Why financial independence is more important than ever

Since graduating from university, I have spent my entire working career with the same company. In fact, I have spent over a third of my life working at the same company. I would be the first one to admit that I’m completely surprised by this, especially considering the general consensus is that millennials would change jobs regularly. Somehow, things have worked out with the same company, and I have changed my job title and job function numerous times over the years. 

Over the last 14 years, there have been good times and some tough times which meant the company has gone through many rounds of layoffs. Fortunately, I have survived these layoffs so far. 

Recently, the company went through another major change. It started off with the closure of a couple of offices to centralize engineering work at one location. A few months after these office closure announcements, another major organizational restructuring was announced. In this announcement, many people, including senior executives, were let go. The result of these three announcements is that a total of 250 positions were eliminated, approximately 20% of the company’s workforce. 

More job eliminations are expected over the next few months, so overall, the morale is low. People are scared, especially given the current job market due to COVID-19. While I should remain safe (knock on wood), it has been extremely difficult to see co-workers that I’ve worked with for years to be let go. Some of them I have worked for as long as I have been with the company and some of them I’ve looked up to as mentors. Unfortunately, it’s not just 250 people that lost their jobs, it’s 250 people and their families that are affected by all these announcements.

The other night, after both kids were asleep, Mrs. T and I were sitting down on the couch, having hygge. She then asked me what I feel and what we would do if I were one of the people affected. 

After a bit of reflection, below are some of my thoughts. I still enjoy what I do at my job and I enjoy the people that I work with, but I believe that having alternatives are more important than ever. And this is why I truly believe that financial independence is so powerful and empowering. 

There’s no such thing as a secured job

When I first started working, I used to think there was such a thing as a secured job. Maybe such a thing exists when you work for the government or municipalities but when you work in high tech, there’s no such a thing as a secured job. 

This is true despite whether or not you have a very specialized job function or not. Everyone can get fired. Heck, even a CEO can get canned and I certainly experienced this at my company. One day an email came out stating that the CEO had decided to step down effective immediately. It didn’t take a rocket scientist to figure out that “stepping down” was a polite term for “fired.” Ah, gotta love these work euphemism terms right? 

So, I have always continued to update my resume and LinkedIn profile just to cover my basis. Occasionally I would look around for job postings to see what the job market is like and if there are any interesting jobs available. 

Since a secured job doesn’t truly exist, it certainly doesn’t hurt to look around and keep my options open. I’ve learned to take charge of my own job situation and my own “employability” rather than relying on your employer to take care of you. 

Open the door for new opportunities?

A few years ago, after a few rounds of layoffs, I finally came to terms with what was going on and stopped being so scared of these cutback announcements. I figured, if it was my turn, then it was time, and I would have had a good run with the company. 

Sadly, often than not, it comes down to the numbers rather than what you have accomplished. So, if the company were to decide to let me go, there’s nothing I could do to convince them otherwise. 

Rather than looking at the negatives, Mrs. T and I decided to be optimistic and look at the positives. 

So, what would happen if I were to let go?

Well, maybe it would provide a great opportunity for us to travel around the world (assuming we could travel safely again)? The kids have been sold on the idea of exploring the world. I’m a true believer that one can learn a lot of valuable knowledge from travelling and seeing the world. And if travelling around the world is not a possibility, maybe that’d allow us to explore Canada or even throughout British Columbia.

Perhaps it would also provide an opportunity for me to stay at home full time and allow Mrs. T to focus on her holistic doula business. After all, being a doula means a very unpredictable schedule and requires me to be at home to look after the kids whenever her clients are giving birth. 

On the other hand, maybe it would allow me to spend more time on this blog and find ways to grow it further (I don’t expect to turn the blog into a part-time job and try to sell readers courses and plastering affiliate links everywhere). Not having a full-time job would also allow me to spend more time working on my photography business. Perhaps it would allow me to find time to publish a book on personal finance or financial independence.

Another possible option would be for us to move somewhere else than Vancouver. Perhaps we take geo-arbitrage more seriously. Maybe we look at moving to a smaller town somewhere in Canada; maybe we look at moving to Taiwan and live there for a few years; maybe we look at moving to Southeast Asia; maybe we look at moving to Denmark (although Denmark wouldn’t really be cheaper than Vancouver). 

Without a full-time job to “tie” me down, the potential opportunities are endless. This, in itself, is actually quite exciting! 

Living off dividends

We probably will end the year with around $27,000 in dividend income. If we convert the US dividend amount that we receive to the Canadian dollar, we might be close to $30,000. At $30,000 of dividend income, it’s not quite enough to cover our annual expenses. We can probably cut a few expenses to get closer to the $30k number but that certainly wouldn’t leave us with too much wiggle room. If we were to relocate to a place with a lower cost of living, living off dividends might be a possibility, although ideally, I’d like to create a bit of buffer to create some margin of safety. 

Perhaps the solution is part-time income? If we could bring in another $15,000 in part-time income, maybe that’d be sufficient for us? This would go hand-in-hand with the idea of focusing more time on our part-time businesses as mentioned earlier… 

Financial independence and beyond

I’m more and more convinced that starting our financial independence journey nine years ago was one of the best decisions we’ve made. Becoming financially independent, meaning having enough dividend income to sustain our expenses, would be fantastic. At the same time, Mrs. T and I keep reminding ourselves that we need to be open to opportunities and be flexible.  

The thing is, I’d rather not look for another job if I don’t have to. So, the idea of staying with the company for as long as possible and quit once we’re financially independent sounds just fine to me – and if we are close to financial independence and I happened to get fired, then it might be the kick in the pants that we needed to jump into the financial independence retire early world.

For now, I will continue to keep my heads down and weather the storm. We will continue to keep our options open and see what happens. 

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16 thoughts on “Why financial independence is more important than ever”

  1. What an insightful post Bob!

    After 25 years with the same company, I can relate to what you’re saying. Especially during these troubled times, there will be further downsizing. My belief is “job security” depends upon the marketability of our skills and the value we bring to the table. Loyalty is not rewarded. The best strategy is becoming an expert in our chosen field and establishing connections throughout the industry.

    Reply
  2. Hey Bob, love the post!
    Super insightful and motivating for me as I recently started my own blog about financial freedom as well!
    I’m just curious, have you ever considered investing in rental properties to generate passive income? Why or why not?
    Again, thanks for the inspiring post!

    Reply
    • I personally considered getting into the landlord biz, but decided never to do so because the rights of tenants are too restrictive to the property owner, let alone the hassle of the responsibility. There are far better things in which to invest without the headaches or commitment, especially in my province of BC.

      Reply
      • Agree with Chris. I feel that the rental laws in BC are favouring tenants. A friend of ours had a bad tenant and couldn’t evict the tenant for almost 6 months. The tenant didn’t pay any rent during those 6 months and the money was never recovered. Worst of all, the tenant ended up breaking a bunch of stuff and left piles of garbage on the property.

        Reply
  3. Nice post, Bob. (If that happens) I think downsizing, and maybe moving a bit further from Vancouver should do the trick for you, especially that you’re now on a $30K dividend cashflow. If you have a mortgage, you could probably eliminate it by moving to another city. Once that mortgage is out of picture, the living expenses can be very low.

    I live in Montreal and I still owe a balance on my property, but If I were to move 40 minutes outside the city, I could instantly eliminate my mortgage and reduce my living expenses to a bare minimum. I could even live off my dividends and other online income and not rely on my job anymore. That would also give my plenty of free time to build other income streams.

    Reply
    • Hi German,

      Yup, if we downsize and move a bit further from Vancouver, like in the interior of BC, or a small town somewhere in Canada, we might be OK with a $30k dividend cashflow.

      Reply
  4. I can certainly relate to your feelings as I have worked for the same company for more than 20 years now. It was scary when I think about finding another job. But the good news is, I have plenty of friends who have switched to a new job on the will or forced to find a new job. My DH being laid off twice and had to answer the question from the kids ” Why are you not going to work”. But all of them found a new job and the majority of them found a better job with higher pay.

    Living on $30K dividends income might be a little bit challenging, but with your portfolio, you have no problem to support the family until you find another job. There is no need to worry.

    I do agree with you financial independence is very important. It makes life much less stressful. When my DH struggled with work, I always told him that if he wants, he can already retire. So far he decided to continue the struggle, but hopefully, he didn’t feel that much pressure because there is already a backup plan.

    Reply
    • Changes are weird and we humans don’t typically like changes. This is true for finding another job too. But if that were to happen, then we just have to deal with it right?

      Financial independence gives you more options in life, that’s why it’s so important. 🙂

      Reply
      • There is this old Chinese saying: A tree dies when being moved, and a person thrives when moving. 树挪死,人挪活。It’s in our nature to be afraid of changes. One of my friends working for Microsoft for many many years until reorganization forced her to find a new job. She found the world outside is full of new chances and feel very fortunate this happened. She is now making more than double what she made with Microsoft and also constantly looking for new opportunities. Being forced to go out of one’s comfort zone could be the best thing that happened to people with lots of potentials.

        All being said, I am the kind of person who is afraid of changes and doesn’t want to get a new job. So I feel for you when your company had so many rounds of layoffs.

        Reply
  5. There was a self published book twenty five years ago where the author wrote about travelling across Canada to seek out a town where they could live. They lived in Vancouver but found it too busy and crowded. So off he and his wife and the dog drove through the provinces from west to east to find this perfect place. They wound up in St. Andrews, New Brunswick where they’ve been ever since, working as real estate agents.

    Another book I read about fifteen years ago, convinced me to take a reduced pension with early retirement. “Why Swim With The Sharks”. The authors lived in Edmonton at the time. They had planned to move to a small B.C. town, (can’t remember which one), but that didn’t work out for them. Last I read they were living a frugal lifestyle (bonds only in the investment portfolio) in Victoria, B.C. Their investment and lifestyle ideas seem to have come straight out of the now 28 year old American book, “Your Money or Your Life”.

    My wife and I just feel lucky in retirement that we’re happy where we live and we can still increase our income from investments each year.

    Reply
  6. After being on the wrong end of a layoff a couple of time, financial independence seemed like the wise choice to me too. It wasn’t so much a goal as a necessity in my case. Turns out I’m fairly good at it too.

    Hope you don’t get layed-off though, it never feels good even if you FI.

    Reply
  7. Thanks for sharing. I went through a tough period after I was laid off from the company I’d been with for 21 years – I had thought it was my ‘forever job’ and of course it wasn’t. But being on the road to FIRE meant that I was able to cope better with the situation both financially and mentally.

    As I was in no rush to get any old job, I took some time out so was quite relaxed (and ready to work) when the right job did come along months later.

    Hope all works out for you, but rest assured that FI puts you in a much better position than most.

    Reply

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