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 Robert on November 15, 2010
This is a guest post by Robert, who lives in Calgary and works as a financial adviser. He is married, has three kids and plans to retire at age 35. Robert and his wife then plan to return to school and become teachers, eventually living and working overseas.
Last week, we discussed the story of a couple who gave away almost all of their $11 million lottery winnings. It raises the question of why the couple bought lottery tickets in the first place. I’ve participated before in an office pool, but I haven’t ever bought a lottery ticket for myself. Mathematically, I don’t understand the attraction. But I heard an explanation that, for me, explained a lot: some people buy lottery tickets as a license to dream.
What would you do if you won the lottery? Let’s suppose that the prize is $11 million. How would that money change your life? Many people say that they would quit their job, travel, spend more time with family and probably eat out more often with friends. What strikes me about this type of fantasy is that it sounds suspiciously like retirement. Fortunately, retirement for most people won’t take $11 million. But aside from that, most people will quit their job, spend more time with family, travel and relax with friends.
My first conclusion is that there’s no need to buy a lottery ticket to dream. Planning for retirement provides an opportunity to dream the same dream. Granted, retirement planning is more expensive. Instead of costing $2 or $5 a week, it might take $50 or $200 a week. The dream is the same, but the odds of success improve significantly from 1 in 1,000,000 to 1 in 2 (taking into account that life is full of surprises).
The dreams that a person has for either lottery winnings or for retirement reveal something about that person. The things they would do, if there were no constraints in their life, are probably the things that make their life meaningful. And so it would be unfortunate to wait for either a lottery win or even retirement before creating meaning in your life. Which leads to my last question: why not start now to try and do some of the things you dream about?
I know from experience that it’s not so simple. Most of us have a bigger imagination than we can afford to indulge. And many of our constraints are unavoidable, such as children or time commitments or other responsibilities. Let’s look at a couple examples of how this might work. Travel can be both expensive and time consuming. I know a family who decided that they would have a long, exotic vacation every two (or more) years, while spending their other holidays much closer to home. This allowed them to save up, but also to travel to places they dreamed of without waiting to be old. Spending more time with family requires taking time from other responsibilities like work. Some people choose to take additional holidays, take a sabbatical or even reduce their work week to achieve this goal. This may reduce their income, but it allows them to enjoy their children while they are young, instead of waiting until the entire family is old.
When I worked for a summer in Switzerland, I met a man who took the Concorde as frequently as he could over to San Francisco. He chose the Concorde because of the speed, which allowed him to miss less work. I asked him, if he didn’t mind sharing, how he could afford it. He responded that he loved spending time in San Francisco and that it was a question of priorities. His priority was traveling (quickly) to the west coast of the U.S. My priority, right now, is financial independence, so that’s where my money goes. And if a person looks hard at where they spend their time and money, it will either reveal what their priorities are. (As an aside, it may also explain why they feel out-of-sync if their resources not committed to their priorities.)
Dreaming allows us to be honest about where our priorities should lie. Rearranging our time and money resources to support our true priorities develops a sense of meaning in our life. People whose priorities don’t align with their job may look to retire early, where those whose priorities do align with their job may never want to retire. Where do you spend your time and money, that’s meaningful to you? If you were to make a change, where would you prefer to spend more time and money, with the expectation that it would make you more content?
Posted by Canadian Dream on November 12, 2010
So after knowing I’m going to fail at making my 2010 goal you might think I would give up making an annual goal in 2011. Yet I’m still going to do it. Why? Because I’m a firm believer that if you write down a goal strive for it and miss you will be further ahead then if you never had the goal at all. So here are my 2011 goals:
Goal #1: Pay down mortgage principal by $39,000.
This year I’m giving myself a little slack since I’m getting better at estimating what I can reasonably do in a year. So even when I really wanted to round that number up to an even $40,000 I resisted the temptation. For those of you wondering where this will leave me in the longer run I should be close to paying off my mortgage by the end of the first quarter of 2013 if I keep up this pace in 2012.
Goal #2: Self publish my book, Free at 45, by end of the first quarter 2011.
After working on/off on this project for the last few years I’m rapidly getting to the point I just want to get the project over with. If you have never written a book before let me be honest. It’s a LOT of work and more than anything just takes commitment to get it done. Depending on how badly this turns out or not, I might consider taking book proposals for launching a 2012 title.
How about you? What goals are you planning to do in 2011?
