\u00a0 Spending money would give me anxiety, even if it were on things that brought me joy.<\/span><\/p>\nThrough the years, I\u2019ve slowly become more comfortable finding a balance between saving for later and enjoying today.<\/span><\/p>\n5. 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?<\/strong><\/p>\nTravel is one of the big-spending categories for us. We travel hack and try to save as much as we can.\u00a0 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.\u00a0 One thing we are really looking forward to when I’m done teaching is being able to travel in the shoulder seasons (spring & fall).<\/span><\/p>\nOur travel budget is usually around $10,000 – $15,000 a year.\u00a0 We don\u2019t always spend this much, but having a large buffer leads to great peace of mind.<\/span><\/p>\nI\u2019m lucky that my hobbies don\u2019t really cost much, and some generate income.\u00a0 I love to read, write, and create things (knitting, sewing, blogging, etc.).<\/span><\/p>\nBut my husband has more expensive hobbies.\u00a0 He loves to ski and golf.\u00a0 I\u2019m constantly giving him a hard time because he picked the most expensive hobbies out there.<\/span><\/p>\nAll in we probably spend close to $5000 a year on our hobbies (not including travel).<\/span><\/p>\nWe also love food and eat gluten and dairy-free for the most part.\u00a0 We don\u2019t mind spending more buying our produce at the local farmer\u2019s market either. Our food spending is more than \u201caverage\u201d most months, but it\u2019s something that we are okay with.<\/span><\/p>\nWhen it comes to not spending money, new things often don\u2019t appeal to us.\u00a0 We both drive older vehicles (that we albeit did buy brand new), and when we buy clothes, we wear them until can\u2019t anymore.\u00a0<\/span><\/p>\nI love to shop second hand, so that is where most of the clothes and toys for our kids come from.<\/span><\/p>\n6. Do you use a budget?\u00a0 Do you track your expenses? Do you track your net worth? If so, how often do you update these?<\/strong><\/p>\nEarly 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.\u00a0 It became too much and really wasn\u2019t helping.<\/span><\/p>\nEventually, we shifted to just tracking our expenses.\u00a0 This works for us because we have gone through our spending and really tried to align it with our values.\u00a0 We have a high saving rate, so there is always wiggle room.\u00a0<\/span><\/p>\nI do track our net worth – I\u2019m a numbers nerd too.\u00a0 Although I track our investments more regularly, I only calculate our net worth twice a year.\u00a0 I found when tracking it more frequently, there wasn\u2019t as much change from month to month.<\/span><\/p>\n7. As a FI member living in Canada, are there any pros to living in Canada specifically that have helped you along your journey?\u00a0 Conversely, any cons?\u00a0\u00a0<\/strong><\/p>\nOne of the big pros for us recently has been living close to family.\u00a0 We both still work, but thankfully, our parents are retired and help with childcare.\u00a0\u00a0<\/span><\/p>\nWe still pay for our childcare, but as my husband is a shift worker, we don\u2019t need it every day.\u00a0 With having family childcare, we only pay for the days we need it. And our kids love being around their grandparents so much.<\/span><\/p>\nOther 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.\u00a0<\/span><\/p>\nAnd we were both able to finish post-secondary debt-free with minimal help from our families.\u00a0 This was partly due to the lower cost of post-secondary and the scholarships that we were able to qualify for.<\/span><\/p>\nBeing a teacher, is another bonus of living in Canada. We are paid well for what we do and have great benefits.\u00a0 This is not always the case from what I\u2019ve heard from my American teacher colleagues.<\/span><\/p>\nBut a con to living in Canada is real estate.\u00a0 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.<\/span><\/p>\n8. What is your investment strategy? Do you invest in mutual funds, index funds, dividend growth stocks, real estate, other businesses, etc.?\u00a0 Has your investment strategy changed over the years?\u00a0<\/strong><\/p>\nOur investment strategy can only be classified as all over the map.\u00a0\u00a0<\/span><\/p>\nAlthough 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).<\/span><\/p>\nOver the years, our investment strategy has evolved.\u00a0\u00a0<\/span><\/p>\nWhen I first started investing, I was in mutual funds because that seemed like the thing to do at the time.\u00a0 Eventually I moved those mutual funds into ETFs with much lower management fees.<\/span><\/p>\nAs we got more invested in real estate, it became evident that we couldn\u2019t have all our money there.\u00a0\u00a0<\/span><\/p>\nThe first year we invested in real estate, we were hit with a $13,000 tax bill.\u00a0 After that, we started offsetting the taxes owed by investing money into ETFs in our RRSPs.<\/span><\/p>\n9. I know real estate has been a big driver in your passive income plans.\u00a0 Can you please share with us your investing strategy when it comes to real estate?\u00a0<\/strong><\/p>\nLike index fund or ETF investing, our real estate investing strategy is pretty dull.\u00a0 We are long-term buy-and-hold investors.\u00a0 This means that after doing our research, we buy a property and plan to own it for many years.<\/span><\/p>\nWhen 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.<\/span><\/p>\nThings that you may want in your home (for example, a finished basement) may not really increase the rent of an investment property.\u00a0 Only 2 of our 9 rental properties have finished basements.<\/span><\/p>\nAnother thing you want to consider with rental properties is the tenant profile.\u00a0 Before we started learning about real estate investing, we had no idea what this meant.\u00a0 The tenant profile is who you want your ideal tenant to be.\u00a0 Then you purchase properties to match that.<\/span><\/p>\nOur tenant profile is young families.\u00a0 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).<\/span><\/p>\nWe always looked to purchase newer properties because they require less maintenance and are typically easier to rent out.\u00a0 And because our tenant profile was young families we looked for single-family homes.<\/span><\/p>\nOwning suited properties (where someone could live in the basement and someone else could live upstairs) may lead to more cash flow.\u00a0 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.\u00a0 This was an important consideration for us, too, because we self-manage all of our properties.<\/span><\/p>\nCurrently, we are not in a buying phase but more of a hold phase.\u00a0\u00a0<\/span><\/p>\nWe own 9 rental properties (8 of them cashflow and the one that doesn\u2019t is a unique case) and plan on keeping them and having the tenants pay down the mortgages.\u00a0 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.<\/span><\/p>\nOne of the reasons we have this flexibility is because we never joint ventured with anyone when buying our properties.\u00a0 Our portfolio could be much bigger if we wanted to partner with other people.\u00a0 But that never appealed to us.\u00a0 We only ever wanted to be accountable to ourselves.<\/span><\/p>\nBefore 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.\u00a0<\/span><\/p>\nIn 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.\u00a0 In my mind, if everything went sideways, we could always liquidate the rental properties and still own our home.<\/span><\/p>\nWe 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.\u00a0 We purchased our first property in 2015 and our \u201clast\u201d one in 2019.\u00a0\u00a0<\/span><\/p>\n10 . Do you take advantage of tax-advantaged accounts offered to you?\u00a0 If so, which ones and how so?\u00a0 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?<\/strong><\/p>\nYes, our RRSPs play a big role in our investment strategy right now.\u00a0 As mentioned above, we use them to help offset our annual tax bill.\u00a0 But as we have a number of rental properties we are conscious of the fact that our incomes in \u201cretirement\u201d may be higher than they are now.\u00a0 Because of this, waiting to withdraw from our RRSPs until the traditional retirement age doesn\u2019t make sense.<\/span><\/p>\nOur plan is to work for a few more years (hopefully less) and then leave our day jobs.\u00a0 Then we can slowly draw down our RRSPs to live off of while paying less tax.\u00a0 Any excess funds we have at that time will be funneled into our TFSAs as they are relatively underfunded at the moment.<\/span><\/p>\nRental 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.\u00a0 And when we calculate our hourly rate, even though our rentals are not passive, they still provide a pretty good return on our time.<\/span><\/p>\nEventually, 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.<\/span><\/p>\nBut that\u2019s years from now, so who really knows what exactly will happen.<\/span><\/p>\n11. Speaking of withdrawals, what is the withdrawal rate you plan to use when you withdraw from your portfolio?\u00a0 Are you a fan of the 4% \u201crule\u201d or something else?\u00a0 Why?<\/strong><\/p>\nOur withdrawal rate is somewhat unique and not set in stone.\u00a0<\/span><\/p>\nWe have been investing in our RRSPs for tax purposes while we are still both working full-time.\u00a0 When I transition away from full-time work, I will begin to withdraw from my RRSP.\u00a0 The rate isn\u2019t set yet but will be decided based on tax efficiency.\u00a0\u00a0<\/span><\/p>\nWhen hubby leaves his full-time job, then we will also start to draw down his RRSP.\u00a0<\/span><\/p>\nWe plan to liquidate our RRSPs and either spend that money on living expenses or roll it into our TFSAs.<\/span><\/p>\nEventually, we will have no money left in our RRSPs, but our real estate portfolio should be in a much better cash flow position.\u00a0 Depending on timelines, some of our properties may be mortgage-free, which is the ultimate goal.<\/span><\/p>\nOnce our portfolio is mortgage-free, we have even more options.\u00a0 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.<\/span><\/p>\n12. As a Canadian pursuing FI, what are your post-FIRE thoughts\/plans regarding health coverage?\u00a0 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?<\/strong><\/p>\nUntil recently we had never really thought of this question.\u00a0\u00a0<\/span><\/p>\nMy husband and I are both still currently working full time and each has great benefits through our employers.\u00a0 And because we both have great family benefits we are never out of pocket.\u00a0 What one plan doesn\u2019t cover, the other one usually does. And if not, I also have access to a health spending account through my employer.<\/span><\/p>\nNow that we are slowly getting closer to achieving FI, we are starting to think more about what that looks like.\u00a0<\/span><\/p>\nInitially we thought that we would just pay out of pocket for any expenses.\u00a0 But after listening to a great <\/span>Explore FI Canada podcast episode<\/span><\/a>, we are rethinking this.\u00a0 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.<\/span><\/p>\nOne benefit we do have is that our \u201cFI number\u201d is more than we need.\u00a0 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.<\/span><\/p>\n13. As a parent, have you found that having children has greatly delayed your timeline to FIRE?\u00a0 How much money have you spent on your daughter per year?\u00a0 What were some of the bigger costs that were worth it, and what were some of the bigger costs that were not worth it?\u00a0 Are you planning to open up an RESP for their post-secondary education?<\/strong><\/p>\nIf anything, having a little one (and now 2) has accelerated our path to FI.\u00a0 Every day I\u2019m at work, I would much rather be at home hanging out with my family.\u00a0 My motivation has substantially increased since becoming a parent.<\/span><\/p>\nOn average, we spend about $2500-$5000 on our little ones a year. That includes childcare (which is done by family), clothes, toys, and activities.\u00a0 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).\u00a0\u00a0<\/span><\/p>\nOur spending doesn\u2019t really include food because they eat what we eat. And it doesn\u2019t include their RESPs because we consider them separate.<\/span><\/p>\nAlthough 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. <\/span>But once we reach FI our childcare costs will be next to nothing so maybe things will even out.<\/span><\/p>\nWe 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.\u00a0 We benefited from many hand-me-downs and didn\u2019t have to buy many of the large ticket baby items.<\/span><\/p>\nI\u2019m also not into big fancy things so never felt the need to have all the baby gadgets and gizmos.\u00a0 The best big-ticket items that we bought were car seats that we could use for years.\u00a0<\/span><\/p>\nYes, we do have RESPs for our little ones.\u00a0\u00a0<\/span><\/p>\nWe have made it a priority as parents to contribute $2500 a year to our little ones\u2019 RESPs (to get the maximum grant).\u00a0 Any money they receive from birthdays or other occasions goes into their own investing accounts.\u00a0\u00a0<\/span><\/p>\nOur 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.\u00a0 Time in the market, right?<\/span><\/p>\nBecause TFSAs don\u2019t play a significant role in our current investment strategy, my TFSA is used in part as our little ones\u2019 investment account.<\/span><\/p>\n14. If you could go back in time and change things, what would you have done differently?<\/strong><\/p>\nStarted earlier.\u00a0<\/span><\/p>\nAlthough I have always been a saver, I had no idea about investing.\u00a0 I wish I had known about all the information available online sooner.\u00a0 It wasn\u2019t until we had already bought multiple investment properties that I had even heard of an index fund or ETF.\u00a0<\/span><\/p>\nI\u2019m not saying learning more about the markets would have changed how we invest right now.\u00a0 But I wish I would have invested my money sooner rather than just keeping it in a paltry savings account and Canada Savings Bonds.<\/span><\/p>\n15. Has discovering financial independence changed how you view your job and life overall?\u00a0<\/strong><\/p>\nI\u2019ve never wanted to work until the traditional retirement age. I just never knew this was called something until discovering the FI movement.<\/span><\/p>\nBut discovering the term financial independence has made me more mindful overall.\u00a0 Now I\u2019m less likely to save for saving sake and am working towards enjoying the journey and my finances.<\/span><\/p>\n16. Have you come out of the FIRE closet yet? Meaning, do your friends, family, co-workers etc. know about your financial independence goals?\u00a0 If so, how did you bring it up and what were their reactions?\u00a0 If not, why not?\u00a0 Why do you struggle with this conversation and why do you feel that money is such a taboo topic?\u00a0\u00a0<\/strong><\/p>\nYes, I have always been very open about my plans to achieve financial independence, even before I knew FI was \u201ca thing.\u201d\u00a0 I think because we haven\u2019t pulled the trigger yet and left our day jobs that people think it is all still something in our heads. I don\u2019t think they will truly believe it will happen until they see it.<\/span><\/p>\nEven though I\u2019m open about my plans to achieve FI, very few still truly understand how we are setting ourselves up for it.\u00a0 And a lot of people think that we are where we are financially because of my husband\u2019s well paying job.\u00a0<\/span><\/p>\nThis is super annoying.\u00a0\u00a0<\/span><\/p>\nThankfully 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.<\/span><\/p>\nI personally love talking about money and personal finance.\u00a0 And sometimes I get a little too passionate about it, and my husband has to tell me to scale back a little.\u00a0 Or only talk to people about their money if they invite the conversation.<\/span><\/p>\n17. What pieces of advice would you suggest to someone who is just starting out or someone who is working toward reaching financial independence?\u00a0<\/strong><\/p>\nFind someone\u2019s story that resonates with you, learn from them, and then make your own choices.\u00a0 There are so many great content creators now with diverse voices that it\u2019s easier now than ever to find someone that resonates with you.<\/span><\/p>\nBut I don\u2019t think you should blindly follow someone else\u2019s path.\u00a0 Learn from others and then make your own choice and do things \u201cyour way.\u201d<\/span><\/p>\n18. What does the word \u2018success\u2019 mean to you?<\/strong><\/p>\n