How I Reached $500K Net Worth by Age 29

FrugalTrader (FT) reaching his long-term goal of a net worth of a million dollars inspired me to tell my personal financial story. Similar to FT, I’ve set out a financial plan to reach a net worth of a million dollars by age 35. Through discipline, hard work and determination, I’m already halfway there, recently reaching a net worth of $500K at age 29.

I received a lot of positive feedback from my recent article in the Financial Post: How this man plans to be mortgage free by age 31. In less than two years I’ll own my home free and clear of any debt. Like most Canadians I have most of my net worth tied up in real estate; once my mortgage is paid off, I plan to diversify by investing in my TFSA and RRSP.

Here’s how I’ve grown my net worth to a half-million dollars and you can, too!

Live like a Student after Graduation

While it’s important to celebrate after graduation, you have to be careful when it comes to debt. It often makes sense to delay major purchases like a house or a car until you’re able to at least start paying back your student debt. Instead of renting a condo downtown for $2,000 a month, I decided to stay at home for another three years, paying my parents $600 a month in rent. I was able to save the difference and put it towards my down payment for a house.

Pay Yourself First

This will seem like a no-brainer for many, but it’s still worth mentioning. After graduating from university debt-free and landing a well-paying job, I started saving immediately towards home ownership. I contributed $250 per week to a low-fee mutual fund account. When I found my dream home, I had well over 20 per cent ($170,000) set aside for my down payment. I was able to avoid paying mortgage insurance (CMHC) and put the money towards my closing costs instead.

Frugal Spending

Until my mortgage is paid off, I’m committed to being very strict with my spending. While I’d love to travel to Europe, that can wait until my mortgage is paid off. A lot of people make the mistake of overlooking smaller expenses, such as mobile phones, daily lunches and coffee, but they can really add up.

While I do go out for coffee with friends, I don’t make it a daily habit. If I went to Starbucks daily and spent $3 on coffee, that would add up to about $90 per month. I’m not saying you can’t enjoy yourself, but if you’ve committed to growing your net worth, you have to be willing to make sacrifices and prioritize your spending. Even though I work 80 to 90 hours per week, I still find time to cook meals at home. I also save money on groceries by shopping at discount supermarkets and packing my lunch.

Buy a Home in An Up-and-Coming Neighbourhood

One of my favourite tips from David Chilton in his latest book, the Wealthy Barber Returns, is to avoid the “biggest financial mistake” by buying too big a house. Even though I was pre-approved for a mortgage on a home with a maximum purchase price of $470,000, I decided I was only comfortable spending $430,000. I ended up purchasing a beautifully-renovated three-bedroom bungalow with a basement apartment for $425,000 ($45K under my maximum purchase price). By purchasing in an up-and-coming neighbourhood I’m still able to live in a decent area and live in a beautiful house today while, at the same time, collecting rent.

Becoming a First-Time Landlord

As a single first-time home buyer in Toronto, I decided to take on the added responsibility of being a landlord. Instead of living upstairs, I decided to live in the basement and rent the upstairs to a family. I got this brilliant idea from the host of HGTV’s Income Property, Scott McGillivray, who lived in his basement for nine years while renting out the upstairs unit to save money.

While this may not be a suitable living arrangement for everyone, if you’re single and aspire to be mortgage-free sooner, it’s worth considering. Instead of only making $800 per month for renting the basement, I’m able to bring in $1,550 per month from the upstairs, enough to cover my mortgage payments.

Set Stretch Goals

Goal setting makes achieving your lifelong financial aspirations seem a lot more attainable. For a goal to be effective it has to be time bound. By breaking your goal into smaller steps, your long-term goals won’t seem as difficult.

After graduating from university, I set the stretch goal of owning a home within two years. Although it ended up taking me nearly three years, I was able to eventually find a home I’ll be able to grow into and live in for the years to come. My next stretch goal is to be mortgage-free at age 31 and I’m well on my way!

Conclusion

These are just some of the ways I’ve been able to achieve a high net worth in my late 20’s. Although there are many other ways to attain a high net worth, you’ll have to be determined and willing to work hard.

Do you have a high net worth and want to share your advice about how you got there?

If you are interested, here are some other stories from high net worth readers.

About the AuthorSean Cooper is a single, 20-something year old, first time home buyer located in Toronto. He has experience in the financial sector as a Pension Analyst, RESP administrator and Income Tax Preparer. He holds a Bachelor of Commerce in business management from Ryerson University. You can read some of his other articles here.

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Sean Cooper

Sean Cooper is a single, 20-something year old, first time home buyer located in Toronto. He has experience in the financial sector as a Pension Analyst, RESP administrator and Income Tax Preparer. He holds a Bachelor of Commerce in business management from Ryerson University. You can read some of his other articles here.
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Mark
6 years ago

Interesting story but how did Sean save $170,000 for a down payment after only 3 years@$250 per week? Even with growth I doubt you could accumulate more than $50K.

Sean:
“I contributed $250 per week to a low-fee mutual fund account. When I found my dream home, I had well over 20 per cent ($170,000) set aside for my down payment.”

“After graduating from university, I set the stretch goal of owning a home within two years. Although it ended up taking me nearly three years, I was able to eventually find a home I’ll be able to grow into and live in for the years to come.”

~ Mark

SST
6 years ago

Wow. This is awesome.
Truly one of the best and worst posts I’ve ever read.

To be a bit less…scathing, this is a very difficult “lesson” to learn for one being born into a pinnacle of capitalism; even more so if you choose to make living Capitalism your life’s goal. It’s also difficult for most young people to grasp this concept as most have never been seriously kicked in the butt by life. Thing with money is, there is an endless supply — the very antithesis of your life.

Then again, there are people who just need to live like that, and they are perfectly happy. There are as many ways to live life as there are people on this planet.

Even Bill Gates set aside one week a year to just kick back and do nothing but read books. But we all know what he did during the other 51 weeks. ;)

“One life,—a little gleam of time between two Eternities.” — Thomas Carlyle (1841)

Sit back and let that sink in…

Brian
6 years ago

Great example of how not to live a full life. Thanks Sean. Being smart with your finances and saving properly to secure a comfortable future is an admirable thing; but taking things to the extreme–as you’ve done–isn’t really commendable at all. “I’ll worry about getting married once my mortgage is paid off”? You don’t even understand the shackles you’re obsession with money has put in, tying you to obtaining a number value that means…what? That you will then be able to “live life”? You’re living it now man! This is it! What are you doing with this life to build your memories and experiences?

I’d be far more impressed if you were 29 with a net worth of 200k-250k, but had traveled the world for 8 months when you got out of college; managed to find the love of your life and married her at 28; had a decent job working 40 hours and not 80, hours that allowed you to read some classic novels in the summer evenings after work; spent money on fees to play on a softball and soccer team; and lived in a small apartment with your wife with plans to purchase a small home together.

Glad you live in a great home; too bad you live in the basement. So now you can listen to your renters make love while you stare up at the ceiling at night.

Live life man. You’re only in your 20s once.

Liette Seguin
6 years ago

That’s so impressive. 29? I can’t believe it! Thank you for sharing anyway!

Alpha Centauri
6 years ago

Wickedly awesome idea: living in the basement to pay the mortgage faster! That’s a luxury you can do when you’re young. Perhaps a little harder with a wife/husband and/or kids! You were wise to make the short-term sacrifice while young.

My Own Advisor
6 years ago

Thanks for sharing Sean.

Great work on working towards those goals. Like Stephen, I admire what you’ve been able to accomplish at a young age. Just make sure you enjoy the journey :)

Stick with the plan as long as it fulfills everything you are striving for without sacrificing too much in the process. I look forward to reading about your updates.

Mark

financejourney.com
6 years ago

Great inspirational story, I don’t think I could reach 500K net worth by 29, but I will try my best. My ultimate goal is achieve early financial freedom.

Cheers,

A Frugal Family's Journey
6 years ago

Great post…I think you covered the topic well. I think that one’s ability to achieve some of these things has a lot to do with deciphering between wants and needs. Secondly, one’s happiness meter also affects these items and the intensity in which one put forth to achieve them. Bottom line, if a person can control their wants and can find happiness in the simple things, they can go a long way toward achieve wealth.

Wishing everyone nothing but success in their own personal journey! AFFJ

Stephen Weyman
6 years ago

As you know, I really admire what you’ve been able to accomplish from a hard work, net worth, and frugality perspective. It also sounds like you are still able to enjoy life just fine.

However, it’s worth considering that always delaying things isn’t necessarily a good idea. It would be a complete shame if you were to get cancer or type 1 diabetes, have a heart attack, or get run over by a bus before you had a chance to travel like you want to and meet the right girl.

Nothing wrong with your plan, but we aren’t always as in control as we want to be. I got type 1 diabetes when I was 24 with no family history and while I still enjoy life there are a lot of things I can’t enjoy freely like I could before I had the disease.

I totally appreciate your desire for early financial freedom (hopefully you can actually slow down later after going so hard for so long). Just make sure you achieve some balance and don’t miss your opportunity while you have it.

Geoff
6 years ago

I think travelling is important, and have done a lot more of from 30 – 40 than I did from 20 – 30, which in retrospect was a mistake. As noted, travelling with children is a lot different than travelling without them (even if you don’t bring them, there are lots of logisitcs to be sorted out).

I also think that people tend to have a bias for what worked for them as being surefire – for instance, although in your case buying and renting out a floor worked for you, one can easily find lots of landlord horror stories as well, so it’s something to keep in mind for a balanced perspective.