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September 5, 2008
Learning about money
At Business Club, Zlotnik talks on planning.
BAILA LAZARUS
When Lynne Zlotnik puts an overhead projection up on screen with the title of her lecture – Money Talks: "Learn the Language" – you know you're going to get some solid advice.
The title of the lecture reflects Zlotnik's no-nonsense approach to dealing with financial issues, and her practical focus that has made her an in-demand speaker in the Lower Mainland.
On this night, Zlotnik was addressing a crowd of about 60 business people who had dropped into King David High School to participate in the Ohel Ya'akov Community Kollel's Business Club. Though many were in banking or professional fields or were entrepreneurs, Zlotnik's address was broad enough for anyone to understand and use for its valuable tips.
Zlotnik started by explaining that learning the language of money was all about confronting fears around money – the fear of never being able to afford a house or not having enough money put away for old age, for example.
The fear is real, and we never really learn in school how to deal with it, said Zlotnik. We never really get taught the two little words that we need to know: "cash flow."
"The goal is to be financially free," said Zlotnik. "When you're older, you want to have a passive income." That income can come from real estate, a managed portfolio or a business.
Throughout her talk, Zlotnik reiterated that it doesn't take a huge income to have enough to put away for retirement. Investing intelligently is more critical. "The money you keep is much more important than the money you make," she said.
In setting up your planning for the future, spend one hour a month taking care of important files, such as tax returns, credit card spending, investment accounts. Get the "global positioning" on your finances, said Zlotnik, expressing her surprise at how few people actually have a will; or how many are wasting money by throwing it away on the interest on credit card debt.
"Credit card debt will kill your options. Paying interest on a credit card debt is a missed opportunity to be able to invest," said Zlotnik. "We don't look at how we carelessly throw money away. Conscious spending will improve your life."
In addition to her own suggestions, Zlotnik handed out a reading list of such familiar names as Thomas Stanley (Millionaire Next Door), David Bach (Automatic Millionaire, Start Late Finish Rich) and Thomas Friedman (The World is Flat). She elaborated on what each text had to offer and opined that we didn't start to learn this material as teenagers.
"You should think about retirement when you're 18," she said. "Are you going to be working forever? Are you going to be buying cat food when you're older?"
While she wouldn't give specific investment advice, Zlotnik did offer some general guidelines – she saw an eight per cent return as being a typically good rate of return; 12 per cent offered by real estate trusts might be better, but they hold a lot of risk, so you have to tread carefully in that area; doing research on emerging markets is a good way to figure out where to put your money, but enlist the help of a broker to get the full picture; and always remember billionaire investor Warren Buffet's two rules:
1) Never lose your principle; and
2) Never lose your principle.
Baila Lazarus is a freelance writer, photographer and illustrator living in Vancouver. Her work can be seen at www.orchiddesigns.net.
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