Daniel grew up in communist Eastern Europe where most people were lower middle class. He knew that counting on government will lead you to be somewhere between poor and lower middle class. He saw that if you wanted anything over and above the basics, be it, experiences, things or even money for the sake of money, you had to work and hustle for it.
Interested in moving towards a better life, Daniel studied business in Toronto. He graduated and pursued a breadth of different opportunities. His first job in digital marketing paid him $47,000 17 years ago. He was there for a year, loved the people but not the job. He lived at home and did not have any major expenses so he decided to resign. From there he spent 6 months traveling, reading books and figuring out his next move.
During this time Daniel had an opportunity to start a bar with a friend. Needing some continuity of work while he embarked on this new venture, he secured a full time job at a research company in project management. He realized that this job and company could not provide a full time career he enjoyed with the pay he wanted, so he did his job “well enough” but no more.
He spent 2 years working full time hours in project management and another 30-40 hours at the bar. Daniel and his two friends successfully built up the bar and Daniel took home $50,000 incremental to the salary at his day job.
From a day job perspective, Daniel has continuously worked to progress. Recognizing that project management was an ever growing and well paying field, he pursued a project management certification and got job at an agency that excelled in this area. Over 6 years, he enhanced his project management skills with expertise in digital strategy. He built up his knowledge and experience consistently growing his income by taking on greater responsibility and new roles. He salary hit six figures in 2011.
Shortly after this he was able to secure a role at a large consulting firm and negotiate a large salary increase. Recognized for great work, he was recruited to join former colleagues at another agency in a Director role and now earns over $150k.
Parallel to this standard world of 9-5, Daniel has continued to juggle many opportunities. In 2003, when he lost his bar lease, he got out of that business feeling good that he had made some nice money and learned a ton.
At the same time, recognizing that he needed to figure out a way to have his money grow independent of his labour and that there was no more land in downtown Toronto, he decided to buy a house with a friend. Daniel borrowed money from his parents for a downpayment. He and Richard bought a run down triplex in an undesirable part of downtown – Daniel would live in it, pay rent and they would both share the value of the house and rental income. With a down payment of 5%, the initial value of the house has grown over 300% over 14 years. With real estate, your investment is limited to the down payment but you receive a return on the entire asset, so there are opportunities to have above average rates of return.
He invested in another business venture with his friends - a high-end restaurant that he loved. They built it up to one of Toronto’s top 10 and then the recession of 2008 hit and they closed it down. Net net, Daniel probably lost $30,000 on this endeavor but the experience was great. He enjoyed the business and used it as a way to connect, network and “build his credibility in the business world”.
In 2009, Daniel bought another house and moved in with his partner. Last year they bought an additional rental property with two close friends. The group of 4 manage the property together and see it as a place to put their money and let it grow.
Overall, Daniel has just over $1.5 M in assets in his early 40s.
What has been the secret to his success?
1. An understanding of the situations that enable success and a goal to operate in those spaces. Back home he learned that “to succeed in a system that is broken, you have to understand and figure out how to benefit from its shortcomings – otherwise you will bang your head against a brick wall”. Daniel knew that even if he put a chunk of work into his project management job, the organization and management team were of such low quality and his chances of success were diminished. He knew that now matter how good he was at a family owned company, he would never really rise to the top because it was family owned and managed. And he ultimately knows that to make real money, you have to have money grow by itself. It can not be solely dependent on your labour – this is what drives his consistent time investment in a breadth of other opportunities.
2. A great ability to extract and be satisfied with the good that exists. There is no doubt that Daniel works hard, an estimate of 50 hours a week at his day job + the time he spends on the two rental properties and whatever current opportunity he has bubbling. During this, Daniel does not get frustrated he is not moving fast enough, he accepts where he is and works to enjoy it for what it is.
This means that his day-to-day life and comforts are focused on the pieces he truly values and other pieces often take a back seat. He enjoys traveling and so goes away at least once a year with family or friends. A couple of years ago, he took a sailing class and is currently planning on taking his next lessons in the Caribbean.
At the same time, a basement rental apartment he rents out is much nicer than his living space because he has not prioritized renovating his old house. He also has a mishmash of furniture collected over the years and he just got rid of a 15 year old car that he drove to the death after buying it for $3,000 from his sister. He picks and chooses where to invest his time and resources, realizes he can not have it all and enjoys the experiences of his choices.
3. A willingness to take risks. Daniel has taken a breadth of risks throughout his career. Some have paid off in standard monetary terms and others have paid off in learning, experience or connections. He values each experience for what it is and keeps building his reserves to enable him to continue taking risks.
4. A focus on true relationships vs networking. Daniel has endless amounts of time to provide, connect, grab a coffee or provide help to others. He is not short sighted or purposeful in this but has a genuine interest in people and nurtures real long term relationships both inside and outside of the workspace. His friends are often is partners and co-conspirators in the side hustles he pursues.
Daniel is another positive outlier. He has figured out the system and worked hard to navigate his way through. How might we better enable other Canadians to excel in their own ways?
Recognizing the stagnation in wages, would we as a society benefit from increasing our investment in entrepreneurship training and support services?
Would we benefit from expanding the understanding of the contributors to success and build a comprehensive and sophisticated knowledge to enable others to succeed?
And most importantly, recognizing that lower income Canadians are not able to access or benefit from the wealth creation of asset ownership or the $5B in annual tax credits to home owners, might we be able to rethink how we build bridges to asset ownership? Might we be able to take that $5B and use it to support low income individuals and families to create assets?
Christopher Pollon, Time to end the capital gains giveaway to Canadian homeowners?, The Tyee, March 2017, https://thetyee.ca/News/2017/03/21/End-Capital-Gains-Giveaway/