Book Review: Stop Working! Here’s How You Can! – By Derek Foster
Derek Foster, self proclaimed Canada’s youngest retiree, has written a thought provoking book “Stop Working! Here’s How You Can!“. I’m sure a lot of you have heard about Derek, but for those who don’t know about him, he retired at the age of 34 while never holding a steady high paying job in his short career.
From reading about him in the newsgroups, he pulls in around $30-$35k/year from his dividends (equivalent to around $70k/year salary), along with income from book sales, and rental income from a single investment property. His home is paid off in full, he drives a new car, goes on vacation every year, and has 3 children.
How did he do this? In his book, he describes how he developed an investment philosophy which is a hybrid of the teachings from David Chilton (The Wealthy Barber), Peter Lynch (One Up on Wall Street) and Warren Buffet, which has allowed him to retire at such a young age. He made a commitment to himself that he would put away $200/month every month no matter what. With the investment money, Derek focused primarily on strong dividend paying companies with brand recognition that are recession resistant. You can read about his stock picks in his book.
Main points made by the book:
- You don’t need as much as you think to retire.
- Start as early as possible, and make a commitment to contribute to your investment portfolio no matter what.
- Invest in strong dividend companies with brand recognition and increase their dividends on a regular basis.
- RRSP’s are not for everyone.
What I liked?
- The book shows the power of dividend growth and the minimal taxes when using dividends as income.
- Gives a viable strategy for retirement cash flow.
What I didn’t like?
- He picks a lot of income trusts in his book. At the time of writing, these trusts were probably a good pick, however now with the new income trust taxes introduced, they aren’t as appealing.
Who should read this?
- Anyone who is interested in personal finance, investing, and interested in reading a great story.
- Another book that gets the two thumbs UP! Great book that is written clearly and flows nicely which makes it an extremely easy book to read. This book has been added to the MDJ Must Read book list.
- Derek gives a compelling argument for investing in strong dividend paying companies. I will follow up with an article with some dividend stock picks.
- I’ve talked about investing in strong dividend paying companies before, Derek is actually the one that first introduced me to the concept a couple years ago.
- This should be available at your local library. If you want a permanent copy, you can pick one up at Chapters for around $15.