Can’t wait

Pete’s a thirtysomething, late-stage Millennial (the most dangerous kind). “Looking to see if you can help me with my finances,” he wrote. Yeah, sure. Gimme details.

“I have a fair grasp on investing but looking to fine tune with some advise on tax optimization in RRSP,  TFSA and non-tax sheltered accounts and to ensure my ETF’s are in the right pots.  Also guidance with percentages in EQ/FI with the ever possible recession on the horizon and how to diversify as it grows.”

Yup, can do that. What’s the goal?

“Currently have about $200k in investments and hoping to optimize my portfolio to be retired in 8 yrs with a net amount over 1mil.”

And Petey got this reply: what you need is a magician, not an advisor.

He disappeared.

It’s called FIRE, which means ‘financial-independence-retire-early.’ The movement’s grown exponentially over the last few years, now encompasses a gazillion web sites, books and vids, all eagerly sponsored by DIY financial outfits (like the robos) looking to profit on a craze. At the heart of FIRE is a screw-the-boomers meme since it eschews real estate, linear careers, crappy insurance-company group RSPs, stability or anything that smells like adulting. Mostly it’s about getting rich fast so you can stop working, travel the world and be a hedonist.

Pete’s typical. Two or three times a week someone shows up looking for The Formula. You know the one. Turn two hundred into a million in eight years by investing in low-volatility exchange-traded funds. Apparently calculators are passé. Investing aggressively, staying invested, avoiding tax and doing okay would double money in seven years. So the key to FI must be two-fold: saving plus investing. That means a hefty income, living drastically below your means, throwing every sous into your portfolio, shedding emotion and, of course, renting.

Financial independence is possible, but it’s a ton of hard work. First you need a job with a big salary (or a rich mom). Then save at least half what you net, and plan on doing that for at least a decade. The best place to put that is at TFSA first, followed by an RSP (to drop your tax exposure) then a non-registered account. The more money stuffed into equity funds, the greater the return will be over time – but with more volatility. Given the 2020 US election, China-HK and the trade war, negative interest rates, a late-stage business cycle, populist politics, tax-hungry governments and the debt bubble the next decade might be a doosey. All-equity investing takes courage, faith and experience. Most moisters run thin here.

So the solution is balance. If you flinch, sell into a storm and crystallize losses, FI recedes further into the distance. That’s why having safe stuff in the portfolio reduces the gyrations, pumps out some predictable interest or dividends and keeps you grounded. But it also dampens returns. From 12% a year (all-equity over the last few decades) to 6-7% annually (for a 60/40 mix). Now you turn $200,000 into $1,000,000 in about 25 years – unless you save like a crazed beaver and live on air.

So how about the get-rich-fast, this-is-so-easy assets like Bitcoin or gold?

Yeah, I know. The cryptomaniacs and bullion-lickers are cultists with a come-hither pitch, telling you that traditional assets and regular money are doomed, soon to be replaced by either digital wallets or garages full of rocks. And while both have done well lately compared to financial securities (won’t last), the track record is one of gut-wrenching ups-and-downs littered with emotional traps. Besides, they aren’t actual money. Both Bitcoin and bullion must be converted into dollars to retire on with any predictability. Liquidity can be a big problem, and neither pay interest or dividends, while gains are taxable. Don’t go there.

Real estate leverage? Isn’t that how so many people made a potful of fast money over the last decade?

Yup, in some markets that’s exactly what happened. But it took a financial/credit crisis to get there. House prices spiked as interest rates tanked – leading directly to where we are now. High property valuations. Crippling debt. Economic slowdown and a mess of over-leveraged people who are house-rich and asset-poor. This is not the environment in which their ‘success’ can be repeated. There is no real estate boom on the horizon. Quite the opposite.

Besides, with prices at these levels the typical Millennial would have to shovel 100% of her net worth into a single asset plus take on a whack of debt just to play. Risk on, baby. Don’t go there.

The best bet for achieving FI, then RE?

Probably to start a web site about FIRE, pretend it’s super easy to get it and shamelessly sell out to big corporate sponsors. Some things never change.

144 comments ↓

#1 Pablo on 08.12.19 at 4:29 pm

Nice blog post and a good wake-up call to have reasonable expectations. Investing, like gravity, must abide by the law of mathematics. My net worth is ~$600K now at the ripe old age of 36 and I have been saving ~35% of my after tax income for the last 12.5 years. I’ll probably work 5 to 8 more years before I hit FIRE.

#2 binkybarnes on 08.12.19 at 4:32 pm

First!

And where do you see the CDN buck headed in the short term, Garth?

Tx. BB

The consensus is higher. But if the BoC cuts in October, the gain could be short-lived. – Garth

#3 Yukon Elvis on 08.12.19 at 4:44 pm

#2 binkybarnes on 08.12.19 at 4:32 pm
First!

And where do you see the CDN buck headed in the short term, Garth?

Tx. BB

The consensus is higher. But if the BoC cuts in October, the gain could be short-lived. – Garth
…………………………………………….

My consensus is lower. When the Libtard-Green coalition form a government in the fall I can see a 65 cent loonie.

#4 NoName on 08.12.19 at 4:46 pm

Now I remember i went to get haircut one time, Hairdresser aksed me what kind of cut i need, so i sad, one that makes my face looks good.
She replyed, you dont need hairdresser, you need plastic surgon…

its not easy to me…

#5 Shawn Allen on 08.12.19 at 4:46 pm

Financial Independence?

Or get a good government job with DB pension and retire sometime between 55 and 65.

Government DB pension for those with good salaries and lots of years in the plan becomes like a good paying job. But you have it for life and never have to show up and do any work or even put in any time!

Just sayin’

But these days they take about 12% of you gross for pension contributions. The government usually puts in another 12%. So about 24% of your gross pay is going into the plan. This example for Alberta government but the exact percentage depends on salary. It’s 10.47% each for employee and government up the Canada pension max of $57,400 and 14.95% for portion of salary above that.

And yes, layer on as much of your own savings as you can on top of that. Even government jobs much less the pension plan may not last.

#6 SunShowers on 08.12.19 at 4:48 pm

Probably to start a web site about FIRE, pretend it’s super easy to get it and shamelessly sell out to big corporate sponsors. Some things never change.
—————

You don’t even know the half of it. Many reputable media outlets have run op-eds with headlines reading something like “How I, a Millennial living in Manhattan, managed to retire before 40”.

This kind of headline brings in tons of traffic because people want to know how that’s possible, and if this person could make it, then why couldn’t they?

Then, buried in the article is a line like “I got a 6-figure job at my parent’s firm right out of college, and my parents also pay my rent, phone bill, groceries, and insurance. By skimping, saving, and not going to Bora Bora every year like I usually would, I was able to retire!”

This generates a second wave of “outrage clicks”, where the enraged masses would fill the steerage section of these op-eds with fouler words than you would even think to allow here.

#7 Lisa on 08.12.19 at 4:51 pm

Do you think Dorothy would ever write a guest post, Garth? Maybe tell all the deplorable in the comments to get a life?

I’ll ask. Then duck. – Garth

#8 Herb on 08.12.19 at 5:08 pm

The website is already out there, Garth, the Millenial Revolution you helped launch five years ago.

#9 Good Grief on 08.12.19 at 5:09 pm

All-equity investing takes courage, faith and experience. Most moisters run thin here.”

That’s excellent. The last thing the boomers deserve is for millennials to buy stocks from them at the current mega-inflated prices. Boomers have enjoyed such luck in the housing market, for god’s sake let us not encourage them to now also step into another bubble.

#10 Sail Away on 08.12.19 at 5:09 pm

Yup, can do that. What’s the goal?

“Currently have about $200k in investments and hoping to optimize my portfolio to be retired in 8 yrs with a net amount over 1mil.”

And Petey got this reply: what you need is a magician, not an advisor.

———————————–

Maybe you don’t give the whole context but it seems like a flippant and dismissive comment without relevant info about his contributions. I’d disappear too.

Sure, if he’s looking for 23% over 8 years it’s unrealistic. If, on the other hand, he can contribute $50k / year, it’s a completely different story.

Context

#11 Penny Henny on 08.12.19 at 5:17 pm

From 12% a year (all-equity over the last few decades) to 6-7% annually (for a 60/40 mix).
///////////////////

All equity is 12%/year. So if I had 60% equity returning 12% that would be 7.2% on a 60/40 portfolio. And if a 60/40 mix is only returning 6-7% that would be lower than the return on the 60 and not even counting the 40. What am I missing?

#12 ana on 08.12.19 at 5:18 pm

HI, I invested in ETFs and my fund of nearly 100K had gained only 3% over the past year. I keep hearing everyone mention gains of 7% or higher. What am I doing wrong?

#13 Penny Henny on 08.12.19 at 5:20 pm

Both Bitcoin and bullion must be converted into dollars to retire on with any predictability.-GT
///////////////////

My gold exposure (11% ish) is in a gold miners ETF (XGD).
Like any etf it is easily sold for dollars

#14 active on 08.12.19 at 5:21 pm

#1 Pablo:

Nice work! Similar situation as you. 34, $650K net worth (no RE). Hopefully I can reach a million in 4-5 years.

#15 ronh on 08.12.19 at 5:27 pm

I thought FIRE was Finance Insurance Real Estate.
Another four letter word:

https://blog.evergreengavekal.com/debt-end/

#16 Linda on 08.12.19 at 5:27 pm

As I recall, there was that young couple (2 – count them – 2 incomes) who managed to cobble together a million or so by age 30ish. Lots of media attention & of course, lots of folks wanting to emulate their success. Preferably faster, better & without having to eschew any of the stuff they want now. Can’t say that most have the discipline to do as that young couple did & trying to go it alone would presumably take longer to boot. Magician is a good description:)

#17 SmarterSquirrel on 08.12.19 at 5:27 pm

Well said Garth. FIRE is possible but certainly not easy and definitely not fast. I was 47 by the time I had sustainable passive income after working most of my adult life and some of my childhood years as well. And like you said it took a ton of saving and selective frugality. And even then I’ve chosen to keep working, like you said, an economic slowdown is likely or at least some turmoil and better to be working when that happens rather than relying on a fluctuating portfolio to see you through. But what I do like about the FIRE movement is the idea of encouraging more people to save more given the paltry savings rates of Canadians these days, that’s not a bad message to have out there. I’d rather it be called a financial security movement. That’s much more where my mindset is. If I lose a job I know I can cover my expenses without stress. That’s a good place to aim for in terms of financial goals.

#18 Joe Schmoe on 08.12.19 at 5:32 pm

FIRE is hilarious.

“Wanna buy a get rich quick scheme?”

#19 TurnerNation on 08.12.19 at 5:42 pm

From the Starve the Beast dept.

(KEG had similar Sss results)

“SIR’s Management believes that recent performance in the full-service restaurant industry has been impacted by a shift in consumer behaviour. Consumer spending at full-service restaurants in Ontario, where the majority of SIR’s restaurants are located, has been restrained by a number of factors including the impact of a minimum wage increase on menu pricing, changes to impaired driving legislation impacting beverage sales, rising costs of living, and high levels of consumer debt. In addition, an increasing number of consumers are choosing to order through meal delivery services instead of in-restaurant dining. Real foodservice sales in Ontario fell in 2018, following four years of average annual real growth between 2014 and 2017”

#20 Loonie Doctor on 08.12.19 at 5:45 pm

I have a mixed opinion on FIRE.

I think that the financial independence piece is laudible: live below your means, spending more doesn’t equal happiness, invest in a low cost way, and work hard to bring home the bacon while you are young and your body doesn’t rebel as badly from the extra effort. This actually comes easy if you have a high income and live like a normal person. I think it is harder for the average income person, but can be done if you make frugality a way of life or even just live in a low-cost area. I have been fortunate to have the high income piece, but my grandparents, aunt/uncle, and parents all retired early via the low cost of living method. And were/are quite content.

The RE part, I struggle with. The retire early piece didn’t resonate with me. You need to have a sense of purpose and usefulness to have happiness. So, you’d really need to be retiring to something else useful. I have chosen to think of it more as RE-focusing. When you have FI, then you can make decisions based on where you think the biggest impact will be rather than the biggest pay check. If you recognize that you have FI, then it is a good stimulus to stop and think about what matters to you and where your time/energy is best spend. Basically a mid-life crisis, but one where you can do something good about it because you have laid a solid foundation.

FI is a good goal (at a reasonable balanced pace) and recognizing that you have it is a valuable milestone to RE-focus on what matters with the ability to act on it.
-LD

#21 crowdedelevatorfartz on 08.12.19 at 5:55 pm

F.iscal
I.diots
R.ejecting
E.nlightenment

#22 BlogDog123 on 08.12.19 at 6:11 pm

The Millennial Revolution couple and the Mr. Money Mustache dude and those other financial bloggers also have their blog/website revenue as a their financial safety net.

#23 I’m stupid on 08.12.19 at 6:25 pm

#1 Pablo

I was like you… then I decided to have a child. (Most rewarding thing I’ve ever done). Working isn’t so bad when you get to come home and see your kid. Life is about choices, just commit to them.

If I didn’t get married and have a child I’d be able to retire before 40. Now we’re going for baby #2. I chose my life and I’m happy with my decision. I’m not telling you what what you should do. Happiness is the key to a rewarding life so do what will make you happy!

#24 Cristian on 08.12.19 at 6:26 pm

“Both Bitcoin and bullion must be converted into dollars to retire on with any predictability.”

So do stocks, bonds and any other investment.

“Liquidity can be a big problem”

False. Very easy to sell to outfits like Kitco.

“neither pay interest or dividends”

The majority of stocks do not pay interest or dividends either. So should people only invest in dividend-paying stocks?

“while gains are taxable.”

So are gains for stocks.
You are so biased against gold, Garth, that you totally disregard some gold benefits in your rush to list the negatives; such as the fact that gold has a low correlation with pretty much any other type of asset, and thus it can act as a risk-decreasing factor in any portfolio that holds it in a small amount.
Isn’t the duty of a financial advisor aren’t you supposed to provide unbiased advice?…

#25 MF on 08.12.19 at 6:26 pm

Mixed opinion on the FIRE thing. Good for these people for wanting to safe and invest agressively.

Nice.

But most of it is timing. It works for the people who started in 2009 and rode the artificial bull to over a mil. Bad for those who just started now.

Markets have gone sideways for decades in the past. How would FIRE fare in that situation? Probably not well since saving and sacrificing while losing net worth as your stocks go down down down is not a good combination (been there) and will drive you nuts.

MF

#26 TraderJoze on 08.12.19 at 6:39 pm

Someone last week posted about writing off interest on a margin loan. The response was ‘yes you can write it off, but find somewhere with low rates’. If you can write of the interest, why would you care what the interest rate was???

#27 Jay on 08.12.19 at 6:43 pm

I first tuned into the FIRE concept when I started reading Mr Money Mustache, thought to myself “that guy has it figured out.” Aside from the financial freedom he created for his family, the simple lifestyle he lives by is even more inspiring. I may not be anywhere near that level, and who knows if I’ll ever get there, but the idea at least inspired me to get started working towards saving something for my future. A few years later and I’ve got six figures more in the bank than when I started. A little focus & some sacrifice you can create peace of mind for yourself too!

#28 Mr Fundamental on 08.12.19 at 6:55 pm

I would say that FIRE is one of those things that is SIMPLE but is HARD. It is similar to losing weight. If you have discipline and self-control, it isn’t that hard. The problem is that most people don’t have these characteristics. If you’re willing to spend a reasonable amount and not try to impress everyone, it is easy. Also, “retire” doesn’t mean you stop doing anything. It just means that you get to work on things that you CHOOSE to work on.

#29 IHCTD9 on 08.12.19 at 6:56 pm

Hey Pete, park 6000.00/month into investments, and you’ll just crack a mil in 8 years assuming 5% every single year. That’s a bad bet though, so if you want to be able to weather a market storm or two, you’ll need to park 8000.00/ month in there.

I’d forget about FIRE and just work till 65 while dropping 1000.00/month into investments. That should get you to the 7 figure mark.

#30 Capt. Serious on 08.12.19 at 7:01 pm

Probably to start a web site about FIRE, pretend it’s super easy to get it and shamelessly sell out to big corporate sponsors. Some things never change.

^^This. I’d have more tolerance for the FIRE thing if the main proponents were not making money off advertising by “spreading the good word”.
The other surprise is likely to be lower returns going forward. Nobody wants to hear it, but I’d be very surprised if a 60/40 is going to give you 7% going forward. Starting PE very high. Starting yield, very low.

#31 Sold Out on 08.12.19 at 7:10 pm

I think FIRE is only doable for most people if they possess the good luck to hit an asset bubble, be it RE or equities. The post-GFC rate plop lit the fuse on valuations, but if you didn’t own RE or a nice juicy portfolio already, or buy in quickly following the plop, the returns wouldn’t be as spectacular. It’s never a bad idea to save like crazy, invest and avoid debt, though. These habits will still get you to the finish line in good financial shape. I personally give thanks daily for the RE bubble; I didn’t cause it, but I sure as hell made good use of it.

#32 Really ??? on 08.12.19 at 7:11 pm

You don’t even have to work to have a retirement now? Who would have thought … I must have wasted my life …

#33 Andrew MacNeil on 08.12.19 at 7:16 pm

#26

Just because it’s a write off, doesn’t mean it doesn’t cost money. Same thing with business expenses, it may lower taxable income, but its proportional, not dollar for dollar. IE. I pay my accountant to do business taxes, costs 5 k. It didnt save me 5k in taxes, just lowered my taxable income by 5k. It might only help shift my bracket, but still costed me 5k regardless. It’s better than nothing though. And deducting interest for business loans and credit does help, but it’s still money out the door.

#34 yvrguy on 08.12.19 at 7:34 pm

how about find something you would do for free in your spare time, get really good at, it to the point someone will pay you for it…

then you’ll never want to retire.

#35 Shawn on 08.12.19 at 7:39 pm

Housing will definitely be buttressed by 2 upcoming BOC cuts.

Look at home builders in the US (ITB, XHB). They have been forecasting FED cuts for months.

#36 IHCTD9 on 08.12.19 at 7:46 pm

WRT FIRE, Let’s think out of the box:

Skip college/university and marry young. Grade 12 education and married at 18, two 14.00/hr minimum wage incomes, for a 58k combined gross, or 3800.00/month take home. No debt, job opportunities galore.

Move to a small town, buy 100k fixer upper. Mortgage will be 473.00/month at 3%. Less than half the price of renting a 2 bedroom.

You’ve got 3327.00 left. Now, I’m going to assume a 6k per head annual TFSA limit average of 6k per head going into the future (that’s a lowball). Stuff 1k/ month lot into TFSA’s starting at 18 years old.

Now you’ve got 2327 left. Utilities, taxes, and insurance will run you about 600.00/month.

1727.00 left. Decent food, entertainment, couple cars, slow home improvements, etc should be covered at 1000.00/month.

727.00/mo left. Now go buy a nice Yamaha Grizzly 700 SE and a nice fishing boat for 25k combined using a LOC or HELOC. That’ll run you 350.00/month over 8 years at 4.5%. We don’t want jack to be a dull boy. Jill can blow 350.00/mo on whatever turns her crank. Blow the rest on a 12 pack.

Now, Kijiji exploitation and hands on practices pay big dividends here, it won’t be optional. But this hypothetical couple will have a paid for house by the time they are 43, and also have nearly 600k invested. By 52, they will have a Mil. At 65 they would have 2 Mil. 100% in TFSA’s, tax free. Their net retirement income would be 2.3X higher than their working income (all math here assumes them working for 14.00/hr their entire lives).

The reality here is their income will rise over the years, and at 43, they could add their former mortgage payment to their investments also. They’ll be used to living cheap, and not hiring contractors and mechanics, so they (IMHO) could hang up the gloves at 52 with a 50K tax fee income, and be just fine (not including a draw down).

Tough to think this way that young, but this outcome is probably way better than 90% of Canadians will end up with.

#37 SoggyShorts on 08.12.19 at 8:07 pm

#26 TraderJoze on 08.12.19 at 6:39 pm
Someone last week posted about writing off interest on a margin loan. The response was ‘yes you can write it off, but find somewhere with low rates’. If you can write of the interest, why would you care what the interest rate was???
*****************
A “write off” does not mean you get the money back…not unless you are in the 100% tax bracket.

#38 Barb on 08.12.19 at 8:11 pm

#8 …the Millenial Revolution you helped launch five years ago.

—————————————–
That wasn’t Garth’s fault.
It was ours, for encouraging youngsters to go vote.

And look at who/what they voted for!
A guy who thought legalizing pot would solve all the world’s problems. T2 is far worse than T1.
At least T1 was intelligent.

#39 IHCTD9 on 08.12.19 at 8:24 pm

#30 Capt. Serious on 08.12.19 at 7:01 pm
Probably to start a web site about FIRE, pretend it’s super easy to get it and shamelessly sell out to big corporate sponsors. Some things never change.

^^This. I’d have more tolerance for the FIRE thing if the main proponents were not making money off advertising by “spreading the good word”.
The other surprise is likely to be lower returns going forward. Nobody wants to hear it, but I’d be very surprised if a 60/40 is going to give you 7% going forward. Starting PE very high. Starting yield, very low.
——

Heh, true. The MMM blog is likely making Adeney 400 thousand per year minimum.

I figure on 5% these days, 7% is going to be rare likely. If you start young enough and have a plan, 4% would be enough.

#40 SoggyShorts on 08.12.19 at 8:26 pm

I’m going to miss my FIRE goal by a year or two since I turn 40 this winter. Here’s the formula I used:

I screwed around in my 20s traveling and partying, racked up a little debt too (about 30k)

Then 8 years ago I started my own company basically subcontracting doing exactly what I was before but with 1-3 employees.

The first couple of years I made close to zero money after expenses.

Years 3&4 were good which allowed about a 50% savings rate.

Then things picked up and now the wife and I together make over 200k and live off 60k after tax. 20k rent, 20k travel, 20k everything else.
This we have done the last 4 years.

We currently are just barely over our 7 digit goal depending on the day (and Trumps latest tweet)

I want to work 2 more years to hit 1.2 ish but the wife wants to pull the trigger yesterday. Most likely 1 more year.

The retirement plan is to travel with an early focus on SE Asia since we have spent many months there and know we can live very well on 2-3% withdrawal which is half of what we could “safely” spend.

After a couple/few years of that some more western travel, if our nest egg has grown, more Asia if not.

——————————-
That’s the only real way I think a blue-collar worker can FIRE.
Work hard> Get skilled> Get a reputation> Cut out the middle man(the company you’ve been working for)> get a spouse on the same track>save at least 1 of your paychecks.

Almost all Blue-Collar jobs (plumber, surveyor etc) bill out at $100-200 per hour and the actual tech gets maybe 25% of that. His boss might have a lot of expenses, but there’s a pretty big chunk of profit left over.

#41 SoggyShorts on 08.12.19 at 8:33 pm

#101 AGuyInVancouver on 08.12.19 at 3:52 pm
#16 SoggyShorts on 08.11.19 at 4:01 pm
#1 AGuyInVancouver on 08.11.19 at 12:40 pm
The official inflation numbers have been garbage for a long time. Anyone going into the local Starbucks can see that.
*************************
Well, that’s just silly.
Of course, really dumb name-brand luxury stuff goes up a lot.

Beats by Dre headphones which are nowhere near being the best sounding headphones are $200, that doesn’t mean you have to buy that garbage.

Starbucks coffee isn’t the best coffee, and it most certainly isn’t 2x or 10x better than the alternatives that are 50-90% cheaper.

A new iphone which does not have the best features available for phones costs more than the phones that do have the best features.

The same probably goes for a pair of jeans- inflation on whatever the coolest name brand is might be 20%, but such purchases are idiotic and shouldn’t count if you can buy the same pair of levis you’ve always bought at 2% inflation.

You can’t be a stupid consumer and complain about prices.
_ _ _
My comment had nothing to do with the quality of Starbucks coffee and everything to do with its price inflation. You sound like one of those bitter old men getting their joe at McDonalds and convinced they’re winning.
***************************
Unsurprisingly you completely missed the point of my reply which was that Brand Name “Luxury” stuff is useless when discussing inflation.
The price of Starbucks does not move with the price of coffee. The price of Lambourginis does not move with the price of a normal car. Gucci vs Levis. etc etc

The super-rich(and super-dumb) have entirely different inflation rates than normal people.

For the record, I get my coffee out of my Keurig in the morning for about $0.30 and roll my eyes at the Timmys/Mcdees/Starbucks lineups when I drive by.

#42 Dogman01 on 08.12.19 at 8:40 pm

I think the attraction of FIRE is largely due to how the nature of work has deteriorated. No loyalty, a lot of lateral aggression, no community or sense of quality\achievement for many. The dream is to be able to get away from it or at least have options.

Last year I was able to “FIRE” my boss; to get out of a government cesspit of Bureaucratic cowardice, toxic leadership and an incompetent but highly diverse unionized work-force.

FIRE is a good goal in case of anything, but I do wonder if my tolerance of my workplace change when I hit FI and had options. (yes it was the pension + our saving and investing + good pay + a modest paid off house + modest lifestyle, Garth’s blog and learning from some mistakes, that allowed FI in our 50’s)

One of the more down to earth FIRE websites I have found relevant is here: http://www.canadian-dream-free-at-45.com/
A Canadian, middle class aspiration, not jet-setting. Realistic on the psychology of the whole thing.

#43 AACI Homedog on 08.12.19 at 8:44 pm

Yet another great post. Thanks, Garth,. I could boast about my sons,, who are in their 30’s, but will spare you all the boredom. I will just say, small town living, where you can find tradeskill jobs is the ticket for a reasonable lifestyle.

#44 IHCTD9 on 08.12.19 at 8:48 pm

#31 Sold Out on 08.12.19 at 7:10 pm
I think FIRE is only doable for most people if they possess the good luck to hit an asset bubble, be it RE or equities. The post-GFC rate plop lit the fuse on valuations, but if you didn’t own RE or a nice juicy portfolio already, or buy in quickly following the plop, the returns wouldn’t be as spectacular. It’s never a bad idea to save like crazy, invest and avoid debt, though. These habits will still get you to the finish line in good financial shape. I personally give thanks daily for the RE bubble; I didn’t cause it, but I sure as hell made good use of it.
——-

It’s just what Garth says it is – big incomes (yes that’s plural) and crazy savings rates – and starting young. You’ll find this true looking at any of the FIRE blogs – plus a lot of tailwinds on top. It’s not for the average income earners or single folks, or folks that want 3-4 kids.

Us average folks (even family types) can still retire comfortably though, just not at 30. The RE boom in a couple Canadian cities is a done deal, so consider it a once in a lifetime fluke. That is pretty much just luck for a few. The rest of us will have to do it the hard way.

#45 Ronaldo on 08.12.19 at 8:55 pm

#9 Good Grief on 08.12.19 at 5:09 pm
All-equity investing takes courage, faith and experience. Most moisters run thin here.”

That’s excellent. The last thing the boomers deserve is for millennials to buy stocks from them at the current mega-inflated prices. Boomers have enjoyed such luck in the housing market, for god’s sake let us not encourage them to now also step into another bubble.
—————————————————————–
What about the GEN Xers? From what I have witnessed in the past 10 or so years, I would say the GEN Xer’s were benind a lot of the speculation that has gone on in the real estate market. Especially in the lower mainland. Am willing to bet that a lot of them own several properties acquired with minimum down payments and now underwater asking themselves, ‘What was I thinking of?’

#46 Ronaldo on 08.12.19 at 8:59 pm

#12 ana on 08.12.19 at 5:18 pm
HI, I invested in ETFs and my fund of nearly 100K had gained only 3% over the past year. I keep hearing everyone mention gains of 7% or higher. What am I doing wrong?
——————————————————————-
Obviously, doing it yourself.

#47 Nonplused on 08.12.19 at 9:02 pm

I’ve got a lot of Petey’s in my family. It caused a family rift.

I did fairly well, so now I can work when it happens not nose to the grindstone. Still work though.

My family wanted to know the secret, so I told them how I did it.

– Went to school for STEM, Engineering in particular. Lived 4 years with no money and increasing student loans. Trades would do too though. Welders make good money. So do plumbers. And it can grow into a business. Even tow truck drivers can end up with a business.

– Got into the profession and learned upcoming skills (at that time it was programming, still is I think)

– Made myself invaluable to my boss (through skill and ingenuity not by password protecting files or other subterfuge) and thus got maximum raises and stock option grants.

– lived well below my means, paying off my first mortgage in 5 years on bonuses alone.

– Played the options well, resulting in a one time huge kick to the finances. Invested it all.

– I’d rather buy a motorcycle I can use any summer Sunday than fly to Mexico in February. A cheap one though not a Harley. You can’t tell the difference when you are on it.

– Just because you have the money to buy the name brand, doesn’t mean you should. If a cheaper product does what you need buy that one unless you know it to be crap. So buy a Toyota not a Mercedes.

– Never assume the good times will last, as they won’t. Save anything you don’t need to spend.

Oh how my family hated these ideas. They thought I was holding out on them! I was intentionally trying to thwart their success by denying them my secret! I was evil! They’d ask questions like “should your nephew Jack buy silver coins to pay for his tuition?” I’d be like, “no, he should get a job and work hard and save his money. Post-Ed is coming too soon for an investment strategy.” Oh how they hated that! (They knew I had some silver coins on display in my house, collectibles mostly.)

They wanted “the secret” that I had discovered. I had discovered no secret than to spend less than I made and in good years invest that money.

There are a million Peteys across this land, hoping for that one big deal. (Paraphrasing Barney Bentall.) They love capitalism as long as someone would just tell them “the secret”. When you tell them there is no secret it’s just study (in something marketable), hard work and luck, they become socialists.

#48 Nonplused on 08.12.19 at 9:13 pm

PS link

https://www.youtube.com/watch?v=wkACgkxKcsg

This one is fun too, greatest breakup song ever:

https://www.youtube.com/watch?v=wkACgkxKcsg

I’m dating myself.

#49 SJP on 08.12.19 at 9:16 pm

#1 Pablo
#14 Active

Damn, I’m 35 with $300k in investments, no real estate, a DB pension and recently earned a graduate degree. I guess if I didn’t do the graduate degree I’d have $350k, but I had to pay my way through school and did a few extra years to finish without significant debt.

I also have to help my parents out as they aren’t in great shape financially, but I appreciate everything they did to get me where I am today.

It’s tough having co-workers that come from means and don’t appreciate what they were/ are given. However we all know people like that.

Congrats on your success and good luck on your journey!

#50 IHCTD9 on 08.12.19 at 9:16 pm

#20 Loonie Doctor on 08.12.19 at 5:45 pm

You need to have a sense of purpose and usefulness to have happiness. So, you’d really need to be retiring to something else useful…
——

From my point of view, having a job of some sort does not equal purpose or useful. In my 20’s and 30’s, sure; I thought I had a cool job, and it did play into my self esteem and sense of purpose and usefulness.

Now in my mid 40’s, I realize the truth, it’s just a job. It has no cosmic significance, or humanity. It’s what I do to survive in a 1st world economy, nothing more, nothing less. I could retire tomorrow with zero loss of value/purpose/usefulness.

It’s a philosophical contemplation, some folks think about this stuff later in life than others. For me, even a great looking lawn would be purposeful enough for the day. To say nothing of what you could do with your time and resources to REALLY be useful.

#51 Christina on 08.12.19 at 9:17 pm

#7 Lisa
Now THAT is a brilliant suggestion. I would love to read a guest post written by Dorothy. And Dorothy – not all of us are complete and utter weirdos. We really do appreciate what Garth writes.

#52 Christopher Dillon on 08.12.19 at 9:31 pm

Another lesson in why global diversification is an essential part of your investment plan.

Argentina’s stock market fell 48% (no typo) yesterday.
https://www.bloomberg.com/news/articles/2019-08-12/argentina-s-46-stock-rout-second-biggest-in-past-70-years

#53 NoName on 08.12.19 at 9:41 pm

#47 Nonplused on 08.12.19 at 9:02 pm

– Played the options well, resulting in a one time huge kick to the finances. Invested it all.

I alredy like you, tell us more.

#54 also in cowtown on 08.12.19 at 9:47 pm

#34 yvrguy: how about find something you would do for free in your spare time, get really good at, it to the point someone will pay you for it…

then you’ll never want to retire.
——————-
Well said. The Japanese call it your Ikigai – google it.
Personally, I am self-employed and have my Ikigai with enough in investments to retire now – but have not desire to stop working. Might work less in four years when I am 65, but for now, life is great!

#55 Joe Schmoe on 08.12.19 at 9:51 pm

Couple of comments:

Why retire if you love what you do? Why not find a passion that supports your lifestyle? two ways to skin this cat.

both the FIRE people and Mr Money Moustache make money through endorsements which is the crux of the issue. “buying the get rich quick” scheme. I liked the MMM blog…but it got tiresome as it went too far once he got wealthy off ot.

FYI. MMM is sadly divorced. All that preaching about quality of life vs material gain was a facade. We’ll see how our FIRE friends do. I wish them happiness, but 45 years of hanging around with someone is a long time. Having long term career goals takes a lot of pressure off ONE critical relationship.

#56 Damifino on 08.12.19 at 9:54 pm

#47 Nonplused

Many thanks. You have perfectly capsulized the formula I used for success and retirement at the tender age of 56. (Except, that is, for the wasting of 5 years playing in a 1970’s rock band. But that was a good waste, and I’d do it again if I had it to do over).

I also had people and relations who felt that I was either hoarding some kind of secret or I was just lucky. From my late twenties on, there was a plan and I stuck with it. It was mostly focus, hard work and making myself the most useful, go-to guy in the room.

#57 Doghouse Dweller on 08.12.19 at 10:03 pm

#12 Ana
#46 Ronaldo

OMERS pension fund only managed + 2%. Reason given; December slump and BTW, we are so talented that we didn`t loose money.

So Ana did 1% better than a Bay Street high rise full of slick
Porsche driving , Armani clad financial professionals. Well done !

#58 akashic record on 08.12.19 at 10:06 pm

Climate situation leaves us with 12 years, or so, that’s the new FIRE time frame.

Money was made for free now, so everyone can arrive there in time, with all outstanding debt paid off.

#59 short horses on 08.12.19 at 10:07 pm

#12 ana on 08.12.19 at 5:18 pm

“HI, I invested in ETFs and my fund of nearly 100K had gained only 3% over the past year. I keep hearing everyone mention gains of 7% or higher. What am I doing wrong?”

Over the last year, there was a big dip in December followed by a big recovery until recently. This is just what the market does sometimes (especially when the biggest economies are in a trade war), nothing to do with anything you’ve done based on what you’ve described.

If you invested your money one year ago in a globally diversified mix of 100% equity ETFs and didn’t touch it then you’d be slightly down, or even, compared to a year ago (if you’re up 3% then you might be 100% US). But if you kept buying over the past year, either through dollar cost averaging or just by adding new capital, then you’d have lowered your Adjusted Cost Base (ACB) and you’d be slightly up on the year.

Some years are better than others but over the long haul (decades) you’ll see average annual returns on the order of what Garth indicates in the article.

#60 Mean Gene on 08.12.19 at 10:13 pm

FIRE is a fallacy, if a human was accumulating wealth quickly, then greed will set in… Warren Buffet, Stephen Jobs etc comes to mind.

A Million dollar invest portfolio being drawn down by 4-5% per year isn’t much of an income in Canaduh.

#61 Capt. Serious on 08.12.19 at 10:15 pm

#39 IHCTD9 on 08.12.19 at 8:24 pm
I figure on 5% these days, 7% is going to be rare likely. If you start young enough and have a plan, 4% would be enough.

Agree. I’m assuming 3% real (after inflation) for planning purposes. If returns turn out better, great, I’ll be retiring sooner. I think there is a margin of safety built in here, and of course I reevaluate about every decade. There is one great truism in investing: a high savings rate can make up for low returns, but one can’t depend on high returns to make up for a low savings rate.

#62 yvr_lurker on 08.12.19 at 10:17 pm

Some of us actually really enjoy our jobs (or careers). For me, the strict FIRE idea does not have so much appeal as I would want to be engaged in something productive. I do like the idea of living well below one’s means, not bloating expenses to meet the latest increase in take home pay.

#63 short horses on 08.12.19 at 10:21 pm

#38 Barb on 08.12.19 at 8:11 pm
#8 …the Millenial Revolution you helped launch five years ago.

—————————————–
“That wasn’t Garth’s fault.
It was ours, for encouraging youngsters to go vote.”

The Millennial Revolution isn’t an allusion to T2 or the 2015 federal election. It’s a literal reference to a blog under the name ‘Millennial Revolution’ started by a pair of (former?) investing clients.

The revolution is achieving so-called FIRE by getting high-salaries jobs, saving it all, and investing it wisely (and then starting a blog and writing/selling books about your ‘journey’).

#64 Fly over island on 08.12.19 at 10:33 pm

I just spent the last hour watching drone footage of Epstein’s island. Can anyone suggest why a small private island would need an ambulance?

https://www.youtube.com/watch?v=EG6YLb3x54Q
https://www.youtube.com/watch?v=OPoohlcHNkE

#65 Jenny Wang on 08.12.19 at 10:43 pm

$200K to a million in $25 years!!!!!! Wow, you’ll be rich just in time to pay $150 for a loaf of bread at the Hundred Dollar Store. Guyzzzzzz, you gotta be smarter than that. Seriously. That’s not a plan. Buying stocks like CGI at $15 and watch them break $100, now that’s a plan.

#66 fishman on 08.12.19 at 10:57 pm

The Queen never gives interviews! Or writes a blog.

#67 Sheena Styles on 08.12.19 at 11:01 pm

I have a royal bank business account that from my business I deposit anywhere from $25,000 to $30,000 a week. It just keeps piling up but I have no understanding of where to invest this money. I already have $700,000 but it does not earn much either.

#68 hawkeye on 08.12.19 at 11:01 pm

I have thee kids, live in a small town in Saskatchewan worked 51 years and have done very well Ran my own Company for 31 years. My way of getting out of Tax and cutting costs was to pay cash for everything including my own house never had a car payment or a house loan. So I purchased a house for each one of my kids and paid cash for each house no interest, no tax on the money for loans. Do the math 4 houses worth 400 K each.You pay tax on the money before you make payments at your income tax rate. This was not easy it is called very hard work and saving. WE NEVER HAD NICE THINGS WHEN WE WHERE YOUNG IT COMES LATER IN LIFE.RIGHT NOW COSTS A LOT OF MONEY

#69 Al on 08.12.19 at 11:41 pm

This generates a second wave of “outrage clicks”, where the enraged masses would fill the steerage section of these op-eds with fouler words than you would even think to allow here.

So true, except when they had no apparent unearned advantage over a regular person, the outrage is even louder as it must all be a lie.. obviously.

#70 Nonplused on 08.12.19 at 11:53 pm

#53 NoName

These were long dated options granted to me by my employer, that I held to close to expiry mostly because I was trying to avoid paying any more in child support, I was already getting drawn on the rack. So I held them as long as I could. Turns out that strategy meant I paid far more in child support, but there was also far more left over for me.

To be fair I was also working for an oil company and had read lots about peak “cheap oil”, particularly an article in Scientific American article that I can not find online anymore other than that it was published in 1998. Colin Campbell was one of the authors.

https://en.wikipedia.org/wiki/Colin_Campbell_(geologist)

So I stayed long my options in the oil company until I could do so no longer, and it paid off. Bigly. Trump doesn’t actually say “Bigly” he says “big league” but I’m a fan of Scott Adams who converted it to “Bigly”.

What is happening now for all those very few of you who are able to think in the third dimension is that peak “cheap” oil is a rear-view mirror event. It happened in 2006. Shale oil & gas is plentiful but anything but cheap, and it never will be cheap. It takes a lot to get it out of the ground. So where we are now is on the road to increasingly scarce petroleum products. But that does not mean high prices. We’ve had high prices before, and all we proved was that people could not afford them and demand fell off.

Folks, we are already on the tail end of the curve. Prices will stay high, but not too high, and demand will fall. We are on the way back to the diluvian gorge, and nothing can stop it save breakthroughs in nuclear energy. The bottle is half empty, but the party is going strong and we are drinking faster than ever.

Anyway one right call with leverage is how you get rich. Anything else is just bullshit. But know if you get the call wrong the leverage will bankrupt you. That was what was so great about stock options. I had skin in the game, but it was all on paper. They weren’t going to take my house if I got it wrong. They also $ucked up. They had no intention of paying me as much as they did. Stock options were supposed to make the executives rich, which they did beyond all measure, but they were only meant to throw a bone to the rank and file. Perversely, by trying to enforce some financial discipline on my ex-wife, I made a lot of money. Ya, your odds of success are that bad. It doesn’t matter what Garth tells you, if you haven’t fallen into the money pit by accident, you ain’t going nowhere.

#71 Nonplused on 08.12.19 at 11:55 pm

#53 NoName

These were long dated options granted to me by my employer, that I held to close to expiry mostly because I was trying to avoid paying any more in child support, I was already getting drawn on the rack. So I held them as long as I could. Turns out that strategy meant I paid far more in child support, but there was also far more left over for me.

To be fair I was also working for an oil company and had read lots about peak “cheap oil”, particularly an article in Scientific American article that I can not find online anymore other than that it was published in 1998. Colin Campbell was one of the authors.

https://en.wikipedia.org/wiki/Colin_Campbell_(geologist)

So I stayed long my options in the oil company until I could do so no longer, and it paid off. Bigly. Trump doesn’t actually say “Bigly” he says “big league” but I’m a fan of Scott Adams who converted it to “Bigly”.

What is happening now for all those very few of you who are able to think in the third dimension is that peak “cheap” oil is a rear-view mirror event. It happened in 2006. Shale oil & gas is plentiful but anything but cheap, and it never will be cheap. It takes a lot to get it out of the ground. So where we are now is on the road to increasingly scarce petroleum products. But that does not mean high prices. We’ve had high prices before, and all we proved was that people could not afford them and demand fell off.

Folks, we are already on the tail end of the curve. Prices will stay high, but not too high, and demand will fall. We are on the way back to the diluvian gorge, and nothing can stop it save breakthroughs in nuclear energy. The bottle is half empty, but the party is going strong and we are drinking faster than ever.

Anyway one right call with leverage is how you get rich. Anything else is just bullshit. But know if you get the call wrong the leverage will bankrupt you. That was what was so great about stock options. I had skin in the game, but it was all on paper. They weren’t going to take my house if I got it wrong. They also $ucked up. They had no intention of paying me as much as they did. Stock options were supposed to make the executives rich, which they did beyond all measure, but they were only meant to throw a bone to the rank and file. Perversely, by trying to enforce some financial discipline on my ex-wife, I made a lot of money. Ya, your odds of success are that bad. It doesn’t matter what Garth tells you, if you haven’t fallen into the money pit by accident, you ain’t going nowhere.

#72 Vampire Studies (doctoral thesis) on 08.12.19 at 11:56 pm

47 Nonplused – good post

#73 Doug in London on 08.12.19 at 11:57 pm

It’s called FIRE, which means ‘financial-independence-retire-early.’ The movement’s grown exponentially over the last few years, now encompasses a gazillion web sites, books and vids.
———————————————————-
The idea of FIRE is catching on? I still don’t see it as that popular in a society that appears to be obsessed with consumerism and conspicuous consumption. Wow, I was 30 years ahead of my time thinking such a thing is even possible. Well the good news is it is possible if you have a good income, keep your expenses are under control, and have discipline with investing.

It’s something that I could easily write a book about. I found during my saving I was often asked dumb questions like: why don’t you buy a new car? I said: why do I need 2 cars? The reply I got was trade my existing one. I NEVER saw the logic in getting a new car if the one I already had worked just fine. You’ll often be called cheap or stingy. Oddly enough, I was never the one trying to get as much overtime pay as possible when the work place was busy. Hey, you still have to have a life while saving. I was told I was somehow depriving myself by not buying more junk that wouldn’t at all increase my happiness, not one bit. What you really want is time, not more useless stuff. Just ask older people like my parents, in their eighties, who are downsizing and getting rid of stuff.

Don’t panic when stock markets drop. That’s when you should buy more, like the engine governor that responds to a drop in speed by opening up the throttle to increase the power output.

Last but not least be patient. Unless you get lucky with buying some penny stock that becomes the next Google or Microsoft, it’s going to take many years of saving and investing but it will be worth it. Remember the saying that the secret to becoming wealthy is a lot of work, that’s why it’s remained a secret for so long.

#74 Vampire Studies (doctoral thesis) on 08.12.19 at 11:58 pm

47 Nonplused – good post

Did I hit submit??

#75 Leo Trollstoy on 08.13.19 at 12:05 am

FIRE isn’t get rich quick

FIRE is get freedom soon

#76 april on 08.13.19 at 12:14 am

#35 – Doubt it… besides what Garth is telling us, Ross Kay, Howestreet.com August 12.
CMHC recent report… June sales brought forward to July and then they spout out that July sales are up….

#77 Jamie on 08.13.19 at 12:25 am

Never stop working but love what you do.

#78 Bob Dog on 08.13.19 at 1:07 am

FIRE is for fools. EI is where it’s at. Work a few years then take a year off while speculators pay you to relax.

Repeat every 3 years.

#79 Nonplused on 08.13.19 at 1:33 am

#73 Vampire Studies (doctoral thesis)

I got double posted too I think there were some server issues. No big deal they happen all the time which is why I will never buy a self driving car thank you. If I am going to die, it will be by my own hand, not some computer that decided to go “blue screen”.

#80 Jenny Wang on 08.13.19 at 1:57 am

#67 Sheena. Slap yourself !! Having a cash pile is smart , to an extent. First, congrats. When I was depositing large amounts of income I quite suddenly got a call from our friends at CRA, ( how I came to thier attention I still don’t know), they weren’t unpleasant about it. I was assigned an auditor who explained what ” perpetual audit” means and how it applied to high cash earners. My income was placed in “perpetual audit”. The theory is:

You are going to owe tax on that money, and the CRA wants thier share immediatley. The threshold is very low , $2000.

I had a very expensive CA, he was struck dumb. So don’t trust your accountants competencies outright. I was required to reported all income as it came into a segregated account to be liquidated quarterly in favour of the CRA. The idea is that you might blow the money before you’ve paid the tax owing.

If you have that cash flow and it’s net, double proud, but if you’re not playing nice with CRA you might have a conflict. There’s always option 3 and you’re not what you say and love to troll the desperate dog pound.

Otherwise, there are Covered Call indexes with very low MER’s that pay monthly dividends. ZWH for ex.

#81 Graeme on 08.13.19 at 2:01 am

The gold boom WILL last as long as they continue cutting rates and debt worsens, forcing currencies down. Mining shares stand to go up multiples. It’s a gamble of course and I’m not saying put all your money there. But as Garth correctly points out you aren’t going to get rich fast with a 60/40 portfolio–stocks and bonds are both at near all time highs, gold is not. “buy low and sell high”.. does that mean buying at all-time highs? Maybe, but probably not. Garth is great and I keep coming back but you might also give Eric Sprott’s weekly wrapup (friday mornings) a listen for a different perspective. If you want a shot (not a guarantee) at FIRE, you might find it interesting. Diversifying your perspective a little can’t hurt either ;)

#82 NoName on 08.13.19 at 2:11 am

#70 Nonplused on 08.12.19 at 11:53 pm

Thank you for replying, very interesting story, so I’ll share my story about leeps that company gave us around same time 2006-ish.

Only problem was that we got call for 100 shares if o remember correctly 5yrs long, shares at that time were trading around low 9 and strike price was 12. I remember few yrs later selling/excercizing it for an around 17-something and exchange rate was in my favour. That worked out ok for me. It was a pocket money for vacation, or credit card payment for that month, doesn’t matter…

Off topic but on topic.
At some point I read this book about options trading written buy some old dude. I can’t remember a title but it was an interesting book, there is this old dude who works at the bank and one day he comes to realization that he retirement is in few yrs and he has not that much.

So he made a mission and only purpose to leave some money for grand children and he started trading options, in a book he explains what and how he did it.

He did well, to this day I am trying to dig out title of the book out of my brain but unsecsesfuly, which is not that surprising, two much unnecessary garbage in, I always hoped drachma bum will teach is how to meditate, but buy the looks of it he won’t…

#83 Dolce Vita on 08.13.19 at 2:33 am

#41 SoggyShorts

Well said to the 1st World “poor me” faux inflation Sirens.

Here in Italia, €2.10 gets you a fresh baked brioche (stuffed or unstuffed) and a Doppio Macchiato. A straight up Espresso is a little over €1. I’ll take these over the Keurig any day (or night) but as you put it, the correct thing to do in N. America (vs. Starbucks et. al. lineups and their insipid “coffee” or fat/sugar thrombosis pâtisserie).

As for purest me, I have a Saeco Incanto Superautomatic coffee maker (Saeco Incanto Macchina da Caffè Automatica…it always sounds so much better in Italian) using Italian coffee beans that gives me a wonderfully tasting Espresso Lungo, or 2, every morning.

And using Italian (Non-GMO) apricots, raspberries, strawberries, peaches or blueberries, etc., I make jam (about 5 min. using Fruttapec, 15 min. prep) and stuff that into lovely “pasta sfloglia” (puff pastry) I buy at my local grocery store (not dripping in fat like the N. American reprobate versions).

15 min. later and out of the oven I have “Fagottini” (turnovers) to go with that Espresso Lungo…a combined taste explosion of pure love for your mouths’ taste buds (my arteries thank me as well).

That trumps N. America, and sadly Keurig, yum yum wise.

Still and for N. America, I AGREE with your very sensible and spend thrift vs. taste analysis SoggyShorts.

Ciao d’Italia.

#84 Ponzius Pilatus on 08.13.19 at 3:54 am

FIRE.
Reminds me of Freedom 55.

#85 yorkville renter on 08.13.19 at 4:10 am

scrimp, save, retire at 40… and then what? total boredom if you only have $1mm and 40 more years to live.

You gotta live a little.

Enjoy the odd nice dinner, see the world maybe even take a sabbatical to see what ‘retirement’ might actually be like.

#86 NoName on 08.13.19 at 5:56 am

@ Lavida Loca

As for purest me, I have a Saeco Incanto Superautomatic coffee maker (Saeco Incanto Macchina da Caffè Automatica…i

Shouldn’t a purist have Gaggia?

I/we had saeco before coming to Canada, I remember seeing it at home and rural appliances when I first came here for 750-ish. Funny thing I use instant coffee for years now, so iam amateur, coffee blasphemist of some kind…

#87 Howard on 08.13.19 at 7:38 am

#55 Joe Schmoe on 08.12.19 at 9:51 pm
Couple of comments:

Why retire if you love what you do?

————————————-

I saw a poll recently that showed that less than 20% of people gain any sort of intrinsic fulfillment from their jobs. I forget where I saw the poll and cannot vouch for its veracity but I don’t doubt the conclusion.

This “find a job that’s also your passion” dream has to be laid to rest. For 80% of people it won’t happen, in fact it’s mathematically impossible. Best you can do is try to identify what you can do competently (not necessary what you love), educate yourself, and find a large or medium sized company where you can make yourself indispensable. Starting your own business is fine but not everyone has the aptitude or start-up costs for entrepreneurship and in any case, the path to riches in this messed up new world is through financialization, not hard work and grit.

The words of am ambitionless, dreamless person. – Garth

#88 maxx on 08.13.19 at 7:43 am

That’s rich – Mils looking to max their TFSAs after screaming that it’s a tax shelter for the rich and voting in Mr. Socks.

“The Formula” is precisely what Garth has laid out, starting with saving like mad for a decade or two.

Newsflash: 1MM is nowhere near enough to retire on

#89 Howard on 08.13.19 at 7:46 am

#84 yorkville renter on 08.13.19 at 4:10 am
scrimp, save, retire at 40… and then what? total boredom if you only have $1mm and 40 more years to live.

You gotta live a little.

Enjoy the odd nice dinner, see the world maybe even take a sabbatical to see what ‘retirement’ might actually be like.

———————————–

For an extrovert it might be boring.

For an introvert like me, heaven. Shelves filled with books, piano scores to learn, language courses, marathons, bike trails to discover and rediscover.

I wonder – is it realistic to “retire” in your 40s, and then get a part-time mailroom or factory job just to earn a little extra wine money?

#90 Howard on 08.13.19 at 7:49 am

The words of am ambitionless, dreamless person. – Garth

————————————–

Only if you believe that ambition and dreams can exist only in the realm of one’s JOB.

When you divide life into ‘work’ and ‘pleasure’ you will always lose. – Garth

#91 Howard on 08.13.19 at 8:00 am

#87 maxx on 08.13.19 at 7:43 am

Newsflash: 1MM is nowhere near enough to retire on

—————————————

That is entirely subjective and depends on one’s lifestyle and location.

#92 Loonie Doctor on 08.13.19 at 8:15 am

#50 IHCT9

I agree. Sense of purpose doesn’t need to come from a job. It just needs to come from somewhere. It could be family, community, creating, etc. Some jobs contribute towards these ends and others don’t. Usually, it is more a matter of degree and will be different for everyone. Those who can get paid for a fulfilling job are fortunate (and perhaps less common) and those who position themselves to choose where they spend time (which is often outside their job) are smart. My point is that FI for purely hedonistic pursuits is likely counterproductive to happiness in the end.
-LD

#93 crowdedelevatorfartz on 08.13.19 at 8:39 am

The words of an ambitionless, dreamless person. – Garth

+++++

I think that accurately describes most govt bureaucrats punching the clock until the generous taxpayer funded pension kicks in….. :)

Doctors? Soldiers? Conservation officers? Teachers? The elected? Reflect on your words. – Garth

#94 Ponzius Pilatus on 08.13.19 at 8:39 am

#82 Dolce

15 min. later and out of the oven I have “Fagottini” (turnovers) to go with that Espresso Lungo…a combined taste explosion of pure love for your mouths’ taste buds (my arteries thank me as well).
——————
“Fagottini”
How did that one get past Garth?
Lol

#95 TurnerNation on 08.13.19 at 8:42 am

Someone is boolish on MIC:::

“Brookfield Business Partners LP has agreed to acquire an aggregate of 48,944,645 common shares of Genworth MI Canada Inc., representing an approximate 57-per-cent controlling interest in the business, from Genworth Financial Inc. for approximately $2.4-billion ($1.8-billion (U.S.)) or $48.86 per share. Immediately prior to entering into the purchase agreement, Brookfield Business Partners did not own any common shares in the capital of Genworth Canada.

Genworth Canada, through its subsidiary, Genworth Financial Mortgage Insurance Company Canada, is the largest private sector residential mortgage insurer in Canada, providing mortgage default insurance to Canadian residential mortgage lenders, making homeownership more accessible to first-time homebuyers.”

#96 David Hawke on 08.13.19 at 8:52 am

Only if you believe that ambition and dreams can exist only in the realm of one’s JOB.

When you divide life into ‘work’ and ‘pleasure’ you will always lose. – Garth

Spot on Garth

#97 expat on 08.13.19 at 8:54 am

On the gold topic

A month or two ago I mentioned that a bullion bank was caught short gold. That was $1280 or so. This was before gold blasted off to the moon.

Gold is clearly transmitting a problem in the matrix.
We see Agrentina implode last night becuase a guy may not get re-elected.

It speaks volumes about the glorious system so many here say is cooking along.

It shows much of a hair trigger this world is on.

Word of caution this short squeeze is nearing it’s end and gold will correct into its intermediate low. Long term it certainly can be held in whatever form you choose.

Be aware though that risk is huge in this area. It is nto for the timid. I hold it physically because my family always have.

If you are considering entering this trade (It’s a trade not an investment) be aware its due for correction to clean up the gaps.

just saying

And no I’m not a gold bug – they are hucksters and shills.

I’m just providing comment. nothing more

#98 Howard on 08.13.19 at 9:27 am

#96 expat on 08.13.19 at 8:54 am

Just to add to your otherwise excellent comment.

I believe the Jeffrey Epstein situation is a watershed moment. Virtually nobody believes he committed suicide. Turns up dead just a day after he agreed to name names in return for a lighter sentence. And naturally the surveillance cameras malfunction. This is a crisis of confidence in the government’s ability to uphold the law, ensure justice is applied equally regardless of wealth or power, and combat corruption. When almost nobody believes anything that comes out of the mouths of elected officials anymore, or the mainstream media, it can only to “interesting” (volatile) times and that will probably translate to rising gold prices.

That was funny. – Garth

#99 dharma bum on 08.13.19 at 9:38 am

The best FIRE website is http://www.mrmoneymustache.com.
I discovered this site about 9 years ago. I have since retired.
Peter Adeney, the man behind the persona of Mr. Money Mustache is an Canadian expat, currently living in the small town of Longmont Colorado. He is a very, very smart (intellectually, scientifically, mathematically, and practically) and capable guy, to say the least.
If you want to understand how FIRE really works, without the hard sell, or smoke and mirrors, start reading Mr. Money Mustache from the very first post.
He’s a great writer – along the lines of Garth – funny as hell, satirical, insightful, philosophical, topical, practical, intelligent, and always on point.
The main takeaway from all of this is that extreme early retirement is NOT a walk in the park!
Pete Adeney (aka MMM) continually emphasizes the fact that it takes a TON of hard work from an early age to get educated, get the right job with the right income, save and invest like a madman, develop the right habits, eschew debt, not succumb to the myriad temptations of the average consumer sucker (suckah!), live in a place where homeownership is low (i.e., not Toronto), never buy a new car, ride a bike 90% of the time, live very close to your job, don’t eat in restaurants or habitually hang out in bars, learn how to fix stuff yourself, etc., etc.
Surprise – you can still live a fun life without being a spendthrift. Selectively dining out, plenty of vacations, a healthy and active lifestyle, and a lot of fulfilment is part of the FIRE lifestyle!
(MMM, in a addition to being a computer engineering dude, is a super capable handyman who is self taught in carpentry, plumbing, electrical, business skills, construction, and other practical DIY skills.)
http://www.mrmoneymustache.com is a definite MUST READ for anyone even contemplating the idea of early retirement.
There is no magic. Just hard work, discipline, and practical reality. One must pay their dues first.
After 2 years of reading his posts from day one, and communicating directly with him after he contacted me when he read one of my comments, I was converted.
Early retirement. Best. Thing. Ever.

#100 IHCTD9 on 08.13.19 at 9:42 am

#86 Howard on 08.13.19 at 7:38 am
#55 Joe Schmoe on 08.12.19 at 9:51 pm
Couple of comments:

Why retire if you love what you do?

————————————-

I saw a poll recently that showed that less than 20% of people gain any sort of intrinsic fulfillment from their jobs. I forget where I saw the poll and cannot vouch for its veracity but I don’t doubt the conclusion.

This “find a job that’s also your passion” dream has to be laid to rest. For 80% of people it won’t happen, in fact it’s mathematically impossible. Best you can do is try to identify what you can do competently (not necessary what you love), educate yourself, and find a large or medium sized company where you can make yourself indispensable.
___

Have to agree. I have a great job and am lucky to do what I do, and especially where I do it, but my enjoyment from working comes from the relationships with those I work with – inside and outside the company (many of which are 20+ years and counting) – not doing the job itself.

Some jobs can probably be fulfilling (Doctor, Social Worker, Business Owner, Police, Teacher etc..), but 80+% seeing a job as simply a means to and end sounds about right to me.

I feel great after booking a big new project at work, but I feel even better surveying the nice new deck I built a couple years back, or that roofing job I did this spring. Simple stuff, but long term satisfying every time. I still admire those new shingles for a moment almost every day when I arrive at home just before I back into the driveway. I don’t do that with a big P.O. when at work. Maybe there is some evolutionary forces at work here.

#101 Ace Goodheart on 08.13.19 at 9:47 am

“Probably to start a web site about FIRE, pretend it’s super easy to get it and shamelessly sell out to big corporate sponsors. Some things never change.”

The kids that Garth helped are unique individuals. They claim to be able to “travel the world” on $40,000 per year. I have questioned their numbers, as if you add up their spending, which they post pretty freely on their website, the totals you get, just from the trips they disclose, are more than $40,000 per year.

But they do also indicate they have “side hustle” income and that they pull only $40,000 per year off their portfolios, which seems pretty reasonable.

What you don’t get told is that these kids, particularly the female, are skilled promoters who spend a lot of their time engaging with media and third party sponsors promoting their brand. They are selling a lifestyle, and they derive income from doing so.

Everyone is not going to be able to do this. $40,000 per year for two people is not a lot of money.

And of course, if you have a million dollars in Exchange Traded funds, you are not actually going to earn $40,000 every year. Some years, you will lose money. Some years you will only make $20,000.00. Some years, you will make $60,000.00, or more. Average it out over around 10 years, and you will have netted out about 40K per year in the aggregate.

If you read the fine print on these websites, they do tell you this, but you have to dig. Garth’s two child financial wizards actually explain that you need something they refer to as a “yield shield” which is basically a pile of cash that you can spend if things go south and your portfolio does not produce income for a period of time. This is actually one of the most important things about FI, but you have to dig to find it. You need free cash, somewhere.

Because if there is a recession and the funds start falling, you will be forced into selling your holdings, at a loss, just to pay your bills. And that is money you can never get back.

So although the rockstar internet sensation lifestyle, with the fancy sun glasses and the book deals and TV shows, sounds enticing, that is NOT how it is going to go for 99% of the FIRE folks out there. Most of them, it is going to go more like the “FYRE” Festival in the Bahamas. Short lived, incredibly expensive, and ending in litigation and financial ruin.

You have to be really, really good at understanding your numbers and controlling your expenses if you want to live this way. Otherwise, you need a “side hustle”.

Like corporate sponsorship and advertising sales on your website.

#102 crowdedelevatorfartz on 08.13.19 at 9:52 am

“Doctors? Soldiers? Conservation officers? …

+++
I do believe I stated “bureaucrats”.

Doctors, soldiers, officers enforcing the Law hardly fall into the category of “bureaucrats”.
Teachers and elected officials…..perhaps.

No the bureaucrats would be…..
The increasingly expensive, nameless, faceless, legions who push paper back and forth in the name of “efficiency”.
Issuing directives that even their minions realize are pointless, useless , self absorbed , drivel that merely justifies their pointless bureaucratic existence.
How did we, the taxpayers, ever survive without the guidance of these people for the previous decades ?
Their , ever growing, $100k+ per annum salaries, benefits and pensions…….?
There’s a lot of angry , tax paying voters out there rebelling against …the expensive, nanny state, bureaucracy.
And every election , more and more sitting govts are tossed out as people vote “anyone but the status quo”.
Minority govts are becoming the norm everywhere.

I expect Trudeau will experience this rising wave of voter disgust first hand in Oct….

#103 milly on 08.13.19 at 9:53 am

Just to add on here. For many Millenials the job market is hell. No mentorship or training, only a sink or swim cut-throat mentality once you enter the market. Then if you manage to make it and not be let go, you are a pawn working long thankless hours. As an engineer, I love what I do, but I hate the corporate culture surrounding it. You can’t engineer anything well anymore, it’s a race to the bottom with bosses following “rules of thumb” and can’t explain why we do anything anymore. This is the type of work Millenials are trying to escape. I wouldn’t mind retiring early and joining engineers without borders or consulting on my own to keep up my skills but without the corporate bs attached.

#104 IHCTD9 on 08.13.19 at 10:04 am

#91 Loonie Doctor on 08.13.19 at 8:15 am

My point is that FI for purely hedonistic pursuits is likely counterproductive to happiness in the end.
-LD
___

I definitely agree with that.

FI to me is security and freedom.

…and a new Yamaha Wolverine X2 850 :)

#105 Unhinged Trader on 08.13.19 at 10:07 am

Good post.

I couldn’t imagine a fate worse than retirement, even more so at an early age. If I spend 3 days at home on a long weekend, I begin to develop a sense of atrophy and death.

Travelling is a meme. Everywhere is the same, except for the amount of trash on the streets.

Life is about the struggle, that’s why so many of these celebrity douchebags are offing themselves, because they were given bags of cash, with little work or effort put in on their part.

And something given has no value.

#106 Mattl on 08.13.19 at 10:13 am

Will be very interesting to see how these FIRE retiree’s make out over time. Returns the past few years on a balanced haven’t been great. We moved our money in Oct 2016 to a 60/40 and all time return has been 5.2% after fees. Not terrible but with inflation at around 2%, not a lot to draw from. I don’t lose any sleep because we are contributing significantly to the pot, but I can’t imagine the stress of trying to live off 1mm for decades in an environment where my money was barely beating inflation.

I think a lot of these folks were fooled by the massive bull run we just went on. When a correction occurs they won’t be able to realize the benefit of contributing during the downturn. What happens when you have a health scare? Elderly parents that need some help?

The idea that you can retire comfortably at 40 with only 1MM seems like a fantasy to me, backed by unrealistic returns over the past ten years. If the next ten years net a few percentage points after fee’s and inflation, that 1MM is going to look pretty sketchy going into their 50’s.

#107 LP on 08.13.19 at 10:16 am

#86 Howard on 08.13.19 at 7:38 am

Someone smart once said: “Do what you love and you’ll never work a day in your life.”

Personally, I think that applies equally well to the bookkeeper as the beekeeper, to the carpenter as to the architect, to the librarian and the writer. Some have a passion for the repetitive and mundane and some for the creative side . It’s all good if you love what you do.

#108 Sold Out on 08.13.19 at 10:24 am

It’s interesting to see the steerage split into two camps; those who can’t wait to amass a pile of money and quit working, and those who love their work and can’t imagine quitting.

To love one’s work, it must provide ego gratification, as well as decent compensation, and there are precious few jobs left that offer both. Even if one finds a job that makes one feel needed, useful and pays well, it’s an illusion.

Don’t get get injured, suffer poor mental health, or run afoul of the of the office group think ethos. Once the “beneficial bond” between employer and employee is severed, it is rarely restored. That’s why you need FU money.

Don’t be the schmuck that has to take on extra work when the boss “suggests” it, just because he/she knows that you live paycheck to paycheck and can’t say no. Working after achieving FI completely changes the power balance, and it makes employers nervous. It also separates you from your co-workers and can change relationships with them, and not in a good way.

Not everyone is suited to be their own boss, so for many of us, stopping work after reaching FI is where it’s at. We don’t know how long our health will last; I don’t want to give an employer any more of my healthy years than I absolutely have to.

#109 Shawn Allen on 08.13.19 at 10:26 am

Dairy Marketing Boards

Okay, different topic but relates to inflation.

I am certainly inclined to be against dairy marketing boards on principal.

But… A dozen extra large eggs at Safeway in Alberta cost me $3.25 yesterday. Not on sale. That is regular price. So someone on $15 minimum wage here can trade an hour of work for 48 eggs with change left over. How can anyone complain. How can the system possibly produce and deliver and retail 48 eggs and all are making a profit and do it for the price of less than an hour’s worth of labour at minimum wage and 30 minutes for a more typical wage. Is this not mind-blowingly cheap?

Sure they are even cheaper in the U.S. but at what cost?

Milk at Safeway is around $4.79 for four litres. So 12 liters for a single hour of labour at $15 per hour with change left over.

Okay I used gross pay not net, but still the eggs are super cheap and milk is cheap too.

I normally prefer the free market. But what items in Canada are subject to a lot of free competition?

I really can’t see how the dairy marketing system is hurting me.

#110 Damifino on 08.13.19 at 10:47 am

#104 Unhinged Trader

I couldn’t imagine a fate worse than retirement, even more so at an early age. If I spend 3 days at home on a long weekend, I begin to develop a sense of atrophy and death.
—————————————-

Then your imagination doesn’t extend very far. I predict a depressing time for those whose working career comes to it’s inevitable close as they are replaced with younger bucks with the drive and energy they once thought inexhaustible in themselves.

The good news is, you needn’t worry. There’s plenty of useful things you could be doing in retirement that don’t involve a paycheck. The need is great out there. It’s best to start by thinking less about yourself.

#111 Jenny Wang on 08.13.19 at 11:03 am

#100 Ace…..yeah, I call bullshit. $40,000 off a Mill ? Possible, but what about the taxman? Side hustle? Does that mean unreported income? Taxman again, but now you’ve actually implicated yourself in tax evasion by not reporting on global income, stupid. The “Digital Nomad myth”? Digital dipshit in reality.

I checked into those sites that are offering a set up for what is basically a paid gap year . The business opportunities are hustles as old as the warts on my ass, shit like “drop shipping”, and MLM what a joke. Digital nomad means “I have to call my Mom”.

Working with out a work visa in any country mentioned is dealt with harshly, and that always ends with deportation. The authorities have cleaned out Thailand, the Cambodians are giving these lazy pseudo-hippies the bums rush and Bali has just hired a new police force to round them up. If you work in another country they also demand you file an income tax return and report your residence so they can check, and they do. The mass majority of these Digital Nomad and FIRE sites ate entirely imaginary bullshit.

Sure you can eat pine cones and sleep in the forest. Sure you can save money by sleeping in Mom’s basement. Yes, you can cut your dick off and never have children, never in a car, you can shop at Value Village and eat mouldy refuse from the bin behind Starbucks, but really, how long is that going to last.

This fits Churchill’s assessment of young minds perfectly when he said ” if you’re not a socialist at twenty you have no heart but if you’re still a socialist at thirty you have no brain.” Now get a job you freaking losers and buy a round. Get a life.

#112 oh bouy on 08.13.19 at 11:07 am

@#104 Unhinged Trader on 08.13.19 at 10:07 am
Good post.

I couldn’t imagine a fate worse than retirement, even more so at an early age. If I spend 3 days at home on a long weekend, I begin to develop a sense of atrophy and death.

Travelling is a meme. Everywhere is the same, except for the amount of trash on the streets.

Life is about the struggle, that’s why so many of these celebrity douchebags are offing themselves, because they were given bags of cash, with little work or effort put in on their part.

And something given has no value.
_________________________________

thats one sad lament.
Retirement doesn’t mean sitting at home doing nothing.

#113 oh bouy on 08.13.19 at 11:15 am

@#98 dharma bum on 08.13.19 at 9:38 am
The best FIRE website is http://www.mrmoneymustache.com.
I discovered this site about 9 years ago. I have since retired.
Peter Adeney, the man behind the persona of Mr. Money Mustache is an Canadian expat, currently living in the small town of Longmont Colorado. He is a very, very smart (intellectually, scientifically, mathematically, and practically) and capable guy, to say the least.
_____________________________________

noticed your commentary on MMM is much more polite than on this forum. Why is that?

#114 IHCTD9 on 08.13.19 at 11:19 am

#107 Sold Out on 08.13.19 at 10:24 am

Working after achieving FI completely changes the power balance, and it makes employers nervous.

It also separates you from your co-workers and can change relationships with them, and not in a good way.
____

I work with a dude who has hit FI – late 50’s, still working. He say’s he’ll quit “when it’s not fun anymore”. He runs a big lathe, but the fun I believe is the social aspect of working with other folks in the shop. The old guys who pack it in almost ALWAYS drop in for visits now and then for a year or two, they miss their work buddies.

I got the same issues if I want to talk money/investments with some family on the wife’s side. Some kind of offense is taken if you’re well prepared for retirement. Not worth the potential trouble, so I clam up.

#115 Mattl on 08.13.19 at 11:35 am

#112 oh bouy on 08.13.19 at 11:15 am
@#98 dharma bum on 08.13.19 at 9:38 am
The best FIRE website is http://www.mrmoneymustache.com.
I discovered this site about 9 years ago. I have since retired.
Peter Adeney, the man behind the persona of Mr. Money Mustache is an Canadian expat, currently living in the small town of Longmont Colorado. He is a very, very smart (intellectually, scientifically, mathematically, and practically) and capable guy, to say the least.
_____________________________________

noticed your commentary on MMM is much more polite than on this forum. Why is that?

—————————————————————-

The typical criticisms of MMM are that he made a bunch on money on RE in a bull Colorado market – he is not a rent and save guy – and that he makes a ton of income from his blog. I mean he just got divorced and bought a house for cash (the family most likely owns north of 1.5MM USD in property) in a pretty expensive RE market. So he is not typical FIRE or typical GF. And that makes people envious, and envy makes people act like fools.

All that said, his advice is incredibly sound and is applicable to anyone. New vehicles are a waste of money, fix and build as much stuff as you can, eat at home,etc, etc. There is a lot of wisdom in his approach IMO.

#116 Flop... on 08.13.19 at 11:40 am

DELETED (at the request of the original Flop)

#117 Ronaldo on 08.13.19 at 11:54 am

#12 Ana

After reviewing your post again.

If your portfolio over past year and considering the big correction in the last quarter, if you are up 3% over the past year you did just fine. If your YTD was 3% that would not be good. If your YTD is say around 8% that would be pretty good as well. I take back my previous comment.

#118 Marcus Tatum on 08.13.19 at 11:59 am

200k to 1M in 8 years is ambitious, but not outside the realm of possibility, assuming he’s paid off debts and has increasing income without a commensurate increase in living costs (beyond inflation).

Still, he’d need to provide a lot more details to see if it’s possible or not, and it’s not so much a question of tax optimization as it is lifestyle and income. With this time line, a lot of the remaining 800k is going to come from savings, not returns, but if he’s making six figures and willing to live on something like 35k, then it’s possible.

The “Millennial Revolution” folks managed it, but a lot of the media attention revolved around the idiotic idea that they “doubled their money in four years” or whatever, as though they saved zero dollars during that time. In reality, they made relatively ordinary returns and saved a crapload of money.

I’ve got similar plans to Pete, but I’ve got a little more money socked away, a bit longer of a time line, and I currently live on about $24k/yr, which believe it or not works well for me. FIRE is achievable, but I think only a thin slice of society fits the profile that can do it.

#119 JB on 08.13.19 at 12:10 pm

I believe that Trumps diapers are full not as he just blinked. Dow up China breaths and their Yuan is hoping for big red “sevens” at the crap table. Did someone actually talk to Trump and get him to listen? Nawwwww Trump is Trump just like a piece of dog dirt is a piece of dog dirt.

#120 Sail away on 08.13.19 at 12:10 pm

#67 Sheena Styles on 08.12.19 at 11:01 pm

I have a royal bank business account that from my business I deposit anywhere from $25,000 to $30,000 a week. It just keeps piling up but I have no understanding of where to invest this money. I already have $700,000 but it does not earn much either.

————————————————-

If you’re making that sort of profit, you must understand your business very well.

You don’t actually need to invest anything.

The reason for investing is to increase your wealth, so if you don’t actually need to increase your wealth, why venture into an area you don’t understand? Just bring the money in, place it in high interest savings fund earning 2% (TSE:PSA), and continue stockpiling.

Eventually find a good advisor. Take your time with that. Be careful about sharing info regarding your cash flow on the interwebz.

#121 Dogman01 on 08.13.19 at 12:12 pm

#107 Sold Out on 08.13.19 at 10:24 am

“Working after achieving FI completely changes the power balance, and it makes employers nervous. It also separates you from your co-workers and can change relationships with them, and not in a good way.”

What I learned working in a large governemnt organization: It is Feudal. 90% keep head down, union protects, get paid, get pension get out. 8% are creative types and they move on after a stint, 2% sociopaths and they thrive.

Now once you hit FI you finally have that taken care of and subtly change focus more on quality, efficacy of the work and start asking “clarifying questions”…. Psychologically seeking something more than just financial compensation, (Maslow’s hierarchy – level up!). The boss, from the 2%, notices that you are not kowtowing, not under the thumb…. And the games begin.

#122 maxx on 08.13.19 at 12:18 pm

@ #90

Run a survey and see how many want that.

I can split a dime 100 ways ’till Sunday at retail and the savings go into promoting a lifestyle that affords opportunity.

Isn’t that what retirement is all about?

#123 Ace Goodheart on 08.13.19 at 12:20 pm

#110 Jenny Wang on 08.13.19 at 11:03 am

I have a lot of questions about how the various “FIRE” wizards out there are actually functioning.

I have been an expat myself. It is important when living the expat life, that you tie yourself to a residence, somewhere.

Taxes do become an issue. If you are US born, you are sh*t out of luck, because the USA taxes its citizens on their worldwide income, no matter where they live.

If you are from Canada, you can become non resident, but that means you give up all the benefits of paying taxes in Canada, and you then also have the very real problem of having to establish a residence somewhere, or you can get snared in the many, many government tax avoidance nets and foreigner with undeclared income illegally residing in our country webs, that populate our planet.

There are many countries that will arrest you because you have established a residence there, without actually having a residential visa. You can also be arrested for going outside of the boundaries of your visa work permit, if you do establish a residence.

Becoming well known on the internet with a well visited web site that generates cash flow is not a brilliant idea if you are claiming “the world” as your home. You will find that there are many countries, where if you stay for a period of time, they will determine that you are a resident for tax purposes and they will want you to pay up.

Whenever I went “expat” I made sure to establish residential ties somewhere, with a proper residential visa that allowed me to do the kind of work that I wanted to do, and that I registered for and paid income taxes according to that country’s tax code. I then traveled at will, often quite extensively, and whenever I had to fill out the usual massive trove of forms and paperwork to get a visa to visit someplace or other, I would just declare my residency as the country I had the work visa for, and I could produce that visa on request, therefore establishing my residence for tax purposes.

You really need to do that. Otherwise you are opening yourself up to a world of troubles.

Oh, and you do actually need a visa to visit the rebels. Little known fact. No, they don’t control the government, but if you want to cross over into rebel held territory, they do issue you paperwork for doing so.

Found that out in Africa. A lesson you never forget.

#124 maxx on 08.13.19 at 12:36 pm

@ #17

Excellent post. Motivating people to create a future filled with optimism and anticipation is a great thing.

47 was my magic year too :-)…… then started a business which is both mobile, great fun and never looked back.

In the early years, I visualized building a huge wall, one brick at a time. Once the wall was built, I continued power-saving until I felt I was sitting atop a mountain with a view of the heavens. At that point, I felt it was time to reap the benefits.

#125 Sold Out on 08.13.19 at 12:50 pm

#113 IHCTD9

I think many workers have a hard time pulling the pin, whether due to “1 e more year syndrome”, or not being able to envision a new role for themselves. People working in fields like medicine can have a difficult time letting go of a rewarding and admired identity – see MDs.

I spent 2+ decades in a career that accorded one a similar degree of respect and regard, but only from the general public, not the employer. When I was injured out of that job, letting go of that identity was difficult, but not as difficult as dealing with HR, WCB, etc. as they cheerfully tried to violate regulation and policy in their efforts to dislodge me.

I finally managed to force WCB to retrain me(useless for actually getting a job that would ever replicate my previous income), after repeated injuries and surgeries, and when WCB said ” too bad, your benefits have run out” I was able to say “Oh well, I don’t need a job anymore”. It was probably a disillusioning conversation for the vocational rehab consultant. She still had to go to work, evidently.

People fall in love with jobs, but the job won’t love you back.

#126 Bitcoin on 08.13.19 at 1:08 pm

One will soon be able to pay property taxes in Richmond Hill with Bitcoin.

#127 Sold Out on 08.13.19 at 1:50 pm

#120 Dogman01

I worked for a large prov. gov. org after FI, and it was excruciating. Nice people, don’t get me wrong, but the idea that one should work hard to stretch taxpayer dollars and provide exceptional service was not popular. I took on lots of co-worker’s tasks, just out of boredom and the need to stretch myself a bit.

I did a couple of jobs after that one, for kicks and giggles, but my tolerance for supervisory ineptitude had reached its nadir. The necessary drive to climb the career ladder evaporates when one’s mortgage is retired.

Now I have a furry 4-legged boss who seems delighted when I just show up and put in a couple hours a day of walks, treats, and ball throwing.

#128 Smartalox on 08.13.19 at 1:58 pm

Property speculation, private lending and organized crime. Can money laundering be far behind?

https://vancouversun.com/news/local-news/dead-angel-with-history-of-bad-credit-got-mortgage-from-charitable-foundation

It’s a shame, I know the charitable organization named in the article, and they do much good work. I hope that the blowback from their involvement in this scheme will not damage their reputation too much.

#129 n1tro on 08.13.19 at 2:11 pm

#101 crowdedelevatorfartz on 08.13.19 at 9:52 am

There’s a lot of angry , tax paying voters out there rebelling against …the expensive, nanny state, bureaucracy.
And every election , more and more sitting govts are tossed out as people vote “anyone but the status quo”.
————————
We saw this with the first Ford brother and his silly “Stop the gravy train” mantra. Maybe if he stopped the gravy boat a bit more at the dinner table, he’d still be alive(?). In the end, a few expense accounts got called out and lowered. Nothing changed. Toronto is still inefficient and wasteful with the reduced number of bureaucrats making “noise” to signal they are doing something.

#130 Stan Brooks on 08.13.19 at 2:18 pm

Read for Shawn Allen

https://davidstockmanscontracorner.com/the-risible-myth-of-the-savings-glut-and-the-lunacy-of-subzero-yields/

#131 Tim on 08.13.19 at 3:15 pm

I did it, FIRE that is. But Garth is right is a TONNE of work. Saved 65% of my salary for just over a decade and yes at the end I was making $100,000/year (just me, the wife runs a daycare so not a lot of money there). And yes, I have two kids as well.

The world has turned FIRE into an ideal rather than admit it isn’t easy. Saving lots and living on little isn’t a walk in the park. It won’t fix your life or make you happy. It does however give you one things you can’t otherwise get: time. Lots of time. Time to do things like write which doesn’t pay crap (ask Garth is you want to know). But hell what do I know…I blogged on this topic for the full decade of saving so you can see every stupid mistakes and second guess I did on the road.

Good luck to those that try.

#132 Tom Brayon on 08.13.19 at 3:24 pm

Stan Brooks this is true because dividend yields used to be tied to interest rate levels but for many years now but probably 15 years plus, dividend yields are staying in the 3.5% to 5% range where interest rates even on GIC’s are dropping with bond yields being artificially crashed down to now negative, confiscatory yields.

#133 Shawn Allen on 08.13.19 at 3:31 pm

Savings Glut?

Stan Brooks said:

#129 Stan Brooks on 08.13.19 at 2:18 pm
Read for Shawn Allen

https://davidstockmanscontracorner.com/the-risible-myth-of-the-savings-glut-and-the-lunacy-of-subzero-yields/

The article says:

But in recent months, it has gone parabolic, and that fact alone demolishes the Wall Street rationalizations. That is, there is no “savings glut” to begin with—-but even the modest savings rates now evident among the major world economies have changed very little since 2015 and hardly at all during the past year of soaring subzero yielders on the global market.

So the savings rate cannot even begin to explain the chart below.

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I already posted about that same 100 year Austrian Bond also in disbelief that its price had risen 60% at the time.

The article “debunks” the savings glut idea with the paragraph above. Which actually provides no data or anything, it just claims the savings are modest and little changed.

The article explains how central banks basically added $22 trillion to the demand side of bond buying. Well, that would mean the institutional bond buyers with a given pot of money have $22 trillion less in bonds available to them than otherwise. Less supply of bonds for institutions equals higher price / lower yield.

The article – despite the headline – has almost no information on the level of savings glut and asserts that bonds are bought for speculation of capital gains as opposed to safety.

Does anything in that article differ from what I have recently posted which was that bonds are bought by institutions who in fact do have large amounts to invest and the price was also driven up by central banks buying? I can see why institutions would buy treasury bills for safety. I can’t see why they buy the long bonds at such low yields.

#134 IHCTD9 on 08.13.19 at 3:49 pm

#117 Marcus Tatum on 08.13.19 at 11:59 am
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Time is huge for the non-rich. I recently jumped on a calculator to see how much more we would need to invest monthly to retire 5 and then 10 years earlier than planned. We are mid 40’s.

To cut 5 years off our retirement wait time requires a 100% increase in monthly contributions.

To cut 10 years off our retirement wait time requires a 400% increase in monthly contributions.

Compare that to a 25 year old investing 800.00 per month till 65. H/She could lop 10 years off with a 65% increase in monthly contributions, and still retire with the same total.

This is Pete’s problem (unless he earns huge of course).

#135 Ronaldo on 08.13.19 at 4:02 pm

#125 Bitcoin on 08.13.19 at 1:08 pm
One will soon be able to pay property taxes in Richmond Hill with Bitcoin.
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Just set up pre-authorized payment with your bank. If you have a mortgage you can just include it the payment and the bank handles the payment for you. No charge.

No need for Bitcoin or other payment methods. That’s all Bitcoin is and not a great one at that. Slow and expensive.

#136 Ron on 08.13.19 at 4:17 pm

#132 Shawn Allen on 08.13.19 at 3:31 pm
Savings Glut?

I can see why institutions would buy treasury bills for safety. I can’t see why they buy the long bonds at such low yields.

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’cause they have to. Insurance companies in particular are required to buy long bonds to match their liabilities towards in an increasingly aging population.

#137 SimplyPut7 on 08.13.19 at 4:33 pm

Many people in social media have to sell-out to big corporations to maintain their lifestyles, sponsored content is huge online.

Who wants to go back to a 9-to-5?

#138 Blog Bunny on 08.13.19 at 5:01 pm

I am at FI but not RE. Too hard to let go the golden cage. Late 30s and passive income covering 3x the annual expenses of a simple lifestyle. This is achievable with a high income and a very high savings rate, but the amount of work and sacrifice required is often glossed over by FIRE websites. On the other hand, the knowledge that you can walk away anytime and be free is priceless.

#139 made my day on 08.13.19 at 10:31 pm

Thanks for the blog Garth, those puppies picture are adorable and made my day.

#140 Doug in London on 08.13.19 at 10:32 pm

@Unhinged Trader, post #105:
Wow, you actually sit at home on a long weekend? It looks like you don’t have much of a life, more like an existence. Get out, socialise, have fun, go somewhere you’ve never been or try out something new.

I’ve been semi retired, working on and off since 1995 and LOVED the time between jobs. At the end of 2013 I decided to become fully retired and, again I LOVE it. I’ve got more time to do what I want, when and where I want. Retirement is proof of the existence of Heaven.

#141 SoggyShorts on 08.14.19 at 2:43 am

#83 Dolce Vita on 08.13.19 at 2:33 am
#41 SoggyShorts

I would love a fancy Italian coffee machine but I’m in an annoying position where buying anything nice is kinda dumb if it’ll end up on kijijiji in under 2 years. Most of Asia doesn’t even use the same plugs so all of my sweet kitchen stuff will have to go.

Actually, all sorts of great stuff is going to be a pain to sell… What I need is to find an arranged marriage couple or something just starting out who I can unload everything on them(and have their parents pay for it)

#142 dharma bum on 08.14.19 at 7:34 am

#113 Oh Buoy

noticed your commentary on MMM is much more polite than on this forum. Why is that?
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The audience.

Playing to the crowd.

#143 Jesse on 08.14.19 at 10:07 am

62 yvr_lurker on 08.12.19 at 10:17 pm
Some of us actually really enjoy our jobs (or careers). For me, the strict FIRE idea does not have so much appeal as I would want to be engaged in something productive. I do like the idea of living well below one’s means, not bloating expenses to meet the latest increase in take home pay.
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Most people hate their jobs, that’s why it’s called work. There’s a reason we are called ‘coffee drinking zombies’. Most people in the west are trapped for 10 hrs/day which includes the commute and time in the cube farm. You get a few ours each night to yourself, plus the weekend. Most people spend their lives doing things they hate. No wonder people in the west stopped getting married and having babies….

#144 Jesse on 08.14.19 at 10:41 am

What I learned working in a large governemnt organization: It is Feudal. 90% keep head down, union protects, get paid, get pension get out. 8% are creative types and they move on after a stint, 2% sociopaths and they thrive.
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You just described ‘Corporate Life’ to a T! Cube life is just like the movie, Office Space, except you need to add in some Game of Throne.