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Saturday, July 26, 2014

The Minimalists Book Tour

Posted by Tim Stobbs on July 25, 2014

Last night in Regina, I finally got to meet two people that I have admired for a while Joshua Milburn and Ryan Nicodemus otherwise known as The Minimalists who were in town as part of their 100 city book tour for Everything That Remains.  While they have a highly successful blog, I admire them for realizing their old lives sucked and wasn’t making them happy and then actually did something to change it.

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In their case, the solution they came across was minimalism.  So first they started getting rid of their excess stuff and they came to realize that that if you focus on what is useful and what you love you tend to actually change your life for the better.  In the process they also reduced their cost of living as you can live on a lot less if you get rid of the excess that is what people have in the majority of their homes.

Then they both took it a step further and left their high paying corporate jobs to do more work on the things like cared about.  That step is what I admire most about them.  The jump off the cliff into a new career, which is sort of like I am planning to do, but unlike them I won’t require any money from the new line of work to support my lifestyle.  So the their ideas are similar to mine, they just went about it a different fashion.

The book, Everything That Remains, if a memoir style book that tells their story of where they started out and then ended up after finding minimalism.  What I liked most about the book was it was less of a ‘how to’ book but much more of a ‘why to’.  Getting rid of stuff is actually fairly easy, the issue comes down to knowing why to do it.  So I found learning what they thought about their situations and how they dealt with the emotions of the decisions.  That is where I personally have been stuck myself for years, so I found the book inspiring and useful to ask myself some tough questions like:

  • What do I deem as a successful life?
  • Who is the person I want to become?
  • What is truly important in my life?

These aren’t easy questions to answer and frankly I’m still working out the answers ever after I have been at it for a while.  So I found the book an enjoyable read that also helped push me into doing a better self examination on my life.  So I found the book helpful.

So overall it was great to meet them.  They talk largely like they write and they are very nice guys.  Also they were nice enough to sign my first edition of their book, so I’m kinda thrilled about that.

Combating Constant Second-Guessing

Posted by Dave on July 22, 2014

Dave is also looking to retire no later than 45, but unlike Tim has no kids and doesn’t want any. Dave is from Ontario and is working towards his CGA certification.

I have a hard time pulling the trigger when it comes to major purchases. I drove my wife nuts a few years ago when we were shopping around for a used car because it took me weeks of reviewing prices, makes, and models before spending the $10,000 the 2008 Nissan Versa eventually ended up costing us (going on 4 years and around 60,000 kilometers).

Most times, I think it’s more I’m worried about buyer’s remorse than I am about the actual purchase and dollars out of the bank. With our car purchase, what finally swayed my decision was we found the model of Versa we wanted at about the cheapest price we could find over the weeks of reviewing different cars of that size. I was basically ensuring that I would not feel ripped off a few weeks or months later.

Sometime in the next month or so, I’ll be starting the “Investment Phase” of my retirement plan. I’m hoping to accumulate enough capital over the next decade or so to retire at or around age 45. For me, one of the major traits I’m going to have to overcome is the feeling of buyer’s remorse after making a stock purchase. It is more than probable that I will make some terrible stock purchases over my investing “career”. I’m hoping that some of these terrible purchases will be balanced by stocks that follow whatever hypothesis I have when I decide to buy.

As with all major purchases, I’ll be discussing it at length with my wife (whether she wants to hear it or not). So far, she hasn’t shown any real interest in much of our financial journey, beyond asking “are we done yet?” I will essentially be teaching my wife what I’m doing while I go, whether she wants to learn or not (I read her this paragraph and she rolled her eyes at me). I hope that we will both learn a lot in this process. I find this kind of new stuff really interesting, and although I’m doubtful it will happen, hope she will gain some level of enthusiasm for it as well.

To a certain point, cautiousness while investing will hopefully help me avoid most large errors I could make that would stop my wife and I from achieving our financial goals, but I need to have some level of confidence in the investment decisions.

How do you overcome second-guessing in your investing? How do you stop the hesitation before pushing the “buy” or “sell” button?

Black Swan Events

Posted by Tim Stobbs on July 21, 2014

Three doors door down from my parents cabin a natural disaster has struck, the slope that nine cabins sit on is unstable and now slowly falling into the lake. This isn’t anyone’s fault and in fact the entire event would have been impossible to predict as a perfect storm of conditions occurred to cause it to happen.  In short the flood of 2011 cut the toe of the slope, then the recent heavy rains saturated the soil and raised the water table which lubricated a shale seam and presto you get a slow moving landslide on a slope that hasn’t moved in 60 years prior.

Now losing your cabin at the start of the season sucks, but the real shit hit the fan for the cabin owners when they started to look at their insurance coverage.  This is apparently classified as an “Act of God” thus in all likely hood their insurance on their properties are nil and void.  Ugh, but you may think they could get something from disaster relief from the government.  Well so did I until it was pointed out that only covers primary residences, not second homes like cabins.  So in the end, they have no cabin and also no means of getting a dime of compensation from anyone.

If that isn’t a black swan event for those people, I don’t know what is.  So the owners of these cabins are getting out what they can and trying to accept that rebuilding isn’t an option unless you happen to be sitting on a far bit of cash.  Needless to say this has also freaked out my parents who are just down the road from this.  It also likely means that my father’s retirement project to rebuild the cabin (which is almost at the drywall stage) could end up falling into a lake or not (so far their property is stable).  They just don’t know what will occur in the long term (at least in their case the cabin is their primary residence so they could get some money).

The point is tale is you can’t plan for everything.  With retirement planning we tend to pretend we can cover all our bases when in fact they are very real situations that can occur that you can not predict, defend against or even do anything about when they occur.  In short, shit happens.  So what can you do?  Really not much other than have a robust plan with some slack in it.

The other lesson I learned on this entire disaster is you can’t depend on your equity of your vacation property in your retirement plan.  Actually in fact, any house equity isn’t a stable long term investment as you local market can go to hell just when you need to sell.  So I would suggest never being at a point to depend on it, which makes me feel good about my choice not to include the house equity in our retirement plan.

So have you ever seen a black swan event?  What happened and how did the people cope with it?