Derek Foster, self proclaimed Canada’s youngest retiree, has written a thought provoking book “Stop Working! Here’s How You Can!“. I’m sure a lot of you have heard about Derek, but for those who don’t know about him, he retired at the age of 34 while never holding a steady high paying job in his short career.

From reading about him in the newsgroups, he pulls in around $30-$35k/year from his dividends (equivalent to around $70k/year salary), along with income from book sales, and rental income from a single investment property. His home is paid off in full, he drives a new car, goes on vacation every year, and has 3 children.

How did he do this? In his book, he describes how he developed an investment philosophy which is a hybrid of the teachings from David Chilton (The Wealthy Barber), Peter Lynch (One Up on Wall Street) and Warren Buffet, which has allowed him to retire at such a young age. He made a commitment to himself that he would put away $200/month every month no matter what. With the investment money, Derek focused primarily on strong dividend paying companies with brand recognition that are recession resistant. You can read about his stock picks in his book.

Main points made by the book:

  • You don’t need as much as you think to retire.
  • Start as early as possible, and make a commitment to contribute to your investment portfolio no matter what.
  • Invest in strong dividend companies with brand recognition and increase their dividends on a regular basis.
  • RRSP’s are not for everyone.

What I liked?

  • The book shows the power of dividend growth and the minimal taxes when using dividends as income.
  • Gives a viable strategy for retirement cash flow.

What I didn’t like?

  • He picks a lot of income trusts in his book. At the time of writing, these trusts were probably a good pick, however now with the new income trust taxes introduced, they aren’t as appealing.

Who should read this?

  • Anyone who is interested in personal finance, investing, and interested in reading a great story.

Final Thoughts:

  • Another book that gets the two thumbs UP! Great book that is written clearly and flows nicely which makes it an extremely easy book to read.  This book has been added to the MDJ Must Read book list.
  • Derek gives a compelling argument for investing in strong dividend paying companies. I will follow up with an article with some dividend stock picks.
  • I’ve talked about investing in strong dividend paying companies before, Derek is actually the one that first introduced me to the concept a couple years ago.
  • This should be available at your local library.  If you want a permanent copy, you can pick one up at Chapters for around $15.
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I really enjoyed his book but more for the investment stuff rather than the retirement planning.
The book really could have been called “How to retire if your house is paid for and you have $500k outside your rrsp”. He really doesn’t cover how he got to that point at age 34. ($200 / month + a few extras does not add up).

Yes, I read that as well. Maybe he should have included significant events like that in the book when he talks about how he accumulated his portfolio.

I don’t want to disparage the book since I think it’s a really good book, but it’s not even close to realistic that someone making $25k a year can retire at 34 or anywhere near that age using the advice from the book. They would need to have incredible investment returns.
It worked for Derek which shows what a great investor he is but I can’t see the average investor doing it.

Anybody who has a book out can retire early. If he keeps on selling his book, then he will keep on getting income.

But not everybody will have the same circumstances in life. Sometimes retiring early is about luck as much as it is about cash flow.

Amazing. Like what Common Sense say, if you have a very successful book that keeps selling, you keep earning forever!

It is sometimes funny that the people who are making lots of money are those who teach others how to make money, even though they have little job experience themselves.

Yeah, This doesn’t add up, and it sounds like the book is just garbage. I haven’t even read it, but based on the review I can tell there is no real information. If he started saving $200/month at 21, he will have only saved about $31,000 by age 34 in principal. Even with fantastic stock market returns he would have had some other help to earn a retirement.

Final Fantasy 7: “Yeah, This doesn’t add up, and it sounds like the book is just garbage. I haven’t even read it, but based on the review I can tell there is no real information. If he started saving $200/month at 21, he will have only saved about $31,000 by age 34 in principal. Even with fantastic stock market returns he would have had some other help to earn a retirement.”

If somebody invests $200 per month for 13 years, with an average annualized return of 43%, he can own a portfolio of $500K. To achieve this 43% rate of return, one has to be very good on investing and pretty lucky.

In fact, Warren Buffet get about 30% return, this guy must be smarter and luckier than Warren Buffet. Cheers.



I’m Derek Foster – the author. The focus of the book was threefold:

– how to invest (focusing on cash flow and types of companies)
– how much you REALLY need
– how once you retire a lot of expenses simply “disappear” (CPP, EI, tax, …)

On the very first page I mention my case is exceptional, but the strategy will work better than the regular advice from the guys selling the investment products!

One more thing….

The $200 was a MINIMUM. On top of that was extra “windfall” $$ (tax returns, GST credits, Christmas commissions,….)

However, to say something is “garbage” without ever having even read it doesn’t make sense, IMHO (sort of like saying some food that you think doesn’t look appealing tastes terrible – without tasting it) I’m open to any challenges you have with my strategy, but how can you have an opinion on something you haven’t even read?

I’ve read the book and I found it very insightful AND inspiring.

I’m not going to change our investment strategy entirely but I plan to ‘tweak’ it a bit to try my hand out at being as ‘exceptional’ as Derek.

Derek’s book is in high demand for a reason. It’s not only his strategy that’s so inspiring, it’s also the reminder that many of us won’t need millions to retire.

I agree with this statement:
You don’t need as much as you think to retire.

When you look at it by the time you’re 65 and ready to retire:
Your house should be paid off.
You’ve travelled lots
You’ve paid off your credit cards
You drive a nice car that’s paid off
Your kids are out of the house
You’ve got money in the bank for retirement.

Also, for most people, when you reach the age of 65, you’ve done alot of things and aren’t starved to discover the world! Some people are, some people aren’t.

If you’ve done things properly, you’ve got cash reserves in bank and your debt should be paid off.
If you’re running up huge debts when you’re 65, you’re crazy!!

So, in a perfect world, retirement should cost less.

[…] of us have heard of Derek Foster, the guy who retired @ the age of 34.  Canadian Dream has got the inside scoop on Derek's […]

Hey Derek, I read your story in “Fortune” a few years back and they mentioned the giant stock win.

I think that FT (despite his greatness), really missed out mention of points #2 & #3. It’s quite typical to not know how much you need to retire, so lots of people don’t even try. It’s also quite typical of people (even PF bloggers) to not even know what they want to do with retirement.

The real highlight here is that you’ve managed to retire with three kids and a steady income on only 500k and a completed mortgage. Most retirement chasers are out “living the dream” trying to save 2M so that they can live off interest income.

Heck you’re on Million Dollar Journey, the site hosted by the person who wants to make a million by the time he’s 35. Except you retired at 34 with significantly less than a million in net worth, so I think it’s pretty clear how he missed point #2 (how much do you need to retire?)

Of course, I just realized that this article was posted in March and I’ve been grilling him pretty hard about the “what are retiring for” question since then :)

I guess it depends on the lifestyle one wants – but I’m in my comfort zone, so more money is not going to substantially improve things….Incidentally, we’ve had our fourth child (which forced us to move to a larger house). I guess I’ve figured out what I’m doing in retirement ;)

Derek Foster(author “STOP WORKING” and “The Lazy Investor”

[…] Thank you for the opportunity to give you a little bit of an update on my ultra-early retirement a la Derek Foster. […]

[…] Pillars writes a review on Derek Fosters new book "The Lazy […]

[…] Pillars writes a review on Derek Fosters new book "The Lazy […]

[…] of a Canadian best seller:  The Lazy Investor.  Thanks to the author (and early retiree) Derek Foster for donating an autographed […]

[…] the success of the Canadian best seller Stop Working: Here's How You Can, Derek Foster has written another book called "The Lazy Investor".  I was excited to […]

[…] with the free daily updates, you can subscribe to the RSS feed via reader or E-mail.After reading Derek Fosters book, I’ve suddenly gotten the urge to do more research regarding strong dividend paying stocks. I […]

I just managed to buy this book at a super bargain price of $7 on amazon and read it in a couple of hours. I liked Derek’s strategy, since he is focusing on dividends for cash flow. I also liked the way he compared taxable income from wages to taxable income from dividends ( at current rates). If you check out his “sample portfolio”, you will notice that it was yielding about 6% in 2004/5, which is not unachievable. He did mention however, that you need to buy the stocks when they are trasing at bargain prices. He did mention that had you bought the stocks in his sample portfolio at their bargain prices you would have paid about 100k for them,rather than 300k in 2004/5. And thus your yield on cost would have been 18% ,rather than 6%.

One cautionary thing to add, is that he wrote the book right after he retired at 34. I would want to see how he has adapted to changing market conditions ( elimination of the income trust structure in canada in several years) in 2015,2025,2035 etc..I hope he will still be able to be retired even when he is in his 60’s..
Another cautionary thing to add is that this strategy worked in Canada, where healthcare is practicaly free. If you lived in the US, however, you would need to save more simply for the rising healthcare costs.

I do agree, however, that the book is truly inspirational!

A great book to read by Derek Foster! Every Canadian should read this one. Too many people focus on amassing great sums of money “hoping” it will be enough to retire on. This is largely the propaganda used by mutual fund companies to exploit people’s savings and scare us into ” not saving enough”. This only feeds their paycheques, not ours.
I have been doing what Derek suggested years before I read his book and it is bang on. We’re talking about the underlying value of the security based on its ability to churn out dividend dollars. The ONLY time I’ve ever actually made any money was when I dumped the so-called “investment professionals” (your friendly mutual fund rep.) and took control of MY money that I worked so hard for. If these people were so good at their chosen field, wouldn’t you think they’d guarantee their work (results)? Hmmm, something’s amiss here. I’ve never looked back since, as I easily dwarf what they achieve. I just wish I had the thousands of dollars I lost taken by these parasites. But you pay to learn, and I finally have.
A note on Canadian Health Care; It is NOT free. We pay heavily for it through over- taxation and it only covers the basics. Many services are not covered as well as a whole slew of medications. Why isn’t dental care covered as well as eyecare? Isn’t that health care? At least cover the “basics”!
Thanks for a great website!

[…] or even buying things on sale.  By value, I mean buying things that make your life better, or as Derek Foster would put it, life enhancing […]


Derek it’s good too see that you’ve posted a few blogs :) I have read all of your books and found them very good and very enlightning/inspiring!!

I heard that you sold all you stock positions around Feb 2009. Does this not go against your “buy and never sell” strategy? What drove you to sell? Will you be buying them back? If so what stocks or sectors are you buying?

Great books and great website!


I have recently read Derek Fosters book. “Stop Working.” As a 22 year old I have always believed in saving hard earned money and using compound interest to my advantage in every way. Recently becoming involved in the stock market after putting $10,000 into mutual funds.

Im looking for advice the new TFSA account. I am using a stock market account to put my first $5,000 into. I am buying higher yielding stocks and intend on keeping them in there forever. This way the profit will never be taxed. With the economic state we are in now, I figured now is a good low time to buy… We have had the Stock Market Crash we were supposed to pray for. I am asking if I am taking the right next step and if how i can use my TFSA account in the stock market to my advantage?

Hey @Colby: I am asking if I am taking the right next step and if how i can use my TFSA account in the stock market to my advantage?

One of the logical approaches to using the TFSA is definitely the “all-in” approach. The tax-free growth on stocks is definitely a boon if you’re expecting your stock picks to grow in value.

Of course, this assumes that you have your 3, 6, or 12 months of emergency living expenses available in a different account somewhere. (# of months will vary)

I don’t know that there are any other “tricks” here. It’s all just standard fare. Do your best not to lose money :)

@ Colby TFSA is a great place to accumulate wealth, but $5000 is not nearly enough to have a diversified stock portfolio. Analyzing companies and watching them over the years is not an easy task. I would take a look at a couple of broad market ETFs and make life easier, you are young and have a long road ahead of you. You will make mistakes and learn from them, do not get fooled by Derek’s book the idea is great but it does not work the way he makes one believe. He managed to retire not because he saved and invested over a long period, but he made a huge leveraged bet on a single stock during a lawsuit and it worked out very well for him. That is the main reason why he managed to retire. Fund your TFSA with $5000 and look at some broad ETFs (not leveraged etfs)….as you start your career you can continue building your wealth.