1. Name the top three experiences from your past, that help form who you are today.
I grew up in a small town where it was hard for young people to get a job. You had the usually jobs in retail, grocery stores and fast food restaurants. Most people worked in the fishing industry , coal mines or the steel plant. As I was growing up, the cod fishery collapsed due to over fishing. The steel plant was owned by the provincial government, who closed it down. The coal mines were owned by the federal government, who took it over in 1967 to wind down operations. The government owned coal mines eventually closed down in 2001. My father worked in the coal mines for 33 years and took an early retirement package in 1999. This was not a defined benefit package and ended when he turned 65.
My father has a good memory put never put it to use. My father was no good with money never invested a single penny. Money was never talked about in my house growing up. I vowed to live differently when I was older. In 2010, I started to invest in the stock market.
Around when I was 15, my parents separated. The financial situation went even worse. My mother went on social assistance as she never worked. My father was stuck with all the marital debts and plus had to pay child support for my youngest brother. I was very observant about how this was handled and vowed to not have children unless I was in a good situation in life.
When I was growing up nobody cared about what to do with the rest of their lives. There was no talk about entrepreneurship or investing. People would go to parties, dances, or to the mall just to hang out with people. I don't have a problem with people socializing, but when they do it all the time and not engage in conversations of their future and what they would like to do with their lives it is wasting time. I decided I want to make good use of my time.
Although the questions asks for 3, I have forth one. I worked at job that was crappy. My co-workers and I were treated like garbage from time to time. Also, we were told to stay home without pay if it wasn't busy enough. One time this went on for 3 weeks due to our client having better heath standards than Health Canada in terms of exposure levels. It definitely makes you realize how much power the employer has over you. This definitely help light a fire inside me to change my life financially.
2. If you have one important piece of advice for investors starting out what would it be?
My important piece of advice for investors is to start earlier as possible. Usually a person is not able to work until about 16 years of age due to child labor laws. But that doesn't mean you can not start a business of some sort such as mowing lawns. The person can than take this money and invest in dividend paying companies that are well run and easy to understand.
3. What was the worst investment in your life? How do you avoid making the same mistakes?
I invested in a mining company in British Columbia through the Canadian Venture Exchange. There projects seemed to have the goods in the ground, but when the recession of 2008-2009 hit, the price of Molybdenum stayed very low as it was stock piled in countries such as China. The main project of this company never got off the ground. The company stopped sending financial reports out. Eventually the company got de-listed and is now with zero. My loss was under $2500
4. Outside of work and investing, what is your biggest passion in life?
My biggest passion in life outside of work and investing is travel. I currently do not do it as I am not in a position financially to do it. This is one of the reasons I had the epiphany in 2010 when I woke up one day and decided to change. By creating streams of passive income, I reduce the stress in my life and make living easier.
5. What is your top 3 Favorite books of all time? Why?
My favorite 3 books of all time are Rich Dad Poor Dad, The Cashflow Quadrant and Stop Working - Here's How You Can.
Rich Dad Poor Dad is written by Robert Kiyosaki. This book will change your view on money. The book is about Robert growing up wanting to be rich, and grew up in a family where money was not important. Robert's father was the superintendent for Education for the State of Hawaii. His best friend's father was a grade 8 drop out who owned businesses and real estate. Robert and his best friend started to learn from this entrepreneur how money works and how the rich think differently.
Rich Dad Poor Dad talks about 5 or 6 things are important if you want to become wealthy. The book discusses why you personal residence is not an asset whereas the banks tell you that your house is an asset. Kim and Robert started saving 30% of the income when they started out in 1985. In 2010, I started with 30% also, but I did 20% saving and 10% to investing until my savings was up to a certain amount then 30% went to investing.
Cashflow Quadrant was also written by Robert Kiyosaki. This book talks about the 4 different types of people who make up the world of business. The quadrant has E (for employee) and S (self-employed) on the left side and B (for big business) and I (for investor) on the right side.
The people who work in the E quadrant work for money and want a safe secure job with benefits. The people who are in the S quadrant, work for themselves as they believe if you want a job done right do it yourself. The people who are in the B quadrant, want people and money to work for them. If they leave the business for a while, it can still run efficiently as they put systems in place. The people in the I quadrant want money to work for them.
As less and less companies have pensions, people have to learn how to be investors. The amount of taxes you pay depend on the quadrant you are in. Employees and Self Employed pay the highest amount of taxes. On the left side of the quadrant, you have to work to get paid. In the I quadrant, you can invest in a dividend paying stock, and the company will pay you a dividend on a regular basis for just being a shareholder.
The third book is Stop Working - Here's How You Can by Derek Foster. Derek Foster is an average guy who never made a lot of money but managed to retire from the rat race at the age of 34. Derek invested in dividend paying stocks and income trusts that paid distributions. In later books Derek talks about an investment in a cigarette - making company after a major lawsuit. He bet a lot of money, including a margin, on this company and fortunately the price did rise. Derek found this time stressful when holding the stock using so much margin. Also in a later book, Derek talks about how he took out a loan of 8.5 percent to invest in a REIT with a 11.5 percent yield. Derek Foster shows you how an average guy can retire early by investing. Derek often says the 95% of the stocks are garbage and he invests in the best of the best such as Johnson and Johnson.
To continue with the tradition with this award, I nominate two bloggers and pose my set of five questions for them. I nominate:
Jason Fieber of Dividend Mantra
And
Kraig Mathias of Create My Independence
The 5 Questions are:
1. Name the top three experiences from your past, that help form who you are today.
2. If you have one important piece of advice for investors starting out what would it be?
3. What was the worst investment in your life? How do you avoid making the same mistakes?
4. Outside of work and investing, what is your biggest passion in life?
5. What made you choose your method of investing to get to financial independence?
Hang out with people who lift you up and inspire you do be a better person.
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DISCLAIMER:
I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.
Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk.
