Hey everyone! Here we are again with our next installment of the FIRE Community Guest Interview Series!\u00a0\u00a0<\/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 Today, we have the pleasure of having Adam join us from all the way in Saudi Arabia!\u00a0 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.\u00a0 Adam is living proof that geo-arbitrage is a very real way to reach FI.\u00a0 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<\/strong> your FIRE journey. <\/span><\/p>\n 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.\u00a0\u00a0<\/span><\/p>\n I’d also like to highlight that Adam is not a blogger\/podcaster so I appreciate him coming on to share his story.\u00a0 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.)<\/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 Adam, please<\/span> leave a comment on this post. Without further ado, take it away Adam!<\/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?<\/b><\/p>\n 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 \u2013 Saudi Arabia to be exact.<\/span><\/p>\n A few years ago, I read a book called \u201c<\/span>Millionaire Teacher<\/span><\/i>\u201d 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\u2026and was immediately hooked.<\/span><\/p>\n 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.<\/span><\/p>\n I decided to take a step back, focus on the \u201cmajor\u201d things and let the little things go\u2026there is only so much you can tweak and adjust.<\/span><\/p>\n 2. When in your journey did you realize financial independence was actually possible?\u00a0 Was that the original goal at the beginning?<\/b><\/p>\n I think I always believed that FI was attainable, but after landing a job abroad \u2013 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 \u201cFI number\u201d a lot sooner. Once this was in motion, the belief was definitely cemented.<\/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?\u00a0 How long have you been working towards financial independence and where are you today?<\/b><\/p>\n 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.<\/span><\/p>\n As expats, we are subject to a number of perks. While I\u2019m hesitant to share exact numbers, I can say that I earn about double what I was earning in Canada\u2026and add to the fact that we have our rent covered, majority of my kids\u2019 education paid for\u2026we are able to save about 85% of our monthly income.\u00a0<\/span><\/p>\n Another non-financial benefit to this lifestyle is that my wife is able to stay home with our kids\u2019 \u2013 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.<\/span><\/p>\n 4. Do you feel deprived?\u00a0 Do you feel like you are sacrificing and missing out on life?\u00a0 How would you say your mindset has shifted throughout your FI journey?<\/b><\/p>\n Nope, don\u2019t feel deprived at all.<\/span><\/p>\n For the past five years \u2013 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\u2026if anything, we have been thriving \u2013 not been deprived.\u00a0<\/span><\/p>\n 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?<\/b><\/p>\n 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\u2019t really spend our money on much.<\/span><\/p>\n Working a 5-day week, and having three kids under the age of 6, our days are pretty unadventurous (but also busy).<\/span><\/p>\n 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!).<\/span><\/p>\n 6. 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?<\/b><\/p>\n We don\u2019t use a formalized budget but we do have a general idea of monthly spend.\u00a0<\/span><\/p>\n Once a month, my wife and I will sit down and map out anticipated costs for the upcoming month i.e., groceries, kids\u2019 activities, residency permit fees, etc. More often than not, we are pretty spot on in our projections.<\/span><\/p>\n As far as net worth tracking \u2013 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\u2026so once a month works for us.<\/span><\/p>\n 7. <\/strong>What are some of the more unique\/uncommon ways you\u2019ve cut down costs?\u00a0<\/b><\/p>\n For us \u2013 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.<\/span><\/p>\n By putting ourselves in an environment with zero percent income tax, as well as additional perks \u2013 I was able to increase my income, eliminate our rental costs, and drastically alter our financial projection\u2026all at once.\u00a0\u00a0\u00a0<\/span><\/p>\n 8. As someone who is now an expat living aboard in the Middle East, how has that impacted your finances?\u00a0<\/b><\/p>\n Pros:<\/b> 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:<\/span><\/p>\n Cons:<\/b> 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.\u00a0\u00a0<\/span><\/p>\n 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?\u00a0 Conversely, any cons?\u00a0 What have you noticed are some of the major pros\/cons now that you are living abroad?<\/b><\/p>\n From the pros side – I do like some of the tax-beneficial accounts that I feel will help us in later life \u2013 such as the TFSA and RRSP\u2026but until now there wasn\u2019t anything massively beneficial.\u00a0<\/span><\/p>\n From the cons side \u2013 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)\u2026the costs are insane!<\/span><\/p>\n 10. What is your investment strategy? Do you invest in index funds, dividend stocks, real estate, other businesses, etc.?\u00a0 Has your investment strategy changed over the years?<\/b><\/p>\n 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.\u00a0<\/span><\/p>\n We don\u2019t 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 \u201call-in-one\u201d ETF, and so purchase VGRO on a monthly basis with a long-term hold approach in mind.<\/span><\/p>\n 11. 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?\u00a0<\/b><\/p>\n 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).\u00a0 However, when you declare non-residency, you also give up your right to invest in accounts such as the TFSA, RESP and RRSPs.<\/span><\/p>\n 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.\u00a0<\/span><\/p>\n 12. 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 \u201c4% rule\u201d or something else?\u00a0 Why?<\/b><\/p>\n While I use the \u201c4% rule\u201d as a guide, I definitely don\u2019t 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 \u2013 I am hesitant to commit to any form of withdrawal strategy.<\/span><\/p>\n 13. What are your post-FIRE thoughts\/plans regarding health coverage?\u00a0 What do you estimate your post-FIRE health costs to be per year?<\/b><\/p>\n No idea \u2013 to be honest, I haven\u2019t thought that far ahead as I doubt I will be going the \u201cretire early\u201d route. I think that when I hit FI, I will be looking to change my schedule and hopefully freelance\/consult. As for now \u2013 me and my family have private medical coverage.<\/span><\/p>\n 14. As a <\/b>parent<\/b>, have you found that having children has greatly delayed your timeline to FIRE?\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 able to open up a RESP for their post-secondary education while abroad?\u00a0 Is there an equivalent type of account you can fund to help with their post-secondary studies if they choose to go that route?<\/b><\/p>\n Nope, definitely don\u2019t 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.<\/span><\/p>\n We have three kids \u2013 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.\u00a0<\/span><\/p>\n As far as larger costs that were worth it \u2013 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 \u2013 we stock up on clothes on sales, and also pick-up loads through Facebook market sites\u2026so we have kept prices in check.<\/span><\/p>\n 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\u2019 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.<\/span><\/p>\n 15. If you could go back in time and change things, what would you have done differently?<\/b><\/p>\n This sounds cliched, but I definitely wish I was more financially educated at a younger age.\u00a0<\/span><\/p>\n It took lots of mistakes and seeking out solid educational materials to finally get me and my family on the correct path.\u00a0<\/span><\/p>\n Also, I would have looked for expat opportunities sooner \u2013 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.<\/span><\/p>\n 16. Has discovering financial independence changed how you view your job and life overall?\u00a0<\/b><\/p>\n For sure \u2013 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\u2019t have to\u2026so I suppose that ticks the \u201clife affected\u201d box.<\/span><\/p>\n 17. 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<\/b><\/p>\n Never considered it a taboo topic. In the beginning I was trying to shout it from the rooftops to anyone that would listen\u2026but found out pretty quickly that not everyone likes talking about\u00a0<\/span>finances, and some people prefer to chart their own paths forward\u2026which is fair enough.<\/span><\/p>\n 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.<\/span><\/p>\n 18. What pieces of advice would you suggest to someone who is just starting out or someone who is working toward reaching financial independence?\u00a0<\/b><\/p>\n My advice would be to tackle the \u201cbig ticket\u201d items \u2013 income, rent\/mortgage, travel, and vehicles, etc.\u00a0<\/span><\/p>\n 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.<\/span><\/p>\n 19. What does the word \u2018success\u2019 mean to you?<\/b><\/p>\n For me, it would mean raising a family that feels loved, safe and financially secure.<\/span><\/p>\n 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\u2026and this can only lead to bigger and better things.\u00a0\u00a0<\/span><\/p>\n 20. Are there any books, blogs, or podcasts that you would recommend for our readers to check out?<\/b><\/p>\n Books: <\/b>Millionaire Teacher (by Andrew Hallam) and \u201cThe Simple Path to Wealth\u201d (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.\u00a0<\/span><\/p>\n Podcasts:<\/b> 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 \u201c<\/span>FI Garage<\/span><\/i>\u201d and \u201c<\/span>Explore FI Canada<\/span><\/i>.\u201d<\/span><\/p>\n Love this interview and Adam’s responses! Here are some of our key take-aways from this interview:<\/p>\n Thank you again Adam for being a part of our FIRE Community Guest Interview Series, appreciate it! In next month\u2019s 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.<\/span><\/p>\n Did you enjoy this interview? Any thoughts or additional questions for Adam? Please let us know in the comments below \ud83d\ude42 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 Hey everyone! Here we are again with our next installment of the FIRE Community Guest Interview Series!\u00a0\u00a0 For anyone new here, this interview series will …<\/p>\n
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