March 2017 – Net Worth

The following is an update of Tim’s plan to retire early.  Please note we are mortgage free.

Our ultimate goal between investments and the home equity is a net worth of around $1 million.  The investment part of that target is $582,000.

Investments

Accounts

RRSP $58,330
LIRA $16,340
TFSA $84,740
Pension $158,220
Wife’s RRSP $86,420
Wife’s TFSA $79,170
Wife’s Taxable $51,380
High Interest Savings Account $26,200

Investment Net Worth $560,800 (increase of $10,880 over last month)

Home Equity

Estimate $395,000

Spending

Last Month $3434

The renovations continue.  This month was the new water heater for ~$1200.  The other odd bit was I took spending cash out at the start and end of the month making this month look worse than it really is.  It should balance out with lower spending month in April.

Trailing Last 12 Month Average $2707 (or $32,490 for the last 12 months)

Results

PF Score: 29.4 {Target 31}

Net Worth ~$955,800

Commentary:

So for those of you keeping score our investments are now at 96% of our target amount of $582,000.  Oddly enough, I’m not that excited about it.  Why?

I’m focusing more on the little things.  Getting stuff done around the house like the water heater.  Cleaning up the yard now that the snow has melted.  Hanging out with family and friends.  I want to live my life rather than stare at numbers that will get where I want them to be without any effort on my part.  Also I have learned over the years that fixating on the numbers isn’t helpful.  The point of financial independence is to give you more time to live your life, not fixate at getting there.  You have to remind yourself about that at times.

Any questions?

March 2017 Investment Net Worth

(click to make bigger)

Spending More on the Right Things

I swear some people think my life must be like a monk.  They confuse the fact that I don’t spend a lot with not spending anything at all.  So to clear that up: yes I spend money.  When you think about it, everyone does it so that isn’t so odd.  Yet perhaps the major difference between a lot of my spending and other people’s spending is I’m usually thoughtful on what I spend my money on.

Yet this does not mean I never impulse buy.  In fact, yes I splurge on impulse items once in a while.  Just once every few months rather than twice a week.  For example, my latest one was I was at the bank to deposit a cheque and I recalled that the local HMV location near me was shutting down soon.  So I wandered over there saw a sign stating that it was it’s last week and all the DVDs and Blu-rays were 50 or 60% off.  So I walked around the store and found a few items and bought them (Mr Robot Season 2, Contact and I Robot..if you were wondering).  Did I need them? Nope.  Did I plan for them? Nope.  Did I want them like a two year wants a piece of candy? Hell yes!  Yet prior to that I really can’t really recall a similar impulse spending event for the last six months.  At the very least I usually have a 24 hour cooling off period prior to buying something.

Then on the other hand I sometimes think things out too much.  I recently had decided to seek out a faster internet speed package from my telecom provider since after months of trying to deal with the issue I came to the conclusion: our internet is too slow for what our house uses it for.  Prior to that I had done numerous technical troubleshooting sessions to see if I could squeak more speed out of out internet, but didn’t improve things all that much. Yet in the end I decided I wanted a faster connection it comes down to this…my kids grew up and spend a lot more time online and my wife started to watch Netflix more.  So I was increasingly battling my family for times to download some files or watch Netflix myself.  So I called in and confirmed my options and found out that I could increase my internet speed from a max speed of 1.5 MB/s to 5.0MB/s (yes nearly 3 times faster)  for an additional $3/month.  After that I turned to my wife and said, “I’m a bloody idiot. I should have found that out ages ago and just upgraded.”  Now I can download a large file in a fraction of the time prior and while my wife watches her show on Netflix.  I was just in the habit of making do with what I had that it took me a while to realize the solution would be to pay the extra monthly fee and upgrade.

So in the end there are two sides of spending: the not thinking about it all all for impulse buying and over thinking something for months that costs next to nothing.  Either end isn’t particularly useful so try to stay somewhere in the middle to achieve a happy balance. That is usually where I spend the most of my time but even I screw up. So where do you tend to fall on that scale for your spending?

Exit Stage Left

Conforming is easy. You don’t have to think that much about your choices. In fact the world provides a lovely little template for you to follow. Go to school, graduate high school and then continue into some kind of post secondary education. Then after picking up lots of debt from that post secondary education, get a job to pay that money back. Oh, but don’t forget you also need to find a spouse, buy a house, get into even more debt and then spend the next 40 years paying it all back and saving just enough money to eventually retire. Yet at that point the script stops. No one tells you what to do in retirement except some meaningless advice like playing golf and relaxing.

Odd, you say? Try having your script stop 25 years earlier. That is the plight of the early retiree. We have abandon our script and walk off stage left before the audience is ready. Then everyone, including ourselves, is wondering: what the hell happens next?

Early retirement only offers the terror of being bound by nothing. The conforming part of your life is gone. The structure of your life is blown to bits when you leave work and your forced for the first time in a very long time to actually face some of the hard questions: who am I? What am I here for?

Facing a sea of endless choices it becomes easy to get lost in the options. What time would you like to get up? What does it mean to achieve something when playing a video game was all you did for a day? Is that productive? Does being productive even matter? Then you finally have to face the big question of your day: do I need to take something out of the freezer at noon to make supper?

In some regards I understand why people continue to keep working. It’s easier to keep pushing back that retirement date and just work. You may not like everything about your work, but it does provide some meaning to your life and some structure to most of your week with no effort at all. You know when you have to get up as you have to plan when to arrive at work, you know how long your lunch break is, you have a series of tasks provided to you by your thoughtful workplace which also provides a wonderful metric on your progress so you know if you have been productive or not.

But the early retiree doesn’t have that so what do they do? There are various ways to impose some order to your life and the most obvious solution is to take the nod from work: borrow order imposed by others. In my case, my wife’s plan to continue working provide a nice excuse to get out of bed and get dressed each day. Of course, after that I’m on my own but at least it’s start. The kids will of course also contribute to the structure of my week by having activities that I can get involved with or at the very least take them to.

The other way to insert some meaning into your life is pick a mission. Unlike your job where that is approved by a board of directors, you get to define your own mission statement. It can be to help save the world or be as minor as been the best napper in your house (beating my dog on that could be a serious challenge). The point is you can choose your mission and then change it as you like. You could spend a year learning a new language and pick a new one the year afterward. Or in my case, you can write stories about things that never happened to people that don’t exist in pretend worlds (see isn’t fiction fun).

Then finally there is the last way to assign meaning to your life: choose not to. Instead just let the days roll past and relax. All this talk of life purpose may make your head hurt. So just get up when you want, do what strikes your fancy and sort it all out later on. While this may work very well as an initial strategy while you detox from work and discover the cool thing of actually having a enough time in the day to exercise, get enough sleep, eat right and finally floss everyday. Meaning after all is arbitrary, what we focus on life is our meaning. You can pretend otherwise, but by choosing to watch TV for 20 or more hours a week you have chosen that as your meaning to life. I didn’t say it was a good answer, but it is an answer.

So dear early retiree, chose wisely. What you do is your life.

A blog about early retirement and happiness