Derek Foster believes he’s Canada’s youngest retiree at age 34 — and so far, no one has challenged him.
Foster didn’t win the lottery and wasn’t born into money.
He just knew how to become an “idiot millionaire,” thanks to investing in simple stocks. This one activity proved to be quite life-altering.
Typically, he says, a lot of people will acquire financial advisors, who end up charging fees.
“I’m not an investing guru or have special knowledge,” said Foster, before giving a free talk at Red Deer Public Library downtown branch on Monday night. “I think the average person can invest themselves. I think people are afraid to do it until they go to an advisor, the bank or some local expert.”
Foster said the key to investing is being able to buy stocks that are simple enough for any six-year-old to illustrate with a crayon.
“You don’t want it complicated and people are usually attracted to more complicated ideas,” said Foster. “Often the simple things work.”
For instance, he says everybody wonders what will be the next big Apple or other technological thing to invest in.
Instead, he sticks with products and services that are used every day, such as toothpaste.
“That’s how I was basically able to fund my retirement,” said Foster. “We basically live in a culture where people want things instantaneously.”
Some people invest like they would at a casino — they want to make a quick gain.
Foster gives an analogy where seeds, symbolizing money, are planted for investment.
That will grow into a tree, but in many cases, people just want to chop it down.
“I plant the seeds and I grow a tree, but I harvest the fruit and I can do it again next year and the next year,” Foster said. “So I tend to focus on companies that pay dividends, where you get cheques every three months.”
Colgate toothpaste has paid uninterrupted dividends since 1895.
“The stock will go up and down, but as long as people keep brushing their teeth, you will keep getting those dividend cheques,” Foster said.
Foster, now 42, has been busy despite retiring, or not having a conventional job, in eight years.
Recently, he and his wife Hyeeun sold their house in Ottawa and are taking a one-year trip through North America with their five children, ranging in age from two to 12.
“We have extra freedom, but we don’t have an extravagant lifestyle,” said Foster.
He’s written a number of books, including his first book called Stop Working: Here’s How You Can. For more information, go online to www.stopworking.ca.
His books were on sale during Monday’s presentation.