- Our 2020 Finances - January 4, 2021
- How Introverts Experience the Holidays - December 28, 2020
- Reader Case: My Irresponsible Parents Are Destroying My FI Plans! - December 14, 2020
Back in 2013, I learned, for the first time, what it felt like to get paid doing what you love. You know that starving artist saying, “my wallet may be empty, but my heart is full”? I always thought it was cheesy, until I finally understood what it meant.
A cheque had arrived in the mail that morning, from the sale of our first book Little Miss Evil and I was cradling it like a newborn baby. I even teared up a bit—something I don’t ever do.
It wasn’t much, not even enough to cover my groceries that month, but knowing I’d earned it from doing something I loved gave me a floaty happy feeling that was different from the paycheque I earned from my engineering job. Even though those cheques were so much bigger, this one seemed more significant somehow.
So, I cashed the cheque first and then framed a copy on my wall. I wanted to wake up every morning and remember why I was going to work every day to build our portfolio. I wanted to become FI so I could do what I love forever. That way my heart and my wallet would be full.
Flash forward 5 years. Now, our wallets are full and so are our hearts. What I didn’t anticipate was that the thing that filled my heart could fill our wallets as well—but only after we no longer needed the money.
Our 2018 Earnings
It feels like we’ve had this blog forever, but in reality, MR is only 2 years and 8 months old. Somehow in that time it has amassed 4.6 million views, which is beyond our wildest dreams! Thank you all for reading and joining our community! You all rock!
Here’s how much we made in the last 3 years (I’m listing income in USD because most of our income is from US sources):
|Year||Profit after expenses (USD)|
Now, as expected we made almost no money after expenses in the first year, because that’s what happens when you’re starting anything new. There’s always a ramp up period where you’re just figuring things out.
But in 2017, we started making money from a combination of Google AdSense, affiliate income, and book advance/royalties from our children’s novel.
And then last year, our earnings jumped by 4x! This is partially because of blog growth and press interest, but mostly due to:
1) Switching from google AdSense to MediaVine—which you can only do after you reach 25,000 impressions per month (not to be confused with page views).
2) Selling our non-fiction book Quit Like a Millionaire it to Penguin
We actually reached 25,000 impressions/month back in 2016 but I didn’t know about Mediavine. Luckily, we heard about it through the blogging vine and now we LOVE it. They have a fantastic team, an easy to use dashboard and prompt payout—which is great because as the popularity of this blog grows, so does our expenses. When we were with Google AdSense, it could barely cover the expenses and we had to rely on affiliates to do most of the lifting. Now that we’re with Mediavine, our ad revenue has jumped significantly to the point where it’s our primary funding source. We don’t have to rely on affiliates anymore—which is a relief because the pay from affiliates isn’t steady and programs can be cancelled at any point.
Another reason why our earnings jumped is because of our book advance. This is more of a one-time thing though. I don’t expect this level of income to continue because books have to earn out their advances before making any royalties.
This is because publishers are investing money in your book and they want to recoup their investment. But, the value add of traditional publishing is that they help you open many doors that wouldn’t otherwise be open to you (public speaking gigs, placement in book stores, media connections, etc.). Our experience with Penguin has been amazing and we definitely made the right choice for us.
Portfolio B Spending
Last year we wrote this post explaining how we’re going to separate out our post-retirement earnings to show that we are, in fact, living off our portfolio and not relying on passion project earnings to support our living costs.
This is why we created Portfolio B, containing all earnings after retirement— a separate portfolio from the 1 million we accumulated when we retired (Portfolio A).
Portfolio A will be used to fund living expenses. Portfolio B will only be allowed to fund the following extraneous expenses:
- Business expenses. Hosting costs, head shots for our book jacket, etc
- Business re-investment. If we choose to, say, hire a web designer to remodel this site, that cost will come out of Portfolio B.
- Self-Improvement. If we decide to take completely optional classes to expand our minds and upgrade our skill set, that cost will come out of Portfolio B.
- Gifts for family/friends and donations
- One-Off Ridiculous Luxurious Expenditures. Any idiotic one-off luxury purchases that aren’t part of our normal living expenses. If we do make one of these, we will disclose them on this blog so as to open ourselves up to the ridicule we rightfully deserve.
In the interest of transparency, here’s how much we spent from Portfolio B in 2018:
One of the other things I noticed is that once you start making money from passion projects, you also start incurring expenses. And not all of it is business related—some are expenses that happen as you go from a scarcity mindset to an abundance mindset and give away money.
As a result, of the $6000 USD worth of expenses we incurred this year:
- 45% went towards gifts and donations
- 7 % went toward personal rewards (ie massages and celebratory dinners out for book writing
- 48% went toward business expenses (server costs, new laptop, new smartphone, author photos, etc)
Our Tax Status
And not only that, we also have to set aside a chunk of your income for taxes.
Some of you might be wondering why that is since we’re nomadic. The reason is for taxation purposes, we’re still tax residents of Canada. We’ve thought about becoming non-residents of Canada, but that would mean selling all our assets in one shot, incurring capital gains taxes. We also haven’t established tax residency in a new country because we aren’t staying in any one country enough time to become tax residents, so it makes sense to keep our tax residence in Canada, for the time being.
So even though we’re not there, we’re still paying taxes to Canada, not using any services, and paying for our own healthcare with expat insurance. Great for Canada, not so great for us.
Which is why it’s so amusing to hear the haters say, “all you early retirement people are parasites—feeding off the system in services and healthcare while not paying taxes.”
In reality, it’s the opposite. I’m a net contributor into our country’s health care/social security system.
Of the $52K, we plugged our numbers into a tax calculator which estimated a tax bill of about $15,000, which we will be setting aside until April. The rest will be moved into Portfolio B, and used for book marketing costs, re-investment into blog, and gifts/donations. As we mentioned before, we will not be using Portfolio B for living expenses.
Here’s how much we currently have in each bucket after expenses and taxes as of today.
Portfolio A: $1,086,000
Crazily enough, since we wrote part 1 during the market dip in Dec, our portfolio has gone up by 5% in just 3 weeks! Which is exactly why we say investing is about the long game. You don’t panic and sell everything in Dec because you would’ve missed out on the recovery in January.
Savings Account: $50,000
This includes our $40,000 living expenses for 2019 and $10,000 Cash Cushion.
Portfolio B: $105,000
This is all the money we made after retirement, plus the $28,000 we used for the investment workshop.
Total net worth: $1,241,000
So, there you have it. When you don’t need the money anymore and pour your heart into passion projects, somehow money comes anyway.
Back when we quit in 2015, If you had told me I’d earn money in retirement from doing what we love, I would’ve laughed in your face.
Now, I know that doing what you love can make your heart and your wallet full. Just make sure you had a second full wallet to begin with.
What do you think? Have you ever made money from your passions?
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