Welcome to the Million Dollar Journey March 2016 Net Worth Update – Team MDJ edition. A select group of readers were selected to be part of Team MDJ which was conceived after the million dollar net worth milestone was achieved in June 2014. Sean Cooper was selected as a team member and will post net worth updates on a regular basis. Here is more about Sean.
- Name: Sean Cooper
- Age: 30
- Net Worth: $736,382
- Day Job: Employed with a major global pension consulting firm.
- Family Income: $55,000 (full-time job), $18,600 (rental income before expenses), $40,000 (approximate freelance income)
Mortgage paid off by 31, million dollar net worth by mid thirties.
- Notes: Owns a house, rents out main floor. Most of net worth is in the principal residence. No other debt besides mortgage.
Boy, what a difference three months makes! A couple days after my last net worth statement in November 2015 went live, my story about paying off my mortgage at age 30 aired on the CBC’s the National .
Just to recap: I was so happy I paid off my mortgage that I threw a mortgage burning party for the ages and invited CBC to capture the glorious moment as my mortgage papers went up in flames.
I was hopeful some people would enjoy my story, but I had no idea how huge it would become. My story literally went viral and garnered international media attention. I appeared on the front page of the Toronto Star. The Daily Mail wrote an article on me. Financial expert and best-selling author Dave Ramsey talked about me on his show. I even appeared on an Australian breakfast television program, Sunrise.
Unfortunately, not everyone was happy about my financial feat. Some people thought I was setting a bad example since not everyone can pay off their mortgage in three years. While I can understand where these people are coming from, I’m disappointed nonetheless. My hope was that people would feel inspired by my story. If you can learn from my story and aim to pay off your mortgage in 10, 15 or even 20 years that’s great. The sooner you have your mortgage burning party, the better!
My book is off to a great start! The working title is “Burn Your Mortgage.” The book’s for millennials and their parents. It goes through the stages of buying a home all the way to mortgage freedom. I offer readers a glimpse into the world of personal finance from my perspective. Not everyone is willing to make the financial sacrifices I made, but you can learn from my story and apply some of my advice to your daily life to boost your income and cut back on your spending. I’m self-publishing the book, so it’s quite a costly endeavor (I may have to delay contributing to my TFSA and RRSP this year), but I think it’s worth it. I’m aiming to release the book at the end of 2016 before the holidays.
I’m still trying to decide on a trip for this year. I had originally planned to go to New York City, but with the Loonie falling so much, I’m not sure if it’s worth it. Are you still planning to travel to the U.S. this year despite the low Loonie? What are ways you’re trying to stretch your money further?
On to the net worth numbers:
Assets: $736,382 (+10.39%)
- Cash: $24,499 (+72.22%)
- Registered/Retirement Investment Accounts (RRSP): $65,284 (-1.74%)
- Tax Free Savings Accounts (TFSA): $11,008 (+1,289.86%)
- Defined Benefit Pension: $35,266 (+0.00%) (commuted value adjusted annually in June when I receive my annual statement)
- Non-Registered Investment Accounts: $324 (-4.97%)
- Principal Residence: $600,000 (+9.09%) (purchase price adjusted for average selling price annually)
Liabilities: $0 (0.00%)
- Principal Residence Mortgage: $0 (0.00%)
Total Net Worth: ~$736,382 (+10.39%)
- Started 2015 with Net Worth: $585,926
- Year to Date Gain/Loss: +25.68%
Some quick notes and explanations to common questions:
The cash is held in a no fee chequing account with PC Financial. I use my chequing account for regular bill payments,
as well as making lump sum payments on my mortgage.
My savings are held in a savings account with Canadian Direct Financial. I mainly use my savings account as an emergency fund and to save towards the balance owing when I file my personal income tax return at the end of April. Even though I contribute the maximum to my RRSP annually, I still have a large balance owing to the taxman since I receive rental income and income from self-employment (I’m a freelance writer).
Where Do the Savings Come From?
I’m very frugal with my money. People are often amazed at how low my monthly expenses are. For most families the most costly household expenses are housing (mortgage or rent), transportation, and food. I’ve been able to minimize all three through lifestyle choices.
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.
Instead of driving a car, I cycle the majority of the year and take public transit during wintertime. In my recent article in the Financial Post readers were amazed I only spend $100 per month on groceries. How have I managed to spend so little? I shop at discount supermarkets, price match, avoid fast food, and buy sale items in bulk. I’m also vegetarian, which helps me avoid paying the outrageous prices for meat.
How Have I Been Able to Pay Down My Mortgage So Quickly?
Besides being a landlord, I’m a financial journalist.
I also work part-time at a grocery store once a week. Through secondary sources of income, I’ve been able to maximize the prepayment privileges on my mortgage and maximize my RRSP contributions each year.
Update May 2015 – I’ve revised my freelance income up to $40,000 from $20,000 to better reflect how much I earn. I’ve received a few questions about how I’ve been able to pay down my mortgage so quickly. It’s mainly been through my freelance income. I tend to be conservative with my estimate of freelance income, as it can vary a lot from month to month. For example, some months I earn $2,000, while others I earn $5,000+. For 2014, I ended up earning over $60,000 in freelance income. Earnings that much in freelance income requires working 80 hours or more a week (including my full-time job). I don’t plan to keep this insane workload up forever. Once my mortgage is paid off at the end of 2015, I plan to scale back and only focus on the freelance work that I enjoy.
My real estate holdings consist of my primary residence. I purchased my house in November 2012 for $425,000 with a mortgage of $255,000. As I live in Toronto, one of Canada’s most expensive housing markets, I’ve based the value of my principal residence on comparable properties that have recently sold in my neighbourhood.
The pension amount listed above is the value of my defined benefit pension plan. I take the commuted value from my annual statement, which I receive by June 30th each year. I am fortunate to receive the commuted value on my annual statement, as most employers don’t provide it. This makes retirement planning a lot easier.