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October 26, 2022

Learning to build foundational savings earlier in your career

Hear how to build foundational savings behaviours with special guest speaker Alex Young Soo Lee. Alex is a fellow medical student at the University of Ottawa and the Director of Student Affairs at CFMS. He is passionate about investing and building a robust savings portfolio all while navigating medical school.




Alex: Learning how to save money is really important, but you also have to understand the actual dollar isn't the only thing that's important, that time is the biggest resource that we have.

Speaker 2: Welcome to The Financial Checkup, a podcast series devoted to improving the financial health and retirement readiness of physicians and their spouses or common-law partners. This series is brought to you by the award-winning Advantages Retirement Plan from OMA Insurance. This episode features audio from an Advantages retirement plan webinar recorded in October 2022.

Marta Hano: Thank you so much for joining us here today. I want to quickly introduce myself. My name is Marta Hano and I'm an education engagement specialist here with OMA Insurance. In my role, I work with predominantly medical students and residents and I talk about how you can use insurance as a form of financial risk mitigation. That's a lot in a sentence, but we talk about insurance. Today we're going to talk about savings, investments. We have a special guest speaker and so we facilitate a variety of webinars throughout the year.

I want to take a moment now and introduce our guest speaker, Alex. I've had the pleasure of working and connecting with Alex over the last couple of years. He's from the University of Ottawa. I know that he's deeply passionate about investing, starting to save early and just building really good savings patterns and behavior and so I'm excited to have him here. Without further ado, Alex, thank you so much for your time. I know you're really busy. I'm just hoping you can take a moment to quickly introduce yourself and tell us a little bit about you and what drives you to be so passionate about investing and how you got started.

Alex: Yeah, so my name is Alex, and over the last 18 months I've been the director of student affairs. I've also been the student affairs representative for the MDPHD cohort for the University of Ottawa. Saving has been always a big interest in mine because having gone through a lot of the schooling by my own self without financial support, it's been trying to understand the financial system to make good use of it has been an important way that I am able to support myself. Also, I think of financial management as building wealth, not money. Those are two different things. They are related, but it's something that we have to differentiate. Yeah, and over the years, I've been able to self-learn and also talk to a lot of great people like OMA Insurance and other groups that have helped me learn how to make myself financially sustainable.

Marta Hano: No, that's fantastic. You said something interesting, you're self-taught, it's sort of an endeavor that you took on yourself, you had an interest in. We were chatting a little bit earlier while we were ahead of the webinar, and just outside of medical students, I think that there's such a disadvantage in our educational system because we don't really have an opportunity to be taught how to invest basic banking life skills stuff, so not only is it absolutely crucial and important, but I want to gauge, is it something that at home you were taught really good patterns, behaviors, or is this something that you just had your own interest, and something sparked that? What was it that made you become interested and passionate about this?

Alex: For sure. It really started during my undergraduate studies at when I was at Hamilton and something that I realized is that time is probably one of the most important resources that you have. The reason why I started to realize that time is the most important resources, even adding contributions to your TFSA is so important 'cause you build wealth by trying to use time to your advantage and you invest in yourself and also you invest in something that you can't buy with just money and that's how you're able to let the money do its own work.

The reason why I initially got interested is because there's a lot of opportunities when students actually actively look for it, but because we're so concentrated on studying that, oftentimes it's not something that we have in the forefront of our thoughts, so I think having some general knowledge actually helps you get a long way in being able to help start that gap that we have between medical school and other professions where we have a long term of studying and where we start from, I would guess, I would say starting from behind, so I think time is something that we have to take advantage of to be able to meet so that we don't delay our building our own wealth.

Marta Hano: No, for sure. But I do have a question. It's difficult. For many medical students, I mean, medical school is expensive, right? I'm sure a lot of your colleagues and friends probably to go to line of credit to help pay for medical school. Is it possible to be in medical school and still save? What advice do you have in terms of how to facilitate that as a medical student?

Alex: Right. I mean, if we think of money as a big pipe, one coming in and one coming out, of course, as a medical student we have a big pipe leap going out of the trade, but less coming in, so learning how to save money is really important. But you also have to understand the actual dollar isn't the only thing that's important, that time is the biggest resource that we have, so even if you have a line of credit, there's a maximum amount that you can contribute to TFSA in a year. Of course, if you don't put that away, that's something that you lose out on. That's an opportunity cost, so definitely using your money to optimize your utility is the most important thing, so adding to your contributions on a monthly basis or weekly basics. It's about building a habit, I find. Don't just splurge because you had a tough month, but also just be able to say, "You know what? I had a tough month but here's $20 that I saved that I didn't go out to eat and back into my TFSA account or my savings account."

Marta Hano: Yeah. I mean, I'm sure for you especially and for anyone else who's on this webinar who does invest, just seeing of year over year seeing that growth is kind of really empowering, too, 'cause you're like, "Yeah, you know what? I didn't spend that $20 on Uber Eats last week and I've been able to save and invest," and you're able to see that success. Two things. Do you have any sort of advice, tips, tricks, apps that students can use to help them become more disciplined, to help them start saving or getting their head around that, and then going down the route of investing? Is there anything that you use yourself, or that you know of that works really well?

Alex: Yeah, I think for tracking my spending, I definitely use my TV. There's an app that tracks which section that you actually use the money on, transportation, food, living expenses, and just using the program to help organize that helps you think of saving money as more something that can be easily managed instead of something you have to put in an Excel line, you have to add it up. Instead of organizing it yourself, let the technology be a tool to make that happen.

Also, I find YouTube is actually quite important because there's a lot of false information on YouTube, But at the same time, watching Yahoo Finance to really just engage yourself in the world of finance. What is interest rate? What is TFSA? What is a yield curve? Those terms will ultimately be something that you need to know to be able to build your wealth. Just getting yourself slowly engaged I find is a very important step into actually making the finance terms a lot more approachable.

Marta Hano: Yeah, no, that's amazing. I guess being a little bit nosy here, but do your colleagues in your friends in medical school, do you guys talk about saving and investing, or is this, some of you do because it's a passion and interest of yours? I mean, or I'm just curious, does the conversation come up?

Alex: Yeah, it's very interesting you say that. I find that it's actually very polarizing. The individuals that are very interested in finances or the ones that invest in crypto, those kind of, "I want to get rich fast," little dicey investments. Those are the ones that you kind of want to say, "Oh." They're interesting but you want to stay away from. But at the same time, there are people who just don't care about it. Medicine is the only thing that they're passionate about and they don't need to care about money. Both of them are quite right in their approach, but I think definitely trying to find a balance, and instead of just going to the polar end, just listening to what people say I find, and have your own opinion on how you approach finance.

Marta Hano: Yeah, no, for sure. It can also be extremely intimidating too. I know personally I've spent my career in many ways in the financial sector and outside of that, I people who are very highly regarded and respected in their positions. When you talk to them about finance, they kind of shy away from that, and it's sort of the unknown, right? It's intimidating and it's almost like, "Well, I don't want to talk because I don't know enough about it, but I'm embarrassed that I don't know."

I feel like sometimes that's sort of the sentiment and it just goes back to not having necessarily the exposure or access all the time to it and the information being overwhelming and jarring and not really accessible. I think you're right, YouTube is a great resource to learn. Not everything on the internet is true, but that's okay. There's still lots of good information there.

This is a question that we often get and just, there's no right or wrong answer, it's just an opinion, and I know you're still in medical school, so you're not necessarily paying off your debt today, but for students who ask, how do you prioritize paying off student debt, or should you be saving, or both? I know you've kind of answered that question a little bit, but it does come up a lot, and so if you have any additional insight that you'd love to share with the group?

Alex: That's a tough question. I think everyone's in different shoes, right? It's hard to get one size fits all kind of approach to this, but definitely paying off high-interest aspects are very important, whether it's credit card, whether it's third-party line of credits, those are things that you definitely want to be paying off first. But interest rate, I mean, I wonder if anyone can ever predict interest rates, so trying to pay that off first versus take $6,000 a year, and put it into your TFSA, and let it grow on its own. Who knows which one will be better?

But I think it's about developing a habit of trying to understand, "You know what? This is money that I have to invest right now and this will grow in time and in 10 years I'll be thankful to myself that I bought Microsoft at $2.50 a share." It's something that you just have to develop a habit of trying to see the longer-term picture and the shorter-term picture is definitely trying to pay off those kind of high-interest rates, high-interest accounts. But I think more than anything else, it's about developing a habit, as I mentioned before. That's so important in building wealth.

Marta Hano: Yeah, no, for sure. I mean, those habits you build, but if someone wanted today, they watch this webinar, they're completely inspired, and they really want to start their trajectory into investing, and saving, where's a good place to start for them? Is there anything that they should read? Or even for us here at the OMA, what type of information can we share with students? Is it explaining what a TFSA is and how you can take advantage of that? What are things that you think would resonate with students, but what also inspire them to want to invest?

Alex: Yeah, I think what inspired me to first get started is I never, when I'm 50 or 60, I want to enjoy medicine for what it is, and for me to be able to do that, having financial stability is very important. If you're interested in making sure that you get to enjoy what you do because you don't need to worry about money, then the financial stability is the platform to build on that.

I find students quite intimidated. Let's say I spend $2,000 on investment. Because a lot of us come from undergraduate where 2,000, $3,000 is a big money, and it is, but we get intimidated by these amounts. But something we have to also take into account is an investment for yourself, and that's something that really helps you be able to... In the grand scheme of things, two, $3,000 as a future position, you have to understand it's not a huge amount of money because it's essentially an investment for yourself, and it allows you to have the financial stability to enjoy your career.

Sorry, one aspect I think something that I think to make medical students more familiar with these aspects, I think there's a lot of platform, like OMA Insurance does a lot of this, CFMS does a lot of engagement regarding financial literacy. The topic can sound a bit boring at times, but I think it's really important for students to have to force themselves to stay in one of these lectures, or these discussions to be able to say, "Oh, you know what? I agree with him or her." Incorporating that into curriculum or some kind of mandatory aspect is something I strongly urge for schools to take into account.

Marta Hano: For sure. You know what's not boring? When you have the financial stability into your retirement years and you're enjoying doing the things that you're passionate about. On that topic, I know, still in medical school and busy, but today, if you were to visualize, what does your retirement look like, or how do you want it to look like?

Alex: Yeah, I mean, I actually never want to retire. That's the funny part because I love learning and talking to patients. I love research. There's so many things that I love that I don't think even if I retire from medicine, I'll still find things that I enjoy to do. As I mentioned, that's built on the foundation that I'm able to save my money and that allows me to engage myself in activities that I really can afford to do. I think it's just about giving back to the community, right? I'm so grateful to be where I am and my retirement is working for the community to make sure that I'm paying it. I'm paying back for what I received in the past.

Marta Hano: That's amazing. I know we did a webinar a few years back, too, and we asked a similar question. I think that medical students today, that your group is so driven to give back, to be a part of the community. Retirement looks so different, the definition of retirement for you guys is very different. It's inspiring. Thank you for giving yourself to the community and being there for everyone. But before we switch gears here, any last advice, tips, tricks, anything else you want to say to your fellow peers and friends before we switch it up?

Alex: Yeah, I think definitely learning about finance can be intimidating, but there are a lot of OMA, CMA, MD Financial Management, CFMS; there's so many amazing organizations that are here for you, for medical students, so don't be afraid. If you want to start engaging, just talk to any of the organization, and they're more than happy to get you started. It's a starting point, right? Try to gather information and make your own decision about these things. Always, if you're looking for a lot of discounts, I always use OMA Insurance as well as other selfless advertisement there. There's so many different ways that you can cut back on your cost of living, so do take advantage of those.

Marta Hano: For sure. No, I appreciate that. I do a lot of insurance talks and I always say to students, residents, I always understand those insurance applications are intimidating. There's lots of insurance jargon on there. I always say to everyone, I'm like, "Connect with us, even to help you read through the application." Same goes for investing and savings, reach out to your community, and if you're not ready yet to take the plunge, but you have questions, start to have that conversation, right? I think it's just sort of getting past this intimidation factor and asking questions. There's no such thing as a bad question. I think it creates a lot of opportunity for growth and knowledge and to get on that track to saving and investing.

For those of you who maybe you're inspired by today's conversation and you're eager to start exploring what options are available to you, I encourage you to look at the association here. We have something known as the Advantages Retirement Plan. This is something that physicians have been asking for quite some time. We create and develop this because physicians don't have access to a pension plan and you wanted an opportunity to save in a safe space and invest, and so in turn, we were able to listen and create this program.

A few things that stick out that I want to draw your attention to is if you are interested, you can start contributing as little as $50 a month. There's no monthly fee for medical students for your entire career as a medical student, so if you enroll today in your first year, you get your four years covered, no monthly fees, your McMaster, it's the three years. But if this is something that piques your interest, I encourage you to take a look at our website. There's lots of information there.

You can honestly go to OMA Insurance, you'll find the Advantages Retirement Savings plan. Here there's just a quick video. I mean, there's a calculator on there that you can plug in your details, and it gives you a really good idea of what your savings and investing trajectory will look like based on your information shared. It's also very easy to use. It's a platform that's been developed as a self-serve model, so you can have access to it at any point in time, so there's full transparency. You can go in, you can make changes. That's something that's available.

I know Alex talked at the beginning of our conversation today, but the power of time, and that's definitely something that is extremely true, and so this is just a snippet out of a document that I'm going to share with all of you in a moment, and I can also send as a follow-up, but it's a really good insight into starting to save early and how you could increase your savings by doing that through the power of compounding interest and so forth.

Then finally, just going back to this conversation at the end of the day here at OMA, we're a not-for-profit association. All of our advisors are non-commissioned, so I encourage you to put us to work, connect with us if you have any questions, if you want us to walk you through the platform, or have conversations, and we're happy to do so. For this program specifically, we have two dedicated ARP specialists. ARP is the acronym for the program. I know that they would be happy to connect with any of you. Even if you're not ready to start investing, but just like I said, you just want to explore and connect, please do so. Again, there's an entire website, OMA Insurance, that can walk you through this program.

I do want to say thank you so much for everyone who is able to join us today. I know it's a busy time of the year. I was talking with Alex earlier and I was just saying that I have some insight into your exam schedules across the schools here in Ontario and I realize it's busy and there's lots of stuff going on, so we do appreciate you taking time to be here with us today. I also want to give a big thank you to our guest speaker, Alex. It's been great connecting with you as well. Thank you so much for your time and all the best on your financial half, but also, more importantly, for in medical school and in clerkship this year.

Alex: Thank you very much for having me and I'm always glad that you're helping with the education of medical students.

Marta Hano: Again, thanks, everyone, and I look forward to seeing you all in the near future. Take care, everyone.

Speaker 2: The Financial Checkup Series is producing collaboration with OMA Insurance and Commonwealth, the administration and technology partner for the Advantages Retirement Plan.