It's another Saturday Teen - Yes it is and today we're going to talk about early retirement
where did we get the money Norm - Now that is a darn good question where
the hell did we find that money - And lots of people are asking us that too
and if you're new to our channel we would really appreciate it if you could subscribe
and give us the thumbs up it does really help our channel to grow - Norms t-shirt of the day
- Ooh you've got the Doors on today Norm - Great band I'm running out of t-shirts so
they'll start getting recycled soon - You're getting quite the fan club looking at your great
collection of t-shirts - So basically we get asked the question how were we able to retire at 55 and
where did we get the money to do that so here's the Coles Notes version we arrived in Canada in
1992 with a very small amount of money because of a housing crash that happened in the late 80s
in the U.K. and believe it or not house prices can go down in value as well as up - Yeah
and in actual fact that's happened to us a couple of times hasn't it Norm - It's happened once in the
U.K. and once in Canada - Where we actually lost so even though there's a housing boom at the
moment houses can go down just as much - So we were committed to buy a house in Canada
we'd owned a house in England and that was the way forward for us so we saw our house as being a safe
place to raise a family but also it was going to fund our retirement because we did not have
company pensions - So even though we just had a small amount of money when we came we actually
we bought a modest house didn't we Norm the first house in Canada was a really nice but modest house
and at the same time we bought this house we then rented for a year while it was being built
so that was quite exciting to see it being built wasn't it - It was and around that time
the "Wealthy Barber" book came out it's a personal finance book by David Chilton and
we I don't know how we got a copy of it but - I don't either I can't remember but we did didn't we - And
we read it cover to cover both of us did and it really spoke to us it was a simple message
but it was very powerful especially as we didn't have any money - It was kind of it was kind of the
message we needed to hear wasn't it - It really was - No money starting over and hey if this book can
do it we can do it - And I was 38 years old so to put it into context we were starting over again
and so what did David Chilton tell us to do - Well basically he said to pay yourself first and we
thought oh that kind of sounds a really good idea - Easy enough - Yeah so that's what we did we
set up a standing order to pay we sent 10% of our monthly money away so that's what we did we paid
that first and then we learned to live on what was left over and the funny thing was after a while we
didn't really miss it did - We never missed the money after 2 or 3 months yeah didn't even know
you were saving because it was just automatically taken - It was great - So we put that into mutual
funds so it was being paid every month into mutual funds in cash and then we would buy units
in the mutual funds and initially they were going pretty good until they stopped going pretty good
(yeah), and then they weren't making money for us and the management expense ratios were very high
this is in the mid to late 90s so we decided to get rid of the mutual funds and so what we did was
opened a discount brokerage for an RRSP and I had the mutual funds sell off all the units in their
funds and send the cash to the discount brokerage and then we bought good quality dividend stocks
primarily some U.S. stocks to maximize the foreign content that you're allowed to do in those days
and the rest in Canadian equities - And while we were very busy doing that we had actually been
looking at a subdivision very near to where we lived and low and behold our dream house came up
at that time didn't it - It did but even better was the price - Oh it was because the house actually was
a power of sale so we got it at an awesome price didn't we - We got it deeply discounted because
- Now it did need work - It was a bit of a mess inside and the the people who had it had disappeared in
the middle of the night - Yeah so we did have to spend quite a bit of money on it over a period
of time didn't we - But we were handy we could do painting and flooring - We did lots didn't we
- So we got the the dream house which is what we felt we owed the children coming to Canada
it's a beautiful house and we knew that that would eventually be sold to fund our
retirement yeah so instead of contributing to RRSP's what did we do with the money
- We put it in the house so basically then we were making bi-weekly mortgage payments increasing
payments as much as we could every year each year we were allowed to put an extra 10% in
at the end of the year I think so we decided all our money was going to go in the house we're going to keep
increasing the payments until we got the house paid off as soon as we could - So every
year we were allowed to increase the mortgage payment by 10% and then eventually went to 15%
and we kept just increasing that every year we never had any capital to be able to repay it but
we had good cash flow - Yeah because we were kind of living pay cheque to pay cheque didn't we
we had good jobs but - We did middle-income jobs (yeah), but we were funding university
- Yeah to put both our children through - And we were trying to increase the take those
RRSP payments put them into the mortgage to get rid of the mortgage so yeah we didn't have
foreign vacations the only things we were doing we were driving down to Myrtle Beach in March - But
we had some awesome trips didn't we of those driving down with the kids taking two days
to get there it was fantastic it was fun but that's where the vacations came from wasn't it
- So then as I said I was 38 by the time I got to 55 I'd had enough of working
we've been able to reinstate our wealth from what we had in the U.K. plus more (yeah), just by
buying that house at the right price the
price increased substantially - Yeah it did didn't it - And so basically we had the cash
in the house so we sold it and moved to a cheaper town and invested the money maxed out the TFSA's
- And at the same time we paid all our debts off didn't we too which was - Because having had the
house over the years (yeah), it does need constant maintenance and we replaced a lot of things in
that (yeah), they all went onto lines of credit - Yeah because we put decks and roofs and windows didn't
we all had to come from somewhere didn't it - So the decision was pay the line of credit off
when we sold the house and we walked away debt-free with a smaller amount of money but
we've invested that and it's been great - It has - And that's why we've traveled so extensively because
we missed out on traveling coming to Canada at the age we were and having the additional expenses of
rebuilding a life and putting your kids through university or helping them they helped us as
well by contributing towards them - But that was always our plan wasn't it the plan was to have the
children and then we would start traveling after and really that's what we've done haven't we and
it's been fantastic so far - So we would encourage anybody in your mid 30s early 40s you can do this
(yeah), if you're not doing it already there is still time start paying yourself first look
to buy a house build some wealth if you can't afford a house buy an apartment (yeah), and get
on that housing ladder and that's how we did it it was real estate by buying and selling houses
moving up the the ladder that we've been able to create a retirement fund that we were able to
retire early so that's our story - It is and we hope everybody's enjoyed our story and hope everybody
is staying safe and keeping well and - Thanks for watching and until the next time bye bye, bye bye