As you know if you’re a regular reader, I read and respond to every one of the comments I get on my blog posts. Some of you commenters have been commenting on my blog for years, and believe me it does not go unnoticed. One such commenter is Rob.
He always has the best comments, so I reached out to him to see if he’d want to actually be part of a blog post. I emailed him some questions about his life in relation to personal finance, and here are his answers. Thanks Rob for participating!
What was your relationship with money growing up and how did it affect you throughout your adulthood?
Our family wasn’t very well off when I was growing up with my two other younger siblings. Dad had lost money in his stock market investments during the Great Depression and he never earned a big salary.
Mom didn’t work but stayed home to take care of us kids until we were in our mid teens. Back then it was common to have only one breadwinner in the family, usually the father. We didn’t own a car back in those days in Montreal but fortunately there was public transportation and we all walked to school. To make ends meet, my parents also rented out one of our spare rooms, located downstairs in our medium sized 2 story 3 bedroom house. So we all had to closely watch our spending.
That said, we managed ok and, although our parents couldn’t afford it, we 3 kids were able to work summers, as well as weekends during the winters, so that we each could finance our own university tuitions while still living at home. One of the good things about living in Montreal was that Quebec had low higher education tuition costs as compared to other provinces.
Also back in those days we finished high school in grade 11 and so, after attending 4 years of university, I graduated with a B.Sc degree (Math) by the early age of 20. Recruited from university I was thus able to start my full time IT career at a pretty young age, compared to when millennial folks such as yourself are starting out these days.
Now, because of the way we were raised, from an early age I was determined to make a big effort to improve my lifestyle as much as possible. Having no student loan debt definitely helped the cause. One thing that I did know was that I wanted to learn more about business, self motivation, and especially everything related to finances.
You can’t make wise decisions unless you educate yourself, gain experience and learn from your own as well as the mistakes of others. To educate myself in these areas, over the years I haunted libraries and bookstores (in the self help, business, psychology, and financial sections).
Of course we all know that learning is a life long activity and so even today I never stop learning new things — not so much in hard/soft cover books anymore but mostly online. It’s much cheaper, easier and far richer in content.
There are tons of websites out there that provide university training, ebook reading of many popular novels and technical writings, not to mention blogs and podcasts galore (such as yours) on a vast array of topics (financial or otherwise).
You’ve mentioned in the comments that you moved from Montreal to just outside of Toronto. Why did you move and was it a positive decision when it came to your finances?
Actually Jess we moved from Montreal to Toronto proper (the Willowdale area) into a detached side split house, located very close to the employers of my wife and myself. It was in early 1978 and back then there was a lot of unrest in Quebec, with many calls agitating for French sovereignty and separation from Canada.
Also there was a lot of labour unrest and strikes. It was not a peaceful time for many. The result was that a number of companies were deciding to transfer their Head Offices from Montreal to Toronto, Calgary and other western cities.
And so it happened that my employer (at that time) decided to join them. A new IT data centre was being established in Toronto and I was offered the chance to move to join the staff at this new site. Although both my wife’s extended family and mine were still living in Montreal we didn’t hesitate but jumped at the chance.
The move represented a supervisory promotion for me. Our entire moving expenses (moving van and movers, real estate fees in selling our old house/buying our new house, legal fees, misc spending) were fully paid by the company.
As well, we received generous housing assistance — tax free, spread over 10 years, and non repayable. Toronto housing was (and definitely still is) much more expensive than Montreal and so housing assistance to help pay the higher monthly mortgage payments was absolutely critical if we were able to afford the move. To this day we consider this a positive decision.
Besides my own future I had to consider the futures of our 2 young kids at the time. Many other Anglo professionals were moving out of Quebec back then (although fortunately not so much the case these days) — teachers, doctors, employers, etc.
Over the years my decision was proven right. The kids received great educations. Both received higher education degrees which eventually led to well paying careers. Neither of them incurred any student debt since, being smart (like their old man — yeah right! lol), they each were fortunate to qualify for 4-year scholarships, sponsored by the employers of my wife and myself back then.
So I have to say the plan came together for us.
Over the years, what were some of your most memorable money mistakes?
There was really only one memorable mistake that I can remember and, although it fortunately didn’t cost me any loss of capital, it did cost me in potential investment growth income which wasn’t realized. Looking back now I feel that I made the same “mistake” as my dad made when he lost money in his investments during the Great Depression. I would say that even today many people still make this same mistake. Any idea what it is?
Before I answer with my views let me pose these thought provoking questions at you:
Would you do brain surgery on yourself or go see a qualified brain specialist?
Would you perform dental work on yourself or go see a dentist?
Would you attempt to drive your car all by yourself the very first time or would you first take driving lessons from a qualified person?
Of course the answer to all 3 above questions is that you would seek qualified assistance and not try to perform activities where you had little (if any) previous experience in successfully performing. Well the same idea applies to effective and successful money investing.
Why fool yourself into thinking that you are smart enough to invest large sums of money based on one’s own limited financial knowledge and experience?
Some years ago I decided to invest a significant amount of money at my friendly neighbourhood bank in a 5-year market index fund. I read the pretty brochures on it and from previous years documented history, it had gained good money for its investors.
Of course, as so often happens, investment history does not always repeat itself and sadly in my case after 5 years had passed the fund had not earned one cent in profit for me (sob!). Fortunately the invested principal amount was guaranteed so I didn’t lose my initial money invested but I could have made much more money by just dumping it all into a GIC or some other high interest savings account. Lesson learned.
I should have instead first contacted a qualified impartial financial adviser, one who was not trying to earn a commission by selling me some financial product but to provide me with knowledgeable opinion and resources as to where to better invest my hard earned money.
No man (or woman) is an island. Getting qualified opinions from others whom you trust is highly recommended when you are embarking on financial decisions – whether it relates to investing, to buying life insurance, to making an offer when buying a house, whatever.
What were some of your most memorable money successes?
I can think of 4 memorable occasions:
(1) The opportunity that one past employer gave us to move expense free and the means to afford an equivalent style of house ownership when we arrived in Toronto as compared to what we had in Montreal at the time. Toronto housing affordability was obtained.
(2) The 4-year university scholarships that this same employer, along with my wife’s employer, granted to our 2 kids upon submitting and winning their scholarship applications. No student debt as a result.
(3) The employee benefits afforded to me during the last 17 years employed at my last employer before I retired. Their savings plan provided us employees with the option of putting up to 10% of our salary (through regular payroll deductions) into purchasing company stock. For every $1 of our money the company would match it at 50 cents on the dollar – tax free!
During the years employed there their stock price has increased by over 3000% so with steady saving and earned dividend reinvesting a significant pile of change has been accumulated. So I saved the max (10%), never felt it (the old “pay me first” payroll deduction strategy), reinvested all the dividends, watched the compounding grow, and retired with those earnings, along with my other income streams (employee profit sharing , RRSP / TFSA / OAS / CPP).
(4) And last, but definitely not least, was when our daughter met her guy, our son-in-law, and got married. His dad was in charge of a franchise business for a major Canadian financial services company and our SIL took over the business when his dad retired. He then generously offered to help us manage our investments which have over the years profited very well from his advice and assistance.
We lucked out in finding a highly capable financial adviser whom we could trust.
How did you prepare for retirement? How much did you figure you needed to be comfortable and when did you start saving up for it?
As mentioned I graduated in Montreal at age 20 with my university degree and started my first full-time job. Back then RRSPs had been introduced only 10 years previously and, since my employer was offering group RRSP plans as part of their employee benefits, I signed up and started saving what few bucks that I could afford back then.
It seemed like a good idea and since by nature I was a saver, I didn’t miss the extra (small) payroll deductions. Of course I was a financial newbie at the time so it took awhile before I refined my investing strategies more productively.
I’ve never given it much thought as to how much I’d need “to be comfortable” later in retirement. My philosophy is that it is what is at the end of the one’s career. The one strategy that I live by is that I make sure that every buck that I ever earned (through working long hours, saving frugally, investing wisely, robbing banks — no, just kidding!) has had a purpose in meeting my short/long term goals and each buck is not sitting idle but out there earning more money.
Then I sit back and let time and compounding be my friends.
What advice would you give to a millennial like me who has just started a career and is in the early stages of saving and investing for the future?
Well it’s been many years since I’ve been in your shoes (well actually high heels aren’t really my thing — lol) and no one out there has all the right answers. Especially moi!
I would say that it’s a mixture of things to keep in mind, a lot of it personal — doing your own thing. Some of it is luck (and I’ve happily had my share over the years). Some of it is learning — life-long learning. Hard work — yup. Keeping a look out for opportunities — yup. Frugal living, wise budgeting, saving, spending, investing — yup, yup, yup, yup.
Meeting the right soul mate in life, one who’s on the same page as you in many different ways (not just financially). Not being afraid to take risks some times. Being patient, disciplined and determined to eventually reach goals (short or long term). Willing to make sacrifices, willing to pay one’s dues in life. All that along with being strongly motivated.
And finally — not trying to do it all by yourself. No one can go it alone. We all need others to help us succeed in life — yes, even from invisible blog readers.
See why I had to interview Rob? He’s awesome! If you’re a commenter/reader like Rob and don’t have an outlet to share you story, I’d love to hear from you. Just shoot me and email and maybe you can be my next interviewee!