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How I Reached $500K Net Worth by Age 29

FrugalTrader (FT) reaching his long-term goal of a net worth of a million dollars inspired me to tell my personal financial story. Similar to FT, I’ve set out a financial plan to reach a net worth of a million dollars by age 35. Through discipline, hard work and determination, I’m already halfway there, recently reaching a net worth of $500K at age 29.

I received a lot of positive feedback from my recent article in the Financial Post: How this man plans to be mortgage free by age 31. In less than two years I’ll own my home free and clear of any debt. Like most Canadians I have most of my net worth tied up in real estate; once my mortgage is paid off, I plan to diversify by investing in my TFSA and RRSP.

Here’s how I’ve grown my net worth to a half-million dollars and you can, too!

Live like a Student after Graduation

While it’s important to celebrate after graduation, you have to be careful when it comes to debt. It often makes sense to delay major purchases like a house or a car until you’re able to at least start paying back your student debt. Instead of renting a condo downtown for $2,000 a month, I decided to stay at home for another three years, paying my parents $600 a month in rent. I was able to save the difference and put it towards my down payment for a house.

Pay Yourself First

This will seem like a no-brainer for many, but it’s still worth mentioning. After graduating from university debt-free and landing a well-paying job, I started saving immediately towards home ownership. I contributed $250 per week to a low-fee mutual fund account. When I found my dream home, I had well over 20 per cent ($170,000) set aside for my down payment. I was able to avoid paying mortgage insurance (CMHC) and put the money towards my closing costs instead.

Frugal Spending

Until my mortgage is paid off, I’m committed to being very strict with my spending. While I’d love to travel to Europe, that can wait until my mortgage is paid off. A lot of people make the mistake of overlooking smaller expenses, such as mobile phones, daily lunches and coffee, but they can really add up.

While I do go out for coffee with friends, I don’t make it a daily habit. If I went to Starbucks daily and spent $3 on coffee, that would add up to about $90 per month. I’m not saying you can’t enjoy yourself, but if you’ve committed to growing your net worth, you have to be willing to make sacrifices and prioritize your spending. Even though I work 80 to 90 hours per week, I still find time to cook meals at home. I also save money on groceries by shopping at discount supermarkets and packing my lunch.

Buy a Home in An Up-and-Coming Neighbourhood

One of my favourite tips from David Chilton in his latest book, the Wealthy Barber Returns, is to avoid the “biggest financial mistake” by buying too big a house. Even though I was pre-approved for a mortgage on a home with a maximum purchase price of $470,000, I decided I was only comfortable spending $430,000. I ended up purchasing a beautifully-renovated three-bedroom bungalow with a basement apartment for $425,000 ($45K under my maximum purchase price). By purchasing in an up-and-coming neighbourhood I’m still able to live in a decent area and live in a beautiful house today while, at the same time, collecting rent.

Becoming a First-Time Landlord

As a single first-time home buyer in Toronto, I decided to take on the added responsibility of being a landlord. Instead of living upstairs, I decided to live in the basement and rent the upstairs to a family. I got this brilliant idea from the host of HGTV’s Income Property, Scott McGillivray, who lived in his basement for nine years while renting out the upstairs unit to save money.

While this may not be a suitable living arrangement for everyone, if you’re single and aspire to be mortgage-free sooner, it’s worth considering. Instead of only making $800 per month for renting the basement, I’m able to bring in $1,550 per month from the upstairs, enough to cover my mortgage payments.

Set Stretch Goals

Goal setting makes achieving your lifelong financial aspirations seem a lot more attainable. For a goal to be effective it has to be time bound. By breaking your goal into smaller steps, your long-term goals won’t seem as difficult.

After graduating from university, I set the stretch goal of owning a home within two years. Although it ended up taking me nearly three years, I was able to eventually find a home I’ll be able to grow into and live in for the years to come. My next stretch goal is to be mortgage-free at age 31 and I’m well on my way!

Conclusion

These are just some of the ways I’ve been able to achieve a high net worth in my late 20’s. Although there are many other ways to attain a high net worth, you’ll have to be determined and willing to work hard.

Do you have a high net worth and want to share your advice about how you got there?

If you are interested, here are some other stories from high net worth readers.

About the AuthorSean Cooper is a single, 20-something year old, first time home buyer located in Toronto. He has experience in the financial sector as a Pension Analyst, RESP administrator and Income Tax Preparer. He holds a Bachelor of Commerce in business management from Ryerson University. You can read some of his other articles here.

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About the author: Sean Cooper is a single, 20-something year old, first time home buyer located in Toronto. He has experience in the financial sector as a Pension Analyst, RESP administrator and Income Tax Preparer. He holds a Bachelor of Commerce in business management from Ryerson University. You can read some of his other articles here.

{ 29 comments… add one }
  • Jungle June 23, 2014, 10:26 am

    very impressive to reach that by yourself at age 29, thanks for sharing.
    Is all your networth in housing?

  • Joel June 23, 2014, 11:59 am

    It is a great story and really something to aspire to. The one thing that really strikes me as being impressive is that you have been able to achieve this net worth by being (wait for it) SINGLE! My net worth never really took off until I got engaged/married because we basically lived the same life but shared all of our living costs which can be a massive savings! So well done Sean! Now that you are a wealthy Bachelor you can have the pick of the litter when it comes to finding your desired life-partner. You have won at life my friend.

  • Evan June 23, 2014, 12:13 pm

    “While I’d love to travel to Europe, that can wait until my mortgage is paid off. A lot of people make the mistake of overlooking smaller expenses, such as mobile phones, daily lunches and coffee, but they can really add up.”

    I agree with the second part of this quote. It probably doesn’t save a huge amount in the grand scheme of things, but it is wasteful spending that provides no long term value or happiness.

    But I would disagree with the first part. You are only young once. Traveling to Europe (as an example) is a completely different experience at 25, 35, and 45. Same thing as going to Vegas for work, with a bunch of friends, or with your wife.

    I think the one thing missing here is what you are doing this for? Is it to retire early? To have the ability for one or both parents to stay at home with the kids (if children are in your future)? Just having a goal or increasing net worth is not a healthy one. Money has no value by itself, it’s what you do with it that creates the value.

  • SST June 23, 2014, 12:29 pm

    At least $425k of that $500k (85%) is principal residence.

    ‘General Net Worth’ is the LCD of wealth metrics.

    Why do you think British Columbia, with its housing bubble, has so many “millionaires”?

    It’s a good starting point.

    Your most impressive and wealth-building feat was not assuming student load debt. That’s a real killer.

    Overall, job well done.

  • debt debs June 23, 2014, 12:54 pm

    Well done Sean! I totally agree with buying less house than you can afford and I also believe that you should pay off your mortgage in 15 years. (I assume you are less than that). This is my own thinking now after learning the hard way and not being $mart like you.

    One thing I would like to know, are you contributing to an employer based RRSP and getting the maximum company match? That is important to do at the same time you are paying off your mortgage in less than 15 years, because that money can grow compounded. I’m sure you are doing this. A granny just needs to check though.

  • Goldberg June 23, 2014, 3:20 pm

    I never understood this fascination with repaying the mortgage so quickly…

    I have a mortgage at 2.25%… In a TFSA or RRSP, I can earn 3% div + cap gains (or 8% and little cap gains for a REIT). Why in the world would you repay your mortgage, only to borrow it back to do a Smith Maneuver (like FT does). A LOC is at Prime+0.5. Even after you deduct it from taxes, you get to the same place…

    I get that people are emotional about debt but that is just financially stupid. You could earn a safe 5.75% (8-2.25), yet you prefer the guaranteed 2.25% return…

    I also never understood the whole “I don’t travel so I can have a fat bank account.” Or “I don’t want kids since they are expensive.” A fat bank account is not the point of life. Sean, as someone who has a very similar net worth as you (but at 34), consider living more! The two things that changed my life for the better were my years spent working for little money abroad prior to starting my master’s degree and having my daughter. Both cost me money. I could have my million now instead of half… but I would do it again. Life is about experience.

    Your next challenge should be to find a balance between living and saving.

  • Greg June 23, 2014, 6:22 pm

    @Goldberg: that would be great if mortgages were always 2.25% and you could be sure to always earn 8% on REITs. Your suggestion exposes you to a lot of interest rate risk. If interest rates return to closer to historical averages you’ll lose yield and capital on REITs and your mortgage rate will go way up giving you higher payments. The effective return from paying down your principle residence mortgage is certain and in my estimation likely to work out better financially in the long run.

  • BA June 23, 2014, 8:04 pm

    I’m going to agree with #3 Evan and #6 Goldberg regarding traveling.

    I partied hard and traveled to many parts of the world during my student days, and I still find time to travel to different parts of Asia, Europe, and Central America with my 3 weeks of vacation every year. Now 26 I travel with my girlfriend, so the partying has calmed down a bit. But still I go every year, and plan to keep doing so.

    Gotta see the world while you still can, in my opinion. There are places in the world that you just won’t go to when you’re 30+ with kids.

    Wouldn’t trade the adventures I had in different corners of the world for anything else.

  • Kevin June 23, 2014, 8:49 pm

    For the down payment on the house. How many years at $250/week did it take? Did the mutual fund have large gains or was it mostly the savings? Did it take 13 years? Good read by the way.

  • @Evan
    While I appreciate your point of view, I think you missed the point of the article. Once my house is paid off I can travel to Europe and have the financial freedom to do what ever I want for the rest of my life.

    @debt debs
    I’m fortunate to have a defined benefit pension plan at work. With the little RRSP room I have left, I’m maximizing my contributions each year.

    @Goldberg
    I like to prioritize goals in life. Once my mortgage is paid off, then I’ll worry about getting married. I’m not going to work this hard forever – that would be crazy!

  • Liquid June 24, 2014, 5:46 am

    Great job Sean :) I’m a big fan of Chilton too. Have you seen him on Dragon’s Den lately? He’s like the new nice guy lol. Buying a place and renting out a part of it was a smart decision on your part. I may do the same in the future. Your story has inspired me to try and reach $500K by age 29 as well. I’m currently 27 and have nearly $300K, but I’m optimistic about the next 2 years as my high quality assets grow in value.

  • Jon June 24, 2014, 12:24 pm

    Is your net worth number net of tax? Both on your RRSPs as well as non-registered investments. Common oversight.

  • Andrew June 24, 2014, 1:15 pm

    Congratulations Saun.
    Don’t forget that ultimately your time is all you have and so trading it and mental space for money (e.g. tenants, side jobs) may not always be wise.

  • 50ishCents June 24, 2014, 1:48 pm

    Hey this is a good article but a few things.

    I really agree that he has taken a lot of the right steps. But I would like to contrast it with my experiences.

    I am currently 29, own a modest home with a mortgage that will be paid off in the next 2 years but instead of saving for a 170,000 mortgage I focused on increasing my income through educational development, and hours and hours of work on my career and my business interests.

    My net worth is over 600 K with money going in the right places.

    I completely agree that he did a great job but I am just trying to say there are alternatives. I understand he worked part time in a grocery store to increase income but that time as well as his other money could have also been used to increase his cash flow in starting a business. As much as I am a saver, I prefer growing revenue streams.

    Also, his comment in the FP article about Europe & Cuba was priceless. I would grab a beer with this guy provided it was happy hour.

  • LK June 25, 2014, 3:17 pm

    I have a tax question concerning the rental suite.

    When you declare the rent to the CRA, I guess you also declare that the basement is your principal residence and that the main floor is for rental. Say 1/3 of the building value is declared as a principal residence and 2/3 rental. If you sell the house, won’t you take a huge capital income tax hit?

  • Evan June 25, 2014, 3:58 pm

    LK;

    I believe the expenses, value is based on the floor area, not the value of the area (where a main floor would be worth more than a basement). There would be no capital gains tax if the value of the home didn’t increase. How much mortgage (if any) has no bearing on the capital gains.

  • S June 25, 2014, 5:17 pm

    Sean,
    You remind me of a lot of myself back in the day (i.e. my twenties).
    I graduated university debt free because I worked during the school year and picked up extra work during the summer (Holt Renfrew – easy gig).
    I can also relate to the long hours worked to build a base from which you can achieve a great compounding effect because time is on your side.

    Regarding travel, I did splurge on beach holidays and Europe with friends and I’m glad I did for the memories. But now I go every year and it’s just as great decades later. So if you want to postpone travelling until your thirties or forties to build your assets, I don’t see anything wrong with that. The Trevi Fountain will still be there for you and look the same.

    The big change in finances came for me in my late thirties, the properties started paying themselves off, my work income jumped dramatically and has increased substantially into my early forties. Though I would have done well with the RE investments, the critical factor was/is my personal income. I would not have achieved my current level of net worth without it. My biggest problem now is staving off burn out.

    Good luck and just like FT, you’re on a great journey.

  • The Wallet Doctor June 25, 2014, 5:29 pm

    I never thought of living in the basement and renting the main part of the house. I think that’s a great idea. You are totally right that this could really contribute to that mortgage in a hurry. I also completely agree with the need to live like a student post-graduation. Too many people get so excited about finally getting a paycheck that they go a little crazy. Its better to continue your modest lifestyle of college and reach financial freedom sooner than live luxuriously immediately after college.

  • CanadianCorner June 25, 2014, 6:23 pm

    @Evan – Totally agree that travelling to Europe is a difference experience at 25 vs 35 vs 45. Feel Sean may be unnecessarily missing out on great experiences at the expense of trying to build wealth faster.

    Bang on with this comment “Money has no value by itself, it’s what you do with it that creates the value.”

  • Geoff June 26, 2014, 1:25 pm

    I think travelling is important, and have done a lot more of from 30 – 40 than I did from 20 – 30, which in retrospect was a mistake. As noted, travelling with children is a lot different than travelling without them (even if you don’t bring them, there are lots of logisitcs to be sorted out).

    I also think that people tend to have a bias for what worked for them as being surefire – for instance, although in your case buying and renting out a floor worked for you, one can easily find lots of landlord horror stories as well, so it’s something to keep in mind for a balanced perspective.

  • Stephen Weyman June 26, 2014, 4:08 pm

    As you know, I really admire what you’ve been able to accomplish from a hard work, net worth, and frugality perspective. It also sounds like you are still able to enjoy life just fine.

    However, it’s worth considering that always delaying things isn’t necessarily a good idea. It would be a complete shame if you were to get cancer or type 1 diabetes, have a heart attack, or get run over by a bus before you had a chance to travel like you want to and meet the right girl.

    Nothing wrong with your plan, but we aren’t always as in control as we want to be. I got type 1 diabetes when I was 24 with no family history and while I still enjoy life there are a lot of things I can’t enjoy freely like I could before I had the disease.

    I totally appreciate your desire for early financial freedom (hopefully you can actually slow down later after going so hard for so long). Just make sure you achieve some balance and don’t miss your opportunity while you have it.

  • A Frugal Family's Journey June 26, 2014, 5:13 pm

    Great post…I think you covered the topic well. I think that one’s ability to achieve some of these things has a lot to do with deciphering between wants and needs. Secondly, one’s happiness meter also affects these items and the intensity in which one put forth to achieve them. Bottom line, if a person can control their wants and can find happiness in the simple things, they can go a long way toward achieve wealth.

    Wishing everyone nothing but success in their own personal journey! AFFJ

  • financejourney.com June 26, 2014, 9:29 pm

    Great inspirational story, I don’t think I could reach 500K net worth by 29, but I will try my best. My ultimate goal is achieve early financial freedom.

    Cheers,

  • My Own Advisor June 27, 2014, 10:56 am

    Thanks for sharing Sean.

    Great work on working towards those goals. Like Stephen, I admire what you’ve been able to accomplish at a young age. Just make sure you enjoy the journey :)

    Stick with the plan as long as it fulfills everything you are striving for without sacrificing too much in the process. I look forward to reading about your updates.

    Mark

  • Alpha Centauri June 28, 2014, 3:32 am

    Wickedly awesome idea: living in the basement to pay the mortgage faster! That’s a luxury you can do when you’re young. Perhaps a little harder with a wife/husband and/or kids! You were wise to make the short-term sacrifice while young.

  • Liette Seguin July 2, 2014, 1:30 pm

    That’s so impressive. 29? I can’t believe it! Thank you for sharing anyway!

  • Brian July 16, 2014, 4:46 pm

    Great example of how not to live a full life. Thanks Sean. Being smart with your finances and saving properly to secure a comfortable future is an admirable thing; but taking things to the extreme–as you’ve done–isn’t really commendable at all. “I’ll worry about getting married once my mortgage is paid off”? You don’t even understand the shackles you’re obsession with money has put in, tying you to obtaining a number value that means…what? That you will then be able to “live life”? You’re living it now man! This is it! What are you doing with this life to build your memories and experiences?

    I’d be far more impressed if you were 29 with a net worth of 200k-250k, but had traveled the world for 8 months when you got out of college; managed to find the love of your life and married her at 28; had a decent job working 40 hours and not 80, hours that allowed you to read some classic novels in the summer evenings after work; spent money on fees to play on a softball and soccer team; and lived in a small apartment with your wife with plans to purchase a small home together.

    Glad you live in a great home; too bad you live in the basement. So now you can listen to your renters make love while you stare up at the ceiling at night.

    Live life man. You’re only in your 20s once.

  • SST July 16, 2014, 9:50 pm

    Wow. This is awesome.
    Truly one of the best and worst posts I’ve ever read.

    To be a bit less…scathing, this is a very difficult “lesson” to learn for one being born into a pinnacle of capitalism; even more so if you choose to make living Capitalism your life’s goal. It’s also difficult for most young people to grasp this concept as most have never been seriously kicked in the butt by life. Thing with money is, there is an endless supply — the very antithesis of your life.

    Then again, there are people who just need to live like that, and they are perfectly happy. There are as many ways to live life as there are people on this planet.

    Even Bill Gates set aside one week a year to just kick back and do nothing but read books. But we all know what he did during the other 51 weeks. ;)

    “One life,—a little gleam of time between two Eternities.” — Thomas Carlyle (1841)

    Sit back and let that sink in…

  • Mark August 1, 2014, 6:11 pm

    Interesting story but how did Sean save $170,000 for a down payment after only 3 years@$250 per week? Even with growth I doubt you could accumulate more than $50K.

    Sean:
    “I contributed $250 per week to a low-fee mutual fund account. When I found my dream home, I had well over 20 per cent ($170,000) set aside for my down payment.”

    “After graduating from university, I set the stretch goal of owning a home within two years. Although it ended up taking me nearly three years, I was able to eventually find a home I’ll be able to grow into and live in for the years to come.”

    ~ Mark

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