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Financial Independence Through Entrepreneurship, with Tom and Ariana Sylvester

Presented by Wealthsimple

Welcome to The MapleMoney Show, the podcast that helps Canadians improve their personal finances to create lasting financial freedom. I’m your host, Tom Drake, the founder of MapleMoney, where I’ve been writing about all things related to personal finance since 2009.

Have you ever felt the pressure to constantly be moving up at your job, just to get ahead? Maybe there’s a better way to gain financial independence, and build a lifestyle that’s perfect for you.

My guests this week have built a life together as partners, parents and entrepreneurs. Tom and Ariana Sylvester are authors of the book, Lifestyle Builders, which details how they created their dream lifestyle through entrepreneurship. Over the years, Tom and Ariana have worked together to create multiple income streams, allowing them to leave their traditional jobs to live a life they love.

What began as a single business that Tom started alongside his 9-5, has turned into full-time entrepreneurship, including real estate investing, a wine and liquor shop, and an online coaching business. Find out how starting a side hustle or business can not only lead to financial freedom, but can help remove a lot of the pressure you may be feeling in your 9-5 job. According to Tom and Ariana, having more than one source of income can even make you a better employee at work.

More and more investors are seeking out companies with a social conscience. Our sponsor, Wealthsimple, can help, with low cost investment portfolios that focus on low carbon, clean tech, human rights, and the environment. Visit Wealthsimple today to get started with Socially Responsible Investing.

Episode Summary

  • How Tom and Ariana started a business to get out of debt
  • Starting a business doesn’t have to mean doing everything yourself
  • The dynamics of owning a business with your spouse
  • The danger of your business taking over your life
  • Four life priorities most people share
  • Figure out what you want, then build up income streams to live that life
  • How to know when it’s time to leave your 9-5
Read transcript

Have you ever felt the pressure to constantly be moving up at your job just to get ahead? Perhaps there’s a better way to gain financial independence and build your ideal lifestyle. My guests this week are a married couple who have built a life together as partners, parents and entrepreneurs. Tom and Ariana Sylvester are authors of the book, Lifestyle Builders, which details how they built their dream life by becoming entrepreneurs.

Welcome to the Maple Money Show, the podcast that helps Canadians improve their personal finances to create lasting financial freedom. More and more investors are seeking out companies with a social conscience. Our sponsor, Wealthsimple, can help with low-cost investment portfolios that focus on low-carbon, clean tech, human rights and the environment. Get started with socially responsible investing by visiting maplemoney.com/wealthsimple. Now, let’s chat with Tom and Arianna…

Tom: Hi, Tom and Arianna. Welcome to Maple Money Show.

Ariana: Hi. Thanks for having us on.

Tom Sylvester: Yes, thank you.

Tom: You’ve just released a new book so I want to go into some of what you talk about in it. First of all, can you tell us a bit about the book?

Tom Sylvester: Yes, absolutely. Basically, we wrote this book after we had been in business for years. The back story is, we met the first day of college and four years later when I got out we had a bunch of student loan debt. I didn’t like the path we were on in life so I set a goal to retire by 35. Ariana was not on board with that so we spent the next several years basically figuring out how to start a business and pay off debt so that we can actually retire by 35. The book was really our roadmap of how we did that along with stories that basically showed some of our key points along the way that allowed us to make that happen.

Tom: Great. I know you started three businesses. How did that happen? Were you both working? What was your situation when that first started?

Ariana: So we didn’t start all three at the same time. Let’s just put that out there. The first business started around 12 years ago. Tom was still in a full-time job. I was actually still in a full-time job as well. That was kind of his foray into entrepreneurship and trying to go down the different path. And about five years in the real estate business we opened the wine and liquor store. At that point in time, I had left my full-time job because they had our first child. We kind of talked over our finances, looked at where we wanted things to go, and said, “Well, we’d really like to have that time at home raising her,” so I stayed home with her and we opened the wine and liquor store. Tom was still working a full-time job at that point. And I sort of took on the work from home position of managing the real estate business and a lot of the wine and liquor store day-to-day.

Tom: How did the liquor store come about? Was it just that you were doing real estate and it was an opportunity that kind of showed up? Or did you look into it separately?

Ariana: That’s a great question.

Tom Sylvester: Usually when people meet us and see we have a real estate business, a wine and liquor store and a coaching business, they say, “You guys are all over the place. How did all this come about?” Really, it was because I set that goal to retire by 35. And let me just clarify what that means. To us it meant we want to have financial freedom and the option to do what we want. We’re still working because we love what we do. When I started looking at how we were going to make that retirement thing happen, I tried a bunch of different things and Ariana was not on board with any of them. Eventually, I spent a whole bunch of money on one of those traveling weekend seminars for real estate. It was not a good investment. Then I had to figure out how to pay it back. We started investing in real estate after the real estate market had crashed. Several years in, I was fully aware that that can happen again so I wanted to start diversifying so we didn’t have all of our eggs in one basket. I started looking for opportunities. A liquor store came up for sale. I did some research on it and it wasn’t a good deal. But I said, “Hey, we have a real estate business. What if we bought a building and opened our own store?” That’s how that came to be.

Ariana: And for context, this was not just a random idea for the wine and liquor store. When we were in college, Tom actually helped his father acquire an existing wine and liquor store and helped him get started with opening that, getting some systems in place with how to run it. It wasn’t that we just randomly came upon this idea. He kind of already knew that business at least a little bit through his father having the business. So it was kind of made sense because we had some knowledge in that area and we know somebody who owns one.

Tom: So it’s not quite as random as I first thought.

Ariana: It was very random if you just have a high-level of the story, for sure.

Tom: Could we cover the investing in real estate? We’ve had Dustin Heiner on the show before. Is it a similar idea where you’re sort of hiring things out or are you heavily involved? What’s it look like for you?

Tom Sylvester: Part of building a business and the way we always look at it is asking the question, “What has to be true for this business to run without us?” That mindset basically shows what tasks need to be done and what team members and systems have to be put in place so that it’s not all falling on us. When we first started the real estate business, I was doing everything. I was researching properties at night, physically traveling out demoing walls and stuff on the weekends. And so over time, every time we bought a new property, we looked at what else we could delegate or put in a system for so that we’d only spend a couple hours a month managing.

Tom: So many times it seems that people who want to invest in real estate figure they do need to do a lot of the work. But just like your liquor store, you wouldn’t open that without employees. You don’t have to do everything just to get going on a business.

Tom Sylvester: Well, that’s a really good point because a lot of people are in a business and start a side-hustle then just assume they have to do everything for the side-hustle themselves. The reality is, if anyone wants to start a business, you want to think like a business owner and CEO which basically means you’re running the business. It doesn’t mean you have to do everything though. You always want to be looking for something you can get off your plate so you can spend time doing more valuable activities.

Tom: Personally, when I started the blog (which started off as a hobby), I had this idea that I had to do everything. I went basically a decade doing most things by myself. Then when I wanted to start the podcast, I looked at it a whole lot differently knowing I was going to need an editor, someone to help with show notes and do the graphics. So I see the difference because I’ve done both all within the Maple Money Show. But there was this long journey of doing it all myself on the blog. So with the podcast I went with a team. That changed the way I do my whole business now because I’ve had and A-B comparison between the two.

Tom Sylvester: Absolutely. And it is so important. We do have to do a lot of the work ourselves, especially early on.

Ariana: I think it depends on the business model as well.

Tom Sylvester: But the key thing is, we don’t want to get stuck doing everything. Like your point with the podcast, if you’re trying to do all the aspects of the podcast, for one thing, you’re not an expert. And secondly, that would take so much of your time which would either take time away from other valuable business activities or time away from your life and family which is the last thing you want to do.

Tom: Yeah. In my case it was out of necessity. I was already at peak time. So when I wanted to start a podcast, I knew I was not going to spend two hours editing episodes. I needed someone else that can do it faster, more efficiently and better than me. So yeah, it became an obvious thing. But I think when someone starts a business, maybe that’s not so obvious. They’re just hopping in thinking they have to do everything. At least you guys were working together. That helps too.

Ariana: Helps a great deal in many different ways.

Tom Sylvester: Yeah, but there’s definitely ups and downs with that relationship.

Tom: Let’s go into that a bit. How did you guys decide that dynamic of who is going to do what and how you weren’t going to kill each other doing it?

Ariana: Well, first off, I want to say it has shifted many times over the years. At first, when one spouse needed help, the other spouse was available to help. I jumped in and did things that were to my strengths. For example, with the real estate business, Tom was still in a nine to five job working Monday through Fridays and on the weekends doing some of the renovations and fixing up the houses. So that didn’t leave a lot of time for the admin work; the paperwork, calling tenants, finding people to live in the apartments and doing background checks. And because of what I had done in my nine to five job, I was very comfortable being an assistant and doing the office management stuff. That very much fit into the roles we needed at the time. I stepped in as that role. But at the time, I didn’t consider myself an entrepreneur. I was just taking on a job where I was able to work from home. It worked out because we had our daughter home with us so it made sense at the time. Over the years as we open the wine and liquor store, I again stepped in as more of the manager. But I started to inch closer to business owner because I was taking ownership and responsibility of a lot more things. Then again, as we started our online business it was very much dependent on both of us because that is how we were attracting people. They liked us because we were a “couple” in business together. Again, we kind of had to re-shift roles a little bit because I didn’t necessarily want to be the entrepreneur, but now I was kind of being forced into being one in order to help people that were coming to us. The biggest thing to take away from that is, you’ve got to really look at what you want your life and business to look like, and be comfortable discussing those roles. Because a lot of times when you’re just getting started, your spouse may not be on board. Just like I wasn’t on board when we got started. But over the years we’ve had multiple discussions around goals; what we wanted for our life and the best way we could support each other. That’s why over the last 12 years I have stepped further and further into the entrepreneurship journey to the point now where I am fully 100 percent an entrepreneur.

Tom: It seems like you guys are similar to me where you’ve spent over a decade stumbling forward into this. I know one of the things in your book is where you talk about visualizing the ideal life. Neither of us were doing this 12 years ago, I assume, so how would you explain that to someone?

Tom Sylvester: The reason we focus so much on that is because we’ve seen so many entrepreneurs build a business that ends up taking over their lives. When we ask most of them if that’s what they pictured in their life they say, no. When asked what would it have looked like, they say they wanted to build a business that would actually give them more time, not take it over. What we did early on (out of necessity) was to get a line on what the future should look like so we could both work together to get there. What we realized was that people needed to take that longer term view and then reverse engineer it. It’s kind of like a GPS—that’s the best way to explain it. We’ve got a starting point which is where you’re at now. You’ve got a destination which is what you want your life to look like in the future. And then you build a roadmap which is basically the steps and milestones to get you there. For most people, we found it comes down to really four categories of what they want their life to look like. The things that they have; a house, a car. The experiences you have; paying off debt, being able to travel, having a family. The relationships you have is another; your family and the people that you want to meet and get closer to. And ultimately, the impact that you want to create; how you can help your family, your people, your community and causes you care about. It comes down to really just starting to figure out what that looks like in the future and then being able to take intentional action towards that.

Tom: I love that. And not only do they have that roadmap, but is very motivating to see a goal in sight and the milestones along the way. You’re actually crossing some finish lines and not just staying busy.

Tom Sylvester: And that’s the key thing too, because this will be hard work. Whenever we’re trying to improve our life and go after something, there’s going to be challenges and it’s going to require us to grow and overcome some of those challenges. So knowing not only where you want to go but why that’s important to you, and then having those incremental wins along the way is so critical to keep you going.

Ariana: For a lot of people it’s kind of a tough discussion to have when there’s two of you because you may have started your life together but in the time since then, many things have happened. You’ve each kind of gone down different growth paths. So sometimes coming back together and aligning on what both of you want, can be a little bit of a challenge. Especially if one of you has had this epiphany about how you can have a different life and the other half is just floating completely unaware of this mindset shift you went through. As you’re trying to do things to grow and to move forward, a lot of times you’re going to have that resistance from the person that you love. And they’re not doing it on purpose to tear you down. It’s just because they haven’t had that same mindset shift. A lot of times this goal planning and vision boarding exercise can help to bring the two of you together on that same page so you can have some of these tougher discussions about how you actually think you can get there.

Tom: That’s one of my favorite tips with personal finance and general. Spouses should have those weekly or monthly meetings just to stay on the same page so you’re not going in different directions all of a sudden.

Tom Sylvester: It’s so critical.

Tom: Another thing I wanted to cover that sounds similar to this visualization is, you mentioned coming up with this “freedom” number. Can you dive into that a bit?

Tom Sylvester: A lot of times people talk about financial freedom but they don’t take the next step to actually figure out what it’s going to take to get there. We talk about this freedom number which basically asks, “How much money do I need to make to cover all of my expenses?” A lot of people think that’s just their current monthly expenses. And it could be but let’s say your goal is to leave your job. There’s going to be some other things to consider there. When you leave your job, if your spouse doesn’t have a job, you might have to consider health insurance and different types of taxes depending on where you are. What we want to think about is what you want your life to look like in the future. And also, what your monthly cost of that lifestyle will be. Everybody will have a different number but once you know what that is, you’ll know your target. Then you can figure out how to get that money coming in. Will it be from stock market investing? Real estate? Is it a business or something else? Then you can take intentional action to get there.

Tom: So it is kind of like the visualization but with dollars where you’re saying, “This is the amount I need,” and working it back from there?

Tom Sylvester: Yeah. Actually, what we do is the next step of the visualization. When we visualize that—let’s say you’ve got a five year target for things. At each step along the way, you can basically see what your lifestyle cost is at that point and incrementally work up to get there. It’s so critical. Just like we did with your goals of having milestones along the way, we want you to be able to say you’re working towards that freedom number and building up the income from another source.

Tom: Let’s talk about freedom. It starts to sound like the FIRE movement. Can you tell me where you fit into that and where it might be different?

Tom Sylvester: For us, and I’ll speak specifically for me, this came about when I was leaving college and I read a book called, The Automatic Millionaire, which basically said if you invest in the stock market continuously, you can be a millionaire by the time you retire. I loved that concept, but I didn’t want to wait 45 years. I read another book called, Rich Dad, Poor Dad, which kind of changed my perspective on things where I basically thought, if we can build up cash flow from other means it’ll actually give us the freedom to live the life we want. Our whole philosophy is, get clear on what you want and build up income streams to allow you to live that life. We align with the FIRE movement. But I think one of things everyone’s got to think about is, with financial independence, that freedom number is different for everybody. How you go about it is going to look different for you. Our tagline is; your life, your business, your way. Just because somebody says they’re going to be extremely frugal and try to retire early—that doesn’t have to be your path. We always talk about what’s important to you. For us, the house we live in and are growing our family in is super important so we weren’t going to cut back on that. But there are others areas of our lives that weren’t as important. So we cut back in those areas because we want to live and enjoy life along the way while also working toward early retirement.

Ariana: And I think the early retirement piece is the key. We never went into this thinking we were going to retire and not do anything after a certain point or only do the fun stuff. For us, a lot of what we wanted to do was not just enjoy our lives, we also want to continue doing things that keep us fulfilled. I think for both of us, what’s become apparent over the last few years is that we have very big potential to create a bigger impact in a lot more people’s lives. In order to do that, we’re going to keep working. We’re going to keep doing things over the next 10, 20, 30, 40 years that most people would consider work. So we can’t use the word retire because we’re not retiring. We’re not stopping doing the work. But for us, it’s more of that fulfillment piece. It’s more of that impact. How can we continue to build and grow our businesses so that we’re making more income? With more of that income we can make a bigger impact because then we can choose to donate to charities or foundations that are important to us. We can put more money back into our businesses to grow them bigger and impact more people. For us, the shift with the FIRE movement is we don’t talk about financial independence, retire early, we talk about financial independence, retire with entrepreneurship.

Tom Sylvester: One other thing… What we want to do is set ourselves up with as many options as possible. When you only have one option—let’s say it’s your job. Even if you love your job, if something changes, you’ll be stuck. You’re going to be in a bad place. Let’s say you get bought out or you lose your job, what we want to do is set up multiple options so that whatever life throws at you, you have flexibility to choose what you want to do. In our case, as it was building streams of income. That way, if we enjoyed our job we could keep doing it. Or, if we got into a spot where I was traveling four days a week and we didn’t enjoy it, I could have the option of leaving and doing something else.

Tom: You guys sound similar to me by not being so much into the whole retire early part. I think once you find something you’re passionate about doing, why get hung up on this definition of retirement? I definitely like focusing on the freedom side. I also like that when you’re working your day job and doing something else on the side, you have this freedom. I found that was a big mental thing that was nice for me. My day job got easier when I felt more confident. It wasn’t 100 percent of everything my family was depending on. It’s easier to say no to certain things and not feel like you have to keep getting promoted beyond what you’re comfortable with or working all those extra hours. It was simply working 40 hours a week. I’ll do a great job, but that’s all you get. It definitely changes your mindset when you can do both but you don’t feel quite as dependent on it.

Tom Sylvester: I think you actually do better at your job because you pick up skills on the side. And to your point, you no longer look at this as having to put all your time into it because it’s the only way to make money. Oftentimes you realize you can actually create more money and leverage your time better with the stuff on the side than you’re ever going to get at a job.

Tom: Yeah, for sure. If someone’s started this and created some sort of business, some side hustle, where do they take it next? How do they get to that point of leaving their job? I know we’re not talking about retiring, but retiring from the corporate life.

Tom Sylvester: One of the biggest challenges people have is deciding when is the right time to leave. And there’s a couple schools of thought there. Some people say, “Hey, burn the boats and just kind of figure it out.” We don’t recommend that. Most times, if we leave a job too early, we take away our source of income that covers our bills and expenses and takes care of our family. What we recommend is an ideal scenario; you’ve built up your business enough to replace your income so when you leave your job you have all your bills covered. Now, most people don’t want to wait that long and it may not make sense. So what we have people do is go through a “runway” calculation. We won’t go into all the details but this is basically saying there is going to be a gap usually between how much your business is making and paying you and how much your bills are. What we want to do is say, “If I were to leave my job today, how many months could I run to close that gap?” Basically, the more savings you have and the smaller that gap is, the longer your runway is. In the ideal case, you’ve got a really long runway so you have a lot of time to make sure your business works.

Tom: I like that. It’s a good conservative way to deal with this and not jump and see what happens.

Tom Sylvester: Another piece of this too is, when you have the safety of your job and that money coming in, you can build the business the way you want. What we’ve seen is when people leave too soon, suddenly they have to maybe make a decision in the business they normally wouldn’t because they need to make money to pay rent. So oftentimes, it can actually be more challenging to build your business if all the pressure is on your business for your financial income. Whereas, if you have the job, it lets you build the business the way you want.

Tom: I agree with that but I want to give you an example in the other direction. What I found personally was, with having the day job and a business, I was a little too loose with the expenses because it didn’t matter as much. Yes, you’ll be making the right decisions but you’ve got to truly treat it like a business and not just like play money where you can kind of give into lifestyle inflation or anything like that. So yeah, it’s nice to have the freedom to make that decision, but treat it like a proper business and don’t be loose with the expenses. I know other people that have said once they’ve gone full-time as a business, they get so much smarter about how they treat those expenses.

Tom Sylvester: That’s why having that vision and that roadmap is so important. If you set milestones along the way and understand money coming into the business as some for expenses, some for taxes, some is for paying myself, then you can start to make sure you’re not being too loose with it and managing it from the start in that manner.

Ariana: That’s why we love using profit first in our businesses, because that’s really what he talks about—you should be paying yourself first so that all of your money your business is making isn’t getting eaten up by expenses. And you’re running it as a business should be run with the goal of having some profit.

Tom: This has been great, I hope it motivated people to do something else—whatever that is and work at that whether they leave their business or not. There’s just this chance to have that freedom, even if it’s somewhat mental just to make them feel a little better. Can you tell people where they can find you online?

Ariana: Yeah, you can find out more about the book at lifestylebuildersbook.com. And from there you can also subscribe to our podcast and find us on social media.

Tom: Thanks for being on the show.

Ariana: Thanks for having us.

Tom Sylvester: Thank you.

Thank you, Tom and Ariana, for sharing your story and for showing us the possibilities entrepreneurship can bring. You can find the show notes for this episode at maplemoney.com/tomarianasylvester. I want to give a shout out to the Maple Money Show Facebook community. I’d love to hear from you there. Feel free to ask a question or share a recent money win to encourage others. Head on over to maplemoney.com/community to share with the group. As a reminder, please join us next week as Salman Ahmed and I discuss professional investment advice and why it remains important in an environment of low-key, DIY investing.

Our whole philosophy is, get clear on what you want, and then build up income streams to allow you to live that life. Financial independence is different for everybody, and how you go about it is going to look different for you... - Tom SylvesterClick to Tweet

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