Starting Point
Hi everyone, Here’s some quick background on my financial journey so far. I come from a middle-class family in Western Canada. In 2010 while working as a draftsman I bought my first brand new car with very little down for $27,000 on a five-year contract. I had some money put aside in my employer-matched RRSP. A few years after that I went back to school to become a professional engineer. I started my professional career in 2014 with $14,000 in student loan debt. Not a crazy high amount compared to lots of people but that still put me in a hole I had to dig out of. In 2015 my car was finally paid off so I was debt-free! I managed to resist the urge to throw a turbo in my car haha. Because I never touched my RRSP, it grew while I was in school. I was a bit of a rabble-rouser but was still able to save some money because I had no debt. Near the end of 2015 when I was 27 years old I bought my first townhouse with 5% down using the RRSP home buyers plan. It was well within my budget because I qualified for much more than I spent. My house had everything I needed and not much else. I splurged a fair bit on furniture but I didn’t think it mattered at the time.
In 2017 I met a financial advisor with World Financial Group at my office that was making door-to-door cold calls. She convinced me to sit down with her and dazzled me with her intelligent financial lingo. After a few meetings, she convinced me at 29 years old to get universal life insurance with an investment component, disability insurance, and invest $500 a month in a TFSA. Most of it turned out okay but for the universal life insurance, I still pay $140 a month, and only $100 is invested and $70 for disability insurance. Until this year the fee to close the account was higher than the value of the account. The fee goes to zero in five more years so I guess I’ll wait. There is no transparency on what the account management fees are. I believe if I invested the money myself I would make a much better return. This is one of my biggest financial mistakes.
By early 2018 I was ready to make my first investment on my own. Being young, dumb, and gung ho I used TD Ameritrade to invest about $1000 into Aurora Cannabis. They had high trading fees at $10 per trade. I was super excited watching the stock go up and up for a few months. Then not long after Marijuana was legalized on October 17th in Canada the stock quickly dropped down to only 30% of what I bought it for or $300. That experience turned me off from investing for a while. I learned a valuable lesson from that. You should always sell and take some profit if you are up huge in risky stocks.
In 2019 I was approached by a few different people trying to get me to join a mysterious group. I thought they might have something interesting to invest in so I agreed to meet with them at a coffee shop. They told me I would be creating a pipeline of wealth, securing my financial future, and other gibberish like that. I asked them repeatedly how I would make money. They said come to another meeting and find out. I said I’ll take a rain check. If it’s too complicated to explain how you make money it’s too complicated to invest money, time, or energy into. Warren Buffett always says never invest in a business you don’t understand.
During my career, there have been times my hours and therefore my pay was cut. I realized during those times having one source of income isn’t a good idea. When the 2020 pandemic started I started to worry more about job security or being trapped in the job with no possible exit strategy. This situation amplified my need to find other sources of income. I started reading FIRE and investment books, watching stock news and investment videos on youtube. I learned that in the history of the stock market after EVERY crash the stock market bounces back over time. Because I was confident the market would recover I started dollar cost averaging after the 2020 March crash in high-quality companies. There were definitely some rollercoaster moments but my growth portfolio sits at around an 18% return today from the date of inception. As for dividends I’m making about $1000 a year completely passively and tax-free.
I’m not claiming to be a financial genius, but I have many years of experience finding ways to make and save money! I am currently 16% of the way towards financial independence.