Take care of your future one step at a time

It’s hard to believe that it is September already, meaning that three quarters of 2019 is almost gone. Over the next couple of days, Baby T1.0 will start Grade 1 and Baby T2.0 will start pre-school. When Baby T1.0 was born, many people told Mrs. T and me to enjoy the baby stage, because with a blink of an eye, time will pass and they would be teenagers. While both kids have a long way to go before they become teenagers, I can totally understand the meaning behind the statement now.

It is true, time does pass by quickly.

The other week, I went down to Portland and San Jose for work. Since Baby T1.0 stayed at my parents’ over the weekend, he didn’t get to see me before I left for the trip. Since the trip was three days and I didn’t land in Vancouver until almost midnight on that Wednesday, he didn’t see me in person for close to five days. While I was on the road, I Skyped with my family and Baby T1.0 kept telling me that he missed me. It was a tender moment. It also made me wonder, when he is a teenager, will he say the same thing? I sure hope so!

Per my post last week, I have waited for a new Tool album for over 13 years (the album is FREAKING AWESOME in case you’re wondering). This experience really made me wonder about what time means exactly. What I have realized is that time is a completely made-up concept. It’s not something young kids grasp. The concept of time has to be learned. Even for Baby 1.0, he understands days and weeks now but he is still learning what a minute, half an hour, or an hour means.

Looking back, a lot has happened to me in the last 13 years…

• Graduated university with a bachelor’s degree.
• Started working at a high tech company.
• Visited Japan for the very first time. Then went back to Japan many times since.
• Visited China for the very first time. Then visited China many times since.
• Started saving. Started learning about the benefits of RRSP.
• Started investing using mutual funds, without understanding what MER meant when it came to total returns.
• Net worth started trending upward.
• Opened a TFSA and put all my money in a GIC.
• Met Mrs. T and we started dating.
• Changed my job title a few times.
• Experienced excruciating back pain for close to a year. Did a lot of physio to get better.
• Asked Mrs. T to marry me at her birthday party, in front of a bunch of our friends. I surprised everyone.
• Had three weddings for under $9,000.
• Spent a two-week honeymoon in Italy.
• Had a financial epiphany and changed our investing strategy. Got out of mutual funds and GICs, started investing in dividend paying stocks and index ETFs.
• Increased our net worth by over 250% in 5 years. Our net worth has continued to grow.
• Explored Alaska with Mrs. T on a seven-day cruise.
• Saw Baby T1.0 born in front of me. Became a dad.
• Went through some newborn struggles.
• Moved from an apartment in Vancouver to a house in the suburbs.
• Changed my career path from engineering to marketing.
• Travelled to Denmark multiple times.
• Started this blog with the goal to chronicle our financial independence journey without knowing what to expect. Then really connected with the community and met with some great people in person.
• Travelled to Japan with Mrs. T and Baby T1.0 and showed them around the beautiful country (Mrs. T was pregnant with Baby T2.0 then).
• Caught Baby T2.0 with my hands. It was a magical moment.
• Went to FinCon and connected with many fellow money nerds.
• Visited Taiwan with the entire family.
• And so on and so on…

As I looked back the last 13 years, I realized that it was more than a third of my life. 13 years felt really long but at the same time, it went by like a blink of an eye.

With a blink of an eye, another 13 years will pass and I’d be close to 50 years old.

For me, it’s crazy to even think about that!

As I reflect, I realized that we need to take charge of our lives. Don’t put something off and tell yourself that you’ll do it tomorrow. If you wait till tomorrow, you will probably put it off to the next day, and then the next day after that. Instead, commit to yourself by taking action today. Make a change today, however small it may seem.

That’s exactly what happens with finances. Small changes add up over time and can be life changing.

You certainly do not magically become a millionaire overnight (lottery is one way to do it, but the chance of winning is extremely unlikely). It takes daily actions and commitments to save what you earn, invest what you saved, and let the money work hard for you.

A few readers recently pointed out that we had doubled our dividend income in about three years. They pointed out that three years ago, we were receiving about $1,000 in dividend income per month. Now three years later, we are getting about $2,000 in dividend income per month. These readers asked me whether we have received a giant windfall, because it meant we had doubled our portfolio in about three years’ time, assuming our portfolio yield rate was the same over this period.

Contrary to these readers’ beliefs, no, we did not receive any windfall.

Rather, we have been saving money every month and putting that money to work.

The long bull run has certainly helped as well.

But as I looked at our dividend income history and portfolio gain, there was no secret or black magic. All it took was disciplined saving and investing, and of course, time. $20k saved and invested can grow to $26k in three years at an annualized 10% return. If you save and invest $20k each year, over three years, at an annualized 10% return, you would end up with almost $73k. Compound interest is really an eighth wonder of the world!    

So, if you are just starting out on this journey called financial independence or if you are in debt and trying to get out of it, don’t fret, don’t get discouraged. It takes time.

To me, the financial independence retire early movement isn’t about financial independence or about early retirement.

Rather, I believe the FIRE movement is about changing your financial habits so you can have a better financial future. People and the mass media should really focus on how to build a better financial future rather than stories about so and so retired at 35, or so and so retired before 40. But I get it, an article about retiring at 35 and travelling around the world is a lot more appealing than having a better financial future.

Even if you have doubts about the FIRE movement, just remember, at its core, FIRE is about creating a better financial future. And when you create a better financial future for yourself, possibilities open up for you and you never know what adventures have in store for you!

Cheers to the infinite possibilities!