Financial Planner AND Real Estate Investor with Meghan Chomut

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Podcast Transcription

Dave Debeau [00:00:09] Everyone is Dave Debeau with another episode of the Property Profits Real Estate podcast today, zooming in from lovely Thunder Bay, Ontario. We’ve got Meagan Chomut. Megan, how are you doing today? Welcome to the podcast.

Meghan Chomut [00:00:23] Thank you so much for having me. I’m excited to have a chat with you.

Dave Debeau [00:00:26] I’m excited to talk with you as well, because you have a very, very interesting background. In the fact that you are a real estate entrepreneur, hence why you’re on the show, but you’re also a financial planner and you’re also a mom and you got how many kids you got for your kids. Holy smokes are you’re a busy mom, entrepreneur, investor, the whole bit. And Megan, I have to admit something to you that you might not like, and that is that I’ve had a good time over the years bashing financial planners left, right and center, because I’m not a big fan of most of the stuff that they sell to the general public. So the fact that you’re a combination of a financial planner and you get it around real estate is fascinating to me because you’re like one of the first ones I’ve met. So I apologize ahead of time if I if I have a jab at your industry a little bit.

Meghan Chomut [00:01:32] No, you go right ahead. I can take it. And I think that you you’re right in having concerns about the industry. I have them to.

Dave Debeau [00:01:40] Well, believe it or not, way back when when I first came back to Canada after living overseas for like 14 years, I went through all the courses to become a financial planner. I didn’t roar through with raging color, but I passed I passed the the financial planning course. I’ve got my little certificate somewhere. But when I got to the whole thing about mutual funds, because my brother had been a financial planner for many, many years, I got the whole thing about mutual funds. It’s just like, yeah, I don’t I’m not big. I don’t like this very much. I don’t think I want to be selling these. And then real estate just kind of came along and seemed to make a lot more sense. So tell us a little bit about your journey. How did you. Was it financial planning first, then real estate investing? What what happened then? Tell us a little bit about your background and how you discovered real estate.

Meghan Chomut [00:02:29] Yes. So I I’ve been in the finance industry since the very beginning of my career. So I went to university and I studied business and finance. And when I first got out of university, I actually went and worked overseas and I worked at the Royal Bank of Scotland. And that’s kind of where it opened my eyes that I didn’t want my clients to be other banks or institutions, which is what I was doing in Scotland. My clients were the branches. I wanted to work with people I wanted to work with the same families, the same people, and help them navigate the financial picture of their lives. So when I moved back home, I started doing the CFP thing. I got a job with a small boutique investment firm and I was actually on track for partnerships, so I really enjoyed it. We had a different model in terms of how the commissions were paid, but it was still very similar to you selling mutual fund and you get a portion back. And as I was doing my own financial planning, I was like, how am I going to retire though? So like you said, I live in Thunder Bay. It’s very cold here. I, in retirement, wanted to be a snowbird. So working at the financial institution, I didn’t have a pension, so I had to create my own pension with tax free savings in our space. And as I’m crunching the numbers, I’m thinking, how am I ever going to get there, especially with my partnership, you know, making that investment into the firm and acquiring that business. And I thought there’s got to be another way. And I mean, like most people I’ve been watching, I’m going to date myself here. But I watched HDTV. I loved trading spaces and income, property and all of those shows, and I thought that might be my missing piece. So when I had the idea, I actually went to the partners at the firm and I mentioned my plans and all of them told me it was a bad idea. Of course. Yeah. And they told me things like, it’s very risky. Tenants are going to wreck your place. You know, they’re not going to pay her you rent. It just doesn’t make it’s not a good move for you. And I thought, OK, you know, like, I really value their opinion, but I did it anyways. And then when I ran into my first issue, I felt like I didn’t have anybody to ask, which was my biggest problem. So that’s kind of where I had to use my background in the finance space. But I also had to expand my resources and say, OK, who else can I ask who’s ten steps ahead of me? Because it was just it was it’s a different piece that I really it made sense numbers wise. If I could pick this place off by the time I retire, it will fund my snowbird goal. But to get there, I had to I needed support. So that’s kind of where I was doing all the research into the real estate and actually why I started my own business, because I needed a me. I needed somebody to say when I got a phone call from a tenant or ran into an issue, my immediate instinct was, oh, let’s just sell it. Well, it’s such a headache. And the normal human mom friend, landlord person in me was like, this is too much work. But then the CFP, the financial adviser to me was like, but the numbers make sense. So it’s kind of blending those two things and thing. But why did you buy the property and does it still meet that goal? So why would you sell it? Can you sell it and still meet that goal? If so, then maybe it does make sense to sell it, because one of the things I didn’t realize that HDTV doesn’t show you is that when you are income property owner, you have just purchased a part time job. Whether you have help or not. So that’s kind of a little bit about my

Dave Debeau [00:07:12] background, that is very, very cool. So Megan, where tell me, how does your business work now? So you’ve branched out. Have you got your own financial planning company now?

Meghan Chomut [00:07:24] Yeah. So what I did when I when I had my third baby, I realized I could in terms of the balance of career life, my capacity for all those things, I just couldn’t keep going in the same track I was going. So I started to look at my other options. So my practice actually is fee only. So all I do is the planning. I don’t sell any products. I one hundred percent certain, just like if somebody needs insurance or needs an accountant to review things, a lawyer, I absolutely recommend those things. And I am happy to recommend people that I like and trust. But I don’t get compensated in any way for that so that the clients that I’m working with can feel confident that all of my recommendations are in their best interest and not because I’m going to be compensated in some fashion for recommending something that made it so.

Dave Debeau [00:08:23] So just so people kind of understand the difference. How is the the average or the typical financial planner compensated?

Meghan Chomut [00:08:33] So the way that I previously was compensated with something called an n e r, which if you buy a mutual fund, there is this rate that you will be told when you purchase it called the M e r, and that’s how the advisors are paid. So, for example, you go on to your online banking and pick one of the investments and one of your hours fees or taxes, pick one of the mutual funds. You’ll see the menar, let’s say for easy numbers sake, it’s two percent. So the idea there is when that mutual fund performs. Let’s say it gets eight percent that year, well, your account will actually grow by six percent because they’re going to take their two percent first. Right. If, for example, they’ve gone negative, let’s say it’s a negative four percent rate of return for that year, your account will be negative six percent because they always pay themselves first and always that are so advised.

Dave Debeau [00:09:35] A number in Canada has the highest in the world.

Meghan Chomut [00:09:38] Yeah. And I’m finding that a lot of my clients that when I’m reviewing some of their statements is they’re paying these high rates with whatever institution they’re with, but they’re working with me. So why are they getting that? They’re paying for that service anyways, that two percent. Even when I stopped working at the institution, I was at my let’s say, for example, my employers were two percent. They were all held there. And I was getting service from my partners in terms of creating a financial plan, keeping track, giving me advice that they could. But even after I moved to my own practice, I wasn’t getting any of the advice, but I was still paying thousands of dollars a year for what? So it’d be one thing if I was getting advice and accountability and direction and it was. Yeah, and great returns because that was the other thing is if they were reviewing my portfolio regularly, making sure that everything was in line, then I feel like I had no problem paying two percent. But if I’m not getting service, I’m not getting advice or accountability, then why pay the two percent if I don’t have to.

Dave Debeau [00:10:58] Yeah. Makes sense.

Meghan Chomut [00:10:59] And that it sounds like such a small number to build.

Dave Debeau [00:11:02] Huge.

Meghan Chomut [00:11:02] It’s huge. Like that could add up for my I’m just a normal family. I got kids, I got daycare bills, I got my husband has a job like we’re just a normal family. But I was paying thousands of dollars in fees. If I could have saved that thought, let’s say it was two thousand dollars, I could have saved that, not had to pay it. It would have grown by every year. So every year would be a little bit a little bit more. So it’s it’s the number itself looks small, two percent, but it definitely adds up

Dave Debeau [00:11:40] or adds up. Huge. Huge. I’ve seen the graphs. I’ve seen how it works, you know, what’s the market going up and down. And it’s never like this. And when it goes negative, you get whacked even more and it takes a lot longer to recuperate and don’t go over on that. But interesting. So so basically right now you’re a consultant for lack of a better term. You’re a financial consultant. You charge a fee, you look over people’s portfolios, you help them. You give them objective advice because you’re not getting compensated by a back end on any mutual funds that you’re selling them. So where do you prefer the average person? What do you kind of suggest for them or a different question? Most of our viewers here are into real estate investing. So if you’re a real estate entrepreneur, where would you say or what would you say people should consider as additional or alternative investments in addition to their real estate investment portfolio?

Meghan Chomut [00:12:43] That’s a good question. And I think it does depend on the structure of their family, their goals also like the stage of life, their end, what’s their age. But I see a lot of people under using their tax free savings accounts, and I think people don’t understand that anything can go in those boxes. So a tax free savings account is just a box. You can put whatever you want in it, whether it’s just cash, just savings. Maybe you want to buy some stocks, maybe you do want to buy some low fee mutual funds index investing is really big right now, so it’s just picking it. Count that service is your best. And for real estate investors, I do think I would lean more towards tax free savings accounts as opposed to ask fees because there are some strategies with using ask should you sell your rental property and try to reduce the taxes there? But it kind of I mean, I’m so annoying when I say it depends, but I do see that tax free savings accounts are really underused and that misunderstanding that literally anything can go in them.

Dave Debeau [00:13:53] So are you are you a proponent now that you’re in the in the fee based side of the business? Are you a proponent of self directed RRSP accounts, self directed TFSA accounts? Are you encouraging people to do that kind of thing on?

Meghan Chomut [00:14:10] Most of the real estate investors that I work with are already set up with those. I feel like as a real estate investor, there’s almost this control hormone in us where that self directed just came naturally. If you were offered the two options, you automatically picked it anyways. But then there’s some that, you know, they prefer working with somebody or getting direction from some sort of advisor at the branch or whatever. So I personally use the self directed, but it’s kind of on your preference and your comfort level. So maybe starting with that one. And then as you get more and more familiar with how it all works, moving over to one isn’t isn’t a big deal

Dave Debeau [00:14:58] and making time flies when you’re having fun. If people want to find out more about you and what you’re up to and the services that you provide, what should they do?

Meghan Chomut [00:15:08] Absolutely. I’m on every social media platform. Nagan CFP. My favorite is Instagram. That’s where I share all of my numbers. I do all the renovations. Well, not me personally, but me and my husband do all the renovations that our rentals like, share all the numbers, what the before and afters and why we decided that that was a return on investment for our portfolio.

Dave Debeau [00:15:34] Some very good. Megan, thank you very much. Has been a lot of fun.

Meghan Chomut [00:15:37] OK, thanks, Steve.

Dave Debeau [00:15:39] All right. All right. Take care. And we will talk to you on the next episode. Bye bye. Well, hey there. Thanks for tuning into the Property Profits podcast. If you like this episode, that’s great. Please go ahead and subscribe on iTunes. Give us a good review. That would be awesome. I appreciate that. And if you’re looking to attract investors and raise capital for your deals, that may invite you to get a complimentary copy of my newest book. Right back there is the money partner formula. You got a PDF version at Investor Attraction book, dot com again, investor attraction book, dot com ticker.

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