As someone who is self-employed in a field that is highly competitive and constantly changing, I knew that pursuing music as a career was going to be a challenge. That was fine for me. In retrospect, I had a huge advantage that many people my age didn’t have when they left high school. That is, that I knew what I wanted to do with my life.; I wanted to be a musician. I knew that I was probably not going to make much money, so I lived at my mom’s and taught guitar to save my money through university.
I lived like a monk (extremely frugally) and managed to graduate university free of debt. I moved out and expanded my teaching to a few music schools while at the same time slowly building up my practice to eventually be entirely private. At first it was difficult but due to my frugality, I was able to save a bit of money.
I was never actively taught anything about money from my parents or from school but I suppose I picked up some things by proxy from my father. My journey to financial literacy truly began with saving money. One of the first instances that I can recall having to save money is when I purchased my first guitar at the age of 12. I wanted a guitar badly, so I saved up my allowance money, and money that I made from doing a paper route.
I remember when I moved out in November 2012 that I spent 6 hours a day for 2-3 days scouring the neighbourhood that I wanted to move to in order to find an affordable place to live that was decently sized. Luckily I found something that was quite below market price however there were some drawbacks to that… the place was old and the bare minimum was done in terms of upkeep. The elevator broke down regularly… a nightmare when you live on the 6th floor and come home from a gig at 2am with a bunch of gear.
Another way I saved money was with meal planning. I would go to the grocery store once or twice a week and plan out my meals for the week taking advantage of the sales or discounts on bulk food. This meant that I would often eat the same meal for 3 days in a row.
I’ve also saved a lot because I didn’t own a car. Instead I would borrow a car, carpool, use a rideshare service like Uber or Lyft (For $50 in ride credit, download the Lyft app using my referral link), or rent a car when necessary. Last summer I tried one of the e-scooter rental services and that was a lot of fun. Get a CAD $5 ride credit with Lime when you use this link to download the app: https://lime.bike/referral_signin/RL4O6YX
One way that I’ve managed to save a lot of money compared to other Canadians is by having a very cheap phone plan. I’m now with Public Mobile, a subsidiary of Telus, which has the best phone network across Canada. My phone plan is 25$ a month + tax and includes unlimited calls & text in Canada + 1GB of data. The cost is actually lower than that now thanks to some of the rewards that I’ve accumulated. Use my code 6Z4NK0 when you activate with Public Mobile and get a 10$ credit. Plus, I’ll get 1$ off of my phone plan every 30 days you are with them.
My first “bank” was the co-op Desjardins but I eventually closed that account and moved over to Tangerine. There are many reasons for this but the main one is that Tangerine has next to no fees for their services whereas most banks have minimum deposit requirements or hidden fees. In addition, the Money-Back Mastercard is also appealing because it also has no monthly fees and offers some cash-back on certain categories of purchases.
Earn a 50$ if you open an eligible account with a deposit of at least 250$ within 60 days of becoming a Tangerine client when you use my Orange Key 55514115S1
Investing
I first started by actively seeking out this information online and started reading from the following publications; Financial Post, Moneysense, and Investopedia. This helped me get familiar with financial vocabulary and various concepts.
When I had a bit of money saved up, I went to the bank to see a “financial advisor”. I invested some of that money in a Market Linked Guaranteed Investment in my TFSA at Desjardins which was locked in for 5 years (though they made it sound like I could take it out earlier without issue).
When I had a bit more saved up, I decided to buy individual stocks through the online brokerage Questrade, which is a service I still use today. I like that I can purchase ETFs from them without having to pay a commission fee.
Use my QPass key: 645719942428304 to open a self-directed account and in return Questrade will offer you a cash bonus of up to 250$ depending on the amount you deposit. If you initially deposit $1,000 and then fund more afterwards, no problem; you’ll have 90 days to reach the highest cash reward.
Shortly after, I discovered the Couch Potato Portfolio and then Ben Felix. For anybody who wants to learn more about evidenced based investing, I highly recommend Ben Felix’s YouTube channel.
For me, the idea of an investment portfolio that requires only a bit of my time is very appealing. Although I have more of an interest in personal finance than most of my peers, the reason that I spend time on this is because of the freedom and time it buys me. Those are things that I value more than money.
Here are some key take away lessons that I’ve learned from reading about investing:
- It’s not about timing the market, it’s about time IN the market.
- Don’t bother choosing stocks, buy the whole market with an index fund. Even Warren Buffett has left this in his will for his wife’s financial advisor.
- Active investment managers rarely ever beat market returns after fees.
So for me the plan is simple; I will keep purchasing all-in-one ETFs with a 100% stock allocation in my TFSA until I no longer have any contribution room. As I still earn a low income, I’ll put any extra into a margin account. If my income increases enough, I’ll consider investing in an RRSP account. Ideally, I won’t need to use this money until my “retirement” because as an independent worker I won’t have a pension. I hope that I will recover from my concussion sooner rather than later as I fear I may have to dig into my “pension” due to how this injury is gravely effecting my ability to work consistently or when I want.
Another financial service I started using is an AMEX credit card because of their generous rewards program with regards to flights. Unfortunately, I haven’t been able to take advantage of that due to ever changing rules and regulations due to the pandemic but hopefully soon! Use my link and you could earn a bunch of bonus points when you signup for a credit card with them.
I feel I have accumulated a decent amount of knowledge on personal finance and investing relative to my peers but I still have a lot to learn in terms of accounting, bookkeeping, taxes, and disability insurance. Got any recommendations? I think I’d prefer to hire some people for this stuff.
For me, money is just a tool that buys me the time and freedom to focus on the things and people that I love. Like making music with my friends. I hope you or someone you care about can learn something of value from this article.