Part of the joy that comes with running this blog is the opportunity to meet and share personal finance and investing perspectives with folks I wouldn’t have normally gotten to know. Like my previous interview with my friend Andrew Hallam, Talbot Stevens is one of those individuals.
I got a chance to connect with Talbot recently, he sent me his new book The Smart Debt Coach to read and he was kind enough to send another copy to giveaway to readers on my site. You’ll have a chance to win The Smart Debt Coach later in this post. First up, a quick bio:
- Name: Talbot Stevens
- Age: 50, and getting younger every year
- Family status: Married
- Background: Financial educator and author. See bio in The Smart Debt Coach.
- Website/Twitter: TalbotStevens.com, @TalbotStevens
- Books: Financial Freedom Without Sacrifice, Dispelling the Myths of Borrowing to Invest, The Smart Debt Coach
- Mission: to help people learn, teach, and build wealth and security, like the rich do.
Thanks for this Talbot, good to finally chat with you.
It’s great to connect with you as well, and discuss some ideas to increase wealth and security.
I know you have a new book out entitled The Smart Debt Coach (and we’ll get to it soon) but I’d like to know how you got started or interested in investing.
After graduating from 19 years of formal education, including degrees in engineering and computer science, I discovered that I was financially illiterate. This was very disappointing, and made me angry. In a world where we make literally dozens of financial decisions every month, some involving hundreds of thousands of dollars, we weren’t taught even the basics about being more effective with money. So I started reading over a hundred books about personal finance and learned that, even a few ideas — acted on when one was young, would literally be worth millions of dollars more at retirement. Then, as we moved into our first house with our first baby, I told my wife that I would quit my job as an engineer, and take a year to self publish a book to become a self-employed financial educator. Here’s some great marital advice for your subscribers: don’t do that! Fortunately, my first book, Financial Freedom Without Sacrifice, did very well and we celebrated our 30th anniversary last May.
Congrats on the book anniversary.
I spend a lot of time on My Own Advisor sharing my saving and investing approach to financial freedom. We’re far from perfect, so I think we could be smarter with our money. What advice would you give to people wanting to do just that, get smarter, save more money?
The easiest way to get smarter about money is to use when I call the “shortcut to success in any area.” If you want to become wealthier faster, study those who are already financially successful. Model their attitudes, strategies, and behaviours. In the old days, that meant learning from books. These days with the Internet, it is even easier by learning from bloggers like you, who provide valuable ideas for free.
My second point is to realize that the key to financial success is not what you know, but what you do. It’s behavioural. Although I am one of those weirdos who likes the black-and-white world of math, I’ve learned that behaviour trumps logic nine and a half times out of 10. To succeed in finances, it is much more important to be focused and disciplined, than it is to be knowledgeable and intelligent.
I also spend time on the site writing about debt, I’m not a fan of it and want to get out of it! What’s your take on debt? Is there really good debt and bad debt?
Yes, debt is a very controversial topic, especially borrowing to invest. But the truth is that there is such a thing as bad debt in good debt, or as I prefer to call it, investment debt. Borrowing at expensive non-deductible interest rates to buy things that decrease in value 20 to 50% per year, clearly should be avoided and/or paid off as quickly as possible. But the wealthy borrow in a different way. They borrow at lower interest rates, where the interest expense is generally tax-deductible, to buy businesses and properties that generally increase in value in the long term. This magnifies returns, and if done responsibly, generally increases long-term wealth. Smart Debt is when you borrow to invest using responsible strategies, responsible amounts, and responsible timing. Some Smart Debt strategies actually have a negative risk and would benefit everyone, regardless of risk tolerance.
So, I’m assuming folks can (and should) do some things to save more and kill debt. Now with the new money saved what should they consider investing in? Why would you recommend that?
After paying off expensive debts, charging more than mortgage rates for example, most Canadians should focus on saving using RRSPs. Those in the lower tax bracket are generally better off using TFSAs. As for what types of investments to hold inside of these tax shelters, I think that most are going to need more equities than they think. This is particularly true in today’s near-zero interest rate environment.
Your hybrid approach of owning a few dividend paying stocks and low-cost ETFs is very sound. Dividend investing has historically been very effective and sometimes outperforms the market. I use this approach as well. And while you claim that this is a simple investment strategy is boring, I suggest that that is a positive, and helps most people start, and stick to the plan.
Back to The Smart Debt Coach. What’s your elevator-speech for this book and why folks should take a look?
My book, The Smart Debt Coach, helps Canadians learn effective ways to reduce bad debt, free up cash flow to invest, and improve investment returns like the rich do. It addresses the full spectrum of debt, from bad to good and Smart Debt. It is full of practical strategies to accelerate wealth and security, but also focuses on the more important wealth-building attitudes and mindset that is key for anyone who wants to become wealthier. All external results start internally – in the mind. And financial success is no different. Like my first book, The Smart Debt Coach is guaranteed to benefit readers. If someone isn’t confident that the ideas can help them benefit at least $1,000, they can return the book to me for a full refund, no questions asked.
That sounds like a good deal, full refund!
Last question before the book giveaway. If you had some advice to Canadians, saving for their financial future (or killing debt as part of their future), what would that be?
My final advice is that if you want to increase your wealth and security faster, like the rich do, you can, if you think and act like those who are already financially successful. Clarify your highest financial priorities, and discover a big enough WHY to make them happen.
Great point to end on, thanks Talbot.
I want to thank Talbot for this interview, taking time on My Own Advisor to share some saving and investing tenants, and provide a copy of his new book The Smart Debt Coach to giveaway to one lucky reader. You can check out Talbot’s site here. Good luck to all entrants!