Ever wonder who’s teaching your kids about financial literacy in school? In Burnaby, B.C., it might be Alim Dhanji, a certified financial planner (CFP) at Assante Wealth Management in the Vancouver area who has taught financial literacy everywhere from elementary schools to colleges and universities. I invited Mr. Dhanji for a Q&A to hear his take on what young people are thinking about when it comes to money. Here’s an edited transcript of our exchange:
Can you tell us a little about your background and how you came to deliver financial literacy sessions for students?
My sister is a physiotherapist and I began helping her and her fellow classmates with their finances soon after they graduated. From there, I was introduced to the Master of Physiotherapy (MPT) students at the University of British Columbia who had asked me to speak to their cohort about financial literacy. I have now been presenting to the MPT cohorts bi-annually for over 15 years and have gotten to know their situation quite well over time. I also began volunteering through Junior Achievement and teaching younger students at elementary and high schools.
What’s your take on the level of financial literacy among young people today, and how does it compare to what you knew when you were that age?
There wasn’t much available on financial literacy when I was a student, and I had to figure a lot out on my own. Luckily my dad is an accountant and I was able to get some training from him. Today, it can be very overwhelming with the amount of information out there, especially when it comes to financial products. I’ve found that young people typically have a higher level of financial literacy these days, however it is more investment-focused rather than planning-focused.
How much does home ownership come up when young people talk about their financial goals, and how optimistic are they about getting into the housing market?
Most young people that I meet with want to own a home and it comes up almost all the time in our initial goal-setting meetings. However, many feel that it is out of reach. I believe that through managing cash flow, cutting discretionary spending where possible and setting aside money regularly for a down payment, it can be attainable. I encourage young people to stay positive. Options include living in a city that is more affordable or starting with a smaller place and moving up later on.
One of the striking financial trends of the past 18 months is how many young people have got into investing. What are the most-asked investing questions in your sessions with young adults?
They have asked questions around cryptocurrency, low-cost ETFs and investing in higher risk sectors. Sample questions: should I be investing in bitcoin and ethereum? Should my portfolio be heavily weighted in technology, or is it safer to stay diversified? Which stock is going to produce the highest return? There are investment platforms that have made it very accessible for young people to get into the market without understanding the risks.
What do you tell a young person starting in the work force who asks, how can I best get started as an investor?
Before starting out as an investor, it would be important to write down your goals and have a plan for the money you are saving. If your goals are shorter-term, then having the money invested in lower-risk investments would be ideal, or perhaps it would make sense to pay down any high-interest debt. If your goals are longer-term, understanding your risk tolerance is important when creating a diversified portfolio.
Invest in stocks or pay down student debt – which would you suggest as a top priority for a new grad with a job?
If the new grad is uncomfortable with debt, then the answer is easy. Pay down the debt. However, if the grad is able and willing to take on some risk through a diversified portfolio and earn a higher long-term rate of return than what the debt costs, my recommendation would be to start investing in order to get ahead.
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Rob’s personal finance reading list
Chowing down on restaurant inflation
A Reddit thread comparing inflation in restaurants and the grocery store. Lots of details on why restaurant prices are quite a bit higher in some cases.
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Our Stress Test podcast for millennials and Gen Z is included in this list of the Top 40 Canadian personal finance podcasts.
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The pall on Munger Hall
Heard of Charles Munger, wingman to billionaire Warren Buffett? Here’s a story about how he donated US$200-million toward the cost of a mostly windowless university dormitory, with the provision that it be built exactly to his specifications. The architect resigned.
Today’s financial tool
A federal government tax proposal tracker from 2015 through the 2021 election.
The money-free zone
I took a little car trip recently to tape an episode of the upcoming season of our Stress Test personal finance podcast. The podcast I chose to listen to en route was Southlake, which documents what happens when the school board in a Texas town tries to address racist behaviour by some students. A well-told sad story.
In case you missed these Globe and Mail personal finance stories
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More Rob Carrick and money coverage
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Even more coverage from Rob Carrick:
- 🎧 Catch up on Stress Test: Are your parents giving you money? • Why it’s time to stop shaming the renting lifestyle • Is now the right time to buy a house? • Why are young Canadians leaving the cities they love? • Eating in: How COVID-19 has shifted our food spending • Crisis-proof your finances? • Can you afford to live downtown? • The cost of kids
- ✔️ The housing file: The housing boom is ripping apart the financial fabric of Canada • Shut out: A well-qualified millennial home seeker throws up his hands after losing multiple bidding wars • Big city housing affordability is over – now what? • She sold her Toronto house to retire somewhere cheaper, but it didn’t work • How young adults and the whole country win with a tougher mortgage stress test for home buyers • Can’t afford your house? It’s likely not your fault
- 📈 Investing: Robo-advisers have grown out of the novelty stage. Here’s help in finding one right for you • The 2021 ETF Buyer’s Guide: Best Canadian equity funds • The 2021 Globe and Mail online brokerage ranking: Who’s best for investing … and answering the phone • Are these the stock market returns of a lifetime? • On the cusp of retirement and wondering about an ETF that pushes the limits on aggressiveness
- 💰 Your money: The five most important numbers for checking the health of your personal finances • Today’s freakishly low mortgage rates can’t last. What will pandemic home buyers do when they rise? • There’s a cost in money, isolation and family stress when seniors choose to remain in their own private homes • Taking CPP early can cost you $100,000 and limit your long term options • Fleeing the city for the suburbs? Watch out for higher property taxes, more cars and other costs
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Rob Carrick