THE STUDENT YEARS

While I didn't like what university had in store for me, I
was resigned to the fact that nevertheless I'd be going.
In the meantime, I still had a couple of years of high school
to come up with a secret plan of action to circumvent the
career and accomplish early retirement. That was both a need
and a want.
Since I'd already learned that needs and wants can be satisfied
with money, I thought I would simply need enough
money to live the lifestyle I had become accustomed to, with
added luxuries, of course. I would need money to cover the
most important basics first: a place to live and food. Then I'd
need additional money for "everything else." It wasn't much
of a secret plan, but it was a start, and I had time on my side
to solve the problem of getting the required funds without
having to endure years of being the dreaded chartered accountant
or actuary.
What I really needed were answers, which meant doing
research. Whenever my parents wanted to do something, they
simply found out how to do it and then tried it themselves.
Ignorance is bliss, and as a teenager I believed anything I
wanted to do was as easy as that. You just learned how, and
then you did it yourself. The trouble was, I didn't know any
self-made wealthy people to ask, and I couldn't seek help from
my parents because they thought my future plans were set. In
the 19705, there weren't nearly as many financial planning seminars
as there are now, but even if there were I couldn't have
gone to them secretly. All I could do was observe the moneyhandling
skills of my parents and read their books. Fortunately,
they enjoyed reading about personal finance, and their collection
was a bonanza! Great titles such as The Money Game, Crisis
Investing, Smart Money Shortcuts to Becoming Rich, How to Live
Rich when You're Not, Think and Grow Rich, and Anyone Can
Make a Million were available to me. But by far the most influential
book was Save Tax in Canada and Retire at 45- That one
addressed my goal precisely, and I thought that, if I followed
the advice at my young age, I had a chance of retiring at 35.
It also supplied the first good lesson on taxation. All these
books were written for an adult audience, and, while I didn't
completely understand the investment terminology, I couldn't
help but absorb the concepts. At the time, those were the only
resources I had, but they formed the foundation of my plan
and provided the means to learn and the advice to experiment
with on my quest for financial independence.
I applied many principles of sound money management
while I was still in high school and more so later in university
and college. It was excellent practice to use the concepts,
and I saw the results of handling income from student jobs,
finding ways of getting additional income, paying my own
expenses, saving money by choosing cheaper alternatives, and
then investing whatever was left over.
My first job was working behind the scenes for the regional
public library head office, from 4—6 p.m. after school. My
brother was already working there, and I had him to thank for
asking if there was an opening for me. Shortly after I was hired,
however, I had the feeling that my time and effort weren't as
valuable there as my brother's. Since I'd learned typing in school,
the head librarian asked me to type an expense report she had
written out in rough. I laboured over fitting the column headings
across the top of the page and made sure all the decimal
points lined up perfectly in each column. It took a long time
to finish, but I proudly left it on her desk. The next afternoon,
she was waiting with the report in her hands, and she didn't
appear to be as pleased as I'd expected. Looking down through
glasses pinched at the end of her nose, she said to me, "The
column in my report for Personnel Expenses isn't done correctly.
You've typed it Personal Expenses, and there is quite a
difference between those two words!"
The second part-time job I held was in a gift shop. I
greeted customers and offered them candy, created displays,
and made candy trees. At Christmas time, the owner received
a large order for turkey gift baskets to be made up for a local
manufacturer's Christmas party. She didn't have the space or
the refrigeration facilities to keep 150 frozen turkeys, so she
arranged for her mother and me to arrive well before daybreak
on the morning of the company's party. The truckload of
turkeys was already there, and the three of us frantically passed
the frozen birds around, added more food to the baskets,
quickly wrapped them, and heaved them back on the truck
for delivery The Christmas rush in retail provided good experience,
but shortly after the frozen turkey escapade the owner's
niece arrived on the scene. I showed her the job duties as
instructed and watched my work hours decrease. Then I was
welcomed into the "real world" and completely squeezed out
of my job.
That was another financial learning experience. Even
though I had provided the desired value for the employer's
money, other factors had come into play to hinder my incomegenerating
activities. Life wasn't fair. Nevertheless, I knew that
if I wanted financial freedom I needed money to pay for it.
I was also learning that I had far less control over incoming
money than I did over outgoing money. I didn't earn much
from these first two jobs, but I followed my mother's rule of
saving at least half. As long as I felt that my goal was more
important than the multitude of wants that kept springing up,
it was easy to save even more. Although the experiences from
these two jobs weren't positive, they did supply additional
motivation for my goal of not having to work.
My brother was two years ahead of me in school, and he
was able to save for a good portion of his university costs from
his after-school jobs and summer employment. One summer
he drove a diaper-service truck, but his most lucrative work
was at a canning factory. I had worked for my parents in their
real estate office for a time, and the experience was invaluable.
My typing had also improved immensely by then, but
postsecondary school costs required summer work like my
brother's that would pay more serious money. My parents asked
all their acquaintances if there were any "unadvertised" student
openings at their workplaces. As a result, one friend of
the family graciously helped me to find a job with Bell Canada.
It was excellent full-time pay with overtime, and it added to
my bank balance nicely. Then, in turn, I was able to find a
position for my brother at Bell when the canning factory
workers went on strike and he lost that lucrative summer job.
Quality family themes such as "We all help out" and "You've
got a voice" were put to good use in such situations. Both are
very important in building wealth. Help others whenever you
can, and ask, ask, ask for whatever you need. Keep on asking
until you get it.
The following summer, I wanted to return to Bell, but the
company only had placements for students to work out of town.
I tried to persuade my parents that the relatively high income
justified the extra costs of living away from home. Unbelievably,
they agreed, and I was on my own in Toronto! It was my first
experience with handling money for grown-up expenses such
as rent, food, and transportation, and I chose inexpensive alternatives
in order to save as much as possible from rny salary I
started out renting a room in a townhouse that a young couple
owned, but I moved to a cheaper room in a single woman's
house that was closer to work. The public transit system was
very convenient and economical. I didn't eat in fast-food restaurants
or order take-out. Instead, I had a full meal at lunch in
the staff cafeteria and bought groceries at a nearby supermarket
to make simple, light breakfasts and suppers.
One Saturday when I was at the plaza for groceries, I
noticed a store called Bargain Harolds. I had never been in a
discount store before. My worldly goods had come from a
high-quality department store, and I'd kept each item as long
as possible by fixing it or making alterations, and my remaining
possessions were homemade. I was curious about the low-price
store but hesitant to go inside, imagining the "kind" of people
who shopped there. Finally, after thinking I wouldn't likely see
anyone I knew, I ventured in. There was a jumble of what
my grandmother would have called "junk and garbage," mostly
poor-quality clothes and home textiles. However, there was a
perfectly fine blouse in one of the bins, and I bought it for
a ridiculously low price. And I found some grocery items on
my list that were priced lower than what I was about to pay
next door at the supermarket. I'd stumbled across a way to
greater savings by choosing alternatives. Although I didn't tell
anyone I was a discount shopper, each monetary reward helped
me to cast off the "snob shop" habit. Added together, all these
small savings meant that I could go out with my friends on
weekends and still have a hefty amount of cash by September.
But my carefully planned summer abruptly changed one
night at Ontario Place. On that perfect summer evening, the
Bell summer students got together at an open-air cafe with a
tented dance floor. The warm night and energetic disco moves
made thirsty people, so I shouldn't have been surprised at the
intoxicated state of almost everyone there. Except me, of course.
Harmless fun was about to change into my first experience
with disability insurance. The disk jockey had chosen a lively
polka, and some clod I'd never met before pulled me onto the
dance floor to show me his moves. 'Polka boy' had a vise grip
but lacked any coordination. He bandied me about, a captive
rag doll in his frenzied dance. Apparently, his inebriation
affected his hearing, and he was completely oblivious to my
yells to unhand me. I finally managed to escape back to the
table, but by then my ankle was severely injured. Later it swelled
to the point where I had to cut off my sock in pieces. The
doctor decided that a cast was best, which meant I was on my
way back home, off work, and immobilized. Fortunately, I'd
been a Bell employee long enough to qualify for disability insurance,
and I received reduced payments while I was off work.
Even though I was able to return to my job before the end of
the summer, my total earnings were quite low. But they would
have been much lower without the insurance payments.
That episode taught me the importance of planning for
emergencies and disabling circumstances. It also provided
another example of having more control over outgoing money
than incoming money. Whether income was in the form of
insurance payments or salary, though, I put my money into
Canada Savings Bonds (CSBS) and trust company guaranteed
investment certificates (GIGS). In the summers, I used 30- to
9O-day GIGS. The term depended on when I received the money
and when I'd need it. They were all short-term savings investments,
needed within a year's time. Interest rates were highest
on the CSBS and trust company GIGS, as opposed to bank products,
and there was an added bonus with the CSBS. You could
buy them a few weeks after the November ist start date of
the bond and still get the full month's interest. Meanwhile,
the money earmarked for the bond would be earning interest
at another institution. Same money but double the interest
income stream. Back then, savings accounts paid a decent
return, and the tax treatment for interest income was much
better, so it was worthwhile to take advantage of the overlap.
I remember my mother regularly calling brokerage firms,
banks, and trust companies to compare term deposit, GIG, treasury
bill, and other government bond rates. It was a good
lesson illustrating that comparison shopping was necessary for
all kinds of purchases, including investments.
I returned to my job at Bell with only two weeks remaining
until university started. It was a relief to have a full paycheque
again, but I was looking forward to living on campus and
making some progress toward my goal of early retirement. As
it turned out, life in residence was also full of financial experiences.
Even though I didn't have much money coming in, I
was responsible for my outgoing cash flow. I had earned enough
for half of all my university costs, and my parents covered the
balance. When possible, I bought used books for my courses
and chose the inexpensive residence food plan. Meals did get
a bit boring after a while, but there was a Wednesday night
all-you-can-eat spaghetti special at a local restaurant and a decadent
ice-cream shop for a rare treat around the corner. While
it would have been cheaper to buy treats and keep them in
the residence fridge, I soon discovered that food was frequently
stolen. Next lesson: if you have something in demand, someone
(or something) will want to steal it. My roommate and I tried
to keep apples fresh in the winter by hanging them in a plastic
bag just outside our window. The squirrels stole them.
But there were also positive money experiences. I took
advantage of many free opportunities offered by the university,
There were music-practice rooms in the residence and a
homey library with a fireplace. I took part in free ballet classes
and swimming at the recreation centre. Free concerts were
plentiful, as were residence parties and movie nights. There
were more than enough free fun activities to fill spare time.
As well, I had a television and a stereo in my room, which
was unusual for a student to have at the time. Although the
TV was only a black-and-white portable, it was better than no
TV, which is what everyone else had. For the stereo, I bought
a top-of-the-line turntable from a discount warehouse, and my
father built the other components. The homemade "amplifier"
box had unmatched and unlabelled switches, but it worked
well. The speakers were chosen for their custom sound, and
the cabinets were made of elm, hand-picked for a nice grain,
then stained and urethaned with love. I still use those speakers
my father made — they are forever.
It was relatively easy being careful with expenses at university.
It was a good preview of my early retirement plan in
that all the basics were paid for, and I took advantage of free
activities for entertainment. My student days were full and
didn't leave much time for other recreation, like shopping. The
residence was right in the core of downtown Toronto, near
the exclusive Yorkville shopping district. I would walk by the
shops, but the prices in the windows would keep me out on
the sidewalk. The only time I went in was when an antique
show and sale was held in an expensive store's concourse level.
When I was younger, my family used to go to auctions regularly,
and I developed an interest in collecting antiques. At
this elite sale, though, I decided I would buy something small
for myself because I had some birthday money to spend. It
turned out to be the windiest day of the year. People clutched
at mailboxes, newspaper boxes, and light standards to keep
themselves grounded as they groped along. So the exclusive
store was a refuge from the weather as well. As I toured the
aisles, I quickly realized there weren't many antiques I could
afford, but I really liked an emerald green miniature oil lamp.
I think the vendor took pity on me as I tried to fish every
last penny out of my purse for it. He accepted what I had,
perhaps being compensated with the knowledge that his lamp
would be treasured. I held on tightly to my purchase, contemplating
the staggering winds outside, when I heard yelling
behind me: "Stop! Stop!" — I turned around to see a skinny
young man running through the front doors. Two security
guards ran after him while everyone else watched. It was almost
slapstick, the thief fruitlessly running against the wind, which
reduced him to slow motion. He turned his horrified face to
us as he realized his dilemma. But the two security men were
also running in slow motion, now hatless with their hair plastered
against their foreheads. They were strong, though, and
probably eventually gained on the thief. All I saw was their
struggle against the windstorm as they turned down an alley
and out of view. It was a familiar lesson: if you have something
of value, someone will want it. It was also yet another
example of taking a financial risk, as in my childhood episode
of canvassing for "charity."
I found only one opportunity for earning money at university.
I had taken voice training for years, so I used one of
the music rooms and taught singing, which provided a little
spare cash. Very few students in my residence worked at parttime
jobs. It came as a complete surprise to me when a
number of young women openly admitted they were at university
only to meet their future husbands. The remaining
few were truly interested in their chosen fields and future
careers. I was there for neither husband nor career. My goals
were completely different from those of everyone else and, as
such, unconventional. I reasoned that, if I had a Bachelor of
Commerce degree, I could earn a substantial income that
would pay for a house and assets and then retire early to
pursue an artistic lifestyle. I really tried to do well, but I
lacked enthusiasm for the theoretical courses, and it showed
in my marks. I barely passed and knew I wouldn't be returning
to university the next year.
My parents were disappointed, and I was devastated. My
plan wasn't working, and I felt like a failure. But at least I
didn't have to be an actuary! So now what? I decided on a
new plan, slightly different from the first. My father strongly
suggested I attend college, where I could still get an accounting
degree. It would be a more practical course, and I could use
some university credits. In my eyes, it would lead to a way of
earning enough money to achieve my goal, although it would
take longer with a lower salary.
I chose to live at home and attend the local college to save
money. I did well in the Business Administration course, but
after the freedom of university classes I felt like I'd returned
to high school. My goals didn't match those of the college
crowd either, and the program emphasized corporate finance,
when I was really only interested in personal finance. At the
time, comprehensive programs in that area didn't exist. I could
have received a designation to sell stocks, mutual funds, or
insurance, but to me each one was just a small part of personal
finance. 1 didn't return to college the next year either.
My parents were disappointed again. I wasn't as devastated
this time, and I thought I'd gained some financial ground. I'd
saved money by living at home, by not buying a car, and by
not taking on any consumer debt, and I would save money by
not spending it on any more university or college courses! I
thought it was time to enter the working world and start making
money. I believed I'd finally be making some headway financially,
and I couldn't wait for those dollars to start rolling in.
Although I thought earning an income as soon as possible
was the way to financial freedom, I'd learned some valuable
lessons from university and college. The most beneficial courses
for gaining an understanding of the financial arena were economics,
accounting, and marketing. Knowledge of economic
laws and conditions made investment decisions easier.
Accounting fundamentals helped in developing and simplifying
personal money management tools to efficiently handle
income, expenses, and investments. And marketing exposed
the many psychological factors in the exchange of money,
which helped rne to recognize and avoid the inevitable roadblocks
to financial freedom.
By this time, I had also read How I Found Freedom in an
Unfree World, by Harry Browne, a book that greatly influenced
my decisions. It presented ideas on how to find freedom from
imposed cultural identities, government, and treadmill living.
I agreed with the philosophy, and perhaps that book gave me
the courage to follow an unconventional path.
I questioned how further postsecondary courses would aid
in achieving my life goals. The courses would have provided
a degree for an eventual "professional" career, but was that
how I wanted to spend my days? Years? Life? Would I be able
to stop nodding off in class? Could I drag myself out of bed
in the mornings to a job I didn't want or like until it paid
for early retirement? I was prepared to accept short-term pain
to achieve my goals, but I thought that the necessary years of
education and the years of work would be incapacitating.
Deciding to end a university or college education was very
difficult, but I made the decision with complete commitment.
Now I was a working girl!
SCHOOL LESSONS
Read personal finance books and publications.
Be prepared for a job loss.
Find ways to increase income and ask for it.
Save money with lower-cost or free alternatives.
Be prepared for disabling circumstances.
Comparison shop between similar investments.
Take any other option besides student debt.
Recognize the potential loss from theft.
Know it's easier to control expenses than income.
Analyse and question lifestyle choices.
Make money decisions and devise plans.
Commit to beneficial financial changes.