In January to February this year, I travelled to Australia. And to do so, I took 5 weeks off work without pay.

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To be honest, this trip was an impulsive one. I booked my one-way ticket to Brisbane just in November which meant I had less than 3 months to save up for it. As such, I expected to acquire a small amount of debt by the time I returned home. (Okay PF community, don’t all shoot me at once for this!)

Since I gave up my full-time nursing position last November, with all the cushy benefits from a “government job”, it meant that I didn’t have any vacation pay to provide income while I’m away. The only income I had were the rental income from one of my properties (which I’m unfortunately cashflow negative on at the moment) and a small amount of passive income from this blog (nothing big enough to live on yet).

So when I sat down to calculate my net worth at the end of February, I was very surprised to find that my net worth actually increased by $4,600 even when I wasn’t working and after calculating my new debt into it.

Looking at the numbers, this was due to a combination of the following:

Reduction of debt via regular payments (student loans, IOU to business partner)
Owning more of the 2 properties I control thanks to regular mortgage payments (I used the purchase price of the properties to calculate net worth and not the current value)
Growth of money invested in retirement accounts
Savings – In the end, I had saved enough to pay for all my expenses in Australia. I went into debt for my other financial responsibilities in Canada; the biggest items being an unexpected dryer repair needed in my first property and a new furnace for the second property. Since these expenses are both tax-deductible expenses, it made sense to keep this debt over credit card debt.

The increase in my net worth is a product of having built a system that now takes care of my bottom line no matter what. And to see it in action in real life only motivates me to keep cementing and keep laying those bricks!

The thing is… even if it’s not your goal to travel for extended periods of time, or you’ve got a great job you don’t want to take time off from, this is still useful to do. Because my “5 weeks off work to travel” could easily be your “broke my leg and can’t work for 2 months” or “got laid off” dealio.

How To Build Your Financial Foundation

It’s quite simple to do actually. There’s a few things you should focus on that will help you build that foundation. Here’s what I did to build mine:

1. Manage debt.

Debt is killer. It will hold you back before you even get a start on ‘getting ahead’. Add that to the fact that it’s so easy to acquire debt then you have a double-whammy you need to wrangle early on. Don’t get into debt if you can help it. Don’t finance a brand-new vehicle just to impress your friends.

That said, I do believe that debt is a financial tool that can help you when you need help. If you have to go into debt, do so wisely (e.g. pick the line of credit with low interest and focus on paying it off asap, use credit cards that provide rewards like cash-back or travel points).

2. Focus on your money-maker, that job or career of yours.

It is easy to get distracted with all these “money-making strategies” out there. Believe you me, I have fallen for my share of at-home businesses I can do part-time and survey-answering, website-reviewing, English-teaching online jobs.

What I found though is I’m spreading myself too thin and not really making that much more money. Now I focus on three things to bring in income – my job as a Registered Nurse, real estate and my blog. I’ve made way more money this way and I’m less insane from trying to juggle too many responsibilities.

Are you maximizing your job or career position? Are you taking courses and certifications that will help you earn more or be more valuable to your company? Or are you seeking out opportunities to diversify and improve your skills. Focus on that… and less on answering $1 surveys.

3. Buy assets.

This is how you make your money work for you. If you’re only trading your time for an hourly wage, you will find your limit very quickly.

When you invest your money however, into a business, investment accounts, real estate, royalty-producing intellectual property, etc… you’re building leverage to make even more money.

Real estate will always be one of my favourite assets. I’m currently saving up for my next property by paying down one of my current properties so I can take a home equity line-of-credit out as down payment for the next one. #winwin

Also, buy with caution… I’m not advocating for you to do what I do. I am, however, advocating that you buy more assets over liabilities.

To get you started, here are a few of my favourite companies to invest my money with:

EQ Bank* – What I use to stash money I’ll need in the short-term like travel fund or emergency fund.
Wealthsimple* – Robo-advisor I use to invest my retirement savings.
JustWealth* – Another robo-advisor I use for investing money. I used my TFSA account with JustWealth to save my down payment for my first house.
Lending Loop* – Peer-to-peer lending site where you can lend your money to Canadian businesses you believe in (they detail financials and such of every business asking for loans so you can make informed decisions). I invest money here because I like supporting these Canadian small businesses who sometimes struggle to get the cash they need to provide their services to fellow Canadians.
Mylo* – Automatic investing; it rounds up your purchases from your checking accounts and credit cards and invests this money every week automatically. I use this to build my travel fund as well.

You can find more detailed information about these companies in my Recommendations page.

Also, it can be quite overwhelming, and to prevent this post getting too long, I purposely did a quick one-to-two sentence on each of those recommendations.

If you want to know more or if you’re looking for guidance to get started, please feel free to email me and I will do my best to help guide you or point you towards resources that you can look into.

4. Focus on the “big three”.

House. Car. Food. Those are the big three.

If you can be creative and sacrificial (is that word appropriate here?) enough to figure these three out so it eats up as little of your budget pie as possible, you’re that further ahead of the general population. Spend less money here and you’ll have more money for debt repayment and savings/investing.

The roommate or used vehicle situation is temporary and easier to do when you’re in your 20’s with little responsibilities and more options. Take full advantage of this to build your foundation so that when your situation changes (prince charming finds you or you pop out some adorable babies), you’re in a much better position to change your circumstances so it fits your new lifestyle.

When my long-term relationship ended 2 years ago and I found myself burdened with a 1,500 square feet house alone, I made the decision to move in with my parents so that I could sell this house off (long story short, it didn’t sell and now I’m renting it out). Also I still drive Rex around, my 2002 Honda Civic with 140,000kms on it. #Teamnocarpayments

These two decisions, in great part, allowed me to be in a good financial position to buy my second property and travel as much as I do now.

5. Start now.

It took me 7 years to build up to where I am now. I started seriously taking care of my finances during my second year of university but didn’t make any big dents until after I graduated in 2014. In the first 4 years of my career, I didn’t travel, I didn’t upgrade my lifestyle and I continued to live with family to keep building this foundation. Now I have more options and my system is working.

You may not be where I am today but the good news is you can start now. The next 7 years will pass anyways so it’s better spent cleaning up your finances than wallowing over what you should have (or shouldn’t have) done in the last 7 years.

Now that I’m full-force working again in my position as a travel nurse, I’m thinking the next net worth update will be even better. I’m now working on catching up on my debts and saving for my next trip.

P.S. Would you be interested to know how I track my net worth (calculations, process, etc.)?

MY NET WORTH INCREASED BY $4,600 – EVEN WHEN I WASN’T WORKING