For anyone new here, this interview series will cover people within the FIRE community who are on their way to becoming financially independent, have already reached financial independence, or who have retired early. If you are reading this and you are financially independent, retired early, or close to reaching these major financial milestones, please reach out to us! You can check out the previous FIRE Community Guest Interviews here.

Today, we have the pleasure of having a former CEO turned early retiree on to share their journey to FI. What I love most about this interview is that it showcases that even though you may make a high income, there’s more to early retirement than just bringing in a big paycheck.  The mental piece to it all is so important and understanding the mindset required is half the battle.  It’s always nice to have fellow early retirees on to share their insight as to how they got to where they are today. I love seeing the words “flexible” and “flexibility” throughout the interview as that really is the key to a successful early retirement.

I hope you appreciate these responses as much as I do and hope you can relate to these guest interviews in some sense to see that there is no cookie-cutter way to FI. If you have any follow up questions or would like to get in touch with Accidentally Retired, please check out their website Accidentally Retired, reach out via their contact form, or leave a comment below!

Without further ado, take it away AR!

1. Can you give us a little background of who you are, what you do, and how you became interested in personal finance? How did you discover the idea of financial independence?

I am an entrepreneur and former CEO, who has been Accidentally Retired for a year and a half now. 

The long and short of it was that after running my company for 10 years and working for a public company for 5 of those years, I was ready for a new challenge in life. And even more, I felt like I wasn’t really living the life I really wanted.

I have always wanted to retire early. In fact, it was something that I was thinking about even in my adolescence. Why work when you can play right? 

So I decided early on that the path to early retirement was going to be via entrepreneurship. I knew that if I could build a big enough business, I would likely make enough money to call it quits whenever I wanted. 

So the idea of early retirement had always been with me, but it took me a long time to put two and two together to really figure out the nuts and bolts of how it all worked. I had just figured, if you make enough money you’re set. 

But I was wrong. After we sold our business, we still weren’t set. I had to put my head down and continue to work to grow the business from within a large public company. And it was probably a few years after that when I really started to take things more seriously and follow more personal finance blogs. 

2. When in your journey did you realize financial independence was actually possible?  Was that the original goal at the beginning?

While retiring early was always my big goal, I didn’t have a real concrete plan for it. 

It wasn’t until I was a CEO, that I was starting to seriously think about my exit plan. I wanted to make sure the business was in good shape and in good hands before I left. 

But on the flipside of that, I started to read personal finance blogs, and then eventually I began to run retirement scenarios on a self-made spreadsheet. 

It became clear that even after selling my company and working as a CEO, I would need a few more years for early retirement to become doable. 

But then fate stepped in. Our brand was divested from the public company we were working for to a private startup. Contract negotiations weren’t going well and I just had this gut feeling that it was time to leave. So I negotiated my exit, and decided to take a mini-retirement to figure out what to do next.

3. To help put things into context, if you are comfortable sharing some numbers, what was your savings rate, FIRE number, net worth, salary, how many hours a week did you work, etc?  How long have you been working towards financial independence and where are you today? How were you able to become a CEO at such a young age?  

My wife and I have decided not to share our personal financial information online, but I have shared our early retirement withdrawal strategy. 

As discussed above, I didn’t make as much money as you would think from the sale of my business. I was a minority partner and we had likely sold about 5 years too soon. 

Yet even despite that potential error, I made the most of what we did make, saving every bonus, distribution, escrow payment, as well as maxing my 401(k). 

Our combined savings rate was roughly about 15% for the first 5 years after college working in more entry level positions, but then as I started to make more money in the later years, it ballooned up to 55%. 

I’ve always believed in having a strong work/life balance. That is why I typically never worked more than 40 hours a week, even as part of a small 3-person team, all the way up until my CEO days. 

My path to becoming a CEO was pretty straightforward. By starting my own businesses and then joining two co-founders as a third partner, it made it a pretty easy path to becoming CEO. I am sure there are many other ways to do it, but starting a business is the easiest way to become CEO. 

Don’t get me wrong, there is a big difference between being a CEO of a small business making $100K a year to a $15M company, but the path is simple. Grow with your company, and build your leadership skill set as your company grows. 

Honestly, the title is just that – a title. People respect those who lead, empower others, and who can get things done. Ultimately, that is what I tried to do whether I had the title or not. 

4. As someone who reached financial independence (at an early age to boot!), how has life changed since you stopped working?  What does a typical day/week look like for you? How long has it been and are you bored yet?

Initially, I started off by taking a mini-retirement. I wanted to take six months off to travel, golf, and spend time with my wife and kids. 

It was during that time that I started to really dig into personal finance even further. I read The Little Book of Common Sense Investing by John Bogle, and I realized that I was closer to my early retirement than I had thought. I just had to get a little creative. 

In some ways life hasn’t changed much at all. I think this is likely due to having two small kids. You still have to be a parent and my life still revolves around my kids and their schedules. 

We typically drop them off at school, then we workout either by going on a long walk or doing some sort of YouTube workout. Then I either run errands or sit down at the computer and write on AR or manage the other website I invested in.

I’ll be honest though, these days, I have ended up back to working quite a bit for an average of 3-4 hours per weekday between AR and my other website.

But the great part is that I can take vacation whenever I want, I can stop working whenever I want, I can support my wife if she is having a bad day, etc. 

In other words, I have flexibility that I did not have while working full-time.

My wife and I pick up the kids from school together and I’ll typically take them on a bike ride or to the park or something like that. 

That is a typical day, and in general, I really can’t get enough of it. 

5. Do you feel deprived?  Do you feel like you are sacrificing and missing out on life?  How would you say your mindset has shifted throughout your FI journey?

No. I can’t claim to feel deprived in any way. I reached FI through entrepreneurship and doing things that I was passionate about. Now, I get to focus on family and continuing to explore my passions. 

But there definitely has been a mind shift. I’ve taken my finances a lot more seriously. While I previously had an investment advisor, I now manage my own portfolio. 

Previously, I thought that investing in the stock market was too complicated for the average joe, even a CEO. Boy was I wrong! 

Once you educate yourself on a few things, and create a plan, investing in Index Funds really couldn’t be easier. 

6. Do you use a budget?  Do you track your expenses? Do you track your net worth? If so, how often do you update these?

We’ve never really had a budget. My wife and I always stuck to the philosophy of making sure to save as much as we could for the future. No matter what we focused on just saving for the sake of saving.

In the early years that was 15% when we were both out of college and not making too much. But as our income grew quite significantly, we still made sure to spend wisely. I maxed out my 401(k), and we lived off only whatever was left over, with bonuses and other distributions all flowing into investments. 

Now, in early retirement, we have more of a budget, but we still aren’t sticklers for it. We save money where we can and we spend where we have to. It helps that we’ve sort of always lived this way. 

All of this gets monitored monthly in Personal Capital, and tracked in my net worth tracker spreadsheet.

7. What are some of the more unique/uncommon ways you’ve cut down costs? 

I wouldn’t say any of this is unique, but here is how I cut costs:

• I am my own handyman
• I am my own landscaper
• I do my own pest control
• I am now my own financial advisor
• I was my own security install technician

If there is something that I can do, and I have the time, I do it. 

My wife and I also both sell used items that we don’t want/need anymore on ebay, Amazon and Poshmark. 

Lastly, we like to prepay on anything that gives you a discount, so things like online storage, car insurance, security, anything that offers a 10% discount or more, we just prepay it to save the money.

8. What is your investment strategy? Do you invest in index funds, dividend stocks, real estate, other businesses, etc.?  Has your investment strategy changed over the years?

My investment strategy has certainly changed over the years. 

At first, it was to rely entirely on the advice of my financial advisor. But after my mini-retirement that all changed. 

So now, I’ve spent the last two years converting all of our investments from expensive mutual funds and a portfolio of 80+ individual stocks, to a three-fund portfolio. I really want to keep it simple and not overly complicate things. 

In my mind, there is no reason to gamble on individual stocks when you’ll beat the market and the average investor with Index Funds.

My one unique investment strategy has been to go out and acquire a small web business. After running various calculations and looking at real-estate versus websites, I came to the conclusion that websites were a better investment than real estate for me. So I spent much of 2021 looking for a website and I eventually purchased one in October 2021.

Of course owning a website is not very passive, and so I’ve been working a few days a week on the project to get it to where I want to be revenue wise. Once there, I’ll shift to outsourcing a majority of the work and operating it a bit more passively.   

9. Did you take advantage of tax advantaged accounts offered to you? Can you please share your withdrawal strategy in your post-FI world?

Yes! Thankfully one of my business partners was pretty chatty and he was talking about maxing his 401(k) pretty early on after we sold our business. So I did the same, and after 5 years of maxing, I should be on track to have about $1.4M in that account by the time that I can withdraw. 

The reason why I purchased a website rather than real estate, was entirely to help fortify my withdrawal strategy. We largely lived off cash reserves for the first 1.5 years of retirement, but I didn’t feel like that was sustainable or safe to do. 

So we purchased the website with the hopes of bringing in more steady cash flow to offset sequence of return risk and allow us to build up our investment portfolio without needing to draw down on it. 

10. Speaking of withdrawals, what is the withdrawal rate you use when you withdraw from your portfolio?  Are you a fan of the “4% rule” or something else?  Why?

I love the simplicity of the 4% rule, but let’s face it…it doesn’t work on a long-term horizon. I love the work that Karsten at Early Retirement Now has done to help early retirees manage sequence of return risk. 

So my strategy is to stick to a maximum of 3.25% withdrawal rate now (hopefully less as the web business generates income), and we’ll also be using an equity glidepath to further mitigate risk and allow for higher withdrawal rates in the future if all goes well. 

But most of all, we simply want to remain flexible. If I have to go back to work and get a full-time job, I will do it. If we needed to more aggressively cut back on our expenses for some reason, we could do that as well.

11. How do you handle health insurance now that you are no longer working?  

For the first 18 months, we stayed on my former company’s healthcare plan using COBRA. We could have even stayed on it for another year thanks to New York state law, but we decided that we’d rather take the risk and switch to a marketplace plan.

So we are now on a High-Deductible Silver Plan with an HSA. As soon as we started the plan, I immediately maxed out our HSA for the year. In an ideal world, we’ll continue to do that for as long as possible and pay any healthcare costs out of pocket and use the HSA as an investment/tax savings vehicle. 

12. If you could go back in time and change things, what would you have done differently?

Honestly, I am not sure. First, it would have been nice to hold onto our first primary home and have rented it out. This would have gotten us started with a little bit of cash flow, but perhaps added stress and headache as things were starting to wear down and need constant repairs. 

Secondly, I regret not maxing out my wife’s 401(k) more than we did. At the time, we were young and worried about not having a big enough emergency fund. But in retrospect, we could have really supercharged things for her had we been more aggressive. 

My advice to anyone in their 20s. Max out your 401(k). You can always back off it later and pivot to a taxable brokerage, but with built in tax savings and company match it is a really easy way to supercharge your wealth if you start early and allow decades for compounding to do it’s thing. 

13. Has discovering financial independence changed how you view life overall? 

FI has brought me back to a more conscious state of living. I always wanted to FIRE, but didn’t plan it out well. By the end of my CEO days, I was just biding time, but not really sure for what. Now, I have time to be more introspective. I read more, I think about my life more, I am less reactive, and more in charge of my life. 

14. Have you come out of the FIRE closet yet? Meaning, do your friends, family, co-workers etc. know that you’ve reached financial independence?  If so, how did you bring it up and what were their reactions?  If not, why not?  Why do you struggle with this conversation and why do you feel that money is such a taboo topic?  

Haha no. I think my friends and family have a general idea that we are doing well and I possibly don’t NEED to work, but we try to downplay it for various reasons. This was also part of the strategy for investing in a web business. We can talk about that with friends and family, and use it as a bit of a shield.

The main reason we aren’t open is because we are fans of The Millionaire Next Door mentality. We’d rather not flaunt where we are at, and it’s not that I feel finances are too taboo, but I do think that other people’s feelings and attitudes towards us will change. So on one hand I don’t want to be shady about things, but on the other, I have seen some legitimate changes in attitudes from people once they know the behind the scenes.

15. What pieces of advice would you suggest to someone who is just starting out or someone who is working toward reaching financial independence? 

Create a better plan than I did. I believe that had I planned better, I could have reached FI sooner. I put all of my eggs in the entrepreneurship/startup basket. While it did work out, it was risky. 

Start investing early in your 20s. Make a plan. Write it down. Stick to it. 

But also, don’t get too stuck in the weeds. You have to live your life too. So find the right balance between saving for later and living in the now. 

16. What does the word ‘success’ mean to you?

I believe that success is simply the ability to be consistent over a long period of time. 

Whatever it is that you are doing, the path to success is pretty simple. Just keep going. Keep doing great work in your niche, in your industry, year after year. 

It took 10 years for my former business to really become successful on paper (even after we sold it). Success takes more time than you think. But anyone can achieve it. 

And another thing – my success does not limit your success. It never has and it never will.

We can all be successful. 

Let’s lift each other up, instead of tearing each other down.

17. Are there any books, blogs, or podcasts that you would recommend for our readers to check out?

I try to recommend as many blogs and books as possible over at AR. I also try to review many that I read, though admittedly I am backlogged! 

If you are reading this you’ve probably read may of the finance books, so I’ll recommend a few non-financial:

• • Essentialism: The Disciplined Pursuit of Less by Greg McKeown
  • Sapiens: A Brief History of Humankind by Yuval Noah Harari
  • The 15 Commitments of Conscious Leadership by Jim Deethmer, Diana Chapman and Kaley Klemp 

18. How can people get in contact with you?

You can head over to my blog, Accidentally Retired and fill out my contact form. 

You can also hop onto Twitter where I hang out from time to time. 

Lastly, if you want to subscribe to my email newsletter, you’ll get my content delivered to you typically twice a week. 

Cheers!

• I appreciate how Accidentally Retired strived for a work-life balance over the years.  I can only imagine as an entrepreneur and starting up your own business, it’s probably very easy to let work become an all encompassing thing.  Being able to separate work from play is a very important skill.
• Boy can I relate to the fact that life hasn’t really changed because of the kids.  I like to joke that I went from a sweet part time shift work gig 2-on 8-off to now working non-stop shift work 365 days a year as a full time parent.
• It’s interesting hearing that Accidentally Retired works for a few hours a day while the kids are at school.  I can see something like this happening to us down the road once both kiddos are in school.  Right now I “work” around 10 hours a week between coaching and the blog.  I can see Nic picking up a ~12 hour/week snow shoveling side-gig over the winters and I’d go work at a bakery, coffee shop, library, etc. As Accidentally Retired words it so well, the key is maintaining flexibility to ensure maximum happiness.
• I think one of the things some people miss is that while you’re busy working toward reaching your FI number, stressed with work deadlines, etc it’s easy to outsource things when problems arise.  But when you’re retired, you now have the time to research how to fix things yourself, shop around for sales, reduce costs by doing things yourself, etc that you likely end up sending less money in retirement for these one-off problems that arise.  Similarly, you now have the time to post pictures of items to sell and make a little money vs donating a huge trunk of things (absolutely nothing wrong with that!) because you didn’t have the time or energy to post things separately.  These are all ways to help lower your withdrawal amount.
• Interesting to see how Accidentally Retired ended up buying a website to maintain as part of their cash flow in early retirement!  I personally do not see any monetary benefit to running a website lol but I also do not focus on SEO, increasing page views, adding subscribers, etc.  To me, this would be way more than a full time job, but to those who understand how to monetize websites it could be a cool side hustle to take on.  Relatively passive once it’s been set up, flexible hours, can do it anywhere, etc.
• We share similar thoughts on withdrawal rates and plan to average 3.25% or less to start things off and also take part in an equity glide path t get back to 90+% equities over time.
• Agree that anyone reading from the States should try to focus on maximizing your annual tax-preferred accounts (401k, IRA, HSA).  Thankfully in Canada it’s not a “use it or lose it” type system like it is in the States, but still important to try to max them (RRSP, TFSA, FHSA, RESP) out if you can.
• I was talking to a FIRE friend the other day about how FIRE allows you to have the time to think (hi Chelsey!).  Simply think.  What do you want to be, what sort of legacy do you want to leave, how do you want to live your life, etc.  These really are hard questions to answer and it’s strange that so many people simply do not have the *time* to self reflect about such important topics.

Thanks for tuning in and check back next month for the next interview.

We love highlighting other members of the FI community. Please contact us if you’d like to be a part of the FIRE Community Guest Interview series and we’ll see if we’re a good fit!

And in case you wanted to read the previous interviews that make up our FIRE Community Guest Interview Series, here you go!

• FIRE Community Guest Interview # 1 – Empowerment Through FIRE
• FIRE Community Guest Interview # 2 – We Quit Our Jobs To Retire Early & Travel The World
• FIRE Community Guest Interview # 3 – Dividend Investor Reached FI By Living An Intentional Life
• FIRE Community Guest Interview #4 – Pursuing FIRE With Multiple Passive Income Streams in Australia
• FIRE Community Guest Interview #5 – Driving to FIRE Through RV Living
• FIRE Community Guest Interview #6 – From High School Drop Out to Retired at 35
• FIRE Community Guest Interview #7 – Medical Professional Family With 3 Kiddos In The Pursuit of FIRE 
• FIRE Community Guest Interview #8 – Calculated Engineer Family Utilizing Geo-Arbitrage to Reach FI
• FIRE Community Guest Interview #9 – Lessons from a Fimigrant – Let Experience Be Your Teacher
• FIRE Community Guest Interview #10 – From Entrepreneur Making $36,000 to Multi-Millionaire In His 30s
• FIRE Community Guest Interview #11 – Hybrid Dividend and Index Investor Who’s Mastering the FI Mindset
• FIRE Community Guest Interview #12 – Proving Financial Independence Is Possible With Kids In A High Cost of Living Area
• FIRE Community Guest Interview #13 – Making An Impact On The Way To FI
• FIRE Community Guest Interview #14 – Badass Momma Knows Her Worth And Became A Millionaire At 36
• FIRE Community Guest Interview #15 – PhD Couple Reached FI at 40
• FIRE Community Guest Interview #16 – Mindful Minimalist Family
• FIRE Community Guest Interview #17 – FIWOOT: Financial Independence Work On Own Terms
• FIRE Community Guest Interview #18 – French Expats Growing Their Real Estate Empire in the US and France
• FIRE Community Guest Interview #19: Money Savvy Teacher With 9 Properties
• FIRE Community Guest Interview #20: Canadian Expat Supercharging His Family’s Path to FI In the Middle East
• FIRE Community Guest Interview #21: Young Retired Couple Have Mastered The FIRE Lifestyle
• FIRE Community Guest Interview #22: Building Multiple Income Streams To Design Their Dream Lifestyle
• FIRE Community Guest Interview #23: A Single Mom’s Journey to FI
• FIRE Community Guest Interview #24: Software Engineer Immigrant Balancing Her Journey To FI
• FIRE Community Guest Interview #25: Late To The FIRE Party – Part 1
• FIRE Community Guest Interview #25: Late To The FIRE Party – Part 2

The post FIRE Community Guest Interview #26 – A CEO’s Accidental Journey to Early Retirement appeared first on Modern FImily.

No need for chit chat, let’s dig right into Part 2 of Late To The FIRE Party’s Interview.  Here we go!

11. Since you’ve recently retired early (congrats!!!), can you please share your withdrawal strategy?

Our withdrawal strategy is dominated by three things: we are ten years max away from starting our government pensions, we have income from an indexed work pension, and we’re aiming to level the taxes across our retirement.

Up to the point we start our various government pensions, our after-tax Comfortable FIRE income level, which now stands at $74K a year, is made up of $35K from the work pension, $36K from our investments (of which $10K is dividends), and $3K from credit card cash backs, and various rewards and rebates.

Immediately I began drawing from my work pension, and despite being able to split this income from age 55, techniques for keeping our total retirement tax bill very low, were closed to us. If we put off drawing from the RRSPs until later in retirement, we’ll pay thousands in extra tax, and likely be hit with OAS clawbacks too. So, to avoid this, our withdrawal strategy requires us to withdraw from the RRSPs early in retirement, bringing our individual taxable incomes up to the upper limit of the 15% federal tax bracket (27.75% with Manitoba taxes); $50,197 for 2022. Any funds withdrawn beyond what’s needed to cover our spending are moved to our TFSAs in January. The end result will be a fairly level amount of tax over the course of our retirement, while at the same time we continue to grow our TFSAs.

If we were to start CPP at age 64, OAS at 65, and UK OAS at 67, and assuming inflation of 6% for 2022, 4% for 2023, and 3% thereafter, our withdrawals will look something like this:

The blue line is our target after-tax income. The difference between the blue and the black dashed line is money taken from RRSPs and pension income that is transferred to the TFSAs and non-registered accounts. The amount from the black dashed line up to the peak of the bars is CRA’s cut.

Based on where we are today, (full-scale invasion of Ukraine, high inflation, stocks and bonds down, GB pound down), this is how our portfolio is projected to change:

The chart shows how our RRSPs, PRIF and LIF are drawn down early in retirement, while our combined TFSAs and non-registered accounts are growing. The growth rate used for our equity/bond portion is 5%, for GICs it’s 3%, and for cash it’s 1.5%.

If we maintain our current spending and gifting level, increasing with inflation, we should be able to leave our TFSAs untouched, providing a significant buffer against changes in legislation, life-changing health issues, and the loss of a spouse.

With stock and bond markets being down these days, we are currently utilizing our cash cushion to supplement the work pension and dividend income. We can operate this way until the start of 2026, at which point, we will likely offload some bonds as per our plan to transition to a more aggressive portfolio.

12. Speaking of withdrawals, what is the withdrawal rate you use when you withdraw from your portfolio?  Are you a fan of the “4% rule” or something else?  Why?

I’m a big fan of the 4% rule. It’s a simple concept that helps get the message across quickly; makes for a great elevator pitch. I push it like a drug dealer when explaining to our children, friends, and strangers at store checkouts. I let them know how FIRE based around the 4% rule can work for them. My eldest son said “of all the dads I know, you’re the only one who tells their kids how not to work”. Having said all that, I do not believe it is a hard and fast rule, and being a firm believer in having a contingency plan, for someone with many years until government pensions come online, I would downgrade the withdrawal rate a little, or build in guardrails, or some other technique to ensure they have reserves to protect against significant negative financial occurrences.

Being moderately close to starting our government pensions allows us to safely go above the 4% rule today, and reduce withdrawals later. If we limited RRSP withdrawals to only what was needed to meet our spending and gifting, our withdrawal rate would average 6% for the first nine years. If we only used funds from the TFSAs and non-registered accounts, then for those same nine years, the withdrawal rate will average 4%. In either case, at the 10-year point, and provided neither of us die early, the withdrawal rate is projected to be just 0.1% thereafter, and even negative if there’s no changes to government pensions, here and in the UK.

As a couple with the latter part of our retirement income based on government pensions, we need to be prepared for the financial hit that will ensue should one of us die early i.e., the loss of the deceased partner’s OAS, UK OAS, a reduction in CPP, an increase in tax, and for Mrs LtoF, a 30% reduction in the work pension. Living expenses are projected to drop by 20%, but this will not be enough to compensate for the income loss, so, the withdrawal rate at the 10-year point would increase to 1.5% for me, and 3% for Mrs LtoF.

13. What are your post-FIRE thoughts/plans regarding health coverage?  As a reference, what did you pay annually or monthly for health related costs when you were employed (be it insurance, co-pays, deductibles, etc.)? What do you estimate your post-FIRE health costs to be per year?  Did you purchase supplemental insurance or are you self insuring?

When we were working, each of us had coverage through our respective employers. I paid $825 a year towards the plan; Mrs LtoF didn’t have to pay anything. Most of our medical and dental costs were 100% covered, including braces for our children. Without coverage, for just me and Mrs LtoF, our costs would have been in the region of $1,300-$1,800 a year, of which the majority would have been for dental.

When I retired, I was able to remain in a group health plan. It covers prescription drugs, physio, dental, etc. mostly at around 80%. The cost is $210 a month, and if nothing changes with our health situation, we’re going to be paying about $1,300 a year more than we’ll be getting back from the plan. Hmm, not such a great deal! I was contemplating leaving the plan until I listened to a very timely episode of the Explore FI Canada podcast: 042: Do You Have a Post-FI Healthcare Plan?. We now feel happy with our decision to join the plan, and we’ll be sticking with it for the time-being.

14. As a parent, have you found that having children has greatly delayed your timeline to FIRE?  How much money have you spent on your children per year (per child)?  What were some of the bigger costs that were worth it and what were some of the bigger costs that were not worth it?  Did you ever set up RESP accounts for their post-secondary education?

By the time we found the FIRE community our children were all working and mostly paying their own way. I’m pretty sure that had we been working towards FIRE when they were young, it would have slowed our journey down a little, but for sure, we still would have reached FI years earlier than we did.

Unlike your amazing tracking, Court, this is an area where we didn’t specifically separate out what we’d spent on the children. I do recall Mrs LtoF always looked for deals on clothes and books in thrift stores. When we were in the UK, many of their toys and bikes were bought used at something called a ‘car boot sale’. As for sports, hockey is crazy expensive, so it was soccer for our children; way, way more affordable.

Our biggest cost that was well worth it, was a two-week family vacation to Florida when they were in their teens. We rented a house with a pool, and visited most of the main tourist attractions, except that is for Disney ($$) as we got the thrills we needed from Universal’s parks. It was the best time we’ve ever had together, and I very much regret that we didn’t do more trips like that.

The main thing that we spent money on that we regretted, was on a small and cheaply made child’s ATV. It was broken more often than it was running.

We didn’t open RESPs for our children, and prior to finding the FIRE community, we didn’t even know they were a thing. Although none of our children went to college when they lived at home, since leaving school they have always had jobs, worked hard, one did an apprenticeship, and today they all earn over $85K a year, so we must have done something right. We’re taking a different approach with our grandchildren and have started individual RESPs for each of them. The money is going into VGRO (80% equity, 20% fixed income).

15. If you could go back in time and change things, what would you have done differently?

Time travel, my favourite topic, and often with unforeseen consequences, so, I’d keep the changes small to be on the safe side as I wouldn’t want to ruin where me and Mrs LtoF are today.

We would have benefitted from a few conversations with an unbiased informed family member or friend who could point us in the right direction for financial success. Someone like you, Court, and many of the other FIRE bloggers out there. The changes we would make include:

1. Learn early about the basics of investing, especially index investing, management fees, and things to avoid. Many years back, I picked up the book The Wealthy Barber, but after reading a few pages I gave up! I just wanted the straight goods, not a story. I should have chosen a different book, more in a style that worked for me.
2. As soon as they are ready, teach our children good personal finance habits, including saving, investing, and what the banks, and credit card and loan companies are all about.
3. Engage an independent fee-for-service financial planner to set us on the right path early, and then engage a second one after arriving in Canada to adjust our plan accordingly.
4. Assess the ‘new’ house more critically: As you saw, we’ve had to spend a fair amount of money on our current house to bring it up to a decent standard, and as we did most of the work ourselves, it used up a huge amount of our free time too. So, before making an offer to purchase, I would meticulously (but quickly) calculate what was needed in both time and money to fix up the property. I would also look more closely at the services available, such as, a decent internet connection, access to public transportation, and bikeable roads and paths.
5. Move less often. Two of our house moves could easily have been skipped. So, we would think more about why the move is necessary, and ask ourselves if it will really give us what we’re looking for, and if we don’t know what we’re looking for, don’t move.
6. Sort out our investments before leaving the UK: Consolidating our UK RRSPs was complicated and time consuming. The asset allocations could have been better too. My investments were way too conservative for the time we had to retirement, resulting in my UK RRSP’s value being 35% less than Mrs LtoF’s for the same money invested.
7. Join our respective employer’s share purchase plans on the first day we became eligible, and at the maximum rate to receive the maximum employer match (free money).
8. Open RESPs (more free money) for our children to plant the seed for further education as an option, even if they didn’t choose to use it until they were in their early 30s. I didn’t realize RESPs were so flexible until I listened to two of the Explore FI Canada podcast episodes: All About RESPs – part 1 and part 2.
9. Contribute to my RRSP as soon as I hit that higher tax bracket. I consider the difference between the 43.4% taxable part of our income minus the 27.75% we pay today as free money (albeit taxable money).
10. Open TFSAs as soon as they become available, and siphon our company shares to the TFSAs when it can be done without paying a penalty i.e., when they have vested.
11. Change vehicles less frequently, and never lease.
12. Don’t buy what we “really” don’t need.

16. Has discovering financial independence changed how you view your job and life overall? 

Yes, it did. Prior to discovering FI, I was fully engrossed in my job. I had no thoughts of retiring, no plan, just work. If I hadn’t found the FIRE community, I’m in no doubt that I would still be working today, and perhaps in a few years, suffering from a stress related illness. My view of my job didn’t change as I believed the work was important to many people, but when we became FI, I did start to feel less driven, and that bothered me. This feeling meant that RE was a necessary next step.

Since retiring, neither of us have experienced any sense of identity loss, or problems with not having things to do. We have so many good things to keep us busy, we don’t need work anymore.

I’d just like to add that without the distractions of work, I’ve become much more aware of the issues around the world, the conflicts, and the disastrous changes in climate. It’s important that I try to manage my consumption of such information, but also support actions and groups that bring about positive changes here on this small oasis in space.

17. Have you come out of the FIRE closet yet? Meaning, do your friends, family, former co-workers etc. know about your financial independence goals?  If so, how did you bring it up and what were their reactions?  If not, why not?  Why do you struggle with this conversation and why do you feel that money is such a taboo topic? 

Mrs LtoF and I have been cautious about flaunting our exact financial position. If people don’t ask, we don’t tell – you asked!

I’ve talked extensively with our children, their partners, and also, when working, with close co-workers about the FIRE community, the 4% rule, low-cost index investing, and achieving FI and ultimately RE, but I never mentioned our financial goals or net worth. No one ever asked where we were on our journey, or how much we needed to be in a position to retire. I think the reluctance to ask stems from a societal taboo around talking about money. Money is clearly a sensitive area for many people. It’s very personal, and seems to be society’s main measure of one’s standing amongst others. It also exposes many bad behaviours, poor judgement, and lack of control.

We’ve benefitted from a steady run of good luck, or perhaps just no significant bad luck, and likely both. As we know, not everyone gets the same breaks, financially, healthwise, or in relationships. The bottom line is, we don’t want to make people feel bad about their own situation, but at the same time, I’d be really happy to help them turn things around where there’s a willingness to make some changes.

In general, I don’t have an issue talking about money, and in fact, Mrs LtoF occasionally insists that I don’t talk about it every time we meet someone. My impromptu FIRE presentations have for sure had an impact on a few people. A number of co-workers told me how they had made changes in their lives after being subjected to one of my FIRE talks. I’ve also given away books on personal finance and FIRE where I suspected it might be well received. I also, of course, point them to FIRE related websites, blogs, videos, and podcasts.

18. What pieces of advice would you suggest to someone who is just starting out or someone who is working toward reaching financial independence? 

For someone just starting out who has a partner, I recommend they have a conversation to see where their partner stands on the idea of working towards FI. Consider sharing some of the video stories of other couples who achieved Fi and retired early. Once you have a sense of their enthusiasm for the idea, proceed accordingly.

For those with or without a partner just starting their journey to FI, they have a choice, gather all the required knowledge and build their financial plan themselves, or, engage a fee-for-service financial planner who understands the FIRE community. I pursued the former path, and it took a huge amount of my time, literally hundreds (many hundreds) of hours to learn, build and model everything I felt we needed to be confident we could achieve our goals. I’m not saying that doing it all yourself is the wrong way to go about it, but just know there’s a vast amount to learn and implement, and paying for a little help could get you moving in the right direction much sooner, and also help avoid costly mistakes.

For someone who is already working towards FIRE, I’d say “stay the course”, and suggest they keep reading the blogs and watching for ideas they can integrate into their own plan. If the FIRE path stops being fun, ease up on yourself and see if Slow FI is more to your liking.

Where someone is a member of a work pension scheme, whether it’s a DC or DB plan, learn which parts of their compensation count toward building the pension and attracts the employer match. Then, when negotiating a pay increase, either themselves or by directing their union, focus on increasing the pensionable side of their compensation, even rolling in bonuses and overtime if possible. Also, for anyone in a DB plan, retire on the day after a long weekend; that’s an extra four days in the plan for no extra work (assuming they do little work on their last day).

For those who haven’t already seen their investments take a massive hit in a market crash, they should build resilience by expanding their knowledge and understanding of past crashes and the subsequent recoveries. Design the retirement plan with such a market crash in mind – know what you will do when it happens, before it happens!

Also, review my answers to question 15 for the things we’ll be doing differently when our time machine is delivered.

19. What does the word ‘success’ mean to you?

I used to think success meant having a huge house, flashy cars, going to high-priced restaurants, and so on. Today, ‘success’ means something quite different.

Spoiler alert! In the movie Yesterday (2019), which is set in an alternate timeline where The Beatles never existed, there’s a scene that really sums up what success means to me now. I remember it being a ‘that’s it!’ movie moment, because it captured what I was feeling about our life after achieving FI. The main character, Jack (who is aware of the original timeline), seeks out and asks a 78-year-old John Lennon a question “have you had a happy life?”. John says “Very”. Jack suggests “but not successful?”. John replies “I just said very happy. That means successful”. You can watch the scene here.

By achieving FI and changing our mindset around money, we have found contentment and happiness in our lives like we haven’t experienced before; success?!

20. Are there any books, blogs, or podcasts that you would recommend for our readers to check out?

The information sources listed below helped us on our journey. They range from introductions to FIRE concepts to advanced investment analysis.

Videos (in suggested watching order):

• Playing with Fire: The Documentary – This is the trailer. Rent the full documentary, it’s great.
• How ‘Mr Money Moustache’ Retired at Age 30
• Canadian couple saved $1M and retired in their 30s – Millennial Revolution
• A couple with two children went for extreme saving and retired in their 30s – The Frugalwoods
• Another couple who semi-retired in their late 30s – Laura and Brad Barrett (ChooseFI podcast)
• FIRE Starters – Short stories about people who have achieved FI (Court and Nic are in there).
• The Simple Path to Wealth – JL Collins
• The 4% rule
• DIY Investing with Barry Choi on the More Money Podcast
• Investing Demystified (5 videos)
• Investing and stock market crashes
• Common Sense Investing – An entire channel of in-depth analysis of financial matters
• Beware of “free” financial advice and hidden expenses:
  • Retirement Plans – John Oliver
  • The impact of charges on investment returns (just think dollars instead of pounds)

Books (in suggested reading order):

• The Wealthy Barber Returns by David Chilton‎
• Wealthing like Rabbits by Robert R. Brown
• Millionaire Teacher by Andrew Hallam
• Quit Like a Millionaire by Kristy Shen and Bryce Leung 

Individual podcast episodes:

• 1st & 2nd Years of Freedom – A personal experience of early retirement
• The Importance of F-You Money – Financial Independence gives you options

Podcast series (add them to your podcast list):

• Build Wealth Canada – Canadian podcaster
• Explore FI Canada – Canadian discussion and interview style FI podcast
• The Mad Fientist – US podcaster
• The MapleMoney Show – Canadian podcaster
• The MoneySaver Podcast – Interviews of leaders in personal finance and investing
• Mostly Money – Preet Banerjee – Canadian, covering a broad range of financial topics
• The Rational Reminder Podcast – Canadian, in-depth investment discussion, also on YouTube

Blogs and websites:

• Boomer & Echo
• The Blunt Bean Counter
• Eat Sleep Breathe FI
• MapleMoney
• Millennial Revolution
• Million Dollar Journey
• Modern FImily (of course)
• My Own Advisor
• PlanEasy

21. How can people get in contact with you? 

I’m good to answer questions in the comments or I can be reached at: LateToFire@outlook.com

You guys, can you not feel the love that Mr. LtoF poured into this interview?! 

WOWwowWOWwowWOW, talk about attention to detail, I love it!  I also absolutely love all the charts Mr. LtoF included.  This interview easily took multiple days to put together, so truly, Mr LtoF, thank you so much for all the effort you put into this.  This is hands down the best interview I’ve ever read in the personal finance space and I so appreciate being able to connect with Mr. LtoF to have him share their story.  Here were my key takeaways from this interview:

• They were late to discovering the concept of FI yet they still crushed it out of the park once they had their ah-ha moment!
• Surprise, surprise another case of not feeling deprived…! It’s all about figuring out what YOU actually do value and spending your money on that.
• Quote of the interview: “What brings us happiness and joy is, without doubt, being free of the pressures of debt and work, and having the freedom to do what we want on our own schedule.” Boom. That’s what it’s all about.
• Very smart move to have two funds in their taxable account to be able to capture any capital losses to help reduce taxes.
• Wow that UK OAS buyback is pure gold!  What a fantastic job figuring that out!  Of course there’s the opportunity cost of what that $3,950 would be by the time they reach 67 had they invested it themselves instead, but it seems very unlikely that $3,950 could basically buy a $6,660 annuity.  Also genius to incorporate your bonus pay into your salary to boost up your pension!
• We may have to get you away from your acreage so you can get on low cost Public Mobile for your phone and Lightspeed for your internet!
• Things I one day aspire to hear: “of all the mommas I know, you’re the only one who tells their kids how not to work.”  Amazing!!

Thank you again Mr. and Mrs. LtoF so much for being a part of our FIRE Community Guest Interview Series, we really do appreciate it! In our next FIRE Community interview, we’re heading to the States to hear from a former CEO who accidentally retired.

Did you enjoy this interview? Any thoughts or additional questions for Mr. LtoF? Please let us know in the comments below And email them at LateToFIRE@outlook.com!!

Thanks for tuning in and check back next month for the next interview.

We love highlighting other members of the FI community. Please contact us if you’d like to be a part of the FIRE Community Guest Interview series and we’ll see if we’re a good fit!

And in case you wanted to read the previous interviews that make up our FIRE Community Guest Interview Series, here you go!

• FIRE Community Guest Interview # 1 – Empowerment Through FIRE
• FIRE Community Guest Interview # 2 – We Quit Our Jobs To Retire Early & Travel The World
• FIRE Community Guest Interview # 3 – Dividend Investor Reached FI By Living An Intentional Life
• FIRE Community Guest Interview #4 – Pursuing FIRE With Multiple Passive Income Streams in Australia
• FIRE Community Guest Interview #5 – Driving to FIRE Through RV Living
• FIRE Community Guest Interview #6 – From High School Drop Out to Retired at 35
• FIRE Community Guest Interview #7 – Medical Professional Family With 3 Kiddos In The Pursuit of FIRE 
• FIRE Community Guest Interview #8 – Calculated Engineer Family Utilizing Geo-Arbitrage to Reach FI
• FIRE Community Guest Interview #9 – Lessons from a Fimigrant – Let Experience Be Your Teacher
• FIRE Community Guest Interview #10 – From Entrepreneur Making $36,000 to Multi-Millionaire In His 30s
• FIRE Community Guest Interview #11 – Hybrid Dividend and Index Investor Who’s Mastering the FI Mindset
• FIRE Community Guest Interview #12 – Proving Financial Independence Is Possible With Kids In A High Cost of Living Area
• FIRE Community Guest Interview #13 – Making An Impact On The Way To FI
• FIRE Community Guest Interview #14 – Badass Momma Knows Her Worth And Became A Millionaire At 36
• FIRE Community Guest Interview #15 – PhD Couple Reached FI at 40
• FIRE Community Guest Interview #16 – Mindful Minimalist Family
• FIRE Community Guest Interview #17 – FIWOOT: Financial Independence Work On Own Terms
• FIRE Community Guest Interview #18 – French Expats Growing Their Real Estate Empire in the US and France
• FIRE Community Guest Interview #19: Money Savvy Teacher With 9 Properties
• FIRE Community Guest Interview #20: Canadian Expat Supercharging His Family’s Path to FI In the Middle East
• FIRE Community Guest Interview #21: Young Retired Couple Have Mastered The FIRE Lifestyle
• FIRE Community Guest Interview #22: Building Multiple Income Streams To Design Their Dream Lifestyle
• FIRE Community Guest Interview #23: A Single Mom’s Journey to FI
• FIRE Community Guest Interview #24: Software Engineer Immigrant Balancing Her Journey To FI
• FIRE Community Guest Interview #25: Late To The FIRE Party – Part 1

The post FIRE Community Guest Interview #25 – Late To The FIRE Party – Part 2 appeared first on Modern FImily.

Here we are again with our next installment of the FIRE Community Guest Interview Series!  

But first, let’s announce our winner for Doc G’s new book, Taking Stock!

Drum roll pleaseeeeee

Danielle, congrats!  You won!  I send you an email with some more info here shortly Back to the show.

For anyone new here, this interview series will cover people within the FIRE community who are on their way to becoming financially independent, have already reached financial independence, or who have retired early. If you are reading this and you are financially independent, retired early, or close to reaching these major financial milestones, please reach out to us! You can check out the previous FIRE Community Guest Interviews here.

Ok you guys, are you ready for today’s interview? It is a fantastic one!  Grab a coffee/tea as there are a ton of details being shared as 99% of you have never heard their story before as they are not bloggers. (These are my personal favourite types of interviews – just everyday FIRE freaks not on the internet showcasing it is possible.)

I decided to break this interview up into two parts or else this would be a 10,000 word post!  So hang tight for part 2 next week.

Today, we have the pleasure of having a fellow Canadian retiree couple on to share their journey to FI. What makes their story unique is that they were late to learn about FIRE… yet they still did it!  So for all the “old” folks out there saying FI is not possible, here’s your inspiration!  They prefer to remain anonymous so we will call them Mr. and Mrs. Late to FIRE.

I hope you appreciate these responses as much as I do and hope you can relate to these guest interviews in some sense to see that there is no cookie-cutter way to FI. If you have any follow up questions or would like to get in touch with Mr. & Mrs. Late to FIRE, please either reach out to them via email at LateToFIRE@outlook.com or leave a comment below!

WAIT.  Did you guys see what they did there?!? They created an email account as part of this interview!! How friggin cute is that?  You better send them an email, dammit!  (I’m serious.) There is so much love in this interview!

Without further ado, take it away Mr. & Mrs. LateToFIRE!

1. Can you give us a little background of who you are, what you do, and how you became interested in personal finance? How did you discover the idea of financial independence?

Hello Court, and thank you for allowing me to share some of our story with your readers. Because we discovered the FIRE community fairly late in life, we’re going by the alias Mr & Mrs Late to FIRE, and for brevity, just Mr & Mrs LtoF.

I feel a bit of a FIRE fraud as our situation is more along the lines of an old-school retirement, but one where applying FIRE techniques helped change our spending habits, become debt free, start saving and investing, discover a whole other pension source, and achieve the earlier and more financially secure retirement we’re living today.

Having never visited Canada, we moved here from the UK in 1997. I’d just turned 34 and Mrs LtoF 32. We’re a blended family, and at the time of our move we had one 5-year-old and two 10-year-olds. We had no family or friends here, no contacts, no jobs or interviews lined up, one suitcase and backpack of possessions each, and just five nights accommodation booked. We immigrated under the skilled worker program as I had IT qualifications and experience.

For the first six months we covered our expenses with the cash we’d brought with us, plus Child Tax Benefit and a Manitoba program for families on a low-income; both programs were a very welcome surprise. Also, Mrs LtoF brought in a few dollars working from home writing general knowledge questions for gaming machines.

After six months in our new country, I’d found employment in the IT department of a publicly traded company, while Mrs LtoF took on the role of stay-at-home parent. Due to money pressures in our fourth year, Mrs. LtoF took a full-time job in the administration department of an insurance company. I later transitioned to the role of manager and strategist in a not-for-profit organization.

By the time we were fully established in Canada, with a house (mortgage of 95%), furniture, and a vehicle, we’d exhausted our entire financial reserves. The next 15 years were spent running hard around the proverbial hamster wheel; working and spending. This was no different from our lives prior to moving to Canada; proof that moving a third of the way around the planet in itself teaches you nothing about money management!

Today we live in rural Manitoba on a small acreage. Our children have moved out and are making their own way in the world. We also have three young grandchildren.

I became interested in personal finance during the 2012 Christmas break, when out of nowhere the reality of our situation hit me. We had to dial down our stress levels before it killed one of us. Mrs LtoF’s stress was coming from changes in the leadership in her department, and for me, it was coming from always having to be “on”, including evenings and almost every day off. I said to say to Mrs LtoF “we have to do something about this, else we’ll be working well into our 60s”. Mrs LtoF was instantly onboard. That brief exchange was the catalyst to turning around our finances and the development of an escape plan.

We began our financial makeover in January 2013. Our general finances were pretty sad for our age, but we did have a few things going for us, primarily, we had two incomes, mine being above average pay, we had been making the mandatory payments into our work (DB) pension plans, and our mortgage was down to $85K. Through most of 2013 we focused solely on debt reduction, including the mortgage.

In late 2013 I stumbled across several dividend investing blogs, which then led me to the FI/FIRE community. Wow! I was blown away by the bloggers and their stories. Some of them just a little older than our oldest children. The question for us was could FIRE techniques work for us? For sure, we weren’t going to be retiring 30 years before age 65, but it might help shave some time off. After reading just a few blog posts I was sold on the idea, and down the FI rabbit hole I went.

2. When in your journey did you realize financial independence was actually possible?  Was that the original goal at the beginning?

I first realized FI was mathematically possible on my way home from college at age 17. I asked myself what yearly income did I need, how much can I earn on savings, and how much do I need in my savings. From that, I knew half a million [GB] pounds would be plenty. So far so good. Over the next three years, I set about developing several electronic and software-based products. That went well too. Unfortunately, getting funding to ramp up production proved to be an obstacle I couldn’t overcome. There were no GoFundMe or Dragons’ Den type options back then. Thoughts of FI were slowly squeezed out by normal daily pressures and the complexities of life. On the bright side, I had broadened my skillset greatly, and that would payoff later in my career. In the meantime, I got to participate in several tech start-ups and work on some amazing cutting-edge tech and scientific projects.

Fast forward three decades, January 2013 was when we unknowingly rebooted our financial journey to FI. Our initial plan was just to become debt free, and it was while working on debt reduction that I became immersed in everything FIRE. I quickly learned there was another path to FI, and we wouldn’t have to put our home in jeopardy or risk going bankrupt.

At the outset we each had different goals. I wanted us both to be able to walk away from our jobs by our mid-50s, and to have the headspace to think and be present with Mrs LtoF and our children. Mrs LtoF’s expectations of what could be achieved were a little lower, with her goal being able to switch to working part-time, which would perhaps make the work stress more bearable.

On the monetary side, the goal was to be debt free, have enough income to cover $40K annual living expenses, and also have $150K in the bank to cover 10 years of travel.

There was one particular FIRE post that excited me and captured the essence of what I imagined FIRE would be like. If you have 27 minutes to spare, you can listen to it here: First Year of Freedom written by the Mad Fientist, and read by Robin Homer, voice actor.

3. To help put things into context, if you are comfortable sharing some numbers, what was your savings rate, FIRE number, net worth, salary, how many hours a week did you work, etc?  How long did you work towards financial independence and where are you today? 

Prior to discovering the FIRE community, we let our employers dictate our savings rate through mandatory wage deductions for our work pensions, which, in conjunction with the employers’ match, brought our savings rate (as calculated here) to just 12.5%. With this savings rate, our retirement date was age 65, and only if we could both hang onto our jobs (yep, that didn’t work out).

Mrs LtoF and I also participated in our respective employer’s employee share purchase plans at 3% of our pay plus the employer match. We would occasionally raid these plans to pay for a vacation or replacement vehicle, so I don’t think that really counts as savings.

After making headway on clearing the debts, we refined our initial goal to two goals:

1. Regular FIRE: $50K joint after-tax income; FIRE number $1.28M (excl. house). This goal didn’t leave much room for travel, but we could at least walk away from our jobs.
2. Comfortable FIRE: $70K joint after-tax income; FIRE number $1.63M (excl. house). This was our preferred goal. It would provide us with $30K a year for travel, hobbies, and gifting. However, it would require both of us to work an extra two years beyond goal #1.

At the start of 2013, our assets included $36K in employee share purchase plans, $68K in foreign/UK RRSPs, $475K in work pension plans, and $170K of home equity. Debts included a mortgage of $85K, vehicle loans of $36K, and other debts totaling $12K, giving us a net worth of $616K.

So, in the Pro column, our investments and pension plans minus our debts was $446K, not too bad of a starting point, but in the Con column, I was age 50 and Mrs LtoF 48. To reach our preferred goal “all” we needed to do was clear $133K of debt, and increase our investments plus work pension plans by $1.05M.

We cut back on spending, and increased our savings rate to an average of 39%. Our savings rate was limited by our decision to continue taking travel vacations. It meant reaching our end goal would take a little longer, but we knew that sometimes you have to do things when you are able.

Four years into our journey everything was going great, when, without warning, Mrs LtoF was laid off from her job of 18 years. That event was emotionally tough on Mrs LtoF as she had always received excellent performance reviews and numerous commendations; an all-round good employee. I could certainly go off on a rant about this, suffice to say, if you don’t work for yourself, be prepared!

We resolved to not allow this layoff to derail our FIRE plans, so I reworked our plan. At Mrs LtoF’s suggestion, we engaged a fee-for-service financial planner to check my numbers, which were correct, and much to Mrs LtoF’s delight, she was able to retire at 52. Her work pension was not indexed, so she took the commuted value and transferred the funds to a self-administered LIRA, which has since been converted to a PRIF and a LIF.

For the remainder of our journey to FI and subsequently FIRE, now on one income, our average savings rate increased to 58%, peaking at 70% in the final year.

To summarize: Two years into our journey we were mortgage free. Four and a half years in we were debt free, and Mrs LtoF was able to retire forever. Six months later we reached our first goal; we were FI. We decided to press on to the second goal, meaning I keep working! At seven years into our journey, we achieved our second goal of Comfortable FIRE. I quit my job six months later.

In total, it took just over 7.5 years, from “we have to do something about this” to achieving Comfortable FIRE with a sizable cushion. In that time, we increased our net worth by $1.68M, taking our net worth to $2.3M when we include $380K home equity.

Here’s what our journey looks like in chart form:

Prior to retirement, the work pension plan’s commuted value is used. After retirement, the value is analogous to an RRSP/RIFF that reduces to zero by age 90. The real game changer was building our investment portfolio.

The below chart shows more clearly how adopting FIRE techniques helped ramp up our savings and investments, and into retirement with the recent declines in the markets:

Prior to Mrs LtoF being laid off in 2017, our combined annual gross income was $180K. In 2020, my final year of employment, my salary plus bonuses was in the region of $140K.

Mrs LtoF worked a regular nine-to-five office job, and for the most part, was able to forget about work when she had finished her day. Due to the nature of my work, I was always working at some level, both in the office and at home, often to 2 am. Although I had full control over the hours I worked, the work had control over me! A typical week was 60 to 70 hours, but in the worst-case situations, I’d be running on four hours sleep a night for days at a time. That higher-than-average pay cheque and a work pension didn’t come easy!

4. Do you feel deprived?  Do you feel like you are sacrificing and missing out on life?  How would you say your mindset has shifted throughout your FI journey?

I had to check with Mrs LtoF on this one as it was something we’d never discussed. The answer is a categorical “no”, we didn’t feel deprived at all. In fact, we felt quite the opposite. We had the prospect of leaving behind the stressors that were sucking the life and happiness out of us. Financially, we were moving forward, while people around us were standing still, or worse, going backwards.

At no time did we feel we were missing out, and perhaps this is because we didn’t cut back on the things that gave us the most pleasure, mainly photography and travelling. During our financial journey, we visited three Canadian provinces, three US states, including the four largest Hawaiian islands, Ireland, Scotland, and England twice.

When it comes to experiences, we can report that becoming mortgage free is a great experience. We immediately felt less burdened, less vulnerable, and more confident about the path we were on. When Mrs LtoF was laid off, being mortgage free paid off big time for how we were able to handle it. Even though I understand the math of investing vs paying off the mortgage, I would do the same again – there’s real value in having one or two things in your life that are done and dusted [a mainly British phrase].

We’ve definitely undergone a mindset shift around making purchases. We no longer buy on impulse, albeit if Mrs LtoF finds a bargain at the thrift store, she might throw caution to the wind and buy a $2 photo frame or book. As a matter of course, we now ask ourselves “do we really need this?” or “will this really make us happy?”. The operative word being “really”.

Instead of making excuses as to why we should buy something, we now find reasons why we shouldn’t. It used to be easy to spend money that we didn’t have, and now that we have money, it’s difficult to spend it!

Another change has been a desire to hoard less, donating or selling off our unwanted items. Mrs LtoF frequently takes boxes of stuff to the charity shop, while I prepare and post ads for our old computer and camera gear. My sales over the last 12 months topped $3,600!

5. What do you spend your money on and what don’t you spend your money on? What brings you happiness and joy? How much money do these things cost?

We enjoy photography, so that’s an area where, after extended deliberation, we’ll spend more than I suspect most people would. We don’t go too crazy, such as buying a $15K lens, but we would buy a $1K or $2K lens and be happy with that. For 2020 (a partial retirement year) we’d budgeted $12K for travel, but as we couldn’t go anywhere due to the pandemic, we spent half of it on upgrading our camera gear, and shared the rest between our children and the grandchildren’s RESPs.

When we buy new, we look for a good balance of price and quality/reliability. And whatever we buy today, we aim to get close to a decade’s use from it. Our bedroom furniture is 25 years old this year, and we have plans to give it a makeover with a nice paint job and new handles. When it comes to our computers, I buy individual parts and assemble the machines myself, ensuring I get the best processing power and upgradability our money can buy.

We don’t buy “toys” like ATVs, skidoos, and the like. We just don’t need the adrenaline rush enough to buy something we’ll barely/never use. Our vehicles are practical, reliable, and 100% paid for. We already live in a rural location, so we have no desire to buy a cottage.

Eating out is a rare occurrence for us, typically tied to a special occasion. When we do eat out, it’s a pretty cheap deal. Anything over $60 for just the two of us would be expensive.

What brings us happiness and joy is, without doubt, being free of the pressures of debt and work, and having the freedom to do what we want on our own schedule. We feel very fortunate. Sure, it would be great to have been here 10 or 20 years earlier, but definitely better late than never.

Many of the things we enjoy cost very little, including walking with our dog, spending time with family, taking photographs (as mentioned, we did splurge on the equipment), reading books and blogs, listening to podcasts, watching movies, and observing the night sky from our deck. Mrs LtoF always has a craft project on the go, while I’m often organizing our photos or working on a spreadsheet related to our finances and future plans, and writing this!

We also get a great deal of satisfaction from finishing a project on the house at a fraction of the price of paying someone else to do it. Our annual budget for house and property maintenance and upgrades is $5K. After all, it is an asset that we might want to draw from one day, plus, we live here and wish to enjoy the improvements. We don’t spend money on work that we can do ourselves, which has included decorating to moving walls, installing new windows and doors, upgrading the kitchen and bathrooms, and all the plumbing and electrical work.

Travelling is something we enjoy a great deal, especially as that’s when we do most of our photography. As I write, we have over 11,000 photos on Google Maps, with over 12.5 million views. It’s pleasing to see our photos show up all over the web and occasionally receive a request to include one in a book or even a TV ad.

6. Do you use a budget?  Do you track your expenses? Do you track your net worth? If so, how often do you update these?

We do have a budget, but the overriding figure of interest is the total annual spend vs the amount in each individual category. If one line item goes over budget, and that is balanced out by an underspend on other items, then that’s fine. The budget (which is an Excel spreadsheet) is split into bi-weekly periods, with numerous categories. For each category it shows the budgeted amount, amount spent, unused budget, and any overspend. Mrs LtoF enters the amounts spent once or twice a month. This tracking is very useful for anticipating how much cash we need to cover upcoming bills, and for planning our future income needs.

I do track our net worth. Again, Excel is where the action happens. If I want an up-to-date net worth, I just open the spreadsheet and the latest prices are pulled in. The spreadsheet calculates our net worth, and updates our drawdown plan and projected net worth out to age 85. The house value increments automatically using a modest growth rate, and the work pension decrements toward zero at age 90.

I also use the free Yahoo Finance web and iPhone apps. These give me a near real-time net worth update as easily as checking a Facebook feed or news stream. This is what it looks like:

“Total gain” has little meaning, as it doesn’t include gains on previously sold stocks/ETFs. “Investments” includes our ETFs, stocks, and cash. “Other Assets” includes our house and the work pension – these and the cash amounts have to be updated manually, but they change little from month-to-month.

While on the path to FIRE, checking our net worth frequently helped build resilience against the hard knocks the markets periodically throws at us. I would give Mrs LtoF updates, “we’re down $12,000 today”, “We’re up $9,000 today”, so when the big drop came in March 2020, and I said “we’re down $145,000”, she calmly replied “yes, but it’ll come back up eventually”, as it did.

Having made it this easy to check our portfolio and net worth, barely a day goes by without me taking a quick peek. I’m thinking I need to cut down on this, because on a bad market day, checking our numbers doesn’t add any value to my day.

7. As someone who learned about financial independence at a later age, how has that impacted your finances and your FI journey? 

There’s a little bit of sadness that we let so many years pass without doing more to help our children and our future selves.

Had I never learned about FI and FIRE, I’m confident that, other than clearing the mortgage, little else would have changed. Mrs LtoF’s layoff would have been a much bigger blow to her wellbeing and our finances, and if we wanted the income we have today, Mrs LtoF wouldn’t have retired at 52, and I wouldn’t have retired until 65, assuming that the stress didn’t get me first.

My mindset shifted from being indifferent to our finances and retirement, to being hyper focused to obsessive levels. With so much to do, and so little time to do it, the first three years on the FIRE path were extremely intense. To an observer, it may well have looked like panic. Every incoming dollar was mapped to an account weeks before it was received. I even started waiting for our wages to appear in our bank account at 2 am, so I could immediately send the funds to the designated investment accounts, maximizing as much as possible the time in the market. My employer’s payroll department told me I couldn’t put $900 each payday into the spousal RRSP because with my work pension, I’d run out of available RRSP room within four months. I had to explain how that was my plan, and that I would stop the contributions once I’d hit my limit. Mrs LtoF would probably have preferred me to have been a little more laid back, but she understood the need at the time, and appreciates where we are today.

A big part of my mindset change was an insatiable thirst for knowledge of all things financial, and to apply whatever I learned to our situation. I’d like to share how this worked for us in some less than usual ways.

Building multiple income streams is a common FI/FIRE strategy, and it got me thinking about what, if anything, we might be entitled to from the UK OAS system for the time we were living and working there. We filled in a few forms, and two months later discovered that we would each be eligible to receive $6,600 a year, (at today’s value and exchange rate), starting at age 67. Over ten years that’s $132K. Digging deeper I discovered that we might be eligible to buy additional years in the system. A little more paperwork, and we received approval to make additional contributions, including the option to buy back 10 years. To date we’ve each bought an additional 16 years, doubling what we already had. The cost was $3,950 each for an annual boost of $6,600 each, meaning that we will more than recover our contributions in just the first year of drawing the pension. The total income from these pensions over 10 years is now $264K. Unlike when a Canadian receives OAS overseas, the UK OAS pension ceases to be indexed when being drawn by recipients residing in Canada; the Canadian government are trying to get this rectified. Incidentally, the pension is indexed for recipients residing in the US and the EU.

Another trait of people pursuing FIRE is optimizing. I knew that my work pension was based on my annual salary, and that my bonus was ignored by the pension formula. Realizing this, I made a proposal to my employer, suggesting that the bonus be built into the position’s salary. My employer was receptive and implemented the change. This move increased the annual pension by around 10%, and had I taken the commuted value, it would have added an additional $110K to the payout.

Further optimization was achieved by consolidating our UK RRSPs, which were with three different companies, all of which refused to let us have any of our money unless we received advice from a UK financial advisor. When we contacted UK advisors, they all said they couldn’t help us, because we didn’t have a UK address. A catch-22 situation! One specialist London company offered to ‘help us out’, explaining how a 5.8% annual fee was a great deal. Eventually, after talking with a UK FIRE blogger, we found a UK company that, for much more reasonable fees, could resolve the catch-22 conundrum. We’re now drawing down these funds. Had it not been for reading FI websites and blogs, I may well have been suckered into paying those super high annual fees.

We didn’t have much lifestyle creep because moving house every three to five years is a great way to burn money. Having said that, in the UK the real-estate agent fees were only 1% to 2%, and in Canada we sold our properties ourselves, spending about $500 on advertising. Still, every house move requires a lawyer, survey and registry fees, removal truck, new stuff, etc. Lifestyle creep was mostly around our vehicles. We progressed from buying used vehicles to dabbling in leased vehicles, and then to buying a series of new vehicles. Once we started on the path to FIRE, we kicked that habit into touch. In almost ten years now, we’ve only done one vehicle upgrade.

8. As a FI member living in Canada, are there any pros to living in Canada specifically that have helped you along your journey?  Conversely, any cons?  

When considering where in the world we wanted to live, at the top of our shortlist were the US and Canada. The big differentiator was their respective healthcare systems. We didn’t have any health issues, but the Canadian system offered a safety net, that regardless of how things worked out, it would be there for us and our children; we chose Canada. We’ve had a few medical scares and injuries over the years, but we’ve never had to worry about the cost of seeking medical attention. This is a huge pro for Canada. We realise this doesn’t come at zero cost, but we feel the higher taxes far outweigh the cost of financial ruin when a serious medical issue arises.

I think many jobs in Canada are better paid than in the UK, and our money does go a lot further overall. This can just mean that you can buy more stuff, bigger houses and higher spec vehicles, and still be living paycheck to paycheck.

Cons for Canada, especially where we live, include long periods of cold weather, high-cost cellphone and internet service, and not so great credit card bonuses when compared to the US.

9. What is your investment strategy? Do you invest in index funds, dividend stocks, real estate, other businesses, etc.?  Has your investment strategy changed over the years? 

Initially we focused on buying Canadian dividend stocks, with our portfolio containing all the usual suspects, banks, telcos, REITs, and energy companies. Choosing, monitoring, and balancing the portfolio soon began to distract from other things in my life, and the more I read about stock picking, the more I realized I was doing little more than making a best guess at what was going to do well. The turning point was a five-part investing video series by a Danish national and former UK hedge fund manager, Lars Kroijer. I highly recommend the series, available on YouTube here. I was also following a number of blogs where low-cost index investing was the main theme, including Millennial Revolution and Canadian Couch Potato. So, after just 12 months of stock picking, we switched to index funds.

Today, we invest primarily in four ETFs: VCN, VIU, VUN, and ZAG. We also hold ZCN for tax loss harvesting (more on that later). I don’t feel an all-in-one ETF is suitable for us just yet because we hold Canadian ETFs (VCN and ZCN) plus our few remaining Canadian dividend stocks in our non-registered accounts. I also want to know exactly how much we have in bonds as that forms part of our six-year fixed income cushion in the event of a prolonged market downturn. Our fixed income also includes two years of cash in savings and GICs, plus cash for the current year’s expenses.

Here’s what our portfolio allocation looks like today:

The “Unassigned” funds are for whatever comes up that we might want to buy guilt free.

The only real-estate asset we have is our house. When we bought the house, it was a borderline fixer-upper; it was livable, but needed a lot of work e.g., new windows, new septic tank, new well and water system, and much more. Here’s what we’ve spent on it over the years:

And in all that spending, we didn’t get a granite countertop! There is a new roof though.

For all but my final job, I always had some form of side business. Now that we’re FI, it’s something I may look at doing again, but for now it’s not something I need, emotionally, monetarily, or for something to do.

10. Did you take advantage of tax advantaged accounts offered to you?  If so, which ones and how so? 

Prior to moving to Canada, we’d put a small amount of money into a UK RRSP like plan, but since our move until 2013 nothing into RRSPs or TFSAs. By the time we’d turned our minds to investing, I’d accumulated $70K of RRSP room and Mrs LtoF $40K. We also had TFSA room of $25K. So, our starting point was $160K of untapped tax advantaged account room, which was increasing at $21K a year. By the time we achieved our Comfortable FIRE goal we had deposited $300K into our RRSP and TFSA accounts, plus a $90K transfer from Mrs. LtoF’s commuted work pension.

Soon after we started investing, I learned about spousal RRSPs, and as I would have a decent income from my work pension, we stopped paying into my RRSP, and redirected the savings to Mrs LtoF’s RRSP and the spousal RRSP. Income from a work pension can be split with a spouse from age 55, but if that option is rolled back to age 65, like it is in Quebec, our respective incomes can still be fairly well split prior to age 65, saving us thousands in unnecessary taxes.

I was very calculating as to how much I deposited each year into the spousal RRSP. I had a good idea of how much RRSP room I would have available before I quit my job, and also gained a good understanding of the tax brackets applicable to my income after deductions. So, each year I would contribute only enough to bring my marginal tax rate down from 43.4% (federal + Manitoba) to the 37.9% bracket. In retirement, our marginal rate is 27.75%. Once I’d reached the cut-off point for funds going into the spousal RRSP, despite still having untapped room, the rest of the year’s savings went into our TFSAs. When the tax advantaged accounts were maxed out, we directed our savings to non-registered investment accounts and built up our cash cushion. Ideally, we would have topped up the TFSAs first, but my employer wanted to know the spousal RRSP contribution amount at the start of the year.

To take full advantage of the dividend tax credit, we only hold Canadian equity in our non-registered investment accounts. We’ve recently added ZCN to these accounts, bought with dividend income, for use when topping up our TFSAs in a down market i.e., when the sell price of ZCN will generate a capital loss, we will sell ZCN in late December, move the cash into the TFSAs in January, and immediately buy VCN. Doing this allows us to capture the capital loss in the non-registered account, without being subjected to the superficial loss rule, and we’re only out of the markets for a day or two. If the Canadian markets are up, we just transfer VCN from the non-registered accounts to the TFSAs as there’s no loss to be captured.

For our grandkids, we’ve built into our budget annual contributions to each of their RESPs.

Let’s pause there for this week and circle back next week with the second half of the interview.  Any comments for Mr and Mrs Late to FIRE so far?

HOW GOOD IS THIS INTERVIEW?!  I just love Mr and Mrs Late To FIRE.  I cannot imagine how many hours it took just to write this first part of the interview.  So truly, thank you for putting in such amazing work into this interview.

Thanks for tuning in and check back next week for Part 2!

We love highlighting other members of the FI community. Please contact us if you’d like to be a part of the FIRE Community Guest Interview series and we’ll see if we’re a good fit!

And in case you wanted to read the previous interviews that make up our FIRE Community Guest Interview Series, here you go!

• FIRE Community Guest Interview # 1 – Empowerment Through FIRE
• FIRE Community Guest Interview # 2 – We Quit Our Jobs To Retire Early & Travel The World
• FIRE Community Guest Interview # 3 – Dividend Investor Reached FI By Living An Intentional Life
• FIRE Community Guest Interview #4 – Pursuing FIRE With Multiple Passive Income Streams in Australia
• FIRE Community Guest Interview #5 – Driving to FIRE Through RV Living
• FIRE Community Guest Interview #6 – From High School Drop Out to Retired at 35
• FIRE Community Guest Interview #7 – Medical Professional Family With 3 Kiddos In The Pursuit of FIRE 
• FIRE Community Guest Interview #8 – Calculated Engineer Family Utilizing Geo-Arbitrage to Reach FI
• FIRE Community Guest Interview #9 – Lessons from a Fimigrant – Let Experience Be Your Teacher
• FIRE Community Guest Interview #10 – From Entrepreneur Making $36,000 to Multi-Millionaire In His 30s
• FIRE Community Guest Interview #11 – Hybrid Dividend and Index Investor Who’s Mastering the FI Mindset
• FIRE Community Guest Interview #12 – Proving Financial Independence Is Possible With Kids In A High Cost of Living Area
• FIRE Community Guest Interview #13 – Making An Impact On The Way To FI
• FIRE Community Guest Interview #14 – Badass Momma Knows Her Worth And Became A Millionaire At 36
• FIRE Community Guest Interview #15 – PhD Couple Reached FI at 40
• FIRE Community Guest Interview #16 – Mindful Minimalist Family
• FIRE Community Guest Interview #17 – FIWOOT: Financial Independence Work On Own Terms
• FIRE Community Guest Interview #18 – French Expats Growing Their Real Estate Empire in the US and France
• FIRE Community Guest Interview #19: Money Savvy Teacher With 9 Properties
• FIRE Community Guest Interview #20: Canadian Expat Supercharging His Family’s Path to FI In the Middle East
• FIRE Community Guest Interview #21: Young Retired Couple Have Mastered The FIRE Lifestyle
• FIRE Community Guest Interview #22: Building Multiple Income Streams To Design Their Dream Lifestyle
• FIRE Community Guest Interview #23: A Single Mom’s Journey to FI
• FIRE Community Guest Interview #24: Software Engineer Immigrant Balancing Her Journey To FI

The post FIRE Community Guest Interview #25 – Late To The FIRE Party – Part 1 appeared first on Modern FImily.

For anyone new here, this interview series will cover people within the FIRE community who are on their way to becoming financially independent, have already reached financial independence, or who have retired early. If you are reading this and you are financially independent, retired early, or close to reaching these major financial milestones, please reach out to us! You can check out the previous FIRE Community Guest Interviews here.

Today, we have the pleasure of having Vi, an Indonesian transplant currently living in the US, on to share her journey to FI.   I truly love the reflective responses that Vi provides and it’s clear that she’s spent a lot of time trying to master the non-financial aspects to one’s FIRE journey, which is super important.

I hope you appreciate these responses as much as I do and hope you can relate to these guest interviews in some sense to see that there is no cookie-cutter way to FI. If you have any follow up questions or would like to get in touch with Vi, please either send her an email at happythrifty.too@gmail.com, check out her blog – Happy Thrifty, or leave a comment below!

Without further ado, take it away Vi!

1. Can you give us a little background of who you are, what you do, and how you became interested in personal finance? How did you discover the idea of financial independence?

Hi! I arrived in the US from Indonesia to get my master’s and I ended up staying! Now I live in Pittsburgh, Pennsylvania with my husband. I am a software engineer turned data/product analyst. I write on my blog to share personal finance/productivity tips and share my remote working experience on youtube. I also enjoy creating music, particularly with piano. 

The first time I heard about Financial Independence was four or five years ago at the MMM site. But back then, I was quite depressed with my job so the idea of achieving FI seemed out of reach to me. I wanted to focus on finding a career that I can enjoy. 

Then, about two or three years later, I was reminded again of the idea of FI when I visited the MadFientist site. At this time, I have made a pivot in my career, and I thought my life would be fine and dandy after finding a more enjoyable career. But, I still found myself complaining about my job and daydreaming about not having to work someday. Honestly, I like the idea of working from 9-5 and being done with my job at 5, but I am still hopeful to have my own thing someday.

2. When in your journey did you realize financial independence was actually possible?  Was that the original goal at the beginning?

Originally, I never thought that Financial Independence was a possibility. After reading the Simple Path to Wealth book by J.L. Collins, MadFientist, and aPurpleLife’s blog, I started to believe that maybe it is possible. After sitting down and calculating my savings rate, i.e., if I save 60-70% of my income over the next several years and add that number with my existing savings, it doesn’t seem impossible to get there. The steps seem pretty simple; reducing expenses, increasing income, and saving/investing the surplus. The rest is waiting. But for me, I want to enjoy the journey as much as possible. I don’t want to get too obsessed with my net worth and put FI as a pedestal for my happiness. 

My goal is not necessarily about being rich. It is about having freedom and more flexibility in life. There are aspects that I like about working for a company but there are things that make me unhappy, i.e., the possibility of working for a manager you hate and the workload. In addition, there are things that I want to achieve outside work, and I want to be able to pursue them without worrying about my finances.

3. To help put things into context, if you are comfortable sharing some numbers, what is your savings rate, FIRE number, net worth, salary, how many hours a week do you work, etc?  How long have you been working towards financial independence and where are you today? 

I’m currently ~86% on the way to achieving my FI number. Currently, my savings rate is about 60-70%. I am probably a little late into the investing game and I wish I had started the journey sooner. But it’s better late than never right  

When I first started my career in the US, I made $52k as a software engineer. I probably could have made significant progress with my income if I could switch jobs easily (still thankful for the opportunity to work and live in the US, though!). I also had to take a pay cut after making a pivot in the middle of my career, but it is worth it because now I enjoy my work (~80% of the time). 

What I have been doing in the past several years are:

• Reducing my expenses, but try not to keep a healthy balance between spending and savings
• Interviewing around and finding a higher-paying job
• Saving and investing the remaining 

4. Do you feel deprived?  Do you feel like you are sacrificing and missing out on life?  How would you say your mindset has shifted throughout your FI journey?

I don’t think I feel (or ever felt) deprived. I still buy my favorite snacks and hang out with my friends at a favorite restaurant. But I try to set a budget when buying something (not always) and see that as an exercise of prioritizing. As far as hobbies, I consider myself lucky because most of my hobbies (reading, writing) are not expensive, except for making music, which can get costly with education and gadgets. It is also worth noting that I do not own a house nor have kids, and my elderly parents are still working (although their retirement age is coming, so I have to be more prepared), which helps set room for a bigger budget. I’m also relatively healthy which I’m very grateful for. 

However, I do feel like I’m missing out occasionally. I enjoy traveling, and there are a few places that I want to visit such as Japan and Europe, and stay there for two to three months. I have been delaying this because obviously, it will be expensive and I’d probably have to quit working. But I can wait on this, and this will be something I’ll look forward to while achieving my FI goal.

I can see why some people can feel deprived when pursuing FI. Maybe they set their budget to the extreme because they are so obsessed with it and assume that FI will solve their life’s problems. In the first year of discovering FI, I was also so consumed with it that I became more like a penny pincher. But I hated becoming a penny pincher. So I got a higher-paying job to save a lot but I can still be generous with my spending. I also don’t want to think FI is the end-all, because after achieving FIRE, I am sure there will be different sets of problems to tackle.

When first starting my FI journey, all I was thinking of is saving and investing my money, but it has slowly changed. I realized that I want a good balance of saving, investing, and spending. 

If you want to achieve something, you most likely have to sacrifice something, and I think the sacrifice vs. the rewards is worth it. I don’t think everyone can achieve Financial Independence, though. Still, some elements of FIRE are helpful, such as investing and budgeting, which people should take notice of to build their wealth or at least not live paycheck to paycheck. 

5. What do you spend your money on and what don’t you spend your money on? What brings you happiness and joy? How much money do these things cost?

I love Japanese snacks and going to Asian markets. I also subscribed to a Japanese snack box ($45 quarterly) to get a new selection of snacks as well. I spent between $60-$80 in the Asian market (sometimes it can be more), and I went about twice a month. 

I love learning new things, so I spent a good amount on education, particularly in music and my career. For instance, I just spent almost five hundred dollars hiring a coach to prepare for my interview. Sometimes I also spend a good amount on tech gadgets. 

I also enjoy running, and last year I spent several hundred dollars buying a new treadmill. Buying a treadmill is money well spent for me because it keeps me walking/running despite winter.

As far as reducing expenses, I don’t buy new clothes as frequently as before. Due to remote work, I also save on gas and car maintenance. 

Since I don’t have kids or a home, I don’t have spending in this area. Having a house would be nice, but I’m not sure if I want to spend my time maintaining and fixing the house. I’d like to own a home one day, but probably not at this time. 

6. Do you use a budget?  Do you track your expenses? Do you track your net worth? If so, how often do you update these?

I don’t use a budget or expense tracker in most of my purchases. Usually when I am making a plan to travel. I use personal capital to track my net worth. Before, I attempted using an excel sheet to track my savings and investment, but it ended up being too much work. For now, I will keep it as simple as I can. Maybe at some point, I’ll start building a habit to track my expenses. 

7. What are some of the more unique/uncommon ways you’ve cut down costs? 

Here are some unique ways that I’ve saved money:

• Splitting wifi bills with a neighbor has saved me about $30 a month.
• If I want to buy something non-urgent, I’d wait at least three to ten days and see if I still desire the purchase. Sometimes I change my mind, which has helped me prevent impulse buying.
• I have enjoyed going to the library and working from there since COVID, which has accidentally helped me cut down utility bills.
• If I get takeout and receive all of those individual condiment packages, I’d keep them, so I rarely spend money on ketchup, mustard, and mayo. 
• Before going to the grocery store, I’d make sure I am not hungry and check on my fridge . Otherwise, I’d spend a lot more than I typically do
• I like checking out employee discounts and employee assistance programs. Recently, I got three free therapy sessions from the employee assistance program. Yay!

8. As a FI member living in the States, are there any pros to living in America specifically that have helped you along your journey?  Conversely, any cons?  

Living in the States has significantly helped my FI journey. The pay is substantially higher, and most companies I worked for offer a pretty good work-life balance so far. Although living costs and taxes are lower in my home country, the income difference makes up for it. Due to COVID, remote work has been getting popular these days. This means I’d have more opportunities and choices when it comes to finding a new job. If I were in my home country, I’d probably be making at least three or four times less, and the cost of living is still relatively high compared to the salary I’d get. I don’t think I’d ever get this far by just having a full-time job if I were to live in my home country.

On the contrary, I’d say the healthcare costs in this country worry me a lot. Last year, my mom was sent to the ER for a nonsurgical operation, and we were charged a $6k bill. Thankfully, we were able to negotiate it down to $2k. Healthcare is still pretty costly where I came from, but it is not as expensive and worrisome as here.  

I think the pros to the US are generally higher income brackets and overall higher standard of living quality. I can move to the west coast and make so much more, although that comes with a higher living cost. Work-life balance seems also better here. It is not uncommon for people to stay working after 5 there, but of course, that varies from your team, your boss, and the nature of your job as well. However, a big con, as everyone knows, is the healthcare here. Thus, I’m considering moving to a European country someday. 

9. What is your investment strategy? Do you invest in index funds, dividend stocks, real estate, other businesses, etc.?  Has your investment strategy changed over the years? 

Over the past years, I have only invested in index funds, particularly in VTSAX. I’ve also been implementing tax avoidance strategies. MadFientist blog is a great resource, and this simple flowchart on how to prioritize your spending is a great start too. I’d also make sure to check new tax laws from time to time to time. I love to keep things simple and probably never want to be a landlord. Since I don’t hate what I do at this moment, I’d probably prefer to study for an interview to get a higher-paying job to speed up my FI journey. 

10. Do you take advantage of tax advantaged accounts offered to you?  If so, which ones and how so?  Do you have a game plan to be able to withdraw from these funds when the time comes or is the plan to live solely off passive rental income? 

I honestly haven’t done extensive research about my withdrawal strategy. When the time comes, I’d probably use my cash first. I plan to build some money for at least two years and then sell my funds from the personal investment account first. In the future, when I don’t have a full-time job, I’d convert my traditional IRA to Roth IRA to be in a lower tax bracket. MadFientist wrote a great article about how to access retirement funds early.

11. Speaking of withdrawals, what is the withdrawal rate you plan to use when you withdraw from your portfolio?  Are you a fan of the “4% rule” or something else?  Why?

I’d want to be flexible with the withdrawal rate, not necessarily 4% per year, but hopefully a little bit less than that because I want to be on the safer side. Maybe I’d sell a bit more when the market is doing well and less when it’s a downturn. I might have a part-time job by then and this would supplement the withdrawal. Probably not the most comprehensive answer since I haven’t used any money from my portfolio. 

12. What are your post-FIRE thoughts/plans regarding health coverage?  As a reference, what do you currently pay annually or monthly for health related costs (be it insurance, co-pays, deductibles, etc.)? What do you estimate your post-FIRE health costs to be per year?

I have to say that I’m still researching this, but this would be my option if I decided to do FI/RE in the US:

• Get health insurance on the health marketplace, which would be expensive and my least preferred option.
• Enroll in DPC (Direct Primary Care) – it is a monthly subscription model with no insurance in between, and we get a consultation in exchange. But we still need an insurance plan to cover testing, procedures, or medication. Mr. Money Mustache wrote a good article about this. 
• Enroll in a Christian healthcare plan. I heard a positive review about the program, so I enrolled my mom. Last year, she got COVID and was able to get her bills reimbursed. If I keep having a positive experience, I’ll probably go with the cheapest option (the bronze plan costs ~$70 a month at the moment). 
• Get a part-time job to get health insurance. 

 Another option is to move to Canada or a European country with a decent healthcare system such as Portugal. Last year, I got two job offers in Sweden, but I decided to stay in the US to build my FI savings. I plan to visit Portugal with my husband next year, and if we like it enough, we will very likely move there. 

Currently, I’m paying about $100 a month for high deductible insurance. The deductible (the amount you pay for covered health care services before your insurance plan starts to pay) is $2200, and the co-pay ranges between $20-$30. It is not terrible, but not the greatest either. 

13. If you could go back in time and change things, what would you have done differently?

I’d max out my 401k and invest in an index fund as soon as I can. If I had done this since I first started working in the US, obviously I’d have been a lot further along. There was a period when I kept lots of cash in an online savings account, and I didn’t know what to do with that cash. I thought I’d buy a house, but I actually never did.

14. Has discovering financial independence changed how you view your job and life overall? 

Absolutely. I used to be scared of speaking up for my needs at work. Particularly when I was on a visa. Now that I’m not too far from FI and gained my permanent residency, I care less about getting laid off or losing my job. It reduced my BS tolerance. I started speaking up about what I needed at work, such as less workload and working from home. I never wanted to climb the corporate ladder anyway, but I used to be very dedicated at work (such as working late). Not that I’m being lazy at work now, but I will only perform enough that I’m not getting in trouble.

 Overall, I feel more hopeful about life. At the same time, I hope to keep the balance between living in the moment and planning for the future. I want to still enjoy life now and start making progress on things that matter to me even before reaching FI. 

15. Have you come out of the FIRE closet yet? Meaning, do your friends, family, co-workers etc. know about your financial independence goals?  If so, how did you bring it up and what were their reactions?  If not, why not?  Why do you struggle with this conversation and why do you feel that money is such a taboo topic? 

Not really. I don’t think I’ll ever want to involuntarily tell my family or friends. I’m not sure how to handle it. My guess is there will be some form of judgment or jealousy. So it is probably better to avoid it But if they are curious or want to learn, I’d absolutely share what I know about it. 

16. What pieces of advice would you suggest to someone who is just starting out or someone who is working toward reaching financial independence? 

I’d first find out if I can cut my expenses and invest any surplus. There are lots of ideas you could find on personal finance blogs but I’d pick ones that make sense for you. For instance, many blogs advised me to buy a used car but I bought a new car instead. I bought a used car before and unfortunately, that wasn’t a good decision. This flowchart is a good starting point if you live in the US. 

 Also, I’d not stay for too long in the same job. I’d find a higher-paying job if possible. I thought that a well-paying job means higher stress, but that’s not always the case. It heavily depends on your team and your manager. 

 Learning about FIRE taught us to be more financially educated. But FIRE probably won’t fix your problem 100%. It will give us more options and it can be a huge help in many cases. But it won’t fix a more subtle yet perhaps important issues like overthinking, assertiveness, and perfectionism for instance. I dealt with and have been dealing with this, and I noticed it is only getting better when I’m actively working towards a meaningful project instead of trying to escape from it or distract myself with other activities. I also noticed that I feel more content even though I don’t know if I will ever achieve/overcome it.

 I’m not sure about other people, but when I become super obsessive with my numbers, it makes me unable to enjoy life. So, I made a plan to save 60%-70%, invest early and often, roll with it, and be patient. There will be a set of new problems after FIRE anyway, such as lack of structure and social interaction, so I try to make the most of what I have now – for instance scheduling meetings regularly with my favorite leaders at work to learn from them and giving a presentation when I can (but I suck at presentation btw :D). 

17. What does the word ‘success’ mean to you?

I have to think about this a little bit. I think success means having good relationships with family and friends and making progress towards things that matter to me. It also means pushing myself even when I don’t feel like it. There are times when I want to become one with my bed, and in this case, success could mean that I’m able to get up and sit in front of the piano and play any song for at least 15 minutes. I used to think success was associated with money, fame, or promotion, which of course it can be for some people, but I’m hoping that I won’t focus too much on the outcome, but rather on the character that I’m building in the process.

18. Are there any books, blogs, or podcasts that you would recommend for our readers to check out?

Here are resources that I recommend:

Personal finance:

• Simple Path to Wealth Book by Jl Collins book or blog. 
• Madfientist blog for tax avoidance strategies.
• EatSleepBreaththeFi –  the FI school lesson and how much does it cost to live the FIRE series is super informative!
• Investing with Rose Youtube Channel.

Personal growth:

• The 5 seconds rule by Mel Robbins 
• Big Magic: Creating Living Beyond Fear by Elizabeth Gilbert

19. How can people get in contact with you? 

My email address is happythrifty.too@gmail.com. Here is my blog, youtube channel and instagram page . English is my second language so please forgive me if I made grammar mistakes.

What a great interview, Vi! Here were my key takeaways from this interview:

Thank you again Vi so much for being a part of our FIRE Community Guest Interview Series, we really do appreciate it! In our next FIRE Community interview, we’re heading back to Canada to hear about an early retirees story of how they got there in a not so early fashion.

Did you enjoy this interview? Any thoughts or additional questions for Vi? Please let us know in the comments below

Thanks for tuning in and check back next month for the next interview.

We love highlighting other members of the FI community. Please contact us if you’d like to be a part of the FIRE Community Guest Interview series and we’ll see if we’re a good fit!

And in case you wanted to read the previous interviews that make up our FIRE Community Guest Interview Series, here you go!

• FIRE Community Guest Interview # 1 – Empowerment Through FIRE
• FIRE Community Guest Interview # 2 – We Quit Our Jobs To Retire Early & Travel The World
• FIRE Community Guest Interview # 3 – Dividend Investor Reached FI By Living An Intentional Life
• FIRE Community Guest Interview #4 – Pursuing FIRE With Multiple Passive Income Streams in Australia
• FIRE Community Guest Interview #5 – Driving to FIRE Through RV Living
• FIRE Community Guest Interview #6 – From High School Drop Out to Retired at 35
• FIRE Community Guest Interview #7 – Medical Professional Family With 3 Kiddos In The Pursuit of FIRE 
• FIRE Community Guest Interview #8 – Calculated Engineer Family Utilizing Geo-Arbitrage to Reach FI
• FIRE Community Guest Interview #9 – Lessons from a Fimigrant – Let Experience Be Your Teacher
• FIRE Community Guest Interview #10 – From Entrepreneur Making $36,000 to Multi-Millionaire In His 30s
• FIRE Community Guest Interview #11 – Hybrid Dividend and Index Investor Who’s Mastering the FI Mindset
• FIRE Community Guest Interview #12 – Proving Financial Independence Is Possible With Kids In A High Cost of Living Area
• FIRE Community Guest Interview #13 – Making An Impact On The Way To FI
• FIRE Community Guest Interview #14 – Badass Momma Knows Her Worth And Became A Millionaire At 36
• FIRE Community Guest Interview #15 – PhD Couple Reached FI at 40
• FIRE Community Guest Interview #16 – Mindful Minimalist Family
• FIRE Community Guest Interview #17 – FIWOOT: Financial Independence Work On Own Terms
• FIRE Community Guest Interview #18 – French Expats Growing Their Real Estate Empire in the US and France
• FIRE Community Guest Interview #19: Money Savvy Teacher With 9 Properties
• FIRE Community Guest Interview #20: Canadian Expat Supercharging His Family’s Path to FI In the Middle East
• FIRE Community Guest Interview #21: Young Retired Couple Have Mastered The FIRE Lifestyle
• FIRE Community Guest Interview #22: Building Multiple Income Streams To Design Their Dream Lifestyle
• FIRE Community Guest Interview #23: A Single Mom’s Journey to FI

The post FIRE Community Guest Interview #24 – Software Engineer Immigrant Balancing Her Journey to FI appeared first on Modern FImily.

For anyone new here, this interview series will cover people within the FIRE community who are on their way to becoming financially independent, have already reached financial independence, or who have retired early. If you are reading this and you are financially independent, retired early, or close to reaching these major financial milestones, please reach out to us! You can check out the previous FIRE Community Guest Interviews here.

Today, we have the pleasure of having a fellow Canadian momma join us to share her journey to FI. What makes her story unique is that she is a single mom!  And immigrated to Canada from another country!  So for all the single folks out there saying FI is not possible, here’s your match as she has a kiddo to boot!  Incredible.  She prefers to remain anonymous so we will call her “SMJ”, short for her Instagram handle @SingleMoneyJourney.  

I hope you appreciate these responses as much as I do and hope you can relate to these guest interviews in some sense to see that there is no cookie-cutter way to FI. If you have any follow up questions or would like to get in touch with SMJ, please either reach out to her on Instagram or leave a comment below! Without further ado, take it away SMJ!

1. Can you give us a little background of who you are, what you do, and how you became interested in personal finance? How did you discover the idea of financial independence?

I am a lot of things; what I want to identify with in the personal finance space is a woman, a single parent, an immigrant to Canada. I work in healthcare and get great satisfaction through mentoring students, new graduates and immigrant professionals.

I became aware of personal finance when I was preparing for my maternity leave. Canada has many social support programs, paid maternity leave being one of them. I was eligible to receive employment insurance (EI) at the maximum level, which was a rude awakening to me as it was a significant reduction to my income at that time.The expenses I had up until that point were going to be way above my income coming in from EI. I made some very logical decisions at that time. I sold a car with a monthly car payment over $500 and managed to get about $2,000 extra from the sale compared to what I owed. I rented out my condo to cover mortgage costs and moved to a lower cost of living area closer to family. I had a renovation loan and credit cards that I was paying on during this time. I got by during maternity leave and didn’t dig any deeper into debt. 

When I returned to work and my income rose, I hadn’t learnt my lesson. I got rid of all my credit cards in about 2016 because I just wasn’t getting any traction, I consolidated my debts, credit cards, and renovation loan which lowered my interest payable and I was consistent about paying it off. It wasn’t till 2018 when I finally found a way forward. I was off work due to medical issues and was again on a reduced income, I had a huge lawyer bill due, over $50,000 and very little saved for my future. Earlier that year I had experienced my debit card being denied at a grocery store while out of town the day before shops closed for four days over Easter. I had to put food back on the shelf and buy only enough food for those four days. It was scary, I had my child with me and I felt so helpless in that moment.

I made good use of my time away from work and went down many personal finance rabbit holes. A friend kept talking about Dave Ramsey so I watched a few debt free screams, listener call ins, and talked through the baby steps in real time with my friend. 

I had a lawyer bill and a car payment at this point, I’d managed to pay off my consolidation loan and didn’t have credit cards. I made a plan and within a year I had both of my remaining debts paid off. While I was paying off my debt I was gaining inspiration from various accounts on Instagram and setting myself up for what to do once I was debt free. That is when I found FI/RE and discovered that I could retire earlier than 65 and likely by the time my kid finishes high school.

2. When in your journey did you realize financial independence was actually possible?  Was that the original goal at the beginning?

Time on Instagram in the debt free community, FI/RE community, podcasts, books, and blogs helped me realize very early on that if I switched the amount I was sending to debt to investments an early retirement would be possible. Every time someone would post their savings rate and projected timeline to FIRE I’d run my numbers and see if I could do it too, every time there were blog posts on numbers, withdrawal rates, savings rates, I’d consume the information and re-run my numbers. The amazing thing was no matter the numbers I was running based on my life it always came back successful – I could retire early! 

My first goal, and I guess current goal is to be in a position to retire when my kid is done with school. For me that means I can create my life exactly how I want it to look – beaches rather than snow for one! Right now I am coast FI, in that I wouldn’t need to contribute any more money and could retire at 65. That gives me so much confidence to actually make decisions related to my finances rather than feel cornered into a situation because I just can’t see another way.

3. To help put things into context, if you are comfortable sharing some numbers, what is your savings rate, FIRE number, net worth, salary, how many hours a week do you work, etc?  How long have you been working towards financial independence and where are you today? 

• savings rate 42% pre tax and 54% post tax
• FIRE number $1 million
• Net Worth $335,000
• Currently unemployed
• Work hours – typically full time 37.5 hours a week, reduced to part time 37.5 hrs per two weeks during the pandemic due to school and childcare closures.

I have actively been pursuing FIRE since December 2019 when I made my first $1,000 contribution to my self directed RRSP. I’m currently 33.5% of the way to my goal.

4. Do you feel deprived?  Do you feel like you are sacrificing and missing out on life?  How would you say your mindset has shifted throughout your FI journey?

What makes me feel deprived is not being able to travel to see family internationally, that has nothing to do with my journey to FIRE and everything to do with a global pandemic that has shut international borders for multiple years. I budget and live my life to things that make sense to me, travel, time outdoors, sports equipment to get through long winters, camping.

As I have pursued my personal FIRE journey I have been able to learn from many people online. My mindset has shifted back to my spunky confident 17-20 year old self who gave no mind to what others said or thought about my choices whether it was where to go to university, what to study, travelling alone, spending exorbitantly on live music – I simply didn’t care! Somewhere in life that changed when I was in tears thinking everyone around me was moving on with life – marriages, kids, houses – and I didn’t fit the picture of a young professional anymore. I have tapped back into living my life for me. It doesn’t matter where I live, I have a house that is affordable and provides shelter. It doesn’t matter what car I drive, I have a reliable car that is safe, paid off, and economical on petrol. It is truly knowing that my life is mine to live and I am the only one that gets to question if my choices align to my calluses. Man, have I missed 17 year old me for her confidence! 

5. What do you spend your money on and what don’t you spend your money on? What brings you happiness and joy? How much money do these things cost? 

My top budget categories for 2021 were investments, housing, daycare, food and gifts. In 2019 they were debt, housing, holiday, daycare, food. 

The lowest spend is stuff – as in wants for myself, my child, and the house. I just don’t spend on stuff that won’t last, stuff that doesn’t have a purpose, and stuff that just fills up my house. I also don’t spend on clothing – my sister and I swap clothing for ourselves and our kids when we see each other. I typically buy used clothing for my child, as kids grow so fast the cost of new becomes outrageous. I also don’t spend on coffee or going out to eat. I don’t drink coffee so there were no habits to change there, and when I look back on my “dining out” spending for earlier years, it was all fast food. I can plan and cook at home, the expense of fast food just isn’t worth it to me anymore.

I am happiest in my hammock in the afternoon sunshine listening to an audiobook from the library or talking to my family online. As far as cost goes, my hammock was a gift, afternoon sunshine is free, west facing backyard – cost of mortgage, access to free audiobooks – city rates, talking to family – cost of internet.

At the moment it costs me nothing to enjoy a long summer afternoon/evening in my hammock. If you wanna get picky it costs me something, but I’d have those costs no matter where I lived.

6. What are some of the more unique/uncommon ways you’ve cut down costs?

I don’t think that I have done anything truly unique to cut costs, I live in a condo rather than a house which halves the purchase price and subsequent mortgage. I drive a car rather than an SUV or truck which is the Saskatchewan norm again at half to one third the cost. I volunteer at events to get free passes.

In 2021 I purchased a house with a ready to use basement suite. From that purchase I have been able to house hack and have drastically reduced my personal housing costs as the rent from my basement suite allows me to live in a wonderful neighbourhood for $400 a month.

7. Do you use a budget?  Do you track your expenses? Do you track your net worth? If so, how often do you update these?

YES, YES, YES! I use a budget each and every month, I currently use the Goodbudget app and have done since 2017. I track my expenses daily in my Goodbudget app. I track my networth monthly on a self made google sheet.

8. As a single parent, how has that impacted your finances and your timeline to FI? 

As a single parent, there is no back up. Most single parents feel this when it comes to provision of child care, getting kids to activities in time, juggling work and family demands. There isn’t anyone to pull in to help with no questions asked.

As a single parent the financial aspect makes me realize that I have to have my finances in order so my card isn’t declined at the grocery store ever again, so that I can say yes to the activities that bring joy to my child and myself without worrying about how it will be afforded. 

I’m pursuing FI so that I will not be a financial liability to my child in my later years. I am pursuing FI so that I can teach my child financial literacy, financial stability, and financial responsibility.

Being a single parent means that some of the options for cost savings are off the table – house hacking to reduce housing costs, though Sarah at @nerdsguidetofi is flipping the script on that and I followed in 2021 and have been extremely happy with the decision. I don’t have as much flexibility with where I can live or work so moving to a lower cost of living area or an area with a better job market isn’t feasible given custody arrangements. 

I think as a single parent I am committed to FI for not just myself, but the future I can give my child too. FI is bigger than me.

9. As a FI member living in Canada, are there any pros to living in Canada specifically that have helped you along your journey?  Conversely, any cons?  

Canada is my second home, Australia is my first. Both countries are first world, commonwealth countries that share more similarities than differences. Specific advantages to being in Canada the big ones that come to mind are health care and social support through EI. I don’t think I have spent more than $100 a year on healthcare (physiotherapy, massage, optometrist, MRI, ultrasound, glasses, contacts, neurologist, gynecologist, dentist, prescriptions) in all the years I have lived in Canada, in part due to a public healthcare system and in part due to benefits provided by my employers. Social supports I have accessed on a number of occasions are employment insurance for periods of time when I was unable to work through injury, and the one year maternity leave.

I live in Saskatchewan, so my cost of living related to housing, transportation, and insurance is going to be considerably lower than the other major Canadian cities. I trade that for farmers fields, and flat straight drives.

Retirement investing is not mandatory in Canada while in Australia superannuation contributions are mandatory at a certain point.

10. On a similar note, being that you are originally from Australia and now in Canada, can you explain some of the differences to living in both countries?

One of the biggest differences that I personally notice between Australia and Canada is the existence of parallel public and private sectors in healthcare and education. Both which give the consumer more choice. There is also pharmacare in Australia that Canada is trying to implement with the NDP. 

Typically Australians drive smaller cars than I see on a daily basis here in Saskatchewan. I have stuck with a small car and am thankful to now be driving a paid off car with great fuel economy.

There are the obvious differences in weather and actual winters in Canada but many people enjoy getting outdoors, enjoying company of friends, and exploring nature.

11. What is your investment strategy? Do you invest in index funds, dividend stocks, real estate, other businesses, etc.?  Has your investment strategy changed over the years? 

I have been investing in self managed funds since December 2019. I have been investIng into index funds consistently since then – a mix of US, international and what I like to call “home country” (I lump both Canada and Australia into this). I do not own any individual stocks and will likely begin to consider this when I have filled up my taxed advantaged TFSA and RRSP accounts. When I move to a taxable brokerage account, Canadian dividend income is taxed favourably in Canada, whereas Australian stocks get better treatment in Australia through franking credits, what I choose to do will have more to do with where I plan to retire.

My investment strategy has changed as far as an adjustment to what I was holding in my superanuation, LIRA, and pension accounts to invest into index funds rather than default investment mixes. 

I have two rental suites and am working on paying down those rentals to have this as a source of income in early retirement.

12. Do you take advantage of tax advantaged accounts offered to you?  If so, which ones and how so?  Do you have a game plan to be able to withdraw from these funds when the time comes? 

Yes, but I’m late to the game. When I first came to Canada, I didn’t understand the accounts, didn’t have anyone to explain them to me, and to be honest never asked about them. I also didn’t know how long I would be in Canada for so I wasn’t sure how investments in Canada would be treated in Australia or how they would be treated as a permanent resident versus citizen. I still may not have all the answers but I do know I will be in Canada for the foreseeable future, and I have considerable contribution room.

I currently hold a RPP from my most recent employer which I will rollover to the appropriate self directed account when the transactions are settled.

I have a LIRA from a previous pension.

I have an RRSP and a TFSA.

I am currently working on filling up my existing RRSP contribution room. I made the decision to contribute to my RRSP over my TFSA first based on my current tax bracket, withdrawal order, potential OAS clawbacks in retirement, and lack of flexibility when an RRSP gets converted to a RIF.

Stephanie over at @prescriptions_and_paycheks inspired me to map out my drawdown strategy, and it may well change in the future but right now it looks like this:

• LIRA and RRSP
• Superanuation – age 60
• OAS/CPP – start age 65 to 71, likely 71
• Empty LIRA/RRSP by 71 to avoid fixed withdrawal schedule (RRIF)
• Brokerage
• TFSA

13. Speaking of withdrawals, what is the withdrawal rate you plan to use when you withdraw from your portfolio?  Are you a fan of the “4% rule” or something else?  Why?

I’m currently aiming for the 4% rule for setting up my FI number and knowing an amount to live on each year. 

14. What are your post-FIRE thoughts/plans regarding health coverage?  As a reference, what do you currently pay annually or monthly for health related costs (be it insurance, co-pays, deductibles, etc.)? What do you estimate your post-FIRE health costs to be per year?

Being both Canadian and Australian, health coverage isn’t top of mind, other than having adequate travel insurance.  I’d currently estimate less than $100 per year in current health costs. I am going to estimate that my post FIRE health costs won’t be too significant. I suspect there will be some one off items like travel related vaccinations, anti malarial drugs and the like. But in terms of overall health costs I’m not expecting much. My grandmother lived a long life and was on only two medications at the time of her death, she lived at home until the day she died. My parents are alive and well, enjoying retirement with no health concerns. I’m hoping for good genetics to come through that will mean I am not suffering with a chronic medical condition. 

End of life can be expensive if long term care is required, the pandemic has highlighted the discrepancy of living situations in various long term care facilities across the country and unfortunately you get what you pay for. Current costs of LTC are in the $3,000-$5,000 range in my area so anticipating $10,000 a month is not going to be too big of a stretch. I want to be in a financial position where the cost of care is not the deciding factor.

15. As a parent, have you found that having children has greatly delayed your timeline to FIRE?  How much money have you spent on your child per year?  What were some of the bigger costs that were worth it and what were some of the bigger costs that were not worth it?  Do you have a RESP account open for their post-secondary education?

I came to FIRE as a parent so I can’t really say that having a child slowed me down, I’d actually say that having a child made me plan for my future and find a way to be financially independent. I believe that I will achieve FIRE in about 10 years given my current situation, which is fairly average for a single person I would guess. People who achieve FIRE sooner (5 years or so) are often doing so with two incomes, major house hacking, or really high incomes.

I’ve tracked spending since 2017, I track spending for my child as want, need, activity, school. In 2020 I spent $5,865 including over $4,500 in daycare costs. 2019 $8,157 including over $7,209 in daycare costs. 2018 $8,885 including over $7,500 in daycare costs. 2017 $10,106 including over $7,700 in daycare costs.

The biggest cost related to having a child for me is hands down daycare. As a single parent with no family support, I can’t get by without it. Aside from that specific individual “big ticket” item, I bought my kid private swimming lessons and winter clothing. Swimming is a life skill and we live on the prairies so waterproof and warm winter clothing is a non negotiable for me! When I look back over the spending over the last four years there are very few transactions that are over $50 and most are offset by reselling the toys and clothes that have been outgrown.

What I did spend money on in my kids first year of life was baby wraps, I fell hard and fast into that rabbit hole. Some were pricey but the connection from carrying my baby everyday during the first year and sporadically up to five (mainly when travelling at that point) is priceless. 

I cloth diapered so didn’t spend on disposable diapers which was a big cost saving. I spent $100 on a cloth diaper set from a friend who never used it and then I passed the kit to my sister, then sold it when we were both done.

I do have an RESP account for my child. This was so important to me that I opened it within 6 weeks of my child’s birth. It took 6 weeks because I had to wait for their birth certificate and social insurance number to be issued! Despite being on maternity leave with a real drop in income that saw me sell a car I couldn’t afford, I was committed to funding education for my kiddo. Initially I set it up to contribute fortnightly for a number of years then in 2018 I shifted over to a self directed account and have been contributing the $2,500 as a lump sum as early in the year as I can, this year was January.

What I really love about the RESP is that it is actually quite versatile with what the money can be used for. It is not restricted just to university in Canada, it can be anywhere in the world. It is also very open with shorter courses that also qualify to use the savings.

16. If you could go back in time and change things, what would you have done differently?

Once I committed to being debt free and then making good financial decisions by pursuing FI, I haven’t looked backed. I am continuing to learn about investments, drawdown options, and real estate. In my journey from 2017 to now I wouldn’t change anything. Prior to 2017 I’d hold off on buying my condo (I bought it for all the wrong reasons). I have very little equity in it as prices are dropping or flat for condos in my area, but I have a safe place to live that I can comfortably afford.

17. Has discovering financial independence changed how you view your job and life overall? 

Absolutely! During COVID-19 my industry was forced to be closed for 6 weeks, then schools closed and I was unable to work full time. Having become debt free at the end of 2019 meant that I had very few monthly financial payments to make. It was the discipline that I had learned in 2019 that set me up to be successful in 2020, purchasing a house with a rental suit in 2021, and taking 6 weeks off unpaid in 2022. It was the books I had read that reassured me that investing was for the long term. So despite the volatility of 2020-2022, I invested every single month since 2019 and had no apprehension. 

2021 has led to unemployment for me and being in the position of deciding between a 20% pay cut or leaving. I was so secure in my financial decisions, situation, and plan that walking away was the better financial decision for me. Whereas “2018 me” would have felt no choice but to take a guaranteed job for 20% less pay and be miserable every day. I’m now in a position where I can look at small contract opportunities or part time work while I secure the job that works for me.

18. Have you come out of the FIRE closet yet? Meaning, do your friends, family, co-workers etc. know about your financial independence goals?  If so, how did you bring it up and what were their reactions?  If not, why not?  Why do you struggle with this conversation and why do you feel that money is such a taboo topic?  

I have one great friend that I talk about money with nearly every time we talk. They are working through debt pay off, and setting up financial priorities as a couple and I’m a small step ahead with investing. That friend sure does know about my planned retirement date. 

I mentioned my planned retirement date to another friend as they were talking about their early retirement date with pension and it is the same year. I’m a handful of years younger so it took a little explaining how it would be possible.

My mum is absolutely aware and I try to convince my sister to consider it, but no luck yet.

My retirement date is currently tied to my child’s schooling. It is a nice clean point in time to be aiming for that will allow me to pause, leave, and live my life.

19. What pieces of advice would you suggest to someone who is just starting out or someone who is working toward reaching financial independence? 

Find the people in the personal finance space that resonate with you and see what you can replicate. You don’t need to reinvent the wheel, people have done it before you, learn from them and make your journey uniquely yours. 

20. What does the word ‘success’ mean to you?

I think it changes all the time. If I consider success in terms of FI it is going to be the point in time that I have no financial stress, can make choices for joy not money and living a life I love while enjoying my journey.

21. Are there any books, blogs, or podcasts that you would recommend for our readers to check out?

Books: Your Money or Your Life, The Simple Path to Wealth, and The Barefoot Investor

Podcast: Explore FI Canada

22. How can people get in contact with you? 

I’m most active on Instagram @singlemoneyjourney

Great responses, SMJ! Here were my key takeaways from this interview:

• It’s wild to me that in less than 3 years SMJ has gone from various forms of debt to 33% of her FIRE goal.  Absolutely incredible and it shows how if you are dedicated and determined, you can do this.
• I love how SMJ highlights the power of social media.  By being purposeful with who you follow, social media really can improve your life.  I love how she took action whenever someone posted a net worth update, savings rate report, etc she dug into her own numbers to see how her progress was doing as well.
• We all need to embrace our 17 year old “I do what I want” attitudes!  You do you.
• “I am happiest in my hammock in the afternoon sunshine listening to an audiobook from the library or talking to my family online.” A simple life really is a happy life.
• It’s so powerful to see that being a single parent is part of the impetus for SMJ’s desire to reach FIRE as she’s doing it not only for herself but for her child too.  This reminds me of my student loans in a sense.  Having this burden turned into a drive to want to become debt free and started my savings mindset.  While some may see being a single parent as a deterrent to ones goals, SMJ is instead using it as a motivating factor to help reach her goals.
• It wild to see the daycare costs for her kiddo but also incredible to see the very low amount of spend for everything else kid related.  When removing daycare, it looks like SMJ is spending anywhere from $1,000-$3,000 on kiddo per year which is quite impressive.

Thank you again SMJ so much for being a part of our FIRE Community Guest Interview Series, we really do appreciate it! In our next FIRE Community interview, we’re staying in Canada (again!) with one of my favourite commenters on our blog who will share his journey to retirement. 

Did you enjoy this interview? Any thoughts or additional questions for SMJ? Please let us know in the comments below

Thanks for tuning in and check back next month for the next interview.

We love highlighting other members of the FI community. Please contact us if you’d like to be a part of the FIRE Community Guest Interview series and we’ll see if we’re a good fit!

And in case you wanted to read the previous interviews that make up our FIRE Community Guest Interview Series, here you go!

• FIRE Community Guest Interview # 1 – Empowerment Through FIRE
• FIRE Community Guest Interview # 2 – We Quit Our Jobs To Retire Early & Travel The World
• FIRE Community Guest Interview # 3 – Dividend Investor Reached FI By Living An Intentional Life
• FIRE Community Guest Interview #4 – Pursuing FIRE With Multiple Passive Income Streams in Australia
• FIRE Community Guest Interview #5 – Driving to FIRE Through RV Living
• FIRE Community Guest Interview #6 – From High School Drop Out to Retired at 35
• FIRE Community Guest Interview #7 – Medical Professional Family With 3 Kiddos In The Pursuit of FIRE 
• FIRE Community Guest Interview #8 – Calculated Engineer Family Utilizing Geo-Arbitrage to Reach FI
• FIRE Community Guest Interview #9 – Lessons from a Fimigrant – Let Experience Be Your Teacher
• FIRE Community Guest Interview #10 – From Entrepreneur Making $36,000 to Multi-Millionaire In His 30s
• FIRE Community Guest Interview #11 – Hybrid Dividend and Index Investor Who’s Mastering the FI Mindset
• FIRE Community Guest Interview #12 – Proving Financial Independence Is Possible With Kids In A High Cost of Living Area
• FIRE Community Guest Interview #13 – Making An Impact On The Way To FI
• FIRE Community Guest Interview #14 – Badass Momma Knows Her Worth And Became A Millionaire At 36
• FIRE Community Guest Interview #15 – PhD Couple Reached FI at 40
• FIRE Community Guest Interview #16 – Mindful Minimalist Family
• FIRE Community Guest Interview #17 – FIWOOT: Financial Independence Work On Own Terms
• FIRE Community Guest Interview #18 – French Expats Growing Their Real Estate Empire in the US and France
• FIRE Community Guest Interview #19: Money Savvy Teacher With 9 Properties
• FIRE Community Guest Interview #20: Canadian Expat Supercharging His Family’s Path to FI In the Middle East
• FIRE Community Guest Interview #21: Young Retired Couple Have Mastered The FIRE Lifestyle
• FIRE Community Guest Interview #22: Building Multiple Income Streams To Design Their Dream Lifestyle

The post FIRE Community Guest Interview #23 – A Single Mom’s Journey to FI appeared first on Modern FImily.

For anyone new here, this interview series will cover people within the FIRE community who are on their way to becoming financially independent, have already reached financial independence, or who have retired early. If you are reading this and you are financially independent, retired early, or close to reaching these major financial milestones, please reach out to the Modern Fimily! You can check out the previous FIRE Community Guest Interviews here.

Today, we have the pleasure of having fellow Canadian, Sandy Yong, join us to share here journey to FI. Sandy is a mom, fellow speaker at the recent Women Can Money Summit, recent TedX speaker, and the proud author of the book The Money Master: Inside Secrets On How To Make Your Money Grow and Stay Safe.  And I’d happy to announce we have another book giveaway!  Sandy has graciously provided us with 2 autographed copies of her book to give away to two lucky winners!

What I love best about Sandy’s book is that it’s packed with useful information but it’s also short and sweet.  Lately I’ve been on a major book hiatus as I’m finding the 300+ page books too much to take on these days with the two kiddos wearing us down on a daily basis.  Sandy’s book is just around 120 pages which I personally think is the perfect size book.     

If you are interested in the book comment below letting us know along with your biggest takeaway from this interview.

I hope you appreciate these responses as much as I do and hope you can relate to these guest interviews in some sense to see that there is no cookie-cutter way to FI. If you have any follow up questions or would like to get in touch with Sandy, please see the last question of the interview to see all the ways you can contact her.  And of course, please comment below as well! Without further ado, take it away Sandy!

1. Can you give us a little background of who you are, what you do, and how you became interested in personal finance? How did you discover the idea of financial independence?

I am a personal finance author, keynote speaker, stock market and real estate investor. 

I became interested in personal finance when my friend introduced me to Robert Kiyosaki’s book, Read Rich Dad, Poor Dad. After reading it, it inspired me to continue reading a plethora of personal finance and investing books. In my early 20s starting my career, I wanted to invest and like most people went to one of the big banks and purchased mutual funds. It wasn’t long before I got burned by high-fee, high-risk mutual funds and lost thousands. From then on, I decided to become a self-directed investor and have been doing this for the past twelve years. In addition, my husband and I own numerous condo properties and rent them out to long-term tenants. We focus on creating multiple streams of income so that we can build our wealth and accelerate our net worth.

I discovered financial independence after attending the FINCON 2019 conference in Washington, D.C. At the conference, my husband and I watched the film, “Playing With Fire” which 

followed a couple who went from living paycheck to paycheck to changing their habits and started working towards FI. It was very inspirational and it made us assess our financial situation and see if it was something that we could achieve. 

2. When in your journey did you realize financial independence was actually possible?  Was that the original goal at the beginning?

I came across Grant Sabatier’s book, Financial Freedom: A Proven Path To All The Money You Will Ever Need. It was a great introduction to understanding how to achieve financial independence. I used an online FI calculator to see how many years my husband and I would need to continue working in order to reach FI/RE. Although it’s not an exact science, we have a relatively accurate picture of when we believe we can become financially independent. 

We also joined several FI groups on Facebook to learn more about other people’s FI/RE journey and to learn different strategies to achieve this ambitious goal. On our car rides, we enjoy listening to various podcasts interviewing people who are either on their FI/RE journey or have already achieved it. 

3. To help put things into context, if you are comfortable sharing some numbers, what is your savings rate, FIRE number, net worth, salary, how many hours a week do you work, etc?  How long have you been working towards financial independence and where are you today?

We currently have a combined savings rate of approximately 40%. To achieve this, we have automated our savings so that on the day we receive our paycheques into our chequing accounts, there is an automatic transfer set up to deposit money into our savings accounts.  

We are very career-driven and goal-oriented people. I think that’s why we work so well together personally and professionally. We are hoping to reach our FIRE number in our 40s and ideally by the year 2027. We both have full-time jobs where we work approximately 40 hours/week. Our rental property income and stock market portfolios along with our book/speaking/brand partnerships incomes also keep us busy with part-time hours. As you can see, we are juggling many balls in the air – all the while taking care of our newborn son! 

Being new parents while balancing all these priorities in our lives can be tricky sometimes. We make it work as we share responsibilities and have open communication with each other. We both have been investing in the real estate and stock market for numerous years. But when we did the math, we realized that financial independence was an achievable goal for us. 

Overall, we are about 80% to reaching financial independence. We want to continue growing our multiple streams of income and ensure we have a comfortable lifestyle so that we can go on family vacations and pass on our wealth to the next generation. 

4. Do you feel deprived?  Do you feel like you are sacrificing and missing out on life?  How would you say your mindset has shifted throughout your FI journey?

We live a frugal life but every now and then we will spend the extra money on an item if we see that it brings value to our life. We don’t necessarily like to buy the cheapest product based on the lowest price if the quality doesn’t last as long. We will do our research and comparison shop to ensure that we are getting the best bang for our buck – even if it means shelling out extra money to buy a higher quality item that will be durable. 

We try our best to practice delayed gratification. We don’t feel like we are sacrificing our quality of life since we often have discussions about what we want to buy and the urgency of it. If we have maxed out our current monthly budget, then we will wait until the next month to buy the item on our wish list. 

We also think about how many hours we had to work in order to buy that particular item. Then we assess if we still think it’s worth the price. If not, then we keep searching for a better deal. 

Furthermore, we see it from a holistic standpoint as a “give and take” process. If we spend a lot of money on a fancy dinner one week, then the following week we will go out and have a cheap-eats meal. This way we can still find a balance with our spending habits and enjoy the things we want to do.

5. What do you spend your money on and what don’t you spend your money on? What brings you happiness and joy? How much money do these things cost?

Although I like to live frugally, I do enjoy spending money on travel and dining at restaurants. My husband and I save up for an annual vacation so that we can explore new countries and learn about different cultures. We watch travel documentaries which inspire us to do more research and add a country to our dream board. I also enjoy finding new local restaurants to try different cuisines. It’s good to support local businesses in my neighborhood and enjoy our weekly date nights outside of the house.

I don’t enjoy spending money on home repairs because they are maintenance items that don’t always enhance the appearance of the home. However, they are necessary repairs and cannot be avoided. Most recently, we had to pay for replacement parts of our HVAC units to ensure that the heating/cooling system would work properly. I also don’t enjoy paying for life insurance, but it’s a necessary evil. You pay into it hoping you don’t need it to use it. I suppose it’s good to have a peace of mind knowing that we are protecting our loved ones.

6. Do you use a budget?  Do you track your expenses? Do you track your net worth? If so, how often do you update these?

My husband and I have a monthly budget and a yearly budget on an excel sheet that we update on a quarterly basis. It’s been a good way to keep track of our household finances. We both keep track of our individual and joint – income and expenses. We keep a record of it on a notepad on our cell phones. It’s convenient to do this on our cellphones because it’s easy to access, especially when we are out shopping or eating at a restaurant. 

We also keep track of our net worth on a quarterly basis. It helps us to gauge whether or not we are on track of reaching financial independence. It keeps us accountable to ensure that we are saving habitually and working towards our investment goals as well. 

7. What are some of the more unique/uncommon ways you’ve cut down costs?

We usually buy generic brands at the grocery store/pharmacy. Most of the time, the quality is still decent but you pay only a fraction of the cost compared to brand name products. In addition, we buy items that are reusable products instead of disposable ones. For example, we avoid using disposable paper towels and use reusable counter cloths instead. This way we save the planet and save our money. 

We are also PC Insiders members and take advantage of PC Optimum points redemptions and bonus points. It’s been a great way to earn points through Shoppers Drug Mart, Loblaws, No Frills and Esso gas stations. These points help us pay for groceries and baby supplies. We use PC Express on a weekly basis to order groceries online and pick them up in store. We have the PC Optimum app and every week I check for free offers. We’ve received free food and household items which helps us reduce our grocery bill. When it comes to baby formula, we have received coupons that range from $5 to up to $15 off which has helped us save some money since it can add up quickly.

Lastly, if we are not in a rush to buy an item, we will wait until it goes on sale to buy it. Typically, canned goods or packaged items will be things that we would stock up when it’s on sale. Sometimes we will buy a large quantity of items and portion them out to put into the freezer for future use. We typically do this for meat products. It’s a good feeling knowing that we got a good deal and didn’t have to pay full retail price. 

8. As a FI member living in Canada, are there any pros to living in Canada specifically that have helped you along your journey?  Conversely, any cons?  

As a Canadian, I’m very grateful that we have the TFSA and RRSP to help build our family’s wealth. We are also fortunate to have pensions through our employers. This gives us the added peace of mind that we will be able to live comfortably when we reach our golden years. 

The downside of living in Canada is the unaffordable housing market. The prices have been soaring making it very difficult for generation Y and Z to become homeowners. Hopefully the federal government can help to alleviate the pressures of this housing crisis and make housing more affordable by building more houses across Canada. However, as a real estate investor myself, this has been beneficial for me since I’ve seen the property values increase over the years. 

Currently, we are also experiencing rapid inflation of approximately 4.5% in 2021 and higher levels now in 2022 thus our dollar is not stretching as far as it used to. We’ll see in the near future the impacts on prices of gas and groceries making it challenging for families to keep up with the rising cost of living.

9. What is your investment strategy? Do you invest in index funds, dividend stocks, real estate, other businesses, etc.?  Has your investment strategy changed over the years? 

I invest in index funds and ETFs. They are diversified globally – Canada, USA and internationally. I keep it simple with mainly plain vanilla funds. I enjoy receiving dividends on a quarterly basis. 

My husband and I are also building our real estate portfolio where we rent out our condo units to long-term tenants. We like to focus on the condo market because it’s easier to maintain and it’s been relatively more affordable than buying a house. We hope to increase our rental income over the next few decades. This will help to pay down our mortgages. 

Since my husband and I are both authors and keynote speakers, we are also focusing on growing our speaking engagements, having brand partnerships, and even some freelancing writing. It’s been a great way to follow our passions and help educate our audience about health and wealth.

10. Do you take advantage of tax advantaged accounts offered to you?  If so, which ones and how so?  Do you have a game plan to be able to withdraw from these funds when the time comes or is the plan to live solely off passive rental income? 

We max out the contributions every year for our TFSA and RRSP. We like how the TFSA allows us to grow our investments tax-free. For the RRSP, the withdrawals will be tax-deferred.  We will probably have to withdraw some money from our non-registered accounts and live off the dividends we receive as well. The rental income will continue to help pay down our mortgages. We’ll also have some cash as a buffer in case the stock market crashes during the time we reach FI. That way we won’t be forced to sell our funds at a loss. We’ll also be sure to ensure our emergency savings funds are padded up nicely in case unexpected events occur. 

11. Speaking of withdrawals, what is the withdrawal rate you plan to use when you withdraw from your portfolio?  Are you a fan of the “4% rule” or something else?  Why?

Yes, we plan to use the 4% rule to start off with and see if we need to adjust it. We might even try geoarbitrage where we will travel to some countries where the living costs are cheaper than in Canada. There are many asian countries that we would like to visit some day.

12. What are your post-FIRE thoughts/plans regarding health coverage?  As a reference, what do you currently pay annually or monthly for health related costs (be it insurance, co-pays, deductibles, etc.)? What do you estimate your post-FIRE health costs to be per year?

We currently pay monthly for health/dental/life insurance through our employers. We will probably look into our university alumni group’s health insurance plan. Our health and dental costs have fluctuated the past several years. I would say it could be around several thousand per year for our family.

13. As a parent, have you found that having children has greatly delayed your timeline to reach financial independence?  How much money have you spent on your child per year?  What were some of the bigger costs that were worth it and what were some of the bigger costs that were not worth it?  Are you planning to open up a RESP for their post-secondary education?

We budgeted on having a child in advance so that we were already saving up for childcare costs before our son was born. By saving up in advance, we have been able to transition better rather than there being a large spike in expenses. 

As new parents, we are still in the first year of taking care of our first child. We have been able to save money by budgeting all the essential baby items and did comparison shopping to find the best deals. We also had friends and family help donate some items so we didn’t have to buy new items. We also used Facebook marketplace to find second-hand items so that we could get items at a discounted price. We bought a crib, play mat, bath tub, plush toy and diaper pail through Facebook marketplace. It’s been a great way to save money. 

We realized that with compound interest, you would actually earn more money on your investment portfolio if you have a large upfront lump sum to go towards your child’s education. There are also some restrictions when it comes to the RESP. We have decided to continue to contribute to our existing non-registered accounts to grow our investment portfolio. Then when our child enrolls into post-secondary school, we can sell off some funds and give it to him directly.  

14. Has discovering financial independence changed how you view your job and life overall? 

Yes, it’s made me realize that I have many passions that extend beyond my full-time career. It’s also made me look at my spending habits and ask myself if I think they are worth it or not. It’s opened my eyes to the fact that I can still enjoy my current lifestyle while saving up for my future. My husband and I are exploring ways to increase our net worth via multiple streams of income. We hope that when we achieve financial independence, that it will give us the time to spend with our loved ones and to further pursue our passions.

15. Have you come out of the FIRE closet yet? Meaning, do your friends, family, co-workers etc. know about your financial independence goals?  If so, how did you bring it up and what were their reactions?  If not, why not?  Why do you struggle with this conversation and why do you feel that money is such a taboo topic?  

No, we haven’t really mentioned this to our friends, family or co-workers. But I’ve been featured in multiple podcasts and interviews that if they listened or read them, they would know that it’s something our family is working towards. We haven’t talked about it because not many people have asked us to be honest. 

We also find that when people hear stories of young adults achieving financial independence and quitting their corporate jobs, it tends to polarize people. Either people are rooting for you or they just can’t wrap their head around it and make assumptions about how you live your life. 

Because so many people live paycheck to paycheck, they think it’s something that is impossible to achieve or that you’ve had to deprive yourself of so many things in order to achieve financial independence. That’s why only a handful of people know and we openly discuss it with people who are on the same path or are more successful than us and understand why we do what we do.

16. What pieces of advice would you suggest to someone who is just starting out or someone who is working toward reaching financial independence? 

Envision what your future lifestyle will look like. Think about where you want to live, if you want to start a family and travel the world. Maybe you want to go back to school or learn a new skill. How much will these things cost? When do you want to achieve them? When you have a financial plan mapped out, it will help you determine what steps you need to take to get there. 

Also, determine what financial independence means to you. Some people want to have enough money to leave their full-time jobs. Some people still want to work part-time. Take the time to figure out what you want and think of the best ways that you can start your path to achieving your financial goals (whether it be investing in the stock market or in real estate etc).

17. Are there any books, blogs, or podcasts that you would recommend for our readers to check out?

I enjoyed reading the following books pertaining to reaching financial independence and creating wealth: 

• Choose FI: Your Blueprint to Financial Independence by Brad Barrett, Chris Mamula, and Jonathan Mendonsa
• Master your mortgage for financial freedom : how to use the Smith manoeuvre in Canada to make your mortgage tax-deductible and create wealth by Robinson Smith
• Quit Like a Millionaire: No Gimmicks, Luck, Or Trust Fund Required by Bryce Leung and Kristy Shen

I also have an ongoing list of excellent personal finance resources that you can check out on my website: www.sandyyong.com/resources. It includes additional book recommendations, podcasts, online financial calculators, quizzes and worksheets. I’m constantly updating the webpage to provide you with great resources that will help you learn more about personal finance. 

18. How can people get in contact with you? 

Please feel free to connect with me on social media:

Website: www.sandyyong.com 

Instagram: www.instagram.com/themoneymasterbook

Facebook: www.facebook.com/themoneymasterbook

Twitter: www.twitter.com/MoneyMasterBook  

Linkedin: https://www.linkedin.com/in/sandyyong1/ 

Email: sandy@themoneymasterbook.com 

Great responses, Sandy! Here were my key takeaways from this interview:

• Love that Sandy highlighted the automatic transfer from her chequing account to her savings account to line up with pay days.  Pay your future self first and try to keep as much automated as possible!  Thins line of thinking lines up nicely with Paula Pant’s Anti-Budget.
• “We also think about how many hours we had to work in order to buy that particular item. Then we assess if we still think it’s worth the price. If not, then we keep searching for a better deal.” This is what Vicki Robin coined as your “life energy” and is such a powerful way to think about purchases!
• Reusable counter cloths for the win!  We too do the same and maybe go through 1-2 rolls of paper towel over a year.
• PC Points!  We too are PC points collectors but are no where near master level that some of these PC point collectors out there are at.  Pro tip is to make sure you check in with the app as you also get customized offers in there.  This week we were able to get butter for $2.99 and eggs for $1.99 thanks to an in-app offer.
• I can’t get over all the different passive income streams Sandy and her partner are building!  Investment portfolio, real estate portfolio, book royalties, and speaking arrangements! Busy bees!  Plus a little guy in tow! I honestly don’t know how you do it all on top of your day jobs!
• Geo-arbitrage for the win for sure.  We are leaning towards travelling for 2-4 months each winter and when we play with some numbers we actually end up making money if we rent our house out while away to go explore other parts of the world.
• “We also find that when people hear stories of young adults achieving financial independence and quitting their corporate jobs, it tends to polarize people. Either people are rooting for you or they just can’t wrap their head around it and make assumptions about how you live your life.” Amen!!

Thank you again Sandy for being a part of our FIRE Community Guest Interview Series, appreciate it! In our next FIRE Community interview, we’re staying in Canada with a single mom showing her journey to reach financial independence. 

Did you enjoy this interview? Any thoughts or additional questions for Sandy? Please let us know in the comments below

And again, if you’d like to win a copy of Sandy’s book, let us know below along with your key takeaway from the interview. We will announce the winners when the next FIRE Community interview comes out.

Thanks for tuning in and check back next month for the next interview.

We love highlighting other members of the FI community. Please contact us if you’d like to be a part of the FIRE Community Guest Interview series and we’ll see if we’re a good fit!

And in case you wanted to read the previous interviews that make up our FIRE Community Guest Interview Series, here you go!

• FIRE Community Guest Interview # 1 – Empowerment Through FIRE
• FIRE Community Guest Interview # 2 – We Quit Our Jobs To Retire Early & Travel The World
• FIRE Community Guest Interview # 3 – Dividend Investor Reached FI By Living An Intentional Life
• FIRE Community Guest Interview #4 – Pursuing FIRE With Multiple Passive Income Streams in Australia
• FIRE Community Guest Interview #5 – Driving to FIRE Through RV Living
• FIRE Community Guest Interview #6 – From High School Drop Out to Retired at 35
• FIRE Community Guest Interview #7 – Medical Professional Family With 3 Kiddos In The Pursuit of FIRE 
• FIRE Community Guest Interview #8 – Calculated Engineer Family Utilizing Geo-Arbitrage to Reach FI
• FIRE Community Guest Interview #9 – Lessons from a Fimigrant – Let Experience Be Your Teacher
• FIRE Community Guest Interview #10 – From Entrepreneur Making $36,000 to Multi-Millionaire In His 30s
• FIRE Community Guest Interview #11 – Hybrid Dividend and Index Investor Who’s Mastering the FI Mindset
• FIRE Community Guest Interview #12 – Proving Financial Independence Is Possible With Kids In A High Cost of Living Area
• FIRE Community Guest Interview #13 – Making An Impact On The Way To FI
• FIRE Community Guest Interview #14 – Badass Momma Knows Her Worth And Became A Millionaire At 36
• FIRE Community Guest Interview #15 – PhD Couple Reached FI at 40
• FIRE Community Guest Interview #16 – Mindful Minimalist Family
• FIRE Community Guest Interview #17 – FIWOOT: Financial Independence Work On Own Terms
• FIRE Community Guest Interview #18 – French Expats Growing Their Real Estate Empire in the US and France
• FIRE Community Guest Interview #19: Money Savvy Teacher With 9 Properties
• FIRE Community Guest Interview #20: Canadian Expat Supercharging His Family’s Path to FI In the Middle East
• FIRE Community Guest Interview #21: Young Retired Couple Have Mastered The FIRE Lifestyle

The post FIRE Community Guest Interview #22 – Building Multiple Income Streams To Design Their Dream Lifestyle appeared first on Modern FImily.

For anyone new here, this interview series will cover people within the FIRE community who are on their way to becoming financially independent, have already reached financial independence, or who have retired early. If you are reading this and you are financially independent, retired early, or close to reaching these major financial milestones, please reach out to the Modern Fimily! You can check out the previous FIRE Community Guest Interviews here.

Today, we have the pleasure of having Lauren join us from my home state of Florida!  Lauren, and her husband Steven, are the brains behind the amazing blog Trip of a Lifestyle. They were able to retire by 29 (that is not a typo!) while making middle class incomes. 

I first heard about them on a ChooseFI podcast that they were interviewed on a few years ago and our thoughts align so much with theirs.  We also are fellow UF alum – go Gators! I love how they value travel and have made so many incredible trips a reality at such a young age.  They are very aware of their spending and provide some really interesting money savings hacks.  

I hope you appreciate these responses as much as I do and hope you can relate to these guest interviews in some sense to see that there is no cookie-cutter way to FI. If you have any follow up questions or would like to get in touch with Lauren and Steven, please see the last question of the interview to see all the ways you can contact them.  And of course, please comment below as well! Without further ado, take it away Lauren!

1. Can you give us a little background of who you are, what you do, and how you became interested in personal finance? How did you discover the idea of financial independence?

I’m Lauren! My husband Steven and I run the personal finance and travel blog Trip Of A Lifestyle. We started learning about and working toward financial independence right after college. Around eight years later, we were able to walk away from full-time work forever.

Getting started at a young age was powerful for us, which is why we try to encourage young people to get started on the path to financial independence as early as possible. But it’s important to have fun as you work toward your goals. Our way of doing that has been to take multi-month travel sabbaticals, each with a net cost of around $0, in between the years we buckle down and save.

2. When in your journey did you realize financial independence was actually possible?  Was that the original goal at the beginning?

Two years after we graduated from college and started working at our first full-time jobs, we had saved and invested over $100,000, and neither of us made more than a teacher’s salary. That huge milestone really proved to us that what we were doing was working. By keeping our household expenses super low, we felt very in control of our circumstances, and that helped empower us to dream big.

But those two years also took a toll on us. In addition to our jobs and side gigs, we were also planning our own wedding. So, when we got married, we decided to reward all our hard work with a really good vacation — a honeymoon in Hawaii. The only thing is, we didn’t want to spend a few of the precious thousands we had just worked so hard to save on a two-week trip. It seemed dumb.

That’s when we decided to take six months off to move to Hawaii instead. We rented an apartment instead of staying in hotels, bought a used car for cash instead of getting a daily rental, and practiced a ton of other lifestyle optimizations that wound up making our vacation more like our usual frugal life.

Because we engineered it to be affordable, we didn’t need to work more than 10 hours a week to cover all of our bills. That trip allowed us to sort of dry run early retirement and gave us the experience we needed to further cement our FIRE plans.

3. To help put things into context, what is your savings rate, FIRE goal, how many hours a week do you work, etc?  How long have you been working towards financial independence, and where are you today? 

When we were working full-time, we saved (and invested) something like 60-85% of our after-tax incomes consistently. We did that for about 8 years, minus a year or so of extended travel breaks. During that period, our annual spending for two was between $18k and $24k most of the time.

At this point, we’ve reached FIRE, but it doesn’t really matter as much to us any more because we’ve realized that we’ll probably never actually need to live off of our portfolio. We’ve considered ourselves to be “semi-retired” since age 29, but we’ve kept a very small amount of freelance work which keeps our portfolio growing instead of shrinking.

Since we don’t have employer-provided health insurance any more, our household spending for two today is more like $25-30k per year when we’re at home, and pretty close to the same while traveling.

4. Do you feel deprived?  Do you feel like you are sacrificing and missing out on life?  How would you say your mindset has shifted throughout your FI journey?

We never felt like we were sacrificing fun on our path to FIRE. I think starting on our FI journey early kept us from falling victim to lifestyle inflation, which is where I think a lot of “FOMO” comes from. It’s easy to be happy living like a college kid when you just keep doing that right out of college instead of trying to cut your expenses back later.

We were fine with our furniture from college, so we didn’t feel the need to upgrade (don’t worry, we did get rid of our futon though). We also baked in plenty of affordable travel, like our graduation road trip from Florida to Alaska and back, our Hawaii honeymoon, and our more recent, seven-month National Park adventure.

That’s a big part of our story and what we try to get more people to understand: your journey to financial independence doesn’t have to be a long grind that denies every pleasure. We advocate for taking breaks when you need them, but it’s important to find ways to keep them from breaking the bank, too.

Ideally, every dollar you save and invest makes you feel that much more free. That mindset shift empowers you to take control over your life and make choices for your own best interest — whether that’s asking for a raise, leaving a toxic workplace, going on a long trip, or starting a business.

5. What do you spend your money on and what don’t you spend your money on? What brings you happiness and joy? How much money do these things cost?

I would say we get most of our joy from things that cost next-to-nothing. Walking on the beach, going to a park, riding our bikes, and just generally getting some fresh air and exercise. We’re huge advocates of the great outdoors as the ultimate theme park.

We also love a good road trip, and our van was one of the things we’ve splurged on in more recent years. We bought a 2013 Nissan NV200 and converted it into a camper for the National Parks trip we did in 2019, but we’ve kept it to continue to travel affordably throughout North America.

Since graduating college, we’ve always shared a single car between us, and we’ve always bought used cars somewhere in the $2,000 – $6,000 range. This van, while used, was the most expensive vehicle we’ve ever purchased at $12,300. But it’s still our only vehicle.

Another thing we pay for is a Planet Fitness membership, especially if we’re traveling. It’s about $25/month for one person, but it allows access to any location in the country — and a guest pass each visit at no extra cost. So, we essentially get two memberships for the price of one, allowing us to work out — and shower — anywhere in the country. This is one of our biggest travel hacks when we’re camping in our van, which is basically just big enough for us and our bed.

6. Do you use a budget?  Do you track your expenses? Do you track your net worth? If so, how often do you update these?

We’ve actually never budgeted, but we do track our net worth monthly. I think it’s a better, more holistic lens to look through, and tracking your net worth naturally encourages maximization of saving, whereas budgeting tends to be more about keeping saving/spending constant.

7. As a FI member living in the US, are there any pros to living in America specifically that have helped you along your journey?  Conversely, any cons?  

I think we’ve been lucky to live in a country that allows us to set our own price for what we’re worth as employees. Looking at employment as a voluntary business transaction means I can do what’s best for me, just as my employer tries to do what’s best for them. If those positions don’t align, we don’t do business. It’s pretty powerful, and it’s helped me take a stronger stance in my negotiations.

Aside from the freedom to do business as we choose, I think the United States just has a big economy that’s full of widely varying opportunities. There are plenty of other countries I could say these same things about too, but I do count myself lucky to live in the US.

8. What is your investment strategy? Do you invest in index funds, dividend stocks, real estate, other businesses, etc.?  Has your investment strategy changed over the years? 

Most of our investments are broadly diversified, total stock and bond market index funds. When we moved to the beach last year, we kept our previous condo as a rental. Since we paid for both condos in cash, we’re a little more real estate heavy than we originally intended, but we’re still happy with the mix.

9. Do you take advantage of tax-advantaged accounts offered to you?  If so, which ones and how so?  Do you have a game plan to be able to withdraw from these funds when the time comes? 

We both max out IRAs and HSAs each year, but we’ve never maxed out any other tax-advantaged accounts. We’ve retired from full-time work, so we don’t have access to any employer-sponsored plans, like a 401k, any more (which we used to contribute to in order to claim an employer match).

We’ve always parked a large chunk of our savings in a taxable brokerage account because we knew we’d be retiring early and potentially wanting access to our portfolio before age 59.5. That account is what’s allowed us to pay cash for our homes.

We also went hard on Roth IRAs when we were younger, and it’s nice to know that the contributions from those (but not the gains) can be tapped penalty-free at any time. We’ve never done it though.

10. Speaking of withdrawals, what is the withdrawal rate you plan to use when you withdraw from your portfolio?  Are you a fan of the “4% rule” or something else?  Why?

Our FI goal has always been loosely based on the 4% rule, but we have no need to withdraw from our portfolio at this time. Ultimately, we’ve found that our specific FIRE number doesn’t really matter to us any more, since our expenses are so low that just a tiny amount of fun freelance work covers them more than 100%. But if we were forced to live off of our portfolio, we’d limit withdrawals to 4% or less annually.

11. As an American couple pursuing FI, what are your post-FIRE thoughts/plans regarding health coverage?  As a reference, what do you currently pay annually or monthly for health related costs (be it insurance, co-pays, deductibles, etc.)? What do you estimate your post-FIRE health costs to be per year?

Our general strategy is to buy as little insurance as possible in all areas of life, self-insuring what you can afford to. Unfortunately, healthcare is not something we can fully self-insure.

We currently have a high-deductible health care plan through healthcare.gov, and we pair it with an HSA. We’re still young and healthy, with no chronic or ongoing illnesses, so we likely won’t make changes to that for a while. Our annual physicals are included, but not much else. The coverage is there for catastrophic issues like a cancer diagnosis. We’re on the hook for anything less than ~$13,000 each year. The premium is something like $580/mo for the two of us at the moment (ouch), but we will probably get a significant subsidy due to lower income this year.

12. If you could go back in time and change things, what would you have done differently?

I would have liked to know about index funds and investing sooner. We started investing shortly after college graduation, but we’d have been in a position to do a little bit of investing before that, if we had known how.

13. Has discovering financial independence changed how you view your job and life overall? 

Financial independence (and the increasing freedom achieved while working toward that goal) allowed me to take control over my life and its trajectory. I didn’t always know it was exactly what I needed, but it was.

14. Have you come out of the FIRE closet yet? Meaning, do your friends, family, co-workers etc. know about your financial independence goals?  If so, how did you bring it up and what were their reactions?  If not, why not?  Why do you struggle with this conversation and why do you feel that money is such a taboo topic?  

I guess everyone knows now that we blog about financial independence, but I don’t know that everyone’s really accepted the truth of it all.

I also think some people read about what we’ve done and think “that’s great for them,” but I don’t know that they believe it could be possible for themselves. We’re trying to change some minds and lives. That’s why we write the blog.

15. What pieces of advice would you suggest to someone who is just starting out or someone who is working toward reaching financial independence? 

Be obsessed with learning. Knowledge pays dividends throughout your entire life, so frontload a lot of your learning, and never stop doing it.

16. What does the word ‘success’ mean to you?

The best kind of success is being happy with both your results and the process of achieving those results.

17. Are there any books, blogs, or podcasts that you would recommend for our readers to check out?

I’m probably a bit biased, but I certainly think you should give our Financial Roadmap a read if you’d like to reach FIRE in the funnest way possible. The blog that helped us the most on our own journey was Mr. Money Mustache. And if you’d like to learn about investing through books, we recommend The Simple Path to Wealth and A Random Walk Down Wall Street.

18. How can people get in contact with you? 

Website: https://www.tripofalifestyle.com/

Facebook: Trip Of A Lifestyle

Instagram: @TripOfALifestyle

Twitter: @TOALifestyle

YouTube: Trip Of A Lifestyle

TikTok: @TripOfALifestyle

Come on, so good! Here are some of our key take-aways from this interview:

• Their story epitomizes why learning about personal finance, and in particular FIRE, at a young age is SO powerful.  They were able to keep lifestyle inflation at bay which greatly supercharged their timeline as they likely did not need as big of an FI number vs if they had discovered FIRE 15 years later once the big house, nice car, fancy this and that became the norm.
• Loveeee how they hacked their Hawaii honeymoon.  So many people assume a longer trip = more expensive.  We too love the concept of slow travel where you can likely see way more for the same price, if not less, over the course of a month+ than what a typical 2 week vacation would cost.
• Another vote for free entertainment.  For us, its going for a walk, building a snowman, going sledding, checking out a new hike, doing an outdoor scavenger hunt, swimming in the creek, looking at bugs, etc.  These things can last hours and provide a ton of entertainment for little kiddos.
• Hands down my favourite hack of theirs was hearing the Planet Fitness shower hack while listening to their ChooseFI interview.  After I heard that, they gained mad respect from me haha.  $25/month to have access to showers (and workouts) all across the country – genius!  So many people would instead upgrade their van to have a shower which would be way more $$! Totally using this shower hack if/when we travel around the States.  
• I hope Lauren’s response to post-FIRE health coverage plans/costs makes some Canadians reading thankful to be living up here!  The high deductible plans in the States are no joke.  Of course, hopefully you never have to spend up to your deductible in a year but it’s something that should be considered for every American FIRE seeker out there.
• I love how they are able to keep their expenses low which allows them to do some fun part time freelance gigs to cover their entire expenses for the year so they’re sitting at a 0% withdrawal rate.  I’d also like to highlight that all profits earned from their blog are donated to charity which I find very admirable.
• We too write our blog to help people figure out the mindset shift.  I’m sure many readers think “there’s no way we can do what they did” when hearing either of our stories but hopefully you can make some tweaks to your lifestyle to improve your financial situation.
• Love your take on the meaning of success

Thank you again Lauren and Steven for being a part of our FIRE Community Guest Interview Series, appreciate it! In next month’s interview, we’re back in Canada with Sandy Yong – author of The Money Master – to share her story as well as provide a free book giveaway! 

Did you enjoy this interview? Any thoughts or additional questions for Lauren and Steven? Please let us know in the comments below Thanks for tuning in and check back next month for the next interview.

We love highlighting other members of the FI community. Please contact us if you’d like to be a part of the FIRE Community Guest Interview series and we’ll see if we’re a good fit!

And in case you wanted to read the previous interviews that make up our FIRE Community Guest Interview Series, here you go!

• FIRE Community Guest Interview # 1 – Empowerment Through FIRE
• FIRE Community Guest Interview # 2 – We Quit Our Jobs To Retire Early & Travel The World
• FIRE Community Guest Interview # 3 – Dividend Investor Reached FI By Living An Intentional Life
• FIRE Community Guest Interview #4 – Pursuing FIRE With Multiple Passive Income Streams in Australia
• FIRE Community Guest Interview #5 – Driving to FIRE Through RV Living
• FIRE Community Guest Interview #6 – From High School Drop Out to Retired at 35
• FIRE Community Guest Interview #7 – Medical Professional Family With 3 Kiddos In The Pursuit of FIRE 
• FIRE Community Guest Interview #8 – Calculated Engineer Family Utilizing Geo-Arbitrage to Reach FI
• FIRE Community Guest Interview #9 – Lessons from a Fimigrant – Let Experience Be Your Teacher
• FIRE Community Guest Interview #10 – From Entrepreneur Making $36,000 to Multi-Millionaire In His 30s
• FIRE Community Guest Interview #11 – Hybrid Dividend and Index Investor Who’s Mastering the FI Mindset
• FIRE Community Guest Interview #12 – Proving Financial Independence Is Possible With Kids In A High Cost of Living Area
• FIRE Community Guest Interview #13 – Making An Impact On The Way To FI
• FIRE Community Guest Interview #14 – Badass Momma Knows Her Worth And Became A Millionaire At 36
• FIRE Community Guest Interview #15 – PhD Couple Reached FI at 40
• FIRE Community Guest Interview #16 – Mindful Minimalist Family
• FIRE Community Guest Interview #17 – FIWOOT: Financial Independence Work On Own Terms
• FIRE Community Guest Interview #18 – French Expats Growing Their Real Estate Empire in the US and France
• FIRE Community Guest Interview #19: Money Savvy Teacher With 9 Properties
• FIRE Community Guest Interview #20: Canadian Expat Supercharging His Family’s Path to FI In the Middle East

The post FIRE Community Guest Interview #21 – Young Retired Couple Have Mastered The FIRE Lifestyle appeared first on Modern FImily.

For anyone new here, this interview series will cover people within the FIRE community who are on their way to becoming financially independent, have already reached financial independence, or who have retired early. If you are reading this and you are financially independent, retired early, or close to reaching these major financial milestones, please reach out to the Modern Fimily! You can check out the previous FIRE Community Guest Interviews here.

Today, we have the pleasure of having Adam join us from all the way in Saudi Arabia!  Adam has ties to both South Africa and Canada and him and his family decided to uproot their lives in Western Canada to supercharge their FI journey by moving across the globe to the Middle East.  Adam is living proof that geo-arbitrage is a very real way to reach FI.  I love how most people in the FIRE community think of geo-arbitrage as part of their post-FI plans but here’s Adam showing how you can incorporate it into your FIRE journey.

Adam and I chat quite a bit with each other and I’m hoping that when it’s time to move back to Canada this lovely family ends up in our town.  

I’d also like to highlight that Adam is not a blogger/podcaster so I appreciate him coming on to share his story.  So many people think the FIRE community is full of these “influencers” trying to “make it big” by shouting their story from every rooftop when in reality the large majority are silently crushing it to FI. (And if anyone thinks we are trying to make anything out of this blog…. I will gladly share with you our laughable annual blog “income” which could maybe buy us groceries for a month.)

I hope you appreciate these responses as much as I do and hope you can relate to these guest interviews in some sense to see that there is no cookie-cutter way to FI. If you have any follow up questions or would like to get in touch with Adam, please leave a comment on this post. Without further ado, take it away Adam!

1. Can you give us a little background of who you are, what you do, and how you became interested in personal finance? How did you discover the idea of financial independence?

I am a South African/Canadian in my late-30s and currently living the expat life with my family and working abroad in the Middle East – Saudi Arabia to be exact.

A few years ago, I read a book called “Millionaire Teacher” by Andrew Hallam. This inspired me to change the way in which I thought about, and in turn invested, our money. As I sought more and more information, I came across the concept of financial independence…and was immediately hooked.

As per most people when they first stumble onto FI, I went down a rabbit hole pretty quick and pretty deep. While it was great to be exposed to a wealth of material I also found myself thinking about finances way too much.

I decided to take a step back, focus on the “major” things and let the little things go…there is only so much you can tweak and adjust.

2. When in your journey did you realize financial independence was actually possible?  Was that the original goal at the beginning?

I think I always believed that FI was attainable, but after landing a job abroad – and all the benefits that come with that – it became clear that we would be able to ramp up the trajectory to us reaching our “FI number” a lot sooner. Once this was in motion, the belief was definitely cemented.

3. To help put things into context, if you are comfortable sharing some numbers, what is your savings rate, FIRE number, net worth, salary, how many hours a week do you work, etc?  How long have you been working towards financial independence and where are you today?

I would say that I have only really been focused on FI intensely for the past five years and our situation is more niche than if I was living back home in Canada.

As expats, we are subject to a number of perks. While I’m hesitant to share exact numbers, I can say that I earn about double what I was earning in Canada…and add to the fact that we have our rent covered, majority of my kids’ education paid for…we are able to save about 85% of our monthly income. 

Another non-financial benefit to this lifestyle is that my wife is able to stay home with our kids’ – something that she has always wanted to do, and something that we could never have been able to do back in Canada with all the financial obligations that come with younger children i.e. daycare costs, etc.

4. Do you feel deprived?  Do you feel like you are sacrificing and missing out on life?  How would you say your mindset has shifted throughout your FI journey?

Nope, don’t feel deprived at all.

For the past five years – prior to this COVID-19 chaos anyways – we have lived in a great family-friendly compound, and been able to travel to both Canada and South Africa to visit family and friends. While we miss Canada and the great surroundings, we have also been able to live a great family life in unique culture and surroundings…if anything, we have been thriving – not been deprived. 

5. What do you spend your money on and what don’t you spend your money on? What brings you happiness and joy? How much money do these things cost?

Honestly, I feel that we are quite dull when it comes to this side of things. Besides travel, and the occasional splurge on a restaurant or takeaway, we don’t really spend our money on much.

Working a 5-day week, and having three kids under the age of 6, our days are pretty unadventurous (but also busy).

I feel this will change dramatically when we do decide to return to Canada, but for now we are comfortable with our daily visits to the pool and playgrounds (which are free!).

6. Do you use a budget?  Do you track your expenses? Do you track your net worth? If so, how often do you update these?

We don’t use a formalized budget but we do have a general idea of monthly spend. 

Once a month, my wife and I will sit down and map out anticipated costs for the upcoming month i.e., groceries, kids’ activities, residency permit fees, etc. More often than not, we are pretty spot on in our projections.

As far as net worth tracking – I check our net worth once a month on the last day of the month. At the beginning of the FI journey, I used to track this closely but you reach a point whereby you realize you just need to let go a little bit…so once a month works for us.

7. What are some of the more unique/uncommon ways you’ve cut down costs? 

For us – embracing the expat life was the game-changer. By taking a job abroad in a more tax-friendly region, we were able to completely alter the way in which we saved and spent our money.

By putting ourselves in an environment with zero percent income tax, as well as additional perks – I was able to increase my income, eliminate our rental costs, and drastically alter our financial projection…all at once.   

8. As someone who is now an expat living aboard in the Middle East, how has that impacted your finances? 

Pros: The financial impact has been massive. Usually, expat opportunities include a number of perks. These will vary according to location, but the main ones for us are:

• Tax free US$ salary
• Substantial/ full rental assistance
• Travel assistance – fee paid to family each year to travel.
• Educational coverage for children 
• Full medical coverage

Cons: While there are plenty of benefits to the expat life, there are also of course sacrifices too. Being abroad means being apart from family and places that you love, while also missing out on the memories that come with that. This is something that definitely needs to be taken into consideration when thinking about making the move abroad.  

9. As a FI member from Canada (well South Africa actually eh?), are there any pros to living in Canada specifically that have helped you along your journey?  Conversely, any cons?  What have you noticed are some of the major pros/cons now that you are living abroad?

From the pros side – I do like some of the tax-beneficial accounts that I feel will help us in later life – such as the TFSA and RRSP…but until now there wasn’t anything massively beneficial. 

From the cons side – I did find having young kids a challenge in Canada and trying to deal with some crazy daycare costs (in BC anyways). Another con was definitely the rental/housing costs in Vancouver (and spreading throughout BC)…the costs are insane!

10. What is your investment strategy? Do you invest in index funds, dividend stocks, real estate, other businesses, etc.?  Has your investment strategy changed over the years?

Yup, it changed a lot – I used to fool myself into thinking that I knew what I was doing and tried to invest in individual stocks (including some very high-risk penny stocks). Once I woke up to the fact that I was useless in timing anything in the market, I converted to a full index fund ETF approach. 

We don’t own any real estate, and have the vast majority of our net worth invested in index funds. I like the simplicity and low costs of a single “all-in-one” ETF, and so purchase VGRO on a monthly basis with a long-term hold approach in mind.

11. Do you take advantage of tax advantaged accounts offered to you?  If so, which ones and how so?  Do you have a game plan to be able to withdraw from these funds when the time comes? 

When we became expats, we declared ourselves as non-residents of Canada. The advantage of doing this when working in Saudi Arabia is that I am not liable to pay any income tax (in either Saudi or Canada).  However, when you declare non-residency, you also give up your right to invest in accounts such as the TFSA, RESP and RRSPs.

For now, we invest in a regular brokerage account and if we ever decide to return to Canada, we will likely shift these across to resume our tax-advantaged account contributions. 

12. Speaking of withdrawals, what is the withdrawal rate you plan to use when you withdraw from your portfolio?  Are you a fan of the “4% rule” or something else?  Why?

While I use the “4% rule” as a guide, I definitely don’t bet the bank on it. Right now, I use the 25X approach as something to set targets, but until we have moved back to Canada and built a lifestyle that we are happy with – I am hesitant to commit to any form of withdrawal strategy.

13. What are your post-FIRE thoughts/plans regarding health coverage?  What do you estimate your post-FIRE health costs to be per year?

No idea – to be honest, I haven’t thought that far ahead as I doubt I will be going the “retire early” route. I think that when I hit FI, I will be looking to change my schedule and hopefully freelance/consult. As for now – me and my family have private medical coverage.

14. As a parent, have you found that having children has greatly delayed your timeline to FIRE?  What were some of the bigger costs that were worth it and what were some of the bigger costs that were not worth it?  Are you able to open up a RESP for their post-secondary education while abroad?  Is there an equivalent type of account you can fund to help with their post-secondary studies if they choose to go that route?

Nope, definitely don’t feel that they have delayed us. The situation would definitely have been different had we been living in Canada, as we were definitely feeling the pinch of high daycare costs in BC before we moved abroad.

We have three kids – all under the age of 7 – and having lived in Saudi for five years now, we have been lucky enough to dodge some of those exorbitant costs. 

As far as larger costs that were worth it – definitely travel. You definitely notice the cost of kids on flights – as airlines charge about 90% of the full ticket price from the age of 2 – but it has been worth it. As far as other costs – we stock up on clothes on sales, and also pick-up loads through Facebook market sites…so we have kept prices in check.

We were able to open up RESPs for two of our kids when we were residents of Canada, but have not been able to contribute to them since becoming non-residents. For now, I include the kids’ education investments as part of our larger investment portfolio, and if we decide to return to Canada, I will look to begin contributing to their RESPs again.

15. If you could go back in time and change things, what would you have done differently?

This sounds cliched, but I definitely wish I was more financially educated at a younger age. 

It took lots of mistakes and seeking out solid educational materials to finally get me and my family on the correct path. 

Also, I would have looked for expat opportunities sooner – the lifestyle is great for young families that are willing to try something different, and the benefits can really give a family a good financial step forward.

16. Has discovering financial independence changed how you view your job and life overall? 

For sure – while I enjoy my work, I am not sure I am meant to follow this path forever. And hopefully achieving FI means that I won’t have to…so I suppose that ticks the “life affected” box.

17. Have you come out of the FIRE closet yet? Meaning, do your friends, family, co-workers etc. know about your financial independence goals?  If so, how did you bring it up and what were their reactions?  If not, why not?  Why do you struggle with this conversation and why do you feel that money is such a taboo topic?  

Never considered it a taboo topic. In the beginning I was trying to shout it from the rooftops to anyone that would listen…but found out pretty quickly that not everyone likes talking about finances, and some people prefer to chart their own paths forward…which is fair enough.

While I used to steer conversations towards personal finance, I now prefer to let conversations get there organically and will provide my input and perspectives if they do.

18. What pieces of advice would you suggest to someone who is just starting out or someone who is working toward reaching financial independence? 

My advice would be to tackle the “big ticket” items – income, rent/mortgage, travel, and vehicles, etc. 

By looking to tinker and maximize returns on every single item or activity in life, you will begin to not enjoy the journey. Look to set your ship on the right path, and let time and compound interest do the heavy lifting.

19. What does the word ‘success’ mean to you?

For me, it would mean raising a family that feels loved, safe and financially secure.

For me, the biggest superpower that comes with financial independence is being able to eliminate financial stress. By doing this, you open yourself (as well as your family) to an environment that promotes positivity and more options…and this can only lead to bigger and better things.  

20. Are there any books, blogs, or podcasts that you would recommend for our readers to check out?

Books: Millionaire Teacher (by Andrew Hallam) and “The Simple Path to Wealth” (by JL Collins). Both focus on the power of diversity and index funds and both are easy reads applicable to those new to the FI space or seasoned veterans. 

Podcasts: While I used to take in an endless amount of FI-related content, I have stepped back from a lot but still like to listen to “FI Garage” and “Explore FI Canada.”

Love this interview and Adam’s responses! Here are some of our key take-aways from this interview:

• I love how Adam dove right into FI upon discovering it (as most do) but then realized he needed to find that proper balancing spot – kuddos to you as that is a hard for many to do.
• The more and more expat stories I hear, the more I’m convinced I want our kids to try out this route if they are keen (and we’d have a place to visit too – woo!).  If you can find the right opportunity, the pay/benefits can be insanely good – and of course you also get to explore a new place, learn about a different culture, learn a new language, try new foods, etc.  I totally understand it’s not for everyone but I personally love the idea of it.  I can really see this as an appealing route for those who are younger and just starting out in their careers.
• I’m still dreaming of the day when someone comes on and explains how deprived they feel… Not even uprooting to a new country will do it.  Shocker.
• I still find it crazyyyy that there are a few countries in this world where you can live/work and pay $0 in taxes each year.  Just wild.  That is a huge game changer when it comes to your savings rate as most people are sitting in a 20-30% tax bracket.
• I appreciate Adam being candid about some of the cons when it comes to expat living as it’s definitely not all rainbows and butterflies.  Like anything, it’s important to weigh both the pros and cons and speak to others who are already living that lifestyle to get a true representation of what to expect.  So for those who are considering this lifestyle, you now know who to contact!
• And my favourite quote of the interview: “By looking to tinker and maximize returns on every single item or activity in life, you will begin to not enjoy the journey. Look to set your ship on the right path, and let time and compound interest do the heavy lifting.” YES, THIS!

Thank you again Adam for being a part of our FIRE Community Guest Interview Series, appreciate it! In next month’s interview, we have Lauren and Steven from Trip of a Lifestyle on to show how they were both able to retire at 29 while traveling and enjoying life along the way.

Did you enjoy this interview? Any thoughts or additional questions for Adam? Please let us know in the comments below Thanks for tuning in and check back next month for the next interview.

We love highlighting other members of the FI community. Please contact us if you’d like to be a part of the FIRE Community Guest Interview series and we’ll see if we’re a good fit!

And in case you wanted to read the previous interviews that make up our FIRE Community Guest Interview Series, here you go!

• FIRE Community Guest Interview # 1 – Empowerment Through FIRE
• FIRE Community Guest Interview # 2 – We Quit Our Jobs To Retire Early & Travel The World
• FIRE Community Guest Interview # 3 – Dividend Investor Reached FI By Living An Intentional Life
• FIRE Community Guest Interview #4 – Pursuing FIRE With Multiple Passive Income Streams in Australia
• FIRE Community Guest Interview #5 – Driving to FIRE Through RV Living
• FIRE Community Guest Interview #6 – From High School Drop Out to Retired at 35
• FIRE Community Guest Interview #7 – Medical Professional Family With 3 Kiddos In The Pursuit of FIRE 
• FIRE Community Guest Interview #8 – Calculated Engineer Family Utilizing Geo-Arbitrage to Reach FI
• FIRE Community Guest Interview #9 – Lessons from a Fimigrant – Let Experience Be Your Teacher
• FIRE Community Guest Interview #10 – From Entrepreneur Making $36,000 to Multi-Millionaire In His 30s
• FIRE Community Guest Interview #11 – Hybrid Dividend and Index Investor Who’s Mastering the FI Mindset
• FIRE Community Guest Interview #12 – Proving Financial Independence Is Possible With Kids In A High Cost of Living Area
• FIRE Community Guest Interview #13 – Making An Impact On The Way To FI
• FIRE Community Guest Interview #14 – Badass Momma Knows Her Worth And Became A Millionaire At 36
• FIRE Community Guest Interview #15 – PhD Couple Reached FI at 40
• FIRE Community Guest Interview #16 – Mindful Minimalist Family
• FIRE Community Guest Interview #17 – FIWOOT: Financial Independence Work On Own Terms
• FIRE Community Guest Interview #18 – French Expats Growing Their Real Estate Empire in the US and France
• FIRE Community Guest Interview #19: Money Savvy Teacher With 9 Properties

The post FIRE Community Guest Interview #20 – Canadian Expat Super Charging His Family’s Path to FI In The Middle East appeared first on Modern FImily.

For anyone new here, this interview series will cover people within the FIRE community who are on their way to becoming financially independent, have already reached financial independence, or who have retired early. If you are reading this and you are financially independent, retired early, or close to reaching these major financial milestones, please reach out to the Modern Fimily! You can check out the previous FIRE Community Guest Interviews here.

Today, we have the pleasure of having Maria join us from Edmonton, AB. Hey neighbour! Maria is the brains behind the blog Handful Of Thoughts and you can also find her on Instagram @thoughtshandful. Maria dedicates her blog to three very important categories: money, mindset, and mom life.  Maria and her husband paid off their mortgage, which was close to $350,000, in less than 5 years!  How amazing is that!  As if that wasn’t enough, Maria and her husband took it up another notch and are real estate bosses with 9 rental units under their belt.  Oh yea and they both work full time jobs and have two little nuggets at home to take care of.  So we have back to back interviews where real estate has played a major role in chugging along to financial independence. 

I hope you appreciate these responses as much as I do and hope you can relate to these guest interviews in some sense to see that there is no cookie-cutter way to FI. If you have any follow up questions or would like to get in touch with Maria, please leave a comment on this post or reach out to her on her contact page. Without further ado, take it away Maria!

1. Can you give us a little background of who you are, what you do, and how you became interested in personal finance? How did you discover the idea of financial independence?

I’m Maria, the founder of Handful of Thoughts, a resource dedicated to helping moms take control of their time and money.  On top of that, I’m also a full-time high school teacher and mom to an energetic toddler and new baby. Yes, I’m exhausted most days.

I’ve always been a saver (or hoarder of money), and as I grew older, this developed into a passion for personal finance.  At an early age, I learned the connection between money and independence.  The more money I had, the more independent I could potentially be.

Eventually, I learned about the concept of financial independence from listening to the ChooseFI podcast.  My brother-in-law had suggested it to my husband, and I had started listening. I was all in from that point.  I now had a purpose for all my saving habits.

2. When in your journey did you realize financial independence was actually possible?  Was that the original goal at the beginning?

My goal has always been to have the freedom not to have to work consistently at a “day job”.  As a teenager, I dreamt of being a bit of a vagabond, traveling the world and working here and there to support my love of travel.

The problem with this dream is that there was no long-term thinking with it at the time. What would I do when I was much older? Would I still want to be a nomad when I was 65? 75? 85?  I had never considered it.

Eventually, I got married and we bought our first home. And then paid off the mortgage on that home.

After paying our mortgage off it felt like we were printing money every month.  We now needed to find another purpose for that money. So we decided on real estate as our investment vehicle of choice.

There was one point early on in our journey where we were talking to a financial advisor who was also a real estate mortgage broker and he told us that we didn’t have to invest in real estate to achieve our goals.  If we just invested our extra savings in conservative investments we would be just fine.

This was a light bulb moment for me. I always thought it would be possible for me not to have to work, but I thought it was only if my husband kept working. Here was someone telling us that we could eventually become financially independent.

This conversation along with the success stories I was listening to on ChooseFI really made it feel possible.

3. To help put things into context, if you are comfortable sharing some numbers, what is your savings rate, FIRE number, net worth, salary, how many hours a week you work, etc.?  How long have you been working towards financial independence, and where are you today? 

To be honest, I had never really tracked our saving rate until 2020. I had always done a little back-of-the-envelope calculation and was happy with the number so I never thought more of it.  But in 2020, one of my goals was to achieve a 50% saving rate, so I dove into all the ways to calculate it.

I’m proud to report that my household (my husband and I combine entirely all things finances) saving rate for 2020 was anywhere from 50-64% (depending on what calculation you use).

Our original FIRE number was $3 million. This is a very high number. But at the time we came up with it, we didn’t really know about FIRE. We just thought if we had a net worth of $3 million, we could liquidate all our assets and put that money into a fund that would generate 3-5% income and would be fine.

Due to anchoring bias, my husband is still stuck on that number even though it is much higher than we actually need for our daily expenses.

Because of our real estate investments, I don’t think we need an actual FIRE number.  We think of it more in how many properties do we need?  The more properties we have that are free-title (no mortgage), the more income they will generate for us.  

This income isn’t passive, but it also isn’t attached to a traditional 9-5 job.

It took us 8 years to accumulate our first $1 million in net worth. We are hoping the next $1 million will be faster than that.

4. Do you feel deprived?  Do you feel like you are sacrificing and missing out on life?  How would you say your mindset has shifted throughout your FI journey?

I do not feel deprived at all. 

But I’ve always been okay with delayed gratification.  As a child, I would always have Halloween candy left the following year because I would try and save it to make it last as long as I could.

Once we paid our mortgage off, we really sat down and focused on aligning our spending with our values.  There are certain things we spend no money on because they are not important to us (new cars, cable TV, new clothes). And there are other things that we spend more than the average family on because those things are important to us (hobbies, travel, food).

Throughout our FI journey, my mindset has shifted to be more comfortable with spending money.  I’ve come to realize that I wasn’t always a money saver. I was a money hoarder.  Spending money would give me anxiety, even if it were on things that brought me joy.

Through the years, I’ve slowly become more comfortable finding a balance between saving for later and enjoying today.

5. What do you spend your money on, and what don’t you spend your money on? What brings you happiness and joy? How much money do these things cost?

Travel is one of the big-spending categories for us. We travel hack and try to save as much as we can.  But with me being a teacher and having only summers and school holidays off, travel is often at the most expensive time of the year.  One thing we are really looking forward to when I’m done teaching is being able to travel in the shoulder seasons (spring & fall).

Our travel budget is usually around $10,000 – $15,000 a year.  We don’t always spend this much, but having a large buffer leads to great peace of mind.

I’m lucky that my hobbies don’t really cost much, and some generate income.  I love to read, write, and create things (knitting, sewing, blogging, etc.).

But my husband has more expensive hobbies.  He loves to ski and golf.  I’m constantly giving him a hard time because he picked the most expensive hobbies out there.

All in we probably spend close to $5000 a year on our hobbies (not including travel).

We also love food and eat gluten and dairy-free for the most part.  We don’t mind spending more buying our produce at the local farmer’s market either. Our food spending is more than “average” most months, but it’s something that we are okay with.

When it comes to not spending money, new things often don’t appeal to us.  We both drive older vehicles (that we albeit did buy brand new), and when we buy clothes, we wear them until can’t anymore. 

I love to shop second hand, so that is where most of the clothes and toys for our kids come from.

6. Do you use a budget?  Do you track your expenses? Do you track your net worth? If so, how often do you update these?

Early on in our relationship, my husband and I used to budget. I always thought of a budget as a strict hard, and fast rule. And would get very upset or frustrated if we went even $1 over in any category.  It became too much and really wasn’t helping.

Eventually, we shifted to just tracking our expenses.  This works for us because we have gone through our spending and really tried to align it with our values.  We have a high saving rate, so there is always wiggle room. 

I do track our net worth – I’m a numbers nerd too.  Although I track our investments more regularly, I only calculate our net worth twice a year.  I found when tracking it more frequently, there wasn’t as much change from month to month.

7. As a FI member living in Canada, are there any pros to living in Canada specifically that have helped you along your journey?  Conversely, any cons?  

One of the big pros for us recently has been living close to family.  We both still work, but thankfully, our parents are retired and help with childcare.  

We still pay for our childcare, but as my husband is a shift worker, we don’t need it every day.  With having family childcare, we only pay for the days we need it. And our kids love being around their grandparents so much.

Other than that, healthcare and post-secondary education are the 2 big things that immediately come to mind. We have never had to plan for tens of thousands of dollars for healthcare. 

And we were both able to finish post-secondary debt-free with minimal help from our families.  This was partly due to the lower cost of post-secondary and the scholarships that we were able to qualify for.

Being a teacher, is another bonus of living in Canada. We are paid well for what we do and have great benefits.  This is not always the case from what I’ve heard from my American teacher colleagues.

But a con to living in Canada is real estate.  Although we are real estate investors here, our portfolio would probably be much more significant with greater cash flow if we lived in the United States.

8. What is your investment strategy? Do you invest in mutual funds, index funds, dividend growth stocks, real estate, other businesses, etc.?  Has your investment strategy changed over the years? 

Our investment strategy can only be classified as all over the map.  

Although a significant portion of our investment portfolio is in real estate, and more specifically rental properties, we also do DIY investing in ETFs, have a portion of our portfolio actively managed with a wealth management company, and we invest in some private equity REITs (real estate investment trusts) and MICs (mortgage investment corporations).

Over the years, our investment strategy has evolved.  

When I first started investing, I was in mutual funds because that seemed like the thing to do at the time.  Eventually I moved those mutual funds into ETFs with much lower management fees.

As we got more invested in real estate, it became evident that we couldn’t have all our money there.  

The first year we invested in real estate, we were hit with a $13,000 tax bill.  After that, we started offsetting the taxes owed by investing money into ETFs in our RRSPs.

9. I know real estate has been a big driver in your passive income plans.  Can you please share with us your investing strategy when it comes to real estate? 

Like index fund or ETF investing, our real estate investing strategy is pretty dull.  We are long-term buy-and-hold investors.  This means that after doing our research, we buy a property and plan to own it for many years.

When it comes to investing in real estate, the key is to treat it like a business and keep emotion out of it when buying. But play to the emotional side of people wanting to rent it.

Things that you may want in your home (for example, a finished basement) may not really increase the rent of an investment property.  Only 2 of our 9 rental properties have finished basements.

Another thing you want to consider with rental properties is the tenant profile.  Before we started learning about real estate investing, we had no idea what this meant.  The tenant profile is who you want your ideal tenant to be.  Then you purchase properties to match that.

Our tenant profile is young families.  So when we were purchasing our properties we looked for newer homes near schools that had multiple bathrooms and ideally a garage (because Canadian winters are cold and snowy).

We always looked to purchase newer properties because they require less maintenance and are typically easier to rent out.  And because our tenant profile was young families we looked for single-family homes.

Owning suited properties (where someone could live in the basement and someone else could live upstairs) may lead to more cash flow.  But they can also lead to more headaches as the turnover in these properties tends to be higher. And you have to manage the relationship between the tenants.  This was an important consideration for us, too, because we self-manage all of our properties.

Currently, we are not in a buying phase but more of a hold phase.  

We own 9 rental properties (8 of them cashflow and the one that doesn’t is a unique case) and plan on keeping them and having the tenants pay down the mortgages.  Eventually, when the properties are mortgage-free, we can either live off the rents or liquidate our portfolio and invest everything in more passive investments.

One of the reasons we have this flexibility is because we never joint ventured with anyone when buying our properties.  Our portfolio could be much bigger if we wanted to partner with other people.  But that never appealed to us.  We only ever wanted to be accountable to ourselves.

Before we started investing in real estate, it was essential to me to pay off our mortgage. I never wanted to be in a situation in which we could lose our family home. 

In order to buy that many properties as fast as we did, we took out a HELOC (home equity line of credit) on our primary residence. And although this was leveraged investing, it was something that we were comfortable with.  In my mind, if everything went sideways, we could always liquidate the rental properties and still own our home.

We bought 4 properties our first year and then put all our savings back on the HELOC. When it had enough room, we would buy our next property.  We purchased our first property in 2015 and our “last” one in 2019.  

10 . Do you take advantage of tax-advantaged accounts offered to you?  If so, which ones and how so?  Do you have a game plan to be able to withdraw from these funds when the time comes, or is the plan to live solely off passive rental income?

Yes, our RRSPs play a big role in our investment strategy right now.  As mentioned above, we use them to help offset our annual tax bill.  But as we have a number of rental properties we are conscious of the fact that our incomes in “retirement” may be higher than they are now.  Because of this, waiting to withdraw from our RRSPs until the traditional retirement age doesn’t make sense.

Our plan is to work for a few more years (hopefully less) and then leave our day jobs.  Then we can slowly draw down our RRSPs to live off of while paying less tax.  Any excess funds we have at that time will be funneled into our TFSAs as they are relatively underfunded at the moment.

Rental income is definitely not passive, but the work involved will be much more manageable when we are not juggling it with our 2 full-time jobs.  And when we calculate our hourly rate, even though our rentals are not passive, they still provide a pretty good return on our time.

Eventually, if it becomes too much, we have talked about liquidating our rental portfolio and investing the money in ETFs. At that point, we should be able to comfortably live off of a 3% (or less) withdrawal.

But that’s years from now, so who really knows what exactly will happen.

11. Speaking of withdrawals, what is the withdrawal rate you plan to use when you withdraw from your portfolio?  Are you a fan of the 4% “rule” or something else?  Why?

Our withdrawal rate is somewhat unique and not set in stone. 

We have been investing in our RRSPs for tax purposes while we are still both working full-time.  When I transition away from full-time work, I will begin to withdraw from my RRSP.  The rate isn’t set yet but will be decided based on tax efficiency.  

When hubby leaves his full-time job, then we will also start to draw down his RRSP. 

We plan to liquidate our RRSPs and either spend that money on living expenses or roll it into our TFSAs.

Eventually, we will have no money left in our RRSPs, but our real estate portfolio should be in a much better cash flow position.  Depending on timelines, some of our properties may be mortgage-free, which is the ultimate goal.

Once our portfolio is mortgage-free, we have even more options.  We can continue to manage our properties, hire a property manager, or liquidate the portfolio and invest the money in something that is actually passive.

12. As a Canadian pursuing FI, what are your post-FIRE thoughts/plans regarding health coverage?  As a reference, what do you currently pay annually or monthly for health related costs (be it insurance, co-pays, deductibles, etc.)? What do you estimate your post-FIRE health costs to be per year?

Until recently we had never really thought of this question.  

My husband and I are both still currently working full time and each has great benefits through our employers.  And because we both have great family benefits we are never out of pocket.  What one plan doesn’t cover, the other one usually does. And if not, I also have access to a health spending account through my employer.

Now that we are slowly getting closer to achieving FI, we are starting to think more about what that looks like. 

Initially we thought that we would just pay out of pocket for any expenses.  But after listening to a great Explore FI Canada podcast episode, we are rethinking this.  We intend to look into our extended health care options and purchase some type of policy for our family. Although right now, we have no idea what that cost will be.

One benefit we do have is that our “FI number” is more than we need.  We like to build an extra buffer into everything (even if that means working 1 or 2 years longer). So we will have enough income to cover any healthcare plans we decide to enroll in.

13. As a parent, have you found that having children has greatly delayed your timeline to FIRE?  How much money have you spent on your daughter per year?  What were some of the bigger costs that were worth it, and what were some of the bigger costs that were not worth it?  Are you planning to open up an RESP for their post-secondary education?

If anything, having a little one (and now 2) has accelerated our path to FI.  Every day I’m at work, I would much rather be at home hanging out with my family.  My motivation has substantially increased since becoming a parent.

On average, we spend about $2500-$5000 on our little ones a year. That includes childcare (which is done by family), clothes, toys, and activities.  The range is so broad due to childcare. The more overtime my husband can get, the more we need childcare (but also, the higher our income and therefore savings will be for that month).  

Our spending doesn’t really include food because they eat what we eat. And it doesn’t include their RESPs because we consider them separate.

Although I should say that we are anticipating that amount to increase in the future as our little ones get more involved in athletics and other activities. But once we reach FI our childcare costs will be next to nothing so maybe things will even out.

We try to buy as much stuff as possible second-hand. And we were lucky to be one of the last ones in our families to have kids.  We benefited from many hand-me-downs and didn’t have to buy many of the large ticket baby items.

I’m also not into big fancy things so never felt the need to have all the baby gadgets and gizmos.  The best big-ticket items that we bought were car seats that we could use for years. 

Yes, we do have RESPs for our little ones.  

We have made it a priority as parents to contribute $2500 a year to our little ones’ RESPs (to get the maximum grant).  Any money they receive from birthdays or other occasions goes into their own investing accounts.  

Our daughter was born in September, and I made sure to open her RESP before the end of the year to get that extra grant money as early as possible.  Time in the market, right?

Because TFSAs don’t play a significant role in our current investment strategy, my TFSA is used in part as our little ones’ investment account.

14. If you could go back in time and change things, what would you have done differently?

Started earlier. 

Although I have always been a saver, I had no idea about investing.  I wish I had known about all the information available online sooner.  It wasn’t until we had already bought multiple investment properties that I had even heard of an index fund or ETF. 

I’m not saying learning more about the markets would have changed how we invest right now.  But I wish I would have invested my money sooner rather than just keeping it in a paltry savings account and Canada Savings Bonds.

15. Has discovering financial independence changed how you view your job and life overall? 

I’ve never wanted to work until the traditional retirement age. I just never knew this was called something until discovering the FI movement.

But discovering the term financial independence has made me more mindful overall.  Now I’m less likely to save for saving sake and am working towards enjoying the journey and my finances.

16. Have you come out of the FIRE closet yet? Meaning, do your friends, family, co-workers etc. know about your financial independence goals?  If so, how did you bring it up and what were their reactions?  If not, why not?  Why do you struggle with this conversation and why do you feel that money is such a taboo topic?  

Yes, I have always been very open about my plans to achieve financial independence, even before I knew FI was “a thing.”  I think because we haven’t pulled the trigger yet and left our day jobs that people think it is all still something in our heads. I don’t think they will truly believe it will happen until they see it.

Even though I’m open about my plans to achieve FI, very few still truly understand how we are setting ourselves up for it.  And a lot of people think that we are where we are financially because of my husband’s well paying job. 

This is super annoying.  

Thankfully my husband will be the first person to tell you that we are where we are because of not only our incomes but how we chose to manage our money, something I play a prominent role in.

I personally love talking about money and personal finance.  And sometimes I get a little too passionate about it, and my husband has to tell me to scale back a little.  Or only talk to people about their money if they invite the conversation.

17. What pieces of advice would you suggest to someone who is just starting out or someone who is working toward reaching financial independence? 

Find someone’s story that resonates with you, learn from them, and then make your own choices.  There are so many great content creators now with diverse voices that it’s easier now than ever to find someone that resonates with you.

But I don’t think you should blindly follow someone else’s path.  Learn from others and then make your own choice and do things “your way.”

18. What does the word ‘success’ mean to you?

Autonomy. The freedom to make my own choices (good or bad).  This includes how to earn, spend, donate, and invest my money.  And how to spend my time.

19. Are there any books, blogs, or podcasts that you would recommend for our readers to check out?

So many.  

The amount of voices in the personal finance space has exponentially increased lately.  It’s becoming much easier to find someone whose voice you resonate with.

Canadian Podcasts – ExploreFI Canada 

Canadian Real Estate Book – Real Estate Investing in Canada by Don R. Campbell (fun fact – Don donates all the proceeds from his book sales to Habitat for Humanity).

20. How can people get in contact with you? 

You can follow my story on my blog Handful of Thoughts. And I am also on Twitter and Instagram with the handle @thoughtshandful.

Love this interview and Maria’s energy! Here are some of our key take-aways from this interview:

• It’s super interesting to hear Maria refer to her past self as a money hoarder.  When I try to think back (I have a terrible memory!) I think I was too growing up.
• I find it fascinating that anchoring bias is keeping Maria’s husband tied to their initially made up $3 million goal.  Money is soooo emotional and this is a prime example of that.
• I too was that weirdo kid at Halloween trying to slowly chip away at my candy stash throughout the year.  Delayed gratification at it’s finest!
• So excited for their future shoulder season travel plans.  That is our favorite time to travel as there are typically fewer crowds, more availability, and cheaper prices.
• Love reading about what people do and don’t spend their money on.  It’s all about your values!
• Maria outlines exactly why I’m not a fan of budgeting.  It’s too easy to get down on yourself about it.  Track track track and you’re good to go.
• Loveeee all the details Maria provided regarding their real estate strategy, thanks for all of that!
• Also love her response to kids.  They are the motivation that makes you want to reach FI faster!

Thank you again Maria for being a part of our FIRE Community Guest Interview Series.  In next month’s interview, we have Adam who is a Canadian expat that is greatly accelerating his family’s path to FI by living abroad. 

Did you enjoy this interview? Any additional questions for Maria? Thanks for tuning in and check back next month for the next interview.

We love highlighting other members of the FI community. Please contact us if you’d like to be a part of the FIRE Community Guest Interview series and we’ll see if we’re a good fit!

And in case you wanted to read the previous interviews that make up our FIRE Community Guest Interview Series, here you go!

• FIRE Community Guest Interview # 1 – Empowerment Through FIRE
• FIRE Community Guest Interview # 2 – We Quit Our Jobs To Retire Early & Travel The World
• FIRE Community Guest Interview # 3 – Dividend Investor Reached FI By Living An Intentional Life
• FIRE Community Guest Interview #4 – Pursuing FIRE With Multiple Passive Income Streams in Australia
• FIRE Community Guest Interview #5 – Driving to FIRE Through RV Living
• FIRE Community Guest Interview #6 – From High School Drop Out to Retired at 35
• FIRE Community Guest Interview #7 – Medical Professional Family With 3 Kiddos In The Pursuit of FIRE 
• FIRE Community Guest Interview #8 – Calculated Engineer Family Utilizing Geo-Arbitrage to Reach FI
• FIRE Community Guest Interview #9 – Lessons from a Fimigrant – Let Experience Be Your Teacher
• FIRE Community Guest Interview #10 – From Entrepreneur Making $36,000 to Multi-Millionaire In His 30s
• FIRE Community Guest Interview #11 – Hybrid Dividend and Index Investor Who’s Mastering the FI Mindset
• FIRE Community Guest Interview #12 – Proving Financial Independence Is Possible With Kids In A High Cost of Living Area
• FIRE Community Guest Interview #13 – Making An Impact On The Way To FI
• FIRE Community Guest Interview #14 – Badass Momma Knows Her Worth And Became A Millionaire At 36
• FIRE Community Guest Interview #15 – PhD Couple Reached FI at 40
• FIRE Community Guest Interview #16 – Mindful Minimalist Family
• FIRE Community Guest Interview #17 – FIWOOT: Financial Independence Work On Own Terms
• FIRE Community Guest Interview # 18 – French Expats Growing Their Real Estate Empire in the US and France

The post FIRE Community Guest Interview #19 – Money Savvy Teacher With 9 Properties appeared first on Modern FImily.

For anyone new here, this interview series will cover people within the FIRE community who are on their way to becoming financially independent, have already reached financial independence, or who have retired early. If you are reading this and you are financially independent, retired early, or close to reaching these major financial milestones, please reach out to the Modern Fimily! You can check out the previous FIRE Community Guest Interviews here.

Today, we have the pleasure of having Sarah join us from the States. Sarah has French roots as she is a French expat living in the US and her family’s long term plan is to move back to France someday so they have an international approach to their investments. Sarah is a mom to two kiddos, takes an eco-friendly approach when it comes to consumption, and has a family net worth very similar to ours.  

I hope you appreciate these responses as much as I do and hope you can relate to these guest interviews in some sense to see that there is no cookie-cutter way to FI. If you have any follow up questions or would like to get in touch with Sarah, please leave a comment on this post or reach out to her on her Instagram account @myown_terms. Without further ado, take it away Sarah!

1. Can you give us a little background of who you are, what you do, and how you became interested in personal finance? How did you discover the idea of financial independence?

Gosh – Who am I?! You’re starting with the toughest question! I had to think hard on that one… what really defines me? Am I a woman in my mid-thirties? Am I a working mom? Am I a french ‘expat’ (now Green Card holder!) living in the US? Am I a wife and mother of 2 kiddos (3 and 1 year olds)? A white person with white privileges I’m learning more about? Am I an only child who was taught the value of money by her parents and who was also a natural saver? Am I a feminist? Am I an aspiring environmentalist? A minimalism and slow life admirer? An HR professional?  All of it!

I think I’ve always been interested in personal finance, somehow. As a child and then a teenager and young adult, I always had a side job and always had money saved to buy the things I wanted. In 2008 I was a student and cash-flowed a trip to Bali. My parents were also always generous in giving me a monthly allowance throughout my studies, which I would always manage well. I have never had debts (other than mortgage). Have always cash-flowed used cars and international travels. 

One of the first thing my (then) boy friend (and now hubby) did in our relationship was to open a joint account. He was the driving force. I had never thought I would do that, as an independent woman I wanted to have my own money. But I went along and I’m glad I did. It set us up for a lot of simplicity (he makes more than I do, but also spends more so I don’t feel bad as we pay everything from that account and everything we own we own it together. We got married and moved the the US shortly early in our relationship and after 3 years of DINK (dual income no kid) we had saved quite a bit of money without really being intentional about it. Just making good income + expat housing allowance + yearly home leave trip paid for, while working lots of hours so not a lot of time to spend! (And my nature of being a saver). So we decided this money should be working for us and invested in SCPI in France (kind of REITs, but not exactly). A few months later we came across a documentary showing a french woman in her thirties who was financially independent thanks to her rental properties. I read her book. We started investing in real estate. A few months later, we came across another documentary where Tanja Hester and others were talking about the FIRE movement. All along, we’ve read and learnt more and more about financial independence and have refined our own fire plans (we have a spreadsheet with a million tabs showing each iteration of our plans/projections).

2. When in your journey did you realize financial independence was actually possible?  Was that the original goal at the beginning?

Somewhere between that first and second documentary! Our beliefs and plans have been evolving so much that it is hard to select a single moment but really these TV moments have been very impactful in our journey. We were seeing people who had done that, something that before we had never imagined was possible! 

3. To help put things into context, if you are comfortable sharing some numbers, what is your savings rate, FIRE number, net worth, salary, how many hours a week do you work, etc?  How long have you been working towards financial independence and where are you today?

Starting with the easy numbers, we both work full time at Manager levels in a big international company (so somewhere between 40 and 50 hours/week each, where I’m probably closer to 40 and hubby closer to 50).

We plan to retire in France where our families are and so our FIRE goal is in euro and because it isn’t in index funds, our reference is in gross income/year: FIRE would be 80k euros per year (without a paid off house), and FAT FIRE would be either 80k with a paid house or 100k without. Note we are basing that number on a family of 5 (while we have 2 kiddos for now… just in case ;-). Will we quit at FIRE level or push through until FAT FIRE… that is the question!

We share our net worth openly on my Instagram account, currently we are at $1.6M for the family. Our saving rate is consistently above 50% (2020 was around 65%), and the bulk of our expenses ($4200/month) is mortgage and daycare.

4. Do you feel deprived?  Do you feel like you are sacrificing and missing out on life?  How would you say your mindset has shifted throughout your FI journey?

I don’t! Because I’m a natural saver, because I hate waste, because I’m laser focused on our goal. But I’m also too extreme and I recognize it, I could go years without doing something special, going on a trip, eating some type of food or whatever would save us more money. Hubby is a good balance for that, although he is getting more and more like me and we have to watch that to make sure we balance things out for our family and our relationship and, although there are million fun and extraordinary things you can do without spending money, splurge a little sometimes!

The great thing is that during the last year we have really made breakthrough changes in our life that have durably lowered our expenses (especially for groceries). Before, we would ALWAYS be over our weekly budget of $400 so I would constantly be annoyed when spending. And now, we very often are within budget so I’m way more relaxed when we eat out for instance – as long as we stay within that budget of course!

5. What do you spend your money on and what don’t you spend your money on? What brings you happiness and joy? How much money do these things cost?

We spend money on:

• Organic and grass-fed / pasture raised, ideally local food: almost always more expensive than conventional options and sometimes significantly but these are things we value for our health, for the environment and/or for the animal wellbeing.

• Eco-friendly alternatives (although for most things, eco-friendly means sustainable and means less spending in the long run).

• At least one trip back “home” per year and vacation in general: we have started travel hacking for about a year now so will be significantly reduced next time as we usually stay with our families and friends so no accommodation costs. We recently spent about $5,000 on a trip to Punta Cana that we funded through several weeks of spending less than our weekly budget and generating side income over the expected $200/month. We did this so that it was completely guilt free because it was not impacting our financial goals. It was super motivating! 

• Also, hubby spends on books and Spanish ham!

6. What are some of the more unique/uncommon ways you’ve cut down costs?

We of course do the typical: owning used (and old!) cars, living in a house several times cheaper than what we could afford, buying second hand a lot, re-evaluating our providers (insurance, internet etc) to compare rates, travel hacking, etc. I think where we are probably more unique is that we are really low maintenance. I almost never buy makeup, jewelry, new clothes, and usually we could care less about “stuff”. We also make tons of things from scratch (our bread, burger buns, tomato sauce, yogurts, granola, cakes, mustard, and just meals in general but also I make my own shampoo now!). We garden, and we have made lots of eco-friendlier transitions: cloth diapers and washcloths, soapberries for laundry, lots of tips to avoid food waste, cloth towels and napkins, air drying (when feasible outside only!). 

As mentioned above, we have significantly cut our groceries expenses (by 2!) by 1) stretching time between grocery hauls (not going every weekend by default anymore but instead being more creating with what we have, so avoiding food waste) 2) having a running list where we capture what we run out of, and then we add what we need based on meal planning 3) comparing prices between stores 4) buying in bulk when we can (ex: I order our bread flour by 50lbs)

7. Do you use a budget?  Do you track your expenses? Do you track your net worth? If so, how often do you update these?

I’m a spreadsheet nerd! I track every cent spent and whether we are within our $400 every week, then our savings rate monthly. Also have been tracking Net Worth monthly for the last 6 months probably and I wish I had started sooner because it is really cool to see it grow!

8. I know you are very eco-conscious.  How would you say sustainability, minimalism, and FI are intertwined?

It’s like a virtuous circle! Add slow life to the list and here is what I aspire to! Each brings meaning to and enables the other. It really goes back to what is essential: TIME. Money is just an enabler in our story, we have no desire to be rich because we know we don’t need much, we don’t want to accumulate “stuff” that will add stress into our life instead of joy. What we want is to be with our kids while they grow (free, no impact to environment, no “stuff” needed), run/hike outside (same), read books, grow our food, cook, really be in the moment (watch a animal, smell the freshly cut grass, listen to a river flow, feel the air, touch a tree, hug each other,…). That probably sounds idealistic but I believe there is no other truth and our modern consumerist over active lives are insane (literally, lack of sanity). 

9. As a FI member living in the US, are there any pros to living in America specifically that have helped you along your journey?  Conversely, any cons? 

Mostly pros since we are still there We could never save and invest that much money back in France, and would not have the career opportunities we have had. In general, life here is also more convenient (stores are open all the time, you can usually pick your daycare vs being on a waiting list for months, large roads, parking spots everywhere, people and businesses are service oriented, administrative activities can usually be done online and efficiently (I’ll tell you another day about how much easier and quicker it is to buy real estate in the US vs France!!)

Only con really is distance with our families, especially since we have kids. I feel bad for taking grandparents/grandkids time away from these two generations! And it’s obviously been really bad with Covid as we haven’t gone back for over 1.5 years so they haven’t met our baby daughter.

10. What is your investment strategy? Do you invest in index funds, dividend stocks, real estate, other businesses, etc.?  Has your investment strategy changed over the years? 

We started with the french real estate shares SCPI (remember, like REITs but not really), then massively invested in rental properties (we have 9 now, including 7 apartments in France and 2 single-family here in the US). We also have our 401k’s where we invested in low fee index funds (have contributed to the employer match, never maxed out), and a whole life insurance (I know – everybody in the FIRE community is screaming right now!) that we are going to be borrowing from as one of our sources of passive income. Our strategy has been evolving consistently as we learn things, run numbers etc. We are now at a point where we have put everything in place and “just” have to pay off to become financially free. We are focusing on our US mortgages first (higher rates) and paid off our first purchased property in December 2020. It has been SO nice to receive our first truly passive income and we are on a roll to keep adding to it.

11. Do you take advantage of tax advantaged accounts offered to you?  If so, which ones and how so?  Do you have a game plan to be able to withdraw from these funds when the time comes? 

We have an HSA that we use for our medical expenses for that year (not investing that money and not letting sit because we won’t be retiring in the US), a dependent care FSA for daycare and our 401k. We have “only” been contributing to the employer match because of the restrictions around withdrawals before age 59.5 (10% penalty). Our goal is really to retire while the kids are still kids so we want to put all the money possible towards accelerating that. Depending on our scenarios (FIRE or FAT FIRE) and therefore how many years we keep working, we might or might not withdraw part of our 401k to complement income until we start borrowing from whole life insurance in 2031 and/or as downpayment for a house.

12. Speaking of withdrawals, what is the withdrawal rate you plan to use when you withdraw from your portfolio?  Are you a fan of the “4% rule” or something else?  Why?

Not applicable in our case! If it was, my guess is we would probably target a 3.5% or even 3% to be on the safe side, because to us it isn’t because the market has always gone up that it will continue that way forever. Global warming is “new” and its impacts aren’t fully known yet but we think there will be areas no human can live in anymore (due to heat, flooding, erosion, etc), there will be lots of immigration to certain zones as a result. We believe that at some point, degrowth will be inevitable (whether it is “chosen” by humans or forced). 

Also we believe that the fact that more and more people invest passively in index funds has an impact on the market itself (there are articles out there to explain that way better than I would!).

13. How has being an immigrant impacted your FI journey?  I know you have some real estate back in France while living in the US.  How has that process been?  Are there any hurdles to being French expats living in the States? 

Being an immigrant has impacted our journey in many ways I believe. It has accelerated it due to our saving rate as explained before. I also think the fact we are away from our family/friends/the society in which we grew up, has given our brains more freedom :-). We have been able to dream, make plans etc towards financial independence without somebody telling us right away how crazy/impossible this is. We have of course shared our plans with our parents, at different degrees depending on which parent it is, but it was only once we already were convinced this was our path. So some of their reactions (some laughing, some being scared for us), did not affect us and our plans.

As far as Real Estate: quite a process for sure! Mainly the first purchase(s). It took us a lot of time to find a lender. We had gone “all in” in 2017, deciding to move forward with 3 apartments that needed significant rehabs. The company we were contracting was managing it all (turnkey type), and for the projections to actually work, we needed the rehab to be financed as well. Except no bank accepted us because we live in the US. So we ended up having to cash flow all the rehab work, furniture (these 3 are furnished), closing costs + 20% down payment. Needless to say 1) it was no longer a good investment from an ROI perspective 2) we were extremely fortunate we could absorb this additional cost without going broke. We didn’t know better, went with it, and in the end we also aren’t anywhere close to the projected (by that company) rents. BAD investments, LOTS of mistakes. Would we do it differently knowing what we know today? ABSOLUTELY! Do we have regrets? No. We did something. We took actions towards our future selves. We started the motion. And now, although not the best investments for sure, we still have 3 apartments that are around 40% paid off and on which we have less than 7 year of mortgage to go.

Back to the process of buying real estate in France from the US: everything over there is slower and more complicated. Takes forever to close. Takes lots of follow up to get people to respond. We bought 3 properties in the US within 6 months and I can tell you, it was MUCH easier and headache free.

In general also, it is complicated to open (or even keep sometimes) a bank account in Europe when you live in the US. IRS has scared everyone off!

And yes, we do plan to go back there to retire mainly because that is where our families are and that we look forward to being able to visit the different french regions, eat the good food and also go to Spain and Italy easily as we both love these countries. The authenticity, culture and history there is really cool.

14. How does life in the US compare to life back in France?  

So I mentioned above how everything is more convenient and efficient here in the US. People are also very nice, helpful, they mind their own business in general. In France, there is more “conflict” (not always in a bad way) in general. People love to complain, to debate, to judge what other people do, etc. Consumerism and materialism are stronger in the US, although I’m not sure France has been evolving in the right (to me) direction.

And as far as food… no comments Finer there for sure, and probably healthier too. There tend to be more fat/salt/sugar and less variety in the food we find/buy here. Like for instance the food that is provided at daycare/school for kids is soooo different. In the US sometimes you feel like the only vegetables that exist are like carrots, zucchinis, peas, potatoes and green beans There are so many more!!

15. What are your post-FIRE thoughts/plans regarding health coverage?  As a reference, what do you currently pay annually or monthly for health related costs (be it insurance, co-pays, deductibles, etc.)? What do you estimate your post-FIRE health costs to be per year?

Ugh that is a good question but I don’t have a firm answer just yet. In France, health insurance is part of social security and it isn’t totally clear to me what our options will be (depending on if we have a small business for instance). We projected 500 euros/month for now but this will need to be refined as we get closer and study more. 

We currently have insurance through our employer. We have a fairly high deductible plan with an HSA and pay less than $200/month for medical, dental and vision for the family.

16. As a parent, have you found that having children has greatly delayed your timeline to FIRE?  How much money have you spent on your children per year (per child)?  What were some of the bigger costs that were worth it and what were some of the bigger costs that were not worth it?  Do you have a 529 account open for their post-secondary education?

I mean… our biggest expense is our kids. We pay around $2700/month just in daycare. So probably yes it has delayed us in some ways but at the same time, they’ve always been part of the “plan” and our motivation to get to FIRE has increased since they were born. Our WHY has gotten bigger and stronger and we have therefore taken more aggressive steps towards it. 

In terms of spendings, we have done better with #2. For our son we did disposable diapers and wipes until he was 2.5 yr old before we transitioned to cloth at the same time we did for our 6 month old daughter. I also breastfed my daughter longer thanks to work from home so we’ll likely skip the formula costs. Labor and delivery probably around $3500-$4000 out of pocket each. We also spend money in IUIs and fertility related exams to conceive them (but our plan was very generous with these). Clothing for both has been, for the most part, hand-me-downs. More details on one of my IG posts on random kids related items (usually 2nd hand) we have purchased and their cost!

No 529, nope. To be honest, because we are planning on moving back to Europe we haven’t even looked into how these work. And the idea is that putting all our money towards building these assets will allow us to spend lots of time with them while they grow up and will eventually be theirs.

17. If you could go back in time and change things, what would you have done differently?

I’m a very forward thinking person so I don’t carry regrets. Hubby is different. For instance, out of the many mistakes we have made throughout our journey is that at the beginning of Covid we had money we had to withdraw from a pension fund and he had the brilliant idea to invest in oil. At first, we had talked about selling after like 6 months (the time we initially thought the pandemic/crisis would last… LOL). We invested 120k (!!) and it quickly went up to $140ish. We debated about selling at that point but decided not to as we were supposed to be in it for longer and were hopeful it was going to go up. Then it went down to like half, and hubby was freaking out and telling me to sell. At that point we committed to never do that again, never try to be the smartest in the block anymore and never speculate again. But still had to align on our exit strategy. Eventually, we ran some numbers and decided that whenever it would be back to a number that would allow us to pay off our first rental property, we would sell. Which we did (well, a little lower than this actually but that is just a detail). Also, as I’m typing this, I am waiting for a Turo guest (renting our car is our main side hustle) who was supposed to return the car several hours ago. Worst case it’s been stolen or in an accident. Best case I have lost precious hours of sleep. 

So yeah, many mistakes along the way that have for sure delayed us but we’ve learnt a lot from them so not wishing I could re-write things.

18. Has discovering financial independence changed how you view your job and life overall? 

Totally! A lot of my friends are going through a sort of mid-life (or at least mid-thirties) crisis, challenging why they do what they do and wondering if it is all worth it. I often tell hubby I’d be on the same boat if we didn’t have our FIRE plans. Don’t get me wrong, I like my current job, I am never bored, am compensated fairly well, like my coworkers and my boss. But if we didn’t have our mid-term plans to retire early, I would not be okay with dedicating as much time and brain space to work as we do today if we had to keep doing it until we are 65+ and then what? Our kids are grown up and our parents have passed or are too old to enjoy life with us? 

I highly respect those who take the Coast or Slow FIRE road but every time we consider these other options (make significant changes to our life now towards what we want our FIRE life to be, while delaying when we get to retire), we agree that this isn’t our path. We want to be work optional and we want it to happen as quickly as possible. We would not do ANYTHING to accelerate, which means we would not accept jobs with long commute or lots of travel for instance even if it meant more money (unless it was for a very short period of time and very significant amount of money :-)). Although we know work takes more space than it ideally should, we are also aware that we are really lucky and spend more time with our kids than the majority of working parents we know. 

19. Have you come out of the FIRE closet yet? Meaning, do your friends, family, co-workers etc. know about your financial independence goals?  If so, how did you bring it up and what were their reactions?  If not, why not?  Why do you struggle with this conversation and why do you feel that money is such a taboo topic?  

Haha the “FIRE closet” Yes, we have come out for the most part. Our parents know, at different levels of details and they probably all doubt we are going to actually make it (either actually get to a passive income that would be sufficient for support our family for the rest of our lives, or that we will have the guts/desire to actually quit our well paid and promising careers). Some friends we have told everything, including some numbers to some, and other friends we have told very little. Most laugh when we mention it, mostly because we’ve been telling them we would come back to France soon for a long time now and they don’t believe us anymore Others have said they would get bored without work. I respect that opinion, but do think it is an evidence of alienation. Some people, and I don’t blame them because that’s all most know, can’t even picture a life without work which is crazy when you think big picture. We’re so into it every day we don’t even question it. But WTF are we all doing? Rat racing for years, counting the days until the weekend, counting the weeks until the next vacation, and then wondering where our time has gone. 

It is pretty cool because we have friends (she was actually our co-worker and her and her husband became our close friends) are now on their own path to FIRE after hearing about our plans. At the time we had the same, completely messed up, boss and it really motivated us all because you never know who your next F* up boss will be and you need your F* you money to say bye-bye! With them, we definitely share more details on our journey. They have had a different approach, focusing on an online business they launched and they are absolutely killing it! 

20. What pieces of advice would you suggest to someone who is just starting out or someone who is working toward reaching financial independence? 

The best day to start the journey was the day you started to make money. The second best day is today! Just get started, action is what matters. You are going to make mistakes, and that is okay because you will learn from them. Obviously I’m not recommending to just go do crazy things with your money without studying but 1) get your 401k to employer match TODAY 2) track all of your expenses, identify opportunities to decrease, combine, negotiate,… THE NEXT DAY 3) Define an amount you are going to save on each pay check (pay yourself first) and make it automatically hit your savings on pay day. THE DAY AFTER 4) then define your strategy, how can you increase your saving rate (by reducing expenses but also, absolutely, because “money is unlimited” (per Financial Freedom book), increasing your income), how/where you will invest these savings, what your ideal life is and how you can get there. Early retirement isn’t necessary the answer for all. You might be happier with a part time job now than no job in 10-15 years. No one size fits all. And track progress, celebrate the little milestones!

21. What does the word ‘success’ mean to you?

Might sound cheesy but it means happiness to me. It means I feel good about what I’m doing with the little time that my one life has allocated me. That hubby and kids are happy, that we enjoy our time together. I’m not necessarily wanting to spend much more time with the kids. I will enjoy having time for myself, time alone with hubby etc to do other things. But I want that time to really be WITH them, interacting, observing, listening, playing, singing, learning,.. Instead of getting all of the household stuff done while they are there as it often happens. When I am work optional, I want to learn new skills, I want my brain to have time to think and have new ideas like I did during my second maternity leave. 

22. Are there any books, blogs, or podcasts that you would recommend for our readers to check out?  

Tanja Hester’s blog (“Our Next Life”) and book (“Work Optional”), “Quit Like a Millionaire” book, “ChooseFI” podcast and local groups (we joined the one in my area and went to a meet up before Covid, it was really nice to meet FIRE community folks around me and super helpful for local tips), “Afford Anything” podcast and the “Purple Life” blog. I have to say though, with work from home I have not been listening to podcasts in a while and the last book I read was during my maternity leave. So most of the resources I check out nowadays are Instagram accounts – Modern Flmily being one of them!

23. How can people get in contact with you? 

Through my IG account! @myown_terms

Thank you so much Sarah for tackling our interview questions! So much good info in here! I swear I would have answered MANY of these questions similar to you . My highlight from today’s interview is this quote in regards to their mistake with their French rental properties: “Do we have regrets? No. We did something. We took actions towards our future selves. We started the motion.“

There is SOOOO MUCCCHHHH amazing information in this interview, I hope you all were able to take some action items from these responses.  As Sarah, and all our previous interviewees, demonstrate – there is no cookie cutter way to FI.  Clearly, they are rocking it and it’s so motivating to watch their progress.

Thank you again Sarah for being a part of our FIRE Community Guest Interview Series.  In next month’s interview, we jump back to Western Canada with a fellow Albertan momma who’s building a real estate empire.

Did you enjoy this interview? Any additional questions for Sarah? Thanks for tuning in and check back next month for the next interview.

We love highlighting other members of the FI community. Please contact us if you’d like to be a part of the FIRE Community Guest Interview series and we’ll see if we’re a good fit!

And in case you wanted to read the previous interviews that make up our FIRE Community Guest Interview Series, here you go!

• FIRE Community Guest Interview # 1 – Empowerment Through FIRE
• FIRE Community Guest Interview # 2 – We Quit Our Jobs To Retire Early & Travel The World
• FIRE Community Guest Interview # 3 – Dividend Investor Reached FI By Living An Intentional Life
• FIRE Community Guest Interview #4 – Pursuing FIRE With Multiple Passive Income Streams in Australia
• FIRE Community Guest Interview #5 – Driving to FIRE Through RV Living
• FIRE Community Guest Interview #6 – From High School Drop Out to Retired at 35
• FIRE Community Guest Interview #7 – Medical Professional Family With 3 Kiddos In The Pursuit of FIRE 
• FIRE Community Guest Interview #8 – Calculated Engineer Family Utilizing Geo-Arbitrage to Reach FI
• FIRE Community Guest Interview #9 – Lessons from a Fimigrant – Let Experience Be Your Teacher
• FIRE Community Guest Interview #10 – From Entrepreneur Making $36,000 to Multi-Millionaire In His 30s
• FIRE Community Guest Interview #11 – Hybrid Dividend and Index Investor Who’s Mastering the FI Mindset
• FIRE Community Guest Interview #12 – Proving Financial Independence Is Possible With Kids In A High Cost of Living Area
• FIRE Community Guest Interview #13 – Making An Impact On The Way To FI
• FIRE Community Guest Interview #14 – Badass Momma Knows Her Worth And Became A Millionaire At 36
• FIRE Community Guest Interview #15 – PhD Couple Reached FI at 40
• FIRE Community Guest Interview #16 – Mindful Minimalist Family
• FIRE Community Guest Interview #17 – FIWOOT: Financial Independence Work On Own Terms

The post FIRE Community Guest Interview #18 – French Expats Growing Their Real Estate Empire in the US and France appeared first on Modern FImily.