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Before making a major financial decision you
should consult a qualified professional.
Free in 30 is a plan to help you go from
having nothing to being financially independent in 30 years or
less. With real estate prices the way they are today, we know that
the road to financial freedom is not as easy as it was in 1968, and becoming
financially independent may take a lot longer than 30 years. However, the
process is still the same - have a plan, live below your means, save and
invest,
and make your money work for you!
The couple who publish this website started married life
in 1968 (he 21, she 17) living in a furnished rented
apartment, with no savings, and they could carry all their
belongings in a suitcase. Both had high school
education. He was making $4,940 per year, and she had
just started working full time, making $3,000 per
year.
They purchased a house
soon after marrying. The house was 100% financed, with a parents' house used as collateral
also. They always had an open variable rate mortgage, even when rates were close
to or above 20% in the 1980s.
Work Life / Family
Within a few
years of getting married, they
were raising two children.
He worked while she stayed home
(working part-time) until both children were in school full-time, at which time she returned to school to become an
accountant. She started working full time in 1979, at the same time
continuing her studies in the Certified General Accountant (CGA) program,
becoming a CGA in 1983.
They started one business and later bought another
business, which was sold in 1988. He was then self-employed and able to work part-time, retiring
completely in 1995. They then started a small
Christmas tree farm.
In 1997, she quit her job and
started to work part-time as a consultant, retiring in
2001. Soon after, they started this website, because income tax
information was very hard to find online at that time.
By 2012, the BC CGA Association wanted her to register for public practice
because they were publishing the TaxTips.ca website, even though there were
no clients of the business, and never would be, with all income coming from ads
on the website. They also said he would
not be able to be a shareholder in the business any longer. Thus, she resigned
from the CGA Association.
Live Below Your Means & Save!
Financial independence was accomplished mainly by living below their
means, and saving money.
The only non-tax deductible debt they ever had was to buy
and renovate their first home. One of their favourite sayings is "borrow to invest, never to
consume".
When he was in his teens, he had a very good
lesson in how credit cards can cause major problems.
His mother let him use her credit card to buy Christmas
presents, and he got a little carried away.
By the next Christmas, he was still paying off the presents
from the previous year! Due to this experience, he
avoids "consumer" debt to this day!
Make Your Money Work For You
The "Richest Man in Babylon" pamphlets, which
were available at a local credit union, also made a great
impression on him. These pamphlets recommended that
you invest your money and make it work for you, instead of
you working for it.
Save and Invest
They borrowed to invest in RRSPs,
because at that time the interest was tax-deductible.
They invested their RRSPs mainly in interest-bearing investments until
interest rates dropped in the 1980's, when they started
investing in stocks. For investing outside of RRSPs,
they considered day trading, but it looked like a good
opportunity to lose a lot of money, so they passed.
They also looked extensively at investing in commercial real
estate and developing some property, but finally decided to
invest in stocks, both inside and outside RRSPs. Stocks provide a good return over time, are easy to sell a
portion of if some money is needed, and are fairly easy to
manage. They've made mistakes along the
way, and lost money in 1992, 1994, 2002, 2007, 2008, 2011, 2015, 2018 and
2022,
but have
averaged 10.8% annual return from 1992 to 2023, with a 5 year return of 15.8% to
2023. This return is net of the
interest paid on borrowing to invest.
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