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From bankruptcy to investing with purpose

Imagine you’re 23 years old, a recent university graduate, and a year of work experience under your belt. You’re preparing to head back to school to complete your MBA when you suddenly realize your debts require you to declare bankruptcy.

It sounds like a fable, but it’s a real-life situation for David O’Leary. On this episode of the Real Money Talk Podcast, Tyler and MoneySense Editor in Chief Sandra Martin sit down with David to discuss bankruptcy, getting out of debt, and how it led him to create Kind Wealth – a fee-only financial planning service.

The David O’Leary story

“I only had an interest in money [because] I wanted it.” That’s David’s six-year-old brain thinking about making money. When asked about career pursuits, David thought of a lawyer or a doctor because he knew those jobs would come with a healthy paycheque.

Growing up in a middle-class home, David’s family wasn’t short of money, but they didn’t take trips or spend frivolously. It was all about save, save, save.

“I was kind of frustrated by that. I wished we had more money to spend, and so when I first started to get money, it was always a challenge for me to do the same thing as my parents.”

When David turned 18, he began investing in the stock market. To expedite his earnings, he started taking loans as a “new business” from the bank to invest more.  At 23, David was $200,000 in debt. Then the stock market, where he had put all his money, crashed. 

David needed to declare bankruptcy.

What it’s like declaring bankruptcy

David was in a fortunate position when he declared bankruptcy. He didn’t have a lot of assets that lenders could take away. His supportive parents took him in and gave him a place to stay as he rebuilt his financial life.

Although it was a traumatic experience, it set David on a better financial path. “(Bankruptcy) is an ability to wipe the slate and clean, and not allow a mistake that you make, whether as an adult or in my case a young man, to really set you behind for the rest of your life.”

The pros of bankruptcy are that it removes all your debts. Lenders use your assets to bring down the balance you owe, and then any balance remaining is now the bank’s problem.

The biggest con is that it takes seven years to access credit again. In other words, no credit cards, no car loans, no mortgage, even renting an apartment is nearly impossible. You can’t negotiate for better rates, ever. But it doesn’t stop there.

The emotional trauma from the process was the most challenging part for David. The embarrassment and anxiety he felt as a bankrupt financial advisor was significant. If he went out to lunch with colleagues or a business meeting with clients, he couldn’t pick up the tab.

So, should you file for bankruptcy? His advice is, “don’t file bankruptcy for a $5,000 debt because it’s such a big cost to eat. If you can borrow that money, if you can pay that back eventually, that’s far better than to claim bankruptcy, but in my case I felt that $200,000 was a pretty big whole to dig out of.”

Picking yourself up

After his bankruptcy, David could only access secured credit cards with $500 limits. A challenging proposition for a smart, savvy financial expert working at a Bay Street firm. All the flights, meals, and hotels he was booking for work were way over that limit, causing him stress, asking his colleagues to help. He had the money now, but not the tools to pay for it.

David’s career was financial planning and investing. With a black mark on his history, the fear that it would impact his professional growth was palpable.

“The level of anxiety around people finding out that you’ve claimed bankruptcy as a result of blowing up your investment portfolio starts to become increasingly nerve-racking because you’re supposed to be an investment professional, and it didn’t really matter that it all happened before my professional designations and education.”

A new start with Kind Wealth

Things changed for David when he met his wife, who questioned the impact of the financial decisions he was making. That’s when he launched Kind Wealth, a fee-only financial advisorfirm that targets all Canadians, not just the super-rich.

“It really bothered me that the vast majority of Canadians don’t get any meaningful financial advice… there’s very little help being offered to that vast majority of Canadians who don’t have $500,000 or $1,000,000 of assets at a minimum before you can get real financial advice.”

Kind Wealth offers fee-only advice – that means there are no hidden management fees advisors take from your investments. Kind Wealth helps ‘people take control of their money so they can live life on their own terms.’ They support their clients with all aspects of financial planning and meet with them regularly to ensure that they keep up with their goals and do what they need to do to get their financial life in order.

David says that Kind Wealth focuses on”helping (clients) figure out what they want. Just growing your assets, making your money is not a very good goal.” He encourages his clients to set SMART goals (Specific, Measurable, Achievable, Relevant, and Time-bound) and supports his clients to live life on their terms. On his website, it says, “Every day we vote with our dollars. We vote for the kind of world we want to leave for future generations.

We believe it is no longer acceptable for companies to pursue profit without regard for the impact they have on our communities and the planet.”

The bottom line

Hear the full conversation with David, Sandra, and Tyler on your trusted Canadian personal finance podcast, Real Money Talk. Also, learn more about Kind Wealth by checking out their website,  You can also listen to David’s Impact Investing podcast discussing “social consciousness” investing.