Personal Finance Interview with Million Dollar Journey on the Best Way to Build Wealth, which started in 2006, is a Canadian personal finance blog that follows the journey of "FrugalTrader" who achieved $1 million in net worth by the age of 35 (at the end of 2014).

FrugalTrader and their spouse started off with a negative combined net worth after graduating from university, but have, over the years, grown their combined net worth to about $800,000. Their philosophy is to build wealth through saving and investing. We thought that FrugalTrader was a great candidate for an interview at our blog, so we managed to catch up with them and ask them a few questions.

Tell us more about yourself.

I am the founder, editor, and primary writer at and co-owner of

In addition to the personal finance blog of, started up in 2009 and is a community of personal finance enthusiasts who share their ideas. A lot of beginner do-it-yourself (DIY) investors join to ask questions and get responses from the more experienced members.

What do you say to people who feel overwhelmed with investing and therefore don't want to attend to it?

Starting out with investing can be an intimidating process. I started investing in my teens with a financial advisor which led me to buying expensive actively managed mutual funds. For people just starting out, I usually recommend to avoid individual stocks and to keep it simple with indexed ETFs or mutual funds; basically buying the whole market for the long term at a low cost. The key mindset is to invest for the long term as the stock market has never lost money over any 20 or 30 year period in history.

So the first step? Do some research on index mutual funds or ETFs. If you're more comfortable with an advisor, then make sure to pick index funds with a low management expense ratio (MER) rather than some actively managed fund that has a higher MER. If you want to DIY, then here is an example portfolio that I have put together.

What's your preferred debt pay-off method?

I believe that most people would benefit the most by paying off their debts first prior to investing. With regards to method, I'm a numbers guy (engineering background), so I pay off debt with the highest after-tax rate (credit cards, consumer debt etc.). Note that some debt interest is tax deductible, so I tend to pay that off last.

Why do you think frugality is such an undervalued virtue these days?

The North American lifestyle today is consumer driven and the perception is that social status and self value is derived from material possessions.

Almost anyone with a decent income and credit can walk into a bank and get a loan for a luxury car or a mortgage for a big house. But the truth is that fancy materials do not equal wealth; the opposite is true, really. Average income combined with high-end material possessions is usually a sign of a lot of debt (and stress).

Building financial assets can lead to the desirable outcomes of freedom, and ultimately more time to do things you really value.

Can we really build wealth just by saving?

Not only can we build wealth by saving, in my opinion it's the easiest and most likely way to build wealth.

I'm not saying that everyone needs to live like a pauper, but spending less than you earn (or earning more than you spend) is a guaranteed method to raise capital to buy appreciating assets. These assets can be publicly traded companies, private businesses, real estate, bonds etc. For example, if you (and your family) can build up to saving $2,000/month and invest the proceeds in the broad stock market, assuming a five percent return after inflation, that will give you a nest egg of $1.675 million over 30 years. If you have a spouse, one strategy is to live off one income and save the other.

Getting back to the question, we went from a negative net worth in 2003 to a high six figure net worth in 2013 (with no debt except a tax deductible investment loan) primarily through saving and putting those savings towards investments. More details on my net worth updates can be found here.

Why do you think we get into so much debt?

In my opinion, not all debt is bad. Student debt may be unavoidable for students who have little financial support from their parents. However, an education is an investment in human capital. Debt can work against you if used for depreciating assets (ie. cars), especially if it's combined with a high interest rate (balance held on credit cards). I believe that consumer debt can be avoided if people start training their delayed gratification mentality and think less in the lines of "I want this now." Basically, if you want to buy something, you need to have the cash available now rather than cash available through future paychecks. The easy solution is to save the cash required for the purchase. For us, if we want to make a big purchase, we will wait a day and if we still really want it, we'll buy it with savings (use credit card for points, but use cash to pay it back in full).

When should we start investing?

Time is your friend when it comes to investing. The more time that your investments have to compound, the bigger your portfolio is going to get (see 30 year example above). In my opinion, people should start investing as soon as possible.

Who's your hero in the money world and why?

I'm not sure I have a money hero, but there have been heavy influences. I stumbled upon The Wealthy Barber by David Chilton when I was in high school and it really super charged my interest in personal finance. I believe that book popularized the concept of 'pay yourself first' which I follow to this day.

For investing, I have a high respect for Warren Buffett. He is known as one of, if not the, most successful investors of our time. His investment strategy of buying companies at the right price with strong brands that can withstand the test of time is followed by many (including me). Not only do I respect Mr. Buffett for his investing prowess, I respect his frugal tendencies and his decision to give away most of his wealth to charity upon passing.

How do you think Mint helps people manage their money better?

Where possible, we funnel our expenses through a couple of credit cards. Why? First, for the points and second, it allows us to track our expenses easily and third, there is limited fraud liability on a credit card (unlike a debit card). Note that this only works to your advantage if you pay off your credit card in full every month.

As for, we started using the service last year by connecting our credit cards to our account. Mint allows us to combine our transactions in one place and sort them into a budget. One saving strategy that really works is to track your spending. It's a real eye opener realizing where your money is going, especially repetitive transactions that can really add up (going out for lunch during the work week, cigarettes, coffee, etc.). My belief is that money should be spent on things or events that add value to your life. To me, a family vacation is an important and fun experience. If savings are tight and a family vacation costs thousands of dollars, I'm willing to brown bag my lunch or perk my own coffee to make it happen.

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