The financial independence retire early movement is getting a lot of attention lately. While it’s nice to see the movement gaining traction, I feel most of the major media coverage has been very early retirement focus. I think this is paints a very bad picture of what financial independence retire early (FIRE) is about. Furthermore, most of these FIRE stories are US related. As a Canadian, I want to hear more Canadian financial independence retire early stories. Therefore, I started an interview series with a focus on financial independence retire early in Canada..
If you are reading this and are Canadian, financially independent, retired early, or getting close to these major financial milestones, I would love to hear from you.
Recently I was fortunate to connect with Court who blogs over at Modern Fimily. Court and her wife Nic became financially independent last year at ages 32 and 30. I thought they would be fantastic candidates to provide some insights and Canadian perspective on financial independence retire early in Canada.
Q1. That is amazing that you and your wife reached financial independence in your early 30’s last year with a toddler. What originally sparked your interest in personal finance? Who discovered the idea of financial independence retire early (FIRE)?
Thank you! I’m not sure if there was really a specific event in the past that sparked my interest in personal finance other than realizing I had to figure it out in my own as I finished school with a lot of student debt to my name. My parents made a decent income but they didn’t always make wise financial decisions. We lived in an upper-middle class neighbourhood and my parents were always very supportive. They made sure my brother and I were able to participate in any activity we wanted (mostly sports!) 24/7. Money was never really discussed in our household growing up and looking back now it’s clear that they were always trying to keep up with the Joneses. So I guess it was just having to look after myself financially and being forced to “grow up quickly” so to speak right around the time I was finishing school that really forced me to get my feet wet with personal finance.
I had about ~$65,000 in student loans that I had taken out for both my undergrad and master’s degree (my parents took out another $40,000 from their end) so knowing I was coming out of school with a ton of debt made me very uneasy and was what really got me into personal finance. Note I went to school in the states so this is likely much higher than most Canadians reading this but sadly about average for the typical American going through the college school system. And I had $80,000 in scholarships on top if this – it’s a pretty insane system, don’t get me started! My mission after school was to pay off this debt ASAP as I am a very debt adverse person and I was able to pay it off in 2.5 years from January 2009 – July 2011 and it ended up totalling around $70,000 after accounting for accrued interest.
I (Court) am the one who discovered FIRE – it was back in 2012 through the Mr. Money Mustache blog that a coworker at the time had introduced me to it. As you can tell from above, I was naturally a saver and debt-averse as I had just finished paying of $70,000 in student loan debt in 2.5 years right around the time of discovering MMM. But I didn’t have a clue as to how simple investing really can be and that it’s possible to retire in 10–15 years. Nic has always been budget conscious and convincing her to join Team FIRE was not hard at all.
Q2. Did you have to convince each other about FIRE? Or were the both of you onboard right away? When did you realize that financial independence is possible?
Nic and I started dating shortly after the time that I discovered the concept of FIRE. While I didn’t bring it up right away, we both were living pretty frugal lifestyles as Nic was finishing up her second degree and living on a tight student budget and I was continuing to live the “poor college lifestyle” while I was finishing paying off my student loans and then saving up for down payment for a home. Once I introduced the concept to Nic, she was on board right away.
I’m definitely more obsessed with it and keep track of our finances, but she’s always down to hear the latest game plan and goes along for the ride. Up until 2015, the plan wasn’t to retire early, rather it was to feel comfortable enough for us both to quit our jobs in Florida and travel around the world for a year to eventually settle in the Calgary area and start the next chapter then. We sold all our belonging except for a few suitcases we left with Nic’s parents and the mini-retirement lasted about 6 months where we travelled throughout the US, Canada, and Europe and then I ended up getting a job in Calgary so the second half in Asia never panned out (some day!). It was after that point in 2016 when early retirement really became a thought. In 2018 we reached our FI number for our family of 3 ($700,000 of liquid investments) and my wife is now a stay at home mom. I’m working still as we are hopeful to become a family of 4 in the future and saving/investing more with that in mind. We now are about $75,000 shy of reaching our family of 4 FI number of $875,000, so we are close! (Note, we do not value our FIRE number the same as our net worth. I cover more of this below but our net worth is closer to $1.1 MM. Any guesses on the difference?)
Q3. As a lesbian couple, you had to set aside money to start a family. What was the IUI like in terms of financial impact to your life?
Starting our family was surprisingly a lot quicker and cheaper than I had originally imagined. I thought it would be a 1-2 year process from when we had our initial visit with our general doctor to be able to try to conceive but it ended up only taking a few months of blood work and tests and we were ready to go. We actually delayed trying to get pregnant by a few months once we received the green light as we had some bigger trips planned that we didn’t want to be pregnant for.
We made a game plan beforehand (which we would highly recommend to anyone else going through a fertility treatment as it can likely take a toll on you financially and emotionally while you are going through the process) that we would try IUI 6 times and then take a break and reassess at that point. Luckily, IUI worked for us on the first time. We spent about $3,000 for the entire process, the bulk of that on 3 donor sperm vials (~$800 each, ~$2,400 total) and we have 2 of them remaining in the freezer at the fertility clinic to help shave some costs for potential baby 2 in the future.
We’d like to note that we were quite surprised by the number of hetero couples at the waiting room each time we went to the fertility clinic. Each time we went (which was not that many), we were the only same-sex couple in the waiting room and there were 10-15 hetero couples waiting as well. Fertility issues are becoming more and more common (that’s a whole other topic to hash out) and I think there needs to be more discussion here too so it doesn’t become taboo similarly to how the topic of money is taboo.
Q4. Your annual spending is about $24,000 per year. What’s your secret for keeping your expenses so low?
Haha I honestly don’t see us living a crazy abnormal life but clearly we come off that way to most people! I’ll preface this all by saying we are not living a deprived life in any way. Simply, we are what I call “valuists” (a mix of minimalism and frugality) and have figured out what actually brings us joy and we focus on that and don’t spend money on things that don’t bring us joy. And in reality, the things that bring us actual happiness, not small hits of dopamine, are likely free or low cost – spending time in nature, reading books from the library, making meals at home, building relationships with family and friends, continuing to learn, going for walks/hikes/bike rides, learning about new cultures, spending time together as a family, disconnecting from technology by going camping in the woods, taking calming baths, enjoying a homemade coffee or tea in the morning, spending time at our family cabin, and sleeping. We let our little one roam outside as much as possible playing with rocks, grass, dirt, water, and snow. All of her toys fit in one single toy box and we only put ~5 out at a time in our living room.
Life doesn’t have to be expensive – we just live in a consumer driven society that tells us to buy, buy, buy and that more is better. If you can break free from that mentality, you’re golden. We cut the cord and haven’t had cable for over 3 years and honestly don’t miss it one bit. We hardly ever check the news and stay away from all the buzz in the media. We also value experiences over things so we would much rather buy annual passes to the zoo, sports centre, science centre, national parks, etc. where we can get our money’s worth vs a new outfit, pair of shoes, or latest technology any day.
Additionally, we house hacked our townhouse in Florida which allowed us to pay off our mortgage in 2.5 years which is now paying for our Canadian townhouse mortgage so we don’t have a monthly mortgage payment to have to budget for. By house hacking I mean that we bought a 4-bedroom townhouse and rented out 3 of the rooms which supercharged our mortgage payoff date. We also learned about travel hacking early on and have visited over 25 countries since we started our FIRE journey in addition to exploring all over the US and Canada.
In general, it’s a mindset shift that we have figured out. We don’t fall prey to marketing and advertising. We don’t care if we don’t wear the latest fashion. We cut each other’s hair and we don’t wear makeup. We don’t care what other people think of us and it honestly has made us more down to earth people as we don’t judge others either. FIRE is really about a lifestyle shift. Once you can figure out how to cut expenses (and boost your income), you can increase your savings rate (ours is currently 75% for a family of 3 living off one income), and propel your path to FI so much quicker.
Q5. What was your strategy that allowed you and Nic to reach financial independence in your 30’s? What is your investment strategy? Do you invest in mutual funds, index ETFs, dividend growth stocks, or rental properties? How are you diversifying your investments?
We invest in low fee index funds, mostly VTSAX for our US stock market index in the US through Vanguard and VUN.TO for our US stock market index in Canada through Questrade. Our US bond index funds are VBLTX for my US accounts through Vanguard and VAB.TO for my Canadian accounts through Questrade. We also have less than 1% of our portfolio in a REIT index fund (VGSLX) in Vanguard, less than 1% in a Cannabis index fund (HMMJ) in Questrade, and less than 1% in a Canadian total stock market index fund (VCN.TO) in Questrade. I own one individual stock and it’s for a company I worked at for years and I believe will continue to be an industry leader in its field. We are BORING investors and do not check our portfolio often. We are currently very cash heavy in a high yield savings account earning 2.8% as we enter early retirement so we don’t have to touch our investments for a while and we also want cash on hand to throw at the market if/when there is a crash in the market.
We currently have 54% in stocks, 22% in bonds, and 24% in cash. Of that 54% in stocks, 42% is in US index funds, 6% is in international stock index funds, 3% is in my previous employer’s company stock, and the REIT, Cannabis, and Canadian stock indexes are all less than 1% as mentioned above. We wouldn’t advise this strategy to most people unless they are in our unique position retiring soon and overly conservative like us. Over the next 5-10 years we plan to be back to 90-100% in stock index funds tracking both the US and international market for the long term.
In our true conservative fashion, we are planning to use closer to a 2% safe withdrawal rate vs the common 4% rule that is discussed in the FIRE community. We use the 4% SWR to calculate our FIRE number but we are planning to only withdraw ~2% thanks to geo-arbitrage via the USD/CAD exchange rate and the Canadian child tax benefit.
Q6. Tell me some of your financial mistakes. What have you learned from these mistakes?
I didn’t have a clue what I was doing from an investing standpoint when I started my first job. I was an economics and math major so I “get” numbers but didn’t know the first thing about personal finance. I’m so glad to see that the FIRE is spreading and younger people have more resources through blogs, books, and podcasts to reference before they finish school. That’s what we’re here for and why we launched our blog, to try to educate those with our previous learnings.
Looking back, it probably made more sense to throw more money at the market earlier on from 2009-2011 rather than being so aggressive on paying off my student loans. I contributed ~10% of my income towards my 401k (similar to group/corporate RRSP) and received the company match but I wasn’t maxing out my tax advantaged accounts at this time. However, I’m still glad I did it the way I did for the psychological side of being debt free. Same goes for the mortgage from 2012-2015. While the market grew at a faster pace than what my interest rate was on my student loans and mortgage, I wanted those debts gone ASAP. So I’m not sure if I would call this a mistake or a missed opportunity. To me, the peace of knowing we were debt free made it all worthwhile but our portfolios would likely be at a higher number today if we threw more at the market and paid off our debt at a slower pace.
Q7. Did you go out and celebrate when you hit your financial independence number?
We didn’t even know it happened to be honest. I don’t obsess over our numbers and don’t track the market constantly. I use a simple excel sheet to track our expenses and income. I use another excel sheet I created to track our various accounts and net worth.
When I started my Instagram account, Modern Fimily, in December 2018 I started logging in to update our FIRE calculations and net worth about once a month. Prior to that I would update our net worth maybe 2-3 times a year. I’d take at look at how the market overall was doing more frequently but my philosophy is it’s better to step aside and put things in autopilot and be pleasantly surprised down the road rather than obsessively track your numbers during your accumulation phase where you may get spooked if you see a downturn. It’s important to note that during your accumulation phase, if there is a dip in the market that’s a GOOD sign as you can buy stocks on sale. No one loses anything in the stock market until they sell. And over the long term, the market will go up.
One day back in 2018, I logged into our accounts and tallied up the numbers and thought “oh wow, we’re there”. It was definitely faster than I thought it would take because again our original goal out of all of this was to feel comfortable going on a year long trip around the world with no jobs lined up. We reached our FI number on my salary alone which has ranged from $69,000-$130,000 (pre-tax) over the past 10 years (with the 6-month gap of 0 in there too). My wife worked for about 4 years making $45,000/year where she paid off her $40,000 in student loan debt, purchased a used car for $8,700, contributed towards our mortgage, and has ~$25,000 saved up that we view as our emergency fund outside of our FI calculations.
As alluded to before, we do not consider our FIRE number and net worth to be the same thing. Our FIRE number is based off passive liquid investments (i.e. stocks, bonds, cash) and does not include equity in our home or vehicles as these are illiquid. We do not include a mortgage line item or car payment line item in our FIRE calcs as these are paid off. If we decide to move or rent in the future, it will be based off the sale or rental income of our current home. And as for a future car down the road, we are currently a two car household and will shift to one car once we FIRE and the sale of that second car will be invested in the market and will provide more than enough money in the future to purchase another low mileage used car down the road once it’s time to sell the car we decide to keep (thanks to the rule of 72). We covered a blog post going into details our FIRE number and the math and reasoning behind it.
Q8. Now financially independent, are you considering quitting your job or slow down by working part time?
Yes, funny you ask this because I have been toying with the idea of shifting to part time for about 5 months now. Literally every day I would switch sides and argue for one-way vs the other. And I’m happy to report, that after months of teetering, I have finally decided to switch to a part time position! This just happened 3 days ago as of writing this post.
I’ll be heading back to shift work (which I love) for a position that I essentially created with my old boss. Part time roles don’t really exist in the field I work in. I saw an opportunity I could create and presented an idea to my old boss and he immediately jumped on it. I asked for 12% more base salary than they offered and they said yes (because worst they could say is no and if it was make or break it for the role I had another job I was currently working to fall back on). THIS is the power of financial freedom. We have basically been able to set up our dream scenario as we transition to early retirement.
My previous role of 2.5 years entailed A LOT of travel and I will be heading back to shift work which entails 0 travel for work. The beauty of shift work (which I had been doing for 6.5 years prior to the 2.5 years stint of non-shift work) is that you know your exact hours and there is never any overtime. The best part now is my part time schedule. It will entail working 3 12-hour shifts on, 14 days off, 4 12-hour shifts on, 14 days off. On repeat. So it comes out to 20 different cycles of 2 weeks off each year – pretty wild! I did the math and it comes out to 73 days in the office a year, that’s it.
If the markets grow at 3% (see how fiscally conservative I am) we would be at our family of 4 FIRE number in March 2020 if I continued working full time vs February 2021 if I take the part time job instead. So we’re only looking at about an additional year of work but I will be working much fewer days overall by shifting back to shift work. And I’ll get that sweet sweet work life balance which I am craving. And of course, we understand that becoming a family of 4 is not guaranteed, so if it doesn’t work out and we remain a family of 3, we are perfectly content with that and I can quit the next day and we will be living like queens with a much higher FIRE number than needed in that situation.
The path to FIRE is not a sprint, it’s should be an enjoyable journey along the way. It’s not about 10-15 years of deprivation and then you can shift to a life you’ve only dreamed about. With our little lady only being 1.5, I really want to be able to experience as many of the amazing developmental milestones she’s experiencing at this age as possible.
Q9. Has financial independence changed how you view your job? Do you feel like you are working because you choose to, not because you have to?
Oh yes, definitely! While my previous full-time job could be stressful at times and entailed a lot of travel, I didn’t allow it to impact me the way it used to in the past. And I honestly think being more blasé makes me a better employee. Don’t get me wrong, I’m a hard worker and will go the extra mile even though we’ve reached FI already, but I don’t sweat the small stuff which is really difficult for someone who NEEDS their job. (I think anyone on the FIRE path is a very driven and motivated person overall.)
It’s an incredible feeling knowing that my job needs me more than I need it. And I do realize that even though we will retire early and be full time parents while our child is young, once she is school age, we likely will do some sort of part time hobby or side gig a few hours a day while she is in school which will likely bring in some sort of income to offset some of our expenses. And if it doesn’t pan out or bring in some extra cash that’s totally fine too as we don’t need it. It’s just very unlikely people who are driven to reach FI at an early age won’t be driven to do SOMETHING once we retire early. Let the alarm bells ring for the retirement police!
Q10. Do you take advantage of TFSA and RRSP? Do you plan to withdraw early from RRSP before age 71? If so, what are you early withdrawal strategies to minimize tax penalties?
Yes, but I am in a unique/awkward spot being a dual US/Canadian citizen and having to file my US taxes each year even though I don’t live in the States anymore. The US has to make things difficult (of course) and they don’t recognize the Canadian tax advantaged accounts like the Canadian government does so I don’t have a lot in either of these accounts. I have about $50,000 in my RRSP and $19,000 in my TFSA – all in US equities (again, partly due to the complicated US/Canada tax rules that admittedly I don’t fully understand). So if there is an accountant reading this who specializes in US/Canadian dual citizen early retirees, please contact me! 🙂
About 2/3 of my investments are in my US accounts and I have a much larger amount in my 401k (similar to RRSP) and plan to use the Roth Conversion Ladder to access these funds early without a penalty. So my plan is to keep the $50,000 in my RRSP until it can be withdrawn penalty free. My wife has her TFSA maxed out and never utilized her RRSP while she was working in Canada for 2 years since she was working part time then and the tax advantages didn’t make sense to us to tie up that income for such a long time. Although as I’m learning more about the Canadian system I’m learning there are ways we (as future early retirees with low income/low expenses) could withdraw from our RRSP tax free.
Q11. Sounds like you love travel hacking and have visited more than 25 countries by travel hacking. Why is travel hacking so attractive? Do you have any big trips planned?
Yes, travel hacking is not for everyone that’s for sure but it truly is amazing. You have to be consumer debt free and able to pay your balance in FULL EACH MONTH. If you can’t do that, travel hacking through credit card sign up bonuses is NOT for you. To be honest, the credit card sign up bonuses in Canada are weak in comparison to what the US banks offer – maybe it’s a blessing in disguise though as it may not lure as many Canadians to sign up just for the bonus points and then get hit with high interest rates if you don’t pay in full. Luckily, since we have a work history in the US and we use my dad’s Florida address still for certain things, we’re both able to still apply and get approved for the US cards whose bonuses are typically at least twice as lucrative than what the best Canadian cards offer.
I first discovered travel hacking in 2011 through another coworker and never looked back. We’ve been to 25 countries and all over the US and Canada including Alaska and Hawaii and still have over 1 million points in our “travel bank”. On average we spend about $1,500 per year on travel for the both of us and have been able to see so many incredible places just by paying the taxes on the airfare. We also have no problem camping or staying at Airbnb’s to keep the accommodation costs down. Like reaching FI, it’s taken a lot of learning from reading other blogs to understand how to best maximize your airline points.
I often get asked “what credit card should I sign up for?” and unfortunately the answer is “it depends”. I like to tell people to have a game plan of what trip they want to go on through travel hacking and then research the best airline award chart for that region and then target a credit card that has that airline as a transfer partner. Just like reaching FI, there is no quick way to travel hack around the world. It too takes a lot of reading and research.
No major future big trips planned yet but we want to explore more of Canada to start – so we are looking at visiting Quebec City, Vancouver Island, as well as a road trip along the east coast to see the icebergs in Newfoundland, the red landscape of PEI, and Cape Brenton in Nova Scotia. During this transition phase of jobs, we are planning to head out to Invermere for a few days. We have a friend’s wedding in the Boston area next summer and we typically head down to Florida to visit friends and family for a few weeks each winter. New Zealand, the Azores, and Antarctica are on my bucket list and Nic has an African Safari at the top of her list.
Q12. Do you have a budget system to track your expenses? If you do, have you lightened up how you budget now you have reached financial independence?
We never really had a budget as odd as it sounds. Again, it’s all about the mindset shift which has allowed us to slash our expenses to ~$24,000/year for our family of 3. However, I’ve been keeping track of my daily expenses, to the penny, since I started my first job in 2009 and can tell you how much money I netted for the past 120 months in an instant. I think this is a key step for everyone to take to get ahold of their finances. Just recording where your money goes is an extremely powerful exercise. I can’t stress enough how much I would encourage any reader to start doing this simple exercise.
I guess you can say we are similar to Paula Pant who talks about the anti-budget. We have set up on auto pay to fund our tax-advantaged and taxable accounts so we know we are paying our future selves upfront. But we’ve also realized a happy life does not need to be expensive so we never really have the urge to purchase high priced materialistic items. I like living by this mantra: I like it. I want it. I wait 72 hours. I decide I don’t need it. I invest instead.
I used to update my expenses/income sheet about once a week but now I do it once a month. We’ve never used any of the financial tools out there like YNAB, Mint, or Personal Capital. The only category we try to “budget” is our monthly food bill, and even then it’s more like a game than a budget. We give each other a jokingly evil eye if we spend more than $100/week at the grocery store. We aim to keep our monthly food costs around $400/month but now it’s closer to $450/month as I swear our 17 month old eats more than me. Otherwise, everything else is pretty much on autopilot.
We account for annual costs like home & car insurance and property taxes (best time to get a new credit card is when you know you have a big annual expense coming up) as well as monthly expenses like HOA fees, utilities, and maxing out our RESP contributions to our little lady’s future education. Our transportation costs are low as we both drive low mileage reliable used cars that were paid with cash up front. For the past 2 years I’ve been working from home and my wife is a stay at home mom so our monthly gas is less than $100/month with trips out to the mountains. My work pays for my phone and my wife’s phone plan is $13/month through Public Wireless. As mentioned in the previous question, our travel comes out to ~$1,500/year or $125/month. We’ve been keeping track of our non-food and non-RESP related child costs since my wife got pregnant and we spend ~$100/month on anything baby related. In other words, we’ve spent less than $1,600 on our 17-month-old thus far. And this includes everything from consumables like diapers, wipes, and teething medicine (those damn teeth!), to clothes, a stroller, a car seat, you name it. Some people spend $1,600 on a stroller alone (our jogging stroller and umbrella stroller were both free and work great) but we like to prove that kids really don’t need to be expensive. We have absolutely no problem getting second hand items passed down to us from family, friends, or complete strangers (thanks Varage Sale app!). Otherwise our miscellaneous items consistently total about $150/month. That’s pretty much it.
Q13. Where do you see yourself in 5 years and 10 years from now? What are the top three things you are looking forward to?
I honestly have no clue. I am an extreme over thinker and am constantly trying to plan out the future but I’ve come to realize that what you think will happen and what actually happens are likely not the same thing.
I’d like to think at some point in 5-10 years we will move a bit further west to a small interior BC mountain town like Nelson or Invermere – but who knows! We’ve also toyed with the idea of moving about 15-20 minutes away from our current location to be a bit more rural and closer to nature and building a custom cabin style home that’s around 1,000 square feet. Or maybe Vancouver Island. The nice thing about living in Canada is that we have an abundance of beautiful locations to look into (and yes, we plan to stay in Canada long term).
I don’t foresee us travelling long term and being complete nomads but I can see us spending a month or two in the winter doing slow travel in another (warmer) country. Our thought is to dabble into house sitting so we can get free accommodation paired up with our free airfare with points. We also are looking forward to spending as much time in the summer at our family cabin and out in nature. Our general rule of thumb is to be in Canada from May-November and then the other months are up for debate.
We recently launched our blog, modernfimily.com, so I’d like to keep adding content there, as well as volunteer at our kids’ school, coach their sports teams, volunteer on school field trips, and teach personal finance to teens. We want to be involved parents. And of course, amp up hobbies like hiking, skiing, and painting. Who knows, maybe one of us will work part time as a coffee roaster at our local coffee shop or mow the grass of our town just for the social side of things and to engage with others in our community. I’d love to say I’m also looking forward to not needing an alarm clock to wake up but unfortunately our daughter is a TERRIBLE sleeper and has us up before 6am each morning so fingers crossed she learns how to sleep in a bit later soon!
Yes, we came out of the closet once already to our friends, family, and co-workers regarding our sexual identity but we are finding it much harder to ‘come out’ again in regards to our financial situation! We keep it a secret because no one in our family is as good about their own finances as we are and we don’t want to make any of them feel uncomfortable. We also don’t want people to think that just because we have a healthy amount of money being invested means that we can blow money on frivolous items we would never buy in the first place. So it’s a bit awkward and unfortunately as you mention money is a taboo subject in our society.
I think money is a taboo subject because so many people are not in tune with their finances and are swimming in consumer debt while trying to keep up with the Joneses and don’t want to admit it even though 90% of their peers are in the same boat (if not more). It’s all about appearances, one-upping each other, and having a case of the “wants”. Sadly personal finance is not taught in schools (or in enough detail, however it sounds like the ChooseFI folks are working on some curriculum for K-12 students which I am excited to learn more about). Instead, we are taught to memorize historical dates or long division which don’t really have much real-world application. Ultimately, I think it is because of a lack of education that no one wants to take into their own hands.
I would much rather talk to people through our Instagram and blog who are genuinely interested in personal finance rather than trying to talk to family about something they couldn’t even conceive, let alone want to try to understand and apply to their own lives. Personal finance is that, personal, and it’s hard to tell people what we did and expect them to be able to replicate it. We’ve slowly learned that some of our friends and coworkers are into FIRE so that’s been fun getting to talk to people we actual know about it. We try to talk to other friends and family members about it but it hasn’t gone smoothly and we never want to come off as pushy or rude so we often times just drop it.
Q15. What would you tell someone like me who is trying to achieve financial independence? Do you have any advice for financial independence retire early?
My biggest piece of advice is to break away from all the marketing, advertising, and the general consumerism society we live in and just do you. Take some time to figure out what TRULY makes YOU happy. No, seriously, go take a pause from reading and write down the top 10 things you do each week that brings you happiness. Compare your list with your family members if you have a family. You’ll be surprised that most of them do NOT cost money. Prioritize those things in your life. Cut out the fluff.
And also, like I mentioned above, track your expenses, to the penny. It doesn’t matter if you use pen & paper, a simple excel sheet like us, or some robust program. The point is just to do it. These are super simple action items yet so many people don’t do either. How can you possibly know when you can retire if you don’t know your annual expenses? Retirement is not an age, it’s a number, and everyone’s number will be different.
Lastly, read and research. Stop spending countless hours on social media or glued to the tv/phone and instead read about personal finance for an hour a day. We created a list of our favourite books, blogs, and podcasts on our blog if anyone is interested in starting off there.
I think you exhausted my brain with your extensive list of questions – kudos Bob for a great set of questions to FIRE at me (pun indented)! The only thing I’d add is that all of these concepts apply regardless of your age. A lot of people think ‘oh I wish I knew all of this when I was younger but it’s too late for me now’. While you will benefit from compound interest the sooner you start, taking control of your finances can happen at any age regardless your current situation! Take my mom for example. She was 62 with $45,000+ in consumer debt and now she’s 66 with all her debt paid off and $23,000 in savings all because of a money mindset flip. And you know what, she’s such a happier and more appreciative person now that she understands what really brings happiness to her life. If you’re nearing retirement without any savings, you aren’t alone. Don’t let that stop you from figuring out how to live an intentional life. Thanks Bob for having me on!
Thank you very much Cour and Nic for participating in the financial independence interview! I really enjoyed what you have shared and the great insights you have provided. Having dual citizenship certainly makes it tricky when it comes to tax considerations. I didn’t know that US doesn’t recognize RRSP and TFSA!
Dear readers, are you enjoying the Canadian Financial Independence Interview Series? Are you a Canadian that is financially independent or retired early from your career? Or close to reaching this key financial milestone? If so, I would love to have a chat with you. Give me a shout!
And in case you want to read the other interview series.
- FIRE Canada Interview #1 – Vancouver reader J
- FIRE Canada Interview #2 – How I became financially independent at age 32
- FIRE Canada Interview #3 – Why I decided to keep working despite reaching FI at 38
- FIRE Canada Interview #4 – Cash flow is the oxygen of financial independence
- FIRE Canada Interview #5 – Creating a long term plan
- FIRE Canada Interview #6 – Create a net worth statement
- FIRE Canada Interview #7 – Do Absolutely everything and never sacrifice or struggle at all
- FIRE Canada Interview #8 – Building a rental property empire
- FIRE Canada Interview #9 – Relocating to Spain
- FIRE Canada Interview #10 – Kids are as expensive as you let them be
- FIRE Canada Interview #11 – Vancouverites retired in their 30’s
15 thoughts on “FIRE Canada Interview #12 – Being a valuist”
Bob – thank you for another great interview.
Court – congratulations to you and Nic on reaching FI. You mentioned that you plan to use Roth Conversion Ladder to access funds in 401k. Won’t the conversion from 401k to Roth IRA be considered Canadian Contribution and make the tax deferral election on Roth IRA invalid?
See page 2 of this RBC post on the topic –
Let me know your thoughts.
Hey Bhramar – thanks for this note. As alluded to above, I’ve been digging into our withdrawal strategy quite a bit the past few months since I wrote this post and there have been a few changes from my end. Our Plan A is to withdraw from cash, high interest savings accounts, Canadian taxable accounts, and US taxable accounts first before touching any tax advantaged accounts. Looking at our latest numbers, this will put us right around 65 which is when we can adjust over to OAS + GIS + TFSA until 72. Then after 72, we can start touching our tax differed accounts (401k in the States and RRSP in Canada) as we will be forced to with RMDs and RRIFs. So I think we can avoid a Roth conversion completely if we have to (based off current rules). There also is the option to convert our 401k directly over to a RRSP which we are looking into as well. All I know that is certain, is that we have time to figure out the best path forward as we have a hefty amount in cash, savings, & taxable accounts and the rules likely will change by the time it comes to tapping our tax advantaged accounts. The US/Canadian rules/treaties are very complicated and not user friendly!!
Thanks Court for sharing the details. I agree that the rules are complicated and might change. Regarding moving 401k to RRSP, you might find this article helpful –
Wish you the very best!
As is always the case with Court, this interview was so detailed, interesting, and inspiring. I LOVED it. You and Nic are so driven and successful, yet you do a wonderful job of balancing things so that you’re already living your best life now. I never tire of hearing/reading your story!
Thank you Chrissy, glad you enjoyed the interview.
Thank you Chrissy for the continued love and support – you know the feeling are mutual from our end! Glad you enjoyed this post and hope you found some inspiration in it 🙂
“It’s an incredible feeling knowing that my job needs me more than I need it.” I love this line!
Thanks for sharing your journey. Going to part time work to free up time to spend with loved ones and pursue the simple pleasures that enrich your life is a fantastic move. We regret the chances we don’t take. Congratulations!
Thank you for this note! Yes, the move to part time was hands down the right choice. I honestly feel like I don’t work anymore yet we’re still able to have a 50% savings rate off my one part time income. All of my coworkers have asked if I’m doing some sort of other job on top of this one. Absolutely not! As you mentioned, I’m enjoying the simple things in life and able to spend TIME with my family 🙂
I love that line too! That’s the freedom of FI!
Great post but I have to admit that when I read “ Court and her wife Nic” it thew me for a moment than I got the modern family reference
Thanks Rob for tuning in and glad you enjoyed it! Yea our blog is a spin on the show Modern Family – it’s instead Modern FImily as we are 1.) a family, 2.) in the modern sense of being a lesbian family and 3.) we’ve reached FI for our family of 3. Cool to see this made it over to Germany 🙂
🙂 Having more diversity in the FIRE community is always a good thing.
Great interview Bob ! A great summary to your questions from Courtney on where they have been and where they are going in the life of financial independence. Nice having been able to meet both of you in person now with such different approaches to personal finance but yet so very similar. I like that your series shows how we can all reach the same destination but with vastly different means.
Thanks for chiming in Chris 🙂 There definitely isn’t a one-size-fits-all route to financial independence. It’s all about creating a happy life along the journey and enjoying the ride, knowing that the end goal is sweet sweet freedom.
Thank you Chris. Court has provided some really good insights. I really enjoy interviewing Canadians who have reached FI, RE, or close to these major financial milestones.