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This is a follow up to my previous post: Why Everyone Wants Us to Fail
I gotta admit, there’s something oddly satisfying about getting someone to admit they’re wrong. Especially if that someone adamantly refuses to admit it, even though your very existence proves them wrong.
So we met up with “Don” again last week, and ever since we retired, he’s been asking me the same question over and over again: “so how’s it going? Did you run out of money yet?”
But this time, instead of just smiling and saying “everything’s great!” and then rolling my eyes while he went on and on about “how fun work is”, “how we’re never going to find jobs again”, and “what are you going to do when you run out of money”, I just flat out said it:
“Actually, we’re making money in retirement.”
Even though it was middle of the day, I could hear crickets chirping, because for the first time EVER, Don was speechless.
“WHAT? How?” Then he thought about for a second. “Wait, it’s your book isn’t it? The money is from writing?”
This was my reaction:
“Nope. It’s mostly from dividends and capital appreciation. While we were traveling, the dividends were paying us the whole time. So, essentially we got paid to travel.”
“Yeah but traveling is expensive right? I mean, you’ll be fine for the first year, but then you’re going to deplete your portfolio if you keep travelling.”
“Actually, we only spent $40K/year for the two of us. We spent more than that living in Toronto.”
“How?”
“Well, we balanced our time between Europe and SE Asia so that brought the average cost down. Also, we travel hacked A LOT which saved us $6000 just on flights alone.”
“Travel hacking?” He gave me a knowing look. “Oh no, no no. That’s “points whoring”. That’s you’re really doing. Don’t sugar coat it.”
I rolled my eyes. “Call it whatever you want. Points whoring, travel hacking, whatever. I call it “not having to pay an extra $6000 dollars.”
Don glared at me and I just glared right back.
Then finally after a minute of our staring contest, he sighed. A deep, resigned sigh. “So it looks like you’re doing well.” He took a giant swig of his beer and set the glass back on the table. Hard. ” To be honest, I kind of wish that you weren’t.”
“But since you are, I guess I have to say “good for you.”
*insert hell freezing over, pigs flying, and monkeys coming out of my ass*
My eyebrow went up my forehead, and shot past my hairline. Don was actually admitting he was wrong?
“So,” Wanderer chimed in, “You gonna come with us? Last time we talked, you said with your house appreciation, you’re officially financially independent. So you can quit now if you wanted to, right?”
Don shook his head. “That was before the bill for the renovations came in.”
I was afraid to ask, but did so anyway. “So what’s the damage?”
“A million dollars.”
A MILLION DOLLARS?!! I couldn’t believe it. Don had more than enough to retire, and he was going to shoot himself in the foot?!
“Jesus! I didn’t know you were building the freaking Taj Mahal! Wouldn’t it be cheaper to buy a whole new house?”
“Nope. 5 bedroom houses in our neighbourhood costs well over $2 million.”
“So rent! Or move out of the city!”
Don didn’t say anything, just gave me a look that said, “Are you for real?”
“You could work for Google in Waterloo and put your kids in public schools. ”
“Yeah, I could…” And then he trailed off.
I wouldn’t have heard the rest of it anyway because I was too busy banging my head on the table.
So Don has a great salary and enough savings to retire if he sold the house, but he’s going to dump more money right back into the house, and set himself back TEN years?! Why!? What MAD MAN would do that? No matter how hard I tried, I couldn’t figure it out.
After we left and hugged Don goodbye, our conversation still ran through my mind. I couldn’t believe that the housing obsession has become such a cult, that no amount of convincing will cause people to make sound financial decisions. Screw having time to spend with my kids. I want the heated floors, marble fireplace, and granite countertops DAMN IT!
I know from experience that you don’t need ANY of those things to be happy. But try telling that to some one too busy keeping up with Joneses. They’d gladly trade off DECADES of their lives, working to pay off a house prison that they’ll never sell until they die. What was the point of it all?
Can you take any of those things with you when you die? Nope. Will you be thinking “I wish I could’ve worked more” ? Nope. What you’ll actually be doing is remembering is all the experiences you had, all the time you spent with your loved ones, and how much you more time you wish you had.
And if you don’t believe me, just ask any millionaire 80-year-old whether they’ll gladly give up the money just to be 30 years old again. Why? Because they know that money in of itself is meaningless. It’s what you do with it that counts. And using it to buy fancy things to impress people you don’t care about doesn’t make any sense. Instead, use it to buy back your time. Because using money to buy your time is the best way to spend it. Hands down.
This is what we’ve learned from becoming Financially Independent and traveling the world:
Time is our most precious commodity. Treasure it. Savour it. Use it well. You can always make more money, but you can’t create more time.
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Social psychology is a powerful phenomenon. It’s very difficult for people to not follow the cues from their social environment. Humans are hard wired for social interaction & are psychologically rewarded for conformity & punished for the opposite.
This is why it is so difficult to be contrarian – but the most important reason to be if one is to lead a fulfilling life.
Well said, Shawn. I have seen this phenomenon happen again and again, and all it does is make people shoot themselves in the foot. Being a contrarian is difficult at first, but you’d be amazed how easy it is once you start doing it and realizing what truly makes you happy. But again, just me saying that won’t change anything. It’s usually when people have some sort of big epiphany that makes them realize what’s really important. For me, it was the stress of work causing my health to deteriorate. For others, it might be something else.
I honestly don’t understand how a renovation can cost a million. I’ve seen all the HGTV shows on the red hot Canadian market…they get beautiful renos for a fraction of that price.
I suppose there’s no limit to what can be spent, but good god. How can that kind of bill be a surprise? You must be going into that kind of scope of work with your eyes wide open, right?
Exactly! How the HELL does ANY reno cost that much? Is he hiring an army of contractors to build a fortress to guard against the zombie apocalypse or something? Yeesh. I know he’s adding a floor to his house, but still! For THAT amount of money, there’d better be a TON of hookers and booze.
Wow, a million to add a floor. I guess the red light district will be booming after those contractors get off the job for the day.
You can buy a waterfront house with an amazing view in the Caribbean for less than that even adjusting for the dollar exchange rate. And likely with enough bedrooms to boot.
Reminds me of what my brother tells me about his bay street boss. Cash flow negative all year long to pay the mortgage and send the kids to school and hopes like hell the markets hold on near the end of the year to support a bonus to pay for it all.
I remember watching a British TV series about “renovs gone wrong” and they were over-budget on restoring a castle. And even then it wasn’t $1 million. I’m hoping he’ll be getting a lot of bonuses at work going forward or life is about to get REALLY hard.
Was it Grand Designs? I love that show! It’s like the perfect antidote for wanting to renovate our house. “Look, they just planned to spend GBP$300,000 to update their small flat from outdated to modern. But oops! It went over budget and now it’s $500,000 so they’ll have to borrow $200,000 more to cover the overage.” And work FOREVER!!!!!1
We also watch Hoarders to remind us to periodically purge our possessions.
TV as therapy.
I think it was called “Restoration Home”. Haven’t watched Grand Designs but that sounds right up my alley. Hoarders freaks the HELL out of me…I thought my mom was good at hoarding…nope. These guys make it into an Olympic sport.
Dude should have hired the Property Brothers.
I know, right? They would’ve charged WAY less and looked really HOT doing it.
Many “normal” people just don’t get! They think the american dream is to own a house! Owning a house is great if you can afford it and if it appreciates.
We brought our house for 260K and after 25 years it is worth $850K but we spent a 100K over the years to improve it.
7 years ago, I told a co-worker that I plan to be financial independent by buying muni bonds. He said “that is great but what do you aspire to be in the company?” I said “Aspire to be? Hello, Once I am financial independent, I No longer have to work ever again!” I get a blank stare from the idiot!
Whenever the idiot sees me in the company he would make fun of me for investing in municipal bonds and for my FI quest so I stopped speaking with him. We now get $84K tax free from our munis each year. Who the fuck is laughing now, you freaking moron?
I learned from the idiot that he brought a 800K house and he has an interest only mortgage! He is paying $4,800k per month for 5 years and then principle will be added to the payments after 5 years. He just wasted $57.6K a year for 5 years! He had to sell the house since his child was about to attend college. He just could not afford the new mortgage payments.
A couple of years ago, the idiot goes and spends 80K for an MBA. I dont think he got any smarter. He still needs a job. I on the other hand am trying to get laid off for a severance package of 50K. If I make to 55 in 3 years then I get 70K at retirement. I am counting down. I dont give a crap what happens at work anymore as many ppl are replaced by India workers. My wife will be laid off at the end of this year and her pension will be 50K. Of course, the idiot is retained by the company since he adds so much value! I freaking love it!
My city college education cost a total of 6K for 4 years. I think I got the better deal!
Adam
“We now get $84K tax free from our munis each year. Who the fuck is laughing now, you freaking moron?”
NICE! Gotta love it when you make smart financial decisions and jealous haters–who don’t even know math–brag about their idiotic home purchase and belittle you. *eye roll* And WOW, those munis have fantastic returns. I wonder why more people don’t have them in their portfolio? Other American FIers usually are 90/10.
And geez, 50K is an AWESOME severance package! No wonder you’re trying to get laid off. I have friends who are trying to do the same, but ironically when you’re TRYING to get laid off, it’s almost impossible to get a package. Somehow they just know.
I really dont know why more ppl dont buy munis in the US. We are extremely financial conservative so we have no money in the stock market. We like munis since we know exactly our fixed income every year. Munis to us is like a riskier CD.
I am indebted to a close family friend that recommended munis to us 9 years ago. He lost his kid’s college fund with mutual funds. He only buys munis and corporate bonds now. The passive income from munis is our FU money. With all the laid offs, we dont care what happens now and we are not stressed.
Since my wife got a severance package, I am safe from a laid off for now. There is a company policy to not let go both husband and wife.
The problem is mgmt laid off 5 out of 9 ppl on our team. Once they leave, there is NO ONE to support a certain software. So, I will use this to my advantage. I explained to my boss that I am willing to swap with my co-worker so that the team will have continued support and coverage. My boss will check with his boss. I really want to save one co-worker that is smarter than I am. He can do my job and support the other software. He has a mortgage and needs a job where as we are basically ready to retire.
It is very true what you said, those who want a package may not get one. There is a very slim chance but it is worth a shot. I gave mgmt a viable option so it is up to them to decide.
My pension now is 37K at 55 if I leave now or if they fire me before age 55.
My pension will be 50K if I get a package. I also get 7-8K for medical a year.
My pension will be 70K if I retire in 3 years at age 55. I also get 8-9K for medical a year.
So, It is stupid if I quit now since I rather get a package or reach 55 to beef up my pension and to also get 7-9K for healthcare.
I will let destiny take its course now.
Adam
If I recall correctly, the character “Wally” in the Dilbert comics was inspired by a talented software employee who realized that when a ‘restructuring’ was announced that only the bottom of the barrel would get the severence. So he started his own business and made it visible that he was doing his own business while at work….
HA! Maybe that’s what Scott Adams did in real life. Smart.
“The idiot”, “moron”…
Adam, I think this guy is “getting to you” quite a bit… and I surely understand why! But I think those of us who have chosen to take “a different path” than the “norm” should not let people who live “the American dream” make our blood pressure go through the roof just because they think we are nuts.
Personally, I’m in LOVE with these people who are convinced life is all about a bigger house, faster car, private schools and so on. Don’t you love them too? Them make the “system” work!
Think about it for a moment… imagine if EVERYBODY would be doing what you, me and many of “us” are doing by choosing this different lifestyle, what would happen? How is the stock market going to continue going up if everybody is FI? How is your house value going to go up if people like your “co-worker” are no longer there to push the price higher? Thanks to them the world will see an iPhone 8, 9, 10, …22 😉 as well as a ton of even more useful and cheap products that WE can buy too.
I don’t know, but it seems to me we shouldn’t stress over these people but rather be grateful for their desire to spend with no end in sight and indirectly pay us good dividends. I’m just sayin’ 🙂
Couldn’t have said it better myself! No need to get all hot and bothered, take a chill pill and enjoy the FI ride…
A million dollar reno? Wow, he must have a VERY expensive house worth way more than $3M that could be worth $5M+ when he’s done. Forget just $2M!
The ability to just relocate to a cheaper city/country is such a easy, fun, adventurous way to save. I find solace that living in SF allows me to move almost anywhere and feel OK.
I really doubt it’ll be worth $5M…it’s a currently bungalow in Toronto (that he bought for 500K 10 years ago. I don’t think it’s worth more than $1.5 Million if he were to sell it now, as is), not a mansion in Vancouver 🙂 Also, I doubt he’ll be selling after the renovations. When it’s that extensive, people get attached to it and won’t want to move. So that’s dead equity in the house for the next 2-3 decades. I hope he likes working ’cause he’s going be doing a LOT of it.
Yup. I know at least a few people who would laugh if I failed. They’ll ask me when my small business will IPO, or laugh about little things. On the other hand, one of them is planning to buy a new 5 series BMW. I don’t give a fuck and laughed a little when I knew about the 5 series.
Honestly, I’m emotionally attached to a home because I hate dealing with land lords and them controlling what I do with my home. But I’m planning to downsize in 5 years, and get a bigger house else where for a fraction of the price of my tiny little home.
Speaking of MBA, I almost went for it too. The cost was 140K USD. I will use my favorite quote to that price — “fuck that shit”
If you buy a home that’s affordable and are willing to downsize to realize the gains that completely makes sense. Most people I know CAN’T do that. They borrow their brains out and then work for the rest of their lives to pay it off, never selling. There are Boomers in Toronto who live in houses that have appreciated to well over a $1 million but they refuse to sell (for sentimental reasons). As a result, you have people living in poverty in their old age and they could become millionaires over night if they sell. Weird.
Yeah, I’m not convinced about the ROI of an MBA either. So many people have one these days and you don’t need it to earn big bucks.
Do people really tell each other how much their houses cost, how much they earn, what they spent on this and that all the time? Outside of a few people at work, i.e. payroll, the only person that knows how much I make is my wife. I think I’ve disclosed how much we paid for our house to two people at the most. I never tell anyone how big my portfolio is.
I just find this rampant self-disclosure fascinating and another form of keeping up with the Jones.
Poor, brainwashed, Don. Oh, well.
I have to ask, though – why exactly do you consider this person a friend? He actually said to you, ““So it looks like you’re doing well. To be honest, I kind of wish that you weren’t,” and you gave him a HUG? I would have told him to take his million dollar house and go screw himself, deleted his number from my phone and never wasted another minute of my time with that loser. A true friend would have been thrilled that you escaped the grind and enjoyed a trip around the world.
You make a good point 🙂 We are still friends with him, more from having a history together than anything else. Though, I do believe you can learn a lot from different types of people…even if they aren’t the most pleasant to be around. If we were only hang out with FIers all the time, we wouldn’t see how the rest of the population thinks….plus I got a good article out of it so still worth it in the end! 🙂
Understood. Well, sounds like you and Wanderer are more forgiving than I am. 🙂 Over the last couple of years as I embarked down the road of anti-consumerism, in addition to eliminating unnecessary purchases and material goods from my life, I decided to also eliminate relationships that did not add to my overall happiness and well-being. This resulted in ending a few long-term friendships, one of which was over twenty years old, once it dawned on me that these “friends” weren’t who I thought they were. I realized that just as life was too short to spend trapped in a cubicle working at a job I hated, it was also too short to spend associating with toxic and negative people. And they have been eliminated along with the impulse buys and retail therapy.
Good for you! I definitely agree with you that life’s too short to waste associating with negative people. Encouragement and positivity goes a LONG way when it comes to achieving your dreams. That’s why I’m so happy to have met so many awesome like-minded people through this blog. You guys rock!
I laughed really hard at this part of your post:
Will you be thinking “I wish I could’ve worked more” ?
Thank you so much for writing. I really enjoyed this post.
Thanks! Glad you enjoyed it 🙂
I think that the best way to live life on one’s own terms. There is no need to bother about others’ opinions on one’s decision. One is responsible for his/her decision. Life is too short to bother on such hassles.
Ben