Million dollar toilet-paper

Q: You want the short, easy answer to the title above?

A: Buy an old, worn-out slum house in a grotty section of Vancouver (substitute Toronto/Calgary/Hong Kong here if you like) in 1989 for $45,000. Do no repairs or maintenance for 25 years. Sell it on the 2014 real estate market in 2 days.

PRESTO, you’ve got a million bucks.

.

Congratulations on being amazingly prescient and/or amazingly lucky.

I am neither of these and so I haven’t walked the smooth, easy path to apparent and modest (only by North American standards) wealth. As a result, I’ve worn upmarket Valu Village fashion for most of this arduous journey.

BUT… I am a Lazy Bum.

LEGAL DISCLOSURE (ie. the fine print):

Maybe I’m a millionaire, maybe I’m not.

I only tell the complete and unashamedly full story when it comes to sex!

I refuse to reveal the full truth here because if I say that yes, I am a millionaire, then it’s boastful bravado bragging. You’ll move on from this post saying:

Who wants to read stuff from that over-inflated windbag?”

Or, if I say I’m not, I blow my credibility totally in your eyes and then you won’t read my advice as if it has any meaning to you:

Why should I trust him, he hasn’t walked the walk, he’s just making this crap up!”

LIAR_LIAR

The luxurious cachet of calling yourself a millionaire has blown away in the inflationary wind over the past couple of decades.

The unceasing rise in prices has transformed a million dollars from an estately “Downton-like” sum to merely making a daily Starbucks latte a cheap treat; it’s hardly a sultan’s caviar fortune.

Anyway, just what makes you a millionaire in today’s world?

  • Is it an annual income of $1M bucks?
  • Is it an accumulated savings account of $1M?
  • Does it include the value of real estate like your house, or is it strictly money in the bank?

For clarity purposes, let me tell you my personal definition of millionaire. Bear with me, it’s a bit loose and a bit boundary-less.

This is important because it affects my ability to live daily life and pay the bills that flow like cool, rushing mountain streams, or beer from the tap of a sports bar on Stanley Cup final night.

MILLIONAIRE [mil-yuhnair]:

A millionaire has the financial resources to live comfortably from the income flowing from their investments without having to stir from his/her bed in the morning. Just yawn, roll over, and the passive-income is deposited in your account.

It’s a fuzzy concept, but for some, living the life of a millionaire can be achieved with $250,000 of financial resources… for some it might take $2,000,000 to live the millionaire’s life they’ve chosen.

AND… while you’re alive, the value of the real estate in which you live and sleep just doesn’t count because (in most cases) it can’t deposit a monthly sum in your bank account.

There you have it.

boss

I’ve told everyone I know –  and probably unsuspecting people on buses and in coffee lines who I don’t know –  that I was going to retire when I was 35. This was the voice of enthusiastic and naïve youth thinking that retirement was just one major economic score away on the penny stock exchange.

And even though in my head I’m nowhere close to reaching age 35 yet, my birth certificate and driver’s licence inexplicably insist that I’m in my mid-50’s (damn liars!).

We all know there are a myriad number of ways to make it to millionaire status, but I’ve chosen to let others be the financial Cross-Fitters and do the heavy lifting for me.

How so?

  • I could have started a small business and worked countless hours to build it into a mini empire. I have friends who were focussed and energetic and have done just that and live lavish lifestyles as a result. I admire their energy and courage.
  • I could have studied incredibly long and hard and gained a career such as physician or MBA CEO/banker that paid handsomely for knowledge acquired. I respect their intellect and perseverance.
  • I could have become a real estate investor, purchasing houses and apartment blocks. Managing income-producing real estate would pay down mortgages and with increasing property values, I would be a wealthy man. I marvel at their risk-taking and verve.
  • I could have rolled the dice and become a professional gambler. There are people who spend inordinate amounts of time in casinos. The occasional one actually makes a handsome return, I’m told. I applaud their optimism and steady nerves.
  • I considered becoming rich through the Male Escort industry… but… well, we won’t go there today. I commend their ability to see past the “EWWWW” factor.

But, in the end, I’m a Lazy Bum.

Lazy Bum

Whaddya mean, a lazy bum? How can you be a lazy bum and still find a way to make a million without cuddling up to a rich relative on their death bed?

Well… it’s easy .. no, it’s hard …or, maybe it’s a bit hard, but not really.

I’ve chosen a path of less resistance and have forced my cash – saved little-bit-by-little-bit through the years – into the competent hands of others. Others who work extremely hard to generate financial value through creating and growing successful companies that produce services and products for which most of us, year-after-year, will dish out our hard-earned dollars.

For many years, I’ve entrusted my savings in stock markets where companies like McDonalds and Microsoft and Deere and Intel and Aflac and General Electric and Bell Canada and TransCanada Pipelines have slashed a pioneer’s path through the economy and paid me increasing dividends to sit back in the bleachers with my pom-poms and watch them do their stuff.

Every time a child stumbles and scrapes their knee, I’m there with a Johnson & Johnson bandage.

Need a coffee to get going this morning? I’m there with a steaming cup of Tim Hortons java.

Gotta have the newest iPad? I’ll deliver you a great Apple product and collect the dividend happily.

Charge your next movie theatre visit to your Royal Bank Visa card and I’ll roll over in bed with a smile on my face.

I consider this to be the lazy way, but to be fair to myself, I’ve invested many many hours in learning to read and interpret corporate financial reports. I know what and why I’m investing my savings in a company before I hit the BUY button.

I’m lazy, just not crazy lazy.

BUY

But never ever do I sit back worrying about a phone call from a tenant with a broken stove, or a rent cheque that bounced, or a client that has chosen my competitor’s business over mine.

For sure, I make missteps occasionally. Shame on me.

I make mistakes like investing $25,000 in a Canadian rare earth magnets manufacturer that turned out to be a Russian mob money laundering operation. Worthless!

I’ve invested in funeral home companies that had everything going their way (how can you lose $$ burying an aging North American population?) but still managed to go bankrupt. Worthless!

I’ve put money into huge real estate corporations that took on too much debt to manage, toppled under the weight and became insolvent. Worthless!

And yet, I sleep well at night because the positive steps have overwhelmed the mistakes over time.

So. You may be two steps ahead of me or you might be two steps behind, doesn’t matter.

Anyone with the patience to save a few dollars aside EVERY month and the willingness to learn a bit about balance sheets and income statements can make intelligent, “Lazy Bum” investments (I talked about some investment tips in an earlier post).

Who knows, you might even retire at 35 and thumb your nose at me as you drive by in your Porsche. Good on you!

But why don’t you stop in and we can wear chocolate ice cream on our faces and play in my sandbox and be lazy “millionaire” bums together?

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