Photo illustration by The Globe and Mail/SOURCE: iStock/Getty Images
Name, age: Ivan, 35
Annual income: $168,000
Debt: $298,000 mortgage
Savings: $10,500 in savings account; $83,000 in TFSA; $163,000 in RRSP; $155,000 in video-game collection
What he does: sales
Where he lives: Ottawa area
Top financial concern: “I would like to be financially independent at age 45. Then I’ll fill up my time with passion projects.”
Ivan has worked in the construction industry his whole life so it’s no surprise he took a do-it-yourself approach to building his own place.
In early 2019, he decided to help build his family home on an acre of land he had bought in the Ottawa area in 2016. The three-bedroom bungalow with a double garage and stone front ultimately came to $445,000, including the cost of the land.
“It was interesting to see it take shape and to feel like you were truly building something out of nothing,” says Ivan, who adds that he would have built a four-bedroom had he known he and his wife would later have twins.
The move saved him $115,000 in building fees – 25 per cent on materials, 15 per cent on labour. (Building costs would spike in 2020 and 2021 in the wake of the pandemic as supply shortages and a frenzy of home renovations triggered higher material and labour costs.)
When building the home, Ivan leaned on his connections among tradespeople, as well as suppliers to save money through family-and-friends discounts. Almost all of the materials he bought at the home-improvement stores were cheaper through a program that provides corporate discounts for those in the business.
“I estimate had we built eight to 12 months later, our cost would have nearly doubled,” says Ivan, who worked as the project manager on site, overseeing the various tradespeople with a part-time foreman. It took four months to build the home, which was completed in August of 2019.
Ivan has a lot of construction experience to fall back on. The 35-year-old got his first construction job at 15 as a general labourer at an independent lumber yard.
He never went to college or university. “I became a yard foreman at 21, supervising people three times my age,” says Ivan. He has since worked his way up the ranks to a senior-level sales role in the construction industry.
The difficult physical nature of the jobs within the industry have convinced him of the need to build a nest egg. “I was doing a lot of blue-collar jobs, looking at people who were 59, 65,” he says. “They didn’t want to do these jobs – they were doing these jobs out of necessity. That really opened my eyes.”
Ivan’s goal is to be financially independent by 45. To that end, he’s been saving aggressively. He puts $500 into a high-interest savings account every month, as well as $800 a month in his TFSA, which he invests in index ETFs, dividend-paying Canadian stocks and mutual funds.
He’s also putting $2,500 a month into his RRSP, which is invested in a mix of investments similar to his TFSA. “I’m prioritizing my RRSP contributions to bring down my income and qualify for the child benefit,” says Ivan, who is married with three children.
Ivan’s video-game collection is another investment he’s managing to ensure it keeps its value. His recently appraised and catalogued collection – the result of 20 years of collecting – is valued at $155,000. “I started collecting video games when I was 15,” he says. “I did it as a way to distract me from the vices in high school.”
Ivan supplements his income by building items instead of buying them. “I’ll go and get different quotes on what a job will cost – such as a backsplash or an oil change,” he says. “Then I save the money I would have spent and do the work myself.”
Ivan also has two passion projects. One is a side gig building outdoor furniture, which brings in $7,000 annually. He’d like to one day spend 10 to 15 hours a week working on passion projects. And he’s busy learning about behavioural finance, hoping to start an investment blog aimed at helping people with little financial expertise to save.
“I’m doing everything I can to save – and time is on my side,” he says. “Wealth accumulation is a focal point at this time.”
His typical monthly expenses:
Investment and savings: $3,800
$500 to high-interest savings account. “This is my emergency fund.”
$800 to TFSA.
$2,500 to RRSP.
$0 to RESP. “My wife and I are both doing something that’s not related to a degree. We’d rather not have something linked to postsecondary education. The TFSA is for [the kids’] education.”
Household and transportation: $3,053
$1,000 to mortgage. “We locked in a low rate in 2019. We have $289,000 owing.”
$83 to property insurance
$350 to property tax
$250 on gas. “We have two vehicles: a 2015 Honda Odyssey that’s paid off and an Acura ILX, which was paid for in cash as we didn’t want to do financing.”
$115 on car insurance
$120 on car repairs
$110 on Internet
$13 on Netflix
$12 on Disney Plus
$1,000 on child care. “My three kids are under 10. They just jacked up our daycare fees by $38 per kid.”
Food and drink: $1,100
$800 on groceries. “I have three hungry young kids with the snack door constantly open. ... We’re big meat eaters, and have lots of fresh fruit.”
$250 on eating out. “We do Friday family pizza night.”
$50 on coffee. “I buy the occasional iced coffee.”
$0 on alcohol. “No one drinks.”
Miscellaneous: $275
$55 on courses. “I’m currently enrolled in digital marketing.”
$100 on dance classes for kids
$50 on clothing
$15 on haircuts and cosmetic procedures
$30 on books. “I filter through Amazon’s Warehouse and sort by lowest to highest to see what deals can be had.”
$25 on vacations. “We might do something small this summer like the Toronto Zoo. We might do Disney next year.”
Some details may be changed to protect the privacy of the person profiled. We want to thank him for sharing his story. Are you a millennial or Gen Z who would like to participate in a Paycheque Project? Send us an e-mail.
