From the Roaring 20’s to the Great Depression

Ruth Goodman was born in 1921 in New York City, a child of the roaring 20’s. From 1920 to 1929, the US saw a 40% increase in the domestic economy. Plenty of wealth during that time was created by speculation on stocks, and plenty of consumer goods were purchased using debt. While she was too young to understand what was happening economically, she was a witness to the enthusiastic and celebratory mood of the times. But the world turned in August of 1929 when she was 7 years old and the Great Depression started. Immediately, Ruth’s family, like many others, had to change their habits and Ruth learned the skill of living frugally. She learned to finish what was on her plate and to never throw out food, to turn the lights off when they weren’t needed and to put on a sweater if she was cold.

By the time she was a teen, she understood what had happened to the economy and she decided for herself that not only would she never be poor again, but that she was going to be wealthy. Ten years later in 1939 when she turned 17 years old, World War I started and Ruth had to put those dreams on hold. She was drafted and put to work in the wartime shipyards. Two years into the war, she met Henry Goodman, a charming young man who was working on the same ship as her and they soon got married. When the war was over in 1945, Ruth knew what she wanted for her and Henry: A stable future where no matter what the economy did, whether it was a major depression, or times of war, they were in control of their wealth.

Ruth’s Path to Wealth: The Early Years

After the war, Henry worked as a tailor, and Ruth ran a dry cleaning shop. They saved for the next five years, living frugally as they did during their adolescence. In the 1950’s, with their small savings, they built their own dry cleaning shop. It was called Dunrite, and it allowed them to save more money which they used to purchase land next door. With their savings, they built storefront shops and as time grew, they became small real estate developers. Henry would build homes and apartments, and Ruth would manage the money. Although they were becoming successful, they were always working and wanted a way to invest that allowed them more freedom with their time.

A Mentor Comes Along

At some point in the early 1960’s, Henry was taken under the wing of an investor, and Ruth was able to learn alongside him. This investor, a private mortgage lender, was older, already successful, and had preserved his wealth during the Great Depression. Through his mentorship, Ruth and Henry learned how to become mortgage lenders, and they gained a set of seven investing rules that form the basis of Tri City’s private mortgage today.

First and foremost, Ruth learned to make investments not looking for the best return, but for the most security. This meant not putting the principle at risk, and not making her capital work too hard. This meant avoiding stocks, because they offered no principle security. This also meant avoiding high-returns, because this also means higher risk. Ruth also learned that land and buildings are the strongest form of security. While stocks can become worthless when a company goes bankrupt, land never goes away.

Also, she learned to spread her capital across multiple buildings. The meant not all of her eggs were in one basket. Next, she learned that residential properties have more stable values, are easier to sell and as a result, pay lower returns due to their low risk profile. She also learned that commercial buildings can have fluctuating values, are harder to sell and paid greater returns, due to their higher risk profile. Understanding the first rule, that security is more important than the return, Ruth learned that if she was going to create wealth as mortgage lender, she should keep the majority of her collateral in residential real estate, with a small portion in commercial real estate. Moreover, she learned to make sure the value of

the properties she took as collateral were 20% to 30% greater than the principal she loaned, and even more so on a commercial property. This allowed her to weather an economic downturn whereby if property values started to drop, she had enough equity in the properties to be able to sell them and keep her principal.

In addition, she learned to invest alongside friends, in a group. This allowed her to invest larger sums of capital, which meant she would have less capital invested per property, which further spread the risk. It also meant that with deep enough pockets, she could attract brokers to bring her business because they could rely on her to have capital available to lend at any given time. By being a good resource to the brokers, she had a wider

selection of mortgages to fund. Ruth and Henry hosted a bridge table at their home and many of their card-playing friends invested with them in a shared mortgage pool.

The last rule Ruth learned was to reinvest her returns, so the capital could grow while she was sleeping. Because Ruth knew how to live below her means, adopting this rule came naturally to her.

Although she drove a simple car, she slept soundly at night with secure investments that were growing. By the 1970’s, Ruth was a multimillionaire.

While Ruth’s dream of security and wealth came true, she never changed her frugal lifestyle, as it was engrained in her while was a child. While she reinvested most of her returns, she had more than enough money to live and with this excess capital in her hands, which she didn’t want to spend on herself, Ruth learned what made life worth living: For her, it was to be in service others. She knew that instead of buying a new car when he old one worked, she could spend that money to support causes she believed in, which allowed her make the word a brighter place. She understood that this would give her far more joy than the new car ever could. As a result of, over the decades Ruth has supported countless causes that were making a positive difference in the world through journalism, ecology, women's rights and fighting poverty.

Ruth’s Seven Rules

Invest for security first.

Go for conservative returns, so you don’t make your money work too hard.

Stick to land and buildings, because they cannot be moved.

Residential properties with equity in them are the safest investment.

Invest in multiple properties to spread the risk.

Invest alongside friends to have a large pool of capital, which allows you to attract mortgages you can handpick.

Reinvest your returns to grow your capital

Ruth's purpose for the Seven Rules:

To be in service of others.

There are more lessons, especially finer points like which types of appraisers to use, what clauses are needed in a mortgage document, what the legal process looks like of registering a mortgage, what residential properties to avoid, which types of neighborhoods to focus on, which borrowers to focus on, how to create repeat business, how to attract high quality mortgage, what interest rate to charge to ensure success for you and the borrower, and this is what we deal with on a day to day basis at Tri City.

For Ruth, it was all about purpose in life, which was to be in service of others.

What it All Grew Into

Throughout the 70’s, 80’s, 90’s, while Ruth had a successful mortgage lending business, her son, Michael Goodman, built his own mortgage pool. With some friends and then on his own, he purchased run down apartment buildings in Fort McMurray in the 80’s and sold them for a gain in the late 90’s, giving him his own pool of capital that became Tri City Capital Corp. In 2010, Ruth combined her mortgage pool with that of Michael, and Michael then launched Tri City Mortgage Fund, a mortgage trust allowed the general public to invest with Ruth and Michael.

Ruth passed away soon after in 2013, and the legacy of knowledge that her and Henry lived by was passed down to Michael.

Today, Tri City invests it’s own capital alongside that of approximately 200 investors in a shared capital pool where the founder’s capital, that of the fund manager and that of investors are indistinguishable. All together, this represents approximately $90 million across 150 properties at any given time. Investors range from private individuals to larger investment companies.

How Our Trust Operates

Michael Goodman decided that a mortgage trust was the best structure to lend money on behalf of himself and others, as a team. For starters, while the trust is managed by a Fund Manager - Tri City Fund Management Ltd. - a trust allows all the interest income to be passed on directly to investors, before it is taxed. As such, it is a flow-through entity. Secondly, the trust puts each unitholder's dollar on par with the other unit holders; when a loan is made, all unit holders make it together, including funds invested by the Fund Manager. Also, when security is held, all unitholders hold it together. Lastly, parties make money together - the unitholders and the Fund Manager, which means all arrows, so to speak, are pointed in the same direction.

What Tri City’s Mortgage Trust Looks Like Today

In the spirit of Ruth's investing rules, 82% of Tri City's mortgages are against residential properties, with the balance being commercial. The total loan to value of the whole portfolio is approximately 60%. As well, Michael Goodman learned learned to live frugally from his parents and he too, has found how to fulfill his life's purpose through wealth.

He launched The Ruth and Henry Goodman Fund, through which he supports groups that he believes are making the world a better place. Some of these groups include The Civil Liberties Association, Be The Change Earth Alliance, Vancouver Folk Song Society, Coop Radio, Okanagan Gleaners, Hollyhock Leadership Institute, Ecojustice, Dove, The Real News Network and more...

Our Performance

Tri City Group Monthly Income Mortgage Trust is returned 8.8% in 2024, based on distributions reinvested. Ruth would have considered this a good return - not too high so that the capital is at risk, but high enough that it make a difference to her income. Although we are regularly asked to make investments that pay more, by following Ruth’s conservative mortgage investing philosophy, our capital is safe and allows us to sleep soundly at night. By not charging too much, but enough to make a good return, Ruth taught us how to create long term, lasting wealth.

How to Join our Family of Investors

TCGMIMT trust units must be acquired through our exempt market dealer (EMD), Harbour Park Capital Partners. Financial regulators in BC require an EMD to conduct the sale, because it allows the regulators to ensure ethical practices are being followed. For example, the EMD representatives must take courses and become registered, whereby they must follow certain guidelines and protocols that look after the interests of investors. For example, the EMD ensures this is a good fit and educates you about this type of investment. It also ensures you don’t put too much money into any investment.

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Invest Like Ruth: The wise woman who started from scratch and retired wealthy.