CIBC wealth expert Jamie Golombek advises millennials to set goals before seeing a financial adviser

One of Canada’s better-known commentators on personal finance is Jamie Golombek. The managing director of tax and estate planning at CIBC pops up in lots of national media outlets to discuss his specialty.

He also teaches an MBA course on personal finance at the Schulich School of Business at Toronto’s York University.

So what does he recommend to millennials in his classes when they ask for a book recommendation?

“The one thing I just tell everyone to read, of course, is The Wealthy Barber,” Golombek told the Straight by phone. “I think it’s the best book ever written in the history of personal finance.”

Author David Chilton’s book offers a commonsense guide to financial planning. Released in 1989, it remained on the bestseller list for what seemed like forever.

Golombek said that Chilton’s advice to save 10 percent of one’s paycheque is probably sufficient for any young person to get by for the rest of their lives.

Moreover, The Wealthy Barber is written in a nontechnical, folksy manner, dishing out wisdom in the form of a fable.

The CIBC executive is aware that some millennials are caught up in chasing the hottest stocks, cryptocurrencies, or real-estate deals. Others see their friends doing this and wonder if they should get in on the action.

To them, Golombek offered this advice: “Speak to a financial adviser.”

But before the first meeting, he recommended that young people first think about their objectives rather than the latest market tip on BNN Bloomberg.

“Is your goal to buy a home? To buy a condo? To move out of your parents’ home? To pay off your student debt? To buy a car? Go on vacation? Or is it saving for retirement?”

Credit card debt comes before stocks

After figuring out the most important goals, millennials then have to figure out how to get there. And that involves not only looking at income sources but also expense sources.

“Organize that all together and come up with an idea of where your money’s going and how much is left over, if anything, at the end of the month—maybe two, three months at a time,” Golombek recommended.

He believes these steps are far more important than jumping into a stock based on a recommendation on a financial program on TV.

“If you have a credit card [debt], why would you even invest in the stock market?” he asked. “You’re not going to get a guaranteed 20 percent rate of return.”

In addition, Golombek said, it’s important for people starting down the financial-planning road to think about how much risk they’re willing to take.

Another important consideration is making a list of one’s assets. There are depreciating assets, like a car or a bicycle, and those that appreciate over time, like a condo or investments in financial instruments.

Golombek is a big believer in reading about personal finance, and not just The Wealthy Barber. There's no shortage of blogs targeted at young people, such as Young & Thrifty and JessicaMoorhouse.com.

"I say read everything—absolutely read everything," Golomobek said. 

That's because he thinks there are many greate ideas about how to save money, maximize cash flow, and obtaining the best rates on mortgages and savings.

However, Golombek cautioned people to also realize that not everything on the blogs is necessarily applicable to their lives.

Then he noted that when people want to improve themselves, they often hire a professional. That can apply to learning how to play tennis or the guitar.

He pointed out that people also hire personal trainers to become physically fit. To him, it’s no different with financial planning.

“There’s no obligation,” Golombek said. “There’s no cost. Sit down and talk to them, and share with them some of the ideas you find online and get some validation.

“Because if you’re working with an experienced adviser who’s been doing this for 10, 20, 30 years, they’ve seen every scenario,” he continued. “They’ve been around through up markets and down markets, through high interest rates and low interest rates. They’ve seen housing crises. They’ve seen it all. That person will be able to guide you.”