Millionaire Interview 68

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.

My questions are in bold italics and his 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 just turned 30 and my wife is 28. We will be married three years this July.

Do you have kids/family (if so, how old are they)?

We have one daughter who is a year and half. Planning for #2 next year.

What area of the country do you live in (and urban or rural)?

We live in the province of Alberta up in the Great White North (Canada).

What is your current net worth?

~$1,300,000

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?

Assets

• $880k in real estate (Two rental condos and our house)
• $770k in unregistered account (Stocks)
• $120k in TFSA aka ROTH (Stocks)
• 168k in RRSP aka 401k (Stocks)
• 19k in wife’s pension (Index)

Debts

• 303k in Primary mortgage
• 350k in Rental properties mortgage

EARN

What is your job?

Field Supervisor for the Agriculture department of my local County. My wife works as a Registered Nurse.

What is your annual income?

I make roughly 80k a year while my wife makes about 60k. She recently went back to work half-time since returning from maternity leave. Previous to having kids she worked full time and made around 90k.

Tell us about your income performance over time. What was the starting salary of your first job and how did it grow from there?

I have a unique story for my millionaire journey as I have never had a super high paying job (most of my gains have come from my investments. I’ll get to that later…).

Out of high school I took a seasonal summer job with my County. I continued to work for the County all throughout university and up until today.

Overworking has been a common theme in my life. I would work every summer outdoors with the Agriculture department. During the school year I would stack all my courses on Tuesdays and Thursdays so that I could stay on with the Ag department on Mondays, Wednesdays, and Fridays. I would then work a second job at the local fitness facility on my evenings and weekends. Because of this schedule it took me 6.5 years to finish my degree. (I wouldn’t change how I did it, as I was able to build up savings and take on no debt. I lived at home until I was 24 so I had minimal living expenses).

For the past 11 years my job title was Equipment Operator. My summers were spent riding in a large John Deere tractor that towed a 15-foot mower. I would cut ditches, municipal reserves, and fields. I still brag to people about how much I LOVED that job. My winters were spent leading the chainsaw crew where we would clear overgrown rural subdivisions and roadways. My last decade was filled with grunt work that most people would look down their nose at. It made my financial success that much sweeter.

I’ve recently moved into management where I oversee all our staff and operations. It took some convincing for me to leave my mowing job, but with our young family the change of pace and benefits were worth it.

My wife was just starting her nursing degree when I met her 9 years ago. She worked 4 years full-time after graduating and has now cut back to half time following her first maternity leave.

What tips do you have for others who want to grow their income?

Hustle. If you want something bad enough you will find a way to achieve it. I didn’t live like most university students. I can’t tell you how many all-nighters I had to pull in order to get my papers and studying done after work.

Outside the jobs I have listed above, I have always been one to pick up side hustles anywhere I can. I’ve refereed lacrosse and hockey year round (still do), worked cash labor jobs, applied for every scholarship/bursary, and never stopped learning about ways to get ahead.

What’s your work-life balance look like?

It has vastly improved as of late. For most of my life I would say it has been an unhealthy balance (my grey hairs at 30 can attest).

During my childhood I was in every sport and extracurricular activity you can imagine. I would be shuttled from one activity, to the next, to the next, on repeat. After leaving high school, all my sports ended and I didn’t know anything else other than a life of being overscheduled. Pair that with the early love of money and it turned into a deadly combo.

My poor wife has been very patient with me. I have promised to dial things back to focus on priorities. Now that we have started our young family, I am committed to being present. One of my driving motivations for success was that my dad wasn’t very involved in my childhood. I wanted to be a better Father for my family.

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 bought my first condo in a brand new building when I was 24. Six months later no one had purchased the unit next to me. I didn’t want to chance having a bad neighbor so I thought, “maybe I can buy the unit next door and control who lives next to me”.

I posted a fake rental ad that night to test what kind of rent I could get. Within an hour I had 15 responses. I called up my mortgage broker the next day to see if I could pull off a second purchase. Thankfully due to my savings, investments, and steady income I was able to quality to buy my first rental property. We’ve since moved into a home and now rent out both condo units. I serve as President of the condo board to keep a close watch on my investment.

SAVE

What is your annual spending?

Our monthly expenses are around 3k/month (36k/year). That is just base expenses, not including discretionary spending. We have always been very strict with our spending but have admittedly been loosening up. We’ve recently done a bunch of upgrades at home.

What are the main categories (expenses) this spending breaks into?

It’s been a while since I’ve laid out all our numbers. The bulk of our expenses are in mortgages, utilities, and food.

I have never been one to compromise on food. Definitely something I could improve upon. We usually eat out 1-2 times a week and don’t watch our grocery bill. I’m hoping my kids don’t eat as much as me or I could be in some trouble. Between all my sports and food I ate as a child, it’s no wonder my family never had much for money.

Do you have a budget? If so, how do you implement it?

I’m not a fan of the traditional budget as I find it difficult to track regularly and keep everyone on the same page. In our house we sit down once a year and do up a full budget of all expenses. We ensure to be conservative and overestimate categories to give wiggle room. Once we have our budget we find our “gap” between expenses and income. We then automate those savings monthly to remove all spending temptations and make the most of our ‘gap’.

For a long time I was the only one in our relationship that had anything to do with finances. Last year I had my wife spend a day digging through all our banking records to do the full budget on her own. It was an excellent exercise for her to understand where we stood. However, she still asks me to talk money when she wants to be put to sleep.

What percentage of your gross income do you save and how has that changed over time?

We’re over 50% if you count all investments and debt payment (mortgages).

This year we are trying something new with my wife switching to a half time position at the hospital. Ideally my wife would like to work ‘casual’ (only when she wants), so we agreed that we would treat this next year as practice. We are living off my income and investing everything so makes. We figure it’s a win-win: it’s good practice for living on one income when she goes casual after baby #2 and we also get to invest all her income.

What is your favorite thing to spend money on/your secret splurge?

Food and travel. As I mentioned above, food has never been scrutinized in our budget. It’s something I love way too much to compromise on. We eat out more than we should and over grocery shop, but I’m okay with it.

We also love to travel. We’ve managed visit a lot of places in the past but will be scaling it back now that our family has started. We have one more trip booked this summer to take advantage of free flights for my daughter before she turns two.

INVEST

What is your investment philosophy/plan?

I started out with mutual funds when I was 18. That’s when I started the practice of automating my investments every month.

By 20 I moved my money over to a full service brokerage that invested in large cap blue chip stocks. Two years later my broker moved companies and I was assigned to a new agent. I decided it was time to move to a self-service discount brokerage and continue the plan on my own. I continued the blue chip game plan for the next 5 years until I was 27.

After reading “The Wealthy Barber” by David Chilton (a Canadian classic) when I was 18, I obsessively read anything I could find to further my knowledge on investments and personal finance. Every book, article, blog, podcast, and mentor furthered my knowledge and confidence.

In October of 2015, I saw opportunity that I could not miss. Canada elected Prime Minister Justin Trudeau. One of Trudeau’s main platforms was the legalization of cannabis. The day after his election win I began my journey investing in the ‘best in breed’ licensed producers of cannabis. I have been stock picking in the Canadian cannabis sector since.

What has been your best investment?

Hands down, taking action to invest in the cannabis industry early. It has been life changing.

Beyond the obvious, I would say investing in myself to constantly learn and search for betterment in my financial life. I consider it a healthy obsession that has paid off exponentially each year. Some may judge my investment decisions or risks taken, ultimately writing off my achievement. But I wouldn’t have been able to achieve what did without the groundwork I laid before the cannabis opportunity presented itself. Before I hit my home run I had already earned, saved, and invested for years to give myself the ammo to capitalize on the moment.

What has been your worst investment?

When I first took control of my investments at the discount brokerage I foolishly took a friend’s tip on a gold stock that sounded like a “sure thing”. The company was just finishing the build of a gold processing plant at their highly promising gold deposit. I didn’t do my own thorough background checking and got burned hard. Bad news came out and the stock dropped 60% in a day. Excellent lesson learned. I’m grateful I experienced it when I did and took a small loss in the big picture.

What’s been your overall return?

For most mutual fund years I probably averaged around 5-6%.

During my blue chip years I was making around 9% a year after factoring in dividends and growth (bull market years).

The last two years I’ve made 910% and 128% overall return.

In 2018 I am down about 20%, but am not worried as I have experienced dips like this previously. I am remaining patient for the last news-fueled run up into federal legalization this summer before cashing out on the way up.

How often do you monitor/review your portfolio?

Daily. In a speculative/high risk sector you must keep your ear to the ground and eyes scanning at all times. I have become consumed with deep diving into research to stay ahead of the curve. The hours spent have become too much at times. I look forward to the coming years when I’m able to transition back to an autopilot philosophy and much less stress.

NET WORTH

How did you accumulate your net worth?

The foundation of my net worth was built between ages 18-27 by the classic ESI lifestyle. I hustled harder than anyone my age, automated all my disposable income before I could blow it, and invested regularly.

FULL DISCLOSURE, I inherited 100k in life insurance money after my mother passed away when I was 23. I was fortunate to have already built the healthy money habits up until that point to use the inheritance to further strengthen my plan already in motion. I used this 100k to put 20% down on both my rental properties and build my investment account. I have also mentioned above the privilege of being able to live at home with minimal expenses until I was 24.

The real magic happened following the Trudeau election. My first of many investments was in Canopy Growth Corporation at $1.42 (peaked this February at $44). I spent the next 3 years riding the waves of explosive growth and volatility. I was able to learn a ton from fellow investors along the way and experienced some very fortunate timing. I have been able to partake in some very successful private placements with several up and coming companies that have produced incredible returns. Many of these private placements came with 2019 warrants that offer me a risk free option to capitalize later if I choose.

The mantra I have learned to remind myself every single day is “I am NOT a talented trader. I am the beneficiary of a ‘free money market’ where I was in the right place at the right time”. I have weathered an incredible amount of volatility the last three years. I am confident there will be one more media fueled buying frenzy as we enter the summer of legalization here in Canada. I plan to exit during the last spike of news and transition out of the cannabis sector and diversify into a mix of dividend stocks and ETFs. I will move a portion into another speculative sector.

What road bumps did you face along the way to becoming a millionaire and how did you handle them?

Investing in a speculative sector like cannabis comes with extreme volatility. The past 3 years has been more about managing emotions than anything else. Many people haven’t been able to watch their accounts rise and fall like a roller coaster.

There were times when the stress was overwhelming and I considered walking away with all profits and not looking back. Especially as my account has grown, the daily swings have become increasingly exaggerated. Between experiencing several dips and finding so many great people within the cannabis investment community, it has strengthened my ability to maintain perspective.

What are you currently doing to maintain/grow your net worth?

I have become MUCH more defensive with investments. I am fully aware of the amount of risk I took on the last few years. It could have gone very different and I would have been wiped back to zero. This is why I repeat that mantra of “not being talented” and “being a beneficiary of a free money market”. I am not kidding myself into thinking I can continue this reckless investment style moving forward.

During the first spike in November of 2016 I completely liquidated near the top by fluke (We were in the delivery room for the birth of my baby girl and I sold everything at the open before everything crashed later that morning). I paid off all debt besides mortgages. During the last spike in January of 2018 I again liquidated all positions and paid off my new car loan and put an extra 10% down on all my properties.

I am now reinvested in the cannabis sector for what I believe to be the last run into summer. But I have re-entered with only half my available funds. The other half I have already transitioned into other investments.

Do you have a target net worth you are trying to attain?

Not really any more. Originally the pipe dream goal was to hit 1 million by 35 years old. I never would have dreamed of hitting the milestone by 28.

The biggest challenge now is maintaining perspective and repeating the mantra.

How old were you when you made your first million and have you had any significant behavior shifts since then?

I was 28 and in the delivery room for the birth of my girl. It was the greatest day of my life. Don’t think it could ever be topped.

No significant shifts. But like I said, we have definitely loosed up a bit on things like eating out and the odd indulgence.

I suppose the new vehicle I got was out of character. I’ve always said I’m a ‘$7k car guy’, meaning I would spend no more than $7,000 to get a dependable car and then drive it into the ground over 4-5 years. But with the arrival of our daughter my wife convinced me to get a good SUV for the family. Still refused to buy brand new. I picked up a 2013 Ford Edge Sport for a fraction of the cost for new.

What money mistakes have you made along the way that others can learn from?

I can’t say I’ve really made any personal finance money mistakes. I was fortunate to learn the right habits early before I dug myself into any holes.

The only major mistake was mentioned above with taking a ‘hot tip’ on a gold stock from a friend without doing my research.

If you had to give advice to ESI Money readers about how to become wealthy, what would it be?

Track your net worth! I preach it to anyone who will listen. I can’t say enough about the value this practice brings. I update mine every month (which is probably overkill), but it’s the best way to maintain perspective.

If you dip in certain months due to poor decisions you will notice. It holds you accountable to your goal. And I think it works especially well for people who are on the journey of paying down debt. It can get discouraging when you’re paying down debt and never see your bank account ever grow. But if you are tracking net worth you will actually see that progress every month. Nothing is more motivating than looking back to see your progress.

And of course, pay yourself first. You are your own worst enemy when it comes to money. Find your gap between expenses and income and then make a commitment to yourself to save before you rationalize a way to spend.

FUTURE

What are your plans for the future regarding lifestyle?

In the near term we are keeping everything the same.

With my wife switching to half time work she is much happier with her work/life balance. We decided the reassess my wife’s work after her next maternity leave. Depending on where everything stands, that may be the point where she switches to working a casual line at the hospital.

I love my job and all the people I work with so I have no intentions of switching that up.

If anything I should probably cut back on side hustles. I always did them to get ahead and now that I AM ahead I have stuck with old habits.

I have already starting scaling back on extra activities to be home more. This will be the first summer I am not playing lacrosse (3-4 nights a week in the past). I also recently resigned as President of my condo board, and board member of my lacrosse club’s executive.

What are your retirement plans?

I plan to eventually either switch to dividend investing or straight indexing. I haven’t decided yet. Part of me thinks it would be too hard to be completely hands as an index investor. However, it’s hard to resist when the research keeps adding up in support of indexing. We will eventually draw from our investments at a rate where our principal will remain untouched. We have lots of time before we need to make any of these decisions.

We love to travel, so I could see us spending a lot of time in warmer weather (we hate the cold Canadian winters). My wife doesn’t like being away from family, so it might just be a vacation home somewhere a short flight can take us. My in-laws have a place in Phoenix we love visiting.

‘Retirement’ might just mean life as normal with ample time spent with our kids as they grow.

Are there any issues in retirement that concern you? If so, how are you planning to address them?

There aren’t many of these interviews where health care costs isn’t the #1 concern. We have free health care here in Canada so I will gladly buck the trend. I can’t think of any concerns. My biggest obstacle will probably fighting the itch to play around with my finances too much. At this point the biggest threat to my future is myself.

MISCELLANEOUS

How did you learn about finances and at what age did it ‘click’? Was it from family, books, forced to learn as wealth grew, etc.?

Growing up I was always interested in money and getting ahead. My parents offered us the best life they could with what little money our family had. As I started, any money my parents had went towards our sports and food. We grew up with very little outside of experiences (which I’m grateful for). I think that’s where my desire to be good with money came from. I looked up to several friends’ parents throughout my childhood. I would admire what they accomplished and try to take note of what they did differently.

The turning point was when I was 18. I was dating a girl whose parents were very well off, yet neither of them had incredibly high paying jobs. I learned a ton about money from her Dad. He was the biggest finance role model and mentor I ever came across. He was the one who gave me “The Wealthy Barber” for my birthday; the book that really lit the fire in me. From that point forward I have been hooked on learning anything I can to further my knowledge.

Who inspired you to excel in life? Who are your heroes?

I looked up to many adults and learned bits and pieces from all of them. The most important figure was my Mom. I’m not embarrassed to say I was a huge Momma’s boy. My mom led by example in everything she taught me about being a good person, giving back to your community, and helping anyone in need.

I was raised watching her step up for numerous roles when no one wanted to. My mom served as the President of the playschool, community league, hockey association, and served as the manager/treasurer for all my sports teams. She was known and respected by everyone in our community. I learned to expand my network as much as possible and never burn any bridges. I’m eternally grateful for everything she taught me both knowingly and unknowingly.

Do you give to charity? Why or why not? If you do, what percent of time/money do you give?

I am always one to donate to almost any cause when asked, but I can’t say I have a set amount or favorite charity I give to. It’s more like every time a cashier or door-knocker asks me if I’d like to donate I do.

It’s only recently that I have started to realize the position I am in. It’s definitely something for me to reflect on moving forward. I like seeing the direct result of giving. So I will likely try to find some more local causes or families in need.

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?

I will definitely leave something behind, however I don’t know how it’ll play out yet. My dream would be to teach my kids well enough that they wouldn’t need anything from the estate when we pass.

I’ve seen many kids grow up wealthy and lack the drive to make something of their own lives. I don’t want to raise entitled children who know they will always be well off. All the things I had to hustle for and earn made achieving them feel so much more worth it.

I would love to spread our wealth widely across the family when we pass. A little bit of money can help a lot of people rather than a few getting more than they would need. In fact, my goal is to start doing these actions long before we pass away. I love giving to others.