Age 53 - Canadian
I recently hit a significant milestone and for numerous reasons I feel reluctant to share with family and friends so I thought I'd share my success story here and see if anyone can benefit from my experience.
I set savings goals for myself in high school when I learned about the power of compound interest. It was a time where interest rates were astronomical compared to today and at the time it seemed easy to accumulate wealth. My initial goal was to invest 10% of earnings or $3000.00 per year (Whichever was lower) until retirement. This coupled with 10%, or greater, interest rates at the time would guarantee that I become a Millionaire by retirement. As you can imagine, there were some hiccups along the way but for the most part, I've kept up to my goals. Here's how.
- I never put more purchases on a credit card than I can cover with cash. I always paid the full balance. Other than a couple of times where I forgot to pay it or accidentally paid the wrong bill, I've never paid interest on any of my credit cards
- When I bought my home, I took advantage of every 1st home buyers plan I could. I had saved 25% towards a down payment to avoid requiring Mandatory insurance
- I made extra payments towards the mortgage whenever possible
- The home was paid off in less than 14 yrs.
- With the house paid off, I secured a line of credit for $75,000 that I use rarely if ever.
- I bought my first new car using the line of credit and paid it off in less than 3 yrs. Then I bought my second new car which was paid off in 2 years
- All along I've been investing my 10% or $3000.00 per year. Mainly in mutual funds and registered in what Canada calls RRSPs which are tax deferred. What this means is if I invest $3000.00 now, the Gvmt will refund the Tax I have paid on that money. When I withdraw the money, I assume (Hope) it will be at a lower tax rate. In the meantime, I can put the refund to work. Typically, I would increase my investment by the amount of the refund. e.g. if $3000.00 would return $1200.00 then I would invest $5000.00 to get a $2000.00 return.
- As my wage increased, I increased my investments accordingly
- If my work had any investment incentives, I took advantage to the max. At one point, I had 8% of my paycheck withheld and the company was matching with an additional 8%. Free Money, I'd be crazy not to.
I'm sure I'm missing a couple of highlights but those are the ones that stand out for me. Yes, I've made lots of sacrifices along the way. I've never bought anything I could not afford. I didn't get off dial-up internet until around 2004. No cable, No TV, Didn't miss it. Game system were bought on Rewards programs and my computers are fairly basic.
Edit: forgot to mention a wife and 3 kids along the way. My wife was stay at home or at best part time until 2010.
Results:
- Investment Balance >$600,000.00
- Property Assets > $400,000.00
Yup, technically a millionaire, and proud of it. and just had to share with someone.
My road map to 65 has me at 1.2 - 1-5 Mil in investments by retirement.
I'd be happy to answer any questions if anyone is interested
Submitted February 14, 2017 at 03:11PM by Needless-To-Say http://ift.tt/2le3DFg
