Working Hard But Not Smart

I was reading an article on Money Sense magazine entitled “How we did it.” The report reveals how everyday people can accomplish amazing financial success. The story that caught my eye was from Perry Goertzen and was entitled “How we paid off our house in three years.” This is the summary.

When we started, we had a rusty old Toyota Tercel, no house, few possessions and a crushing debt of $37,000. A few years later, we had two almost-new cars and a beautiful new four-bedroom house on a 46-ft lot in Milton, Ont. Everything was completely paid off — we had zero debt. During this time, neither of us made much more than $60,000 a year at any one job, but by working several jobs and saving almost all of our income, our net worth increased from negative $37,000 to positive $420,000 in less than five years.

Sound very impressive! What did the Goertzen’s do to turn their financial woes around? They saved 80% of their after-tax income ($80,000 a year) and work like dogs.

I worked an average of 90 to 100 hours a week, or about 14 hours a day, seven days a week. It wasn’t unusual to work 22 hours straight, go home, sleep for two or three hours, get up, shower, and work another 12-hour shift. I once worked 99 days in a row, took two days off, and then worked another 60 days. Meanwhile, Tiffany began supplementing her salary as a teacher by tutoring and giving piano lessons.

When reading their story I didn’t know if I should be inspired by their dedication or feel sorry for their stupidity. While Money Sense likes to paint the Goertzen’s as financial successes, I say they are financial failures. The Goertzen’s worked really hard. They have 6-7 jobs between them that brought home $80,000 after tax. Excuse me! But there is this thing call a life! And it’s really a shame that the only way they think money can be made is by working more jobs. You’ll never get rich by working hard. Sure the Goertzen’s were able to pay off their $220,000 mortgage in three years but look what they had to give up in order to do that – no life outside of work, no free time, living like starving students because they’re socking away 80% of their income into their mortgage.

And now that they are debt free, they have no plans to go back into debt, which mean they were never taught the difference between good debts and bad debts. The Goertzen’s are a great example of working hard but not smart.

You can read the online version of the Goertzen’s story here.

10 thoughts on “Working Hard But Not Smart”

  1. Sam says:

    I couldn’t agree more with you, I actually find this very dumb people. I mean, I can only imagine the strain this must put on your body. I don’t think I would be able to do such things.

  2. Rob says:

    Cringe – that is a very sad story.

  3. Stephen says:

    That’s a very old mentality to work your life to pay off the mortgage, while having nothing but your house to retire on. If they looked at their other options, they’d be further ahead for sure. It’d be interesting if they did a case study with another couple, only this time, the couple had a life, and incurred some good debt and picked up some investment saavy along the way. It would probably make the Goertzen’s feel really silly that they broke their backs for that, and they still won’t have any fun!

  4. Stephen says:

    I made a mistake and said they’d have nothing but the house to retire on. The article states they are aggressively saving to retire. However, with an interest rate of 5.2% on their house, they’d easily make money on that loan with a modest investment. Or, since they own the house, do one of the tax deductible mortgage interest strategies. But of course, they have no plans to go into debt again, so they won’t do that.

  5. Carl says:

    That is really stupid! You might as well go to jail for 3 years.

  6. Oliver May says:

    It would only be stupid if you explained how they could have made more than $120,000 in 4 years (the increased value of the house in Milton, ON.). Also explain how paying $200,000+ in interest over 20+ years is a good debt. I know the answers to these questions but none of the above responses or the article addressed them. If you could make more money through investments then maybe. Why do the banks make so much money, mortgage payments is certainl a big part of their massive profits.

    It has to be a really big robbery to pay-off half a million (albeit Canadaian dollars) and get only 3 years in gaol.

    Also, in Canada most mortgage interest is non deductible so you need to find an investment earning 5.2%+

    A better question is; why aren’t you both working 10 hours a week and enjoying life?

  7. John Chow says:

    While I can not speak for Sam or Rob, I know that Carl, Stephen and myself all work less than 10 hours a week and we’re having the time of our lives.

  8. Carl says:

    10 hours only if I have to work overtime that week!

  9. Stephen says:

    Work? You must be kidding right? LOL!

    If someone sees me working and not having fun instead, please smack me.

  10. zaffir says:

    need help with paying of mortgage faster

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