with money like you, like you mean it I, what I really tried to bring together was, I started out as a as an economics writer, before I was a personal finance writer. So I've been in, I've been a reporter for over a decade, and it was kind of evenly split in between economics and personal finance. And this is what you'll find in the book. So it's a book about personal finance, that yes, it's full of sort of actionable tips. But it also explains, especially if you're a millennial, and Gen Z, why you kind of feel this angst that you can't reach the goals that the personal yonder, the money goals, the financial goals that your parents seem to so easily have reached when they were your age. And it's there are powerful sort of economic and technological forces at work, that are complicating personal finance and making it harder to reach those goals. And this book both explains sort of some techniques that you can use to get where you need to be where you want to go anyways, but also gives you the broader context to context to understand that, you know, it's not your fault, you know, you can make good decisions, but you really need to understand what's going on around you these days. And the other thing that I wanted to do with this book is give us a little bit of a comprehensive personal finance one on one guide, there is a wealth of great information out there, I'm biased in depth, you know, very accessible about personal finance on the internet, but it is scattered all over the web. And I kind of just wanted to put it in one book and so this book, you know, it's got it's got debt, it's got housing, it's got work which is something that a lot of personal finance books don't discuss. So how to make money you know, as a you know, the gig economy side hustles what's worth it and you know, to put in more than a full time job you know, it's got retirement retirement investing, sharing your finances with a significant other and planning for a baby if you if you want to have a family and the pesky but all important topic of accepting financial help from from your parents.

Preet Banerjee: 50:02

Yeah, that is a lot of information and it hits on a lot of I think concerns that that people have so certainly looks like a great addition to the bookshelf, digital or otherwise for people. The book is called Money Lakeya mean it personal finance tactics for the real world. The author is Erica aleni. The book goes on sale like I said it's presale is now and it it the official published date is December 9, I believe. Yes. There you go. So you can find it. I'm guessing anywhere that books are sold. And you want to check it out Eric cars doing great work covering the personal finance beat at Global News. And so you can check out her work there as well. Erica, thank you so much for coming on the show really appreciated having you.

Erica Alini: 50:49

Thank you so much for having me.