I’m taking a break from the dividend world today to tell you a little bit more about my story. I’ve always been as much transparent as I could with you, and this won’t change today. On July 1st, 2017, I officially quit my job as a private banker and started my journey as an entrepreneur.
A leap of faith;
A dumb decision;
Call it what you want. On that day, I stopped receiving a paycheck, I kissed my defined pension plan goodbye and I turned my back to job security for life. But after crossing the Honduran border twice with my family; fear has been deleted from my vocabulary. I was up for something more exciting.
A look back at the first months
I started my journey as I start pretty much everything in life: all-in, full speed. The first months remind me of how I tackled my first trail run. I ran like there is no tomorrow until I realized that I needed to breath as I wouldn’t make it to the finish line. The difference is that I took about a year before I realized I needed to slow down.
The first months were quite hectic. One day, I was working 10 hours and achieving tons of things. The next day, I was better off playing Hearthstone as my brain was completely dead. Finding a balance in hours worked and a consistency was a major challenge. With no boss and no appointments, wondering on the internet all day could be easily done!
I was rapidly going back to my tasks as I left my job without any safety nets. I had just come back from a 12 month trip across North & Central America. I had virtually no money left. I had to live with the possibility of not having enough money to pay my bills at the end of the month. Fortunately for me, I had someone looking out for me and he was ready to put money in whenever I needed it. I guess this is why we call that “love money” when you start a business. In an ideal world, I would have waited to have money on the side before quitting my job. But that would have been just another excuse piling up on top of another ten thousand reasons for not quitting my job sooner. I didn’t let that happen.
How I make money
So, could I generate enough money to sustain a family of five? Can this blog generate that much money? Unfortunately, it doesn’t. When I started working full-time, I had three major sources of revenue. I sold advertising on other websites (not this blog), I wrote a lot for Seeking Alpha and I built my membership website; Dividend Stocks Rock.
The first two sources require that I trade time for money, especially writing for another site. Each time I wanted to generate money, I needed to trade a couple of hours of my time in exchange of a paycheck for my article. While the money is good and it’s a good way to get immediate returns, this is not scalable. In fact, this looks a lot like having a job.
I’ve spent the past two years on building a better platform for dividend investors. In two years, we have grown our members community by more than 1,000. DSR has now become the most complete investing platform for dividend growth investors.
So, Mike, do you really live off your investments?
When I tell people, I retired from the corporate world at 35, they all think I’m rich and living off my passive investments. There are so many discussions and definition of the FIRE movement (Financial Independence Retire Early) that one can easily be lost. I use the words “retired from the corporate world” as I now design my own lifestyle. Here’s what I mean by “I’m retired”:
I’m doing what I really like each day. This doesn’t mean I don’t work; I do. But if being retired means not working, I’m not going to be retired unless I pass away. If I had $10M in my bank account, I would still live in the same house as my children cherish their neighborhood and school. They have built a life here and I respect that. Once my children grow older, I’ll sell my house and travel the world while visiting them every 2-3 months. That’s what most people would call a great retirement, right?
I work 365 days a year, but I’m on vacation just as much. I don’t make any difference between Friday and Monday. I can work on Sunday morning, but be completely free for a Tuesday evening I’m never stressed to pick-up kids somewhere or driving them to their next activities. In 2018, I took at total of 6 weeks of what people call “vacation” and I’m planning to spend 1 month in Vietnam in early 2020. I will likely travel a month per year going forward. It’s not like taking a vacation because I’ll still work. But transforming my lifestyle into “I’m always working and always on vacation” is the best feeling.
I can work anywhere in the world. The only reason why I’m not already travelling across the world all the time is because I respect my children’s life here. However, I could easily afford to jump from country to another all year around. We are starting a “test” with Vietnam, but I really see myself going away 1 month per year (yes, during school time) each year starting in 2020.
I’m paid to manage my portfolio. I’ve noticed a major difference since I started working full-time on DSR: my investment performances have got even better. I was already doing well (I beat the market between 2012 and 2017), but I was even able to post positive returns in 2018, where both US and Canadian market were down by mid-single digits. Did I become a better investor? Not at all. The only difference is that I now spend 8-10 hours a day working on tools I developed at DSR and use them on my own portfolio. The more I work on DSR, the more I improve it, the better my portfolio performances are.
I guess the secret is that I found a passion (the stock market) and made a business out of it. This way, I never have the impression that I work. This is the definition of being retired for me: living a life that makes me happy without having to be obliged to someone or something else.
Now that I’ve bragged for a while about how great the business is and how I enjoy my new lifestyle, I must tell you, being a business owner is no different than any other adventure in life: it’s amazing, but it comes with a great load of frustration too.
When you sit at a table with a pen and paper thinking about how great your business plan is going to be; you are filled with dreams and ambitions. You are ready to work relentlessly, and you expect great rewards. This all looks good on paper… I even had the impression I was reasonable, read cautious, in my estimates. Ah! What I fool I was.
The first problem I encountered was that no matter how hard you work; rewards don’t come right away. I’ve found myself working hard (this was no vacation or retirement!) and getting little results at first. I expected exponential growth, but it was more linear. For a while, I really had the feeling I was (again) trading hours of work for money. Then, it started to grow a lot faster, but it took over a year before I could reap the fruits of my labor.
I also started to “live the life” a little too fast. During my first year as an entrepreneur, I’ve had about 6-7 weeks off, I travelled to Guatemala, rented 2 vacations properties and toured all Atlantic provinces (besides Newfoundland). Let’s just say I was burning my money as soon as I made it. The company was left with little to survive. I should have remembered: cash is king. Now, I make sure to have lots of liquidity available in my company’s bank account!
The second challenge I encountered was finding consistency in my work. One day, I was a machine ready to work like 5 financial analysts. The next day, I found myself surfing between Twitter, Seeking Alpha, financial blogs and… playing Hearthstone. It took a good 6 months before I was finally able to have a schedule where I could work with consistency each day. I had to become better at planning my days, my weeks and I’m now working on planning my quarter (still a work in progress).
The third issue was scheduling ahead. For the first 12 months, I was basically working my way through the day and hope that I had done enough at the end of the week. Then, plenty of surprises would come my way at unexpected moments. For example, I had completely forgotten that we had annual renewals for both our hosting services and financial data access (through YCharts) during the same month. Let’s just say I didn’t enjoy spring break in March as I used to.
I’ve learned a lot during the first twelve months, and I can tell the second year was a lot better. During the last year, I learned how to manage those challenges and I’m now getting close to the point of hiring another employee as the business keeps growing. Being an entrepreneur is like a never-ending race where you must constantly learn new things and adapt. The finish line is rarely what matters, the journey is the real thing.
What I like the most about being an entrepreneur is the ability to change the course of things. I gained full control of both my life and my financial situation. Each day, I’m amazed to see this business growing into something a lot bigger than “just me”.
For 8 years now, I have a full-time employee. Vero, my core business manager, was “there” before I worked full-time on DSR. She learned how to work alone and manage the ship throughout the storms. Today, the team is growing as we have two part-times and I’m looking to add someone new to the team in the next 12 months. Watching DSR become a team effort is amazing. Now, I go on vacation and the job is still getting done. That’s a great feeling.
We also reached out 1,000th members after 18 months of hard labors. Around December 2018, we crossed the mark of 1,000 members and we keep growing. We are now about to help over 1,000 investors to avoid mistakes and make “good investments”. When members tell me, they were waiting for their Friday morning coffee to read my newsletter, it makes my day.
In February 2018, we launched an upgraded service called DSR PRO. This was a huge step forward for both the business and our members. We started with 35 beta testers at that time. The goal was to produce a report tracking each investor’s holdings and provide them with a summary of each earnings season. Today, we track over 1,000 stocks (on both Canadian and US markets) and generate reports for several hundred members. PRO subscribers not only receive a portfolio summary every quarter, they also get ratings on all holdings and a list of potential replacements for lower rated stocks. Even better, our buy ratings outperformed the market in the past 6 and 12 months while our sell ratings also save several thousands for our members.
Last year, DSR turned 5 years old. It was a great achievement as we have published our portfolio performance since day one. I always thought that if someone is willing to pay me for information, I better deliver something great. To this day (getting closer to 6 years!), most of our portfolios beat their benchmark (and the stock market as a whole). We went through 2018 with great success too (so don’t tell me bull markets make geniuses ?).
What’s going to happen next?
When I meet with old colleagues, most of them ask me if I regret. The only thing I regret was to not quit my job earlier and design the life I really want. This opportunity was sitting patiently in front of me for the past decade, but I only seized it 2 years ago. So no, I don’t regret my choice, I embrace it!
In the next 12 months, I want to move even faster. That’s why I’m working on hiring another employee, someone with a strong financial background that will help me bring DSR to a whole new level. I see there are so many ways we can improve investing knowledge that haven’t been done. I thought I could have hired that person already, but as everything else I planned; it looked better on paper than in real life!
In the next 12 months, I will also get to the “part II” of my lifestyle design. In an ideal world, I would travel with my family (my wife and three kids) for a month and then still have the resources to spend 7 to 10 days with my wife in another country each year. I think this is something that could happen in 2020, but this will include lots of work in the upcoming months! Fortunately, this is the kind of work that looks like a treat more than a task!
I always try to be as transparent as possible. If you have any questions about my lifestyle, my business, or how I manage anything else; just write a comment or write me an email.