Michael V. Smith
Occupation: Writer, filmmaker and associate professor of creative writing, University of British Columbia, Okanagan campus. Smith is the author of six books and has created or co-created 15 short films.
Earnings: Annual salary of $138,000; about $4,000 per year from creative work; $10,000 to $12,000 in rental income
City: Kelowna, B.C.
Assets and liabilities: My husband, Francis, and I bought our house about four years ago for $581,000. It’s now worth $750,000 and we owe roughly $460,000 on the mortgage. I have about $20,000 in an RRSP, invested in mutual funds, and $1,000 in a TFSA, as well as another $20,000 in savings. My pension is currently valued at about $215,000. My car loan is $7,000. I recently took four months off to work on a novel and maxed out my line of credit to the tune of $18,000.
I’d like to retire from teaching at age 60. My goal is to have a comfortable financial basis from which to write full time.
Divide and conquer
I have six or seven little savings accounts at various institutions, some of which are locked in. Each payday, I automatically transfer money into the various accounts, as well as an extra $100 to the mortgage and $300 into my RRSP. It’s one of my ways to save without really noticing that I’m saving. Periodically, we’ll use money from the savings accounts to pay off a debt that has a higher interest rate than I’m earning. I like the idea of diversifying where and how I save my money because I don’t trust any system to be foolproof. And I like to feel that I have less money than I actually do because then I spend less. I’d rather be surprised by how much money I have than by how much I owe.
Marriage and money
Money is the single biggest stressor in my relationship. The majority of arguments that my husband and I have are about money; we have vastly different attitudes toward it. I like to penny-pinch so I can buy bigger-ticket items later. He thinks that’s a stupid strategy. But he doesn’t have any other strategy. I have retirement in my sights and he has no retirement strategy whatsoever — he’s nine years younger than me and it’s not on his radar. Recently we had a serious conversation about that. I said to him, “If you would like me to live my best life, then you need to get a retirement plan, because I don’t want to be the person financially responsible for both our retirements.”
What can an advisor do for us?
We just met with a financial planner for the first time ever. It’s taken us years to get to this point. To find an advisor, I asked people on Facebook for recommendations within the Okanagan. We went with a guy who is not attached to a bank and who came recommended by people we like. It was a brief, introductory meeting, and a more detailed one will follow. I’m hoping to get wise advice on how to best manage our money: for example, do we invest more in RRSPs, or pay down the mortgage faster?
Money used to be enormously stressful because I didn’t have much of it. It made me panic. Before I got this job, I had to give myself permission not to look at prices when I bought food, because I needed not to starve myself. When my income doubled, I had to teach myself how to not freak out about money. I’ve spent the last 11 years learning how to do that. Now I need the pendulum to tip back in the other direction so that I can reach my retirement goals.
Up close and personal
Growing up, my family was poor. I’ve had at least a part-time job since I was 10, working the door at hockey games in my hometown of Cornwall, Ont. I put myself through university and graduate school through loans and part-time jobs. After graduating, I spent a decade writing, making films and working in arts administration. I see that time as an investment in my creative future: I got my job at UBC based on that body of work. When I became a professor in 2008, my salary more than doubled, from $33,000 to $68,000, and it has doubled again since then. That’s crazy to me.