Posted by Dave on November 15, 2011
My wife and I had a big day last week – we finally reached the top of our piggy-bank (an empty three liter bottle of Canadian Club – a remnant from a party in my past) and were able to count all of our change. Although it may not be a momentous occasion to most, it’s fun for us because it essentially means we get free money to do something fun for a weekend (we’re thinking Niagara Falls during off-season or Toronto to see a show). Because we rarely spend cash, this level of change saving (quarters and below) has taken us around three years to accumulate, so we are going to enjoy ourselves on this miniature “windfall”.
Besides our “adult” piggy-bank, I utilize an ING account for my own personal spending – I save $20 per paycheque that I use to save up for golf, video games, and other money-losing purchases. Because I don’t make withdrawals from this account very often once in a while I’m able to have a balance over $1,000 to finance my expensive hobbies.
None of these savings amounts are working towards my end goal of financial independence. Slowly but surely, I have built a buffer for my sometimes poor purchasing decisions, a strategy that could be carried into my early retirement years, either because I have stopped making these kind of decisions totally (which would certainly help in reducing the amount of stuff in my house), or because my “fun” savings has built up significantly.
This kind of long-term saving, something that I have done from a young age onward (something my parents both drilled into me) bodes well for an early-retirement goal – expanding the same type of mentality to gradually watch my debt decrease (my mortgage disappearing) and eventually passive income increasing (dividends or interest) is something I have “trained” for over a 20-year period.
If someone has never experienced delayed gratification, they would think I was nuts, waiting until all that loose change reached to top of the bottle before making plans for a relatively cheap weekend away in the grey days of January. Yes, I could easily afford this purchase but I have already ear-marked a significant portion (around 75% of my paycheque) to paying down my mortgage. If I chose to spend that money on a weekend away it would be putting me further away from my ultimate goal of exiting the workforce as quickly as possible.
Do you have a “piggy-bank”? Do you never splurge, or how do you afford the odd amount of overspending?
Bonus content:
- This article shows how not to spend a $6 billion fortune (Not a problem I’m concerned with, but I’m not exactly sure what demographic reads this Blog).
- I recently taught myself how to bake pies (from scratch). This discovery has definitely made it much easier to decide what to bring to people’s houses when you’re invited over – everyone loves homemade pie. I would highly recommend learning how to make this relatively cheap dessert for the holiday period.
Posted by Robert on November 14, 2011
This is a guest post by Robert, who lives in Calgary and works as a financial adviserretired at 34. He is married, has three kids. Robert and his wife then plan to return to school and become teachers, eventually living and working overseas.
I really struggle with answering the question, “So, what do you do?” So many people define themselves by their job, that it seems to have become a shortcut for getting to know people. He’s a cop, she’s a teacher, he works for the city, she’s a politician, etc. What am I? I worked for years as a stockbroker and financial planner, so sometimes I simply say that I’m a financial advisor. Sometimes I tell people that I’m a retired stockbroker, but I know I don’t look the part.
Last week my wife and I were at the stable with my two year old daughter. My wife was riding, while my daughter and I watched and visited the other horses. The owner of the horse my wife was riding had come to meet us, and she had her three young children in tow. “How can you both manage to come out here on a weekday afternoon?” she asked. She needs to work around the schedules of her husband’s work and her children to be able to find a time to get away. For simplicity, I answered, “Neither of us work.” “But … you must!” she blurted.
Of course, I explained that I had worked as a stock broker and sold my practice, which allows me to not work right now. Since I look even younger than I am, she probably wasn’t totally satisfied. But what struck me is the expectation that everyone runs their life the same way: go to work, earn income, spend it all, go to work again tomorrow. I remember when I started working and our income just covered our expenses; we were in the same position. As our income rose, our expenses rose much slower, and we chose to manage our life differently (spend less, save more, invest at opportune moments).
I still work. I don’t have an office, and I don’t have set hours. I don’t receive a paycheque. I do some work on our investments, and I receive our income from our investment accounts. But to feel like I’m using my abilities and continuing to learn and grow, I spend a lot of time volunteering. I volunteer at the school, I chair the school council and I advocate for public education with the school board and, to a lesser extent, the province. I also spend time with my kids, while my wife works on her Masters degree. I never realized how much work caring for the kids can be!
I have thought about getting a regular job again. I’ve applied at a couple places that sounded just perfect for the skills I want to continue to develop. I haven’t heard back yet, but I question how much money I would want to earn to make it worthwhile to leave behind the things I’m doing now. I’m proud of the contribution I feel I’m making in my family and in my community.
What work do you do that you are most proud of?
Posted by Canadian Dream on November 11, 2011
I’ve recently been reading a book that had an interesting point that I’ve always understood, but realized I’ve never discussed on this blog: you should never try to have your life at maximum happiness all the time. It’s a recipe for abject failure and future misery.
I know that might seem like odd advice from a blog that is half focused on happiness, but let me explain my point a little bit. In our culture we have the idea that if something is good, then more of it is better and we apply that idea to stuff, money, work, information and of course happiness. Hence we have an entire industry that exists for the sole purpose of making us better people: the self help product. While I fully admit I’ve read books in this genre, I don’t read many of them. Why? I know it is rather pointless to try and change too much of me.
You see when you turn about 25 years old your brain more of less sets from a neurological point of view. Yes you can still add/remove habits, but your general outlook on life wont’ be changing all that much from that point onwards. So if you are under 25, ok, go ahead and try things as you might make a difference. Over 25? Don’t bother with most of it as you won’t be able to do that much. After all if all this self help crap really worked won’t we all be thin, rich and completely happy?
So this lead me to an important point, I don’t try to be completely happy all the time. It’s a waste of effort. You can’t live life on an emotional high of 9 out of 10 all the time. Since if you even managed it for a while, it would merely become your baseline and then any future happiness would decline dramatically since you would be comparing back to your 9/10 rather than your usual 6/10 level. Thus a typically 2/10 event looks bad from a 6/10 viewpoint and looks much worse from a 9/10 point. Happiness or misery is largely about the difference between your baseline and the event itself. This is of course how you can get addicted to any chemical compounds that help you achieve 10/10 for a while. If that becomes your baseline, then everything other than being on the drug sucks.
What all this means is you want contentment in the majority of your life, so being at a 5/10 or 6/10 level. Thus when you do have a better event you can still notice it and enjoy it. So I focus on not being in a crappy job and generally having a few things I enjoy every week to ensure I don’t drift too far up or down the scale. So yes, try to be happy in your life, but not mind blowing happy all the time. It’s just a waste of money to try.
So what’s your average level of happiness on a ten point scale and why? I personally think I drift around a 6/10 most of the time lately, namely because I’ve been enjoying my new day job so much.
