Chucking it

“Long time reader of your blog,” says Tim, in Edmonton. “It helped me immensely when I was in my 20s form a realistic financial plan. Now I am in a transition of sorts.”

In fact, T sounds like he’s having a mid-life crisis, at 35.

“My wife, 33, and I have two young kids. She’s on mat leave for 18 months and I work as an engineer in the oil patch, with a 145k a year salary plus bonuses, and long term incentive, as well as a DB pension. My wife, when she is working, is a pharmacist at the local university hospital. roughly 110k a year salary with a DB pension.

“Our investment assets total $450k, plus also own a house that we bought for 700k in 2017. We just retired our mortgage (yay). Now I am scratching my head, what’s next? I don’t love my job. I’d much rather spend my life experiencing the world, practicing music, engaging in sports, than doing menial tasks in a cubicle. So, now that the mortgage is gone, my plan is to invest $5,000 a month into our accounts. When the wife goes back to work we can likely increase this even more, 7000 maybe even 8000 a month.

“Using a simple compound return calculator in ten years I could have 1.5 – 2.5 million invested. Will that be enough for me to retire at the age of 45?”

We’ll get back to Cubicle Timmy in a minute. First the latest on housing as we go into the second-last weekend of the summer. And the big news is a change in mortgage rates. DOWN. Seriously. A couple of the Big Guys have just quietly let home loans slip below the 5% mark – down to 4.94% and 4.89%.

Okay, not much. But this reflects a plop in bond yields (as bond prices rise) and comes after we’ve seen inflation numbers roll over a little in Canada and the States. Yes, yes, CBs in both countries will be adding to their benchmark rates next month by (probably) a half-point. And there’s more to come after that – two pops of 25 beeps each. So the chartered bank prime now at 4.7% could well finish the year exactly 1% higher.

Despite that. Mr. Market is telling us on multiple fronts the big inflation surge has crested. Retails sales are still strong. Unemployment levels are in the ditch. House prices are down sharply. Used car values have crumbled. Two-by-fours are way cheaper. Corporate profits have held. All this suggests (a) there is no recession. Not now. Not coming. (b) The economy can grow and prices can drop, even while wages augment. Woohoo. (c) Central banks – all 90 around the world doing the same thing – will likely win this fight, as we inch closer to a soft landing. And (d) the Ukraine war, Monkeypox, zero-Covid in China, Russian gas and even Lisa LaFlamme’s flinty locks will not halt the progress. We’re on the path to a better place.

In the meantime, try to ignore the house-humpers because real estate values have further to fall. Like Re/Max. Those guys never quit.

The latest company ‘report’ says lower prices have re-ignited the buyer feeding frenzy, particularly for detacheds. “For those buyers that were active in [the second-quarter], improved housing affordability due to easing prices and the threat of higher rates down the road clearly provided the impetus for many to leap into detached home ownership,” says the marketing outfit’s spokesguy of activity in Vancouver and Toronto. The company also warns as lots of people delist the homes they had for sale, choice is falling while prices have weakened. So, kids, get in there and buy!

Of course, reality is getting in the way of the Re//Max spin. Sales of detached homes in the GTA last month crashed year/year by 46%, for example. And for good reason. Average prices have tanked $500,000 as mortgage rates more than doubled and potential buyers were punted out of the market. It’s a trend we are, perhaps, half way through and heralds conditions that could be in place for a decade. So let’s call it the Re/Max Falling Knife® Report.

Okay back to thirtysomething Tim who wants to be a gentleman of leisure in his forties. Is this realistic?

Depends.

First, it’s not just Tim & squeeze, but also the rugrats that must be considered. Two young children, a decade away, will become needy, whiny, aloof yet demanding teenagers. Then, for another decade, they’ll be even more costly uni students who might also expect the parentals to buy them each a condo and an EV.  Now Tim is 55.

Living without employment income on a portfolio of $2 million means a monthly draw of maybe ten grand (taxed at a lower rate than working income). Plus whatever pension benefits have been earned. That should preserve the capital portfolio amount and essentially last a lifetime, with caution. The family will be costly. The real estate is paid for. And the income seems adequate. Not princely, but enough. However, will this 40-year-long period of post-career nirvana be spent in Edmonton? Forty Februarys?

Careful with the crisis, Tim. Life’s expensive.

About the picture: “Summer is the time to forget about investing and enjoy life,” writes Bob. “A balanced and diversified portfolio can darn well stay in the city and chill,  while we relax and enjoy the very fresh mountain air of Jasper Alberta. We are looking after our health while hiking to our hearts content in the scenic Tonquin Valley Jasper. No data connection out here to spoil things. The finances can just roll along on auto pilot. Our portfolio will carry on and support our lifestyle thanks in a great way to your generosity of advice over the years. Retirement is coming to millions of Canadians . . . . right now. Time to start spending some of those savings on the things you love. Yes, I’ll add the standard, read all your books, (had the kids read them too) and read every single post since day one. Keep up the great work/hobby in your blog, I can’t imagine not having your daily blog to read.”

90 comments ↓

#1 crowdedelevatorfartz on 08.19.22 at 3:35 pm

35 and already pining for retirement?
Life can lob you a curveball Tim.
Divorce, sick kid, job layoff, etc etc etc.
Milk the gravy train until 55 its only 20 more years for cripes sake.
And you’ll be much better off financially.

#2 Dave on 08.19.22 at 3:39 pm

The housing crash is not just happening in Canada

There are 50 million empty apartments in China

https://www.scmp.com/business/china-business/article/3188781/fifty-million-empty-flats-threaten-plunge-chinas-troubled?module=perpetual_scroll_0&pgtype=article&campaign=3188781

#3 squire on 08.19.22 at 3:40 pm

Timmy having a midlife crisis and not even 40. Reality check, you have 2 kids and plenty of time to go. Keep working and saving. Keep squeezing your squeeze so she doesn’t leave and costs you more money and delayed retirement. Just saying…

#4 Dogman01 on 08.19.22 at 3:52 pm

– #112Shawn on 08.19.22 at 7:54 am

“Analysis is now only as trustworthy as the person doing it.”

——————————————-

Come for the trusted financial advice, stay for the insightful gems!

#143 T2 or Bust on 08.19.22 at 3:21 pm

Climate Change…I too ask “Cui Bono?”

https://www.telegraph.co.uk/news/2022/08/15/peddlers-environmental-doom-have-shown-true-totalitarian-colours/
“a coordinated transition” that “will require governments, along with the financial services and technology sectors to catalyze, facilitate and accelerate progress; foster information flows across systems; and align individual incentives with collective goals.”

A clearer statement of totalitarian inclination could hardly be penned.

https://www.youtube.com/watch?v=–QS_UyW2SY

Looks to me that a personal ESG score is coming our way…..and for the record, I welcome the benevolent rule of our omniscient and omnipresent Global elite masters.

#5 Fran C on 08.19.22 at 3:53 pm

So essentially Garth is saying kids can really foil an early retirement plan. Or at least turn an otherwise chubby FIRE into a much leaner FIRE.

#6 Leftover on 08.19.22 at 3:58 pm

Tim, 35 and not loving his job, has another option once the nest egg is complete – start his own business. He’s an engineer in the oil patch and surely those skills will be in demand.

He can work as much as he needs to in order to stay sane (though probably a little harder in the early years in order to establish the business) and, having the income from the $2 million +/-, will allow him to focus on work that he likes doing and is probably pretty good at.

Retiring at 45 sounds good when you’re 35 but, in reality, it’s too young. The trick is to concentrate on work you like to do and it won’t seem like work.

Sounds to me as though the problem is the “job” not the “work”.

#7 Love_The_Cottage on 08.19.22 at 4:01 pm

The latest company ‘report’ says lower prices have re-ignited the buyer feeding frenzy, particularly for detacheds.
____________
I generally don’t join in the criticism of the MSM, but seeing multiple sites / organizations republish this nonsense from Re/Max without challenging it certainly is worthy of derision.

#8 Fact Checker Fred on 08.19.22 at 4:03 pm

“The company also warns as lots of people delist the homes they had for sale, choice is falling while prices have weakened”

Certainly not the case in my Kitchener neighborhood. Lots of new listings recently and more than a few that have been on the market for a while.

#9 Sail Away on 08.19.22 at 4:03 pm

Tim’s done it right: proper education for in-demand employment, proper location for high salary, proper house price for debt retirement, proper financial planning… and he’s young. Good work, Tim. You’re in the driver’s seat.

Get on those RESPs so your kids can do the same.

Regarding ten years of work: instead of staring down a 10-year tunnel of unsatisfying work, consider planning a 4-6 month ‘work vacation’ in a few years…. then enjoy the time off with family doing fun stuff, and repeat at 5 year or so intervals. From experience, this gives something exciting to look forward to and plan and it’s quite easy to buckle down for 4-5 years at a time when an exciting event awaits. Do all the cool stuff while you and the family are young.

Good luck!

#10 Shawn on 08.19.22 at 4:06 pm

Tim? Hilarious. Check back when you have actually accumulated about $5 million.

Never announce your retirement years in advance. Leave that sort of thing to Jay leno.

#11 Sail Away on 08.19.22 at 4:10 pm

Warren B. is aiming for control of Occidental:

https://ca.finance.yahoo.com/news/u-regulator-says-berkshire-hathaway-175201681.html

Buffett likes oil. So should wise investors. Or just buy Berkshire and piggyback Buffett’s genius.

#12 ogdoad on 08.19.22 at 4:12 pm

Oh Timmy Timmy Timmy…you sound like me! Except, I’m not a WUSS who needs validation and I’m already living your dream life….sucks, I know…Question is: why are you asking G (and the tesla owners on this blog) instead of experiencing your life dilemmas for yourself? You know, like, learning! First, grow a set. Second, grow a set.

Finally, a little imagination, NOT! Working in the oil patch must be akin to attaching one end of a string to a doorknob and the other to your tooth…then calling for your 4yo.

Do it, bro! Don’t ask questions just be prudent. Ask yourself who you’re living your life for? And who made up the rules that you follow? Hmmm? Don’t buy a tesla ’cause nobody needs one (unless you have the SYNDROME). Travel on a budget. There are people in the world that would be willing to swap houses, for instance. Unless, of course, like the rest of the first world, your inanimate objects are too precious to you…..hug?

Its called living! And if you play your cards right you can have a SICK life while you’re young and enough $$$ to buy meds and undies when you’re old…waiting to die…writing on blogs…wondering what ‘imagination’ means.

Jeesh…the need for strangers advice. Are there no tribes anymore? Or is this it?

Og

#13 Waystar Royco Shareholder on 08.19.22 at 4:26 pm

Dave on 08.19.22 at 3:39 pm

The housing crash is not just happening in Canada

There are 50 million empty apartments in China
_________________________________________________________<

I wonder if the local REALTORS there spew the same BS about a housing shortage to fool buyers into snapping them up.

REALTORS love to brag about being 'professionals', but I'd be super pissed if I listened to their 'advise' and bought anything in February or March. Sadly, none of them will be held accountable for the hundreds of thousands of dollars that were needlessly overspent in many cases.

Come to think of it, I haven't seen my REALTOR friends brag about helping their clients 'win' a home against multiple offers on social medial for a while.

It would be interesting to know if they still feel like winners

#14 JSS on 08.19.22 at 4:29 pm

Salaries are high in Edmonton, considering the housing cost is so low there. Also, it’s cold in most of Canada, so just buy a nice parka, and travel to someplace warm in the winter. This dude Tim has the discretionary income to do so.

Maybe he needs to slowly change careers, rather than ‘retire’. Common issue among engineers who get tired of sitting in a cubicle filling out paperwork and sitting in zoom meetings, but are so used to making a good salary that they can’t give up because their household budget is set to it. Then they sit in their cubicles dreaming of running a food truck

#15 Jilly on 08.19.22 at 4:32 pm

Garth, just to let you know that there are five weekends left of summer!
Its gone by too fast as is, please don’t make it go away any faster.

#16 T-Rev on 08.19.22 at 4:35 pm

As someone who’s got half a decade on Tim, also from Wild Rose Country, similar life position in terms of income, spouse, kids, etc, but in a position a few years ahead of him, I have some advise to pass on.

1. Your $700k house in Edmonton is probably worth $800 today, even with current conditions. This means you’re probably rolling 2400sq ft, fully finished basement, and a big (triple?) garage in a nice burb 25 minutes from the core. I just sold mine for close to a mill a few months ago and bought a fixer upper for $450k. $100k in renos later, my house is smaller but new and with no impending major maintenance costs cause it’s all been done. Pocketed the difference, and it’s amazing how we don’t miss the extra space at all.
2. Don’t quit your job, make your job quit you. If work sucks, change what you do there an how you do it. Figure out what would make it tolerable in terms of stress, responsibility, challenge, novelty, variety, hours, duties, etc, and start doing it that way. Chances are you’ll be better at it and more productive for your company, and if not, hey, they can always give you a package. That gets you closer to the goal anyway. Win-win.
3. Retirement at 45 sounds great, but wtf are you really going to do for 40 years? Your kids are going to be in school/uni, your wife may actually like her job, and you’ll be at home bored out of your tree. So, first execute step 2 above. Then in a few years if you still hate it or it doesn’t provide the right balance, semi-retire. Do contract work, work in a difference field, etc. Make $60k/yr working 6 months, and then travel the other 6. $60k/yr in income is plenty if you’re already got a paid off house and a mill or two in the bank.

Careful with the crisis.

#17 The Original Jake on 08.19.22 at 4:50 pm

I saw this segment on CTV News the other night. Had me scratching my head, is there another Toronto in another universe I didn’t know about it?

“Elton Ash, RE/MAX Canada’s executive vice-president, said despite the easing of prices, the “sky is nowhere near falling.”

https://toronto.ctvnews.ca/this-is-where-home-prices-are-holding-steady-or-still-going-up-in-ontario-1.6032835

#18 Feds on 08.19.22 at 4:56 pm

Garth,
I rent where I live and work and have never owned my principal residence. I do own a small rec property, but only vacation there a few weeks a year. Would I be eligible for the FHSA? I can’t seem to find the answer to this with available information. Thanks.

#19 Victor Llearna on 08.19.22 at 4:59 pm

If only T could add the $6400 a year that the govt confiscates off his paychecks each year, could add another $200k to his retirement. instead of the paltry amount if eventually would pay out when he hits 60

#20 Søren Angst on 08.19.22 at 5:00 pm

#11 Sail Away

yeah _ _ _

and Warren.

————————-

T, you’ll be bored silly with that early a retirement. Wait until you’re good and sick of working, then retire and enjoy it all that more.

And ya, Garth’s correct:

“Tim. Life’s expensive.”

#21 Felix on 08.19.22 at 5:01 pm

Chucking it.

An excellent suggestion for what to do with an obsession for dogawful mutts.

Happy Feline Friday!

Did you know:

If your cat approaches you with a straight, almost vibrating tail, this means that she is extremely happy to see you.

Kneading — which some people refer to as “making biscuits” — is a sign of contentment and happiness. Cats knead their mothers when they are nursing to stimulate the let-down of milk.

Meowing is a behavior that cats developed exclusively to communicate with people.

#22 paddy on 08.19.22 at 5:06 pm

Great photo Bob, what a stunning place Jasper is.
Reminds me of the Torngat Mountains in Labrador.

#23 Tom from Mississauga on 08.19.22 at 5:21 pm

Retail sales looks like Toronto is going to be fine. Vancouver and BC? Their economy is in full meltdown.

Just read yesterday’s post. Government deficits will explode with FHSA. Definitely opening one these.

#24 paddy on 08.19.22 at 5:21 pm

I’de like to add one more name to the “steerage section commenters who I wouldn’t be sad if they never commented again” list. To refresh our memory, the list is as follows:

1)Turner Nation
2)Felix

And the 3rd spot goes to…drum roll please……ogdoad

Though I found your comments humorous at first, you just kinda drag it out in a weird, Boomer kinda way.

#25 mj on 08.19.22 at 5:24 pm

seems to me like the bank of Canada will keep raising rates until we hit a recession

#26 TurnerNation on 08.19.22 at 5:33 pm

“. I’d much rather spend my life experiencing the world, practicing music, engaging in sports, than doing menial tasks in a cubicle”

^^ Typical Millennial. (And has he tried becoming a blog dog?)

Ahh those Millennial snowflakes: Caden, Aiden, Jayden, Greyden, Jaydon, Haydon, Braydon.

——
——

Note that two things, in the media 24/7 are being used to re-make the world since March 2020: Corvid and Climate. There will be nothing else, Corvid and Climate.
In Kanada your every waking hour must be spent Preventing the Spread (Follow the Rules Comrade), and Changing the Climate (a tad cooler plz)

A new study from the Foundation for Economic Education.
Flat regression line:

https://fee.org/articles/new-study-provides-yet-more-evidence-that-covid-lockdowns-didn-t-work/
“Yet another comprehensive study was just released showing that the drastic lockdowns (“stay-at-home orders”) enacted in many US states did not meaningfully reduce COVID-19 mortality. Economists Casey P. Mulligan, Stephen Moore, and Phil Kerpen ran the numbers to rank all 50 states on COVID mortality, economic performance, and pandemic education outcomes (based on how much they were able to keep schools open).

The results show that despite their drastic, sometimes-lethal second-order consequences, government lockdowns did not meaningfully reduce COVID-19 mortality.”

#27 Reality Check on 08.19.22 at 5:47 pm

Interest Rates going back down to “normal”

I’ve met a few people lately that are holding off buying or selling until internet rates go back down – essentially go back to “normal”.

What people do not understand is that what we now view as “normal” rates are actually emergency “economy on life support” rates.

Todays BoC rate is just the lower range of long run average rates going back 80 years (not even including high rate years from mid 1970s to early 1990s.)

People over 40 do not remember that a mortgage rate of 5-7% was for most of our lives a pretty good deal. And people under 40 have not generally experienced those rates.

For those people expecting rates to return to emergency levels and become the new long run normal…..

Good luck.

#28 Quintilian on 08.19.22 at 5:49 pm

This is a perfect example of how the “hard sciences” fail humanity.

#29 JSS on 08.19.22 at 5:54 pm

Tim, listen to #16 T-Rev

#30 TurnerNation on 08.19.22 at 6:01 pm

What would have Smoking Man said today?
Maybe that at age 33 he’d already had several bratty kids and then quit his job as a rivet bucker, stolen the customer list then proceeded knocking on their doors and selling them all siding??

Might not be a bad idea for today’s FIRE supplicant. Calgary’s weather is harsh. Get that list on a USB stick .

————–

From the Killing us Softly Dept. GEE after 2 years of “Rules” and “Mandates” were were to be so healthy?

https://uk.news.yahoo.com/silent-crisis-soaring-excess-deaths-203000290.html
Silent crisis of soaring excess deaths gripping Britain is only tip of the iceberg
For 14 of the past 15 weeks, England and Wales have averaged around 1,000 extra deaths each week, none of which are due to Covid.
If the current trajectory continues, the number of non-Covid excess deaths will soon outstrip deaths from the virus this year – and be even more deadly than the omicron wave.


— Travel: 2.5 years into this and those rights are never coming back. The social credit/digital control system is in place. Herding Sheeple.

.’Scrap the App’: border chambers of commerce ask government to end ArriveCan (windsor.ctvnews.ca)

.UK: NHS Covid pass down, leaving some passengers struggling to board flights (bbc.co.uk)

#31 AM in MN on 08.19.22 at 6:04 pm

Much if the early retirement boom is made possible by the free health care.

Not working for 40 years and being looked after by others is a dream for so many, but I’d caution Tim to look into the future bit more. Better budget $2k/month for healthcare in your calculations.

Possibly a bit more if you need to pay to get to the front of a very long line of seniors expecting to be looked after by a shrinking percentage of children.

#32 Observer on 08.19.22 at 6:09 pm

#5 Fran C on 08.19.22 at 3:53 pm
So essentially Garth is saying kids can really foil an early retirement plan. Or at least turn an otherwise chubby FIRE into a much leaner FIRE.
^^^^^^^^^^^^^
Of course. And when they grow up, they blame you for climate change and high house prices.

#33 Dr V on 08.19.22 at 6:13 pm

Some excellent comments and suggestions for Tim, so Tim, read them all and give them due consideration.

Good luck!

#34 Myron on 08.19.22 at 6:15 pm

As an ex-pat Canadian if you do not have 5 million saved and locked you can not retire!!!

#35 Sail Away on 08.19.22 at 6:15 pm

#12 ogdoad on 08.19.22 at 4:12 pm

Oh Timmy Timmy Timmy…you sound like me! Except, I’m not a WUSS who needs validation and I’m already living your dream life….sucks, I know…Question is: why are you asking G (and the tesla owners on this blog) instead of experiencing your life dilemmas for yourself? You know, like, learning! First, grow a set. Second, grow a set.

——–

Og, do you have kids? If so, then you know that most parents’ dream lives, first and foremost, involve successful kids. Entertainment and diversions are fun and all, but the truly important thing is the well-being of the family, and structuring one’s life to provide that.

There’s a saying that a parent is only ever as happy as their saddest child.

#36 Al on 08.19.22 at 6:18 pm

Seems like a luxurious life, 80k draw (2 mil portfolio) with dual DBs to boot and paid off 700k house. So net worth of 2.7mil plus DBs (another mil?) and our host is hesitant. Lol. Pushing 4 mil net worth.. if that is a precarious situation, prolly should evaluate the other side of the equation.

#37 Myron on 08.19.22 at 6:19 pm

OH Yeah, Absolutely, NO DEBT, and the germ bags paid for until you no longer are responsible for them!!!

#38 R Sportif on 08.19.22 at 6:28 pm

Ma recommandation pour Tim: Si on va faire la supposition qu’il va avoir deux enfants, il peut avoir une belle vie lorsqu’il a épargné cinq millions dollars. Si on faisait la supposition un taux de rendement de 10% par année (une petit optimiste), avant les impôts sur ces placement, il pourrait vivre, son inquiétude, sur 500 000$.

#39 Steven Rowlandson on 08.19.22 at 6:30 pm

Perhaps Tim should give it another 10 or 15 years and save and wisely invest all he can. Easier said than done of course. On the other hand if it is R&R he needs take advantage of the normal holidays and vacations.
2 million is fine as working capital if you are getting 10% or better but the lower the rate of return the more capital you need hence the need for more earnings, savings and time. Don’t fall in love with real estate as an investment. Look for something productive that produces something everyone needs, can afford and has a global customer base.

#40 John on 08.19.22 at 6:30 pm

Yes Tim, you can definitely retire

#41 Patel on 08.19.22 at 6:37 pm

What the hell is wrong with young people? All of them want to retire early? Who the hell is going to provide engineering services to society/ country if all young engineers like Tim retire ?Also true for other professions….

I blame Tiktok for this disaster.

#42 Wrk.dover on 08.19.22 at 6:37 pm

My wife’s 1st of 4 deferred salary leaves/year off from teaching occurred when I was 35 and we ran out of debt. I shuttered my business and we did a drive by through about 40 states over a five month period. Nafta then happened, so I quit my sole proprietorship, got a job long enough to collect max pogey, then nursed all that money until her next year off, and we did a nine month tour of seven provinces and many states, wintering in AZ.

I managed to never return to work for 34 years now, by being frugal, industrious, and following the mandate of only spending her money on us, not me. I did do a pair of six week paid gigs for play money during all these years though.

My wife is a little older, so she got her freedom 55 sixteen years after my freedom 35, though she only worked twelve of them.

Her DBP is based on 33 years, because the deferred years off are included/she made the contributions.

My CPP started at $100/mo. Money is no problem at all for us, because we live in the countryside with ocean in front of us and wilderness behind, so there is nothing to spend it on, except travel, which gets 1/4 of our budget. We have no electric, water, sewage or heating bills, real back to the land Hippies, with a big garden, green house, and four freezers.

No kids in our life, but around here poor folks do afford them. Figure it out Tim! Start by negotiating a deferred salary leave for yourself, perhaps. Learn to build and fix a $1000 car, that’s the money pit that doesn’t need to be one. We get a new car every twenty years here for the three hour run to the city, but drive a bunch of projects we’ve had for many decades, mostly. (when we do drive at all, which isn’t very often.)

I’m at the wrong blog right?

#43 chalkie on 08.19.22 at 6:50 pm

Tim, retiring at 45 or even 55 years old, is way to young, even if you can afford it, but with two kids that has yet to go through university, 2 million dollars won’t last you very long, when a couple of pit falls come your way, and they will. The bottom line is, retirement is way overrated Tim, don’t wish your life away, stay career engaged and allow yourself to keep your own sanity

#44 Lawless on 08.19.22 at 6:53 pm

Always so skeptical of FIRE, Garth! I think at the high end of the projections Tim, squeeze and children are more than fine. A liquid portfolio of $2.5, paid off real estate at $700k, so net worth of ~$3.2 at 45 PLUS a partial DB pension kicking in at some point. That’s a pretty solid base. A few comments here. For their age, given their net worth, they are not likely big spenders. The biggest risk in FIRE comes in the early years, so if things go south early Tim and squeeze would still be young enough to return to work to shore up the portfolio. Also, the assumption that FIRE necessarily means zero income for the rest of your life is typically wrong. People who are interested in financial freedom usually end up with a side hustle or two outside of the cubicle. There are typically other inflows of cash that happen over life from CPP to inheritance. Most valuable thing is time – don’t waste it doing things you hate. Run your Monte Carlo analysis, evaluate the likelihood of running out of money, and set your withdrawal rate according to your risk tolerance. I don’t think Tim and squeeze will be eating cat food at 90.

#45 Lisa LaFlammethrower on 08.19.22 at 6:57 pm

My flinty locks!?

Good grief, Garth. Mind your own business and keep on topic!

I’ve interviewed some of your Amazons – did you get your management know-how from Bell Media?

#46 Islandgirl on 08.19.22 at 7:00 pm

As someone who is really tired of working full time (20 years doing the same thing) and trying to figure out what to do without losing the current benefits without being ready to retire (not enough saved). Look at finding work that perhaps let’s you work only 3 days a week. This will give you more time off to do stuff you like to do, while giving you just enough work to keep a bit of extra money coming in for the extra fun stuff you want to do. It’s definetly finding the work/life balance that we all crave.

#47 The General on 08.19.22 at 7:17 pm

The Audi leasing humpers will stop at nothing. There are less victims, I mean greaterfools to deceive I guess. This blog should be mandatory reading for those about to be fleeced. Lots of dwellers here saved their bacon, thanks to Mr. Turner. Dog bless him.

#48 Lawless on 08.19.22 at 7:17 pm

What’s with all of the folks griping about millennials valuing their time and freedom over money?!? If you want to work beholden in a cubicle until you are 65, have at it. I don’t complain about your self-flagellation. But don’t assume that because YOU chose to do it, that everyone else has to take the same path. It really should not matter how younger folks choose to live their lives. If Tim and squeeze have managed to hack the system and accumulate more than 90% can save by age 65 at age 45 (probably largely by not buying all of the useless crap most people spend their money on), more power to them. It may not align with your values… but get over it.

#49 The General on 08.19.22 at 7:24 pm

I believe we’re heading toward being an Idiocracy. The talent pool is getting shallower, as the boomers go out to pasture. And mabey having the head idiot “running” things is filtering down to the yogurt eating man-bun crowd.

#50 Unpinned on 08.19.22 at 7:29 pm

Have to agree with Tim in the respect Canada and Alberta are very small centres in population and job or career changes and limiting in many aspects for a youngish 30something. Texas is big and more diversified for a parallel shift but adding a larger landscape in society and work and career. This is a rather typical Canadian mid life career angst given our small economy with limited or dead end features common to all of us here.

#51 Shawn on 08.19.22 at 7:29 pm

How to Win The Pension Game

Wrk.Dover said:

My wife is a little older, so she got her freedom 55 sixteen years after my freedom 35, though she only worked twelve of them.

Her DBP is based on 33 years, because the deferred years off are included/she made the contributions.

*********************************
Smart. The way to win the government and many big company DB plans is to start by age 25 (20 is better and the trades guys do it, think government utilities like Hydro Quebec). At age 55 you have 30 to 35 years in.

Normally in all actuarial fairness you ought to take a pension hit to retire at 55 versus 65 even with the same 30 years of service. But lo and behold a magic number formual says no 3% per year reduction if age plus years = 85.

And its even way more generous usually for military, fire service and police)

Way to go. Wrk.Over, You married well and I suppose so did she since you are low maintenance and can do things.

#52 YOLO on 08.19.22 at 7:34 pm

Good for you Tim, you on right track, as long as you stay invested and keep topping off TFSA when you retire it is totally doable. Discpline is key. All the best

#53 Shawn on 08.19.22 at 7:40 pm

New plan:

Forget Alberta, Move to China

**********************************

Dave on 08.19.22 at 3:39 pm

The housing crash is not just happening in Canada

There are 50 million empty apartments in China

#54 KLNR on 08.19.22 at 7:42 pm

geez people, retiring on his own terms doesn’t mean he’s going to sit on the couch on watch netfix for the rest of his life.

Tim, it’s clear what you should do. get out of the oil pit and do what you actually want to do with your life.
could be over tomorrow for all you know.

#55 ALBERTA on 08.19.22 at 7:58 pm

Im 65…with current world situation lm working to next year possibly longer. But i have 2 mill in investments and no mortgage. Work while you can…life can sideswipe you. And I have 4 grandchildren who will need educating…no Tim its a long way off.

#56 Westcdn on 08.19.22 at 8:18 pm

If I qualified to open a FHSA account I certainly would even though I am retired and winding down my RRSP’s. I can’t stomach the idea of them being fully taxable on an untimely demise. A FHSA would give me more financial flexibility but would not solve my tax issue. All in all, my TFSA has priority and I don’t need the FHSA.

I am down about 5% ytd on my 100% equity portfolio but my cashflow from it remains intact and is improving currently. I am still hopeful I can get back in the black but the prospects are getting dimmer in the short term.

But I am suffering a much bigger loss to inflation. Just about every service I use has gone up at 10% this year and unfortunately they represent at least 75% of my cost of living. These are property tax, utilities, Line of Credit interest and internet. Food isn’t as bad but there is pain there too. I seldom eat beef so I take a vitamin B12 at least once a week. Fresh foods are the worst so I have been using more frozen foods. Have I mentioned I have lost about 60 lbs since retiring?

The only costs I have been able to reduce is my mortgage and my booze bill. Also the LOC interest is fully tax deductible at my highest marginal rate and keeps me in compliance to receive a full OAS benefit.

Even with a modest lifestyle, I think I pay more than my fair share of taxes and I get little to show for it except on the medical front. My doctor watches me like a hawk to a mouse. She sends me for quarterly blood work to monitor my blood sugar level and blood pressure. She searches for other possible health issues and has added concern with my kidneys. The annual checkup is intense. I observe the medical system is rife with seniors. It is only going to get harder to get medical services. Good thing that Freeland and T2 apparently believe debt does not matter. God we the people need help against these midgets and their minions (usually public servants)

See what happens when you introduce a virus into “kennels” of seniors. I persevere with morals while grumbling about paying my bills. still I have not had to resort to lying, cheating or stealing yet. Speaking of which, the Alberta carbon tax refund is a joke to me. It is like getting a 15% tax credit just like your CPP contributions. Tax neutral… my butt.

I see T2 was whining about the falling use of the French language. Yep, you guessed it. Increased preference for French speakers in Federal organizations. It is not a small wonder I am an Alberta separatist at heart or give Alberta more slack (to hang ourselves?)

#57 Madcat on 08.19.22 at 8:19 pm

“When the wife goes back to work” Hahaha!!

#58 DON on 08.19.22 at 8:58 pm

Spoke to a close family member who is an experienced RN. Turns out a lot of RN’s retired, through in the towel. Most volunteered to work in the Covid centres and never went back to their base job. Her daughters are new RNs and they are short shifted every day. I have many older friends who called it quits and retired early with DB pensions and bloated house prices, some even rent. Everyone that can seems to be pulling the plug now and getting out of dodge. Then again lots of layoffs in the news lately. I started to cut spending on all non discretionary items after having but some pricey items in June and July. More interested in seeing food prices coming down the only real important cpi measure. World wide droughts affecting crops and live stock. Russis to launch an offensive to take Odessa and land lock the Ukraine is the latest thinking.

Mr. Market is looking for it’s next fix and the central bankers are trying to regain credibility. Realtors and Media are hopeless, vague and never seem to ask the right questions or do any meaningful reasearch outside a sound bite. Reality has a way of cold slapping the delusion outta people.

Looking for a new used suv…no rush just starting my research, might be better to buy new looking at the prices of used cars…did they not get the memo. I’ll be patient though.

Still watching the increase in credit card use as people pile on the balls and chains. It is hard for some people to stop shopping or gambling until they hit the wall.

#59 Ken on 08.19.22 at 9:38 pm

Oh Tiny Tim!

#57 Madcat has your number…

Check this plan with your wife because marriages are full of compromise. For example, your wife is going to compromise with your ‘dream’ by quitting her job to be at home with the kids and letting you buy a new guitar and new sports equipment for your off days from work.

#60 NOSTRADAMUS on 08.19.22 at 9:54 pm

HOT RESIN AND BROKEN GLASS.
I felt a great disturbance in the force, as if a thousand underwater real estate speculators suddenly cried out in terror and were suddenly silenced. New point. Hold the barf bag. Re/Max company “report” says lower prices have re ignited the buyer feeding frenzy, etc. This news blast book ends the Royal LePage’s report of only six months ago predicting real estate values to rise by 10% in the calendar year 2022. Whoa, Big OOPS! I suspect these reports make perfect sense in some alternate universe somewhere??? As to the above real estate companies, the absolute worst of the lot in a decidedly crowded field. I suspect a great number of the Wee Little People who listened to this nonsense are now dipping their fists in hot resin and broken glass , getting ready to rumble. And you wonder why people’s trust in realtors is fracturing. One final point, before too long, real estate scandals will spread far and wide. Are you not entertained???

#61 crowdedelevatorfartz on 08.19.22 at 10:02 pm

@#38 Sportif
“cinq millions dollars. Si on faisait la supposition un taux de rendement de 10% par année (une petit optimiste)”
+++
Je ne parle francais
HOWEVER
I do believe you have recommended a $5 million dollar retirement fund and have estimated an optimistic 10% return on investment for a 500k annual income.
C’est Magnifique!
:)

++++++++++++++++++++++++

@#49 The General
“I believe we’re heading toward being an Idiocracy”
+++
We’re already there.
Trump….. Trudeau….. Poilievre……

Who is there to vote for?

#62 Ed on 08.19.22 at 10:06 pm

I say pull the pin ASAP…working unnecessarily is for schmucks.

I retired 14 years ago at 52 …been sailing and touring the world since then.

I need to live to 120 to do everything my business life prevented me from doing.

Go now…go early. YOLO

#63 Doug t on 08.19.22 at 10:15 pm

https://globalnews.ca/news/9067293/quiet-quitting-jobs-burnout/

Welcome to the new norm – AND why the west is done lol

#64 Doug t on 08.19.22 at 10:21 pm

I remember my years at GM St. Catharines engine plant – the clock house hade two large boards on the wall displaying names of newly retired (red board) and newly deceased (black board) – it was both depressing and a major kick in the a** to start living more

#65 Ponzius Pilatus on 08.19.22 at 10:37 pm

#139 crowdedelevatorfartz on 08.19.22 at 1:15 pm
@#129 Ponzies Probate Predicament
“Who uses a Lawyer for a simple Will?”
+++
Between my personal and business financials and assets.
My Will wasn’t “simple”.
Unlike your question.
P.S.
For showing concern about my Will…..
You get TWO used toothbrushes

If you are ever going to use a lawyer for something, make it your will. No time to be cheap. – Garth
————————-
No lawyer will make a cent on my hard earned money.
Will all be spent and distributed way before me kicking the bucket.

#66 Ponzius Pilatus on 08.19.22 at 10:51 pm

61 crowdedelevatorfartz on 08.19.22 at 10:02 pm
@#38 Sportif
“cinq millions dollars. Si on faisait la supposition un taux de rendement de 10% par année (une petit optimiste)”
+++
Je ne parle francais
HOWEVER
I do believe you have recommended a $5 million dollar retirement fund and have estimated an optimistic 10% return on investment for a 500k annual income.
C’est Magnifique!
:)

++++++++++++++++++++++++

@#49 The General
“I believe we’re heading toward being an Idiocracy”
+++
We’re already there.
Trump….. Trudeau….. Poilievre……

Who is there to vote for?
———————-
Well, you could run.
Would keep the streak going.

#67 Ponzius Pilatus on 08.19.22 at 11:00 pm

Not sure what the deal with Wills is.
My wife and I raised four kids through University.
Sacrificed a lot.
What more do they need?
Call us selfish.
But now it’s Us-Time.

#68 Faron on 08.19.22 at 11:13 pm

While sipping a brew at White Sail after enjoying their gender and trans inclusive bathroom signage I strapped on a barf bag and dove into Greater Fool comments.

I noted our resident engineer joined a scrum in yesterday’s comments about a field of study he and the other clowns know nothing about. Same guy claimed COVID was a nothing burger before, during and after it killed 25+ million above normal death rates and left countless millions struggling with long COVID and that continues to hobble the economy.

I snickered, finished my beer and we headed to the Chemainus for a dip. The tides of idiocy are rising fast. Fastest in Loserville it seems. Could it be the SAGIest SAGI of them all? We shall see.

#69 Xyz on 08.19.22 at 11:39 pm

I don’t know man, but $2 million sure ain’t what it used to be, even in Edmonton. Even without a mortgage you’re barely scraping by @5% yield divided monthly and after taxes. I calc a net around $6300. With inflation raging and Trudeaus tax sky high I see $6300 as welfare living ten years from now. Keep working before Ottawa takes your job away.

#70 Lord Garth of Izar on 08.19.22 at 11:43 pm

We are witnessing dot com bubble 2.0

Tech is in big trouble. Layoffs everywhere. Cheap money funded endless pets.com fake startups with no chance of becoming profitable.

What comes after a tech crash? A major recession.

Bet your last loonie we will see something like 2001 .com implosion. Perhaps topped off with a 9/11 style bitch slap in the form of hypersonic thermal nuclear strike by a desperate adversary.

Sell everything. Quit your job and enjoy time with your children snd partner

#71 Coin biter on 08.20.22 at 12:11 am

Bitcoin plummet is red flag folks and is now a market predictor like VIX volatility index. Does not bode well for markets

#72 Tim on 08.20.22 at 12:12 am

Tim here, thanks for the insight everyone.

I can definitely appreciate the points about not counting your chickens too early, and being bored.

Cheers everyone, have a great weekend.

#73 fishman on 08.20.22 at 12:30 am

” You don’t need a weathervane to see which way the wind blows”. But if your a sailor when your life depends upon it, you do need the Windy App. I have no idea how the Czechs did it but its good,real good, bet your life on it good. So I checked up north of the Crimea. Light winds from Russia, blowing west by northwest across western Ukraine & then swirling around Poland & into Germany & eastern European Nato countries. For the next week & into the foreseeable future. I’d pass on any trippies into Europe for the next little while my bloggie doggie friends.

#74 Beavis on 08.20.22 at 1:21 am

Tim,

Was in a similar position 10 years ago (mid-30s, unhappy oil patch engineer, nurse wife, toddler kids, paid off house, small but growing B&D portfolio) and here are a few things for consideration.

Oil patch is volatile (duh!) and got laid off (found another job though) Squeeze working in health care, no mortgage and B&D portfolio was a great hedge. You’ll have good upward mobility as few young engineers entered the patch which should open other options (management, economics, sales) and could even switch (renewables). I’ve switched and am more engaged.

Resisted lifestyle creep and shiny new toys (unlike most of our friends)

Agree with previous comments. We focused on what early retirement would mean and practiced it. Took short travel sabbaticals and classes. We have a way better view of what the day to day in retirement looks like and what we would do.

It seems like you have the financial mechanics in place. Focus on family relationships, hobbies and your health.

#75 James John on 08.20.22 at 1:29 am

Inflation rampant, origins unknown, just don’t ask for a raise.

https://spencerfernando.com/2022/08/19/tiff-macklem-screwed-up-now-he-thinks-canadians-shouldnt-get-higher-wages/

And btw, those problems at the airport are your fault says minister. And, wasn’t it nice of that judge to negate all this Covid fines meted out by the Trudeau clique. I know the CBC had to retract the accusations of ” racist truckers, mysoginyst, Nazi flag, arsonists etc etc ( after the medias salacious damage was already done. But wouldn’t it be nice if Trudeau stood up and apologized?

#76 SoggyShorts on 08.20.22 at 2:29 am

#10 Shawn on 08.19.22 at 4:06 pm
Tim? Hilarious. Check back when you have actually accumulated about $5 million.
——
#20 Søren Angst on 08.19.22 at 5:00 pm
T, you’ll be bored silly with that early a retirement. Wait until you’re good and sick of working, then retire and enjoy it all that more.
——
#43 chalkie on 08.19.22 at 6:50 pm
Tim, retiring at 45 or even 55 years old, is way to young, even if you can afford it, but with two kids that has yet to go through university, 2 million dollars won’t last you very long…

***************************
Ignore the naysayers Tim, F.I.R.E. is awesome and your goal is totally realistic.

#77 Jane24 on 08.20.22 at 2:46 am

I’ve said it many times before but as long as you get out of expensive Canada in retirement you don’t need a lot of money to retire on. Choose somewhere warm with a pool and social health care and you won’t lack for family visitors.

We have many friends living king-like in Southern Italy for 1500 euros a month.

My son lives prince-like in Cambodia for $1000 US a month.

We live Duke and Duchess-like in Southern England for £2500 a month but are thinking of moving to either Portugal or Sardinia for the low-tax pension schemes, 10% to 7% on world-wide income respectively.

The main keys for an exotic but cheap retirement are:

Own your own house outright with no rent or mortgage.
Be somewhere with govt/socialized medicine or very cheap world-class medicine (Dubai, Thailand) so no health bills.
Have no kids of any age in the house or any debts.
Have a second home somewhere popular that you can house exchange so holiday accommodation is free.
Be somewhere warm in the winter to avoid heating bills. Be somewhere cool in the summer to avoid air con bills.
No matter how much he annoys you, never divorce.

Our combined pensions and savings are quite modest but by controlling bills as above, we have about $40,000 a year in total fun money and boy do we have fun. You never know when your health will fail or the Grim Reaper arrives. Retire as early as you can and live but you do have to get out of freezing and high cost Canada.

#78 Summertime on 08.20.22 at 4:10 am

The ‘soft landing’ meme is just wishful thinking.

Retail sales and confidence is down, due to inflation and it is just starting.

https://ca.finance.yahoo.com/news/retailers-canada-see-first-sales-130916676.html

There will be no return to the old ‘normal’.

Cash strapped and overextended/overleveraged people can not keep spending on loan like drunken sailors.

And WFH is here to stay.

#79 Christ on 08.20.22 at 4:52 am

Where does the 10k per month withdrawal come from? Is that a 6% withdrawal rate? Isn’t that a bit high?

#80 under the radar on 08.20.22 at 6:19 am

65 – you assume your demise will be controlled and that you can time the distribution of your estate while alive and competent. I have known a few clients who thought that way. One couple was killed in a car accident. Much left undone with complicated and expensive consequences. Another, who talked to me about making his will , had a sudden heart attack and never made it home while walking his dog. His dog died a few weeks later, widow says it was from a broken heart. Yup, save your money , your estate will pay big time.

#81 Handsome Suit on 08.20.22 at 8:47 am

Tim is on the wrong continent , wrong country. He should be where investment creates employment, that isn’t Canada’s oil engine. As an petroleum engineer he should be looking at Texas, so should his wife.

Big money being made down there. Great lifestyle, cheaper homes, cheaper cars, more freedom. Just buy your tickets in advance, the seats to Dallas are full in every flight, all Canadians bailing.

And, with FinDev Canada pumping Canadians millions into Africa to development oil and gas there, it’s another perfect set up for a young family. The future development in Africa under Marc Carney and Justin Trudeau could vault a guy like Tim into a global managers job paying millions. He could be very wealthy before he’s forty and might consider a luxury retirement in Dubai.

Think bigger Tim.

#82 crowdedelevatorfartz on 08.20.22 at 9:30 am

@#77 Jane24
“Retire as early as you can and live but you do have to get out of freezing and high cost Canada.”

+++
There’s a lot of Ukrainians that would disagree with that statement.
How’s your Russian?
Rumour is they are planning a big push next week.

#83 IHCTD9 on 08.20.22 at 10:03 am

#77 Jane24 on 08.20.22 at 2:46 am
I’ve said it many times before but as long as you get out of expensive Canada in retirement you don’t need a lot of money to retire on
———-

I’ll be retiring in Canada, you can do it cheap here too. The problem in Canada is actually starting out building a life from scratch, this problem is less than 10 years old. If a guy is 45+, he got off and running before things went down the tubes. House is paid for, savings were possible, no debt required.

I could live where I am, and how I am right now for under 30K year.

#84 Steerage on 08.20.22 at 10:06 am

#77 Jane24 on 08.20.22 at 2:46 am

I’ve said it many times before but as long as you get out of expensive Canada in retirement you don’t need a lot of money to retire on. Choose somewhere warm with a pool and social health care and you won’t lack for family visitors.

We have many friends living king-like in Southern Italy for 1500 euros a month.

My son lives prince-like in Cambodia for $1000 US a month.

We live Duke and Duchess-like in Southern England for £2500 a month but are thinking of moving to either Portugal or Sardinia for the low-tax pension schemes, 10% to 7% on world-wide income respectively.

The main keys for an exotic but cheap retirement are:

Own your own house outright with no rent or mortgage.
Be somewhere with govt/socialized medicine or very cheap world-class medicine (Dubai, Thailand) so no health bills.
Have no kids of any age in the house or any debts.
Have a second home somewhere popular that you can house exchange so holiday accommodation is free.
Be somewhere warm in the winter to avoid heating bills. Be somewhere cool in the summer to avoid air con bills.
No matter how much he annoys you, never divorce.
………..

LadyJane… doing it for King n Country… you sure hubby feels the same?

#85 Dogman01 on 08.20.22 at 10:30 am

Tim – this guy retired on much less, Western Canadian, engineer, with kidlets.
His blog details many aspects of his lifestyle and decision.
http://www.canadian-dream-free-at-45.com/

In my experience:
– Winter in Canada is long, dark and cold, to retire well in Canada you need some sort of solution to that problem.
– People whom squirrel away the coin like you have and can FIRE are usually Introverts\Internal personality orientated. So make sure you have a few hobbies.
– Consider one spouse quitting while the other works, this removes a layer of frantic “madness” from your life. It may make your entire life more pleasant such that you re-discover joy at work and some calmness at your home. A way to slow down.
– The baseline misery level at my old work has elevated and become a baseline happiness level at retirement. A break may have got me out of the burnout, so consider a break which could be the beginning of retirement or whatever you want it to be.
– “Time is the fire we burn in”
– Like gasoline, money needs to be acquired, stored, and consumed as necessary in order to go places and do things. The extent to which you consume it, and the efficiency of how you use it, is the key to your wellbeing and longevity.
– “Almost without exception in life it is better to have money than to have stuff.” – Garth

#86 Philco on 08.20.22 at 10:33 am

Tim
Never fully quit you have no clue of the future events.
A million will be like $100k in time. It is to me already.
In one years time I’ll have way into 8 digits of RE that pays $400k cash flow a year. I’m going to keep going cause I like it. Change it up you just got bored.
Tim assume nothing your not rich Jeff Bezos is.
Something blows up good luck finding good cash flow when your wrinkly.

Anywho I’m building mini storage building #1 cash cow running the crew. It was like working on the sun this week!
I employ my neighbour’s he’s 72 and is in great shape he loves it. Got another guy he’s 75 and a machine and 2 good knuckle head hard working kids.

Looks like a bit of a roll over in the market.

#87 IHCTD9 on 08.20.22 at 11:41 am

#86 Philco on 08.20.22 at 10:33 am

I employ my neighbour’s he’s 72 and is in great shape he loves it. Got another guy he’s 75 and a machine and 2 good knuckle head hard working kids.
—————

It’s really amazing how much work an old guy can do. Farmers and construction workers that do it for life seem to become blessed with high pain tolerances, and physical endurance. I’ve worked with several and was amazed even in my teens at some of these past retirement guys going full-bore in the hot sun all day, every day. Hope you pay them well.

Most of these guys made it past 90, one is still alive and must be nearing 100. Minds stayed sharp right to the end. Hard work outside seems to have a beneficial effect on lifespan.

#88 Dharma Bum on 08.20.22 at 12:00 pm

Tim –

Consider taking a sabbatical. 12-18 months travelling the world and fulfilling your adventure desires.

I did that because I effin’ hated my job with a passion.

It refreshed my soul, and renewed my enthusiasm for life. It took the edge off the immediate urge to retire completely.

I returned to work more energized and retired 8 years later.

Plan the year off carefully. Including schooling the kids along the way. There are online sources to assist you with sabbatical planning.

It was the best career move I ever made.

Warning: you will have to deal with the seething envy of your peers, colleagues, and “friends” (of whom you’ll find out which ones are real).

Eff ’em all.

Take the plunge.

Life is way too short to crush your soul in a lousy cubicle.

When you return – get a better job.

#89 Slim on 08.20.22 at 6:09 pm

Tim, the grass maybe greener on the other side, but it still needs mowing.

#90 mark on 08.20.22 at 10:28 pm

I’m all for pets, but please, no more feet pictures.

Definitely not a trend we need to start.