How To Become A Lazy Millionaire

My wife hates it when I claim I’m lazy.  But laziness can be a virtue. 

I’m not like most people.  I want to spend more money, save less money, become financially free before most people and have a decent-sized bank account.  It’s not a pipedream.  I’ve actually done it on a teacher’s salary.  And if you’re young and willing to embrace your inner sloth, you can do it too.

But the financial service company, Vanguard, doesn’t know the motivating secret.  They recently posted a statement, followed by a question on Facebook.

“Fifty six percent of 18-34 yr olds say they’re saving $0 for retirement! (via How can young investors be encouraged to think long term?”

The answer is really easy.  To get young adults to think long term, they should strive to be lazy and spend more of their income during their lifetimes.  Who wants to scrimp in their 20s, 30s and 40s, so they can have bucket loads of money in their 60s, 70s and 80s?  What a waste.

I’m talking about spending more money during a working lifetimes AND ending up with more money for retirement.  Here’s an example:

Joe Smith studies law in college. 

He becomes a lawyer at age 26, but he doesn’t know how to be lazy.  So he spends the money he makes.  OK, this might not make sense if you’re a “worker” who’s used to his or her nose on the grindstone, but stay with me.

Joe starts saving at age 40 for his retirement.  And he socks away $2000 per month for 20 years.  In total, he “saves” $480,000 ($2000 per month x 12 months x 20 years).  That’s a lot of money to save.  And what Joe saves, he doesn’t get to spend. 

If he makes 8% per year on his investments, he’ll grow his savings to $1.18 million.  The poor guy isn’t much of a thinker.  To build a $1.18 million investment portfolio, he has to save $480,000 of his salary.

Call Joe a sucker for punishment.

Tim isn’t really smarter than Joe.  But he’s lazy. 

There’s no way he wants to save $480,000.  He works at the same law firm as Joe, makes the same annual income, but wants to spend more over his working lifetime AND end up with more money than Joe.

Tim starts investing just $200 per month ($6.66 per day) at age 18, which he puts together from the odd weekend job.  From age 18 to 26, he keeps investing the same amount.  If he makes 8% per year on his investments (the same return that Joe makes) he’ll have $27,570 at age 26.

When the law firm hires Tim (at age 26) he starts investing $600 per month and keeps it up until he’s 60.  He earns the same salary that Joe did.

By the time Tim is 60 years old, he has $1.6 million—nearly half a million dollars more than Joe.

Tim ends up with $1.6 million, compared to Joe’s $1.18 million.

But Tim was able to spend nearly $100,000 more than Joe while he was working…on fun things, like holidays, toys, and dinners on the town. 

Joe is a worker.  He saves more and ends up with less money.

Tim is lazy.  He saves less (spends more) and ends up with nearly half a million dollars more than Joe.

It pays to use your head and be lazy, like Tim.

I started to invest money when I was nineteen. 

And I recommend that all lazy kids do the same.  I spend more money than my “harder working” friends, and I have more money.

It’s important not to brag, but this needs to be shared.

And it does a decent job, I think, of answering Vanguard’s question:

“How can young investors be encouraged to think long term?”

By embracing their inner sloth, that’s how.

For more information, check out my book, Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School.


worlds best value financial advisor

Andrew Hallam

I’m a financial columnist for Canada’s national paper, The Globe and Mail, as well as for AssetBuilder, a financial service firm based in Texas. I’m also the author of Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School (2nd Ed. Wiley 2017) and The Global Expatriate’s Guide To Investing: From Millionaire Teacher to Millionaire Expat (Wiley 2015). My mission is to educate, motivate and inspire people on basic retirement planning and best practices for investing, using evidence-based strategies. I'm happy to comment on your questions. However, please read the Terms of Use, Privacy Policy and the Comments Policy.

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12 Responses

  1. Trevor says:

    Really like the Lazy approach!

    I'm very interested in your strategy of keeping investments simple (just 3 ETF's, wow!)

    How do you approach portfolio balancing across multiple accounts without incurring too many fees?

    For example, if both my wife and I have RRSP, TFSA, LIRA, and a joint cash account at a discount brokerage, and re-balance even just once per year, we are incurring costs of approx $10 x 3 ETF trades x 7 accounts = $210. If we re-balance more often, those costs really start to eat away at returns on our low 6 figure portfolio. What's your strategy? Are TD e-series funds the better option for this size portfolio?

    • Hi Trevor,

      I don't know the size of your accounts, but if you have accounts with less than $120,000 Canadian, then the e-Series option is more cost effective. I mentioned this in my book, with a comparative breakdown.

      I only own one account. I make roughly 10 purchases a year, and I might rebalance once a year. My brokerage costs (per transaction) are $30 a shot. So I spend about $360 annually in commissions. But my account's size is nearly $2 million, so I pay very little, on a percentage basis. For me, the e-Series account would be much more expensive. But as I said, if your accounts are worth less than $120K, you'd be better off with the e-Series.

      Check out my book. I think you'd like it!



      • Grade 7 Robb Road St says:

        Hi Andrew,

        After reading your book, I transferred my money from Investors Group to your recommended TD e-series fund portfolio. I bank with TD so it was all quite painless.

        I understand why portfolios >$120,000 should be made up of ETFs and why portfolios <$120k should be made up of e-series funds.

        However, I am a little confused at what I should do at the transition point when my TD e-series funds portfolio exceeds $120k (something that could likely happen within 4-5 years)?

        Specifically I have a (maxed) TFSA, RRSP, and Non-Registered accounts each with the recommended funds (except the non-registered does not have the bond index because it is not sheltered from tax). When re-balancing, I treat all of these accounts as one big pot of money and allocate so that the four funds are weighted 25/25/25/25 across all of my accounts (~ my age).

        Can you speak to how you would see this transition happening?

        Thank you!

        Grade 7 Robb Road Student – still learning

  2. Barry says:

    I gave Vanguard Australia a call today

    It really is DIY investing, not much assistance from them with regards to index funds or a strategy such as that in your book, including Lifestyle and Index/Bonds beyond what is on thier web-site

    • Oh definitely—it certainly is DIY investing. The Lifecycle funds make it easy though. You just buy them and do nothing. Then you can get on with the more imporant things in your life.

      • Barry says:

        Available on my curent trading platform at around $20 per trade are the following vanguard funds.

















        The current Index Fund I have is STW which has a higher MER than the Vanguard Funds, so am looking at Vanguard and a 3 fund strategy

  3. Saori says:

    Hi Andrew,

    I'm a 35 year old living in Japan (I'm Japanese).

    Currently, I have all my savings in either cash (yen) or in Japanese government bonds, so I was thinking of diversifying by investing abroad with offshore funds (Friends Provident) when I came across your blog. I have read your book and that made me decide to start index investing instead, but I'm still trying to figure out what way would be the least expensive for me.

    Japanese brokers seem to offer Vanguard's VT but not the international bond index. However, I have heard rumors that one of the brokers might start offering all ETFs on NY exchange in a year or so.

    I saw in the comments above that a portfolio less than $120K is less expensive in e-series funds. The problem is that whenever my portfolio exceeds that and I try to move it to ETFs, I will be taxed 20% on my gains.

    I've also heard of the relay method before, where I save up a decent amount (ex. $12K) in index funds and relay that to ETFs. If I do it this way, I was thinking of selling all my index funds once a year when I would rebalance anyway and buy the ETFs. One of the problems for this method in the long run would be the hidden currency exchange costs (yen to dollars and back to yen for the index funds and again to dollars for the ETFs). Also, I will be taxed 20% for any gains for the year from the index funds every year.

    Which method would you recommend? Or should I just skip the index funds and start buying the ETFs?

  4. ljh says:

    I do not receive your emails even though I am told I am a subscriber when I try to sign up again. What can I do to start getting your emails? Thanks. ljh

  5. Sonia says:

    Hi Andrew,

    Thanks for your wonderful books and advice!

    I have some savings both in yen and in dollars, so I am thinking of opening 2 portfolios that follow your advice: one in USD and the other one in JPY. Would you please recommend an ETF/ bonds in Japanese yen? Thanks!!!

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