Smart Saving and Investing Advice: My Story

Smart Saving and Investing Advice: My Story

The following is a guest post from a passionate reader of this site, Phil. Read on about Phil’s saving and investing story to financial independence. 

Who am I?

Just a guy that met my lady in university with a dream to live happily ever after…

Here’s my story about smart saving and investing that allowed me to step away from the working world, earlier than most.

Just Like You – Starting Out

For me (and maybe just like you) schooling was not my passion. I worked hard in university but not enough to secure scholarships to fund my way. I had to fund my own post-secondary education (and so did my wife for the most part). To make ends meet I held down a few jobs while struggling with my engineering courses. My girlfriend (now wife) and I learned through necessity to keep our costs low and live on what we had, we learned to keep a couple of bucks leftover at the end of each week just in case.

With no money and lots of schoolwork we were “Do-It-Yourselfing” (DIY) maybe sooner than most. We learned to cook most of our meals and reuse and repurpose things often; we couldn’t afford what other people were doing, throwing out what could be repaired and reused. What our early years taught us was that as long as you lived on less than you had coming in, life could be good.

Moving along the investment journey

Two years after university I landed my dream job working for a global consumer products manufacturer as a new product quality engineer. Soon after graduating, I suppose our investment journey began, that was in 1997 with a couple of mutual funds for our Registered Retirement Savings Plans (RRSPs), some Bissett Canadian Equity & Phillips, Hagar & North (PH&N) funds. In 1999 we purchased out first home together, we treated our mortgage debt like an enemy. In 2002 we borrowed money and invested in the Sprott Canadian Equity Fund for a non-registered account. We did this because we were making a good go of our mortgage at the time and wanted to see if we could offset our mortgage expenses with investments, which worked nicely tax wise (a strategy known better today as the Smith Manoeuver). In 2003 we started a family, and became 2+1. That same year, we killed our mortgage. It was a good year.

We promptly opened up a Registered Education Savings Plan (RESP) for our young son using the BMO Canadian Equity Fund. This was also the year I met a man I have come to trust in the investment world, Mr. Peter Hodson, with whom I met at a Sprott presentation in Ottawa.

In 2005 I opened our first non-registered stock account through an online broker. We hopped on the pick-any-stock-for-a-nice-return-ride up until the market crash of late 2007, at which time we ditched some of our Sprott investments. The 2007-2008 market collapse opened our eyes. We had been lucky but didn’t know it. Our investment portfolio lost a staggering 40% of its value (about $200,000) so needless to say I quickly immersed myself in reading about investing.

Lessons learned and looking ahead

During my readings, I came to the realization these market crashes have happened before (and they’ll probably happen again). In 2009 Tax Free Savings Accounts (TFSAs) were introduced and based on what I now understood about investing, these accounts were a no-brainer for investment purposes. In 2009 as the market bottomed out, we purchased a recreational property. Since we did not have any debt at the time, we took a 3-year fixed mortgage at 3.85% to pay for the property but swapped-out the loaned money for investment purposes. This loan was paid back in 2011 and again, we’re debt-free. Also in 2011, as a result of the financial meltdown my place of employment decided to close up shop so I decided to become a (retired) stay-at-home Dad. In May this year, I switched my RRSP holdings from the original PH&N fund to a basket of chosen stocks. I have time to research my stocks before I buy them and at the time of this article, I’m happy to report my RRSP investment returns are 11% since May.

My wife still works, she has a great job that we can live comfortably on but we also live comfortably because of our smart saving, killing debt and making good investment decisions. Our net worth is now over $1.4 million and growing. I’m sharing this story because I feel I have some important lessons to share and they might apply to your own financial freedom journey, so here goes.

1. Learn basic money management skills – they are essential to financial freedom.

2. Read Your Money or Your Life – this book changed my whole outlook on money and working for a living.

3. Learn about financial products, the good, the bad and the ugly and make your decisions from there – no load mutual funds made sense early on but I’ve changed my approach since then.

4. Save then save some more – we didn’t have a target to save a certain % of income every month but we did decide to live a frugal life so we start “living life”. If I had to guess, I’d say we were probably saving 30-40% of our after-tax income while I was working and we’re saving 10% now.

5. Living on (much) less than you make is essential – without a high savings rate we wouldn’t be where we are today.

6. Know who you are – understand your relationship between money and the type of investor you are. It’s easy to make money in the markets when things are rosy; it’s something else to buy when everyone else is selling. This time is never different; it’s all been done before and documented. Train yourself to be different.

7. After you save it’s OK to splurge now and then – we splurge on family things, including trips (Hawaii, Italy, and The Rockies) and on our sporting items (canoes, kayaks, camping gear, ski equipment). I also like fine Cognacs, it’s just great when friends stop by!

In closing I’m happily retired and did so on my 39th birthday, not by choice but not working for a living nonetheless. I have chosen to stay-at-home and take care of my family and their assets; time is also a very precious commodity to me. Our financial plans going forward are surprisingly no different than the past: stay the course, learn more about investing and never stop learning. That plan has worked out very well so far and I’m confident it can work for you.

I want to thank Mark for sharing my story on his site and hope you learned a few things as well.

Phil lives in the Ottawa area and is a fan of My Own Advisor and many fine Cognacs.

My name is Mark Seed - the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I'm looking to start semi-retirement soon, sooner than most. Find out how, what I did, and what you can learn to tailor your own financial independence path. Join the newsletter read by thousands each day, always FREE.

24 Responses to "Smart Saving and Investing Advice: My Story"

  1. That was so confusing! I was reading through it and I was thinking “wait.. this doesn’t sound like Mark!” But it wasn’t. Ha! I’ve never read Your Money Or Your Life but have heard good things about it. I don’t know how much of it would apply to me since we’re pretty solid financially, but I’m sure I could learn a thing or two.

    1. A little misleading was the header… Oh well, you read it, and hopefully understand every journey has a story, and enjoyed sharing mine :). Your Money of Your Life is a fantastic book. It summarizes all things people good with their financial well being usually get to, but all wrapped up in a nice read… – Cheers.

      1. Yeah, that’s marketing for ya, get the reader in and keep them here 🙂

        I look forward to reading that book, hopefully it’s under the tree for me next month! Thanks for answering all the comments Phil, very much appreciated.

  2. Thanks Mr.CBB! It is such an awesome feeling killing a mortgage before its time is due… My wife and I used a budget only at the very beginning but have gotten away from using one since now that good spending habits there was no need. What we do now is track spending, just to keep an eye on where everything goes, and to review at the end of the year in planning major spends for the following year to know where/when to do it. Trust me though, your long path in time will feel short. 11 years ago, which just feels like yesterday, I had a mini-me, and somehow it has grown and matured and well life is just motoring along… Don’t forget to enjoy the ride life provides, knowing you have that strong financial base chugging along that you just keep tweaking as you go. – Cheers.

  3. Well done Phil!! We killed our mortgage 5 years after getting it and are now investing even more in our retirement plus we have a newborn son. We just opened his RESP this month! I haven’t heard of that book but I’d be interested in reading it if I can find some time in between feedings and diapers! I agree a plan is important and for us our plan included the budget. Without our budget I don’t think we’d be where we are. We still have a long path to travel. Thanks for sharing your story Phil!

  4. Great story! When I was reading it I didn’t realize it was a guest post and thought it was Mark’s story 🙂 Anyway, it was inspirational and after seeing the results, it should motivate all of us to become involved with our financial matters.

    1. Thanks Brian! Actually as I learn more about Mark it seems somehow our attributes are very similar. All the small things we do differently from the herd make the difference, and having a plan seems to be a big difference – Cheers.

    1. Thanks MDP! If you have enacted a plan and are in the executing stage, then time is on your side. Rewards come to those who planned early, have patience and time. – Cheers.

    1. It’s a pleasure Tawcan. Sharing is one way we learn of possibilities we might not have known about, or may have known about but not taken advantage of. – Cheers.

    1. Thanks AG! The book is a good one. Having read your blog I’m sure you already know most of what is in it, but nonetheless it is a worthy read. – Cheers.

  5. Great story. It sounds like a solid financial plan worked out for you which is great. I think too many people tend to overestimate what basic financial understanding they need to become successful. Your story is a perfect example of how lots of hard work, some basic financial understanding and sticking to a financial plan can pay off in the long run. Congrats!


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