A 30-something path to building wealth

A 30-something path to building wealth

You might already know from reading various posts on this site – I enjoy learning from others.

This theme applies whether I’m learning from successful retirees that have “been there, done that” on my Retirement page…

OR

…from younger investors who have already realized some of their financial freedom goals:

You can read about how this couple ditched home ownership in Toronto and become millionaires instead.

You can read about this young, successful private equity investor here.

I have my own financial dreams – they include sitting on this beach in the coming winters!

Tamarindo Beach, Tamarindo, Costa Rica.

Over the years of running this blog I’ve been fortunate to meet and learn from a number of very bright folks and passionate investors.  I hope to continue to use this blog as a forum for that.

Enter in for today’s post Jordan Maas.

• Jordan was born and raised and continues to live in Winnipeg.
• Currently 35.
• Married, almost 9 years.
• Two “little ones” (Holland 3 ½; Isaac 2).
• Other tidbits: was a Winnipeg Jets season ticket holder; travelled to World Cup in Brazil in 2014 to follow his team (The Netherlands); played soccer since he was basically old enough to walk.

Thanks for making the time on the site Jordan.  How did you get started with investing?

Great to be here Mark!

I was interested in making money from a very young age.  I was an avid comic book/hockey card collector and I used to set up a “store” in my house where kids in the neighbourhood could come by and buy cards, comics, and even candy and pop drinks (which I would buy and then mark up slightly).

Although neither of my parents were really great with, or interested in money, they did have a copy of The Wealthy Barber, which my dad told me I should read.  I noticed that on your bio as well Mark!

That book was the first (of many) finance/investing books I would read, and I’ve been hooked ever since.

I opened an RRSP account when I turned 18 and started investing in mutual funds right away.  I started investing with about 25 bucks a month, and slowly increased my monthly contributions whenever I could.  Last year was the first year I actually I had to cut back, or I would have gone over my RRSP contribution limit.

Since those mutual days, like you Mark, I have switched out of my higher cost mutual funds to lower cost ETFs, and D-series mutual funds.

I also opened up a spousal RRSP, since it didn’t make sense for me to keep contributing to my account, when my wife didn’t have much saved up.

About 5 years ago, I finally opened up a TFSA and direct investing account, and now I use my TFSA for individual Canadian equities, and my RRSP for my ETFs.  I guess I take a “hybrid” approach to investing like you (some stocks, some ETFs).

Let’s jump gears a bit.  I’m always curious about money struggles or at least how folks are working through their goals.  I mean, I have some debt challenges, and we’re trying to work through them (i.e., we have mortgage debt still).

I wrote about our financial freedom target goals here.

What money struggles do you face, anything keep you up at night?

I’ve been fairly fortunate to be with the same company for 15+ years, so I wouldn’t say we are “struggling”, however I will say daycare costs for 2 kids has definitely been noticeable!!

When I think about most of my friends, other 30-somethings, most of them are just finishing up paying off their student loans, and just getting started with investing.  So, for some 30-somethings, I can really see the struggle to get ahead.

I guess I’m fortunate since I feel so passionate about personal finance and investing, and I was able to start at a young age.  My friends ask me all the time, what they should invest in, what they need to do to get started, etc.  It’s nice they ask but the sad fact is, personal finance, budgets, taxation, etc. is not really taught in high school.  This means most of us are left to figure things out on our own.  I would bet some of my friends couldn’t explain the differences between an RRSP or a TFSA.  That’s not a knock against them, simply as you say – people don’t know what they don’t know.

Part of the reason I started my site (MoneyMaaster) was because I do generally enjoy talking about these things, and if I can help even one or two people along the way – I think it’s worth it.

Good stuff Jordan.  So, how are you investing now?  Are you socking away some cash for your kids?

Well, right now, we’re trying to balance everything with a young family.  I’m not one of these “extreme frugal savers” or FIRE people.

Is FIRE right for you?

My method has essentially been the same since I was 18 years old:

• I automate payments/we pay ourselves first – to ensure money is being put away for our future.
• Whatever is left, we spend it and enjoy it. I enjoy going out to eat a lot, and I’m a big time craft beer & cocktail enthusiast, so I am not shy spending my extra hard earned cash on the things I enjoy.

My portfolio is invested almost 100% in equities right now (although a few of the funds I hold, have a small % of fixed income).  As I get a bit older, I’ll probably increase my fixed income allocation – if needed.  My only big money goal is the same one I’ve had since before I held a full-time job:  I want to have enough put aside to retire early – and retire comfortably.

For the first 10+ years of my investing career, I only really cared about how fast the portfolio was growing.  I’ve matured over time, over the last few years I’ve started thinking a bit more about income generation (from my portfolio), and taxation.  This is why I’ve almost stopped contributing to my RRSP completely, set up a spousal RRSP and increased my TFSA contributions.

We also started RESPs for the kids, although we haven’t been funding it very aggressively yet.  Lots of things to balance but we’re doing OK I think.

Any big plans for the future?  Advice for fellow 30-somethings to build their wealth?

No plans for the future really – aside from slowly shifting the focus from growth to income.  I’m a big believer in the slow-and-steady approach.

As far as advice goes – the biggest piece of advice I give everyone who asks – just get started.

I think you’re better off getting started with investing, right now, even if it’s in a higher cost mutual fund than doing nothing at all.

I get it – managing your investments, doing any stock analysis isn’t for everyone – but you don’t need to do that stuff.

Go to your bank’s discount brokerage division or find an independent discount brokerage – open an account, and just get started.

For any 30-somethings, I’d typically recommend a balanced ETF or a growth ETF (depending on risk tolerance, etc.) but I honestly think the biggest thing is to keep it simple.

There are some great, simple, all-in-one low-cost ETFs you can buy that you’ve written about Mark.

If people don’t keep it simple, they probably won’t do anything.

I have friends who WANT to get started, but feel intimidated, this is why I always tell them just get started – you can optimize your accounts and find other investments later on.  Hell, I started with 2 RBC costly mutual funds…and held them for years before I made the switch to XAW and a D-series fund.  I think the hardest part for many people in my age group is just opening the RRSP or TFSA account.

Summary

Getting started for many people, in many of life’s endeavours is not easy Jordan, but clearly you have a passion for investing to help others.  You’ve also done well to get your own financial house in order at a young age.  Kudos!

I know from reading your blog you’re a fan of sports and craft beer.  Let me know when you’re in Ottawa so we can take part in both.

All the best!

Readers – got questions for Jordan?

You can also check out stories from early-retirees and other successful investors on this page here.