Rempel Maximum – The Story of Joe & Rich

How can your life really be different if you focus on maximum wealth-building principles?

It’s not about the money. It’s about your life.

This story is an extreme version of the life of an ordinary person managing his money exceptionally.

I’ll explain the concepts in my next article, “Rempel Maximum – 5 Steps to Becoming a Multi-Millionaire”.


The Story of Joe & Rich

Joe and Rich were childhood buddies, graduated from university at 22, worked together at the same salary and both saved $10,000 per year until they retired at 65. They both saved 20% down to buy a $400,000 home.

But they were not the same. Joe is a conventional guy. Rich read all about the Rempel Maximum wealth-building process and committed to doing it to the maximum. He wanted to try living an exceptional life.

Joe used conventional methods. He invested in a conservative, balanced portfolio making a 5% return, bought his home at 29, and retired at 65 with $963,000 in investments. He retired reasonably comfortably on $55,000 per year with a middle-class lifestyle. Joe loved travelling, but was satisfied taking a couple trips every year.


The Road to Freedom

Rich wanted an exceptional life. He wanted financial freedom, but also self-confidence from having a huge net worth. He decided to build the largest investment portfolio he could.

He started by investing more aggressively with 100% in equities, making an 8% return over time. He saw the evidence that stocks provided more consistent long term growth than bonds or cash.

He was determined to avoid “last decade risk”. Traditional slow & steady wealth-building means that the vast majority of the investments most people own during their working years are in the last few years before retirement.

Rich wanted a large portfolio while he is young, not just the last few years before retiring. Every year, he borrowed to invest as much as he could qualify for. Initially, his only option was a 3:1 loan on the amount he had invested. He invested his $10,000 savings plus $30,000 from a loan every year. The loan was a “no margin call” loan, so he would not be forced to sell if his investments declined.

When he bought his home, he did the Smith Manoeuvre strategy to invest more without using his cash flow. As his mortgage was paid down, he borrowed the same amount to invest, which slowly converted his mortgage into a tax-deductible credit line.

The Smith Manoeuvre helped Rich with his broader strategy of maximum wealth building. He found he could use the investments from the Smith Manoeuvre to qualify for a larger investment loan. Every year or two, he increased his investment loan to the maximum he qualified for. His higher net worth gave him more loan options.

Every year, he saved $10,000, borrowed $14,500 from his secured credit line and increased his investment loan by $74,000. His investment loan was getting large, but his focus was on his net worth, which was rising faster.

Rich invested very tax-efficiently, trying to defer all the tax on the growth of his investments. He invested for long-term growth – not income. Meanwhile, he claimed large interest deductions every year on his investment loans and the investment credit line on his home, reinvesting all his tax refunds.

Rich retired at 65 with a portfolio of $12,940,000. He owed $2,540,000 on his investment loans, which gave him a net worth of $10,400,000, not including his home. His large portfolio gave him a retirement income of $535,000 per year.

He felt very confident with his high net worth. He owed a lot of money, but was comfortable with it. He did not want to sell any investments to pay off the loan, so he kept it right through his retirement. He paid $101,000 per year of tax-deductible interest every year, but could easily make those payments from his high income. He still had $435,000 to spend every year.

He considered slowly paying off his investment loan during his retirement, so that he would die debt-free. In the end, he decided to let his estate pay off the loan. He did not want to leave a large inheritance, preferring to enjoy his retirement and do something meaningful with his life.

Throughout his life, he always had faith that his investments would grow long term, patience to wait, and discipline to stick with his plan.


The Life of Freedom

Rich lived exceptionally well, travelling extensively, taking long trips to several new places every year. He always invited friends or family to join him on his vacations. He was a long-suffering Toronto sports fan, with seasons tickets to the Leafs, Raptors, Jays and Argos, as well as the theatre.

He bought a nice cottage on a lake, mostly for his extended family to hang out together. He sold some investments and paid cash, but then immediately borrowed 75% back to invest, to minimize the effect on his portfolio.

Rich knew many people that had suffered from cancer, so he made very large donations every year for cancer and several other charities that were meaningful for him. He felt proud to have several charities mention his name on commemorative plaques.

From Bill Gates, he got the idea to setup “Rich’s Charitable Foundation”, which would outlive him, continuing to support the charities important to him.

Rich’s huge portfolio gave him such a great feeling of self-confidence and security. His life was full of great options and he loved the freedom.

More valuable to him, though, was that he felt he was an inspiration to his family and friends as to what one ordinary man can do just by managing his money exceptionally.


The Point of the Story

This story is an illustration only of the principles in my next article: Rempel Maximum – 5 Steps to Becoming a Multi-Millionaire.

The “Rempel Maximum” is a process to build as much wealth as you can in a solid, reliable way. It is best to think of the Rempel Maximum as a concept – a set of tools, not a recipe. Do none of it, a bit, or the amount you are comfortable with that will give you the life you want.

It can include a variety of tax and investment strategies (tools). You can choose which of these tools make sense for you and how big or small to go.

A quick caveat. Doing these ideas to the maximum is probably not for you. It is only for the perhaps 3-5% of people that are aggressive wealth-builders, have a high risk tolerance and are highly motivated to become wealthy. Even these wealth-builders should probably not push it to the maximum.

Why build wealth? It’s not about the money. It’s about your life.

The benefits of being wealthy are hard to put into words until you get there. There is the obvious great lifestyle, but the emotional benefits are most important.

Security. Freedom. Self-confidence. These are priceless.




Planning With Ed


Ed Rempel has helped thousands of Canadians become financially secure. He is a fee-for-service financial planner, tax  accountant, expert in many tax & investment strategies, and a popular and passionate blogger.

Ed has a unique understanding of how to be successful financially based on extensive real-life experience, having written nearly 1,000 comprehensive personal financial plans.

The “Planning with Ed” experience is about your life, not just money. Your Financial Plan is the GPS for your life.

Get your plan! Become financially secure and free to live the life you want.


  1. North American Mink on April 13, 2018 at 11:55 PM

    Hey! This post could not be written any better! Reading this post reminds me of my previous room mate! He always kept chatting about this. I will forward this write-up to him.

    Pretty sure he will have a good read. Many thanks for sharing!

  2. Ed Rempel on July 3, 2017 at 11:27 AM

    Hi Tim,

    Good question. There is very little discussion anywhere about 3:1 loans, so few people know anything about them.

    3:1 “No Margin Call” investment loans are only available from a couple smaller banks that work only with financial advisors.

    They are an awesome way to build signficant wealth for people that are focused-wealth builders.

    3:1 means you invest $100,000 and the bank lends you another $300,000. This size of leverage is usually too large for most people. You should get professional advice before considering a 3:1 loan.

    For people under 40, getting larger amounts invested has a far larger effect on your future than rate of return or other investment consideration. Read my latest post on “The Ultimate Strategy for Millennials – Lifecycle Investing” to understand this key concept.

    Using a “No Margin Call” loan is far safer than using a margin account, since the loan will not be called if your investments decline in value.

    The banks will only accept mutual funds or segregated funds as collateral – not ETFs or individual stocks.

    It is best to invest them with “All Star Fund Managers“, so that you can get professional advice, a high chance of long term out-performance, and to give you confidence in your investments when they are down.

    From experience, the #1 factor in success is having confidence when they are down. If you would make the “Big Mistake” of selling or getting more conservative even once in the next 30 years, you should not use 3:1 loans. I find that know there are All Star Fund Managers

    Other key factors for using a 3:1 loan are a long-term time horizon (I would suggest a minimum of 20 years to get a high chance of a good result.) and tax-efficient investing.


  3. Tim on July 2, 2017 at 4:56 PM

    Hi Ed, how do you get a 3:1 “no margin call” loan. What do the banks call that type of loan?

  4. Ed Rempel on February 7, 2017 at 11:57 PM

    Thank you so much for your genuine kind words, John & Anita. It means a lot to me.


  5. John Coutinho on February 6, 2017 at 11:43 PM

    Dear Ed
    We love reading your blog on smith manoeuvre & the Rempel Maximum.
    Thank you and regards
    John & Anita

Leave a Comment