Here we are again for our 11th interview as part of the FIRE Community Guest Interview Series! Wow, this series really is growing and I love reading all the responses from our guests.<\/span><\/p>\n 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,\u00a0<\/span>please reach out to the Modern Fimily!<\/span><\/a>\u00a0You can\u00a0<\/span>check out the previous FIRE Community Guest Interviews here<\/span><\/a>.<\/span><\/p>\n Many Canadians in the FIRE\/DIY investing space will likely recognize our next guest, Bob from\u00a0<\/span>Tawcan<\/span><\/a>! In fact, this FIRE Community Guest Interview Series here on our blog was inspired by Bob’s guest interview series and you’ll notice many of the questions are similar. I loved the idea of reaching out to others to bring their perspective to the table too.<\/span><\/p>\n Bob has been blogging for many years documenting how his family plans to reach financial independence through dividends (and he’s been adding in index funds to the mix as well). Bob digs into a ton of analysis on his blog comparing different ETFs, different brokerages, different individual stocks that make up his dividend portfolio, etc. and also spends quite a bit of time focusing on the mindset side of things too. He posts way more frequently than us while maintaining a full-time job and oh yea is a father to two boys! So yep, he’s a driven, organized, FIRE freak! \ud83d\ude42<\/span><\/p>\n 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 Bob, please check out his blog,\u00a0<\/span>Tawcan<\/span><\/a>, or leave a comment on this post. Without further ado, take it away Bob!<\/span><\/p>\n 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?<\/span><\/strong><\/p>\n I am Bob. I was born in Taiwan and immigrated to Canada over 20 years ago. My wife and I met in university in 2009 when she was an exchange student from Denmark. We live in Vancouver Canada with two young kids. I work in high tech while my wife stays home with the kids.\u00a0<\/span><\/p>\n I have always been interested in personal finance because money was a topic that my parents discussed openly with me and my brother growing up. My parents opened up a bank account for me when I was around grade two. I still recall looking at my bank balance and calculating how much interest I\u2019d earn in one or two years. For my wife, having grown up on a farm and from a frugal family, she always knew the concept of don\u2019t spend more money than what\u2019s in your bank account (i.e. live below your means).\u00a0<\/span><\/p>\n Financial independence was not something new to me because\u00a0<\/span>FI runs deep in my family<\/span><\/a>\u00a0– my dad retired in his 40\u2019s, a cousin of mine retired in his early 40\u2019s, and another cousin of mine became financially independent in her 40\u2019s but continued to work. Financial independence was more of a new concept for my wife. She was immediately hooked on the idea though because that means we can choose to work because we have to, not because we want.<\/span><\/p>\n 2.\u00a0 When in your journey did you realize financial independence was actually possible? Was that the original goal at the beginning?<\/span><\/strong><\/p>\n Having family members who are retired or are financially independent meant I always knew financial independence was possible. I never had any doubt that we will become financially independent in the future. It all came down to the simple math of saving money and investing that money to generate passive income.\u00a0<\/span><\/p>\n 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?\u00a0<\/span><\/strong><\/p>\n Since I don\u2019t blog anonymously anymore, I don\u2019t share actual numbers of our savings rate, FIRE number, net worth, or salary.\u00a0<\/span>Technically we can be financially independent<\/span><\/a>\u00a0if we wanted to today, but we choose to prolong our FI journey. By prolonging our FI journey I mean that we are building up a\u00a0<\/span>dividend portfolio<\/span><\/a>\u00a0that will eventually generate over $50,000 a year in\u00a0<\/span>dividend income<\/span><\/a>. When that happens, we can call ourselves financially independent.\u00a0<\/span><\/p>\n Because I work in high tech, there\u2019s no such thing as the standard 40-hour workweeks. I work to get all the tasks completed. I also happen to travel quite a bit for work. When I\u2019m overseas, it\u2019s not unusual to pull double shifts, unfortunately. Having said that, my wife always reminds me about work-life balance and how I should be spending more time with our kids.<\/span><\/p>\n We had our so-called<\/span>\u00a0financial epiphany in 2011<\/span><\/a>\u00a0so I suppose we have been working toward financial independence for about 9 years. We think we can reach financial independence in the next 5-7 years when we are in our early 40\u2019s.\u00a0<\/span><\/p>\n 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?<\/span><\/strong><\/p>\n We have been tracking our expenses for almost 10 years. When we started doing that, I was the one that wanted to trim down or eliminate as many expenses as possible, so we could save more money for investing. Over time, although our expenses were going down and we were saving lots of money, my wife and I would argue over small expenses, like her going to the coffee shop to enjoy a cup of latte and some pastries. Eventually, I realized that the financial independence journey is not about sacrificing and missing out on life. It\u2019s about finding the\u00a0<\/span>right personal balance<\/span><\/a>\u00a0between spending the money to enjoy life today and saving money for the future. In other words, optimize and reduce spending on things that you don\u2019t enjoy but spend money on things that you enjoy. So my mindset has definitely shifted during my FI journey.<\/span><\/p>\n 5. What do you spend your money on and what don’t you spend your money on? Do you use a budget? Do you track your expenses?<\/span><\/strong><\/p>\n In the last few years, we have been spending more money on travel because we enjoy exploring new places. We also have been spending money on organic products, so we can make delicious nutrient-rich dishes at home. We don\u2019t spend our money on things like an extra car (we\u2019re a one-car household) and social status symbols like fancy jewelry, brand-name clothes, the latest electronic gadgets, and other luxury goods.\u00a0<\/span><\/p>\n We have been using a budget system since late 2010 where we allocate our income to six different categories. Thanks to our budget system, we managed to\u00a0<\/span>increase our net worth by 250% in 5 years<\/span><\/a>.<\/span><\/p>\n Being an Excel nerd myself, all of our expenses are tracked in a master budget Excel sheet with a lot of Excel macros.<\/span><\/p>\n 6. What brings you happiness and joy? How much money do these things cost?<\/span><\/strong><\/p>\n When we spend time together as a family and just being silly and enjoying the present moment. Most of the time, it doesn\u2019t cost us any money at all. When we were\u00a0<\/span>traveling in Japan last year<\/span><\/a>, instead of going to the Osaka Aquarium as planned and spending a bit of money on the entrance fees, our kids wanted to check out a local playground. We ended up spending almost three hours going up and down a\u00a0<\/span>fun 3-story slide<\/span><\/a>. Everyone had a ton of fun and it was completely free!<\/span><\/p>\n 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? What would you say are some differences that you’ve encountered compared to many of the American based FIRE bloggers out there?<\/span><\/strong><\/p>\n We are fortunate to live in Canada and pursue FIRE because we don\u2019t have to worry about the cost of health care. Health care cost is the biggest unknown if you\u2019re seeking FIRE in the states. Also, the Canadian tax advantage accounts, the TFSA and the RRSP, are more flexible compared to the American counterparts.<\/span><\/p>\n However, living in Canada is not all sunshine and rainbows. High tech salaries in Canada are typically lower when compared to salaries in Seattle, Silicon Valley, or other major American cities. Also, the average Canadian housing price is much higher than the average American housing price. Food cost tends to be more expensive in Canada due to the weak Canadian dollar as many products are imported from the US.\u00a0<\/span><\/p>\n 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?\u00a0<\/span><\/strong><\/p>\n We utilize a hybrid investment strategy – we invest in both index ETFs and individual dividend growth stocks. We like this mix because we get to<\/span>\u00a0take advantage of the best of both investment strategies<\/span><\/a>. Investing in index ETFs allows us to have instant asset diversification. We also\u00a0<\/span>invest in an international index ETF (XAW)<\/span><\/a>\u00a0to give us geographical diversification. Investing in dividend-paying stocks gives us a predictable dividend income. It also means we don\u2019t have to sell anything when we are living off our investment income. Thanks to the organic dividend growth of the dividend stocks we hold, our dividend income will continue to increase and keep up with inflation without any new capital investment.\u00a0\u00a0<\/span><\/p>\n 9. As a parent, have you found that having children has greatly delayed your timeline to FI? On average, 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?<\/span><\/strong><\/p>\n Yes, children have delayed our timeline to FI somewhat. But in reality, kids are only as expensive as parents make them be. For both of our kids, we used cloth diapers and got a lot of hand-me-down clothes. We certainly didn\u2019t purchase these fancy unnecessary items like a baby wipe warmer, a diaper genie, or cloth diaper wash service. Even today about 80% of both kids\u2019 clothes are hand-me-downs.\u00a0<\/span><\/p>\n Although having kids have delayed our timeline to FI,\u00a0<\/span>I wouldn\u2019t forgo kids to become financially independent earlier though.<\/span><\/a>\u00a0<\/span><\/p>\n I would say we spend about $150 per kid per month. Looking at our budget master sheet, the biggest cost for having children comes in the form of food costs. From time to time, both kids would eat more than me! Some other bigger costs are things like swimming lessons and camps but I think they are worth it because they allow our kids to learn new skills.\u00a0\u00a0<\/span><\/p>\n 10. If you could go back in time and change things, what would you have done differently?<\/span><\/strong><\/p>\n Funny you asked this, there are\u00a0<\/span>10 lessons I would have given my 23-year-old self.<\/span><\/a>\u00a0Like most people, I would have definitely started investing in index funds and individual stocks earlier rather than putting my savings in GIC\u2019s and mutual funds. If I knew that the Canadian real estate would go gangbusters, I would have invested in real estate earlier. For example, I would have purchased an apartment near the University of British Columbia when I started university and rented one of the rooms out while living in the other room myself.\u00a0\u00a0<\/span><\/p>\n 11. Has discovering financial independence changed how you view your job and life overall?<\/span><\/strong><\/p>\n Definitely. For a while, I thought about pursuing an MBA. But after looking at how much an MBA would cost and knowing that I don\u2019t plan to work until age 65, I decided that an MBA was not the way to go. My wife and I also stop paying attention to material things or societal status symbols. We no longer care what others think about us.\u00a0<\/span><\/p>\n 12. Do you take advantage of tax-advantaged accounts offered to you? If so, which ones and how so? What is your withdrawal strategy to avoid fees\/taxes?\u00a0<\/span><\/strong><\/p>\n We take advantage of both RRSP and TFSA by maximizing our contribution limits each year. My work matches my RRSP contribution to a certain percentage, so I also take advantage of that (i.e. free money). I have written\u00a0<\/span>a pretty comprehensive article on how we plan to withdraw from our RRSPs<\/span><\/a>\u00a0early without getting hit with the early withdrawal withholding tax.<\/span><\/p>\n 13. 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? What do you estimate your post-FIRE costs to be per year?\u00a0<\/span><\/strong><\/p>\n As discussed previously, I think we are fortunate that as Canadians, health care is covered universally. In BC, we used to need to pay a monthly premium for our MSP (Medical Service Plan) but this premium was removed in 2020. Currently, work covers 90% of our extended health benefits, so we are paying very little when it comes to health-related costs.\u00a0<\/span><\/p>\n Once we are FIRE\u2019d, I believe our health care costs would continue to be low. One of the things I need to research is how we will cover expenses like dental and vision through extended health insurance. In my initial research, it looks like the cost would be around $100-200 per month for a family of four but that number can vary depending on the coverages.<\/span><\/p>\n 14. Where do you see yourself in the next year, 5 years, 10 years?<\/span><\/strong><\/p>\n Ha ha! Funny that you asked this question since I asked you\u00a0<\/span>the same question for my interview<\/span><\/a>.\u00a0<\/span><\/p>\n In the next year, I see myself continuing with our FI journey by maxing out our RRSP and TFSA contribution limits and continuing to invest in index ETFs and dividend-paying stocks. From a financial point of view, we have been more or less on auto-pilot for the last few years. I also see myself continue to work in the same high-tech job, after\u00a0<\/span>spending \u2153 of my lifetime working at the same company<\/span><\/a>. As a family, we plan to continue traveling and exploring the world.<\/span><\/p>\n In the next 5-10 years, I think we will reach financial independence. My wife and I have talked about living in both Taiwan and Denmark for a couple of years, so I\u2019d like to see us pursuing that idea. Another idea we\u2019ve been toying with is travelling around the world for a year or so. I would love to have this idea come true in the next 5-10 years as well. Due to my work in high tech, we pretty much have to live in a major Canadian city. Once we reach financial independence and I no longer work full time in high tech, we plan to live in a small Canadian town and enjoy the slower-paced life.\u00a0<\/span><\/p>\n 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 such a taboo topic?\u00a0\u00a0<\/span><\/strong><\/p>\n My family and many close friends definitely know about our FIRE plan. I was featured on\u00a0<\/span>Money Sense Magazine<\/span><\/a>\u00a0a few years ago so a few co-workers know about my blog and therefore our FIRE plan.\u00a0<\/span><\/p>\n For the most part, I don\u2019t hide our FIRE plan from anyone. If someone is ready to talk to me about FIRE, I can talk for hours. A couple of years ago, we were over at our neighbours for dinner. As we began to talk about work and our future plans, my neighbour started asking me if I\u2019ve heard the term financial independence retire early. Needless to say, we talked for hours about FIRE since that conversation.\u00a0<\/span><\/p>\n I think money is such a taboo topic in society because most people grew up in a household that doesn\u2019t discuss money openly. Discussing salary information among co-workers is also frowned upon. Isn\u2019t that weird? Can you imagine if salary information is widely available just like the professional athletes? I think the average worker would feel better about their jobs and how much they are getting paid because comparable information would be easily available.\u00a0\u00a0<\/span><\/p>\n 16. What pieces of advice would you suggest to someone who is just starting or someone who is working toward reaching financial independence?\u00a0<\/span><\/strong><\/p>\n Financial independence is a personal journey. Stop comparing your journey with other people. Everyone\u2019s situation is different so it can take each individual a different amount of time to reach FI. Also,\u00a0<\/span>early retirement doesn\u2019t define success in life<\/span><\/a>. There\u2019s nothing wrong with retiring at age of 67 or later! Stop worrying about whether you\u2019re financially independent or not. As long as you\u2019re improving your financial well-being, you are doing yourself a favour.<\/span><\/p>\n Furthermore, life is more than dollars and cents. Life is about building relationships, helping others around you, and improving society. I\u2019ll finish this question with a very powerful statement that someone told me:<\/span><\/p>\n \u201cAt the end of the day, it\u2019s not about how much money you make, it\u2019s not about how big your house is, it\u2019s not about what kind of car you drive, it\u2019s about the relationships that you build and the impacts you\u2019ve made on other people\u2019s lives.\u201d<\/span><\/em><\/strong><\/p>\n 17. What has been your greatest accomplishment to date?<\/span><\/strong><\/p>\n Beating all the other sperms to the egg, getting out of the womb, and taking my first breath!<\/span><\/p>\n If you can beat the odds of life, you\u2019re already accomplished in life. \ud83d\ude42\u00a0<\/span><\/p>\n 18. How can people get in contact with you?\u00a0<\/span><\/strong><\/p>\n You can find me on my blog\u00a0<\/span>tawccan.com<\/span><\/a>. You can also reach me on Twitter\u00a0<\/span>@Tawcan<\/span><\/a>\u00a0or Instagram\u00a0<\/span>@Tawcan<\/span><\/a>.<\/span><\/p>\n Awesome responses Bob! What are some of our key takeaways from Bob’s interview?<\/span><\/p>\n Thanks again Bob for being a part of our FIRE Community Guest Interview Series. In next month\u2019s interview we have one of my favorite Canadian blogger friends in the spotlight who is just so genuine and loves helping others. She also is the co-host of a pretty rad podcast that I’ve been on a few times.<\/span><\/p>\n Did you enjoy this interview? Any additional questions for Bob? Thanks for tuning in and check back next month for the next interview.<\/span><\/p>\n We love highlighting other members of the FI community. Please\u00a0<\/span>contact us<\/span><\/a>\u00a0if you\u2019d like to be a part of the FIRE Community Guest Interview series and we\u2019ll see if we\u2019re a good fit!<\/span><\/p>\n And in case you wanted to read the previous interviews that make up our FIRE Community Guest Interview Series, here you go!<\/span><\/p>\n\n