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Career

The Wealthy Custodian: Building Wealth On A Modest Income


Ron is the chief custodian at the school where I work. I’m grateful that he agreed to let me interview him for this post.

Early life lessons about financial stress

Ron learned early in life what it meant to be financially stressed. He remembers his father, also a custodian with the school board, rarely being at home. After his shift at school, Ron’s dad would go out to whatever side-job he was working at the time – pizza delivery, painting, carpentry … With a wife and three kids to support, and mortgage rates running between 12-18%, it was always a struggle for him to stay on top of the bills. “I wasted my money on cars and partying when I was young,” he would often say bitterly. His dad’s regret was very clear to Ron as he grew up, and as a young son, he formed a resolve to set himself up for a different life. Ron may not have started out wanting to be a wealthy custodian, but he did know that he didn’t want to struggle for money as his father had struggled.

Early career: willing to work

When he started working as a custodian for the board at the age of eighteen, Ron was a “casual” employee without job security. He managed to get a contract position within a few months by taking on a job nobody else wanted at an elementary school “out in the boonies.” Within a year, he was able to move to a location in the city by taking another position that nobody else wanted – on the night staff of a high school. Still finishing up his own high school education, Ron went to Adult High School during the day and then to work from 3:30- midnight from Monday to Friday. Starting out at a low income of about $27,000 that first year, he decided to make some extra money by cleaning for Saturday School at an overtime rate of time and a half.

Home ownership & mortgage payoff goal

After two years, Ron had earned his high school diploma, and he was able to move from his job on the night staff. By the time he was 26 years old, in March 2009, Ron had saved up enough for a down-payment on 1,200 square foot, 4-bedreeom, semi-detached house – just like the one he had grown up in. He set a goal of paying off his mortgage in 10 years, and to help him accomplish this goal, he decided to take on cleaning work at an office building near his home for one hour each morning from Monday to Friday. It meant he had to wake up  very early to put in his hour from 5:00-6:00 before opening up the school for 6:30, but it also earned him an additional $600 per month.

Ron was promoted to the position of chief custodian at the young age of 28. His salary, which had gone up steadily since he had started with the board 10 years earlier, took a good jump, but the position excluded him from the possibility of his overtime Saturday School hours. His overall income, given the salary increase, was roughly what it had been before, and while Ron continued to work his early shift cleaning the office building, he now, after 12 years of work, had five-day week and a two-day week-end.

Investing

As a board employee, Ron has had to contribute about 10% of his annual income to a pension plan. On top of that, he has invested another 10% of his income in RRSPs (similar to 401K). Now aged 33, earning an income just under $60,000, he is three years away from paying off his mortgage.

No judgment

“I knew early on that I didn’t want to spend frivolously,” he said. “I made the decision to buy what I needed and to invest wisely.” He has never carried a balance on his credit card, and when he has to buy a car, he pays for it outright. I asked him how he felt about people who earn more than he does but who are in financial stress. “It boggles my mind,” he admitted, “because they make more money and have more to show for it, but they are struggling from paycheque to paycheque. If you’re always living off the credit card or the line of credit, always paying interest, you do the math. How much are you actually spending?”

“So what does that make you think of – say, someone like me?” I asked pointedly. “My husband and I are older than you. We’ve been earning an income for longer than you have, and our combined income is more than twice yours. But we got ourselves into big debt – just like your dad did – and we won’t have our mortgage paid off by the time you pay off yours.” Ron was quick to say, “But I don’t have kids. There are other factors . . .” I interrupted him. I emphasized the poor money management we had when we were his age. I assured him that I could take his criticism – that I knew I had made mistakes. “There are other factors,” he graciously repeated. “I respect people. They are free to make their choices. They may learn the hard way, but it’s still their choice.”

Future hopes and parting advice

Ron is single, but is hoping to meet the right woman some day and start a family. He has set himself up to be able to devote time to friends and family in a way that his father – on a similar income – did not. “I don’t want to work beyond 55,” he said. At the rate he’s going, he’ll probably be able to retire at a much younger age than that.

I asked if he ever tried to offer financial advice to friends. “I give suggestions when I’m asked, and if they accept it, great – if they don’t, I let it go.” I asked for some parting words of wisdom. “When you start off in financial life,” he said, “ask yourself, ‘Does my spending exceed my income?’ If you watch your spending and buy what you need vs. what you want, you can do quite well.” Ron’s story proves that one does not have to earn a large income in order to grow wealth. Being a wealthy custodian is entirely possible.

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Erin Thompson

Erin Thompson spent years managing her own blog about budgeting and debt. Because of that, she has great insights not only about managing spending and borrowing but also about running websites profitably. When she's not writing articles for us, she's traveling and looking for new types of wines to try.
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