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An immigrant woman shares finance lessons

Insurance-Protection-Planning

Imagine living in a country where the topic of finances is considered taboo.

This is the reality in many developing nations, where women in particular have little understanding of the importance of financial planning. In fact, while 59% of men reported having a bank account in developing economies in 2014, just 50% of women did, finds the latest Global Findex Database. This compares to 99% of women in Canada who have an account — equal to 99% of men.

The statistics are even more dire in South Asia. Only 5% of women in Pakistan have an account, and 43% in India.

So when women from developing countries immigrate to Canada, they’re hit two-fold: adjusting to cultural norms while getting up-to-speed on key financial terms.

This was the case for Saima Naz, 34, the principal at iLearn DL Secondary School in Surrey, B.C.

She was in grade two when she moved from Lahore, Pakistan to Montreal, and she recalls how difficult it was for her family.

“My father was the only one who earned. My mom didn’t work but took care of all the money,” says Naz, adding this included paying rent and bills, and budgeting for expenses. “But my parents weren’t financially savvy. They didn’t buy mutual funds or have credit cards. They lived off cash, spending what [dad] earned.”

Why? In Pakistan, she says, if you want to buy a house or a car, the mentality was that it’s best to pay in cash. “Getting a loan didn’t make them feel free.”

And the attitude didn’t change when Naz, her parents and younger sisters moved to B.C. after a few years. “If they’d invested, we could’ve owned a nice property but they never took the chance. We had enough to survive, but we could’ve done so much better if my parents had had some kind of financial savviness.”

Seeing that, Naz decided to plan and discuss finances early on. At age 15, she opened up a bank account after securing her first job in retail. At age 21, she used a $5,000 loan to launch her business, a tutoring service for students. By age 23, she’d made enough to purchase her family’s first home — a 10,000-square foot, eight-bedroom house for about $500,000 in Surrey. MLS listings shows that a comparable property today, 11 years later, averages $1 million.

“All the risks [my parents] didn’t take, I ended up taking,” she says.

It was at this time Naz realized she needed an advisor. “I had debt and thought, ‘What if I die? What would happen to my family?’ ”

Naz’s advisor, Anita Dalakoti, CEO of Apple Insurance & Financial Services Inc. in Surrey, B.C., taught her the importance of life, critical illness and disability insurance. She also helped Naz with financial planning, including opening an RRSP and investing in mutual funds. Also, Naz and her husband, whom she married in 2014, are in the process of downsizing from the eight-bedroom home because her parents and sisters no longer live with them. So Dalakoti is advising her on the sale.

Dalakoti, whose book consists of 35% immigrants, agrees many South Asian women who move to Canada are not financially independent. “It’s not in the culture. Whatever they need, they’re provided. They don’t understand they need to be involved.”

So she’ll ask tough questions. “What happens if tomorrow for some reason, your husband is unable to produce income? What are you going to do? You don’t even know where your bank account is.”

Dalakoti will educate them on the basics, including budgeting. “They need to understand how much money is coming in. A lot of women don’t even know how much their husband makes.”

Then she explains RRSPs, TFSAs, RESPs, estate planning and insurance.

Naz recalls 10 years ago, when she purchased insurance for both herself and her mother. She’s grateful she had that conversation with Dalakoti.

“I had to help my mom do some of her own financial planning, [which included buying] a $100,000 life insurance policy,” says Naz.

In 2012, Naz’s mother was diagnosed with cancer. She died in October 2013. “It gave my mom peace of mind at her deathbed. My mom was happy to know that she’d left something for us.”

The advice Naz used to give her mother is one she’d give all immigrant women. “Within the South Asian community, we have this habit of hanging on to money [in a] safety deposit box or under a mattress. That’s dead money — it’s not doing anything for you. So speak to someone to invest it. Even if it’s growing slowly, it’s still growing.”

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