Posted by Canadian Dream on April 20, 2011
Ok, confession time. As a student I had the experience of being broke a few times, but I can honestly say I’ve never been poor in my life. So what is the difference? Mmm, to me it is a rather fine line between the two states yet still a big difference.
Being broke is the simple state of being without money. It might be right before your next pay cheque, so while you are without money you are not without hope of more money. Being poor is a completely different mind set, you don’t have any money, but you also don’t have any hope of more money. So at that point worries of having a place to live or having enough to eat come forward. So I have experienced the first state of being broke, but I’ve never been poor.
I grew up firmly in the middle class (or upper middle class depending on your definition). So I never went to bed hungry (unless I had been a stubborn idiot and tried to say I won’t eat supper because I didn’t like it). I grew up always having that security behind me, so I didn’t worry about going hungry or having a place to sleep. This carried forward even during my broke times as a student. I always knew if push came to shove I could always beg for some grocery money from my parents and get it (not that I ever did it). Yet this background level of security has marked me with my approach to money.
I’m not afraid of living on a low amount of spending. I don’t equate a low level of spending with being poor or a lack of security. As such my retirement plan can contain a modest level of spending ($27,000/yr) that might scare the crap out of others, but I’m fine with it.
You see money really isn’t just money. Money is also your hopes, dreams, fears all wrapped up in the guise of numbers at your bank or bills in your pocket. Your childhood can mark your relationship with money, so if you have ever been poor that will affect you greatly and likely for life. That desire to never been poor again can drive people to odd savings targets that are really too rich and they can often fall into a cycle of never having enough money or things. I know I will never be that way, but I do understand how that can drive people in their retirement planning (I’ve had several long discussions with people who have been poor).
I’ve a bit of the opposite of that since I don’t equate a lower level of spending as risky. Actually I would argue the opposite is true. A lower level of spending in your life actually allows more savings and thus better security at a much younger age than others. Also by leaving work while you are younger allows you more time to earn money at other opportunities, that might not exist when you get older and have poorer health. So while I’m planning an early retirement that might scare you, I would argue I’m going to be better off than most people at that age. I won’t have to work, so layoffs won’t be a worry, food will always be at the table and I will never be forced to move out of my home by the bank or a landlord. I just might spend my entire like never knowing the feeling of being poor.
So how about you? Have you ever been poor or broke? How did the experience change your relationship with money?
Posted by Canadian Dream on December 3, 2010
One of my favorite posts on this blog would have to be this one which outlines my family’s journey from approximately 2000 to 2007. Yet since that time a lot has changed in our lives which has been documented somewhat on the blog, but not all in one story. So I’m going to try and compress that down into a single summary post.
At the end of 2007 our second child was on the way and I started to notice a difference in my perception of the world. In the beginning of my early retirement journey I fell into the trap of a lot of people that I thought about early retirement as a solution to a better quality of life, but then I started to realize that there is more to life than just savings. You can do things now to improve your life that yes do cost money, but often can lead to a better balance now and in the future. So after our second baby was born in the spring of 2008 I had arranged to have a seven week parental leave to help out at home. This was despite the fact my wife was taking a year off with no income since she was self employed.
It was one of the best things I have ever done. I loved those weeks off at home and so did the rest of my family. I helped out a lot with the baby and also demolished our old deck with my oldest son. It was again one of those periods in our lives when we didn’t have much extra money, but we enjoyed ourselves at lot regardless. I’ve noticed that in my life. A lot of my most happy periods I had little to no extra money. Perhaps this is why I find the concept of retiring early on a small income not something to be afraid of, but rather looked forward to.
I also got some perspective on my work during that time off and decided that my job at the time had a fatal issue with it. I liked the work and the people, I just disliked the highly variable workload that goes with working at a consulting firm. So in late 2008 I moved on to another job for an increase in pay, but more importantly generous time off benefits and I was hoping a more steady workload. The steady workload did occur, which made me very happy with my new workplace.
Yet after two kids I was starting to notice and care about more larger scale issues and I began to get involved more with following and being involved with politics. So when I noticed no one was running for the public school board for our subdivision in late 2009, it seemed like a good time to test the waters and I filed my nomination papers. Much to my surprise I was acclaimed to the position for a three year term. I also found out it happen to pay fairly decently with a salary of $23,400 a year.
So now I was doing some work that helped in my desire to improve the world for people and making more money, but after six months of working both jobs I realized I was doing too much. My family was suffering and so was I. My wife was even trying to take a self directed course during this time and we found that was hard for me to support. If I kept this up I would likely just burn out sometime before the end of my term. So I had a great meeting with my boss where we discussed some ideas and I proposed dropping down to 80% time. I was pleasantly surprised when he agreed and we started a six month trial which would become permanent after that time (if we both agreed it was working).
From my perceptive the change has been worth every penny of pay I lost going to reduced hours. It’s also if anything made me more loyal to my place of work than any raise they could have gave me. (Note to all HR departments: the new coin of the realm isn’t money, but rather flexibility.) It has also allowed my family to streamline our week together to place common appointments on Friday and then leave more time on the weekend to be together. My wife even enjoys the situation as it has allowed her time to take another course and complete a certification for her daycare.
Then if that wasn’t enough positive change to our lives, I had the opportunity to write for the Toronto Star early this year and fulfill one of my dreams of getting paid to write something. It was a lot of work, but I did enjoy the experience overall. It also provided my the motivation to push ahead with my book project in 2011.
Now of course going after some of these dreams of ours it has made our lives more enjoyable now, but also helped us out financially. In three years we have increased out net worth from just over $200,000 to over $370,000, but even more impressive is we have paid off almost $60,000 of our mortgage and increased our investments from about $47,000 to $117,000. That’s an average reduction of debt and investment increase of about $43,000 per year.
So in my last success post I focused on the fact you can defy the odds and early retirement is possible. I still agree with that conclusion, yet I would also point out you don’t have to wait to retire to pursue you dreams and have a better quality of life. The two goals are NOT mutually exclusive. Dare to dream to have it all, you might be surprised on what you can do.
Posted by Canadian Dream on October 18, 2010
Hi, welcome to Canadian Dream: Free at 45 a blog about early retirement and happiness. I’m Tim, the main writer behind this site. I hope you enjoy your look around the site and to help you out here are a few things you should know.
1. There are three writers on this site: Tim, Robert and Dave (see the About page). So don’t assume everything is done by one person, the majority of the posts until the last year have been done by me, Tim, but after that you will have to watch out who you are asking the questions to.
2. The Math Behind Freedom 45. The actual numbers on how I plan to retire early are in a series of posts called “Retirement Calculations” located under the Popular Posts sidebar (here is the link to the first one). Before you start asking questions I suggest you read that five part series which will likely answer the majority of the obvious questions on how much I plan to save and what I currently spend each year.
3. Questions? Feel free to ask any questions you have on any post, but I would encourage you to leave questions regarding the series for Moneyville either on that site or on this post. For our regular blog readers here is the link to the first Moneyville article.
Enjoy the site and if you want more please subscribe to the blog.
