My Dad has never made a mortgage payment in his life, yet owned his own home by the time he was 30.
He only received a very minor inheritance when he was over 60, so that didn’t factor into it.
No one gifted him a down payment.
He didn’t get lucky on a stock pick, lottery win, or marry rich (he met mom soon after building the house – not sure if that was a major factor).
So how did he manage this housing miracle?
Well, he worked until he had the money to buy land and materials, and then he built it. I know that this answer belongs to a simpler time and that it sounds like a plotline out of Little House on the Prairie or something, but it’s true nonetheless.
I’m not sure if my dad’s experiences “back in the day” will be of much practical use to many of you across Canada in 2016+ – but it’s kind of a cool case study anyway (I might be a little bias).
When Men Were Men
My dad isn’t a carpenter by trade, but has helped out on his share of job sites and is a pretty good handyman. Luckily he has simple tastes, and a pair of brothers that were pretty talented builders. With some help here and there from them, he was able to build most of the house my brother and I grew up in, (there was a small addition when I was young). He got a small loan from my grandfather near the end of the project – which he promptly paid back by the end of the year – and that was that.
The part of the story I’m glossing over is that Dad worked hard from a very young age. The world of rural Manitoba that I grew up in is likely quite different from the daily experience of most Canadians today. Thirty-five years ago when Dad was my age, this was likely even more so the case. Manual labour was a solid job option for young men, and the Prevost family had put bread on the table by harvesting lumber (the politically correct way of saying they were all lumberjacks) for as far back as anyone has bothered keeping track. It was only natural that dad went into the family business.
In addition to cutting wood – which is mainly a winter activity in much of the country – Dad took odd labour jobs in the summer. He helped replace several of Manitoba’s railways, and was an equipment operator in remote locales all over the province. During the winter months, he pretty much worked sun-up to sun-down because of the relatively short amount of daylight available. Much of the time he lived in bush camps (usually some form of temporary housing in a forest – far removed from “civilization”). Sometimes the companies he was working for would put him up in the fanciest hotels that rural Manitoba had to offer (a bit of a sarcastic oxymoron there). Other than the odd “luxury” such as a semi-new pick-up truck, or an occasional adult beverage, he basically saved his money and created the life he envisioned for him and his future family.
In the interests of full disclosure, it should be noted that in the early 1980s, the price of land in rural Manitoba wasn’t exactly rivalling downtown Manhattan. To be fair though, the rewards for building your own home were pretty massive because of how high interest rates were at the time (20%+).
Related: Buying a House in Canada
What Living Mortgage-Free Meant
If Mom and Dad would have been personal finance nerds, they might have used their frugal lifestyle and mortgage/rent-free budget to amass a solid investment portfolio. This wasn’t exactly their style, so instead they invested in Dad’s business (some years a great investment, other years fairly poor), Mom’s defined benefit pension plan, and spoiling their family.
My brother and I never wanted for much. Looking back, that was pretty noteworthy given the part of the world we grew up. A lot of households made do with life at, or just above, the poverty line. The lifeblood of the community when my dad was growing up was the lumber mill and the accompanying natural resource industry. Once the mill shut down, the same gradual decline as most of the rural prairies experienced set in. All that to say, it wasn’t a given that little Johnny would have new clothes for the start of a school year, or could afford to go to summer camp. By the standards of those around us, we were spoiled. My brother and I played organized sports from a young age, were involved with tons of extracurricular pursuits, and got to go on some great family vacations. Don’t get me wrong, we never had the latest video game system, and we both had jobs at younger ages than most. It’s not all people though, that would sacrifice their material wants and needs in order to give their family the experiences we had (without going into debt), and to help them out with their post-secondary costs. (A gift that keeps on giving when I see the student loan balances many Canadians now graduate with.)
Having no mortgage or rent payment to worry about also meant that my parents could afford to upgrade our house as we went along (not a bad strategy if it’s available to you). I mentioned that they added on a mud room and office when I was young, and then mostly finished the basement, before finally putting in high-quality fixtures over the last few years. Witnessing the slow improvement of my surroundings, paid for without borrowed money, was a great lesson that I had no idea I was learning at the time. To this day I don’t really understand the obsession with young folks needing marble countertops, three bathrooms, and a walk-in closet when they buy their first home.
You Don’t Have to Be a Frugal Lumberjack – But It Helps
If I’m being blatantly honest, part of the reason I wrote this article was to humble brag about my parents a little bit – maybe it’s my way of saying Thank You!
I realize that not many of you are going to live in a bush camp or start taking drywalling lessons anytime soon.
That being said, I think there are some interesting takeaways for the average Canadian today:
- Living mortgage-free and rent-free gives you options. While investing alongside paying down your home is likely the smarter play from a pure math and return-on-investment perspective, if you are more motivated by paying down your mortgage, then play to your strengths and DO IT. It’s much better than doing nothing and/or spending on consumer luxuries.
- Living rurally can be a great deal for building wealth. Check out the article we wrote about it here.
- You don’t need your dream house right away to be happy!
- Not wanting to have it all right now, can help you get most of it if you’re patient.
- Working hard with a defined vision in mind can really help you produce measurable results.
Does my Dad just belong to a simpler time, or is his story still noteworthy? At what age do you aim to be mortgage free?