All posts by Michael Drak

The Big Dip in Financial Freedom

There is something very wrong with the work world today. It is far too common to find employees who are tired, over-worked, stressed out, and living in fear of an uncertain future.

As a result, people are eating too much, watching too much television, and complaining too much, often self-medicating with drugs and/or alcohol or taking prescription medication to cope with their stress.

How can it be that in North America, with two of the most prosperous societies in the world, people are taking more medications for anxiety, depression, and sleep disorders than ever before?

Blame it on the big dip.

The graph above represents a typical person’s (mine) working lifecycle. I call it the “big dip” as it’s only fair to recognize Seth’s influence on the development of the concept.

You will note two axises, the vertical one representing personal freedom and the horizontal one representing time spent in years. The graph isn’t to scale but it does get the point of the story across. Be warned, it might scare you: it gave me the jitters when I first drew it so you might want to sit down for this one.

Entry point A is when you leave school and start working, maybe in a “corp.,” like I did. It’s a happy time. Life is fun and exciting and you do not have any significant worries. You are finally making some real money for the first time. One could reasonably say a person at this point is financially independent. They carry no personal debt, their parents still provide them with a roof over their head and food on the table. Life is as simple as it could be. Work-Eat-Have Fun-Repeat.

Everyone’s goal at this point is similar. Work hard, get promoted and make more money. This was the path to success as taught to them by their parents and teachers and every kid wants to look successful in the eyes of their parents, right? Continue Reading…

Helping Boomers create their own Victory Lap Retirement

Victory Lap Retirement is currently #7 on the Globe & Mail’s Canadian non-fiction bestsellers list

I’ve been working hard on my year-end review and goal setting, which I will share with you in next week’s blog. I’m excited by what we have accomplished over the past year, but recognize that there is still a lot to do in the years ahead.

My co-writer Jonathan and I are on a major mission and that mission is made up of two parts:

1.) To convince investment advisors to adopt a more holistic approach and provide quality lifestyle planning assistance to their clients.

2.) To teach young people about financial independence, or Findependence as we like to call it, so that they can get off to a good start in life.

It’s a big job, but it’s something that we just feel the need to do.  Call it our way of giving back to the community! Today, I would like to expand on the first point a little more.

Retirement planning, as it is done today, is inadequate. We are constantly being told by the financial services industry that the more money we save for retirement, the better our retirement will be. This causes a lot of stress for people and the message they are sending is simply wrong.

Financial Planning Fails without Lifestyle Planning

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Introducing the inaugural winner of the Victory Lap Retirement [VLR] Award

Author Ernie Zelinski

Picking the first winner of the VLR [Victory Lap Retirement] Award was easy for me. Some might consider me a little biased, but how could I not give the award to my friend and mentor Ernie Zelinski?

After all it was Ernie’s books How to Retire Happy, Wild and Free and The Joy of Not Working that basically salvaged my life and gave me the courage to leave a 36-year banking career that was slowly killing me.

If I had read Ernie’s book earlier, I would have probably exited my corporate job even sooner than I did.

Ernie is an interesting guy, who learned early in life that he wasn’t cut out for the corporate world.

He’s a true free spirit, always has been, always will be and I just love his personal story. At the age of 29 he bailed (some might say was fired) from his job as a professional engineer. I say bailed because subconsciously we sometimes do things that will end up giving ourselves the result that we really want, as in “I know if I do this they will probably fire me” and in Ernie’s case they actually did.

In Ernie’s own words: “I Truly believe that had I not left corporate life, I would either be dead today, or suffering from some serious stress-induced illness.” Yours truly was also on this path. Thanks for showing me the way Ernie!

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Considering a Sale Leaseback on a principal residence

Quiet street with new houses and condo buildings on the background.This idea came to me while away fishing and the more I think about it the more appealing it becomes.

Sale leasebacks are common in the commercial property arena but I can’t recall seeing it discussed with respect to residential property.  I googled “sale leaseback residential property” and was pleasantly surprised to find that some people are already doing it.

Based on what I know, and my own particular situation, here is how it should work in theory.  My wife the Contessa would like to live downtown by the waterfront in Toronto one day. Austin is our only son still living with us, with our other two boys somehow managing to escape. So when Austin eventually, leaves the house will be largely empty. There is a good chance that Austin will move into residence in downtown Toronto when he goes to university in three years.

My mother, who is 92, is in a nursing home close to my house and I wouldn’t consider moving while she is there. Why move, complicate my life further and create unnecessary pressure?

My idea is to sell in the spring if residential real estate prices stay high and the market stays hot. I would negotiate a minimum five-year lease, which will allow me ample time to simplify and de-cumulate, getting rid of a lot surplus stuff accumulated over the years.

My Options

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Financial Independence, Zen and the Art of Wealth

zenw_fr_500_773I was recently asked to review a new book, Zen and the Art of Wealth, by Warren MacKenzie. It’s the story of two friends who chat while one helps the other build his drystone wall.

It’s a good book and reminded me of some important life lessons that I had forgotten over the years. The book also triggered some memories about how I was first exposed to the world of Zen.

My first exposure to Zen was as a child, when I watched the TV show “Kung Fu” starring David Carradine as Kwai Chang Caine. In the first episode, Caine is accepted for training at a Shaolin monastery, where he grows up to become a Shaolin priest and martial arts expert. Caine fights for justice, protects the underdog and has a strong sense of social responsibility, something that is sadly lacking today. Flashbacks were often used to reveal specific lessons from Caine’s childhood training in the monastery, from his teachers: the blind Master Po and Master Kan.

I loved the lessons from Caine’s training in the monastery and those lessons have stuck with me for some reason over the years: Continue Reading…