Almost 30 years ago, Maya Corbic and her family moved to Canada from war-torn Bosnia. Today, Ms. Corbic is a certified public accountant and author of a book called Piggy Banks to Stocks: The Ultimate Guide for Young Investors. Ms. Corbic faced some financial challenges after arriving in Canada, and she’s keen to use her experience to help other immigrants. Here’s a e-mail Q&A in which Ms. Corbic shares what she’s learned:
Q: Maya, can you tell us a bit about your background as an immigrant to Canada and how you came to write your book?
A: My family immigrated to Canada from war-torn Bosnia when I was fifteen, arriving with only $50 and two suitcases. We faced challenges, living in government shelters and relying on welfare until my parents learned English and found jobs. I had two part-time jobs in high school to pay for bus tickets, hygiene products, etc. I was lucky that we had a roof over our heads and food. However, even though my mom cooked and stretched the dollar as much as she could, sometimes she would go to the food bank.
Transitioning from Bosnia, where the economy was socialist, to Canada’s capitalist system was a significant adjustment. I saw opportunities for wealth-building in Canada and became passionate about personal finance. Despite my interest, investing was intimidating, even after reading extensively on the subject.
When I wrote my book, I wanted everyone to feel confident while reading it and learn the basics of investing. I wanted them to feel like, ‘OK. I got this. I can understand how investing works.’ I purposely wrote it in a language that a 10-year-old could understand. The book looks like a colourful kid’s book because I did not want it to intimidate my readers. Many parents have shared with me that they have learned these investing concepts alongside their children because they did not learn them from their parents or school.
Q: What’s been your biggest personal finance challenge in Canada?
A: My biggest personal finance challenge in Canada was during our initial years after immigrating. Having no network and barely speaking English, it was difficult to get a job or an opportunity to prove myself and what I was truly capable of. It was frustrating to see job opportunities that asked for experience, yet no one was willing to take a chance on me to allow me to obtain that experience.
Q: Having a chequing account is crucial for participating in the economy – how do you pick a bank when you’re new to Canada?
A: The largest five Canadian banks have similar terms for chequing accounts, so I suggest selecting a bank close to your home. Many new immigrants do not have cars to drive to the bank, and paying for public transportation can add up.
Q: One of the personal finance trends of the past few years is the growing importance of credit scores. What’s the quickest path for a newcomer to build a good credit score?
A: The quickest path for newcomers to build a good credit score is obtaining a credit card with a modest limit – $500, for example. They should use the card for everyday expenses, paying the balance in full each month to avoid interest charges. When they are able to increase their credit limit, they should do so while continuing to pay it off in full each month. Additionally, they should ensure that all their other bills (cellphone, utilities, etc.) are paid on time.
Q: The federal government has proposed that rent payments be used to help people establish good credit scores. How much will immigrants benefit from this move?
A: Immigrants will benefit immensely from this as most of them are unable to enter the housing market when they first arrive. The ability to build credit through timely rent payments provides them a valuable opportunity to establish strong credit profiles and obtain home ownership.
Q: What advice do you have for newcomers to Canada who want to get into the housing market?
A: I recommend focusing on two key aspects: building their credit scores and increasing their income. It’s crucial not to overextend by purchasing a larger house than necessary. Additionally, I suggest they explore house-hacking opportunities, such as renting out a portion of the home (e.g., basement) to supplement or accelerate mortgage payments.
Are you new to Canada? Looking for more financial help? Sign up for The Globe’s Newcomer’s Guide to Finances in Canada, a straight-talking, five-part e-mail course with tips from Globe reporter Erica Alini about saving, investing and much more.
Kids and allowances
Globe reporter Salmaan Farooqui is writing about how parents approach allowance for their kids. How do you decide how much money to give them? Is allowance conditional on completing chores? Do you give cash or deposit money into a bank account? Or, do you not give allowance at all? Salmaan is looking to interview parents about those questions, and any other opinions they may have on the topic of allowance. Please reach out to him directly at sfarooqui@globeandmail.com
Subscribe to Carrick on Money
Are you reading this newsletter on the web or did someone forward the e-mail version to you? If so, you can sign up for Carrick on Money here.
Rob’s personal finance reading list
Bigger house, bigger car
A critical take on the idea that to be a good parent, you need to upgrade your house, car and more.
The missing millennial middle class
A U.S. study finds that there’s a bigger wealth gap among millennials than other generations. Introducing the millennial elite, richer than boomers were at the same stage of life. We covered the plight of the millennial middle class in an episode of our Stress Test personal finance podcast. In a Globe opinion piece from 2022, the author argues that there is no millennial middle class.
The cost of car repairs
The 10 cheapest vehicle brands to maintain over 10 years. Now, for the 10 most expensive.
The goal is to get to zero
All about zero-based budgeting, where you continually tweak your spending so that your income minus expenses like household spending, saving and investing equals zero. The idea is that if you make sure you have essential costs covered, the rest is yours to fully spend.
Ask Rob
Q: How and when are the management expenses ratios from an exchange-traded fund actually charged to the investors?
A: The management expense ratio, or MER, of an ETF or mutual fund collects almost all the costs of running the fund and expresses them as a percentage of assets. MERs are a definitive way to compare the cost of owning an ETF or mutual fund. Fund returns reported to investors are shown on an after-fee basis, which means there is no direct interaction between investors and fund companies collecting their fees. It’s all happening continuously in the background. Whatever you see in your account is after fees.
Do you have a question for me? Send it my way. Sorry I can't answer every one personally. Questions and answers are edited for length and clarity.
Paycheque profile
Are you a Canadian under the age of 45? Struggling with debt, saving, investing, earning, renting or home ownership? Are you open to talking about your personal money situation? The Globe is looking to profile young Canadians about how they spend their monthly paycheques for our Paycheque Profile series. Like this one about a Toronto HR worker making $80,000 who feels she still needs her bartending side gig, which brings in $20,000. Or this one about a vet technician, 33, who is scraping by in a small city Ontario house her parents paid for: ‘It’s a lot of guilt,’ she says. Or this profile of a tax accountant living in Scarborough who despite his high income, doesn’t own a car and rents a townhouse with his girlfriend.
E-mail Globe editor Roma Luciw rluciw@globeandmail.com and we could contact you for a profile.
Tools and guides
A survey of providers of travel medical insurance for seniors.
In the social sphere
Social Media: A contrarian take from a financial adviser on the backlash to the increase in capital gains taxes.
Watch: How to build and protect your credit score.
Money-Free Zone: Several years ago, I walked into a record store on Queen Street West in Toronto and heard the album Bend Beyond by Woods playing. I liked the mellow psychedelic vibe and bought it on the spot. Woods has a new EP out with a song I’m enjoying called Lay With Luck.
More PF from The Globe
- The 2024 Globe and Mail ETF Buyers Guide, Part Five: Canadian dividend ETFs
- Own a cottage or investment property? Here’s how to navigate the new capital gains tax changes
- Having no kids is a financial win, but what happens when you get old?
- You’re no longer middle-class if you own a cottage or investment property
More Rob Carrick and money coverage
Subscribe to Stress Test on Apple podcasts or Spotify. For more money stories, follow me on Instagram and Twitter, and join the discussion on my Facebook page. Millennial readers, join our Gen Y Money Facebook group.
Even more coverage from Rob Carrick:
- 🎧 Catch up on Stress Test: Why millennials and Gen Z are Alberta-bound for a more affordable life • Rising interest rates brought pain for new homeowners – and opportunity for house hunters • Why more Canadians are choosing to be child-free or delay parenthood • Love in the time of inflation: How to manage rising costs when dating • You're not bad at money – you're suffering from money shame • Retirement might look different for Gen Z and millennials. Here's how to plan for it • Recession-beating tips for the job market, housing, investing and the cost of life • Is the middle class dead for millennials and Gen Z?
- ✔️ The housing file: A house isn’t special. Get your head straight about the reality of home ownership • The good, the sad and the unaffordable: Saving for a home down payment in Canada’s big cities • Property taxes are popping in some cities – how worried should you be about other tax hikes? • Our other real-estate problem – people have too much wealth tied up in houses • Borrowers and savers, here’s how to time the eventual rollback of interest rates
- 📈 Investing: Canada's top digital broker is TD Direct Investing, with an assist from the TD Easy Trade app • 2023 Globe and Mail ETF buyer's guide part one: Canadian equity ETFs • For the ultimate in cheap investing, check out the Freedom .08 ETF Portfolio • Yes, there is risk in Canadian bank deposits for the unwary and complacent • CDIC covers bank deposits, but who protects your investments if your broker goes bust? • Answers to your questions about the low-risk ETF paying almost 5% • Happy fifth birthday to one of the all-time best investing products for everyday people • An investing strategy that wins cleanly over the long term by outperforming in bad years like 2022
- 💰 Your money: Mortgage holders, savers and GIC investors, it’s time to change your thinking on interest rates • How much debt is each generation of Canadians carrying, and how do you compare? • For the sake of their financial futures, young people should leave Toronto and Vancouver • This practical new spin on a savings account might just peel you away from your big bank • Rental fraud grows amid rise in fake, falsified tenant applications • Are Canadians worse off financially now than in the 1980s? • From groceries to auto loans, here’s how much more it costs to live right now • When saving for retirement, should you change your asset mix over the course of your career? • Do retirement income needs always rise alongside inflation? Not necessarily • When the bank suggests you lock in your variable rate mortgage, it has an angle
How do you approach allowances for your kids?
Parents, we want to know how you manage giving out allowances for your children. How do you decide how much money to give them? Is allowance conditional on completing chores? Do you give cash or deposit money into a bank account? Or, do you not give allowance at all? Please share your experience and strategy for allowances, or reach out directly to Globe reporter Salmaan Farooqui at sfarooqui@globeandmail.com.
Rob Carrick