I started my career in insurance where a million dollars of replacement value on your house was a lot. Even in Vancouver. The land is what makes Vancouver real estate infamously "expensive".
Then I changed careers to capital markets finance. For those not familiar with the term, capital markets finance is an area of finance dealing with the stock market. This is the part of finance where companies sell a portion of their company (shares) to the public for millions or even billions of dollars. These are called initial public offerings (IPO's). This is the part of finance highlighted in movies such as Wolf of Wallstreet.
People in capital markets finance call a $100 million dollar company "small".
If you have ever tried to start a business, you'll know that a $100 million business is not small. It's actually quite amazing how the founders build a business that can be worth $100 million.
If $100 million is small, then $1 million is nothing. So why does it feel like a mountain?
Saving money is critical to retirement and retiring early. I have thrown around the concept of saving a million dollars, in a very casual way.
But to be very clear, a million dollars is a lot of money. It's enough for most people to stop working for the rest of their lives.
A million dollars might not be much to someone in capital markets finance. But in our individual lives, a million dollars is a lot of money. It's the difference between "needing" to go to work and "choosing" to go to work.
For those starting at zero, a million dollars is like climbing a mountain. You just look at the mountain from a distance and think you'll never climb it, and you end up staying where you are.
The Grouse Grind is like saving a million dollars.
In Vancouver, there is a mountain call Grouse Mountain. If you drive north across the Lion's Gate bridge crossing the Burrard inlet, in a few minutes you will reach the foot of Grouse Mountain. This is where you can start a 2.9 kilometre trail up the face of Grouse Mountain called "The Grouse Grind".
Standing at the bottom, all you see is a forest of trees ascending the side of the mountain, with a shallow trail winding through the trees. But the climb is 2830 stairs scaling 2800 feet in elevation gain. Just thinking about it, I'm already getting vertigo.
Despite its overwhelming presence, over 150,000 people hike the trail every year (during the spring to fall when its open) from hikers ranging from 7 to 90 years old.
The record for completing "The Grind" is 23 minutes and 48 seconds. I completed it in just over 1 hour my first time, without stopping. But with some water breaks, it will take most people 1.5 to 2 hours, or up to 3 hours for those really unprepared. But ultimately everyone that starts will eventually get to the top.
The path is laid out for you. The mountain is 2830 stairs and you are not recommended or allowed to go backwards. All you need to do is take one step forward at a time. Some people take one step at a time, some people take each step with two feet, some people run up skipping steps along the way, and some people do a combination of the three, taking bigger steps when they can and smaller steps when they need to. The only factor that is consistent among the hikers is that they put one foot in front of the other.
It's the same with saving money. Some people can save $20 a day, some can save $200 a day. You'll have days when all you can save is a pocket of change, but then other days where you can save a fat stack. As long as you keep saving and taking steps forward, you will eventually get there.
A million dollars might be a mountain. But a mountain is nothing to be afraid of. When you just consistently take the next step, eventually there will be no steps left to take. The path will open up to a clearing, and you will have your freedom.
When you prepare to take this journey of Saving Money and Retiring Early, there is no turning back. Every day will be a small step forward. After a while, you won't even need to think about what the next step is because the path is already set, you just need to take it.
Save Money Retire Early is written by Jon Lo, a barely 30 something change optimist, and personal finance guy. I believe anyone can be rich or poor, it's what you save that makes the difference.