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Sunday, December 21, 2014

My ‘Success’ Story

Posted by Tim Stobbs on October 16, 2007

*** Warning – This is a VERY long post***

Over at Get Rich Slowly, JD is having a contest which is part of his group writing project which asks people to write their own success stories. Since I really haven’t gone into this topic in much detail I thought it would also provide a little history on where I was and how I got here.

It began in 2000. They shoved a engineering degree into my hand in the spring then then I added a wedding ring that fall. My wife and I were $60,000 in school debt combined and working minimum wage jobs trying to make student loan payments. I remember it well. I was basically broke all the time, but strangely enough I was happy. I had good friends and a wife who loved me. Besides, we were just out of university, so we knew how to deal with being broke and still have a good time.

Then about eight months later I got my first ‘real’ job. The base pay sucked, but I would be earning bonuses on each job I did after I completed the training in six months or so. My mistake here was I leased a new car and added $20,000 to my debt load. I thought I ‘deserved’ the car after getting a ‘real’ job. Perhaps the only smart thing we did is we continued to live on the base pay even after I got bonus cheques. So that way I was already living below my means and paying back our debt.

Then one day I realized I hated my job. I mean I was almost physically ill going back to work after my days off. I realized this was no way to live. So I resigned. They instead transfered me to another department giving me an extra six months to try to find another job. I didn’t get one, so I ended up getting ‘laid off’ so at least I could collect Employment Insurance (EI). I spend the next two months constantly worrying about not having a job. Despite the fact we were fine for money during this time I still worried.

Then I took an entry level position with another company. The work was alright, but the pay sucked again. But we got by. Then after while I got a promotion/transfer to northern British Columbia. Despite not having earned all that much money during all this time we managed to save enough to buy our first home. I felt so proud, yet at the same time I was now drowning in debt buy adding a $108,000 mortgage. My new job was similar to my first real job. I got a small base salary and then large bonus cheques each quarter. We continued to live on just the small base salary.

This we found out was a very good thing. Shortly after moving into our home we found out we were expecting our first child. It was like a dream come true. A home, a wonderful wife and a baby on the way. The dream came to a crashing halt 30 weeks into the pregnancy. The baby came 10 weeks early. We were tossed into a world beyond our control and I just found out our house’s main structural beam was rotted and had to be replaced. Also our buy out came due on my car lease and that was on top of the medical related expenses such as my plane ticket south to a hospital that was equipped to deal with our son. We were now beyond broke, I had a baby I didn’t know was going to live and $20,000 in unexpected expenses.

This was when I learned, when you’re at the bottom learn to swallow any pride you have left and ask for help. The helped poured in. We stayed with friends in cities where our baby was located and saved hotel costs. Gifts and prayers flowed in from family and friends. I managed to strip out ever dime of savings I had and max out my line of credit to cover $15,000 of the expenses. Then my parents came forward and offered us a loan for the remaining $5000. My work gave me an unlimited paid leave to deal with the crisis. Our baby grew and got stronger and somehow so did I.

I’ve often been asked by people how we dealt with it all. To be honest I don’t know. Somehow I woke up each day and held it together. After 64 days in various hospitals and neurosurgery we got our son home. At this time we also learned my wife would only get part of her maternity leave. She was working as a teacher’s aid at the time and had collected EI the previous summer, so she would only be able to collect six months of the normal twelve that she would have got (she didn’t have enough new work hours between claims to get the full time off).

My finances were in tatters, but my family was home. That’s all that matter. So we cut costs to the bone and I saved like never before. In nine months we had paid my parents back. We continued to pay down the line of credit, yet as my wife’s maternity leave money ran out we came to a decision. We wanted my wife to stay home to look after our son, but in doing so we would have no extra money for anything. No vacations, tiny amounts for Christmas presents and no extra spending money beyond the basics. So I offered my wife a challenge, you can stay home, but you have to find a way to make some income. I don’t care how much, but you must make something.

So the daycare opened and we continued to claw our way out of debt. After a year I had an opportunity arise. I had a job offer back in Saskatchewan. We could move back to be near both our families and share our son with those that helped us so much in the beginning. Yet there was a cost. I had to take a 27% cut in pay. At this time we had paid back all of my student debt and had less than $10,000 left owning on my wife’s student loan. So we took the chance and moved. As it turned out my house had increased in value substantially after our renovations to it. So after selling the house we had made $55,000 in profit. We took $40,000 and used as it as a payment on our new house. Then we cleared the remainder of our other debts and moved with just a mortgage.

Now about 15 months after that move my net worth is pushing $200,000. Granted $100,000 of that is gains on the new house, but still even without that gain, I went from -$80,000 net worth to $100,000 net worth in just over seven and a half years. That’s a average gain of $24,000/year to my net worth when our household income never went near $100,000/year.

To be honest, I never did the math on our average savings until this post. I’m shocked we managed to save that much money for that long. To me it was never about getting rich, but rather providing the best foundation possible for my family. To allow us the freedom to let me take a lower paid job to move closer to our family to share our son whom grew up to be perfectly normal despite being warned repeatedly of all the problems he might face from his premature birth.

Now with our second child on the way I’m still well on my way to retirement on my 45th birthday. I started this blog to share this one story. It is possible to defy the odds. You don’t have to have a huge income to enjoy the one thing that matters most about having your finances under control: freedom.

This post is now part of the 123rd Carnival of Personal Finance.

Comments

29 Responses to “My ‘Success’ Story”
  1. CD, inspirational post bud. Great stuff.

  2. Fernando says:

    I don’t usually comment too much on posts, but MDJ is right: really inspirational. Thank you for sharing.
    All the best to you and your family.

  3. telly says:

    I will agree with the others…a great, inspirational read. Thanks for sharing your story.

  4. Xias says:

    Wow, way to really overcome adversity and stay on track. A lot of people never seem to pull themselves out of a nosedive like that financially.

  5. mariam says:

    Great story. I’m sure it’s not only the monetary value of your assets but what you went through that makes you appreciate your comforts that much more. I have a friend who came from nothing and everytime a company closed, or he got laid off, he relocated to the next job. But he knew each time he could make it because he did it before.

    Congrats to you.

  6. FourPillars says:

    Fantastic story – I thought I had it rough because of a over-budget reno a couple of years ago :)

    Mike

  7. J.D. says:

    Awesome story, CD. Thanks!

  8. kudos to you and your family.

  9. Canadian Dream says:

    Thanks everyone. Also a big thanks to my wife, who approved this post. I thought it was getting too personal, but she thought it should go up.

    Tim

  10. MoneySucks says:

    What a great story! Congratulations to you and your family.

  11. wow, what a story! This is the first time I have come across your blog – best of luck on retiring by 45 :)

  12. Robert says:

    So the moral of the story is to buy real estate before a rapid increase in housing prices?

  13. Canadian Dream says:

    Robert,

    *laugh* That’s one moral to take out of the story.

    Actually even if you stripped out all the real estate gains I still improved by net worth by about $17,000/year. So I’m happy with that.

    Tim

  14. Robert says:

    I would be happy with that as well. How did manage to increase your net worth that much per year? Did you have a significant increase in your family’s salary?

  15. Canadian Dream says:

    Robert,

    No most years our combined income wasn’t that high. I think it has more to do with I’ve never really lived on more than $35,000 after tax a year and often much less than that.

    We kept our costs low and so saving a lot of our income was fairly easy once you are use to it. I did have two years of really good bonuses with one job, which helped our savings. Yet most of the increases where from slow and steady savings.

    I think it helped we also kept our goals in mind. First it was pay off our student loans and then save for a house down payment. By always having something to work towards it makes it a little more manageable.

    Tim

  16. Congrats on all you and your family have accomplished!

  17. Wow, i am not sure if it is a good thing that i can relate to you or not :D

    I am still in school, going to be married and currently we have 60k in debt :S The sad part is im a tad old then you were *laughs* and the housing market is ridiculous!

    But none the less you have inspired me, now i at least know it is possible!

  18. Hyman Colden says:

    I was having a challenge not thinking of some business issues, so I started looking for some entertaining blogs. I enjoyed your blog and it helped me settle down.

  19. the best wedding ring is of course the very expensive diamond ring,:”

  20. the best wedding ring that you could possibly give your wife is always a diamond ring*,”

  21. Excellent! Thank you for sharing……

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