Wednesday, March 11, 2015

My Money Epiphany

Before going on my trek to become financially independent, I was doing a lot of things wrong with my money. 

Fact is, when it comes down to money, I'm a hundred years from the man I once was. Thankfully for my portfolio.

Sometime in 2009, I sent a letter to a newspaper. This letter was intended to a columnist that was writing articles about personal finances.

My letter included an overview of my net worth (TFSA, RRSP, saving accounts) and of course a question. Essentially, I was asking him if I should eventually invest in the market or if I should consider buying a property. An old dilemma, right?

The columnists'answer was very well put and balanced. He said I had to look into "this and that". Be aware that "the market goes up and down"... That I needed to invest "for the long run"...

That sort of stuff.

But before closing its article he came up with a blunt comment about my finances. It went something like this : "You have to understand that whatever path you choose to go  saving remains essential. Right now, with the kind of salary you make, you are definitely a poor saver".

Spot on. Indeed, I was a poor saver.

Granted I had no debts. But I was making more than 85 000$ per year and I really didn't have nothing to show for it aside from my 15-20K$, which was stuck in my RRSP.

I was pretty much living pay check to pay check, spending everything I was earning as I going along in life.

So his comment stayed with me and fuelled my desire to change some of the things I did with "my money".

Here's some of the changes I have made since then:

1. I started to save. I didn't set a number nor a percentage (like the often talked about 10%). I just saved money as much as I could. Bottom line : I realized how important was an after-tax dollar earned. Shall I say more?

2. I started to invest. I opened a brokerage account and started investing. It's funny how investing sometimes feel like you are spending money. But you're not. If you invest well (in reliable dividend paying companies) you are actually putting your money to work.

3. I started to read more. The more you read about something, the more you get interested about it, don't you feel? Reading opened up my eyes. It goes for personal finances as well as so many other things. Information and knowledge is key.

4. I started to cut down on spending. Do I need a membership to a local gym at 40$/month? No, I can go out and run daily (my 5K or 10K) and lift some weights from home at not cost. Of course it would be nice to drive a brand new BMW. But my old Corolla is doing just fine and I much prefer seeing regular dividends coming in my account than going out in fumes. Do I need to eat out as often as I did? Of course not. What a waste of money! Avoiding going to the restaurants will remain a hard task for me. It's one of the things I like doing. But cutting down on eating out has made me realized that I love cooking. Besides, it's much more healthier.

5. I started to find ways to save. Saving money could (I said could) be simple if you, for instance, set up a periodic money transfer system in your account. By doing so you pretty much par yourself first. This is key. The hardest part, I reckon, is to find ways on a daily basis to save even more money : coupons for the groceries, shopping deals, free stuff, etc. These little tricks need a little bit more organisation and follow-up on your part, but can help you achieve your saving goals even sooner.

I guess these 5 changes can be summed up with this general change within myself: I became aware. It was some kind of epiphany. I was now fully conscious of how I spent my money. And I wanted badly to turn things around.

This is where it all starts : becoming aware and wanting to change.

How about you? When and how did you become aware that a change was needed?


  1. Mr. D,

    Great post! I believe this captures the process that many of our community members went through at one point in time before starting their own financial independence journey.

    I never experienced it as I've always been a big saver thanks to my parents. When I earned my first money moving the neighbour's lawn, I had to put away 50% of what I earned in my piggy bank. I guess that always stuck with me. Now I'm trying even hard since I know it can buy me freedom in the future!

    Best wishes and good luck,

  2. Hey NMW,

    Thanks for the kind comment.

    I think you're very lucky to have been sown the importance of saving. I wasn't. And although I can't complain about my parents, because they have a been a great influence on my life in many other aspects (I love 'em very much), they were poor decision makers financially speaking. They are still paying their mortgage well after retiring. That gives you an idea.

    But I guess, it's sort of like a child who's seen his parents smoke and can't stand cigarettes, the fact that did poorly saving wise might have triggered something within me to actually be wiser with my money. I'd have to talk it over with my shrink!

    Thanks for coming by. I will catch you on the flip side.

    Monsieur Dividende

  3. In terms of financial management, I guess I've always been aware of the importance of savings and investing. Unfortunately personal finance management isn't one of the things they teach you in school, but both of my parents work in the banking industry, so they've instilled a sense of financial responsibility in me since I was a kid.

  4. Hello Tony @ Investing on Track

    You are one of the lucky. Like I was saying, my parents are wonderful, but they could be "much richer" if only they had saved. About school, you are spot on. A personal finances course is definitely missing : how about a simple graphic to students on the effects of compounding interest. That would have done the trick for me! ;-) Thanks for coming by.

  5. Just saw this on twitter.. I can totally relate to your experience. The funny thing is that saving becomes addicting after a while.. just knowing that you saved more than the last month is great motivator to continue doing it.. it feels great being in control.

  6. It is addictive. And often you find yourself looking at other people spending and think : are these people nuts? When I am out there traveling and doing my things I will probably say : they were indeed nuts! ;-)


Thanks a lot for your comment.