Julia wrote her first letter to me this week.
Hi Garth. I know being gay is neither here nor there but it has had an impact on my life. My parents and extended family have disowned me, as such I have had no mentors or elders to help me navigate with anything in my life. All that I have done or have has all been trial and error. I am in my thirties, self employed, rent, drive a 20 year old car and have no debt. My entire working life I have worked 2-3 jobs at a time and managed to squirrel away some money. I have about $5200 in TFSA, $4100 in an RRSP account and $20,000 in a savings account. After paying my monthly expenses I have about $200 to spare. I’ve been self employed full time since 2008. I used to work for an international relief agency until then but lost my job because of the financial crash. The investment donations that used to support our office dried up, our office was closed and I took the scary plunge into full time self employment.
I am in the events industry and organize everything from weddings to corporate launches. Summer is always good for work but come fall things start to slow down and I get scared and stressed out. Even though my business has done well for the last 8 years I still get scared. I would love to have a child but I don’t see how I could do that financially and this has to be the hardest choice I have made. It makes me sad but I am a realist and am ok with my choice. Well, ok as I can be. I can do without fancy things, houses and cars but I hate the stress of feeling poor and living my life to survive only.
Is there a way for me to better invest the money that I have? Where do I get more info on the on-line discount brokerage account you talked about? Will I need to hire a professional to know how to achieve 7%?
I’ve learned more from your blog than I have ever learned in any class. Your blog has been a surrogate mentor and I really thank you for that.
It’s a tough time, Julia. Being afraid on some days is the right way to feel. It keeps you human. Many of the world’s best leaders have said they often woke up in a cold sweat or felt simple terror in dealing with their circumstances. Without fearing things, we don’t act to change them.
For too many folks in their thirties, this is a bleak period. Their working lives are launched in student debt, then they’re catapulted into a society where degrees are demanded but not valued, competition for jobs is insane and imperfect parents demand perfection. The pressure to get a new house, new car, new partner or new baby is relentless, and yet the economics of it suck.
What does it matter how ‘affordable’ mortgages are when house prices are out of reach? When the bank will lend you so much money you’ll still be paying it back in a quarter century? When employers are too cheap to give pensions? When interest rates can only go up? When an MBA gets you an interview for a commissio-only sales job? When success is measured in granite, stainless and debt? When the disparity between the well-off and the struggling has rarely been so acute?
It’s easy to understand how the Occupy movement sprang to life, and puzzling to know why it failed. The middle class is being gutted from within, by these societal pressures to consume, and from without by uncertainty and cutbacks. For the first time on record, the 40% in the middle now receive just 20% of the income. And yet Mercedes sales in Canada have never been more robust, while our banks earned $8.2 billion in the last 90-day period.
So, Julia, if there is solace in knowing you are not alone, take it. Simply being self-employed, able to survive on your own smarts and guts, puts you in a unique class. Not being indebted is another huge positive, along with actually having some money stashed away. I’ve said often on this blog how many people I meet who have a life full of stuff, but no money and enough debt to bury them. They have the trappings and pretense of success, yet are living failed lives. Is it any wonder the main cause of relationship breakdown is not the absence of love, but the lack of money?
Go back a couple of posts and read my advice to Ben. Get the money out of the savings account and top up your TFSA, investing it in the mix I described. No, do not look for an advisor because you lack the funds to attract anything other than a mutual fund salesguy masquerading as a human being. Google online brokerages like Waterhouse, iTrade, InvestorLine or Questrade. Call and talk to a rep. Ask people on this blog for tips and suggestions (but not the metal nuts). And you can always reach me.
Once you have the outline of a plan, stick to it. Invest your $200 every month. Remember, a TFSA topped up to $20,000 and then fed two hundred a month averaging 7% will be worth $276,000 by the time you’re sixty.
You are not poor. You’re not living only to survive. Out of nothing you’ve created a job, giving you what so many around you lack – independence, autonomy and freedom. Others take their identity from fickle, capricious and uncaring employers. You have crafted your own. And it is all the more impressive that you did this, growing up with bigots.
Oh, and the gay thing?
I agree. It’s had an impact. You win.