Here’s our latest interview with a millionaire as we seek to learn from those who have grown their wealth to high heights.
If you’d like to be considered for an interview, drop me a note and we can chat about specifics.
This interview took place in November.
My questions are in bold italics and their responses follow in black.
Let’s get started…
OVERVIEW
How old are you (and spouse if applicable, plus how long you’ve been married)?
I’m almost 60 and so is my spouse.
We’ve been married a long time, 35 years, and we courted for years before that.
So, basically what seems like my whole life.
Do you have kids/family (if so, how old are they)?
Two great kids.
One is almost entirely off the payroll except for the family cell phone plan. I’ve said it’s character building to fly entirely by oneself but…not quite yet.
The other is firmly still on the payroll but working bottom up in a chosen career path. It will be difficult and we are providing support.
One kid got the full educational support, the other is getting life support to launch.
What area of the country do you live in (and urban or rural)?
We were city people who decided our second home would just become our first home.
So, now we are country people, a couple of hours outside of a major Canadian city.
There is a modest second home as well.
What is your current net worth?
Our current net worth is about $10M U.S.
When you are based and structured in Canada, you tend to measure in Canadian dollars because, well, we generally earn and spend Canadian dollars and thinking about US$ makes us feel bad. Believe me, I wish they were US dollars but they are not.
In practice, in Canada, $1CAD feels about like $1US would feel to you if you lived in California or New York. It’s expensive to live here, especially in or around the handful of major cities and taxes are plentiful and punitive.
What are the main assets that make up your net worth (stocks, real estate, business, home, retirement accounts, etc.) and any debt that offsets part of these?
To keep this organized, the main wealth categories would be something like:
- Real estate, personal residences: $2.7M
- Stocks, bonds and similar in taxable accounts: $3.5M
- Stocks, bonds and similar in retirement and deferred accounts: $700K
- Stock, bonds and similar in corporate accounts: $2.5M
- Other hard assets in corporate accounts: $300K
- Cash: $150K
Plus, I receive deferred income streams from my former business, in the order of $100K per annum for life/spouse’s life. That has a practical value to us akin to having another $3M in fixed income.
So, there you go, about $10M of real dollars we can access, plus the extra pot representing capital that spins off those deferred incomes.
I’m not counting all the toys in the garage and stuff in the houses. It’s 100’s of thousands more but it’s chicken scratch compared to the big stuff and pretty hard to monetize.
We have zero debt. Kids’ education has been paid and ongoing support for Daughter 2 comes from cashflow.
EARN
What is your job?
Retired!
I’ll take a moment to set some context before I dive in. I retired 5 years ago from my career, and gave up my business ownership stake. I was a co-owner and executive in a large enterprise that I won’t describe any further.
That ownership stake was not structured to be individually monetized, so our wealth couldn’t come that way, but it did produce a lot of cash for the co-owners. So, wealth built up from good old earning, saving and investing! That’s why I have always loved our host’s site and the ESI ethos.
My business ownership stake delivered the earnings (very good), we managed our spending so there were some pretty big savings (pretty good), and I invested (not very good, but I didn’t blow up either).
My spouse stopped working with the second child and provided the other half of the support and nurturing our family needed, while I went out there and slayed the dragons.
I got to the top of the pyramid, played exactly as long as I wanted to and then said enough, time to move to the next phase of my life. I played different C-suite executive roles nationally and globally.
I do a lot of things now and none of them are “work”. I have no need nor intention to work for money ever again.
As it turns out, I do make a stupid amount of money (per hour) from some little hobby things I do based on experience and expertise. I can’t help myself. I’m wired to make some money, it seems.
What is your annual income?
I don’t have an income anymore from job or business earnings like before, but we simulate a pretty good annual income from our investments and holdings.
We have structured our holdings to passively deliver an adequate mix of dividends, interest, the deferred income streams, and capital gains. In all, the pot delivers something like $375K per year in gross income, generated as tax efficiently as possible between my spouse and me.
After we deal with our Canadian tax regime, that leaves us with about $1.50 and cup of coffee! But seriously, I’m very proud and feel privileged to be in our position.
I’m not going to include anything from my little hobby things. It’s a silly high amount. It was never part of any plan. It’s been a pleasant accident.
Tell us about your income performance over time. What was the starting salary of your first job, how did it grow from there (and what you did to make it grow), and where are you now?
Well, you are really taking me back but it turns out I’ve told the story many times in discussions with career-starters who wanted to understand what the art of the possible could be in my former industry and similar ones. The answer is $20,000. But there was overtime! Yay!
I took this ridiculous-sounding salary because, well, what choice did I have as a new grad in the mid-80’s coming off a vicious recession? But the real answer is that I believed in the potential of this career area. And the potential paid off. The growth was significant over 30 years.
It would have gone something like this:
- $20,000
- $25,000
- $35,000
- $45,000
- $55,000
- $60,000
- $80,000
- $110,000
- $120,000
- $130,000
After that, my income in the form of a share of business earnings, grew linearly over the next 20 years up, ending with a number of earnings years near and over $1M. It was a very good run!
My salary and, later, my share of business earnings grew as a direct result of my contribution to business performance. This was pretty direct drive. I made bigger impacts and took on much bigger accountabilities, and it paid off. The ownership stake also meant bigger risks and rewards. Don’t forget the lucky part. I never do.
What tips do you have for others who want to grow their career-related income?
Getting to these levels of incomes is hard no matter what you do and who you are. Sure, there are many get rich quick stories and world today is different than when I started out in the 80’s.
I do believe there are many more options and alternative paths. I didn’t have any kind of explosive ideas to rocket me forward from scratch. So, I knew it would be hard work and take a while, and for me, it did. I knew I wanted to have a business or some type of business ownership stake, and I think was instrumental in achieving these kinds of incomes and ultimately a chance at this type of wealth building.
Here is a short hit-parade of things to think about growing career-related income:
- Flexibility: The willingness to take on what is need to be done and raise your hand. It has to make sense for you and the organization
- Holistic View: Avoid thinking in silos. Think laterally to generate ideas, win new friends and influence outcomes.
- Global Posture: Think globally and act globally. It’s a big world out there. I know, I come from a mostly-empty country. I travelled and worked extensively in other countries and lived on the ground as a native. It shaped me in fantastic ways and opened my mind to possibilities.
- Focus: Laser-focus was needed to move mountains often as I scaled my responsibilities and took on more risk.
- Understand Risk: The ability to see the big picture and make the right risk-adjusted decisions. Every decision requires risk adjustment before you commit!
- Network: You live and die based on your network of support. Building and nurturing this is truly as important as building any skill, area or knowledge or other attribute.
- Be Your Strategy: Everything is about strategy. Your strategy needs a strategy. It’s everywhere: how you sell, how you execute, how you influence people, how you negotiate, how you persuade people with your ideas, how you fix problems, how you grow your career or business. Everywhere, all the time.
What’s your work-life balance look like?
Fantastic!
I’m in a stage of my life with total control over my time, commitments and preferences.
I literally do nothing I don’t want to do. Well, except give the dog his second walk when it’s pounding rain. That one is beyond my control.
Do you have any sources of income besides your career? If so, can you list them, give us a feel for how much you earn with each, and offer some insight into how you developed them?
I described my passive income streams. It is a pleasure to have this little treasure chest and have it delivering everything we need and more, right now.
All I have to do is manage it carefully and prudently and it will last my life, and well beyond with any luck.
SAVE
What is your annual spending?
We worked hard on controlling our expenses during the later years of my career. We knew it would have a big impact on our ability for me to retire early, and for us to have a great lifestyle. While working, we made few if any sacrifices and saved enough.
Our lives had lots of struggles but they were top-level struggles and to an outsider, they would have thought we were living some kind of fantasy existence. I assure you it wasn’t. We might have made it look kind of easy, but it only looked easy. That doesn’t mean it wasn’t worth it; it was.
Saving substantial amounts in a high cost, high-tax environment takes time. And we needed to be sure of the numbers. So, we basically took our anticipated retirement wealth model and spending levels for a test drive before I retired to pressure test our assumptions.
It turned out to be a nice virtuous circle: we controlled our spending adequately, so we generated bigger savings, but we maintained a great lifestyle, which allowed us to be happy and save faster to build the wealth needed to sustain it after I quit the race.
Today, we are really living on a core amount of about $125,000 per year. Our passive income exceeds this by a healthy margin, so we use some of the excess as an annual buffer, some goes back into the big pot, and we give some away.
Big one-time things that happen can just get paid for as they occur out of cashflow. Eventually, daughter two goes off the payroll as well, which will be good for her and us, but mostly for her!
What are the main categories (expenses) this spending breaks into?
The spending profile today would break out roughly as follows:
- Travel: $20K
- Homes and their Regular Expenses: $35K
- Groceries and Eating Out, Sundries: $14K
- Cars: $12K
- Health and Fitness: $4K
- Pets: $3K (he’s gotta eat!)
- Kid Subsidy: $22K
- Other: $15K (Entertainment, education, miscellaneous services, etc.)
Total is about $125K, give or take. It is going to scale up to $160-$180K with increased travel and other things.
Do you have a budget? If so, how do you implement it?
No budget, and we never had one. We always managed to live within or below our means at the beginning as a young couple and that vibe continued, fortunately, as we scaled up.
I will say that expense tracking was very important to us. As the quantum grew, we increasingly felt we needed to know where the money was going. Big amounts were sloshing around. It especially helped when the planning for early retirement started in earnest. We had to know where the treasure was. Tracking really helped identify opportunities and we were able to action them.
What percentage of your gross income do you save and how has that changed over time?
When I was working, we put ourselves in a position to save a lot as my earnings scaled up. We really earned and saved our way to success because I know my investment performance was sub-par.
When my earnings numbers got big, we saved a big percentage of the gross/net available to us by controlling our discretionary spending. I think we still lived it up and my old passports prove it. I have reflected on it many times in recent years as wanting for nothing. Even with costs and taxes, larger numbers helped us and in those big earnings years, we saved 30%-40% of the gross incomes or more.
Today the situation is different but still favorable. We produce passive incomes that exceed our needs. A gross passive income “paycheck” of $375K nets us about $300K after tax so with spending in the range of $125-$180K, we have a pretty good buffer and safety margin.
Taxes are still are largest single line item, even though we have optimized them about as much as reasonable for retired people like us, in Canada. We are also very conscious of inflation and have built that into our approach to try to keep it at bay.
What’s your best tip for saving (accumulating) money?
You must be able to see where the money is going so you can identify the discretionary buckets and then control them ruthlessly.
It works.
What’s your best tip for spending less money?
That is a no-brainer. Eat at home. I could not tell you how much we wasted over the years on mediocre food that hurt our health.
And, if you are into cars, just…don’t…do…it. I spent a fortune. I had fun. I could “afford” it. It was really stupid!
What is your favorite thing to spend money on/your secret splurge?
I have some fun things in my life that are potentially expensive and I need to keep my hands off keyboard lest things just “show up” at our house.
We were blessed with a 30+ year arc that allowed us to do everything anyone would want to do. My spouse and I agree there is no bucket list. It’s empty.
We still like nice experiences, but frankly, we’ve simplified now and lust for nothing. Certainly nothing material. Well, except business class and a heated steering wheel. And an up-to-date Mac and iPhone. Those things are mandatory.
We are into ensuring we continue to grow as people and learn, so investments in that kind of thing are great. We had a fantastic run and now we just want to have a great ride out and continue to support the people we love to get what they want out of their lives.
INVEST
What is your investment philosophy/plan?
I like to think we have created a perpetual money machine which is designed to last our lives and be handed on to our kids. That is the key design parameter.
The machine produces incomes (dividends, interest, deferred cash flows, capital gains, etc.) that are passive, exceed our needs, and should grow with inflation. The capital continues to grow slowly over time too if we are lucky. The machine protects us, we protect the machine. Rinse and repeat.
Of course, you can only construct this Yale-type plan if this is what you actually want (i.e., if you want to die with zero, that is a very different plan) and if the pot is big enough. The answers for us are “yes” and “yes”.
We discussed this a long time and ago and landed on the approach and over the years, it just came together. Fortunately, my spouse and I have always been closely aligned on financial and related matters, so this worked out easily for us. There was no tension over it.
We have invested in a mix of things to try to balance the big swings and still deliver inflation-adjusting incomes and capital increases over time. To the extent possible, we are protecting ourselves against inflation but periods like these last several years are worrisome. The deferred income stream helps provide a base. There are no guarantees with any of this but we have a plan that we think is decent. I am certainly not going back to work any time soon. I hope.
I manage everything myself and always have. I’ve made lots of mistakes. My need to feel in control probably pushed me this way and it’s turned out ok. I probably could have done something dead simple years ago and thrown a dart and achieved a better overall result. You can’t dwell on it!
What has been your best investment?
Definitely my career and the business interest it allowed me to retain.
I earned and saved my way to being rich. It wasn’t my investment performance.
Oh, and luck helped a lot along with way.
What has been your worst investment?
Terrible early stock investments in things I didn’t understand, or with a belief that I could time things; you can’t.
What’s been your overall return?
If I include everything, that is, real estate, paper and other hard assets, I think I’m riding below the averages overall by a little. Real estate is propping up the average for sure and we have monetized some real estate gains along the way.
Our return on paper assets alone is below the market average I’m sure.
Having said that, we accumulated enough when needed to. Since the house-related assets produce nothing (they suck money), everything we need to live on is coming from the paper assets and deferred business incomes.
How often do you monitor/review your portfolio?
I look at everything all the time. I guess that makes me the portfolio manager.
That doesn’t mean I do anything to it. I promise, I just look at it.
NET WORTH
How did you accumulate your net worth?
As I’ve already suggested, I made a lot in business earnings and I saved a lot of it.
That was my big secret. Some secret. So simple and yet so difficult for so many.
I got here by force of will, hard work and luck.
What choice did I have? I came from a poor immigrant background with lots of troubled history. The only way “up” was to be in business or climb, or both.
What would you say is your greatest strength in the ESI wealth-building model (Earn, Save or Invest) and why would you say it’s tops?
Definitely Earning. I was lucky enough to be able to hit earnings escape velocity. This was my vision and it came true. Of course, I didn’t want to die trying and that turned out ok as well.
We managed to live very well and still control spending. That allowed us to Save well, thankfully, because I sure as heck did not Invest that well.
What road bumps did you face along the way to becoming a millionaire and how did you handle them?
The messy-middle years were very tough as I recall them. Gigantic work obligations with real personal, professional and financial risk on the line. Little kids at home. Trying to get some kind of financial plan together that made sense. Keeping spending under some form of control. Getting some time for yourself and your spouse.
This is life in the messy middle. I didn’t have any big bumps, I had lots of smaller bumps that slowed me down, threw me off course, and made me have doubts about the vision and plan.
What are you currently doing to maintain/grow your net worth?
The name of the game is steady as you go at this stage.
It would be sheer stupidity to rock the boat too heavily at this stage. I am very vigilant. There are too many threats out there to be blasé about the risk.
I’m good at managing risk and I wish I had done a better job earlier but the big amounts lead you to false perceptions of your brilliance and also can lull you into a false sense of security. I should have been writing this on my private jet (fractional-share) flight or small (but very nice) yacht. Nope, my favorite recliner will have to do.
Do you have a target net worth you are trying to attain?
We got there. The target was always $10M.
I would have loved to get to $15M but it was clear that wasn’t going to happen before I stepped away from working. Still, not bad.
How old were you when you made your first million and have you had any significant behavior shifts since then?
I was about 40 when we crossed the million-dollar line. No corks popped but I did make an orange highlight in my spreadsheet about it.
I would say there were no material behavior changes until I hit about 50, and then the changes came fast and furious as we decided to make a run at early retirement for me. Since I was the family CFO and bottle-washer, I had to come up with the plan and make it happen. This required a lot more diligence than I had put in during the messy middle years. I was determined to try to make it work and delighted when it did.
What personal habits and/or traits have you developed that have made you successful at growing your net worth?
I’m capable of focus, patience and can think laterally. These have proven to be very useful when dealing with the problem of growing and keeping wealth. And, make no mistake, this is just as much about keeping it as growing it.
The focus was important when we had to buckle down and get things done with laser-attention.
The patience was required because this kind of build takes time and as I’ve said, the government and other forces are working against you.
The lateral thinking was useful because we had to make changes for a number of reasons including a couple of fairly major structural things along the way. Rigidity would not have been helpful. You had to have some ability to see over the horizon and move when needed.
What money mistakes have you made along the way that others can learn from?
I named the biggest one earlier so I’ll name it again here so that perhaps I will actually not be so stupid about it going forward: you cannot market time. You cannot market time because you cannot predict. You can only assess the probabilities and position yourself for the most likely outcomes. Anything else is luck. Just like roulette. Except more expensive.
I’ll name the other one that hurts. You cannot succumb to fear. Fear is the mind-killer, as Frank Herbert so eloquently said in Dune. Bad decisions are guaranteed when you let fear take over. Ask me how I know.
What advice do you have for ESI Money readers on how to become wealthy?
Readers, pick a course and stay the course.
I won in business, life and money through staying power. I was smart, quick, tough and lucky. There were smarter, quicker, tougher and luckier people than me all around. But they didn’t have my staying power. I outlasted them. I showed up and outlasted them.
FUTURE
What are your plans for the future regarding lifestyle?
I’m living the life right now. We have beautiful homes, a great family, and a high degree of freedom and security.
I hope to be able to leave a great legacy to the kids and enjoy a great ride for the rest of the time I’m here too.
What are your retirement plans?
We have wonderful properties that require time to maintain and I enjoy doing it, and that’s fortunate because if I didn’t, they’d go downhill very fast. I am pretty handy and love learning new mechanical skills. It really keeps me sharp. Thank the gods for YouTube.
I have a set of core hobbies that build mind and body, including music and surprise – personal finance.
I’m decently fit and intend to stay that way. My health is generally good but age is catching up to me in a few ways and I need to keep fighting it off.
I use some of my professional and leadership wherewithal to help people and organizations who ask. For it to be real, they pay me. It feels good to be wanted in this way, and it’s just fun!
Are there any issues in retirement that concern you? If so, how are you planning to address them?
Nothing specific. I want this last phase of my life to go kind of like a modern battery: power on full and then a sudden stop rather than some kind of slow decline. That’s my preferred method of operation.
Whenever this all ends, it ends. We’re well prepared.
MISCELLANEOUS
How did you learn about finances and at what age did it “click”?
I started to learn in university and dabbled but couldn’t control my fear and the tendency for young people to chase shiny objects.
Several of the small investments I made in my early twenties would individually be worth millions if I had kept them. I didn’t.
Who inspired you to excel in life? Who are your heroes?
Churchill. He’s always the person I usually name first.
A modern-times, flawed giant of a man that changed the world.
Do you have any favorite money books you like/recommend? If so, can you share with us your top three and why you like them?
I read all the classics and love them. I’ll focus on the one that really, by far, I think had the most impact. It was The Millionaire Next Door.
It is a seminal book. It changed my understanding of wealth, how to build it, and how to keep it. It’s dated today, of course, but talk about eye opening when I read it for the first time. Wow!
Do you give to charity? Why or why not? If you do, what percent of time/money do you give?
Over the mainstream years of my career in business, I gave large, visible amounts to recognized name-brand charities. It was almost a competition and was done for a variety of reasons that made sense in terms of optics. I doubt any of it had much real impact on society. I won’t debate that here.
Today, I select much more intimate things to support that align better with my values. I also contribute a lot of my time directly to support people who need guidance of the types I can give based on my experiences, skills and path. I’ve written business plans, reviewed and challenged concepts, sat on a volunteer board, and several other things.
Do you plan to leave an inheritance for your heirs (how do you plan to distribute your wealth at your death)? What are your reasons behind this plan?
We intend to leave the money machine entirely to our kids. They are fully in the tent and prepared if that happened. They have the plan.
We have designed the big pieces to be easy to transition, either to my spouse if I go first, or to the kids in the case of a car wreck.
Along the way, the money machine should be able to spit out some helpful amounts we can give the kids at key times it might be useful. Have you seen how much a used car costs? However, they clearly know that they need to fly independently without our support. They are both great with money. Talk about careful shoppers!
M-124 says
I’m going to read this through a second time but I must say , this is probably the best “how-to” I’ve read here. Really great commentary on attitude, execution , goals.
I’m in an almost identical place (58 soon) and NW is same. I really needed this kick in the ass today.
“I do alot of things now and none of them are work. I’ll never work for money again “
Ditto and thanks !
MI-389 says
My pleasure, it was fun writing this. It was a record for myself as much as to lay it out for other readers. Good luck in your journey. I’m joining the MMM forum as we speak so perhaps we will speak there as well. Thanks.
Maverick says
Excellent work ethic with solid results. Having said that, do you believe this is being passed down to your offspring with so much adult age support and inheritance?
Canada loves your taxpayer support. How long do you wait for medical procedures? How is the “freedom of speech” in Canada?
Note: for the record, I lost a very good friend last year who was a legal immigrant to US from Canada.
MI-389 says
Thanks for your comment. I think the important elements of our journey are getting passed down to the kids. They are very responsible with money and understand where it came from and how hard this all was, and how hard it is to keep. We think they have the right work ethic and values but of course time will tell. They appreciate everything they have gotten and their current young adult lives reflect the fact they expect nothing they don’t earn on their own going forward (2nd-kid subsidies aside, which is temporary during launch).
Yes Canada loves me. Many, many millions in taxes paid over ~40 years.
The medical system here is, unfortunately, compromised. There are many dedicated people but the system is broken. I have and am fully prepared to again go elsewhere to get the assistance my family needs.
I will avoid taking any major political positions here, but I will offer my view that there are tangible threats to personal freedom. Recent events and decisions speak for themselves. It is not the place I grew up in, in many ways. Anyone with similar views and the means (that is, a lot of people) has as a Plan-B and is ready to pull the trigger on it as needed.
Maverick says
Sounds like you are like most of us who created wealth first generation; we want government out of our way, not as a constant support system.
Joseph J Scholl says
Very nice interview. Thank you. You have had great success and take the time to enjoy it, especially with the automobiles. A couple of your comments resonated with me as I am at my late to mid-point in my career (48 yrs old).
The two I really learnt from: (1) I won in business, life and money through staying power. I was smart, quick, tough and lucky. There were smarter, quicker, tougher and luckier people than me all around. But they didn’t have my staying power. I outlasted them. I showed up and outlasted them. (2) Be Your Strategy: Everything is about strategy. Your strategy needs a strategy. It’s everywhere: how you sell, how you execute, how you influence people, how you negotiate, how you persuade people with your ideas, how you fix problems, how you grow your career or business. Everywhere, all the time.
I needed these now and your thoughts were very helpful. I have read all interviews and your hit home for me at the right time. Very nice job, JS
MI-389 says
Thanks! Glad you found it interesting. I was really in the thick of it at 48 but it was not long after that I smelled the coffee and really crystallized my exit plan. All the best to you and yours!
Financial Fives says
Very interesting dialogue. Makes me wonder what you are like in person! Congratulations on your success, it’s nice to see those in Canada reach these levels and what their life is like given that the taxes, healthcare, values, etc might be a bit different there.
MI-389 says
Thanks for your comment. Like I said in the write-up, it ain’t easy here! Things are different here from the US, but it was similar enough from say 1970-2020 for people to create a great standard of living here. It was attainable, and there is a fairly large class/cohort of people here who did it. I know many.
But, just as in the US and other places, it is getting much, much harder.
DC says
I dare ask: How do you know (re: fear)?
MI-389 says
Oh boy, I hoped no one would ask. I panic-sold in three situations over my investing horizon. Each time had more serious ramifications than the last. The last one (a while ago) still hurts a lot when I get triggered.
I was fearful and stupid in those moments and fear prevented me from seeing the wisdom of our plans and. sticking with them. You cannot predict the future and panic creates a mental state where you forget that – to the downside. All you see for a moment is destruction, so “get out!” is the response.
I had a great run and I’m hopefully “all set”, but these events were setbacks that I would prefer had never happened. I did well, but it could have been better. Goes to show that smart people who get most things right still make dumb mistakes all the time.
MI - 228 says
Congratulations! And: Thank you for all of the detail. It resonates, sounds familiar but packaged up in a fresh and encouraging way. I will re-read and study. The only part I don’t like is that you probably would advise me against buying that Porsche I have on order. 😉
MI-389 says
No, I would advise you against trading your Porsches frequently just because you can, like I did. Congratulations and really enjoy it. And keep it! Thanks for reading.
Waterboy_39 says
I have read close to 90% of the millionaire interviews, and this one is exceptional.
Such wisdom here, you seem like such an amazing person. You have somehow put into words what I’m sure so many of us feel in our journey to financial independence. It is so satisfying to see someone who is so at peace with their transition to retirement.
I felt some guilt when you gave some guidance on not going down the “car” route, as I have the disease. Fortunately, I am more of a window shopper than a purchaser, but I do own one of the most affordable sports cars in the history of automobiles:)
Enjoy all that you have earned
MI-389 says
It’s a disease, but it’s treatable with long-term aversion therapy. Window shopping and surfing great Youtube sites, etc. is a good way to scratch the itch so I’m totally with you. Good for you to have one that you love right now. I don’t and may need to fix that in the future depending on how our life rolls and where we are located/for how long at a time. Thanks so much for reading!
Phillip says
Our new car has a heated steering wheel. I don’t get it. The wheel takes time to heat up and by the time it’s warm, the cabin is also warm. Maybe it makes a difference in extreme cold?
MI-389 says
Great comment! You are right, but it is very make/model dependent. A prior Ford could take 20 minutes, but other makes (hint: German brands I chose which don’t start with M) are much faster, almost instantaneous and the effect is very pleasant. I daresay, mandatory? Well no, but really nice to have. Thanks for reading my little monologue, great fun to write.
Tom.from.MD says
Agree. My BMW 330xi has heated seats and heated steering wheel. They both start working before I get down my driveway, so under 2 minutes. It’s glorious on those cold Maryland days! Totally mandatory in all my future car purchases.
And I agree with most that this was a very well written, thought provoking Millionaire Interview. I look forward to continuing the conversation on the MMM!
MiniretirementSoon? says
Congrats on creating this position for yourself!
Could you please elaborate on your dividend and interest income – What the the sources? How much do you get monthly? And what is the principal investment? Thanks
MI-389 says
Thank you! Nothing fancy. I’ve got a portfolio comprised of a mix of :
– Large positions in selected large cap dividend paying companies. Most of these names are tax advantaged to me, as a Canadian. The same as someone else would do in their own country. Of course, I hope these positions also gain in capital value as they continue to pay me increasing dividend amounts every year.
– Fixed-income investments including individual bonds and carefully selected short-duration/income oriented bond fund.
My dividend and interest machine has no magic to it at all. I simply have enough money working for me, something like $6.5M US.
It spits out something like $280K US per annum in gross cash flow that is tax optimized for what it is. The dividends in there will grow over time. I harvest all capital gains and yields from the bonds.
I’ll make adjustments as needed, but that is the premise and it’s been this way for some years.
Along with my other deferred business income streams, the machine is cranking out a good income and it’s completely passive, except for the need for risk management. I have no interest in any active income components at this time.
Fellow Canadian says
Congrats MI-389! And greetings from another fellow Canadian! Your story is really inspiration to me, and I am hoping to trail your foot steps when I hit 60.
The tax system in Canada is really messed up. It is unnecessary complicated, and it penalizes T4 (W4 in US) folks with no options. On top of the usual RRSP (25k) and TFSA (7k), there are really no other tax breaks. And to top that off, tax dollars are squandered with broken promises of health care and education.
You mentioned Canadian taxation a few times in your post. Any unconventional tips you can share with fellow Canadians on top of maximizing RRSP/TFSA type of advises? Any suggestions especially for high income (T4) earners?
MI-389 says
Fellow Canadian, you said it, you have few if any options as a high income T4 (W2) employee earner. I had more options, through ownership. Good luck in your journey because I know how hard it is.
Once you have investable capital, you also have more options and more control.
Structured right, you can markedly reduce the overall tax you pay through the right mix of capital gains, dividends and other cash flows.
You should also ensure your spouse (if you have one) is part of an overall tax optimization plan.
Can you create, buy or buy into a business? Having access to business ownership, particularly an active business of some type, as a container gives you a whole new range of options that go well beyond RRSP/TFSA/etc.
Bobcat says
Congratulations on your success!
Also a Canadian, a decade younger and a couple millions shorter. Wondering how you spent the last decade? Thinking about retirement and traveling more, but still have to fill my time if retire fully.
MI-389 says
Congrats to you on your progress.
My last 10 years were roughly my last 5 of working and 5 of post-work.
I rate post-work a 10/10!
Yes, you definitely have to have a plan to fill your time. I had many interests before and I wasn’t bored or boring. Retirement has allowed me to explore all of them deeply, and add totally new ones.
Truly, I don’t know how I got everything (mostly) done when I was working. And yes, like you will, I have the means to do things without any real financial pressure.
Travelling is not a plan. Travelling is part of a plan. You need, IMO, a real roster of things to do that excite you and can help you feel fulfilled. It can be any combination of things; it doesn’t have to be about solving for world hunger unless you want it to be. It just has to be the right combination for you, that gets you out of bed every Monday because you want to not because you have to.
Bill says
Always limited myself to ones I could do the work on myself, in keeping costs lower.The 68 Ford Galaxie is long gone, but the 72 Ford f100 with a 390 provides that sweet engine music 🙂 However, neither approaches a true high performance and high end vehicle.
Clay says
Any strategies you will take with your investments fooling the changes to the capital gains tax? You have investments within a corporation? Interested in any strategies you identified as my brother is in a similar situation and there is very little time to avoid a higher inclusion rates of gains (I’m assuming the historical unrealised gains will be subjest to the higher inclusion rate after June, but admit I don’t know the mechanics of the changes.