Posted by Dave on March 23, 2010
Have you ever read a book or website that has completely changed your way of thinking? I was thinking about this as I was reading the book “Good Calories Bad Calories, Challenging the Conventional Wisdom on Diet, Weight Control and Disease”. Although I am not finished it yet, I have found it very engrossing as it challenges the majority of nutrition wisdom around low fat/low calorie/low cholesterol eating that North American health professionals adopted as gospel in the 1950s and have carried on to today. Although not necessarily a “game-changer” this book definitely has got me thinking about why I eat the way I do. Although there are many more people than I am going to list below, I thought I would highlight a few writers that have inspired me, personal finance-wise.
When I first graduated from University, seven years ago I had very little knowledge about money and what I should do with money. I had a bunch of student debt a decent paying job and really no plan. Enter The Wealthy Barber – for someone who had no plans or aspirations, the easy to read and understand story told gave me money goals and aspirations to strive for. I gained a basic level of personal finance knowledge that I followed over the next five years, where I paid off my student loans (approximately $25,000 worth), bought a car with cash (for which I got a lot of comments like “it must be nice to have that kind of money laying around”) and religiously saved 10% of my pay for the future. I will forever be grateful to David Chilton (the author) for writing this book. I own it, I bought my 21 year old sister a copy of it when she graduated from college (hoping she might have the same type of reaction as I did) and would tell anyone who needs a plan to read this book.
I followed the advice for several years, basically planning on leaving the workforce at around 55 or 60 like most people. About two or three years ago, I picked up a copy of Derek Foster’s “Stop Working, Here’s How You Can”. Although I don’t necessarily agree with the author essentially bailing on his iron-clad investment tactic in what seems a fit of panic during the economic downturn (when I believe his book states to look for these opportunities to boost your portfolio) in general his book changed my whole thinking on retirement. He offered a plan that would that would allow me to retire in around 12 years. For someone with around 40 years of work ahead of them, cutting that down by 75% is very attractive. I understand the riskiness of living on just the dividends from stocks promoted by his book, but there is a certain level of hopefulness offered by this book that gave me hope.
The final author, which eventually lead me to this site (it’s listed in his blogroll) is Jacob from Early Retirement Extreme. This author offers a method of leaving the workforce in around five years. I read every post he had on his site over a two or three day period – eating up what he was saying as it made sense to me. Although I don’t know if my spouse and I could live on $10,000 to $15,000 per year, he provides a method of doing so and has proven that it is not only doable (he did it himself) but enjoyable to be retired in your early 30s. Although I have gravitated more towards Tim’s site and his more “moderate” stance on early retirement, striving to copy Jacob’s method and discipline may shave a couple of years off of my retirement date.
So, these are the people that have lead me on my current financial path. Do you have any writers that have inspired you financially (or otherwise)?
Posted by Canadian Dream on March 22, 2010
The other day I was doing an interview and discussing a few items in regards to personal finance and during the wrap up where the reporter was getting all my details: name, location and age. She paused slightly when I mentioned my age, turning 32 in a couple of months. At first I couldn’t figure out why the pause then I wondered if personal finance suppose to make you old? Hence my age would be slightly surprising.
Typically youth is associated with a lack of responsibility while older people are suppose to be more responsible. This of course is a gross over simplification of the situation. I’ve met exceptions to both ends of the spectrum. Yet I do think there is a bit of truth about my question. Personal finance (PF) does tend to result in people acting a bit more responsible hence the expectation of people that you are older.
By learning about PF you tend to start to think about the longer term issues such as paying off your mortgage earlier, saving for retirement or putting something away for your kids education. You also learn about delayed gratification and not spending more than you earn. In some regards learning about the PF essentials is a bit boring, but very valuable information to have.
The result of all this is I tend to have conversations with anyone and everyone on money. I can discuss pension concerns with the nearly retired and equally feel comfortable talking to younger people who are still looking for the get rich quick program (which does exist, but no one wants to admit it typically takes decades so ‘quick’ is misleading). So the end result is I think some people who never see me face to face expect me to be a bit older than I am.
This odd expectation is completely fine with me. Financially speaking I likely have more in common with the average 42 year old than my actual age (house will be paid off in the next two years and I have a comfortable $100,000 nest egg started). So the mistake is actually somewhat true on a purely numbers game. Yet really that is the point of this blog. I want to be financially old and trapped in a young person’s body when I retire at around 45.
If people want to think I’m older, the go right ahead. I’ll take it as a compliment.
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Posted by Canadian Dream on March 18, 2010
Since becoming a school board trustee I’ve gotten a much more realistic view of politicians and have actually begun to start to sympathize with them at bit. Beyond realizing that it’s a fairly thankless job overall (if you do something good you get no media coverage, but if you close a school you end up the 6pm TV news). I’ve also just started to understand the seduction of political power.
You see it starts so very simply. People in the organization you work for treat you like you are important, which you are to them. Yet after being treated this way for a while you start to expect it a bit. You also start to realize the full extent of the changes you can make to a system and if you get used to that power you can run into problems of doing anything to retain that power.
Overall the effect is shocking similar to having a high income. A six figure income means you can easily use credit to pay for entire kitchen renovation today, you can buy a new car today or even actually consider owning a second house either as a cottage or an investment. So when you look at doing any of those things people treat you like you are important, because you are to them if you are spending a lot of money.
In both cases the seduction is a bit of an illusion. You don’t have to spend the money if you make it and you don’t have to change a system just because you can. Power is only in your head and often people tend to forget that 99.9% of the general population still don’t know who you are and have no interest in what you do. You are really only important to a very small portion of people and only to a very narrow degree. People are not their job regardless if they get elected to them or push paper in an office or pump gas.
In the end, now having sampled both money and political power now I can say I get the seduction of both is pleasant looking, but ultimately over rated. I’ve ceased being overly impressed with either type of influence on the world. Your life is what you make of it regardless if you ever hold a political office or make a lot of money. So how about you? Were you ever seduced by money?
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