Ever since I can remember I loved spending time at my uncle Stewart’s auto repair shop in Thornhill, Ont. As a child, I’d help wash cars, clean up the shop floor and help out with small repairs. Over time, uncle Stewart made a profound difference in the way I think about money and investing. In fact, his auto garage turned out to be the perfect place to hear stories about the importance of building wealth from a young age.
Uncle Stewart had bought his own house 20 years ago and built his wealth slowly by paying down the mortgage quickly. The lesson for me was obvious—buy a house, pay yourself first by paying off the mortgage regularly and one day, you’ll wake up and the house will be worth a lot of money. For years I watched my mom, a single mom, work hard as a homecare worker and save whatever money she could. Then, three years ago, she bought her first house, too. Seeing both my mom and my uncle have such a passion for building wealth through home ownership inspired me and that’s when I decided to buy a home of my own and start building wealth for myself. But how to start?
Since I loved tech courses I talked to my Grade 11 teacher who encouraged me to continue my studies in auto mechanics. As a result I started a co-op term in auto mechanics during my high school years and after graduating high school, I was hired by the head mechanic of a local auto repair shop as an apprentice. Today I work with a fully-licensed mechanic, making $14.65 an hour. Within weeks of starting my full-time job, a friend explained to me how he was saving $500 every two weeks in the hopes of building up a few thousand dollars to invest. I was paying my mom $200 a month in rent to help with expenses, which was minimal, so I made a decision to concentrate on saving up money for a down payment on a house. After 15 months, I had saved $6,500 and I was spending weekends going around to pre-construction sites and checking out house prices.
In November 2013, I took the leap and bought a 1,300 square-foot freehold townhouse for $236,000 in Shelburne, Ont., 100 km northwest of where I live in Ajax, Ont. I was 19 at the time. Upon signing, I put down $3,000 and I’ve been paying $1,000 each month to the builder for over a year now. My plan is to rent the townhouse out for $1,300 a month—almost enough to carry all expenses—when I get possession this fall. At that time, I’ll have enough saved up for closing costs as well as $7,000 extra to put towards the mortgage.
My long-term plan is to live with my mom in Ajax for a few more years as I steadily pay down the mortgage on my Shelburne house. I’ll contribute $350 every two weeks towards the mortgage principal and put a further $300 a month towards a fund for repairs. My goal is to have the house paid off in 10 years—and I think I can do it. When I’m a fully licensed mechanical technician three years from now, I’ll earn $60,000 to $90,000 annually and will put any disposable income towards paying down the mortgage. Eventually, I’d like to buy a duplex in a university town and maybe even open up my own auto mechanic shop.
Even with a full-time job and more responsibility real estate investing will always be part of my life. Why? Because real estate is a useful commodity that I understand. I’ve read enough personal finance stories to know that the earlier you start saving towards your financial goal, the more time you have to reach it and become a success. I intend to do just that.
My advice to kids my age is this: it’s never too early to simply stop buying more trendy stuff and start focusing on longer-term goals. Buying real estate has made me feel like I’m moving forward with my life and building my nest egg. That works for me, and if you have the passion I do, it will work for you too.
—As told to Julie Cazzin