Max Shabalov (00:07)
Max Shabalov here and welcome to another edition of Financial Literacy Canada podcast. You've heard the advice that to get ahead financially, you need to cut costs and save more. But what if there was a way to do that without giving up the things you enjoy? No drastic lifestyle changes, just smarter decisions that free up cash every month. My guest today is Gordon Stein, a keynote speaker, an educator and an author of Cashflow Good Book. In our conversation, we talk about how Canadians can save hundreds of dollars a month by rethinking routine expenses, from utilities and insurance, to subscriptions and even the way you shop. We also discuss the mindset shift that makes saving feel effortless and how investing those savings can compound into long-term freedom. If you ever felt that saving money means missing out, this episode will show you smarter, simpler way to take control of your finances and keep more of what you earn.
Gordon Stein, welcome to the show!
Gordon Stein (01:22)
it's great to be here. Thanks so much, Max.
Max Shabalov (01:24)
You've written a book Cashflow Cookbook, How to Save $2 million in 60 Recipes. In this book you talk about how Canadians can save money in very practical ways. And it all started with car washes. Tell us that story.
Gordon Stein (01:43)
Well, yes, I was dropping a friend off after a barbecue. And while we were driving, he looked in the console of my car. He found this car wash receipt for $13 and asked me why I'd spend money on car washes. thought, you know, that's who cares, you know, $13 car wash receipt. And then this was in Canada at the time. And there was the Esso Extra card and the little keychain dongle that you can use at the time you'd pay. Now it's done with an app. And when you do that, you accumulate these Esso Extra points and you can use those toward car washes. I was buying a couple of car washes a month, save $25 a month. I didn't think much of it, but it was just so easy because being able to pay with that little keychain dongle instead of taking out a credit card, particularly in Toronto in February was an easier way of doing something and yet it saved money. You know, so I thought geez, there's so much talk in the financial world about you've got to sacrifice, you've to give up things. And yet here was a really simple hack. Not that the $25 was worth much, but I thought you're actually getting something for nothing. And then that led to a whole chain of research over two years. And I just kept finding more and more things. And that's really how I got started.
Max Shabalov (03:03)
And you suggest that people should focus on cutting those recurring expenses. And what is the power of cutting those kinds of expenses?
Gordon Stein (03:12)
Well, it's massive, and to my way of thinking, if you think about, we have a situation where if you can free up even let's say $350 a month over the course of your working career, that'll easily add a million dollars to your retirement. So when you talk about, you know, typical Canadian, average Canadian retiring with about $200,000. These simple hacks can add a million dollars to people's wealth at retirement, that's a huge deal. And for many people, members of my audience, when I'm doing speaking engagements, they'll come back and tell me they've freed up $1,500, $2,000, $2,500 a month by plotting these ideas while giving up nothing.
Max Shabalov (03:58)
Yeah, and on your website, you've got a really nice calculator of compound interest and how much it can save in long term. Like I knew about the power of compound interest, but I didn't realize it's so much savings, which is incredible.
Gordon Stein (04:16)
Yeah, most people have no idea and they'll blindly pay whatever the bill is. Their car insurance, their house insurance, their gas bill, electric bill, water, sewer, all of these different recurring monthly expenses, but they're not thinking about the power if you optimize those. People often say, well, do you follow all these ideas? And I do. You know, as an example, in our home, we slashed our electric bill in half. So our consumption went from about 1,300 kilowatt hours a month to about 650. Handful of simple tweaks. There's a blog post I did on, talk about it in the book. People always say, well, how do you do that? It's all in the book or ⁓ you can follow the blog posts at cashflowcookbook.com. So you do these simple hacks and you enjoy the savings for the rest of your life. So chopping my electric bill in half for the rest of my life, that's a big deal. And that can easily be worth several hundred thousand dollars at retirement by making a few simple changes.
Max Shabalov (05:18)
Right, and what data do we have that people are bad at managing their expenses?
Gordon Stein (05:23)
No shortage of data. just recently saw an article that people now on average spend four hours a day worrying about money. So just think about that. Worrying about money for four hours a day. If we talk to EAP companies, so employee assistance programs, large companies, a lot of them have these programs, and employees can go get help on whatever the issue may be. It might be marital problems. could be substance abuse with their kids, suicidal children, whatever. Every possible kind of issue and what they tell me is more than half of the calls are people talking about their financial concerns. So it's a big, big issue for people.
Max Shabalov (06:07)
Yeah, and I think you also talked about when people hit the retirement age, they actually don't have much wealth, right? So they did not actually save and invest over this long term as you suggest.
Gordon Stein (06:22)
Well, the stats are really quite bad. I'll give you a US stat, but most things in the US and Canada are pretty similar when it comes to personal finance. 64 % of Americans will retire with less than $10,000. And the numbers aren't much different in Canada. And even when you look all the way through people's lives, Max, when you look at reasons for divorce, 41 % of divorcing couples felt that financial stress was the principal driver of their divorce. So you see it happening all the way through.
Even if you look in Canada, the Canadian government has a terrific program in RESP, it's an opportunity to save for your child's university or college education, which is just fantastic. There's grant money, there's tax savings. I how do you not take advantage of it? But it's only about a third of Canadian homes take advantage of this terrific tax break on saving for your child's education? Well, why wouldn't everyone take advantage of it? And the answer is cash flow. People don't have the cash flow to set aside the money for their child's college education early in the game so that the government will contribute with grants and tax benefits. They're throwing away free money. Why? Again, they don't have the cash flow.
When you think about every stage of life, financial emergencies, it's about 40 % of Canadians can't handle a financial emergency of $400. So what do they do? They don't have the cashflow. So they put that incident on a credit card and then they're paying interest at 25%. It just goes on and on and on all of these problems. And this is where people are stressed out.
Max Shabalov (08:15)
A of young Canadians feel though that it is harder now to save money than it was for their parents. Do think it's true?
Gordon Stein (08:24)
Well, when I look at people's situations, there's so much opportunity. know, is it harder to save for a home? Yeah, I think it's definitely harder to save for a home, but you have to get more inventive than I think, than my generation did for sure. The cost of a home in major cities like Toronto as an example, or Vancouver, is a much, much bigger multiple of people's earnings. But there's always opportunity. You can move to smaller communities. You could get some renters in the house with you. could set up a basement suite and rent that out. You could go in on a house with a sibling perhaps, or obviously a spouse. So there's always opportunities, but when we talk just about savings, people are throwing away an incredible amount of money. If you think about every possible monthly expenditure, car insurance, home insurance, every kind of life insurance, all of these things can be shopped and shopped very effectively. And there's no yelling. There's no screaming. There's no stress involved, but these changes make a really big difference. I'll give you one example. I was doing a speaking engagement ⁓ to clients of a wealth advisor and the wealth advisor kicked it off and she indicated that she'd read my book and she followed all the things I was talking about. And she gave an example where she freed up $300 a month on her family cell phone plan, had a few kids and her and her husband, etc. And she's, you know, raved about this $300 savings. So, what I said when I got up, I said, well, that's really not the story because if you take those savings, invest them at 7%, over 30 years, actually it might've been 20 years, the total value was $378,000. So, you know, that simple hack, it was a one-hour phone call, and it added $378,000 to her net worth over the course of her working career. Well, that's a huge deal. And then sometimes people say, oh, you know, I don't want to have to call my cell phone provider. I'll probably be on the phone for an hour. And I've said in my talks, you know what? If you can spend one hour to add $378,000 to your wealth at retirement, that's a really, really good use of that hour.
Max Shabalov (10:48)
Right. Yeah. And I read your book four years ago and it's such a great book because I feel that it's hard for Canadians to save money. But when you look at the books, there is actually really practical ways how to cut expenses without much sacrifice. you're broken down the book into main sections of housing, car, food and drink, household, lifestyle, and then financial. So let's start with the housing. And there's a lot of great advice for how to save if you live in a house. But let's say for a young couple living in a Toronto condo, what are the ways they can save?
Gordon Stein (11:25)
Yeah, there's lots of opportunities. mean, one area that people ⁓ miss quite often is parking. So they may be in a condo and let's say that they have a car and in many cases they will rent a parking spot in the condo. Or in some cases they may be renting a monthly parking spot near their place of work. So there's an easy hack right there because often there's parking. Near your work or might be parking right around the corner from the place you live that's dramatically cheaper. It'd be a apartment building or something like that. So that's a quick example. ⁓ In the apartment or condo itself, oftentimes there's an opportunity to shop around for a place that's cheaper. There's not a ton of opportunities because utilities may not be a factor in something as small as a condo. There's probably not a whole lot you can do there. But there may be opportunities in some of the other categories, or oftentimes people get very attached to an apartment or a condo. just say as an example, let's say a woman has a condo that's near her work. And then let's say she gets married, spouse moves in, spouse's office is a long way away. And then maybe she changes jobs and her office is a long way away as well, perhaps over by her spouse's office. So they're still living in the same condo, but now they have two separate commutes, which can be really expensive. So it might make more sense to change that up. Give you another example is one that I see quite frequently is, have a young person just graduated, single, and ⁓ they'll go get themselves a nice apartment somewhere. But the difference in having a roommate or two or three is pretty dramatic. So...as an example, my son graduated as an engineer, know, great starting salary. And you know what? He's worked hard. He's earned it. He deserves to go get himself a nice apartment. So instead he got himself a roommate app on his phone and he used that to find a great house with two other guys. He was paying, this is actually in Ottawa. He was paying about $500 a month instead of about $2,500 a month for apartment on his own. Now those early years, that makes a big, big difference. Because that frees up $2,000 a month. In his case, he maxed out his company's share purchase plan. He maxed out his RSP. He maxed out his TFSA. So you could just imagine the power of that compounding early in the game by making that simple move and getting roommates instead of his own place. And the three guys were great friends. They did all kinds of things together. It was just big savings and kind of an instant social life.
Max Shabalov (14:18)
Yeah, and this is a great example. What about if people have a house? Now there is so much that you can save. Can you give us an example,
Gordon Stein (14:30)
Basically, I would line up every single recurring monthly expense and the book, Cashflow Cookbook, I go through just about every single one of them and simple changes that you can make. So in the case of housing, you can go after your utilities bills. I mentioned that we sliced our electric bill in half. We also reduced our gas bill by about 23%. And in houses, people often start with, we'll replace the windows, we'll put in more insulation, know, to lower the energy bills. And those are probably the two lowest return on investment moves that you can make. A better place to start is air infiltration. So air leaking around windows, doors, all that kind of thing. So I can tell you in my current home, I did exactly that in my backgrounds in engineering. So when I found gaps under doors around windows, I measured them just for fun and calculated the square footage or square inches of gap. So there was a big gap, the door that goes to the garage into my workroom at our home. And that was about three quarters of an inch with no weather stripping, no sealant, nothing. So I found a few such things, gaps around electrical boxes, around pipes, added it all up. It was the equivalent of having a 13 inch hole in the wall of the house. Now, if you had a 13-inch hole, you'd be in a big hurry to patch it. But a lot of people don't think about all these gaps leaking around. And often, utility companies will provide discounted home energy audits. And even if not, that's, I think, a really good investment if you're not handy. Get a home energy audit done and see what they prioritize in terms of return on investment. But energy savings in a home is a great ⁓ place to go. And then reshopping home insurance is almost a no brainer. There's apps now where you can quickly compare multiple providers or you can work with an insurance broker who has access to multiple insurance lines from multiple companies and let that person do the comparison for you. But each and every bill, water bills and water and sewer bills are often connected together. know, electricity, lot of Canada has time of day pricing. So just changing when you're doing the laundry and dishwashing, kick that over into non-prime zones. Another great way to save money. But typically in a house, know, decent sized house, you've got opportunities for easily three, $400 a month. And once you make the changes, you're all set. Nothing left to do.
Max Shabalov (17:07)
Now, cars in transportation are the second biggest expense for Canadians. And of course, the best way is not to have a car at all. But sometimes we really need or we really want to have a comfort of a car. What are the practical ways we can save money there?
Gordon Stein (17:16)
Well, I think the first one is commuting is a huge deal. So particularly in big cities, again, like Toronto, if you're racking up time on the 407 and you're paying 407 fees, you may or may not be paying parking at your office and the gas and all those miles add up to more maintenance costs. So when you actually do the math on commuting, it's really significant. So if you can switch, know, work from home obviously became popular during COVID and now there's a bit of a back to work movement. If there's an opportunity to work from home another day or two a month, that's a big, big difference. It's kind of a hidden cost. So that's worth having a look at for sure. One of the biggest ones, I did a blog post how I saved 42 % on gas. So again, different kind of thinking. You'll see people talking about gasoline apps, know, which gas stations, two cents cheaper per liter. That's absolutely nonsense. I mean, that is just the silliest way to save money. I wouldn't do anything like that. What does make a big difference is your driving habits. ⁓ So if you check out the blog post, which is on cashflowcookbook.com, ⁓ you know, it's really about driving habits. You ease up on your acceleration. Don't accelerate so fast. That uses incredible amount of gas. And when you're cruising down the highway, just set the cruise control five kilometers an hour slower, maybe 10 kilometers an hour slower. And when I do that, particularly the long drives, the car's quieter. I can hear the podcast better than I'm listening to. It's safer. It's leisurely. And you know, what difference does it make? Well, maybe I'm going to get to my destination 12 minutes later. Does that matter? I mean, what is it I was doing with those 12 minutes? It was so important. So it's just a different way of thinking about driving and dramatic savings. So that's a big one.
The other thing is people often buy too much car. I'll often drive by a home and you'll see a minivan and a big pickup truck. Well, and you know, maybe they've got three kids. they say, well, we've got to have big cars because we've got the whole family. Well, do you need two vehicles that both can carry the entire family or could you have one bigger vehicle for family outings and then have a small commuter car that someone doing the most commuting takes that car? So it just goes on and on and on. In the book, there's 10 recipes for each of the categories that we're talking about, Max. There's eight more in that section on transportation.
Max Shabalov (19:58)
Yes, and food and drink. I feel like food and drink is the last category where people want to cut expenses because they think of it as first of all, it's health and you really don't want to cut expenses on food, but you found ways how to do it without much sacrifice. What are the examples?
Gordon Stein (20:18)
Oh my goodness, there's so many. And again, people focus on silly things, Max. know, people are driving around to six different grocery stores. I don't want to drive to six grocery stores. You know, they're clipping coupons and they're bringing their coupons to the store. It's just way too much work. So I would say, you know, some simple hacks. You join your grocery store's loyalty program. You scan your card when you buy your groceries. In my case, that saves about $1,300 a year just by shopping from one grocery store and I don't have to drive anywhere. A huge one that most people miss entirely is families on average waste about 25 % of the groceries that they buy. So, know, dinnertime comes, people are saying, what do you feel like? I feel like, you know, spaghetti or I feel like, you know, a chicken dish or whatever it is. But instead of thinking that way, take a look in the fridge and say, okay, what needs to get eaten in the next couple of days? And that's what you eat. So the idea is you drastically reduce what you're throwing out. So, some meal planning at the store level makes a big difference. Shopping for things on sale makes a big difference, but reducing the food you're wasting is a 25%, can be a 25 % savings. That's huge. Another thing that's interesting is ⁓ prepared foods always cost more than buying the ingredients, doing it yourself. I should say they typically do. So there's a... You know, simple hack. can tell you the grocery store we go to, always kind of have a laugh in the onions section. Not that onions are, you know, a big area for saving, but just to illustrate the point, ⁓ there's identical red onions or yellow onions in two bins. And one of them has the outer peels removed versus the ones that look rough, still have all of their outer peels on. Same onions, just slightly more prepared. They remove these rough leaves. The price difference is two fold. There's twice as much cost for the onions that have those other shells removed. So you're just getting a little bit smarter. Another huge area is buying frozen foods versus fresh. The savings could be two, three, four times ⁓ the money because obviously perishable foods, grocery stores cost them a lot of money. They have to throw it out. Frozen foods last a long time. So, switching over to frozen things where you can. There's another great hack.
Max Shabalov (22:45)
This is really great. For the household category, mentioned clothes are a big expense. How much of the savings are we talking about there?
Gordon Stein (22:55)
Well, clothes are really quite something. When I looked into the research, right to the research on cashflow cookbook, I was amazed that we only ever wear 25 % of the clothing that we buy. And that sounds, how can that be? Most people, they say, well, that's crazy. That's not the case for me. Well, you know what? Try the experiment where hang all your clothes backwards. In January, put all your hangers facing away with the hooks facing away. And each time you wear an outfit, turn the hanger the other way. And you'll see by the end of the year, you don't wear all kinds of stuff. We buy on impulse, you buy on sale. Most of us have had the experience where you're out in the mall and you see this great deal on a designer sweater, you know, beautiful blue color. And so you grab it really quickly because it's 60 % off. It's such a deal. And then you fold it neatly and you go to put it in your closet and you put it right beside a nearly identical blue sweater. So we're so caught up in getting these savings and the whole shopping, retail, quote unquote, retail therapy, dumbest thing ever. And so we buy things we don't need. And then if you buy in haste, you know, when you go and try it on, you realize, huh, it's a little bit boxy or sleeves are a little bit short. Now you're going to go to an important meeting, Max. You've got a job interview, your annual performance review, you're out on a date. Are you going to wear your fourth best outfit? Your third best outfit? No, you want to look the best you can. So what happens is everything that isn't perfect. What happens to it? Well, it just sits in the closet and then you sell it at a yard sale for five cents on the dollar. So being a little bit more mindful about our shopping, don't shop for the sake of shopping, that big excitement, the dopamine hit because, you're making a purchase. It really fades quickly when you come home and the thing doesn't quite fit. You didn't really need it. And then you see it on your credit card. So it's just changing this wiring of the brain from this shopping, oh, I've got a shop, look at the new exciting stuff, to being a little bit more mindful and seeing that long-term growth in your wealth. And when your wealth is growing significantly every year, you've got peace of mind. You've got options. You've got choices.
Max Shabalov (25:18)
Yeah, these are great advice on how to cut expenses and there is many more in the book. Now, when it comes to measuring your financial situation, you advocate that people should focus on tracking their net worth rather than just doing budgeting. What exactly is net worth and how should people track it?
Gordon Stein (25:38)
Yeah, I would actually go back even one more step. If you want to track just one metric and you're starting out, I would track savings rate. And that's just the percentage of money that's going to building your wealth. So if you take your contributions to your company share purchase plan, to your RSP, to your TFSA, or maybe into aggressively paying down some debt that you had before, all of those things are building your wealth and you divide that by your total income. So in other words, if in a year you're putting into your TFSA or RSP, et cetera, you're putting in $10,000 and you make $100,000, that's a 10 % savings rate. So start with what your savings rate is, simple number to calculate, and you want that to be at least 10%, and I think 15 or 20 % is a whole lot better. I would start with that. That's the very first number. Second number, I call it wealth, but most people call it net worth. I like the term wealth better because our net worth is so much more than just our money, ⁓ whichever term you like. And really that's the difference between what you own minus what you owe. So things you own, could be your house and your car, all of your financial assets, TFSAs, RSPs, all of those kinds of things. And what you owe of course is your credit card, student loans, car loans, mortgages, all of these things. And then you just. set up a spreadsheet or you can do it on a cocktail napkin or a piece of paper, whatever you're happiest with. There's apps that do it. You don't have to get fancy. Just make a spreadsheet, you know, by year. So in 2025, here's the value of our home and our car and all of these things. Here's what we owe. And therefore our net worth is X dollars. And then if you track that on a spreadsheet and you just want to see that bottom line growing. if your net worth, your wealth is growing each year, well, Now you're headed to a happy place. And if you spend less than you earn, you feel great. And the longer you do that, the richer you get. It's no more complex than that. And it doesn't mean you have to give up things. You don't have to scrimp. You don't have to save. You really just focus on these recurring monthly bills. You grind those things down. Typically you're giving up exactly nothing. But when that wealth grows, now you're not thinking about money for hours a day because the money is taking care of itself. And the more that money starts to grow, then it starts to really compound your wealth compounds and think of great you feel when you look at that spreadsheet every year or every quarter or even every month. And you're saying to yourself, wow, I'm actually getting somewhere. So you're working hard at your job, but a lot of, a lot of couples or individuals look at their situation. They say to themselves, I'm just not getting anywhere. I've been working for five years. I have nothing to show for it. Well, that's really depressing. Let's get people out of that mode, Max. Let's get people feeling great about their finances and the life possibilities that it gives them.
Max Shabalov (28:43)
Yeah. And when I learned that, I realized that that's exactly what my wife and I should do, the savings rate and measuring net worth, because what we do currently, just mostly sit down and look at our expenses and income, basically budgeting, but not those two metrics, which put things into a very different perspective, realizing that we should save more and invest those right to grow our net worth. I have two questions on calculating net worth. First is about the house. Should we consider the closing fees on a condo? For example, when we sell this, we actually don't get condo minus mortgage, but also all the closing fees, the real estate agent stuff like that.
Gordon Stein (29:29)
Yeah, I would take that off. it's a great point. When you value any of these assets, in other words, the things that you own, whether it's a car or a house or whatever, you have to do it at what you could actually sell the thing for. And yeah, I think that's a great idea to calculate a net of all those kinds of expenses. it depends on the property and depends on where you live. Those numbers may be material or they may not, but that's true of a house or condo. It's what did recent properties sell for? Not what were they listed for? What did they sell for? When you talk about cars, how much are they actually, the used ones actually selling for? Which of course is going to be less than what they're listed for. You can use AI for all of these things. We didn't even talk about that, but you could say, hey, I've got a 2021 Chevrolet Tahoe. What can I actually sell this thing for? I live in Edmonton. So you can use AI to get all of these numbers. then, you know, on the debt side, that's pretty easy because you can just look up your recent statement for your mortgage and your car loan, your student loan, all of those things. But yeah, you do it at realistic numbers, but I'll just throw out one bonus. A bonus is if you have an RSP as an example that your company contributes to, I think it's fine to add the company contribution when you're calculating your savings rate, because it's a freebie. So you're raising some good finer points on those calculations, but that's a great point.
Max Shabalov (31:00)
And my second question was actually about RRSP. So when we calculate our wealth, should we exclude tax from RRSP amount? And if yes, how much?
Gordon Stein (31:11)
Well, I think you can, you you want to be consistent. So if you want to do that, you can. ⁓ If you don't, you know, that's fine too, because what's important is the fact that it's getting bigger. The actual number in a sense is almost less important. What's really important is you're moving in a good direction. You're growing it over time. So taxes are kind of, you know, you can't escape from the taxes. You can say you could evaluate your after-tax assets like TFSAs differently than your, you could assume a future tax rate and discount the value of your RSP balance if you want to. And that's probably more accurate assumption. So, you know, I would pick and stick. So pick a methodology and stay with it.
Max Shabalov (31:56)
Yeah. And in the book, what I like your book about is that you suggest how to cut expense in those stealthy categories. Because for example, I already lead a very frugal lifestyle, but even after reading your book, I realized actually I could save more, cut more. Let's say a person looked at this, followed all the advice, but then they just found only a couple of hundred dollars to save because they've got kids, they've got aging parents to support maybe. What would you recommend to those people?
Gordon Stein (32:29)
Well, think in everyone I've ever dealt with, audience members that come back to me, people come to me for financial coaching, people read the books, me emails, et cetera. There's always much more than you think. There always is. people, they're scrimping and scrimping and scrimping and impacting their lifestyle. And yes, there's some people who are in some very difficult situations. There's no doubt. But I would say the vast majority of people, there's more that they can save. And sometimes comes in areas that are pretty stealthy that they don't even realize. as an example, credit score, a lot of people don't know their credit score. They don't know how to improve their credit score. Again, there's a blog post on cashflow cookbook, all free. You can learn about how to do that. But it has a big impact. So it depends on what part of Canada you're in, but depending on the province, it can dramatically lower your car insurance and dramatically lower your house insurance. And it absolutely can lower the costs of interest rates on car loans, mortgages, et cetera. So there's a perfect example. You can make some moves to improve your credit score over time. know, next time you get a car loan, a mortgage or whatever, you can get a much better rate and you didn't give up anything. It's not like you, you know, don't have enough food. So you can make some of those kinds of changes. And again, let me stress, there's people who are in very difficult financial situations, and I have plenty of empathy, but usually there's ways to improve that situation.
Max Shabalov (34:03)
Yeah, and what I like in your book, you'll suggest maybe starting side hustle business if you can, and then it doesn't interfere with your full-time job. And when people say that they don't have enough time for this, you mentioned that, you know, the average time screen is about 10 or 20 hours a week, right? So you can actually try to do something with this time.
Gordon Stein (34:28)
Yeah, I mean, let's talk about that for a second. It's a great point. you know, I used to on the speaking circuit, I would often quote the stat that people on average spend 20 hours a week watching TV. And you think about it, that's 50 % of a full-time job. That's a pile of time. So people say they don't have the time. No, there's all kinds of time. And now the status changed where the TV time has reduced to a degree. But the other screen time has just exploded. So the total screen time now, not unusual for it to be 25 or 30 hours a week. 25 or 30 hours a week, you could do a lot of things. I mean, as example, you could read cashflow cookbook cover to cover and go implement the five or 10 biggest areas in your home and free up 500, 1,000, 1,500, $2,000 a month of cashflow. You have the time, you know. You could cut down that screen time. Everybody has the time. Or if you have that much free time, you could start a side hustle. You could be walking people's dogs or whatever, doing some handyman work. There's all kinds of it. If you Google easy side hustles, you could go into ChatGPT and say, here's the things I'm good at. I could put in 15 hours a week, tell me about a side hustle. It'll write the business plan for you. In that respect, it's easier than it's ever been.
Max Shabalov (35:54)
You read all kinds of personal finance books you mentioned and I just wanted to ask you about the advice that is in The Richest Man in Babylon, the principle of first setting aside 10 % and then spend. What do you think of this advice?
Gordon Stein (36:11)
Well, I think most personal finance books, frankly, are a downer. They make you feel guilty. You're not doing enough. You got to save 10%. You have to do detailed financial budgeting. You have to give up things you love. Well, I don't want to do any of those things and I don't do any of those things. The only advice in those books that really does make sense is you really do have to save a significant proportion of your income for long-term savings to build wealth. You need it for retirement. You need it for freedom. You need it for flexibility. need it to give yourself options. You need it for peace of mind. So that you have to do, but the way you get there, it's not about belt tightening and scrimping and saving and not having any fun. That's just bad advice. If I'm to go to a concert, I get great concert seats because how many do I go to in a year? You know, when I go to three or four big concerts a year, I want to enjoy myself. I want to have great seats. Why not? But if you think I pay a dime too much on my cell phone bill, my car insurance, home insurance, water, sewer, gas, all of these things, transportation costs, all of those I optimize and most of them are one-time pieces of work and then you're done. And then you enjoy the savings. You enjoy your life. know, when I buy a guitar, I love guitars. I get beautiful guitars. Now I typically buy them used for about half of the price you'd pay in a store. But you enjoy your life. You know, you have a great life and you put this whole financial stuff back down into a box where it belongs and you go have great experiences. You spend time with friends and family, you help other people, you do things that are charitable and you can do all that because you've got your own financial house in order and you don't have to spend time worried about it.
Max Shabalov (37:56)
And as young people we're listening to this and let's say we want to be very practical, but at some point we want to enjoy life. And Gordon, what do you recommend? When, at what point a person can say, yes, I can afford to buy that Mercedes without any guilt.
Gordon Stein (38:16)
Yeah. You know what? mean, look, in Canada and in the US now, there's 96 month car loans. Okay. And that is just financial insanity. That literally makes no sense at all. Now, if you've got the cash to go buy the Mercedes of your dreams, you know what? Go buy it. As long as you're set up financially, your wealth is growing every year. I mean, if you're smart about all this, you could get to retirement or early retirement, your wealth is growing faster than you can spend it, then you know what? What the heck? Go get yourself a Mercedes. I would say if you get a two-year-old one, you could probably hack 30 % off the cost so you could maybe have another dream as well. But I find in general, you know what? Happiness doesn't come from spending money. ⁓ You can get in that groove and you can have your brain wired that way. And goodness knows the marketers are all trying to get us to think that way. you know, it's buy now and you know, they're doing functional MRI scans of our brain to figure out how we buy and how to change their messaging, their jingles, their imaging by actually looking inside people's brains with an MRI. So we can't compete against that. The system is designed to part as much money as possible from your wallet. So you've got to get a little smarter and you rewire your brain where that the buzz doesn't come from shopping and hang out in shopping malls. The buzz comes from having your finances in order, calm. And now you go and enjoy the outdoors, you exercise, you spend time with family and friends. ⁓ And then what you're going to find is that Mercedes that you lusted over or whatever the thing is, it becomes less important. You don't really care because you're more excited about doing the things that actually matter.
Max Shabalov (40:09)
Yeah, I love this. Well, Gordon, this has been a great conversation. Where can people go and learn more about the book and your work?
Gordon Stein (40:17)
Yeah, they go to cashflowcookbook.com. There's a whole bunch of blog posts out there. That part of the site is all free. So take advantage of that. put out more, notionally I do a new blog post every week unless I'm skiing or sailing or kayaking or enjoying the outside. it's a great day or I've got a good guitar jam going, I don't bother to write a blog post. But I put more and more of them up there. That's one place that's in there. They can get a copy of Cashflow Cookbook. In Canada, you can get the book on amazon.ca. Look for Cashflow Cookbook, Gordon Stein. ⁓ And back on my site, they can actually get my course, Cashflow Cookbook course, which is five hours of video. It's got worksheets. It's easy. It's fun. I think you actually did the course, Max. It's fantastic. They can get a hold of the course on there. ⁓ And there's a whole bunch of tools. You can do some retirement planning kinds of things on there. ⁓
Gordon Stein (41:14)
You can look at, what's it worth if I save $220 a month on a particular bill? How, and if I invest that at 7 % or 8 % or 10%, how much will that grow over time? So some of these financial tools, the tools are all free. Go ahead and try those out and lots of great resources.
Max Shabalov (41:33)
And we've got the code for this course, right?
Gordon Stein (41:36)
Yes, yes. So do you want to tell them about that? Significant discount for your listeners.
Max Shabalov (41:41)
write FLC, just type FLC stands for Financial Literacy Canada and you will get a 50 % discount.
Gordon Stein (41:49)
Right, so just go to get there, go to cashflowcookbook.com and then you'll click on course. You'll see course in the main menu. Read about the course if you're interested. You can use that FLC code and very significant discount. And I promise make a big difference in your finances.
Max Shabalov (42:08)
Fantastic, well, thanks for your time, it's been a pleasure.
Gordon Stein (42:12)
Thanks so much Max. All the best.
