by Joanne David CFP FCSI
Over the years I have worked with many different types of people, from many different professions. Interestingly, the people that do well financially are not always those that you think. The true Edmonton ‘millionaire next door’ is often a surprise. Below, I contrast my experience with a well educated, quick thinking (and quick at investing) Edmonton emergency room surgeon with a low paid Edmonton grocery store clerk. Which do you think is the true Edmonton millionaire next door?
I will always remember this interesting emergency room surgeon that worked nights at one of the Edmonton hospitals. I would meet him at the hospital and he would talk quickly and always seemed a bit frantic. Let’s call him John. John was a true hero that was used to saving lives: with that came the necessity for quick decision making. Life and death decisions were made in the spur of this surgeons focused moment.
John had an interesting habit. He would buy land that others promised to develop, because of course John had disposable income to spend. What John did not have was the time to educate himself on investment matters and he was not a land or development expert. John also suffered from ‘doctor’s illness’ which is essentially the inability to see one’s own limitations combined with the need for status. Having spent so many years in higher education that assisted him to become an expert in his field, John was simply unable to see that he held any education or experience limitation: with any endeavor.
John’s investment decisions were just as quickly made as his emergency room decisions, but with one important difference. John was well educated and experienced in emergency room and surgical procedures, and therefore had the solid ability to make exceptional decisions on the spot and save lives. But John did not have any education or experience with investment decisions, yet still applied the same quick decision-making ability to his investment decisions.
John and his wife kept a few very expensive vehicles, a family cottage, and many land development holdings. Due to job location changes, he had converted his pension to cash and therefore currently had left only a small pension with the hospital. in addition to a private retirement portfolio.
Can you guess the result? This surgeon was largely in debt. He had seen more than one of his past real estate investments fall through. Development projects in poor locations and with inexperienced project managers and strong sales platforms often fall through, with the individual investors losing their entire investments while still carrying debt of the uncertain project. It was a great deal of stress for John. One of the reasons that John engaged my services was that he was interested to preserve his private pension as he thought he may be facing bankruptcy. (by the way if this sounds like you, there may be some protection strategies you qualify for. Please contact me).
Now, I wish to tell you about Kim. Kim has no formal education and worked at a major Edmonton grocery store chain all of her life: well at least since she was about 18 years old. At one time the grocery chain paid a higher wage, but they had ‘rolled everyone back’ in salary, and currently Kim was earning relatively close to a minimum wage.
Kim lived on the south side of Edmonton and sadly her husband passed, leaving her a small insurance policy that she wisely invested in conservative mutual funds. In addition, Kim saved almost all of her money. Her home was not filled with expensive furniture and many of her items were second hand. Her appliances were older, and I recall when we met she was reluctant to replace them even though she had just recently purchased a newly built home. A home that she could afford to purchase for cash.
Kim was provided a uniform at work and therefore did not have a large personal financial budget for clothing or for other personal effects. She did not need or desire them. There was an older car always in her driveway, but she had long chosen to bus or walk to work.
Kim spends winters in Yuma. After working for the grocery chain for almost 40 years, she has seniority and the freedom to do as she likes. She owns a small second home in Yuma. Kim currently leads an active semi-retirement, and is involved with many community activities and enjoys gardening. Kim is debt free and is an Edmonton millionaire.
I asked Kim how did she get that way? Kim would tell me with a grin that she would not buy anything unless she really, really needed it. And even then, she would look to find a used version that was just as well. Having done this since her early 20’s, she was able to save her excess money each month and invest it. “Now I can do whatever I want!” Kim would happily exclaim.
In my eyes, Kim is the true Edmonton millionaire next door. You can play in the fast lane but there is no ‘get rich quick’ scheme that works in the long term. Eventually, this strategy will burn you. Instead of getting rich quick, people learn the various ways to lose financial investments.
On the other hand, it is pretty much a sure thing that you can ‘get rich slowly’ by applying smart choices over the long term. Wherever you are on your journey, we can help. Be the true Edmonton millionaire next door.
by Joanne David CFP FCSI
by Joanne David CFP FCSI
Certified Financial Planner
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