Mortgage free by 31

Sean Cooper is hosting a “mortgage-burning party” tonight and plans to be a millionaire in four years’ time



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Sean Cooper 2As a millennial, financial writer Sean Cooper is exactly half the age of this aging baby boomer, yet we both share a passion for financial independence. In an early guest blog at the Financial Independence Hub, Cooper once credited my financial novel, Findependence Day, with inspiring him to seek early financial independence himself.

The book argues in particular that “the foundation of financial independence is a paid-for house.”

Cooper apparently took this message to heart because by the end of September, he plans a mortgage-burning party to celebrate his long-awaited goal of mortgage freedom: five months before he turns 31.

Here’s an email Q&A I conducted with Sean recently to show other millennials (as well as baby boomers) that a) financial independence can be achieved early in life and b) how it can be done.

JC: Congratulations, Sean, when did you buy the house and how long did it take you to pay it off?

SC: Thank you, Jon. I bought my house in Toronto in August 2012. I purchased it for $425,000 with a mortgage of $255,000 and a down payment of $170,000. It took me 3 years and 2 months to pay it off.

JC: What was your interest rate and what did you do to accelerate the pay down?

SC: I chose a 5-year fixed rate mortgage at 3.04 per cent with First National. To accelerate the pay down, I made annual lump sum payments of 15 per cent, increased by payment by 15 per cent every year and doubled-up my payments.

JC: Did you also use weekly or biweekly payments on top of lump sum annual prepayments?

SC: I made accelerated weekly payments. I maximized my prepayment privileges every year. I was able to do this from extra income I earned from renting out the upstairs of my house and my career as a financial journalist and personal finance expert.

JC: What motivated you to do this?

SC: I was inspired to pay down my mortgage so quickly to achieve financial independence. I wasn’t comfortable living with 6-figure debt hanging over my head for the next 30 years. I saw how much my single mother struggled to pay down the mortgage when she was laid off during the financial crisis. Although I probably could have gotten a better return investing, I like the guaranteed rate of return debt repayment offers. If you lose your job you can stop investing; however, if you stop paying your mortgage, the bank will foreclose on your house.

JC: What’s your next milestone in financial independence?

SC: My next goal is to achieve a million dollar net worth by my mid-thirties. I’d also like to achieve a better work-life balance. I’ve been working 80 hours or more the last three years. Although I’m going to continue to write for extra income, I want to scale that back and concentrate on my personal life. My next life milestone is to get married. Now that I have achieved financial independence, I have the financial freedom to do that.

JC: Do you equate being out of debt with financial independence? How do you define FI?

SC: Being out of debt is a stepping stone on the way to achieving financial independence. However, just because you’re out of debt, doesn’t mean you’re financially independent. For example, if I rented instead of buying a home I would be debt-free, but not financially independent. Being financially independent means you can live off of your assets without working a 9-5 job. For example, if I quit my job tomorrow, my rental income would more than enough to cover my living expenses.

JC: You mentioned your next goal is $1 million net worth. Would such an amount generate enough dividend income to live on without having to take employment income?

SC: As I mentioned, my rental income is already enough to cover my household expenses. However, the dividend income would be a nice cushion to live off of, while continuing to save for retirement.

JC:  What age do you want to retire in the traditional sense? i.e. No longer earning income?

SC: I plan to continue to work in some capacity for the rest of my life. Even when I leave the 9-5 grind, I will continue to freelance write as long as I enjoy it. Once I have more time I would like to volunteer and pursue other interests I haven’t had time to do while I was working.

JC: Do you have plans to travel extensively?

SC: I’ve always wanted to travel. Now that I am financially independent I can. Places I’d like to visit include Vancouver, New York, Chicago, U.K., France and Amsterdam.

JC: Sean, you have worked in the pension industry and have written about defined benefit (DB) pensions. Can you comment on the millennial generation and the odds any will collect a DB pension like the Boomers’ parents did and a few fortunate boomers? Do you see pensions as one part of the FI mix or FI as an alternative to traditional pensions?

SC: If you have a workplace pension, consider yourself lucky. With less than a third of the workforce with the luxury of a workplace pension plan, the likelihood of you collection a pension is slim. If you want a decent retirement, you’ll need be financially disciplined and save your money in RRSPs or TFSAs. I see a pension as part of the FI mix for anyone who has one. For everyone else, it’s up to you to save your money or be prepared for a bleak retirement.

JC: What is your asset allocation and what do you suggest for most millennials? What do you think of robo advisers?

SC: I invest in the TD e-Series index funds. I’m invested in 90 per cent equities (a third in Canadian, U.S. and international) and 10 per cent Canadian bonds. I’m investing more aggressively since I have a defined benefit pension plan and my retirement is a long ways away. I haven’t used robo advisers, but I might consider them once my investment portfolio grows.

Jonathan Chevreau runs the Financial Independence Hub and can be reached at


11 comments on “Mortgage free by 31

  1. I was mortgage-free by age 34. The problem he didn’t mention or hasn’t noticed is that you ended up living in the neighbourhood with much lower income bracket and less educated.

    What I’m saying is, it is so much more than cutting back that daily latte. There aren’t any good stores in my area. Even salespeople at The Bay here is rude, the store is messy like a TJ Max. Customers often open the boxes and break the seals in the grocery stores. Stores leave milk out in sun for hours. Even the Starbucks have flies in their pastry case and the girl said, “that’s fine. Flies are everywhere.” These things are less likely to happen in wealthier neighbourhoods.

    I have been rethinking my “independence” and looking into buying above 1 million mark with 30-year mortgage like everybody else so I can be around people more like myself.


    • Maybe he doesn’t want to live in an enclave of 1%ers? We paid off our mortgage early (before 40, but not as early as either you or Mr. Cooper), and are quite happy with our family home in a mixed income neighbourhood. In fact, I would actively avoid living in an area consisting of people only with high incomes – doubly so as I have kids. I don’t think segregated neighbourhoods are healthy for cities. While a segregated low income neighbourhood wouldn’t be my first choice either, it would certainly be much more appealing to me than an island of upper middle class or wealthy people who have walled themselves off from the day to day realities of most Canadians. The idea of paying $1M+ in order to live in such an area is ludicrous to me.


  2. Why does it not mention at any time…. what his income is.
    Do you think he would be able to do this if he was making $30,000 a year working at Rona
    Not realistic Jon


    • What do you mean moderation !!!!!!! Its a simple reply


    • I was wondering the same thing–it would be useful to know what his income was.


  3. I see debt as a tool to become financially independent. Without carrying debt it’ll take me much longer to become independent. I’ll take 7%+ returns over making anything more than the minimum possible mtg payment, and use credit card cash advance promos as another tool to build wealth


  4. I am 38 and my spouse is 35 and we are debt free with a $375,000 house. I have been working 65 hours a week for the last 17 years and have had many promotions and bonus as well. I have aggressively saving monthly while I first started at $1,800, I am saving $4,000. My spouse has been saving aggressively too comparatively to her income for the last 12 years, she is doing $2,700 a month but now is doing $1,600 a month.

    I have many freelance jobs and have a small business too so I do have multiple sources of income. My spouse is now at home taking care of our 6 year old child and has a part time job from home. I have managed to save and invest $650,000 in RRSP’s, $15,000 in RESP’s, $49,000 in TFSA’s, $50,000 in GIC’s. My spouse has $225,000 in RRSP’s, $18,000 in RESP’s, $52,000 in TFSA’s and $125,000 in GIC’s, $110,000 in various individual bonds.

    All this money is currently generating about $54,000 a year with 86% in longer term fixed rate Canada, provincial bonds, strip bonds. We could technically retire today as our current expenses are $26,000 a year but we want to add another $1,700,000 at least to our investments by RRSP, TFSA, contributions and other non-registered savings, investments.

    This should not take more than 12 to 13 years where we would have about $3,000,000 and an income of about $112,000 to $118,000 a year. This would give us about a $45,000 to $50,000 a year financial cushion of net income per year above our future annual expenses that can be reinvested which would increase our income by $4,000 a year on average over the next 25, 30, 35 years, over the longer term etc.

    We do have both $600,000 term life insurance policies and in 12 to 13 years, our child will be 18 or 19 years old in which we should have at least $110,000 in RESP’s which is not included in the $3,000,000 total investments.

    Our annual $32,000 annual income tax bill after we make our annual, maximum RRSP contributions is quite hefty and we wish we could escape that.


    • Sounds like you’ve done a great job. If your expenses are only $26,000/year now, why are you aiming for such a high annual income that includes a lot of extra savings. Unless, of course, you expect a huge increase in expenses in the future. To me it would make more sense to cut down on your hours of work a bit and enjoy what you’ve already achieved. That would also help with your tax bill. When you’re so used to working so hard it might be hard to contemplate this, but you might end up enjoying it!


  5. Congratulations to Sean. It’s great to see a young person living and saving sensibly and not being totally caught up in the spendy ways of our society. Be sure to really enjoy the things you’ve worked hard to have the ability to do.


  6. My husband and I became mortgage free at 37 and 34 respectively, but in a city like Vancouver it means either living further away and/or in a condo. In our case we live in a very beautiful neighbourhood 25 minutes from the city centre, but in a 2 bedroom & den condo (maintenance fee is about $380/month). I’m sure this article could be more in depth, but people need to realize there will always be sacrifices that need to be made, and although I think this is a very good topic and article, perhaps there needs to be more emphasis on the fact that this man worked try hard to achieve his FI. My husband and I are duo income, no kids, so obviously it is easier to save, but we try to find a good balance between frugality and enjoying our life now (we have the philosophy of responsible spending, but enjoying life a little now instead of waiting for a day that may never come).

    I do often wonder, in our city where houses are over a million for a “starter home” if it is worth making that jump, or whether we should stay where we are in our modest, but quiet condo. We realize that the $380/month can be better applied (and I used to be on my strata until it almost took my sanity), but there is also something nice about not having to put 70% of your income into your home anymore, and knowing that if I’ve had enough of my job I can truly walk away. To me that is financial independence. I am lucky enough to have a DB pension plan as well, and we have many years to save up more $. I’ve told many friends that this is the way to go, but I am shocked by how many non believers there are re: this philosophy. To me there are many gambles in life, but if you pay off your mortgage early that is a guaranteed return right there.


  7. I just wondering how much you have to make to get almost 100k net income annually?


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