The Financial Reality of Canada

My guest today is Mimi Lee. She is a Financial Advisor with over twenty years of experience in Canada. She also does tax filing. She volunteers to help file taxes for people who normally can't afford a tax consultant. She joins me to discuss the financial reality of Canada and how it effects average Canadians.

Transcript

[00:00] Russell: All right, folks. And we're back. Russell here with the Canadian Conservative podcast.

[00:05] Russell: And today in the studio, I have Mimi. Mimi is a financial advisor.

[00:10] Russell: She's been advising people on finances for over 20 years. She also does tax filing, and part of her volunteer activities that she does is she files taxes for people that may not necessarily be able to afford filing taxes normally.

[00:26] So welcome to the show today, Mimi.

[00:29] Mimi: Hi.

[00:29] Russell: Thank you.

[00:30] Russell: Before we get started, just tell us.

[00:32] Russell: A little bit about yourself.

[00:34] Mimi: Well, as you said, I've been a financial Advisor for over 20 years. My background, I came from Hong Kong. As a matter of fact, I did not study anything regarding accounting, economics, or, you know, things like that.

[00:49] I, I'm actually a bachelor of science graduate. Yeah. But then, you know, some way, somehow I ended up with this financial thing for over 20 years. And I've been trying to help Canadians and, you know, Canadian families, one family at a time, to improve their financial situation and get them going, buying homes and, you know, things like that.

[01:17] Russell: Now, when it comes to helping people with their finances, what do you think is one of the best things that.

[01:25] Russell: A financial advisor can do when they're speaking to a client?

[01:29] Mimi: Well, the very first thing any financial advisor needs to do is to know their clients.

[01:38] There is no one thing anyone can impose to all people because everybody is very different.

[01:46] So a financial advisor first and foremost has to know their client, know where they are standing, know and understand where they want to go in the next 10, five years.

[02:01] Are they going to get married? If they're a married couple, are they going to have kids? Are they planning to have any major expenses going on? Are they, you know, thinking to, to buy a home, you know, things like that.

[02:14] And a lot of financial advisors out there, they might not want to spend that kind of time because you have to have a lot of communication. You have to. And also the clients, too, you know, sometimes they're like, why are you asking all these questions?

[02:35] I'm asking all these questions because I want to make sure whatever I prepare for you, the plan is actually good for you, suitable for you, and it's something that you can manage.

[02:50] Russell: Now, right now in Canada, there's, there's a lot of people right now that.

[02:54] Russell: Are feeling the crunch. Things are getting more expensive.

[02:58] Russell: We hear a lot of stuff in the news about people and they, they can't afford a home.

[03:03] Russell: Some of the more scare tactics news.

[03:06] Russell: Articles that we hear is that people.

[03:08] Russell: Are a hundred dollars away from insolvency. They're, they're, they're ready to go insolvent.

[03:13] Russell: And it seems like every year there's a new article saying that everyone's about to go bankrupt. Basically what would you level is very high now. And yes, people's debt loads are very high.

[03:26] Do you think that Canadians have a.

[03:30] Russell: Toxic relationship with credit overall?

[03:33] Mimi: I think this is not a Canadian problem. It's just basically it's a first world problem. Majority of the people, they rely on their credits instead of their own money.

[03:53] Russell: And do you think that's kind of.

[03:54] Russell: Reached almost an unsustainable breaking point?

[03:57] Russell: Because it seemed for a while people.

[03:59] Russell: Could handle having additional credit load and the banks were more than willing to.

[04:03] Russell: Give people higher and higher lines of credit, higher and higher amounts to put.

[04:09] Russell: Onto their credit card.

[04:10] Russell: And the advice didn't really seem to be, hey, pay this down. It seemed to be, oh, you need an extra $10,000. Well, we, you know, we can give.

[04:20] Russell: You an extra $10,000. Did.

[04:22] Russell: Do you think that's kind of put us in a, in a bad spot?

[04:26] Mimi: It is. As a matter of fact. The banks are not your friends because they are, they're in the business, you know, and, and majority of the time they treat you good when, when they see that you have a lot of deposits or, or when you have investment with them.

[04:49] Right. But then at the same time, you know, like is, it's very brutal in a way that a normal person, let's say they have their steady job day in, day out, and then they start saving money in the banks.

[05:08] And then the banks will say, oh, you know, like you have this whatever, and then you have a steady income, let's give more credit to you. Right. And then some people, they start spending and maybe just very unfortunate, that person lose the job.

[05:28] And then when they really need help, the banks come back and say, oh, you no longer have that job. I'm sorry, I can't help you.

[05:37] So when you really look at the banks, they are not your friends.

[05:42] Exactly what you're saying. They actually help to push Canadians in this.

[05:50] Russell: Yeah, it's always been difficult for me because you, you'll see pictures of credit.

[05:56] Russell: Card companies and they'll, and they'll have, you know, take your family on vacation with MasterCard.

[06:01] Russell: And it shows this family and they're.

[06:03] Russell: At the beach and everyone's having fun.

[06:05] Russell: You know, there's a reason why credit.

[06:08] Russell: Card companies, they have like behavioral science. They, they, they invest in psychology.

[06:12] Russell: They, they, they, they want people to get in debt. But then when someone gets really, really.

[06:18] Russell: Far in debt with credit cards, they turn around and say, well, you're supposed to be a responsible consumer.

[06:23] Russell: You're supposed to know your limit and kind of play within it type thing. And, and it, and it seems like it's, you know, oh, we, we, you know, take this amazing vacation with us.

[06:33] But then when you can't pay it off well, you should have been more responsible.

[06:36] Russell: Do you find that's kind of like double sided messaging?

[06:40] Mimi: Yeah. And they fantasize a lot of things too, right?

[06:43] Russell: They do. So people that are having trouble with.

[06:48] Russell: Their finances and I think that's a.

[06:50] Russell: Lot of Canadians right now, what would.

[06:52] Russell: Your best advice be to people that.

[06:54] Russell: Are, that are having trouble with debt right now?

[06:59] Mimi: Okay, so I have been helping people get out of debt for a long, long time.

[07:05] So of course, you know, like if you could, then of course the, the less amount of credit cards you have, the better you can be. I always say, you know, like if you can have less than three, three is really the maximum amount of cards that you, you really need.

[07:23] Let's say there's one card for whatever points, one card you have for cashback or whatever. You know, there are always a reason why people take on certain credit cards, but you don't need more than three.

[07:38] As a matter of fact, two is really what you can make use of most of the time anyway. Now regardless, let's say you're already in debt and you would want to start paying them off by putting most of your payment into either the highest interest rate card or the lowest balance card.

[08:10] So forget about the other ones, just pay minimum payment on the others, but get rid of one either again, highest interest rate that charging you or the lowest balance.

[08:26] So you eliminate the amount of debts you have along the way. So that's one thing. Now the second thing is let's say you are looking to see how you can save more money.

[08:41] Then I would suggest you to go through one exercise to go through three months of your bank transaction together with your credit card transactions.

[08:53] So whatever accounts that you use to pay things, I mean consuming stuff, right? So I'm not talking about paying for your hydro bills, you know, not, not those, but whatever way.

[09:10] Let's say you use debit card the most or you, you use one credit card most to pay your gas, your food, you know, things like that. So go into those accounts and look at your transactions.

[09:25] I say mostly three months is a good reflection of your spending habit. But then if you have time, by all means go through six months of it. So when you do that exercise, you'll be exploring actually and discovering what kind of money that you are spending.

[09:48] With that said, along the way, maybe you can find something. Let's say if you are drinking two coffees a day, then maybe one of the coffees can be a cheaper version, that kind of thing, Right.

[10:08] So there are things that you will discover along the way to how you can actually save a little bit money here and there. Now, another thing which is very interesting, I had clients who actually put things into, like, okay, so he earned under his company, and then he doesn't give himself a whole lot of income.

[10:38] So with that said, of course this is a good way, you know, you actually get taxed a lot less. But at the same time, his estimation was not that great.

[10:49] So from time to time, at a certain point in the month, he will actually get into overdraft.

[10:57] Now, so everybody knows that whenever you get into an overdraft, you get charged on the overdraft fee and then you get charged on interest right? Now, so what happened is that whenever he sees that he get into red, he will go and get money from his company and put it back.

[11:19] So now his account is in black, but in a week's time, maybe he goes back to red again and then he puts money back so that it becomes black. Now, with that said, every single time when you put your overdraft protection from negative to positive and then it goes down to negative again, you get charged on that overdraft fee again.

[11:50] So if that's the game that you're playing, then basically you don't want to continue with that. Just let it stay in red or put a little bit more than what you actually need into your account.

[12:08] Instead of going back and forth and let the bank charge you fee, just let it stay. And when you have the money or when you are actually doing that one transfer, make sure that you transfer more than what you actually need along the way.

[12:28] Or better yet, do a better calculation.

[12:33] Russell: You know, talk. Talking a bit about fees. It seems like there's fees for everything that you do with the bank these days. Is there any ways that Canadians can look besides just, you know, of course, staying out of overdraft and that, but can look to, to try to waive fees or get fees, you know, so you're not having to pay the bank as much money.

[12:57] Mimi: Well, I guess this is a very tricky question because everybody banks in a different way, right? So the only thing you can do is really go to different banks and understand what kind of packages they have and pick the most suitable ones for yourself.

[13:17] Like, is not something that I Can just give you like an equation or a formula. There's. That's not that unfortunately, you know, talking.

[13:28] Russell: About the banks too, are the banks.

[13:31] Russell: Really independent in Canada?

[13:33] Russell: Because like if I go to, let's say Scotiabank and then I go to.

[13:38] Russell: Another bank, they are going to tell me that they're still bound by the same regulations from the bank of Canada.

[13:44] Russell: It really feels to me like the.

[13:46] Russell: Banks are, aren't really independent.

[13:47] Russell: They don't really get to compete with each other except maybe through their cards programs or discount programs. Do you think that's not a good.

[13:58] Russell: Thing for Canada, the fact that the banks can't compete with each other?

[14:01] Russell: Because then they're not really. It doesn't seem like they're trying to.

[14:03] Russell: Get your business in that regards.

[14:06] Mimi: Well, put it that way.

[14:08] Canadian markets in a lot of different markets as a matter of fact, they are not really competing with each other. Majority of them. We have what, five big banks, we have three big telecom companies.

[14:29] We have what, two or three groceries company that actually import food for us, even shoe companies. We don't have a whole lot of choices. So no, we are never having actual competitors so that we can actually be able to benefit from the free market.

[14:56] No, we are not. We are nowhere close to free market. Actually.

[15:01] Russell: That's a bit of a harsh reality I think because I think many people.

[15:04] Russell: Are under the assumption we do have a free market similar to the United States.

[15:09] Mimi: I know we're nowhere close to that.

[15:13] You look at, forget about the banks for now.

[15:16] Look at the amount of money that we pay on our Internet, on our cell phone services.

[15:21] We pay so much more. And as a matter of fact, right now in this day and age, Internet and cell phone are essential product and we are paying an arm and a leg for it in Canada.

[15:34] Russell: This is ridiculous. And on the other hand though, I've.

[15:36] Russell: Heard people say we don't want like the States where there's so much competition.

[15:42] Russell: That there's a lot of fraud and.

[15:43] Russell: That, that by taking these measures it's protecting people from, from bad actors and that. But can we not have a middle ground somewhere? Like a happy middle ground somewhere along the way?

[15:55] Mimi: Well, the, the fact is they are actually not protecting consumers. They are protecting the big companies that we just mentioned because by doing that with less players on the market, they can do basically whatever they want because you know, they are.

[16:12] So they are friends with each other. Right. So they just come by. Yeah. Together and charge everyone the same high price.

[16:22] Right.

[16:23] So yes, of course, you know, you always have bad Apples, no matter where you go, you get some bad apples, you, you, you will encounter flaws and whatever. But then, you know, like everybody has to be smart enough or do, do more research or homework before you.

[16:47] Russell: You know, with the banking regulation as well, we quite often hear that we.

[16:52] Russell: Need all this banking regulation to protect.

[16:54] Russell: Ourselves from drug cartels, money laundering, illegal activities.

[16:59] Russell: And yet those things all seem to.

[17:01] Russell: Be able to happen pretty much unimpeded. From what I see. The, when they, you know, especially we.

[17:07] Russell: Hear a lot of talk from our.

[17:08] Russell: American friends right now about, you know, the fentanyl crisis in Canada and the issues that we're having here, but the banks don't seem to be able to do anything about it.

[17:22] Russell: And so I'm just wondering, you know, Fintrac says that they, we need to have all these heavy regulations to protect.

[17:28] Russell: Canada, but it doesn't really seem like.

[17:30] Russell: They'Re, they're able to actually catch any.

[17:32] Russell: Of the stuff that goes on.

[17:33] Russell: Is it just because it's too widespread.

[17:35] Russell: Or is it just, I'm not sure what it is.

[17:39] Mimi: Well, too widespread is one of it. But at the same time, look at it this way. It has already rooted in Canadians markets and there are so many big players in the same circle.

[17:58] And you know, at the end of the day everybody's making money.

[18:04] So who's going to be able to actually step out and say, oh, you know what, I'm going to do this and that so that everybody is going to be better by cutting off the money making stream that they have for decades.

[18:21] You know, we, we need actual revamp on a lot of things to be able to take this out.

[18:29] Russell: What are your thoughts on like digital currency?

[18:32] Russell: You know, the, they've talked a bit.

[18:34] Russell: About, you know, implementing like digital currency in Canada.

[18:37] Russell: What, what type of implications do you.

[18:40] Russell: Think that would have on Canada and.

[18:41] Russell: The markets if the government was to.

[18:44] Russell: Look into digital currency?

[18:46] Mimi: Well, well, digital anything is always convenient.

[18:52] But at the same time, if that convenience, how much sacrifice you making to get that convenience is one big question right now. This is a very, very old story. People are saying, okay, you know, like when we use cash, that $5 you spend on milk or whatever goes to the store, the store owner, the store owner take that $5 and buy whatever he or she wants to either, you know, for their families or for, you know, go back to the store or anything.

[19:34] That $5 is always $5 when this is a $5 bill. But then if you spend $5 at the store electronically, digitally, that $5 is not going to that store 100% because there's the transaction fee, you know, and then, you know, when you have that $5 in the bank, you, you just said we have even monthly fees get charged in the banks.

[20:05] So anything along the way that $5 would deplete. It totally is just gone, you know, from, from your wallet.

[20:16] So it's really hard to say. Of course, again, digital stuff is very, very convenient, but at the same time, you know, it depends on how secure whatever you carry, right?

[20:34] So if you get hacked or whatever, then boom, it can just disappear, right? So there are a lot of different things that people have to look into, whether the digital thing is for you or not.

[20:49] But at the same time, if you're talking about in the big picture, like if the government depending, they really want to go move forward with that, there's very little us as an individual can actually make any changes in that regard.

[21:08] Of course, we can always voice our concerns or whatever by putting a petition on the House of Commons or things like that. But then at the same time, I feel.

[21:22] I don't know. You tell me, Russell, you are homegrown, right? You were born here?

[21:28] Russell: Yes, ma'am.

[21:30] Mimi: I feel as an immigrant, over 35 years ago, came into Canada, I feel that Canadians are not really willing to voice out what's not good or something that they don't like, they just swallow it, like why it.

[21:54] Russell: It really goes back to the British roots. British people are very much like this as well.

[21:59] Russell: This quiet discontent.

[22:00] Russell: You know, we're, we're unhappy with the.

[22:02] Russell: System, but we're just going to murmur.

[22:04] Russell: About it to our friends and family.

[22:06] Russell: Kind of under, under our breath.

[22:08] Russell: And, and that's kind of been the way it is. You know, if you, I call like.

[22:13] Russell: The shakers and the movers, right.

[22:14] Russell: You know, that we haven't had a.

[22:16] Russell: Lot of people that shake the tree.

[22:17] Russell: So to speak, and probably even less movers. We just kind of, we just were happy to get along, to go along, you know, going back to like the trucker convoy.

[22:27] Russell: I think that was the first time.

[22:28] Russell: In a long time that Canadians that were not going for some form of progressivism, which is like a negative rights for people, people that were saying, no, we, here's a red line in the sand.

[22:41] We don't, we're.

[22:42] Russell: We're not going to cross this line.

[22:44] Russell: I think that was the first time in a very long time that just.

[22:47] Russell: Regular working class Canadians, not part of a centralized union or some NGO or.

[22:53] Russell: Some special interest group stood up and said, that's enough.

[22:57] Russell: We've had enough. And it, and it sent our system for a shock.

[23:01] Russell: I mean, you only had to see.

[23:03] Russell: Ottawa was in shambles.

[23:04] Russell: Their, their city count. I mean, I'd listen to one of.

[23:06] Russell: Their online city council meetings while the.

[23:08] Russell: Convoy was there, and they're screaming at each other and calling each other because.

[23:13] Russell: It all fell apart.

[23:14] Russell: Because that's not how we do business.

[23:17] Russell: When we do protests in Canada, Right.

[23:19] Russell: You know, we get a permit and we march around with the signs and take pictures and, and then we say.

[23:26] Russell: We made a difference and we all go home at the end of the day.

[23:28] Russell: But these people didn't go home and they weren't going to go anywhere. And so I think that kind of.

[23:34] Russell: Marked a big change.

[23:35] Russell: But then the system, the only way it knew how to do anything was.

[23:39] Russell: To take the most authoritarian measure it possibly could to, to say, no, that's.

[23:44] Russell: Not how we're going to let you do business here.

[23:47] Mimi: Well, that's the thing, right? Like, funny enough, you, you said about the British root, right? As I said, I came from Hong Kong. We had the British root also. But then, still, I, I think Canadians are too lenient.

[24:05] You know, like, with whatever's happening in the last 10, 20 years, everything has gone so bad and nobody really are talking about it. And like, yes, maybe we're talking about it, but nobody actually want to do anything.

[24:25] You know, like, the amount of scandals and stuff like that, that we have, the amount of unfairness left, right and center.

[24:36] It doesn't look like people have any issues after they murmur, you know, among themselves.

[24:45] Russell: I, I would agree with that. I think it just comes down to people are generally just.

[24:52] If they're getting those small pleasures out of life for whatever reason, Canadians are like, well, you know, I can still.

[24:58] Russell: Buy my fast food.

[24:59] Russell: I can still put Netflix on tv. So, and, and I, and I can't.

[25:03] Russell: Control what happens in other areas.

[25:05] Russell: So I'm just going to focus on the things that make me happy. And I, and I think part of that, too, is we have a large.

[25:13] Russell: Population in Canada that works for the federal government.

[25:17] Russell: And who's going to go, who's going.

[25:19] Russell: To say anything against the federal government when you work for the federal government? Because you could lose your job for that. And the federal government has very, very.

[25:27] Russell: Strict rules about public servants talking about.

[25:31] Russell: Political issues in public they're very, very big on.

[25:34] Russell: And I mean, they go as far.

[25:35] Russell: As they'll have, like, people's security clearances pulled. I mean, they practically have a snitch line, from what I understand. For the public servants where if someone.

[25:44] Russell: Says something that doesn't conform to whatever.

[25:47] Russell: Political standard is of the day, they.

[25:50] Russell: Can call and basically do a report and then someone can have their security screening pulled. And it's not like they're doing anything.

[25:58] Russell: That'S like a foreign threat or they're, they're not extremists.

[26:01] Russell: They just may not be happy with.

[26:03] Russell: Direction of the government.

[26:05] Russell: And so I think with the fact.

[26:07] Russell: That so many people work for the.

[26:08] Russell: Government, they're, they're, they're under almost this self imposed silence because of that. And, and they do that to keep their jobs.

[26:19] Mimi: Well, with what you had just described, that's what it sound like is the communists that actually doing this.

[26:31] Russell: Well, I, I wouldn't dis, I wouldn't disagree. I, I, I, you know, I, I would agree.

[26:37] Russell: It's a system that is very reminiscent.

[26:39] Russell: Of, you know, a Marxist style system of control over, over people, controlling what people say. I mean we just had in the.

[26:49] Russell: United States, the president there, he just.

[26:51] Russell: Said, and he wrote an executive order.

[26:53] Russell: Saying basically that free speech is back.

[26:56] Russell: And people are going to be able to express themselves. I don't know how you can write.

[27:00] Russell: An executive order for free speech. You either have it or you don't.

[27:04] Russell: But you know, I think it was.

[27:05] Russell: A symbolic gesture more than anything else.

[27:08] Russell: And of course, you know, speech doesn't.

[27:10] Russell: Mean freedom from consequences of that speech.

[27:13] Russell: People say crazy things and there's consequences for that. But it's when people are trying to have, I think regular conversations about issues that mean something to them and they're.

[27:25] Russell: Being labeled as an extremist or they're being labeled as someone that needs to be on a watch list or someone.

[27:30] Russell: That'S unpatriotic and that it's, it's worrying. I mean we, we just had, we just, they just wrapped up the, the trucker convoy trial and one of the.

[27:42] Russell: One of the convoy leaders is now.

[27:44] Russell: Going to be on house arrest for.

[27:47] Russell: Basically for being part of a protest.

[27:51] Russell: And you know, other people have been defamed. I mean I have friends, I have.

[27:57] Russell: Family that had their bank accounts frozen.

[27:59] Mimi: Yeah, and that's, and that's another thing. Like how can you just freeze people's account just like that? Like, how can the banks just take orders like that? Like bank accounts are everybody's everyday stuff.

[28:18] And like imagine if that whoever got frozen account, he or she was actually at a gas station filling up gas and all of a sudden cannot pay.

[28:31] This is just ridiculous.

[28:34] Russell: Yeah. I mean we've written dystopian novels about that. We, we read about governments in other countries where, where, where those sort of things can happen. Where you know, if, you know, we.

[28:46] Russell: Take the CCP social credit system, you.

[28:48] Russell: Know, we hear about that, we hear, you know, and they, they even parodied.

[28:52] Russell: That a bit in Black Mirror where.

[28:54] Russell: That, that lady, if she didn't have.

[28:56] Russell: A high enough social standing then she couldn't get some services and if she.

[29:00] Russell: Had a high enough social standing. Yeah, you can't go anywhere. And that, that's, it's, it's quite worrying that we have almost like a backwards.

[29:10] Russell: Version of that in, in Canada.

[29:12] Mimi: Exactly. You know, it like I was like going eye opening at that time like this can happen in Canada. It's very scary actually, you know.

[29:24] Russell: Yeah, it is. And that's why I think, you know, like one of the things I, I.

[29:28] Russell: Wrote on, I do a blog as.

[29:29] Russell: Well and I, and I wrote, you know, how debt costs us our personal rights and people are so far in.

[29:37] Russell: Debt now that they do self censor because they may feel very passionately about.

[29:42] Russell: Something and they know that maybe their company has a corporate policy, you know, because apparently our companies get to dictate our morals and our values now and they may have a policy and that.

[29:55] Russell: They disagree with but they're not going.

[29:57] Russell: To say anything against it or, or say let's change that because they can't afford to lose their job.

[30:04] Mimi: Right, right. And that goes back to the same kind of situation with the people who are working for the government. Right?

[30:13] Russell: Yeah, it's really, it's not a very good situation here.

[30:18] Mimi: No, it's actually very sad as a matter of fact.

[30:23] Russell: It's very sad and it's, and you're.

[30:26] Russell: Right when you said earlier about politicians.

[30:28] Russell: You know, I call my show the Canadian Conservative but I don't just back.

[30:34] Russell: Like the Conservative Party of Canada because in my opinion the Conservative Party of.

[30:38] Russell: Canada, they're not saying the things that.

[30:40] Russell: Need to be said. They're, they're still playing this game and I don't understand why when you can.

[30:45] Russell: Just get out there and say this is enough, we're done with this, it's done. We just need to be done with this.

[30:50] Russell: We need to change this.

[30:51] Russell: We need to, you know, get away from this thing that's destroyed us. Instead, instead we're still, to me I.

[30:59] Russell: See the Conservative Party and they're still.

[31:01] Russell: Giving like talking points and they're still, it's, it's like it's packaged up in this very pole and family friendly type of Thing, but it's not, People are suffering.

[31:14] Mimi: Well, don't you feel, haven't you found that the conservative have actually changed a lot in the last few decades?

[31:26] You know, their standpoint, what they're saying and what they stand for. You know, it has changed a lot.

[31:35] Russell: I would probably agree with most of that. I think that, you know, conservatism as.

[31:42] Russell: We see it today is not really conservatism as it was 40, 50 years ago.

[31:48] Russell: It's, you know, just at the end of the day with the liberal enlightenment. Conservatism itself as a, as an ideology has been very liberalized overall.

[32:01] Mimi: Exactly. You know, so they have taken the liberal spot in that regards and the liberals had gone far left.

[32:13] Russell: Yeah, it's kind of, it's kind of weird, I think. Was it Colin Wright that did that.

[32:18] Russell: Did that infographic where it's that stick.

[32:20] Russell: Figure and he's standing there and he just saw like everyone ran as far.

[32:25] Russell: Left as they could and then they.

[32:26] Russell: Said that he was conservative, but he's actually like a center liberal type thing.

[32:32] Mimi: Yeah, everything, everybody became far right when every, everybody else are heading left. Right.

[32:42] Russell: Well, I, I, I think that's why like for the show, like when I.

[32:45] Russell: When I talk about conservatism, I always say it starts in the home. Right.

[32:49] Russell: Like conservatism, you can't rely on a political party. Right. Like the conservative party. Conservatism itself starts at home because it's.

[32:58] Russell: Your traditions, it's your values, it's those.

[33:00] Russell: Things you want to see in the world around you. And you know, I, I'm not going.

[33:05] Russell: To tell someone that they have to have those values.

[33:08] Russell: I have to cultivate those values.

[33:09] Russell: And people have to see those values.

[33:11] Russell: And say, hey, I like those values. I'd like to have those types of values too. And to me that's how it grows.

[33:17] Russell: It grows from the home outwards, not from the government outwards.

[33:21] Mimi: Oh, of course not. But at the same time, what I'm trying to say is that, you know, like, even like it's, it's very funny because like I had a chance to talk to some voters in 2019 because I was actually working part time with a radio station at the time.

[33:43] I, I have actually over a decade media background before I was a financial advisor. Anyway, so I had the luxury to chat with some voters, 2019, heading into the poll and, and they were telling me, you know, like, they, they don't revisit what's happening along the way or just they, they have not realized the changes that we were just talking about to Conservative Party, as well as.

[34:20] Not just Conservative Party, of course, you know, like a lot of parties, like Liberals, who you were just talking about, you know, they have changed their standpoint. They have changed so many things.

[34:30] And, you know, like, many of them are actually immigrants, like me, right. So they came, let's say, 30, 20 years ago. And at that time, because we were, we were new to the country, then we looked at, oh, okay, you know, like, who are these people?

[34:50] You know, what are they standing for? And then we decide, okay, you know, this is the party that I'm going to vote for. Right. And then they keep on voting them without revisiting what's happening around the world, what's happening around in the government, what's happening in those parties, what changes those party had gone through.

[35:15] They just vote for that blindly for decades.

[35:21] And that also alarming.

[35:24] Russell: Yeah, it is.

[35:25] Russell: People fall into their voting patterns.

[35:27] Russell: And I mean, I fully admit, and.

[35:31] Russell: I have no problem admitting this, I voted for the People's Party of Canada.

[35:34] Russell: For two elections because to me, the Conservatives at the time, they were going.

[35:41] Russell: Very Red Tory, like, like very liberalized conservatism.

[35:45] Russell: That was very blatant. And so I said, that's not what.

[35:48] Russell: I want to see. I don't want to see that.

[35:50] Russell: So then the PPC was there and. And I saw a party that was willing to say things that the other.

[35:58] Russell: Parties weren't, and they seemed to represent.

[36:00] Russell: Much more my values.

[36:02] Russell: So I voted for them twice. In fact.

[36:04] Russell: I was, I was in the room.

[36:06] Russell: Sitting about 10ft away from Maxine Bernier.

[36:10] Russell: In 2021 when he, when he did his lost speech.

[36:14] Russell: I was in one of the tables.

[36:16] Russell: Right in front of him when he.

[36:17] Russell: Did his speech, talking about, you know.

[36:19] Russell: How he, how he had lost and.

[36:21] Russell: Giving his condolences and that.

[36:23] Russell: And it was to me, the ppc, that, that put the Conservative Party back on the path it should be going down because the Conservative Party was just bleeding voters left, right and center and, and to the ppc.

[36:40] It's just too bad that the PPC.

[36:42] Russell: Kind of lost traction after 2021.

[36:44] Russell: They. They just. I don't know what it is.

[36:47] Russell: They just, they sort of lost that traction.

[36:49] Russell: And then Pierre came out and he.

[36:52] Russell: Was talking big and big in the polls and.

[36:55] Russell: But was he really big in the.

[36:56] Russell: Polls or were people.

[36:57] Russell: Are people just tired of Liberals?

[37:01] Mimi: Right, right. And I think one of the other issues that most Canadians have at the poll is that they vote against what they don't want instead of voting for what they want.

[37:16] So that doesn't help in any shape or form because at the end of the day, if we have already done the blue and the red interchanging for that case and nothing is working and it only gets worse, then we know what's the definition of insanity is.

[37:40] Keep doing the same thing, expect a different result.

[37:43] Russell: Yeah, a hundred percent. So, yeah, touch on this. I saw a news article earlier today and it was talking about one trillion dollars.

[37:53] Russell: Now I'm trying to remember, it was from cbc.

[37:55] Russell: One trillion dollar money transfers coming down from. As the, as the boomers start to die off and as their wealth starts to go into their kids hands and that sort of thing.

[38:08] And I was, you know, reading about it and I was like, okay, well.

[38:11] Russell: It'S an interesting article. You know, it'll be interesting to see.

[38:13] Russell: How the market goes, you know, as they sell, as boomers sell their homes.

[38:17] Russell: And then we move them into retirement.

[38:19] Russell: Homes for their final years and that sort of thing.

[38:22] Russell: But I was a little concerned at the very bottom of the article because.

[38:26] Russell: The whole article seemed to be a.

[38:27] Russell: Prime for the last two paragraphs, which was to talk about the inheritance tax.

[38:31] Russell: And I was like. And they, and they were talking about.

[38:34] Russell: How we need to revisit the inheritance.

[38:36] Russell: Tax and, and that because this money is being passed down, it could be.

[38:41] Russell: Redistributed to help people in need.

[38:43] Russell: And I was like, really? Like, I just, I couldn't believe it. I just, I like, why, why can't.

[38:52] Russell: People seem to have money?

[38:53] Russell: Why, why are people not allowed to.

[38:55] Russell: Have money without it having to be redistributed?

[38:59] Mimi: Well, that's a very good question. As a matter of fact, even like you see, some people are saying that like they were saying about, oh, in Canada we, we don't have a death tax or in heritage tax or whatever.

[39:18] But then for the longest time, for long, long decades or so, like we have probate fee. Probate fee is actually a form of that tax to start with. And it's not just, of course it's not just the baby boomers.

[39:35] The baby boomers is just like one huge generation or a few generations that are experiencing, you know, that kind of thing. You know, when they pass along or they pass on, then you know, the money has to go to the other generations.

[39:58] But then that's, that's the thing, like you don't seem to be able to win in any shape or form.

[40:06] You just can't because the government is looking into different ways to try to grab money from your pocket and they're.

[40:15] Russell: They'Re pretty good at it. You know, a friend of mine was.

[40:19] Russell: Looking to try to pay down some.

[40:21] Russell: Debt and so what he did is.

[40:24] Russell: He took a bunch of extra work.

[40:25] Russell: At his workplace and because of that extra workplace, extra work that he took on, on his workplace, he put him into a higher tax bracket. And then, and that, and that's all work he took on to try to pay down debt.

[40:40] And then because he went into the extra high tax bracket, even though he.

[40:44] Russell: Paid down debt, he had to go into debt just so he could pay.

[40:47] Russell: The tax man at the tax season.

[40:50] Russell: And he's like, so what am I doing?

[40:51] Russell: How, why, why am I taking on.

[40:53] Russell: All this extra work? Why am I doing all this extra.

[40:56] Russell: Work if I'm just going to end.

[40:57] Russell: Up paying it all back in the end anyways?

[41:00] Mimi: Well, I know like as a financial advisor, we, that's one of the things that we help our clients, right, is at the end of the year or begin, I mean by the end of February, which is the deadline of rrsp, we calculate our clients income and to help them to lower into the next tax bracket, lower.

[41:25] So with that said, you are not just saving a little because the whole amount is going to tax less. Right. And as you said, you know, we have clients that actually got a raise.

[41:39] But then because of that raise, he went into a higher tax bracket, effectively he actually bring home less.

[41:48] Russell: Yeah, it's, it's, it's kind of crazy. Like I, I, like I did a.

[41:52] Russell: Little bit of research on my own and I found out to be a.

[41:54] Russell: 1% earner in Canada, it, you don't.

[41:57] Russell: Actually have to make all that much.

[41:59] Russell: Money to be a 1% earner. I think it's, I think it's just a, you're probably going to know this more than me.

[42:05] Russell: I think it's a little bit less than $400,000.

[42:08] Russell: Puts you in like the 1%. But if you make, I believe it's.

[42:12] Russell: $160,000 a year, you're already in the top 7%.

[42:16] Russell: That's crazy.

[42:18] Mimi: That's right. Not a whole lot of money actually. And as a matter of fact is actually even worse if you are retirees because you know how we save a lot to be able to retire, right?

[42:34] Like they play really, really big on retirement planning and all that stuff, right? So people put money into the RRSP and then maybe they have a pension or whatever, right?

[42:45] So effectively when you withdraw your money from your rsp, from your pension, you know, and all that stuff, the same person who is younger who's working compared to a retiree.

[43:00] The retiree actually technically test got tax higher because he or she has that kind of income and they experience a crawlback on their benefits.

[43:14] Russell: That's crazy. That's like, that's like almost like a.

[43:17] Russell: Like a reverse mortgage.

[43:18] Russell: Almost like. It's like it.

[43:21] Russell: That's insane.

[43:22] Mimi: Yeah, I know, I know. And that, that makes it very, very hard in so many levels. Yeah.

[43:30] Russell: So what should Canadians expect for tax season this year as we enter into it?

[43:36] Mimi: Well, it depends on whether you are employee or whether you are self employed and you know, have, have a business or whatever. Right. But one thing that I want to make sure that everybody is aware of is that because of the postal dispute that we had, the charitable donation deadline had actually extended until February 28th.

[44:02] So if you are making any donation to any charity, you know, like normally is the end of December, but this year because of that postal dispel, we have it until February 28th.

[44:19] So if you want to donate to this community center, to this church or you know, a charity, you know, you have more time to do so.

[44:28] Russell: Okay.

[44:29] Mimi: Yeah. So with that said, for people who are actually having their own business.

[44:38] Actually, no, not that. It's just what we were talking about. Whoever's earning over around 173 grand this year, they have something called the alternative minimum tax rule.

[44:56] So that particular thing is actually a calculation that actually allows less deductions, less exemption and less credit.

[45:09] So if you are with that bracket like more than 173 in change, you probably is going to pay more tax this year.

[45:21] Russell: Oh no.

[45:22] Mimi: Yeah, I know. It's again, very depressing. Also, I don't know what to tell you.

[45:30] Russell: Oh man. Yikes.

[45:33] Mimi: Yeah, I know. Well, but then at the same time we all know that we could lower our taxable income by doing rrsp. And of course, RSP deadline is the end of February.

[45:47] Russell: So get. Put your. Don't put your money into RSPs or RSPs as quickly as possible then.

[45:55] Mimi: Yeah, but then at the same time, don't blindly max out your RRSP room either. You know, there are, there are good calculations to base on whether how much RRSP you want to put in as well.

[46:10] I have had a lot of clients came from other banks or advisors and they were told to, oh, just max out your rrsp. No, you do not do that. And that's why I said one of my exercise with my clients around this February end of February time is to calculate how much they want to contribute before the deadline to just get themselves one tax bracket lower.

[46:43] Russell: So that becomes like a big strategy is to just see if we can put people just one tax bracket lower just to try to save them.

[46:53] Mimi: That's right, yeah. Because chances are you won't have the money to put yourself lower than one tax bracket.

[47:03] If you do, that's another thing altogether. But at the same time you always want to be able to leave some room for flexibility because you don't know whether whenever you would need that RFP room along the way.

[47:19] So we'll say, you know, like you keep that RSP room flexible, keep that room there so that you have the flexibility to use it along the way.

[47:30] Russell: You know, I guess I should ask.

[47:32] Russell: Then too, are TFSAs worth it anymore?

[47:35] Russell: Because you know, when I first heard.

[47:38] Russell: About TFSAs it was put your money.

[47:40] Russell: Away, you won't be taxed on it.

[47:42] Russell: When you take it out and then you'll make some interest.

[47:45] Russell: But it doesn't seem like people make.

[47:47] Russell: All that much interest on TFSAs.

[47:49] Russell: You would have to put a lot of money in and then you have to make sure you, you don't put in more than your maximum allotment is.

[47:57] Mimi: Well, I would say TFSA is still worth worthwhile with it. As a matter of fact, I would say if you don't need your RSP to lower your income that month maximum, your TFSA is actually the first thing you want to do.

[48:15] Even though as you said, the interest being earned might not be a whole lot. It really depends on what kind of return that you are getting. You know, if you are as a matter of fact now that we are going to pay more on capital gains, you want to use your TFSA more than before actually.

[48:38] Russell: So are they actually going to move ahead with that? I heard that they weren't going to.

[48:42] Russell: Move ahead with the, with the capital.

[48:44] Russell: Tax because it never passed parliament.

[48:47] Mimi: Well, they said that they are actually postponing it, but hey, it's the government, right? Again, they want to get into your pockets left, right and center. They would do whatever to do it.

[49:02] I was actually chatting with you earlier, right. There's one thing as, as time goes along, a lot of us are slashers. So we do more than one thing. We have more than one full time job.

[49:18] And then some people may have a part time job, some people may have freelance gigs, you know, stuff like that. So one of the things that I always hopefully people can do, advise people who has, who have actually extra income to try to put away that extra income.

[49:39] Whenever you get paid, you Know when you actually put it away, just as if you've never earned it, just put it all away if possible. Otherwise just save 70% of it.

[49:53] So spend or use 30% then it will help you to save a lot faster. In no time you would forgotten that you have actually earned that money. And also, oh, one more thing, I always tell people to have a saving account and a spending account.

[50:14] So when you get paid, you put it into your saving account. Give yourself an allowance to spend on the spending account. When you're spending, don't even look at your saving account.

[50:28] And as I said, when you have extra income, put whatever you want to save into the saving account. So you don't even see it, you don't know about it. So of course the best way is periodically you put it in an investment so that it actually grows better than just sitting into a bank and getting eaten up with the fees.

[50:50] But then, you know, that's actually one of the, the ways that it's very effective, be able to save money, I guess.

[50:59] Russell: Before we, before we wrap up for today, is there any final words, any final words of advice you give to Canadians before we wrap up today?

[51:09] Mimi: I would say with all that that we have covered, not just financial stuff as well as political related stuff, don't feel helpless, try to voice out what you don't like.

[51:26] And when we know the federal election is going to be very soon, like people are talking about probably in May, get to know your candidates, go meet your candidates. If you think the conservative is going to win anyway, vote for somebody that's actually going to serve you.

[51:53] If the conservative is going to win anyway, it makes no difference whether they get your votes or not. So vote for somebody that's actually going to work for you, not the party.

[52:07] Russell: Awesome. Well, Mimi, thank you so much for.

[52:10] Russell: Joining me on the show today.

[52:11] Russell: I think this is a lot of stuff that we covered today is really.

[52:14] Russell: Important stuff, especially for Canadians, you know, in a credit crunch today.

[52:18] Russell: And I, and I appreciate you taking the time to come on to the show.

[52:21] Mimi: Well, thank you for having me.