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.
Today the interview features Chris from Mindful Explorer who has reached the FIRE status spring of 2017. I had the chance to meet Chris in person late last year at a blogger meetup. Given that he’s FIRE’d and a fellow Canadian living on the West Coast, I figured he would be the perfect candidate for the Financial Independence Retire Early Canada Interview series.
Q1. It’s amazing that you quit your job and FIRE’d in spring of 2017. What originally sparked your interest in personal finance?
I think it was when I noticed I was constantly finding ways to consolidate debt. Looking for a way to pay off something I had bought and to allow me to get the next toy or big ticket item. At the same time a friend reached out to me to chat about life insurance and got me intrigued on looking at my complete financial health. From there it led to hitting the bookstore for finance books and like so many of us discovering all the personal finance blogs and the whole FIRE movement. This all occurred around 2010 if I recall.
Q2. How did you get your wife hooked on FIRE? Is she involved in the household finances and investments?
My wife is an incredible entrepreneur and we are both financially savvy, other than spending all our money in the early days as fast as we made it. She looked after the accounting of her small retail business and tasked me with making sure our household finances were dialed. We talked about every single thing along the way and wasn’t that hard considering we have been together since high school. We have only ever known a financial life that involved each other.
She really enjoys working, I know a lot of people say this but she genuinely loves it and gets so much from daily social interactions. This has allowed me to FIRE with the help of still earning an income. She isn’t interested in leaving work but when she does decide I am there to help her with whatever she needs.
Q3. You worked 21 years in the Canadian Oil Industry but today, you’re a very environmentally conscious person. What caused the shift in mentality?
Along the path of FIRE and the MMM lifestyle it seems a common occurrence that many people also find mindfulness and self-reflection. Combine this with a move across the country we did as part of our FIRE path for geo-arbitrage to advance our financial independence creates the perfect conditions for change. This move opened us to another way of living, new people and a different attitude. It is often said that the most important thing we can do to expand our awareness and understanding of the world is to travel, to get out of our silos of perception. Having moved I now completely agree with that. The second half is when you look closely at how you are spending your money, how you live your life and the affects of your consumerism you are often exposed to the environmental and sustainable aspect they have. Lastly the final piece that tied this all together is the freedom of time that financial independence affords us. This allowed me to spend many days outdoors mountain biking, backpacking, hiking and climbing amongst beautiful wild places. Thus how could one not develop a love and desire to protect our environment?
Q4. Tell me about your process from living paycheque to paycheque to establishing financial security. How did you do it? How did you start saving more and more money each month?
As mentioned above I need to give a shout-out to my friend who is a financial advisor that gave me the friendly nudge. I still bought so many things like campers, motorbikes and fancy trucks during that time but at least I had a desire to learn about personal finance and investments. I started extra RRSP accounts, clued into my TFSA that didn’t have a penny in it and looked at all the consumer debt I had from credit cards to vehicle loans. I started budgeting and tracking my expenses and savings which is a must for anyone, visualized things and seeing it on paper is so powerful. If you see the light as many of us in the FIRE movement have, well then you realize it is such a rapid transition of learning and searching for more and more information, almost insatiable.
Q5. What is your investment strategy? Do you invest in mutual funds, index ETFs, dividend growth stocks, individual stocks, or rental properties? How are you diversifying your investments?
At the start I had my company RRSP that was in the typical group plan, this was all I had. Through my friend I started buying RRSPs with him and bought market exempt products. I then started an RRSP account at my bank when I learned about index funds. With the fact that I am Canadian as soon as I discovered the Canadian Couch Potato website I completed changed my TFSA and RRSP strategy. I opened a brokerage account and did a 3-fund index portfolio in both my TFSA an RRSP. Just recently I adjusted it to 20% bonds from 10% bonds to offer my FIRE stage of life more stability if I do need to draw down the actual stocks while the equity side of things bounces back from any massive drops. I currently hold XAW (US/World ex Can index), VCN (Can Index) and ZAG (Can bond index).
Tawcan: We own XAW in our investment portfolio as well. We used to utilize XAW and VCN in our kids’ RESP accounts but for simplicity reason we decided to go with one of the all-in-one ETFs available to Canadians. Using the all-in-one ETFs allow us to go from a multi-ETF approach to owning one ETF only. Ahh the simplicity!
I do have a rental property but it does not generate any income, it merely breaks even. The market has dropped where it is located and does not hold any equity either. Thus I have mixed feelings on rental properties.
Q6. Did you utilize a financial advisor for your investments? Why or why not?
I did at first and I don’t regret it one bit. I am sure the fees I paid were much higher than they needed to be much the support to make the investments and someone to answer all my questions truly helped. Then once I learned more I stop putting my money with them and eventually started to transfer out the funds to my current holdings.
Q7. Tell me some of your financial mistakes. What have you learned from these mistakes?
Wow, the amount of money I missed out on from not capitalizing on employer matching RRSP programs is crazy. There was stretch that I didn’t even buy any RRSPs and then when I did I didn’t maximize the amount needed to get the full employer portion.
Tawcan: That’s why you never say no to free money. Make sure the enroll in your company’s RRSP, especially if your employer is matching your contributions.
Buying new cars, RVs and streetbikes; this was such an impact on your monthly payments and then the losses from depreciation, Of course add in trading in those trucks every 2-3 years with negative equity and then don’t ask about the rims and tires I spent money on lol.
Buying market exempt capital raising funds that I invested in, a few of them had weird internal fraud and the entire portfolio was lost. The same happened for a handful of Canadian oilfield stocks I bought that lost over 50% in value, which I sold for a loss.
Lastly is my condo investment property. I bought it as I thought the diversity would be good for my investments. I bought at the height of a boom and bought new. Then the local economy suffered a steep recession, which still exists today. This has cut my rent income substantially and also lost all the equity I built up in the value.
Q8. Do you take advantage of TFSA and RRSP? Do you plan to withdraw early from RRSP before age 71? If so, what are your early withdrawal strategies to minimize RRSP tax penalties?
Before I left work I had maxed my RRSP and my TFSA out completely. In the past 3 years since then I have not added anything to them as I no longer have an income. I saved up enough cash for the first 2 years to live off and then this 3rd year I have begun to pull out my dividends each quarter as cash into my bank account. I plan to do this for as long as possible and if I get enough supplemental income I may take less or if the market is suffering I may end up having to work more.
I have not factored CPP or OAS into our FIRE withdrawal strategy or the significant equity in our home. These act as our contingency fund and safety buffer when we reach 60 so I know they are there but don’t calculate them into anything.
Q9. If I have to categorize you, you’d fall into the lean FIRE category. Why does lean FIRE work for you?
We have worked extremely hard at driving down our expenses to a point that no matter what faces us we can easily get by with little or no income. I always tell those that ask about finances is that the easiest way to make more money is to spend less. I pulled the trigger early on FIRE and getting by on just enough because I knew that I would be fine with working down the road in the LEAN times if needed.
I also pulled the trigger immediately because the fall before I FIREd both my Uncle and Dad passed away unexpectedly. I was 42 , my uncle 52 and my Dad was 62…there was something about those numbers that made the decision an easy one. It all culminates in the Stoic phrase that guides a lot of how I decide on things and react to the world around me; “Memento Mori,” or translated in English, “Remember you must die.” I like this quote that sums it up.
“Let us prepare our minds as if we’d come to the very end of life. Let us postpone nothing. Let us balance life’s books each day. … The one who puts the finishing touches on their life each day is never short of time.”Seneca
Q10. Your wife has a small retail business and has done well. Are you tapping into your investments today? Or are you relying on the income from the retail business? If you are tapping into your investments, what is your withdrawal strategy?
At the tail end of 2019 my wife wanted a big change and took a position at the local bank. She ran our retail store for nearly 20 years and was looking for a change. She still does all of the paperwork side of the business but now I have started working a bit. I walk to our store, which is 2 blocks from our house; I open for the day and get things rolling. I hang out for 2 hours reading different blogs, drinking my coffee and helping customers if they come in. It is pretty sweet for me and so relaxing.
This allows me to only pull my dividends from RRSP right now and a small part time minimum wage the wife pays me from the shop for those 10 hours a week. The beauty of FIRE is the flexibility to do what you want in the moment. Right now that involves me helping the wife at her store, making some side hustle money off my outdoor-based writing and photography and then my wife’s income picking up the rest.
Tawcan: Sounds like you have a pretty chill FIRE life! That’s so awesome!
Q11. Where do you see yourself in 5 years and 10 years from now? What are the top three things you are looking forward to?
In this time frame I hope to have sold the rental property and hopefully have sold our retail business. We both really enjoy owning and running businesses so possibly a coffee shop could be on the radar. Done properly there is a nice passive income potential to small businesses. That being said it is more like minimum wage lol so don’t expect to be on easy street.
I don’t see myself doing much different than what I do right now. I hike, bike, backpack and travel when ever I want. The big difference is I would have my wife with me, I would love to show her all the places across the United States and Canada I have been. I guess an epic road trip for a month or two.
Outside of that we really enjoy our normal daily life, we are so content just being in the moment. Walking the dog, enjoying local coffee shops and just hanging out at home with each other.
Q12. Tell me about your rationale of getting a Nisan Leaf. What made you switch to an electric car? Has this experiment worked well for you?
I love the environmental aspect side of electric vehicles and the awareness of sustainable and eco-conscious living that it brings to every day discussions. I had been a fan of EVs for some time and was paying attention for a couple of years but the cost was too high for my frugal mindset. As the used market developed as more EVs came on to the market the chance to buy one changed.
I looked at the mileage I was driving in my existing vehicle and maintenance costs. I then took this amount and compared it to the purchase cost of a used Nissan Leaf. The math worked out great and the fuel savings and lack of maintenance costs allowed me to make my bi-weekly loan payment at a net amount of $20-30/dollars. I chose to take a loan because the savings offset the payment and did not want to take any money out of my investments that were earning returns.
As for owning an electric car, aside from the environmental impact the performance and cost of ownership savings is awesome. I am a converted vehicle owner and now try to convince anyone I know about them. I wrote a follow-up after 6 months in this blog post and now have had the car for 18 months.
Q13. Tell me about how you taught your kids about money. Do you talk about money openly at home?
I try to explain every bit of both our personal and business expenses with the kids. I have shown them how I realized that big fancy vehicles and houses don’t mean anything. Finding contentment with what we have, working hard and saving should be our priorities. Of course they are young adults and I reflect on how I was at that time. I spent money on silly things and also had a lot of fun. This is something I don’t want to deny them but I continue to be preaching frugal thoughts to them. They both live at home still and I don’t charge rent but do expect them to pay for their own food, cover utilities and help out. This is working out great for our household and I have told them there is no rush to leave, I think our modern society fragments families too much. I financed both of their vehicles also through my personal credit lines and they have paid back more and also faster than they would have done in a conventional bank. The next hurdle will be getting them saving more money but at least I am happy my son has maxed out his employer matching RRSP, he has me beat by 15 years on doing that lol so he is off to a great start.
Tawcan: That’s great to hear that your son has maxed out his employer matching RRSP! And I totally agree with you that modern society fragments families too much.
Q14. How are you planning to fund your kids’ post-secondary education? Are you planning to pay for their educations in full? Or will the kids need to cover a portion on their own?
I started the kids with RESP accounts as soon as they were born. I added money every year and built up a nice little amount for them. My son decided to be a heavy-duty mechanic and to take his training through the trades program here in BC. This program paid for his first year’s tuition as he actually went to university instead of grade 12. It is a very cool program and any parents in BC should look into it, especially as it saved us $5,800 in tuition. Then for the subsequent years we withdrew an RESP EAP amount to cover his 2nd and 3rd year tuition as a journeyman. He is now 21 and has been working for 3 years and will be taking his final 4th year courses soon.
Our daughter has just graduated and is unsure of what she wants to do right now so the funds are still sitting in the family fund. If she chooses not to go to post secondary we will then just do a capital principle withdrawal of the remaining cash and put into my RRSP.
I don’t share openly how much I have in my investments or how much I made during my working years. I do let people know it is a significant amount and that during my career I was lucky to make well into the 6 figures. What I do tell them though is that the habits and strategies I employed is applicable to anyone (outside of systemic societal issues). I speak about financial independence to anyone that asks and always try to help. I would write more about it on my blog but the content of my website organically went a bit more towards outdoor pursuits. Therefore any writing on my blog focuses more on lifestyle choices around eco-frugality, simple living and minimalism.
Tawcan: I think it’s important to write about topics other than financial independence retire early. FIRE is just a small part of our lives, we should really focus on lifestyle choices.
Money because of our society in North America has oddly become a secret that many keep. It is in part probably because of the status symbol that is attached with it, people don’t want to be judged for having too little and equally some for too much. I think if we shared more, educated students instead of selling to them and change how money is perceived we would be much better off.
Q16. What would you tell someone like me who is trying to achieve financial independence? Do you have any advice for financial independence retire early?
Work hard and save hard but ensure you focus on work life balance. As mentioned above this is achieved by focusing the most on your expenses and not getting caught up in our heavily focused consumer based society. It is ok to purchase things but do so as if you owned a small business, will this achieve the highest return on the investment? Will this help me achieve my goals? The hours of your life are finite, don’t waste them indiscriminately.
Honestly it would be to share the biggest benefit I have found with the FIRE movement, which is the side tangent of personal philosophy reflection. For me this equally reflect on our mindset as we do our finances and is accomplished via Mindfulness. Thus the name and inspiration of my blog; “Mindful Explorer” speaks to exploring a new way of living which includes simple living, financial independence and mindfulness that you find in Stoic and Buddhist teachings. This mindfulness allows us to put less emphasis on consumption and money to walk a life focused on making the most of our finite time roaming this planet.
Cheers Chris for this great in-depth interview. I really like that you put so much focus on lifestyle choices around eco-frugality, simple living and minimalism. We shouldn’t look at FIRE as a fad. Rather, we should incorporate FIRE into our day-to-day lives and embrace it like a lifestyle. When we start being frugal and environmentally conscious by cutting back consumption, this will create a better Earth for future generations.
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
- FIRE Canada Interview #12 – Being a valuist
- FIRE Canada Interview #13 – Always live a rich full life for today
- FIRE Canada Interview #14 – Lifeunscripted
- FIRE Canada Interview #15 – The first million is the hardest
- FIRE Canada Interview #16 – Lean FIRE
- FIRE Canada Interview #17 – Anyone can retire within 20 years
- FIRE Canada Interview #18 – Dividend Powerhouse
- FIRE Canada Interview #19 – Mini-Retirements