By Sheryl Smolkin

 

Hi, today I’m kicking off the 2015 SavewithSPP.com expert podcast interview series. I’m delighted that Gail Vaz-Oxlade has made time in her busy schedule to talk us.

Gayle is truly Canada’s money maven. She has worked in the financial services arena for 25 years as a writer, reality-television host, public speaker and corporate spokesperson. Over the last several decades she has published 15 personal finance books, four of which were on the best-seller list at the same time in January 2012.

She has also filmed almost 200 episodes of her television programs, Til Debt Do Us Part, Princess and Money Moron. In addition, she regularly blogs and answers questions from readers on gailvazoxlade.com.

But, what I’d like to talk to her about today is mymoneymychoices.com, an online financial literacy program she founded just over a year ago.

Welcome Gayle.

Hi, thanks for having me.

Q: So Gayle, how do you define financial literacy? How big an issue is lack of financial literacy in this country? 
A: The issue itself is huge because most people already know most of what they need to know but aren’t doing it.

Q: You describe mymoneymychoices.com as Canada’s first comprehensive financial literacy program designed to raise the money IQ of Canadians by drawing on community support, a solid financial roadmap and gamification for reinforcement. How did you come up with the concept?
A: I was actually between television shows. I had a big whack of time off and I read about an organization in the U.S. that that used positive peer pressure in order to change behavior. So I laid out this roadmap of everything you need to do in the order I think you need to do it in, to build a rock solid financial foundation.

Q: What are your goals for the program?
A: Really what I want people to do is stop saying “I don’t know where to start.” If you go to mymoneymychoices.com and register – it’s absolutely free – and you just take the steps as they are given to you in the program, then you will work your way to being financially healthy. I want people to come together in communities and support each other, teach each other and work together in order to increase their community’s financial literacy. 

Q: You say the first level is the hardest. Why?
A: In the first level, which I say has all the heavy lifting; you have to do your six-month spending analysis. You also create a debt repayment plan to get your consumer debt paid off in 3 years or less. You have to build a budget and you do your first net worth statement.  And very often I find that people don’t understand why the pieces are necessary. I say to people all the time, if you do the net worth statement today and it looks really bleak, it’s irrelevant, because it’s not where you are today. It’s how different it will be when you do it in six months for the second time.

Q: Do you have any sponsors or partners? Or, are you solely responsible for the development and maintenance costs of the site?
A: I would love sponsors to support us, but the thing is that, whenever you affiliate with anyone, typically what happens is they then have some say in what you do. And so I bore the costs of the development of the site myself and I set up the My Money My Choices Foundation, where I’m taking donations. In late 2014 I ran an Indiegogo campaign and raised $3,785.

Q: Is My Money My Choices, aimed at any particular age or demographic?
A: No it’s not. The reality is it doesn’t matter if you are 23 or 43. If you’re not aware of where your money is going then that’s the first place you have to start. If you’ve done all those things already you can just pick through those on the program until you get to the level where you are implementing something new for yourself. For example, it might be the level in which you investigate disability insurance and life insurance

Q: Give me briefly how the program works. I see there is a leader board and different prizes and levels.
A: The prizes are really icons. They are what you can use to show the world where you are and how you are progressing through the steps.

Q: What is the community element? From what I read on the website, you can’t do this on your own. You’ve got to be part of a tribe or a team.
A: You can do it on your own because anyone can use the roadmap. However if you are working within a tribe then what happens is you benefit from the support that comes along with that. When you have a whole community cheering you on, or kicking your butt depending on what you need that day, you’re much more likely to get back on the horse if you get bucked off.  That’s part of the purpose of the community.

The other part is that some people within a community are very good at some things and other people are very good at something else. And, when you bring it all together you create cohesion, together with process, together with management skills. When you bring all those things together you make it much stronger than each individual trying to do all the pieces alone.

Q: What role does the watcher play?
A: The watcher is the first guy to do the teaching. Typically the watcher is someone who has some money expertise whether it is official or not. And that person’s job is to help the first few people go through level one, and then guide those same people through the various other levels and encourage them to bring more people into the tribe so that they can become teachers and mentors to their own protégés. Ultimately, the watcher will manage the whole process and say “okay, this is how we’re doing as a community.”

Q: If a group of people want to get together and participate in your game on your website, do they have to have a watcher or does someone become a watcher because they are the first one who gets through the levels?
A: I’ll give you an example. I was invited to speak to a church community in Thornhill a few weeks ago, and I agreed as long as they set up a My Money My Choices tribe as part of the process. A gentleman named Emilio who is well along the way because he’s been following me for years became the watcher for that church community. He set up a Facebook page so people could communicate with each other. He made sure that there were books in the library so that the resources were available if people needed help making a budget or doing a spending analysis. He did all the administrative and support stuff to make sure that as people started coming into the program they didn’t get sidelined by small issues.

Q: That’s really cool. So it’s 23 levels. Can you give me some examples of what participants learn as they progress through the various levels?
A: Sure. The very first level, as I said is the hard one because what’s it’s laying the ground work for everything else. Once you’ve done level one you move on up to the point where you are putting process in place. You’re using a spending journal. You’re posting to your budget every single month. You know where your money is going. As you move up you also start allocating money to savings. You get your debt paid off. Ultimately, the reason there are 23 steps is because I don’t expect people to go from 0 to 100 in 12.2 seconds. It takes time.

Q: So you say you’ve had 8,000 people register on the website. How many of them have progressed through all the levels?
A: Nobody yet.  Because at the last level you are maximizing your RRSP, you have paid off your mortgage, you are maximizing your tax-free savings account, and you’ve got all your consumer debt paid off. This is a process. You are incrementally improving your financial position all the way along in very, very small steps.

Q: There are ways to earn extra points. What do you do with those points? What do they do for you? 
A: This is a very interesting phenomenon. One of the pieces of research shows that the points in and of themselves are what people want. They don’t care what the points translate into. It’s human nature. We like to gather things. We like to accumulate things. We measure our success in points. We like the point system.

Q: What kinds of things do people do to earn extra points?
A: It’s the idea that every time you post to your spending journal or push your spending journal to your cash flow budget you acquire more points. The reward system is based on action. If you are actively participating, you keep accruing points.

Q: Do you have any plans to changing or enhancing the program,?
A: I’m not going to touch the My Money My Choices program as it currently exists. I worked on it for about two years before I actually put it up. I think it covers all the bases. If people send me good resources to supplement it, I will add those resources over time once I have vetted them. But really, I don’t have to reinvent stuff if it’s okay and it’s working. What I want to do is use some of the Indiegogo money to create more of a presence on the internet that helps people find the program.

Q: You always seem to have dozens of projects on the go. Is there anything new and exciting still in the developmental stage you can tell us about?
A: I have a new book coming out in January 2016 called “Money Talks, When to Say Yes and How to Say No.” And that will deal with all the relationship side of money. How do you have those really difficult conversations that people just seem to be avoiding? Whether it is the conversation you have before you get married or the conversation you have with your parents because they keep hitting you up for money and you are dead sure they don’t have a retirement plan. So it’s all about having these difficult conversations and how best to position them.

Q: Thank you so much for taking the time to talk with me today Gayle.
A: Oh, my pleasure.

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You can find out more about mymoneymychoices.com and how to play the game here. All of Gayle’s books are listed here and can be ordered from Indigo or Amazon.

By Sheryl Smolkin

Whether you are starting a business, writing a book or spearheading a charitable cause, you may need to raise money. Crowdsourcing or crowdfunding web sites allow you to globally market your campaign well beyond the boundaries of your own community or province.

For example, you can raise money on Indiegogo for just about anything including community, health-related and environmental projects. In fact, in June 2012 Max Sidorov, a Toronto college graduate used Indiegogo to raise over $700,000 to send tormented school bus monitor Karen Klein on a vacation, with lots to spare.

In another recent project, Courtney B.C. resident Shawn Wood almost tripled his initial goal of $5,000 to finance a dream wedding for his fiancé Emily Niinmets who has terminal lymphoma.

And even celebrities are getting in on the act. In a six week campaign, author Margaret Atwood raised U.S. $94,995 (original target $85,000) to develop an online event space where artists and performers can connect with fans and aficionados called Fanado.

You can opt for one of two funding models.

• With flexible funding, you pay 4% to Indiegogo if you reach your target amount, or 9% if you do not. This encourages people to set reasonable goals and promote their campaigns through other forms of social media.
• A fixed funding option also costs 4% if you reach your objective, but if you do not, you receive nothing and your contributors are refunded.

Currency exchange fees may also apply and there is a 3% fee for credit card processing plus a $25 wire fee for non-U.S. campaigns.

Your campaign is built online using the Indiegogo platform and will typically include one or more videos and text. One-click social media integration, direct email and announcement features are designed to help spread the word, raise awareness and increase funding. Indiegogo also uses an algorithm they call the “gogofactor” to select the most active campaigns featured on its homepage.

Kickstarters is another popular crowdfunding site limited to raising money for creative projects. The catch is that unless you raise all the money you need, you don’t get any of it. If the project is successfully funded, the credit cards of all contributors are charged on the same day and Kickstarters deducts a 5% fee.

Until recently it has been largely inaccessible to many Canadians as participants had to satisfy the requirements of Amazon Payments including having a U.S. bank account and a major U.S. credit or debit card.

However, with the recent launch of Kidstarters Canada, this popular platform is more accessible to creative Canadians. For example, The Aesthetic Studio of Toronto has raised $96,708 (original goal $55,000) to develop little customizable robots and entrepreneur Y.Z. (full name not provided) has raised 147% of the money he needs to develop a token card  designed to hold 8 Toronto Transit Commission tokens and fit into your wallet’s credit card slots.

A research report released last year by industry publication The Daily Crowdsource says crowdfunding has gone from a $32 million market to a $123 million market in the past two years.

Ninety-three per cent of successful campaigns offer donors incentives for contributing. For example, Toronto-based Matthew Ogelsby’s drive to raise $10,000 to expand his comic book series, “Romantically Apocalyptic Books of Captein” generated $51,873. For a $10 donation, contributors got pdfs of two previous books. CDs, greeting cards and an autographed print were added to the package for larger donations.

Kickstarters reports that the average crowdfunding campaign tries to raise $5,000 and 56% of all campaigns fail. With an average campaign target of $3,700, 80% of Indiegogo projects fail.

“The most successful campaigns are proactive, have a good pitch and find an audience that cares,” says Indiegogo spokesperson Rose Levy.  “The campaigns with the greatest challenges are those where participants think all they have to do is post their story and the money will pour in.”

The U.S. Securities Exchange Commission has recently passed equity crowdfunding rulings that allow backers to reap eventual financial returns on investments. The investment scale for businesses and start-ups is much larger than for typical donation-based crowdfunding campaigns.

The Ontario Securities Commission issued a progress report stating their interest in moving forward with the development of a regulatory framework for equity crowdfunding. However, the report highlights the difficult balance that must be attained to provide investors with adequate protection against the risks of investing through this new marketplace without imposing excessive regulatory burdens on issuers and funding portals that would unduly impede the effectiveness of this means of raising capital.

For the pros and cons of crowdfunding, see this CBC article. Filmaker Ian MacKenzie has compiled a list of crowdfunding sites with links for various purposes.

Have you had a personal experience with crowdfunding as a donor or a fundraiser? Share your tips with us at http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card. And remember to put a dollar in the retirement savings jar every time you use one of our money-saving ideas.

If you would like to send us other money saving ideas, here are the themes for the next three weeks:

31-Oct	Winter travel	Planning your winter getaway
07-Nov	Augmenting your income	Seasonal jobs
14-Nov	Work expenses	Why you should pack a lunch