The Truth About Early Retirement

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FIRECracker

FIRECracker is Canada's youngest retiree. She used to live in one of the most expensive cities in Canada, but instead of drowning in debt, she rejected home ownership. What resulted was a 7-figure portfolio, which has allowed her and her husband to retire at 31 and travel the world. Their story has been featured on CBC, the Huffington Post, CNBC, BNN, Business Insider, and Yahoo Finance. To date, it is the most shared story in CBC history and their viral video on CBC's On the Money has garnered 4.5 Million views.
FIRECracker
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Railay beach, Thailand

Back in 2015, when we blew up our “safe” conventional lives and retired at 31 to travel the world, our friends and ex-coworkers had a few choice words about the whole thing:

“You’re going spending 24/7 together?! Are you nuts? You’ll kill each other.”

“Travelling the world for a whole year? That’s expensive. What are you going to do when you run out of money?”

“Retirement is so boring. You’ll be fleeing back to work in 6 months. That’s what happened during my sabbatical.”

The woman who predicted we’d kill each other? She once asked her husband if they could have lunch together because their offices were so close, and he responded by falling on the floor laughing.

The guy who said travelling the world is expensive? He regularity drops $1800 on home office chairs, has never stepped foot in Southeast Asia or Eastern Europe, and thinks riding the subway in Vienna is “roughing it” because the people there are “too shabbily dressed for Western Europe.”

The dude who said retirement is boring? He spent most of his sabbatical on the couch in his underwear, watching Netflix for 6 months.

A lot of judgy people will tell you why your plans won’t work and why you’ll fail on your path to financial independence.

Ignore them.

What they are really doing is questioning their own life decisions and fears. And a lot of these fears are myths with NO basis on fact. And as someone who ACTUALLY retired early and travelled the world, let me debunk these one by one:

Retirement Myth #1: You and Your Spouse Will Kill Each Other

Silver leaf, White Temple, Chiang Rai

While I get that not everyone wants to spend every waking moment with their significant others (psychopaths mostly), if you need to keep a job JUST so you can avoid your spouse for most of the day, your relationship probably isn’t that strong.

And sure, Wanderer and I have our share of disagreements when we run into obstacles, but working together to solve problems makes our relationship stronger, not weaker.

Relationships aren’t perfect and you do need to work on them, but avoidance isn’t the answer. Instead, work together to overcome challenges and share triumphs. Why? Because that feeling you get when you succeed at something you built together? Priceless.

So not only are Wanderer and I NOT killing each other, we’re KILLING IT (*insert slow sarcastic clap*).

Retirement Myth #2: You Will Run Out of Money

2 for 1 happy hour draft beers $0.63 USD each, Sihanoukville, Cambodia

I always find it mind-boggling when people think early retirees would blow through their portfolio once they quit their jobs.

REALLY?

How do you think we got here? By being reckless, impulsive, and NEVER EVER tracking our progress?

Like somehow a 7-figure portfolio and financial independence just MAGICALLY fell into our laps?

Nope. We got here by tracking the shit out of everything, and are we going to change that any time soon? HELL NO!

In fact, by carefully controlling our costs (like we did for the 9 years it took to get here) we were able to travel the world on $40K CAD/year, which comes out to a 4% withdrawal rate, which means we can continue travelling the world FOREVER.

And since we left our jobs, not only did we NOT run out of money, our net-worth actually went UP by $27,000 (and even MORE if you include our side income from coding and writing)! This is because we structured our portfolio to give us a yield of about 3% and kept our traveling costs within 4%, leaving most of the capital value to grow. So yeah, we got PAID to travel the world. Boo-yah!

If you read our Investment Series, you’ll know from the “Sequence-of-returns-risk” post that the biggest risk to depleting your retirement portfolio is withdrawing during a downmarket in the first five years. That has not happened and will not happen, because we can live off the yield without touching the principal.

RUN OUT OF money in retirement? HA! More like MAKE money.

Retirement Myth #3: You’ll be Bored to Death and Desperate to Go Back to Work

Book signing, Book Expo America in New York

Before we quit our jobs, we started writing on the side so that when we did quit, we could pursue our passion without worrying about money. This has paid off in SPADES. Not only did we publish a children’s book with Scholastic, the biggest children’s publisher in the world, we also ended up connecting with a non-profit to develop a book discovery app. And now that we’re no longer working, we have all the time to work on these passion projects and connect with like-minded peeps while travelling the world.

We’re not bored, nor are we desperate to go back to work. In fact, we bound out of bed every morning, excited to code and write.

You can CHOOSE to do nothing, get bored, and go back to work just to have a “forced purpose.” Or you can use this opportunity to LIVE the HELL out of your life and follow your dreams with relentless passion until you succeed.

Which one will you choose?

As human beings, we don’t learn by overthinking or guessing, we learn by DOING.

Had we listened to all the haters, we would’ve never discovered how much LESS it cost to travel the world than live in Toronto. We never would’ve realized that we could travel FOREVER on 40K/year based on the 4% rule. And we definitely wouldn’t have have met so many expats and entrepreneurs living unconventional lives (many with KIDS) who are MUCH happier than our friends and co-workers back home.

Now, you might be thinking, well, clearly we’re all very privileged, and we should be thankful that we even have jobs, and not bother to question the status quo because living in the first world is already a privilege, and people in other, less developed countries, can never do this.

Okay, first of all, if you had opportunities that others don’t, why would you throw it away by following the status quo? Wouldn’t you want to free up your time so you could use it to help others? Or spend time with your kids? Wouldn’t you want to use your passion to help the world rather than be stuck in a job making money you no longer need for the sake of making money? A job is a means to an end. It doesn’t define your whole life. And secondly, don’t assume that only people who live in so-called “first world” countries can do this.

I leave you with this article from the Bangkok post:
The Simple Life

If this guy, who grew up with nothing, ended up finding his passion and living a simple life, even though he has 6 kids to support, what’s stopping you?

Come meet us at this year's Chautauqua UK! Details here

101 thoughts on “The Truth About Early Retirement”

    1. Yes, that is a good one! And you’re definitely killing it on that front 🙂 Will need to pick your brain if we end up having kids.

      1. You should create a post on how having kids will affect your finances including potencial expenses and child benefits etc. A simulation of sorts to find out the costs you will incur.

    2. Also, the one about your kid will be lazy because you don’t spend all day at work.
      Actually, I’m not sure how this one is going to turn out… 🙂

  1. One of the first things people ask me when I tell them I retired early is “how does your wife like having you at home?” The implication is that she’ll hate it.

    Given that I’m now doing more housework and cooking and that we get to take a couple hour-long walks every day, I think she likes it just fine. 🙂

  2. Love the post and agree with it all. I do try to be sympathetic to people who react ignorantly to an extremely early retirement, because it is truly some Plato’s cave sort of stuff. The gap between normal life and FIRE is too great — lots of push back is the inevitable result, but each one is actually planting the seeds of change, or at least acceptance. As the traditional worker hears more and more evidence that FIRE can work, then the push back and myths will be less.

    As you noted, early retirement isn’t going to solve any problems that are already there in your life. If you lack purpose, leaving work isn’t going to create it. If you don’t want to see your spouse that often, spending 24 hours a day together isn’t going to magically sound wonderful all of a sudden.

    1. A big part of why people don’t want to quit their jobs is health insurance.

      “In 2016, the average total monthly premiums for group health insurance were $536/month for single coverage and $1,512/month for family coverage.”

      https://www.zanebenefits.com/blog/bid/97380/faq-how-much-does-individual-health-insurance-cost

      $1,512 * 12 months = $18,144 per year just for insurance!

      Hard to live on $40K when you have to pay that much for insurance. You can, of course, choose not to have insurance at all, or just buy a very cheap, basic plan, but then you’re at the risk of having one medical disaster wiping out all your savings—all it takes is one.

      1. Not such a big problem in Canada thankfully. Our MSP in BC is currently around $150 a month for a couple and not much more for a family of 4. Sure, you won’t have extended health benefits like dental and life insurance, but you will be covered in case of any emergency treatment.

        Also, I run our office extended health benefits plan and even if you did want very good coverage including 100% dental, Life, LTD and all sorts of other things like therapy, massages, eye care, hearing aids, private hospital beds etc. it’s still probably around $4,000 per year per couple right now. I highly doubt many would need this level of coverage in retirement though, but it’s not ludicrously expensive if you did.

        1. (1) “Our MSP in BC is currently around $150 a month for a couple and not much more for a family of 4.”

          Would you get coverage if you get sick while living in other parts of the globe?

          (2) “…it’s still probably around $4,000 per year per couple right now. ”

          That’s a very good deal, if you can get that even after separating from your employer and in retirement. Again, does that have global coverage?

          I would love to see a post (or a series) on How to Bulletproof Your Finances from Medical Disasters—especially for people currently living in the US.

          1. You are only eligible for MSP if you are a Canadian Resident in BC and you live in BC for 6 months of the year at a minimum, so no if you live in another country/province permanently you would not be covered. Actually now I think of it, the cost of MSP is based on income. If you earn $0 – $22,000 MSP is free, so if that’s the case once you are financially free you may even get medical insurance for free if your investment withdrawals are below $22,000 (perfectly doable if you build up your TFSA, as those withdrawals are not classed as income).

            As for the extended benefits, I’m not too familiar with them outside of employment. I know our retirees are able to take advantage of a “continuance” package whereby once they leave the company they can keep their benefits and pay for it themselves. I’m not sure if the fees are similar though, but I can’t expect they would be considerably more. I know most if not all of our retirees have taken it once they’ve left.

            Also, in retirement you generally don’t need LTD as that is a benefit to cover loss of income from work, so your benefits might even cost less as you aren’t covered for as much.

      2. Americans DID have a good solution for that called Obamacare. Because your income drops to basically 0 when you retire, you would have qualified for either Federal subsidies to pay for your premiums. Now, of course that’s all going away.

        The Early Retirement community (and I guess, everyone else in the USA) is in limbo as we wait to see what your government replaces it with. After that we will reassess the math.

    2. That’s a good point. Hopefully, readers will get less and less pushback as FIRE becomes more mainstream. As nice as it is to sympathize with the negative people, it’s also NOT helpful for people who are trying to stay the course. Luckily, as online communities have developed over time, it easier and easier to find your tribe and not be derailed by said people.

    1. I doubt that. People who love their jobs and are genuinely happy don’t waste their time judging other people. They are too busy being happy. They also don’t read FI blogs if they have their whole lives figured out and don’t need any help.

      1. Hahaha! True. And much of it has to do with fear of the unknown. Fortunately you took the plunge to FI and have been able to report that the grass really is greener on that side.

      2. You the bomb FC! I love that response. People wanna attack, pick apart and shut down what scares them or falls outside of what they themselves don’t understand or haven’t figured out yet. Human ego is usually one of our worst enemies (i.e. “if I haven’t figured this out yet then it must not be realistic or possible…those people must have something wrong with them”). That’s ego talking. Good post.

        1. Ha ha. Thanks, Jeff. Yeah, our human brains are wired to abhor change. So in order to avoid the pain of changing or stepping into the unknown, we’d rather find a way to explain to ourselves why the change is bad or why we don’t need it. But in reality, if we were perfectly happy, we wouldn’t need to justify anything.

  3. Interesting tidbit:

    From the year you were born, assuming your parents had the foresight (and means) to contribute $10,000 each and every year into some type of account that pays an annual rate-of-return of 7%, that account would have a balance of about $1,000,000 when you’re at age 31.

    You can then retire at age 31.

    (P.S. I do envy those families that have been building up wealth like this generation after generation.)

    1. I thought about this a few weeks ago when I got a piece of snail mail from my previous tenants (one who works at a major bank) from an investment brokerage addressed to their child (who is no older than 3 years old). Clearly this is one way that wealthy people maintain wealth – they build it right into the life of their child before or at birth. By the the time that child is ready for university she is likely not going to have to work to pay for tuition. If the money is left untouched, she may very well have hundreds of thousands if not a million dollar net worth at the age of 31.

      I wish my parents had the means, foresight, and investment knowledge to do this for me. Should I ever choose to have a child, I will set it up this way for him/her.

  4. Very inspiring post as always. I wish I was in the situation to confirm from first hand experience that those are only myths but they all make sense. Especially number one: both of you seem very much alive 🙂

  5. Retirement myth #3 is the one I hear the most – that you’ll be so bored you’ll have to go back to work. My thought is, okay, if that does happen, what’s the problem? Oh, it must suck so much to have to go back to work because I’m bored .

    Where I live, you can take college classes for $10 per credit if you’re over 62 years old. I don’t ever hear people saying how awful that would be to do have to take college classes FOR FUN. In fact, people say that sounds great.

    Seems a lot better to go back to work because you think it’s fun, rather than going to work because you have to do it in order to survive.

    1. Exactly. I don’t even know why that’s even a fear. Even if you’re bored and end up going back to work, still better than being FORCED to work and not having any options. At least you get some time off. What’s wrong with that?

  6. I think it’s important to ask yourself why you are gunning for an early retirement. It’s true that some people will not enjoy retirement all that much.

    The thing is, financial independence and retirement are different things. FI simply means you can do whatever you want, you can and likely will still work and earn money, you just don’t have to. Retirement, to me, means you will no longer work, period.

    The key is to ensure you have things to do when you do pull the plug on working. I think most people chasing FI will have things to do.

    The problem occurs when people are chasing financial independence because they hate their current life. For many it’s just a form of escapism, the sooner they can retire the better. That’s all well and good, but you have to ask yourself what makes you happy. Can you fulfill this happiness just by stopping working? If you have a plan once you reach financial freedom, great, but if you’re just doing it to escape your 9-5 without any plan after that, you might find yourself somewhat bored and miserable.

    1. True. I don’t ever want to “retire”, just be financially independent. I don’t want to travel around the world (been there, done that), don’t ever want to “stop working”, ‘cos I like what I do.

      1. Then by all means, continue doing what you love and being FI. The key to happiness is to live a life you want, not someone else’s.

    2. That’s true. I do agree with you that running away from your problems doesn’t solve them. You just end up with a new set of problems. The key is to run towards something rather than simply running away from your problems. I get that some people may not want the RE part of FIRE. They simply want to become FI and have the option of quitting.

      In my case FIRE worked out better. I really enjoy the flexibility and not having to follow a 9 to 5 schedule and not reporting to anyone. But that’s just me 🙂

    3. I think that most people who are gunning for FI do so specifically because they have goals and passions outside of work that they cannot wait to pursue. FI just gives a person more options to continue working or not to.

  7. Hi! I’ve heard on Early retirement extreme that early retirement seems to fit some personalities better than the other. He classifies himself as an INTJ- the type who unconsciously plans super far in advance and constantly runs simulations in their head, coming up with strategies and contingency plans.

    Would you be able to take a test and see if it’s true for yourself?

    https://www.16personalities.com/free-personality-test

    Or maybe you know your type and can just share what it is? It’s usually done as part of job interviews as well.

    1. Fun quiz! I got “Executive”- ESTJ and Wanderer got “Commander” – ENTJ. I guess that’s why we get along so well…because of our obsession with facts/logic over emotion and achieving goals.

      I’m not sure how accurate it is on the “values tradition and rules” aspect, considering how much I love breaking rules and hate tradition 🙂

      It is curious that all 3 of us has the “TJ” trait though. Maybe the commonality amongst FI-ers are people who like executing plans and picking fact over emotion?

      1. Surprised none of you is an introvert:)

        That’s probably why it’s hard to explain FI to others-

        most people are usually S- sensors (not future oriented)

        or F- feelers (influenced by emotions) or P- unorganized or scatter brains

        1. Makes sense. Life decisions (particularly financial ones) made on emotions are dangerous. Emotions are irrational and lead to unwise choices.

        2. I think I was born introverted but became more extroverted overtime (after I realized how much more successful extroverts are). It’s definitely hard to explain FI to F’s. For P’s, the disorganization can be helped with tools, and I’m an “S” but I’m still future oriented enough to make plans. But F? Very difficult. Kind of like the “It’s not about the nail video”: https://www.youtube.com/watch?v=-4EDhdAHrOg

          1. Do you feel drained after spending time with other people? Especially people you meet for the first time?

            Do you need alone time after that to think it over?

            1. I used to, but not anymore. Now I like meeting new people and finding out what they do, what they want, and what makes them tick. I think maybe writing gave me a goal to get to know people better because in order to create interesting, multi-layered characters, you have to understand people.

              1. I do find the test results change depending on when you do them. I’m the exact opposite, I use to be extroverted and now I’m more introverted. None of my friends or coworkers would ever describe me as introverted but it tires me out talking to people too much.

                I feel like a fake INTJ, the percentages are so marginal

                Introvert(16%) iNtuitive(56%) Thinking(3%) Judging(1%)

                FIRECracker did you stop feeling tired when talking to people after you stopped working or before that?

                1. Extroverted to introverted. Interesting! I’ve never heard of that before. Maybe people got more annoying over time so it got tiring talking to them 😉

                  After. When I was working, I avoided social events. Maybe because I was so tired from working and writing, I didn’t want to bother socializing. Now, I get super excited from meeting new people in different parts of the world. Never felt that excited when meeting new people back when I was working.

                  1. Yeah can’t tell if its from being tired or I became really introverted. I think at some point you do need to allocate a good amount of time to yourself in order to get certain things done. Writing, reading etc, there are many things I enjoy that can’t really be done in a group setting…unless we’re all silent and just doing our own thing haha

                    Maybe since you are retired, you have plenty of alone time so you don’t feel exhausted socializing?

                    Anyways, Merry Christmas to you and Wanderer 🙂

                    1. That’s probably it. I have more than enough time now so I don’t have to horde it like I used to. I can make time to get shit done AND be social. It’s awesome.

                      Thanks and Merry Christmas to you too!

          2. Ha. Maybe that’s why I still haven’t figured out how to mention my FI plans to my good friend who’s INFP…

            I’m yet another optimization-obsessed INTJ, and I can see that that makes me slightly out of step with most of the rest of the world, so mostly I just don’t talk about FIRE. I *have* told an ENTJ friend, who was enthusiastic about it. (These are actually the only two friends who’ve told me their personality types; it’s not really something I normally know about people.)

            There’s an argument that personality typing is little better than astrology, but I think there must be something more to it, given the preponderance of certain personality types in this space. Also I have so much in common in terms of outlook with my ENTJ friend, despite very different backgrounds (and her inexplicable tendency to prefer socializing all the time over indulging in long stretches of delicious solitude).

            1. Generally I don’t pay much attention to personality tests (I think that’s the logical part of my brain talking), which is why I HATE horoscopes, but I think the article analyzing the Myers Briggs results of FI bloggers is quite interesting. Definitely more scientific than most of the other personality tests I’ve seen.

              That being said, it doesn’t mean someone can’t succeed at FI just because they don’t have the “TJ” traits. It just means their motivation and method to get there might be slightly different

              This test does, however, shed a lot of light on how my friends think and why they think that way. And I think in your case, it does explain why you want to tell your TJ friends about FI, but not your FP friends.

              1. I don’t mind horoscopes – they’re silly, but usually harmless – but I absolutely despise things like homeopathy. Relying on the placebo effect is not a valid medical approach! You cannot think yourself better from cancer!

                I am still planning to tell my INFP friend because I don’t want her to be completely shocked when I do this, and I also feel she should be aware it’s an option in case she *is* interested herself…I just have to find the words; the words I used with my other friend are not right. 🙂

                1. At first I didn’t pay attention to personality types- I saw Jacob from ERE post that INTJ are draws to personal finance and early retirement.

                  Then I tried to talk about it from people at work and I they probably think I’m crazy. Then I realized when we talk it’s like we speak different languages. They said you can’t plan in advance cause you don’t know what’s going to happen. I asked if they want to look at my spreadsheets, statements, progress so far, assumptions or read a couple of books and articles and let me know if I made a mistake. No they say, they just don’t “feel” you can plan ahead. So now I know I should try to spot a feeler and don’t shove math or facts into their faces.

                  There’s also sensor problem for me. Usually for me it’s them going into so much detail, noticing and mentioning every tiny smell, texture, something being off, someone doing something, almost shoving you with information that “intuitives” don’t really need. Family conversations with sensors usually go like this: James married Janet, Peter went there, Joanna gave birth etc just throwing things that happened at you. At this point I go into my head and imagine what it would be like if I could fly.

            2. Interesting, because I am actually an INFP and I am most definitely into FI. 😛 However, I am borderline on both F and P–I think my innate personality is FP but due to my parents (typical strict Asians) they drilled it into me that “TJ” is the way to go (I feel that “TJ” traits very closely match the Asian ideal, so growing up in this environment may have changed my personality).

              I actually tested INTJ when I first took this personality test (way back in high school, when I “conformed” much more to what my parents wanted me to be like). Also, when I first started dating my boyfriend (an ISTJ who is also very much into FIRE), he guessed that my personality type was INTJ as well, so it seems like this is the personality I “project” to the outside world. (I suppose I should thank my parents since I do feel that TJ is far more conducive to planning for FIRE than FP is.)

              Anyways I guess I went off on a tangent but the point is, maybe not all hope is lost for your INFP friend. 😛

              1. That is interesting. I can see how environment could affect how strongly you lean in a particular direction, esp if you were borderline to begin with.

                I do think my friend might be interested – she has commented that it would be nice to be able to do things like take long periods off work to go travelling. (Which is why I want to have this conversation with her, because there is a way she can do that! If she really wants to!)

                I probably need to focus on stuff like that and refrain from geeking out too much about the math and spreadsheets when I tell her about it. I suspect. 🙂 Though you need to talk about math for the idea to be credible. But maybe the intro shouldn’t be, “See this cool graph?” (from MMM’s “shockingly simple math” post.)

                1. Absolutely! One of the main reasons I am interested in FIRE is so that I will have the freedom to do whatever I want and go travelling. =) I actually think the idea of FIRE would very much appeal to INFPs; we are “dreamers” and quite idealistic–and what could be more ideal than a life of FIRE where we can do anything we want, free of constraints? I can’t see your INFP friend enjoying a life filled with the monotony and bore of work (unless perhaps if she works in a creative field that she likes). However, perhaps for most INFPs, they are lacking a bit of the TJ aspect that enables them to actually get down to business and execute a plan towards FI. (Again, I think my Asian background helped because I totally geek out over detailed Excel spreadsheets and graphs…which perhaps isn’t the case for other INFPs? I’m not too sure since I don’t know who else is INFP in my life…)

                  We are also perfectionists though, so if she really does decide that FI is an ultimate goal for her, I think she will have the drive to overcome the lazy FP side dragging her down. (No offense meant–after all, most of the time I am a lazy INFP myself! :P) Definitely focus on the wonderful end-goal of FI first, then when she realizes how amazing her life would be with FIRE, start to expand on the details and explain what she actually needs to do in order to accomplish this goal.

      2. I don’t know, I’m a -TP type, but I’m still progressing well toward FI. However, I do find that my approach and motivations are a little different than what I read about on most blogs, and it definitely leans more to the “improvisational” side.

        I don’t tend to track my spending closely on a month-to-month basis. Originally I did a “spending audit” where I tracked everything for a few months, and used it to identify opportunities to spend less, which took care of most of the low-hanging fruit, now I just make those assessments on a case-by-case basis and don’t really keep track. As long as I’m not spending willy-nilly, I find I save more than enough, so I also don’t worry about spending on something that legitimately brings me joy.

        I also don’t have a long-term goal pushing me to FI, it’s more about increasing options. It’s the same reason I’ve always been extremely debt-averse: debt is leverage, leverage means that someone else controls what you do. Ultimately, getting to FI just means that I can do whatever I want at that time. It might be retiring and traveling, it might be staying on at my job and using the extra money to splurge on dumb stuff, it might be going into semi-retirement as a part-time consultant, it might be pursuing a totally different form of work. Who knows? I’ll find out when I get there.

        Sometimes I worry that I don’t stick to this stuff closely enough, but I’m content enough with the fact that I’m in a much better financial situation than most people my age, and probably most people older than me as well.

        1. I think your approach is fine. I suspect whether or not FI-bound people track spending down to the dollar has more to do with whether we find that *fun* than anything. Speaking as someone who does track at that level, and has for years, but has occasionally thought that it might be healthier to be more laid-back about it. But it really is…*cough*…fun, in a how-much-more-can-I-optimize-my-life-to-reach-my-goals-sooner sort of way. 😛 And I certainly do still spend money on non-necessities that bring me joy – that stuff’s important!

          1. “*cough*…fun, in a how-much-more-can-I-optimize-my-life-to-reach-my-goals-sooner sort of way.”

            Ha ha, this is how I think as well. Optimizing is the most fun thing ever!

        2. Very interesting! This definitely goes to show that everyone has their own motivation and methods to get to FI, and one size doesn’t fit all.

          Keep doing what you’re doing and don’t worry about not sticking to everything closely. You’re pretty flexible about what your retirement (or non-retirement) looks like, so your path to get their can be pretty flexible as well. It’s only an issue if someone wants something really specific and is inflexible, but their plan to get there is wishy washy. Then the risk of failure is high.

      1. Wow! This is really eye-opening. Especially this part: All 3 types have “TJ,” which are very common traits in managers and leaders. TJs are task-oriented doers who like to plan ahead.” I think that’s pretty accurate. You need to have those traits to stick it out long enough to become FI. I also find it interesting that ESTJ and ENTJ were predicted to have the highest salaries. Hm…I guess it’s the extroversion, plus the logic over emotions, plus the get shit done personality?

        Thanks for sharing! Which type are you?

    2. That’s a great assessment. I’m also an INTJ, so interesting that such a small population falls into this bucket, yet in the link below about 30% of FIRE bloggers were in this category. That’s a pretty big discrepancy.

      1. That’s cause of the introverted intuition- they did a survey and found out that INTJ planned the most into the future- like 15 years more than the next type. Cause we can clearly picture ourselves already retired and the brain just runs simulations all day every day on how to make it happen.

  8. You know what my step-mother said to me when I told her about my FIRE plans last year? She was saying I shouldn’t be so frugal. I told her it was so that I could be home more and spend more time with my family, actually get to see my 1 year old son grow up and be a super dad to him instead of being stuck in a cubicle. She said “They don’t want you at home!” (Not true, BTW.) That one sticks with me. The hate against breaking away from the norm is real.

    1. Yikes. That’s hurtful. 🙁

      My mother’s response to me becoming FI and living the life of my dreams? “So what, you don’t even have a house.” I stopped caring what she or other people thought after that. They are beyond reason.

      The only way you will live a happy life is to live your own life, not someone else’s.

      Stay strong, stay the course!

      1. How does she feel one year later?

        I noticed many Asian people care a lot about appearances… you called LV bags of shit and I agree but look at how many people love their luxury brands and their bao bao

        1. They can love their luxury brands/bao bao (haha) all they want. As long as they don’t push their spending habits on me, we’re cool 🙂

          Now that I’ve been retired for more than a year and clearly NOT going into financial ruin, my mom’s softened her stance. I guess it’s just really hard for traditional Asian parents to understand this whole FIRE thing. That’s okay, everyone’s entitled to their opinions. As long as we stay strong and not let it dissuade us from the life we want to live, we’ll be fine. That’s why online FIRE communities are so helpful. If JL Collins and MMM hadn’t done it first, I might have been too scared and continued following the status quo.

          1. Yes, Mandarin parents haha

            I wonder if your parents are aware how stressed you were at your old position? I noticed a lot of parents always beam when they say their kid is a doctor or lawyer while I cringe a bit thinking about the high stress and incredibly high financial investment it takes to go down such careers.

            On a side note – was Wanderer as stressed as you in his old position? I hear IT/software are less stressful relative to the pay to other fields (ex: finance). Of course this varies depending on the company but it’s just a general statement I heard from a few people

            1. I doubt it. I told them about the stress, but as an Asian you’re supposed to wear your stress like a badge of honour. They don’t know about the panic attacks or the lacks of sleep for weeks on end though.

              Wanderer deals with stress and anxiety way better than me. Also he’s a much better coder so that helps.

              1. Wanderer sounds like he enjoys tech quite a lot, did Wanderer ever consider working longer while you quit? But I guess if that happened, he wouldn’t be able to travel with you etc.

                You and FS’s blog have got me really thinking about how I need to do some planning and crunch some numbers – are you still doing the analysis via emails? I don’t see it in your contact area anymore 😮

  9. If I only knew now 10 years ago. Keep up the awesome posts. I might have even convinced my wife that this FIRE stuff might be for us because of a couple of your blog posts.

    1. Thanks, Jason! As the Chinese proverb goes: ““The best time to plant a tree was 20 years ago. The second best time is now.” So you are not too late!

      1. Hehe funny, I also just read this quote in The Wealthy Barber Returns last night =)

        As he said, the second best time is 19 years ago!

  10. “This is because we structured our portfolio to give us a yield of about 3% and kept our traveling costs within 4%, leaving most of the capital value to grow. ”

    FC, can you explain this one for me? If you are yielding 3%, and spending 4%, aren’t you eating 1% of your capital? And when you say yield, do you mean dividends? (New to investing since I’ve been following your blog in August so still trying to figure this all out…)

      1. Soooo…. the dividends are yielding 3%, and despite our retired friends eating 1% of their capital, their capital gains are still above this. Am I getting this right?

        1. Probably better to no differentiate between dividends and capital gains- unless it’s for tax purposes.

          Both dividends and cap gains are your capital. You had $100 and you made $3 from dividends and $4 from cap gains and now you have $107 (your capital). You withdraw 4$ and you still have $103- more than you had before. Who cares where the money is coming from:)

    1. When I say 3% yield, I mean dividends + fixed income. And yes, 1% would be coming from capital. That’s why i said “leaving MOST of the capital value to grow”. Since we set up the 60/40 to give us a higher yield, we’re mostly relying on dividends and fixed income instead of capital growth. And in the case of a stock market downturn, we can easily decrease our spending from 4% down to 3%, which means we wouldn’t have to touch the capital value at all. Hope that clears things up 🙂

      1. Yes it does. Thanks Eugene and FC. Trying to wrap my brain around this. I’m 3 years away from cashing in my commuted value and I have to admit I am petrified. I am trying to figure out if pulling down 4% of this lump sum (plus some other conservative investments, plus some of the equity in the house) will be enough to survive… This blog is my life line right now! 🙂

        1. I feel you! I was also terrified before pulling the trigger but turns out retirement in reality is WAY less scary than our brains imagine it to be. Did you know that the average retiree household income in Canada is 42KCAD/year? That’s AVG, not lowest. So that means you need way less money in retirement than you think. So many working costs go away…commuting, childcare, dry cleaning, eating out, “decompression” costs, etc, etc.

          1. And many of our working costs would indeed go away… we have crazy commuting/bus fees, almost $700 in childcare (afterschool program) every month, last minute lunch purchases… but we still have little ones at home (4, 6 and 14) that come with some expenses that have to be accounted for. Hey, if you ever feel like doing a reader case study for a public servant with a pension, hoping to pull it out before 50, then I’m your gal! 😉 You guys haven’t done a commuted value vs. pension analysis yet, have you?

            1. 3 kids wow good for you! We decided to put it off for a while till we are 29 and about to retire… And I think Mr. Tako had a post where he checked how much he’d get in child benefits after retirement and it’s pretty substantial. Now when you work you barely get anything but if you retire your income drops or goes under the radar (TFSA + basic personal amount) so you can get like $9000- $10000 per year in child benefits. And since we’ll hopefully be retired our day care costs will be $0. So there will be probably $3,000 or $4,000 extra that we can plug right into the RESP for their education and max that out… but in Ontario they have now free education if you are early retired and have under $50,000 family income.

              So I don’t get it how all those short sighted people criticize Firecracker and Wanderer – they can have 20 kids if they want and the government will give them more money then they will ever need.

              1. That’s smart to wait until you are FI before having kids. I followed the more traditional path… spend 8 years in university, exit with a $30,000 debt, get a job with a pension and benefits, buy a house, sell, buy a bigger house, make babies, sell, buy an even bigger house in the suburbs and 2.5 hours of commuting every day, and then complain all the way to retired. At 44, I am completely burnt out and dying to spend more time with my kids. I was following this typical boomer path until reading this blog in August… now my world has been tipped upside down. I’ve started investing, I’m budgeting using Mint, I’m spending way less, and I’m constantly trying to calculate whether I can actually retire now. Trying to convince the husband (who has also always been on this predictable and typical path). The commuted value makes it harder because it’s not cold hard cash sitting in an account… plus you get to a certain salary and you can’t imagine it not coming in every two weeks.

                By the way, I can’t find any info about free education in Ontario… any links you can provide Eugene?

                1. I didn’t do a thorough research since I’m in BC but here’s what I read

                  http://news.nationalpost.com/news/canada/canadian-politics/is-tuition-really-going-to-be-free-for-some-ontario-students-despite-the-skepticism-heres-how-itll-work

                  By 2017/18, students from households making less than $50,000 a year will pay no tuition, and at least half of those from homes taking in less than $83,000 will also pay no tuition.

                  So by this definition it seems like people in FC situation who can control income and live on let’s say $40,000 can get free tuition themselves and for their kids.

                  Let me know your thought’s on this.

                  Oh by the way when is the earliest you can use the commuted value?

                  1. Wow, I hadn’t heard about this. We have a few years until our oldest starts university so I’ll be watching closely to see how they work this out. It could certainly be interesting and another nudge to take the retirement plunge.

                    As for my commuted value, the earliest one can pull it out is after two years with the government; of course, at that point in time, it’s not worth much. But since I’ve been with the feds for 16 years now, the amount is quite big, like huge! How it works is that I have to pull it out before I turn 50, otherwise it is locked in as a pension. That pension is quite small at 50+, but then grows but 5% each year until you reach age 60 or some other calculation that I forget right now. So if I pass age 50, I basically have to stick it out until 56 or so for it to be worth $40,000 a year. Pulling out the commuted value means that a portion goes into a LIRA to be invested, while the remainder is taxed, mostly at 46% (ouch!).

                    1. Yes the tuition situation makes me want to move to Ontario just to take advantage of it (and I might). Wouldn’t it be cool- learn anything you want without having to think about how you can make money out of it or worry about student loans. Or saving for kids education- makes RESP kind of irrelevant- it’s easier to designate one spouse as a stay at home parent and take advantage of free tuition. Kind of perverse incentive in a way but why would we complain.

                      Wow that pension stuff seems over complicated/boring:). It’s a lot easier with just RRSP/TFSA. Max out RRSP then TFSA. Early retire- use RRSP under basic exemption – supplement with TFSA. Then get OAS+GIS (since you are considered a low income) and supplement with TFSA (not considered income) while letting RRSP grow again. This way you avoid most taxes. Not just that but you’ll get all the low income goodies- max child benefits/ free tuition/ Guaranteed Income Supplement/ no Health Insurance premiums in BC and the list goes on and on.

  11. I have to say that your blog is my favorite of all of the early retirement blogs that I follow. You have such a way with words! I am a ENTJ-A and I am a successful senior executive making gobs of money, so there might be something to this personality and success thingie. I am also a woman. I love reading about how you are rocking early retirement and I hope to join the ranks on July 1, 2017! I CANNOT WAIT.

    1. Wow! That’s high praise 🙂 *blushes*

      Thanks for reading and rooting for you to join us next July! *ONE OF US! ONE OF US! ONE OF US!*

  12. Awesome! Life is what you make of it. Retirement is a tough transition when you’ve been in the work force for 40+ years. Actually, I think early retirees have it easier on this front because we are less indoctrinated. These myths are more true for the traditional retirees. Maybe we should come up with some ER myths. 🙂

  13. Great post! There are so many haters out there that have been programmed to think and act a certain way. If you step out of the box, they’re right there to try to smash you back in it. People have this idea that you have to win the lottery or receive a large unexpected windfall in order to retire super early. The thought process of, “maybe I don’t need to indulge every want that crosses my mind” has never occurred to them.

    1. Yup. That’s exactly it. They don’t want you to step outside the box because it makes them question their own choices. The longer you’re retired though, the easier it is to ignore the haters 🙂

  14. You are such a “bad ass” writer and I love love all your posts. Thank you for the great encouragement all the time. I did the test and I am an “ESTJ” as well 🙂 Sometimes, I feel like your lost twin except I am nowhere near as cool. Our goal is to retire in the next 5 years by 31 and travel around the world. I am Chinese as well and my parents are interestingly super open-minded and adventurous. When I talk to them about early retirement, they get really excited and they are glad I am on track to do something they are not able to do (they are well-off life in China, but have to wait to be a certain age to “retire”).

    1. YAY! Long lost twins! 🙂 I’m so happy that your parents are supportive (very rare amongst Asians). I think this will definitely help you achieve your goal because ones of the biggest fears holding me back initially was disapproval from my parents. You won’t have to deal with that so the sky’s the limit for you!

  15. Just now catching up on your posts. Great read. Critics are going to tell you why you’re wrong and you can’t do anything more than prove THEM wrong by example. 🙂 Keep living the good life!

    I know we’re enjoying each others’ company in early retirement, and when we don’t, there’s individual activities we enjoy (and we have more than one room in the house and a whole world out there to explore).

  16. “You’re going spending 24/7 together?! Are you nuts? You’ll kill each other.”-

    Depends on the marriage. A lot of people get married for reasons that will eat them alive later on. In North America we tend to thrive on the “self hate” principle, so if someone actually wants to marry you, it is cause for celebration and the honeymoon period lasts for potentially months, following which the two people, who really do not know each other at all, try to “make it work” through various methods including having children and working a lot so they don’t have to see each other that much.

    Really people should just marry their best friends. Me and my wife did that and we are still going strong 11 years in. I still wonder about people marrying people they do not know at all. This is again probably a product of our society. We are taught about “romance” and “chance encounters” and we spend all of our lives looking for this. Meanwhile most of us know a perfectly good person of the opposite sex (or same sex) that we are very close to (and often best friends with) and could become romantically involved with, but we don’t because that is not the way it is “supposed to happen”.

    RE: “Third world” myth: I spent most of my 20s travelling and working in the so called “third world” and I can tell you that the myth of the superior “western world” is a load of caca. The only thing that the Western world is superior at is working themselves to death. The lack of culture creates a dense, angry society where material wealth is the only thing that matters. Children are taught to value their peers based on their parents’ social positions and net worth. People actually relate to each other by comparing the sizes and values of their houses. It is a load of crap. There is no way that anyone ever would be happy in a Society where the primary goal is to accumulate more money and stuff than everyone else, through basically screwing over your way to the top.

    For me, I trade in favours. My currency is I do something for you, then some day you help me back. This is the way that 99% of our planet functions. When all people are equal, favours are the currency.

    These folks who run this site are a cool couple. I like them. Usually due to my running various businesses and rental properties I don’t have a lot of time to actually write anything here but I do read this blog. I like these folks. They are a bit naive, but they have their heads in the right place. And they are travelling in Cambodia. That is cool. I spent my formative years teaching ESL in South East Asia so I know where they are.

    I am 43. Wife is 32. We will both be permanently retired by the time I am 50. Our method? Badassity. Total and relentless. North America is run by folks who want to steal your soul. You have to recognize this early and put up walls. Otherwise they will eat you alive, you will “retire” at age 70 or so, enjoy 3-4 years of the “good life” (when you are too old to care) and then you will die from all of the accumulated stress.

    1. “I can tell you that the myth of the superior “western world” is a load of caca. The only thing that the Western world is superior at is working themselves to death. ”

      Agree with this. People who think so-called “third world countries” aren’t worth going to haven’t actually gone there themselves. Or they just stay in fancy hotels and do the 1-2 week vacation thing. You don’t really get to know a place by doing that.

      I also agree with you on marrying your best friend. Worked out great for us!

  17. I think this is my biggest concern about going FIRE. I can barely stand my wife during the weekends, how can I be every day together and not going nuts?

      1. hahah You’re right. I mean I love her but she thinks men should be working all day long and not at home ..old mentality.
        What I’d really like to do when I reach FI is to rent a place on a beach and trade stocks (separated portfolio, not the FIRE) all day long ! Hell yeahh this is what I love to do and what I wanna do for fun and maybe get some extra income along the way

        1. Glad you emphasized the “separate portfolio” and not the FIRE one. *phew*.

          Hey, if you’re living on the beach, that’s not “at home” and doing what you love is considered “working”. So there you go. All her checkboxes checked off.

          Tell her to lay off the Mad Men. You are not Don Draper and this isn’t 1962.

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