Here at the dojo, being a black belt in finance means to have a net worth of a million dollars.
Just like a martial arts dojo, I want Millionaire Dojo to be a place where we can learn about personal finance and eventually become financial black belts ourselves. In this series, we get to hear the stories of actual millionaires and see what it took for them to get to that level.
Today’s guest is Brad and he blogs over at myroadtowealthandfreedom.com. Brad is married, lives in Ontario Canada, and is a young millionaire at the age of 40. Brad has been tracking his net worth on his blog since May of 2014, so be sure to check it out and read more about his journey after reading this interview.
Now for the interview:
What degree black belt are you? (e.g. one million = first degree, two million = second degree).
Give us the break down on your current net worth. What is it invested in and do you have any debt?
By my most recent calculation, I estimate my net worth conservatively at around $1.2 million. If I account for the true market value of my real estate it would be over $1.5 million. Of the $1.2 million, about $512k is in real estate and 675k is in liquid financial investments like stocks and ETFs and I have small amount of gold and silver coins that I collect.
How was your childhood? Was your family wealthy, middle class or low-income?
I had a normal middle-class upbringing. My parents were pretty frugal and always found ways to stretch a dollar. I always knew finances were important if you don’t want to struggle throughout life. While I agree that money doesn’t solve everything, I do think that having a little bit of money makes a lot of the day to day problems that we face a lot easier to deal with. After all, the problem that most people have is that they don’t have any money!
Did you go to college?
Yes, I spent way too long in school “finding myself.” I completed a Bachelor’s and Master’s degree.
What is your fighting style? (Career path from first dollar ever made to present).
I’ve worked in the transportation sector all of my life. I wouldn’t say that it’s a dream job but it does pay very well and has good benefits. My objective from day one was to find a decent job with good pay so I could start building wealth.
Would you recommend people to pursue the same career path? Would you choose a different job if you could go back?
That’s a tough question because I feel like everything I’ve done to date has brought me to where I am today. It’s the big what if question. Things always look quite different in retrospect and we tend to see things more clearly than when they presented themselves at the time.
But if I had it to do over again, I would have been more focused in school and started working much earlier than was the case. Education is important, however, staying in school too long delayed my “working” life by about 6 years. That’s a long time, especially when you think about the power of compound interest.
Have you had any side hustles?
Other than my blog, I don’t have any other side hustles.
If you have a spouse, how have they contributed to your net worth?
For the most part, my wife and I are on the same page when it comes to money. We don’t splurge on expensive things, but we do value our experiences like vacations or outings with our children. Throughout our thirties we did a lot of things right like focus on saving, investing, making more money and paying off our debts. Now we are starting to ease up a little and enjoy life a bit more.
How old were you when you became a financial black belt?
At what age did you start seriously saving money?
What has been your investment strategy?
My investment strategy focuses on building passive income so I won’t have to rely exclusively on my job to make ends meet. Dividend stocks and ETFs are the majority of my passive income. I owned some rental properties for a period of time but sold them due to property manager issues. I’m still open to buying another rental property someday when the time (and price) is right. I think that owning a combination of stocks and real estate are great ways to invest and build wealth.
Who was your financial sensei? (Most influential person/source of information in your financial life).
When I started to make real money out of college, I read the Rich Dad Poor Dad and the Automatic Millionaire. I immediately began to automate my savings and investing, and that one simple act went a long way towards helping me cross the million-dollar mark.
Are you pursuing FIRE (financial Independence/retire early)? If so, how much money do you plan to retire on and are you going to quit working for money altogether?
Having money gives us options in life. We have the option to stay at our current job or retire early or start a business etc. I like to keep my options open right now because I like where I’m at.
Right now I’m focused more on building financial flexibility more so than strictly saving for FIRE. I’ll admit that the fire movement is pretty inspiring. But I would personally need at least another million to fully retire comfortably. “Comfortably” is the keyword. I read lots of articles about couples with no children, or home, etc just leaving it all behind after socking away a million bucks.
That’s not really practical for me or the vast majority of people out there. I struggled a lot to get to where I am already, and I’m not interested in eating ramen noodles for the rest of my life!
The reality is that it’s tough to raise a family on 30k or 40k a year. Many people in the FIRE crowd leave their day job for what is essentially self-employment. Whether they’re running an online business like blogging or dealing with their rental properties or some other investment, these guys typically are still working. Sure they’re the boss and they ultimately control their time but it’s not exactly sipping margaritas in retirement.
Mind over matter
Do you think psychology plays a more important role than math with finances?
Honestly, I think it’s a bit of both. Psychologically, be prepared to face a lot of adversity in building a million-dollar net worth. Bad things happen all the time in life and we need to push through them to achieve our goals. I track my finances pretty closely and in the daily grind, it’s really hard to see that I’m making any progress at all. But over time, the results are impressive. It’s important to keep perspective and to remember that it takes time to reach financial freedom.
What was your toughest mental opponent on the path to your black belt?
I think that we are our own worst enemies when it comes to our finances. Achieving a measure of financial freedom or becoming a millionaire took me about 10 years of solid commitment. During those 10 years, I experienced a lot of doubt and negative thoughts when things didn’t go my way. I think a lot of people struggle with staying the course and believing in themselves. There are lots of reasons and excuses for people to just give up. The key is to stick it out and never give up.
There are a lot more financial white belts than black belts out there. How do you think differently than the average person when it comes to money?
I can say things like focus, determination, and drive, but lots of people possess those qualities and don’t necessarily go on to building multi-million dollar wealth. For most of us, myself included, things can’t happen fast enough. What I’ve learned is that PATIENCE is key to financial success. 99.99% of aspiring millionaires won’t achieve it overnight. It takes about 10 solid years. To get there you need to have some patience and the determination to see it through without giving up your goals.
What does wealth mean to you? Should everyone pursue it?
Everyone says that there are more important things in life than money – and that’s true. But frankly having some money makes things a lot easier! So, of course, everyone should pursue it.
The majority of stress in people’s lives and in their relationships involves money – more often than not, the lack thereof. Once we eliminate that problem, the vast majority of the day to day problems that cause us so much anxiety and stress isn’t really that big of a deal.
Should people follow their passions or just do something practical?
I don’t believe that it’s really practical for everyone to truly follow their passions and succeed. There are lots of struggling artists, actors, musicians and writers out there. I think we need to be realistic and do something practical. You can always pursue your passion on the side and if it was meant to be then you’ll succeed.
What is your weapon of choice? (favorite money tool/app)
I’m old school, my favorite tool is my Excel spreadsheet!
What has been your favorite way to earn money?
I would have to say online income from my blog and stock dividends.
What’s your favorite way to use money?
Right now, I like to use my money to earn more money or pay down debt. Pretty boring stuff, but I’m starting to ease up a little and enjoy life.
What’s your one piece of money advice to us financial underbelts?
Building wealth and becoming a millionaire is all about Time and Money. The more money you save and the sooner you start investing, the faster you’ll get there. So I’d say, make as much money as you possibly can at your day job and increase it through side hustles. Then learn as much as you can about investing and start investing your hard earned money into passive income sources like index funds, dividend stocks and real estate.