Financial Analysis and recommendations: Elijah Baker

Elijah is a friend I met at the McGill toastmasters club. His speeches have always been thought provoking and inspirational.

Elijah is a true hustler. He has several side gigs and job. Due to his many activities he hasn’t much time to think about his financial goals. He only started saving after having a conversation with me about the possibility of retirement or having some money for emergencies.

This interview was held May 2017

Age: 33
Work life: Different jobs at different places and side hustles.
Education: Bachelor’s in communication and music.

Alain: What are your professional ambitions?
Elijah: After graduation, I never wanted to work a 9-5 job. So far, I have succeeded at that.

At “A Closer Look” rehearsal

Alain: How do you earn your living?
Elijah:

  • I have been a musician for years, I do gigs at different bars and events.
  • I teach guitar and drums to a few private students
  • I started a videography company, I do corporate videos, weddings and events with my small business www.triplebottomlinemedia.com
  • I am a teacher at Trebas Institute

Alain: Can you tell me a bit about your financial planning?
Elijah: In the past I have accumulated some savings, but I always ended up spending it.

I haven’t been disciplined about saving because:

  • I didn’t have the motivation,
  • I didn’t have the knowledge
  • It wasn’t that important
  • I never had a steady income

Only recently I have had the capacity to set aside a certain amount of money to save regularly.

Alain: Have you ever thought about retirement?
Elijah: I don’t think that far into the future. I can’t imagine what life would be like at age 65.

I am trying to set up my life so that even at 65 there will be demand for my services. I hope that people will want to have videos made, they will want to listen to my music and will want to learn to play musical instruments.

Alain: Do you have any goal which could affect your financial life? Do you want a house? Kids? Get married?
Elijah: Yeah, probably, but at the moment I am more focus on living on the present.

Alain: So what are your financial goals?
Elijah: I would like to have a bit of money set aside for emergencies. I would like to continue working until old age without the pressure of having to produce every month. I would like to work because I want to, not because I have to.

Diagnosis

The whole idea of financial planning is new to Elijah. He lives a frugal lifestyle and he is happy with it. His priority is to have lots of freedom, not to have a 9 to 5 but not to lack anything either. He doesn’t mind living a spartan life but if he feels like having a beer with friends, or taking a trip to Costa Rica, he would like to have the money to do it without worrying too much about how to pay for it.

  1. We started by opening a brokerage at his main bank
  2. I asked Elijah not to listen to the advice of the financial adviser at the bank. The bank offers actively managed mutual funds with high fees. The more a fund cost, the less money it makes for its investors.
  3. We spoke about choosing and Index fund, a broad based investment products which represent the whole economy of a county.

Actions

  1. Elijah opened an account and deposited some money he had in his bank account.
  2. We chose the Canadian Index Fund with management fees of less than 0.33% per year.
  3. He’s making contributions every month.

Conclusion

  1. This is just the beginning, his present savings are not enough to fund a retirement. After a few months he will have enough money to face any short term emergency.
  2. Our first goal was accomplished, to get into a habit of saving and planning for the future.
  3. In future meetings we will speak about the saving a bigger amount and about how to start diversifying his savings.

Follow up

Next meeting will be May 2018.

Pitch. I am a money coach. If you would like to talk about your financial situation, please get in touch with me.

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