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Singing: “It’s Friday Friday, gotta get down on Friday…”
Rebecca Black’s lyrics aside, I actually had no idea it was Friday until I got pinged from my asana to write a Friday post. That is one downside to early retirement—it’s really hard to figure out what day of the week it is!
But now that we know it’s Friday, you know what that means? Time for a reader case!
We get a lot of reader cases and this one really popped out at me because I was so impressed with what this couple has accomplished in just 10 months! You’ll see what I mean in a minute
Here we go:
Hi Wanderer and FIRECracker!
Thank you for creating the Millennial Revolution blog and inspiring so many people to take control of their finances and learn to invest to get more out of life!
My husband and I discovered Millennial Revolution about 2.5 years ago, which was just after we committed to crush our $76,000 of student loan and car loan debt over 12 months. We started obsessively tracking every expense and set a budget, and <10 months later we were debt free! We were so happy with our accomplishment and were more motivated than ever to achieve financial independence. Following the investment workshop blog, we both opened Questrade accounts and have been faithfully contributing for the past 20 months… well the last 6 months we haven’t maximized our contributions due to increased travel but are contributing nonetheless. Oh, and did I mention that we live in Vancouver, East Vancouver to be exact, and we pay $1900 rent for a 1 bedroom apartment. Yes, we could live further outside the city but we have lived in the neighbourhood for 10+ years and love it, so we give up other luxuries to compensate the expensive rent.
But here’s our biggest challenge – we love travelling and feel there is so much more to life than our day-to-day lives in Vancouver. Without sounding too whiny, we both don’t care for our jobs, the commute, or the “me first” Vancouverite attitude, and it is getting more and more challenging to continue. So why do we stay? We make OK money and are able to contribute to our portfolios.
We have reached the point where we either 1) suck it up and live it out until FI; 2) Move away from Vancouver to decrease living expenses and potentially our income (and risk being more unhappy due to location…we tried this for 3 months already and it didn’t work out so well); or 3) sell all our possessions and buy a van to explore the America’s followed by Asia, India, Eastern Europe… you get the idea (note: we would not touch our portfolio money, instead save $50K and estimate 18+ months of travel). Obviously, the logical option is to continue down the FI path but how does one rationalize the portfolio over sanity? We are both less happy than we use to be… back when we carelessly spent money on travel and whatever we wanted in the moment. Surely you have felt similar at some point in your journey to FI, so I am hoping you could comment on the following to help bring us clarity one way or another:
1) How did you manage the urge to drop everything and travel?
2) Should we just go travel and worry about the portfolio when we return? I mean, who knows what could happen to either of us in the time it could take to reach FI and we have many more years to work.
3) Could you calculate roughly how much we would set ourselves back if we travelled for 18 months on $50,000 (that we would save over the next 10-12 months). I did create my own retirement calculator and would like to calibrate it against yours 🙂
The breakdown (luckily, I have expense data for the last 30 months):
Gross/net annual family income: $147,000 / $105,500 (this increases if we travel for work)
Monthly family spending: $3,900 Includes minimal travel, rent, utilities, life insurance, car insurance, rental insurance, and $1200/month budget for groceries, gas, clothes, miscellaneous items.
Debt: Debt Free!
The interest rate: N/A
Your minimum monthly payment: N/A
The outstanding balance: N/A
Fixed assets you have (house, car, etc.): Car: $25,000, motorcycle: $4000
Investments / savings:
Cash: $1000
Combined ETF’s: $131,000
Sincerely,
Nomads in the Rat Race
Okay, before we get into the numbers, I just want to say, WOW, fantastic job on paying off that much debt in such a short amount of time! You should be extremely proud of that, and we here at Millennial Revolution are humbled to know we played a small role in that. It still weirds us out to learn that our silly little blog actually changes people’s lives.
Now I must confess, not all of MR’s impact is entirely positive. Sometimes, people look at our lives globetrotting the world and doing whatever the Hell we want and conclude (correctly) that it looks pretty rad and they want to do it too, but like NOW.
One of the couples we met in Chautauqua is in this situation. After a sauna-based one-on-one, one of them now really really Really REALLY wants to quit their miserable job, throw everything into a van, and start travelling RIGHT THE HELL NOW, while the other one’s like “Whoa whoa whoa maybe we should work just a liiiitle bit longer.” Sorry guys, that was our bad.
To be fair though, that Chautauqua couple’s numbers looked pretty damned close, and with a couple minor tweaks we could with a clear conscious tell them “Go for it. You may FIRE when ready.”
The couple in this reader case, though, are still quite far off. Remember that we worked and saved for almost a decade before we pulled the trigger. This couple is still near the beginning of their FIRE journey. How long will it take them? Well, let’s see…
Math Shit Up!
So to summarize NomadsInTheRatRace’s numbers…
| Summary | Ammount |
|---|---|
| Income | $147,000 (gross), $105,500 (net) |
| Expenses | $3,900 monthly, $46,800 annually |
| Debt | $0! |
| Net Worth | $132,000 |
At that spend rate, they would need $46,800 x 25 = $1,170,000. And at their current savings rate of $105,500 – $46,800 = $58,700, combined with their existing $132,000 net worth, they’d reach their FI target in…
| Year | Balance | Savings | ROI | Total |
|---|---|---|---|---|
| 1 | $132,000.00 | $58,700.00 | $7,920.00 | $198,620.00 |
| 2 | $198,620.00 | $58,700.00 | $11,917.20 | $269,237.20 |
| 3 | $269,237.20 | $58,700.00 | $16,154.23 | $344,091.43 |
| 4 | $344,091.43 | $58,700.00 | $20,645.49 | $423,436.92 |
| 5 | $423,436.92 | $58,700.00 | $25,406.22 | $507,543.13 |
| 6 | $507,543.13 | $58,700.00 | $30,452.59 | $596,695.72 |
| 7 | $596,695.72 | $58,700.00 | $35,801.74 | $691,197.46 |
| 8 | $691,197.46 | $58,700.00 | $41,471.85 | $791,369.31 |
| 9 | $791,369.31 | $58,700.00 | $47,482.16 | $897,551.47 |
| 10 | $897,551.47 | $58,700.00 | $53,853.09 | $1,010,104.56 |
| 11 | $1,010,104.56 | $58,700.00 | $60,606.27 | $1,129,410.83 |
12 years. So that’s fantastic, obviously, as the default working career for most people is around 40 years. So not only has this couple successfully murdered their debt, they are now barrelling towards their FI target at break-neck speed.
So can they quit their job yet? The short answer is no. If you were to pack and travel for 18 months, it would extend your retirement date by about 2.5 years, since that’s about a years’ worth of savings you’d spend, plus another 1.5 years you wouldn’t be working. Sorry, you have to suck it up, buttercup and row like the rest of us until you hit your FI number. There’s no way to skip that part.
But that being said, there are ways of making that journey shorter.
Damned Vancouver
First of all, let me just say something about Vancouver. To our non-Canadian readers, Vancouver is THE most expensive city to live in Canada. It’s where you can spend $1M on a falling-over crack-shack, where everyone is regularly in millions of dollars in mortgage debt with shady alt-lenders, and the city where every economist is saying will be the epicentre of a housing crash.
This is because despite the fact that housing is so expensive, there’s really no high-paying industries to support it. Our friend and fellow finance blogger Financial Samurai took one look at the Vancouver housing market and almost threw up. The housing prices, he noted, were similar to Silicon Valley, but without the Silicon Valley part that paid entry-level programmers six figures right out school.
The median housing price in Vancouver as of 2018 is $1.23 million. The median income? $38,449. That means for the average family, the cost of housing (including mortgage, utilities, property taxes, maintenance, etc.) is actually MORE than their after-tax pay. Which means that the average family in Vancouver is cash-flow-negative and going into debt every month they live there. That’s why almost everyone who writes in from Vancouver is stressed out of their minds.
And yet, Vancouver has this strange appeal that I quite frankly don’t get. I’ve been there, it’s nice, kinda rainy, and has lots of nature and hiking trails. Does it seem like a nice place to live? Sure. Would I kill myself and put myself into debt every month for the privilege? Hell no!
Maybe NomadsInTheRatRace can help me understand why, but for some reason people who live in Vancouver have this “Vancouver is the absolute best city in the world. I cannot be happy in literally any other city” attitude that I just don’t get. People in Toronto also have that attitude, but at least they have the high-paying finance and high-tech jobs to support it. Vancouver has rain, a lot of nature, and according to NomadsInTheRatRace a “me first Vancouverite attitude”. Am I missing something?
Suggestions
OK enough Vancouver bashing. What can we do to help our couple get out of the rat race faster?
Are you using your RRSPs?
At a gross/net incomes of $147,000/$105,000, your tax rate seems oddly high. Assuming your incomes are relatively evenly split, I put these numbers into a tax calculator and it seems to indicate that you’re not using your RRSPs at all.
If that’s true, open up an RRSP and start shovelling money into it. Like, now. If you max out your RRSPs going forward, your after-tax income will jump to about $121,000, and if we take that extra tax savings and shovel it into your retirement fund, here’s what it does to the math…
| Year | Balance | Savings | ROI | Total |
|---|---|---|---|---|
| 1 | $132,000.00 | $75,200.00 | $7,920.00 | $215,120.00 |
| 2 | $215,120.00 | $75,200.00 | $12,907.20 | $303,227.20 |
| 3 | $303,227.20 | $75,200.00 | $18,193.63 | $396,620.83 |
| 4 | $396,620.83 | $75,200.00 | $23,797.25 | $495,618.08 |
| 5 | $495,618.08 | $75,200.00 | $29,737.08 | $600,555.17 |
| 6 | $600,555.17 | $75,200.00 | $36,033.31 | $711,788.48 |
| 7 | $711,788.48 | $75,200.00 | $42,707.31 | $829,695.79 |
| 8 | $829,695.79 | $75,200.00 | $49,781.75 | $954,677.53 |
| 9 | $954,677.53 | $75,200.00 | $57,280.65 | $1,087,158.18 |
| 10 | $1,087,158.18 | $75,200.00 | $65,229.49 | $1,227,587.68 |
11 years. So by simply opening up an extra account with Questrade, you will shave a year off your working career. And if your employer has any RRSP matching program, it’ll help even more. Not bad for 5 minutes of work eh?
Treat Yourself!
As for the question “Can I travel now?” the answer is actually yes, but maybe not for 18 months at a time. I’m a firm believer in rewarding yourself when you hit a big milestone, and paying off $76,000 of debt is definietly a big milestone. See if your work will let you take some unpaid leave, take a month and travel!
My only advice on that is to make it not just a vacation, but a scouting mission. Don’t just go to the Bahamas and live it up on a resort, but take your time travelling and really explore. Pick a few cities that you could see yourself living in long-term, grab an Airbnb, and actually try living there for a week! Hit up Portland, or Lisbon, or Tulum, Mexico. Really go off the typical vacationer’s path and look for those hidden gems we write about in our Travel Series, because you’ll be surprised how many great cities there are out there that you can live in for a fraction of what you’re spending now.
And this is something I suggest for anyone who’s stuck in a “I-have-to-live-in-my-city-and-nowhere-else” attitude. Because…
Geographic Arbitrage Is Your Friend
The biggest knob you can turn in your retirement plan is to not retire in a high-cost city. Most cities cost a lot to live in because that’s where the jobs are. When you retire, you could live anywhere.
If you can find a place that you’d enjoy retiring to that costs a lot less, it can have a dramatic impact on your retirement date because your FI target will drop considerably. Remember, your FI target is not your current expenses x 25, it’s your retirement expenses x 25. Most people confuse the two and think they’re the same.
Let me tell you of another success story I’m quite proud of. There was this couple we met at a Chautauqua a few years ago. They both lived and worked in Silicon Valley in high-paying high-tech jobs, but being in Silicon Valley they were worried they’d never be able to retire and travel because the cost of everything was so high.
During our one-on-one, we discussed their retirement plan, and during our conversation they mentioned that their job was one of these startups that didn’t actually have a physical office. Everybody worked remotely, and used tools like Slack and Asana and whatever to collaborate.
A light bulb clicked on in my head.
“You realize you could just pick up and move somewhere else and they’d never even notice, right?”
Blink blink. “What do you mean?” they asked.
Their work was completely remote! There’s no reason to be physically located in San Francisco. I pulled up a map on my phone and drew a vertical line along the West Coast. As long as they were in the same time zone, their company wouldn’t be able to tell the difference, so they didn’t even need to ask permission.
A few weeks after they got back, they messages us and told us they had packed up everything and relocated to Mexico and, as a result, their cost of living dropped significantly. They were still saving money, and because their cost of living was no longer tied to a high-cost city, their FI target was now only a few years away.
Since then, they keep popping up in our Facebook feed with messages like “Hi! We’re in Montreal!” “Now, we’re in Oaxaca!” They were having a blast living it up, while one of them continued working remotely. You can read all about their adventures and cost of living on their blog: NomadNumbers.
I mention this because if there’s any possiblity of working remotely for NomadsInTheRatRace, or to switch to a job that does allow you to work remotely, then the nomadic travel can start immediately. I don’t know what kind of job they both work in, but from the line “Move away from Vancouver…we tried this for 3 months already and it didn’t work out so well…” it seems like there’s some location flexibility in their job.
But if you do this, the trick is not to just move to some crappier version of Vancouver, but to really mix things up and move to Costa Rica or something.
And We’re Done
Anyway, this post went long so I’m going to go lie down. What do y’all think? Let’s hear it in the comments.
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A buddy of mine did the telework thing and didn’t bother to tell his employer — just kept his folks’ house on the tax forms and then posted on Facebook from poolside in Nicaragua with his laptop open. He did this for half a dozen years, met a rad Kenyan who went to Oxford, had a couple of kids with her, and now I have no idea where he is but they’re all living it up.
Actual facebook note from two years ago:
“a bit more cavalier with this pregnancy. Homeless ’til a week before the due date. Strolled into the hospital and they asked how many weeks along she was. All of ’em. When are you due? Saturday. Today is Thursday! Do you have a doctor? Not on this continent… Named him Maurice. Wanted to give him a cool Kikuyu name, but the elders back in Kenya did not approve. Firstborn son MUST be named after his paternal grandfather.”
So, if you get into extreme telework, opportunities abound for a wild ride. 😉
interesting! i wonder how that works with taxes, being a ‘resident’ of somewhere you’re aren’t actually .. residing… (i’m a straight-laced kinda person). but this is such an enticing idea 🙂
Opportunity is everywhere for getting serious “side hustle millionaire $ gUaP $.” 🙂
Wow, he’s living the 4-hour work week for reals! And talk about being super chill about giving birth. I’m guessing they are more “fly by the seat of your pants” versus extreme planner type of people. Wild ride is definitely the correct description 🙂
Yup, you’re right. With the ability to work online these days, there are more and more opportunities to hack your life to get to freedom faster.
I think the important question to ask is whether you can continue disliking your day-to-day lives for another 10-12 years. If you don’t like the commute, the community, the high rent, or your jobs, isn’t that maybe a sign that you should look into making a change sooner rather than later?
Of course reaching FI involves sacrifice and none of us always likes our job, but I think it’s important to lead a balanced life. It might be possible to find more enjoyable jobs, a cheaper locale, and a lifestyle that will still let you travel and reach FI well before the usual age.
Maybe you want to get some travelling out of your system now, and if you can afford it, maybe you should. Putting money into an RRSP which you can withdraw while you’re not making any income might be a good strategy for that.
One thing that I learned in the past 10 years of travelling to 20 countries for short periods both for work and pleasure is that although there’s a great diversity of cultures, scenery, and climates, after a while it all kind of seems the same. Human struggles and goals are largely the same, and I’ve found that constantly experiencing new places gets old after a while if you don’t have some other purpose to be in them.
Maybe you’ll decide that travel is great, but that you want to do more than become financially independent just to be a permanent nomad. Or maybe that’s exactly what you want. A break now to do some travelling may help you discover if that’s the lifestyle for you.
Yup. I agree. If they can negotiate a sabbatical, take some time to recharge and travel, then find a better job, that would make it easier rather than sticking with an unlikable job and commute for another 10 years. They shouldn’t just up and quit everything to travel for 18 months, but they can consider taking some vacation, then looking for a more likable job in a less expensive city.
I’ll bite. I love Vancouver. I’ve only been there twice, en route to or from Hawaii/Portland, but I’ve met up with beloved friends, had the best Malaysian food of my LIFE, and had brunch at the farmer’s market by the Pacific Ocean. Also, one of my friends wants her kids to grow up around their grandparents, and that is not geography-independent.
If you love Vancouver, then it takes sacrifice, like the reader case, who spends very little (50% goes to rent), but it’s worth it if you relish every day.
If you don’t love Vancouver (me first? Really? I thought that was more NYC or LA), then you can try a different location with a low cost of living. It’s always a trade off.
As always, excellent advice, FC and W!
Yup, it’s definitely about trade-offs. Can’t have everything.
Thanks for your input, Melissa! Most people I talk to who’ve gone to Vancouver love it–but I don’t just get the appeal. Maybe it’s because I hate rain and bad value. But hey, for people who are willing to sacrifice to live in a place they love, more power to them! You gotta do you.
We actually live offshore jurisdiction that is tax free! It doesn’t say what they do for a living but there are lots of locations around the world that you can live/work in tax-free, in a warm climate and save a crap load of money! We also get way more vacation time than we would if we were living in Canada. Singapore, Hong Kong, BVI, Cayman Islands, Bermuda just to name a few.
Way to hack the system, Julie! We’ve been looking into tax-free places as well–Hong Kong would be attractive if it wasn’t super expensive. I read somewhere the Georgia (the one in Europe) is a popular choice as well. How can anyone say no to saving a crap load of money and a warm climate!
Aloha from Hawaii! I was lucky enough to receive a military pension at 43, and since then I’ve taken a 4-month yacht captain course in Australia, gone to grad school in Thailand, and hiked the entire Appalachian Trail. I used a combination of geographic arbitrage by living overseas, and what I like to call “floating arbitrage,” by living on my sailboat and renting out my condo for a few years. I saved and invested until it hurt during my working years, now I just keep thinking up new adventures without having to worry much about money. Just imagine how much easier it would be to embark on these journeys if all citizens had a Universal Basic Income such as the one Andrew Yang is proposing.
“floating arbitrage”…I love it! We met a British retiree in Cambodia who did just that. Saved 75% of his income by living on a boat in Australia and giving tours. If you know how to use travel as a tool, you can live a life of adventure while still having tons of money.
I don’t know much about Andrew Yang, but I’ll have to look him up. Thanks for the suggestion!
Yes the responsible thing to do would be to keep working toward FI, however, how old are you NomadsInTheRatrace and do you plan to have any kids? My lady and I were looking at having kids and understood (correctly) that you change with kids and will not be able to travel the same way. We quit our jobs and did an extended around the world trip. Yes it extended how long it took me to get to FIRE, however, it was the best decision of my life. My oldest is now 10 years old and I am comfortably FIRE and blogging the hell out of it. I never went to disneyland as a kid but now in my 30’s I have little desire to go. For me travelling when we did at the age we did was a great decision and would not feel the same if I did it today versus when I was in my 20s. We are also pretty disciplined peeps and knew we’d get here eventually. Best of luck all on the journey
Thanks for sharing your story, LOTM! Good to know that your decision to travel before having kids worked out so well. Definitely something to consider for NITRR.
Disneyland, or Disneyworld you are not missing much, we spent $4000 in 5 days, and I didn’t have any fun. It was the wifes idea to “get away”. It was stressful and rushed. And the one thing I had to remind myself walking around is, its all fake. Kids love it, but as an adult, I would have rather done a hike somewhere, like the Grand Canyon, or Yosemite.
cheers
I think the fact that I had to google which one was which answers that. Little kid me never went to either disneyworld or land but dreamed of it a lot. Now that I am in my 30s maybe a belgian brewery tour by bike is my new Disneyland haha. Ahh the price we pay to get the things we thought we wanted only to find we now want something else
Gross/net annual family income: $147,000 – for 2 single people… really this is not a challenge…
$38,449… i wanna hear from this guy, how is it possible to survive in Vancouver on this amount of money… Victoria is no better. This is the guy I can relate too…
cheers
That’s a great question. I’m thinking there are only 2 possibilities…debt or bank of mom and dad. If I had that salary, I would move out of Vancouver.
How did they manage to pay off $76k in 10 months?! Can they keep doing whatever they were doing so they can save the same amount going forward ($91k annually?).
I’m just as impressed as you. Yeah, if they can keep the same savings rate, they’d get to FI faster. Though it’s definitely easier to do for 10 months than it is to do for 10 years.
I gotta say there are a lot nice points to living in Vancouver despite the ridiculous property prices and large population of rich, douche bags. Great food and drink and just about the only place in Canada with livable temperatures being two of them 😉 Also there are still a lot of us here (like myself and the reader case) who fall between the two extremes of ultra-rich and low/no income, who aren’t stressed out of their minds but who also have a kind of love/hate relationship with the city. In these cases it can still be a relatively good place to save a good amount of money.
I always have two big problems with geographic arbitrage: 1) Some people (myself included) like having an actual home (even if it’s rented) with some permanent stuff, even if it’s just a comfy bed and a nice shower. Travel is great but to me what makes it greater is the idea that afterwards you have somewhere that’s “your place” to return to. 2) What the heck do you do with your investments if you decide you don’t want to live in Canada (or anywhere in particular) for 180 days in the year anymore? Every time you move country you either move your investments as well or leave them somewhere you’re not resident anymore and get hit with non-resident taxes on all your investment income. You may have covered this elsewhere on the blog but it’s always puzzled me.
Anyhow, as a fellow Vancouverite, in a similar-ish situation to the reader I really enjoyed this post! 🙂
Fwiw, you need to live in one place for >= 180 days to lose Canadian tax residency.
I like Vancouver as well. If you’re in high tech the income vs expense ratio can be much more tolerable. Not sure how everyone else gets by though.
You always have the best answers, BikeMike! 🙂
Glad, you enjoyed the post, Shaun! When I’m talking travel here, I’m actually really talking about location independence. If you make your situation flexible enough that you don’t have to live in high cost city, it helps in terms of gaining freedom. I get that travel isn’t for everyone. You gotta do you, right?
To answer your question, BikeMike said it best below. We are still Canadian residents for the purposes of taxes because we don’t stay in any one country for more than 180 days. As a result, we’re actually paying Canadian taxes with our passion project incomes while not using any services.
Funny that today’s post is on Vancouver.
The 2019 Mercer ranking was released this week and has Vancouver as the best North American city to live in (Vancouver is in the Mercer Top 20 Worldwide, along with Toronto and Ottawa, and maybe Montreal too).
US Cities are far far behind.
But yeah Vancouver is super expensive for sure.
I always hear good things about Canada. 🙂
It probably is a good place to live in terms of nature, healthcare, etc. But incomes can’t keep up with the cost of living. Interesting to know about the 2019 Mercer ranking though. Thanks for sharing!
I was one of those people who wanted to retire right away as soon as I found your blog but for me it wasn’t to travel, it was because I’d already been wanting to sell our place in a Greater Vancouver area suburb and move somewhere cheaper in case the market crashed. For us it just made sense to act right away because we had a really cheap rent option in a remote location and even though we weren’t FI yet it turned out I could work remotely from my job so now I work just 4 hours a day and we don’t need to touch our portfolio at all.
Not everyone needs to travel, I get that. Sounds like you have an awesome life, Liz! Happy for you.
Thanks FIRECracker for sharing our story with your reader. This reminds me of how live changing our week in Chautauqua was.
Similar to Vancouver, San Francisco (SF) has became the most expensive city to live in the USA. I don’t see this changing, especially as some high-profile IPOs are due this year that will put a few more millionaires on the market looking to buy multi millions homes for cash. While SF is a HCOL area, we’ve been really grateful for living there & getting highly paid jobs. At the same time we manage to crushing our cost of living which helped increasing our saving rate. (For specific numbers check out our 2018 spending report: https://www.nomadnumbers.com/2018-year-end-travel-spending-report/.)
Ultimately getting to Financial Independence (FI) was about the journey (more than the destination) for us. Once we did the easy part of figuring out our investment strategy and financial goals, we had to think hard about what we wanted to do with our lives post FI and meeting you two at Chautauqua was a pivotal moment to help answer some of our questions. As you readers seems to have another 10-12 years before they can pull the trigger, have they already though about what their ideal life will looks like once they won’t have a 9-5? Sure, traveling sounds fun but do they see themselves traveling full time or do they also want to spend some of their free time to help to make the world a better place?
For us, now that we don’t have to worry about the money, we are going to keep doing more of what we love: traveling, spending time with friends/family & connecting with like-minded people (hence the blog we started). We will also be keeping an eye on places we might want to return and call home(s) someday in case we want to slow down travel and get rooted somewhere.
(BREAKING NEWS: As of March 1st, 2019, Mrs. Nomad Number doesn’t have a 9-5 anymore. She quitted and we are now both fully retired from a corporate job! We hope we can cheer to that with you guys in person as we visit Europe/SE Asia later this year.)
You guys need to come to FinCon so we can hang out again! I’ve enjoyed following your adventures! Only 15 months or so before my family hits the road and follows your example!
Congrats guys! So proud of you. I saw your retirement announcement on FB but wasn’t sure if you were ready to reveal it on the blog yet. Hope to see you soon somewhere in the world!
As I tell my son, “If you want anything in life you have to earn it. You don’t get it because you just want it.”
The same goes for Financial Independence and travel. We might want to leave our jobs *with a passion* before we’ve saved enough… but we have to earn our freedom first.
Partly the burden of earning that freedom can be lightened by needing less than others. Could they cut expenses? Indubitably, but are they passionate enough to do it?
Could they earn more with a side hustle? It’s definitely possible.
The real question is, are they passionate enough to enact real change in their lifestyle?
Totally, Mr. Tako. We all need to earn our freedom, not just be given it. And the best part is when we go through the challenging journey to get there, we’ve change ourselves to be the type of people who can stay FI, rather than just blow it. Flexibility and adaptability are good skills to have–given that there will inevitably be many market downturns in our lifetime. Hopefully they will develop these skills as time goes on.
Wait a minute… Chautauqua one-on-one in the sauna?
Hell yeah! It’s the best way. Brandon/MadFientist started the trend back in Chautauqua UK 🙂
And I thought our one-on-one with Jim Collins, that quickly turned into a two-on-one with Pete/MMM and then continued to be more like a six or ten-on-one as more and more speakers and attendees joined in was pretty epic. But in the sauna? That is next level!
That sounds pretty epic. Now repeat the whole thing inside a sauna. Mind blown.
Me And hubs work remotely. We can be anywhere in the world, so we are in Poland. Geoarbitrage for the win.
We sometimes work from Provence, from Sicily or from Portugal. And thanks to EU, our teleconferences don’t cost anyone anything else (no roaming fees).
We once took workation in the Us for a month, at my company’s approval. My customers were US based at that time, so no difference to them.
This is our way to make it work until we hit our numbers. 48 months to go!
Awesome work situation you got there, Agata. Geoarbitrage five! Congrats on being only 48 months from FI. You’re SO close!
I actually know a couple who travel in an RV across America and they seem to love it. The catch is the husband still works remotely for a software company and brings in good income. You may think taking off 18 months to travel is fun now but full time traveling gets tired after a while and you may end up outspending your budget when you’re traveling. I’d explore option 2: finding jobs outside of Vancouver. If you really need a break, maybe do a shorter trip (say 3 months) and have some sort of part-time employment. Some active income goes a really long way if you don’t want to slow down your FI journey.
Good tips, LSoW. I agree that doing a shorter trip or finding jobs outside Vancouver is a better immediate solution.
I love Vancouver too, but there is no way I would want to live there with those housing costs! But if you like the mountain lifestyle, and you can work remotely, then the interior of BC could be an option, although much colder in winter. But the lower mainland is pretty expensive no matter where you go compared to the rest of Canada outside Toronto.
Like Shaun mentioned, there is a cost associated with changing residency, and I would love to get Firecracker and Wanderers tips and strategies on this! As an Australian / Canadian with investments in both countries I admit I have a personal stake in this.
Good question, Shane. We haven’t changed our residency as we don’t stay in any country longer than 180 days. That might change in the future, but as of right now, we prefer to be nomadic rather than establishing residency in a specific country. Downside is that we’re paying taxes (from our passion project incomes) to Canada while not using any services, but that’s a small price to pay for the ultimate flexibility of travelling the world 🙂
There’s something to be said about not letting life pass you by.
There is. That’s why a short sabbatical or long vacation is in order. Gotta celebrate the wins on the way to FI!
Great post! Geo arbitrage is high on our list as we live in London!
We are lucky that my partner is half Canadian and half polish. We are taking advantage of the high salary in London (no option for remote work yet) and once we get a bit closer to FI plan to relocate to Wroclaw Poland. This decision will cut our time to FI in half!!!
We absolutely love our neighbourhood in London, however we can come back and visit whenever we want for very cheap.
I find that lots of people have a hard time to embrace change but for me the most magical times in my life have been after making a bold decision to flip the script on my life path. It’s scary but the thing is you can always revert back if things don’t work out. For me there is little risk and all upside to geo arbitrage 🙂
Looking forward to UK Chatauqua this year!
Super excited to see you at Chautauqua, Patrick! I think this is absolutely genius: “once we get a bit closer to FI plan to relocate to Wroclaw Poland. This decision will cut our time to FI in half!!!” Way to use geoarbitrige to supercharge your way to FI. WOW. I can’t wait to meet you and hear you story.
Super excited to see you at Chautauqua, Patrick! I think this is absolutely genius: “once we get a bit closer to FI plan to relocate to Wroclaw Poland. This decision will cut our time to FI in half!!!” Way to use geoarbitrige to supercharge your way to FI. WOW. I can’t wait to meet you and hear your story.
I agree with the other commenters… I think it’s time to start thinking out of the box here. Maybe there’s a choice between 10 years of job hating vs 18 months of no income.
Perhaps you could save money until you know that if it continues growing for X years you’ll be able to retire even if you leave it alone and then travel with a free heart while it grows? Perhaps one of you can negotiate to work remotely/part time while on the trip?
I personally found that once my investments were at about 1/2 what I would need to retire and if I just left them alone they would eventually grow to where they needed to be, I felt much more powerful. I negotiated working with my employer to work remotely and moved with my boyfriend to (actually a higher cost of living area) but with better weather and beaches. I also found working remotely doesn’t take that much time, so even though I’m saving somewhat less I have a better quality of life and the flexibility to do what I want with my life.
“even though I’m saving somewhat less I have a better quality of life and the flexibility to do what I want with my life” –> Love this, Tracy! Thanks for showing us that sometimes it’s worth it to give up some savings in order to create a better life for yourself. At the end of the day, it’s really about freedom and time–money is just tool. If they can restructure their life for more freedom the way you did, giving up some savings and having a slower trajectory to FI is still worth it.
This predicament definitely resonates with us! We were at a crossroads last year and decided that moving abroad now was the right thing for us. We didn’t have the benefit of working remotely so we both left our jobs… We couldn’t handle living in an expensive city, working in windowless offices anymore. So we sold everything and moved to Mexico! But, this has opened up so many opportunities for us to explore our passions and turn them into profitable ventures. We call it semi-early retirement haha. Could be a possibility for this reader case if they have ideas of what they want to do in retirement that could earn them a bit of money while traveling. And if all else fails, you can always move back!
Nice work! Plus, the weather in Mexico is so much better. Would love to hear about the passions you’ve managed to turn into profitable ventures.
Yes, we escaped the polar vortex that was happening in Denver this winter! I think it maybe got down to 65F here once *brrrr*
My wife started an online health coaching business! That was a big reason for why we moved. And I am currently writing a book (not profitable yet, but hopefully someday).
Nice! Congrats to her and the online business and kudos for writing a book! It’s not easy but overtime, you’ll see that it’ll be worth it.
Great article!
Just writing to add one more data point regarding traveling pre-FI.
We’re a family with two young kids, and I work in healthcare – not a job I can do remotely. We really wanted to be abroad, so we brainstormed all our options, even the ones that sounded crazy. While healthcare isn’t generally remote, you can often arrange a flexible schedule and the pay is great.
When we were about half way to FI, we decided to sell everything and unplug from the suburban family lifestyle. Without the expenses of house, cars, childcare and US health insurance, our expenses dropped like a rock. I decided to fly back to the US every 2 months to work …my schedule for the last 9 months has been 6 weeks of travel, 2 weeks of work – lather, rinse, repeat. Additionally, a couple of remote opportunities materialized for both my husband and I…unexpected income!
While it may sound crazy to commute from another continent, this setup covers our expenses, allows us to max IRAs and a 457b, AND live/travel in some really cool place. We’ve slow traveled the Alps, Morocco, the Iberian Peninsula, and I’m meeting my husband and kiddos in Croatia next week. We’ll probably settle in Porto for the next school year.
Math shit up and think outside the box! You just might be able to realize your dreams without sacrificing your finances.
Awesome post! I live in Vancouver as well and this post really resonated with me. I was in a similar situation about 18 months ago, and did actually take 1 year off to travel the world having negotiated a sabbatical away from my job!
Luckily, my employer agreed to let me return to my $100k / year job upon return, which was pretty sweet. Plus there’s opportunities for OT which can add another $20-30k / year. The downside is that the job can’t be done remotely or outsourced, so I have to physically remain in Vancouver for this to work.
Did it delay my timeline to FI? Yes. Would I do it all over again given the chance? Absolutely. Life is short, and I could get hit by a bus tomorrow. I didn’t want to defer the chance to see the world for too long while en route to FI as tomorrow is never guaranteed.
The year off gave me a lot of clarity on the geo-independent lifestyle I want, and fresh motivation upon coming home to hustle like a mad man to stack cash, and build a side-hustle asset to get me there within 5 years. I also used some of that time as an opportunity to scout out other places in the world I eventually want to live and geo-arb once I hit FI.
To chime in on Vancouver, I 100% agree with FireCracker and the reader’s opinions! Poor value, super expensive housing, cliquey and snobby people at times, but also ridiculously beautiful half the year and awesome food scene! Plus friends and family are here. Tourists, international students and foreigners always rave about it, but locals like us always complain about the downsides.
I guess there’s worse places in the world to call home while building towards FI.
*geo-arb five* Way to hustle, dude! Love your attitude.
Hi NIRR, after following firecracker and wanderer for a while we decided to move from Vancouver to Yellowknife. We went from $30,000 savings after living for 5 years in East Van, awesome place but hard to get ahead. To $300,000 after 4 years in Yellowknife, RRSP’s, pensions, good tax breaks northern living allowance. We still managed to go on 4 minor holidays every year and save. The lifestyle is somewhat different and it is really really tough at -50. We are now on a year long cycling trip with $45,000 we saved separate from the $300K investments. Why take a break I hear firecracker say?? Well mostly for sanity’s sake, we just couldn’t face another winter. Anyhow the point is we both love the work we do, she is a planner and I’m an electrician. We don’t want to quit some shitty job, we both really enjoy what we do. We just don’t like working for the sake of working. So we made enough money to be comfortable and travel, when we get back to canada we will start work again fresh, save another $300k and take off for a year, rinse and repeat. We are in no hurry to retire as we are high energy people and both of us need to work at something, we are just very very lucky to enjoy what we do and have enough money to tell future bosses to f@@k right off if need be. I can’t say what is right for you guys, but if you hate your jobs save enough for some investing and maybe go back to school to learn new jobs options. The best thing I leant from MR is the fuck you money. The early retirement I’m not 100% sold on as everyone seems to go back to work anyhow!! Firecracker is writing books and MMM is (was) renovating houses etc. Sitting on a beach for 40 years is as much fun as it sounds lol. Anyhow that’s our 2 cents worth. Don’t be tied to any one idea.
“We went from $30,000 savings after living for 5 years in East Van…To $300,000 after 4 years in Yellowknife”
WOW! Way to go, you guys! I’m so impressed, I don’t even have words. Can I share your success story?
Well it’s not a full blown success story by fire standards… but it’s a good start. Share away it’s unbelievable just how many people don’t know this stuff. Plus it’s equally unbelievable how many people knew and didn’t tell others. Damn boomers lol. Thank you both for sharing, I’m not sure you know how much your blog helps people!!! You guys rock.
Hi,
I agree with your view. Sitting on the beach and doing nothing, is one of my preferred way of leisurely lifestyle.
WTK