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Rye grad pays off mortgage in 4 years

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By Mitchell Thompson

Sean Cooper set a daunting goal for himself roughly four years after graduating from Ryerson’s commerce program—to have his mortgage paid off by the time Star Wars Episode VII came out.

In summer 2012, he bought a $425,000 Toronto bungalow, just east of the beaches, with a $255,000 mortgage.

Three years and two months later, he stood outside his new home, dressed up in a black suit jacket and bow tie. Friends surrounded him as he set his now-paid-off mortgage papers on fire. He beat his December 2016 deadline by about two months and thinks other young Canadians can do the same, despite continuing challenges.

Though Cooper said “having the weight off his shoulders” was satisfying, the period in-between buying the house and paying off his mortgage left him with no time for friends or fun.

Cooper worked 80-hour weeks

Growing up with an indebted and insecurely-employed single mother gave him incentive to throw all he had toward his financial freedom. His experience working as a financial consultant and writer helped him learn how to manage money and cut costs, he said. For several years, Cooper—now 32—worked 80-hour weeks, bouncing between three jobs: one full-time, one freelance and the other part-time at a supermarket. He cut back on food and transportation—which generally make up people’s two biggest expenses after shelter—by packing his lunch every day and riding his bike as often as he could.

Though he acknowledges the pay that comes with part-time work is generally low, his part-time and freelance work turned the $55,000 he earned from his full-time job into $100,000 annually, CBC notes. This helped him commit $825 weekly to his mortgage at an accelerated rate.

His family and friends were constantly checking in on him to express their concerns about his well-being. Though his doctor found no adverse health effects from overworking, he said that if he had to maintain that type of lifestyle for more than three years, things could have gone downhill.

A 2015 study by Stanford University, for example, found workplace stress—including working long hours, job insecurity and a lack of work-life balance—can lead to health complications that aid killing 120,000 people annually in the United States.

“I don’t expect people to pay off their mortgage like me in three years … That’s not realistic or healthy”

Stanford professor Stefanos A. Zenios told Stanford Business researchers that “the deaths are comparable to the fourth and fifth-largest causes of death in the country—heart disease and accidents,” with long hours increasing mortality by about 20 per cent.

Cooper also moved into his basement apartment and rented out the upper floors to earn landlord cash. He quickly learned how to distinguish good tenants from bad ones after getting stuck with a group of loud, late-paying and fight-prone renters who frequently drove him to sleep at his parents’ house in pursuit of some peace and quiet.

He spent a lot of time thinking about “all sorts of creative ways to push them out,” including lying about wanting to move back upstairs. But they left on their own initiative once the lease was up.

Precarious work is the future

Because of the current financial climate, a good number of students today will be doomed to a future of low-pay, insecure, part-time work and debt after graduation.

“I don’t expect people to pay off their mortgage like me in three years … That’s not realistic or healthy,” Cooper said. He  no longer lives in his basement and has finally won his “financial freedom.” Though he wouldn’t recommend his strategy to everyone, he said there are things people can do to secure extra funds.

“Precarious work may be unfortunate, but it gives you the free time to pick up more work,” he added. “Jobs may not be as stable as they were but there are more opportunities than ever to make money and part-time workers have more free time.”

One example of part time work he gives is being an Uber driver a few days each week.

“Precarious work may be unfortunate, but it gives you the free time to pick up more work”

Cooper published a book on the subject of financial freedom, where he recommends that “instead of using low interest rates to pile on debt, use it to spend to your advantage to pay down the biggest debt of your lifetime.”

To put this in context: the Bank of Canada’s interest rate is the amount in interest paid on Canada’s banks’ money, so a lower rate incentivizes more lending. Since 2008, Canada’s interest rate has been abnormally low and currently sits at a record 0.5 per cent to buoy a lagging economy. There are concerns this has caused household debt levels in Canada to surge because credit is so cheap.

Additionally, a recent UBC report on Canadian housing policies found most young Canadians must save for 12 years before they can afford a 20 per cent down payment on an average home—15 years if the house is in Toronto. It takes the average Canadian an additional 11.7 years to pay off a mortgage, though some reports have estimated that most Ontarians don’t expect to be mortgage-free until they’re in their mid-to-late 50s.

Going forward, Cooper is going to make some lifestyle changes, the main one being to not work 70-80 hour weeks. Working extremely long hours for so long allows him to now sit back and feel secure.   

“I’m house rich and cash poor now”

But still, he said things aren’t perfect and the day-to-day chaos and pursuit to save seems never ending.

“I’m house rich and cash poor now,” he said.

“Step one for financial freedom is paying off your house, but step two is saving money outside your house because what else can you live on?”

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