What was your earliest memory about money?
Being handed a can of Coke from my dad after arriving in Canada for the first time. I was eight years old. Coke was a rare luxury in China at the time, so when I first drank it, I was so excited I had a massive nosebleed. I even kept the empty can and used it as a toothbrush holder. That’s when I first realized that Canada was a land of plenty, and you could buy luxuries like this here whenever you wanted.
What’s the first thing you remember buying with your own money?
A poutine. I was in grade seven, and I finally earned my own money–and kept it without giving it to my parents—from a summer job, working at my friend’s family restaurant. It tasted like freedom.
What was your first job?
When I was eight years old, I delivered newspapers in Waterloo. I gave my tiny paycheque to my parents, who used it to buy cleaning supplies for our apartment. When they drove to Toronto to buy groceries from Chinatown, it was my job to clean the apartment.
What was the biggest money lesson you learned as an adult?
Money is simply a tool and not what you use to feed your ego. Once you have enough, you can use this tool to buy your time back. We discovered this in our late 20s and were able to use our money to retire in our early 30s. Since then, our life has been filled with happiness, friends and travel. And buying back our time has also enabled us to help family in times of medical emergencies. That’s the best use of money—to buy back time so you can do what you love with the people you love.
What’s the best money advice you’ve ever received?
Invest your money to build a passive income. To do that, you need to invest in index funds, which is a basket of stocks or bonds that tracks the performance of a particular stock market (e.g., the S&P 500 or the TSX). Because an index fund owns shares of every company that’s listed in that stock market, it’s diversified. When companies fail, they drop off the index and get replaced by new companies. This is a “cleansing mechanism” that ensures your investments can’t go to zero because that would require every company in the index to fail at the same time (at which point you have bigger things to worry about than your portfolio).
Another advantage of investing your money to build a passive income with index funds is that you get paid dividends (profit-sharing from the companies you own) and interest without having to sell any shares. This gives you a reliable income to live on in retirement without having to predict the stock market and know when to sell (which no one can do without a crystal ball). You just buy and hold and make passive income in your sleep.
We run a step-by-step investment workshop that guides people in how to build a portfolio like the one we used to retire, and it’s available for free on our blog.
What’s the worst money advice you’ve ever received?
Buy a house. We are inundated with pro-real estate propaganda in Canada, but the light-bulb moment came when I realized that the people around me who had done everything “right” and went into massive debt to own real estate at inflated prices were even more stressed and unhappy than before. Don’t take financial advice from people who are unhappy or are living lives that you don’t want.
MoneySense Editors
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