A Plumber, a $3M Portfolio, and What We Can Learn

Recently, I read the story of a plumber who retired with a $3M portfolio. It’s an interesting case study — much like The Wealthy Barber was back in the day. I’m sure this retiree could write a book to inspire other investors.

I love these stories of ordinary people making it big. Not just because they prove it can be done, but because there’s so much to learn from them. It’s no longer theoretical.

It’s real. And relatable.

Jim was a plumber who saved diligently and lived below his means. He invested all of his savings in Canadian dividend stocks, with a few U.S. dividend holdings mixed in.

It’s a very typical retiree portfolio: financials, utilities, REITs, and energy stocks. Not all were high yielders. The focus was primarily on company strength — not just income.

I don’t know Jim personally, but I suspect his main focus was simply saving consistently and investing the difference. At some point, the portfolio began working just as hard as he did.

That’s compounding at work.

We all tend to start with the obvious dividend names — Royal Bank, Enbridge, Fortis. Simplicity and consistency work when you give time the opportunity to do its job.

Today, about five years after retiring, his portfolio holds 26 stocks and is worth $4.5M. Individual positions range from $38K to $826K.

In just five years, the portfolio grew by 50% — or $1.5M — while the family has been living off the wealth.

One thing worth noting: there’s $100K in cash in the portfolio. I’m not sure if it’s strategic, but let’s assume it is.

Simplicity works. Anyone can do it.

You don’t need a high-paying job to build wealth. You need discipline — knowing where to save, investing the difference, and staying consistent.

Jim focused heavily on savings and had strong conviction in dividend stocks. He worked hard — and eventually let time and his portfolio take over.

That’s very similar to how I started in 2009. First banks, then energy, then utilities… and it worked. I went from $45K to $1M in nine years.

You can make it happen. And don’t forget savings play a key part early on.

That said, I don’t believe you should stumble into retirement.

And I don’t believe you should work without a clear number.

That’s easy to say — but it requires a plan. And building a plan isn’t easy.

Most people in their 20s and 30s don’t think about retirement unless they’re pursuing FIRE (Financial Independence, Retire Early).

But at some point, you must know your number. Otherwise you are not in control.

You need a target.

It feels like Jim had one — but in my opinion, $3M was too high.

Why?

Because after retiring in 2021 and living off the portfolio, it still grew by 50%, or $1.5M. And none of the holdings are true hyper-compounders.

In short, the portfolio is generating more wealth than the family needs.

Sure, that feels safe. Very safe.

But the same outcome may have been achievable at $2M.

The family could potentially have adjusted their lifestyle five to ten years earlier and avoided working 50 hours per week. There’s a real quality-of-life trade-off when you work longer than necessary — unless work itself is your purpose.

Today, unlike a decade ago, we have spreadsheets and software that easily model retirement paths. Not just investment strategies — but depletion models.

It’s worth noting that Jim considered retiring at $1.5M but questioned what he would do with his time. That’s important. It highlights the importance of the transition once you reach your number. Retirement is more than just replacing an income. It’s about the use of your time.

The younger you are, the more wealth you may need — but you also need purpose.

Wealth + age directly influence how you spend your time.

Die With Zero is an excellent book that forces you to think about the intersection of age, health, and wealth.

Health becomes the biggest factor in retirement. Targetting the right portfolio amount will help you balance health and working years.

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If simplicity is your goal, start with a broad index. You’ll experience market volatility either way — but forecasting becomes easier.

Always build a baseline model using an index. Your neighbor isn’t a benchmark.

Our friendly plumber appears to have worked tirelessly without a clearly defined target until burnout, combined with portfolio value, triggered retirement. To me, that’s reacting rather than planning.

To be fair, he did reduce contracts toward the end. But he was still working hard. A more intentional glide path — slowing down to four days per week, then three — could have created a smoother transition. Taking mini-retirements along the way might also have changed the approach entirely.

Retirement doesn’t have to be a switch you flip overnight.

You can’t predict 20 years of returns. But you can understand business consistency and track your rate of return. Review it annually. Update your model. You see it coming instead of just happening.

The portfolio was heavily Canadian-focused. That’s fine — but adding more U.S. dividend exposure could have meaningfully improved returns. And I’m not even talking about chasing tech stocks.

Higher returns change timelines.

And earlier timelines create freedom.

The goal isn’t retirement. It’s financial freedom — the ability to choose.

​Today, you can still hold US stocks while not getting exposed to USD currency through Canadian Depository Receipts (CDR).

There’s too much noise around the phrase “buy & hold” or “forever stock.”

The world changes.

→ Machines made the pace of innovations faster
→ Computers made the pace of innovations faster
→ AI, now, makes the pace of innovations faster

Jim’s largest holding is Royal Bank — and it has been a strong performer for 25 years. But very few companies can sustain that trajectory for decades.

Look at the top companies of the 1990s versus today. Very few remain.

The lesson?

Assume a 10-year review cycle. Re-evaluate whether each holding still fits your goals. This is where a structured framework — like a layered portfolio approach — helps define the role of each investment.

The financials clearly dominated and continue to dominate. The Canadian Banks have an oligopoly but will open banking challenge them?

Very big shift. Only Walmart stayed in top 10.

Jim mentions paying very little tax thanks to dividends. But eventually, RRSP withdrawals are taxable. You can’t avoid that.

The family lives on $60K per year but earns about $150K in dividends.

TFSA income is tax-free. RRSP withdrawals are taxable. In taxable accounts, the only real optimization is how and when income is realized.

In many cases, capital gains provide flexibility because you control when to trigger them — especially if your RRSP isn’t yet depleted.

Headlines often advertise “$0 tax on dividends,” but that only applies under specific thresholds and account structures. Once RRIF withdrawals begin and CPP is added, the tax picture changes.

It’s also worth noting:

At lower income levels, eligible dividends are very tax efficient.
At higher income levels, capital gains can become more efficient.

Blending both is often optimal.

Unless your goal is to die extremely wealthy, you will eventually need to sell shares.

Build a decumulation plan. Model CPP, OAS, and RRIF withdrawals. Know the tax implications in advance.

The transition from wealth building to decumulation carries significant tax implications, and it must be planned deliberately. Every financial advisor will want to work with you well before retirement to design the most optimal strategy.

Retiring with financial strength is possible.

It requires:
→ Discipline in saving and controlling lifestyle inflation
→ Conviction in your investment strategy
→ A clear number and a plan to reach it
→ A willingness to adjust along the way

Simplicity works.

And clarity amplifies the plan’s success.