Victory Lap

Once you achieve Financial Independence, you may choose to leave salaried employment but with decades of vibrant life ahead, it’s too soon to do nothing. The new stage of life between traditional employment and Full Retirement we call Victory Lap, or Victory Lap Retirement (also the title of a new book to be published in August 2016. You can pre-order now at VictoryLapRetirement.com). You may choose to start a business, go back to school or launch an Encore Act or Legacy Career. Perhaps you become a free agent, consultant, freelance writer or to change careers and re-enter the corporate world or government.

10 ideas for a Mini-Retirement lasting 6 months to 2 years

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Working a nine-to-five routine can be draining. The practice of taking time away from work for an extended period of time has become increasingly popular among employees. This “mini-retirement” can help professionals recharge and provide a much-needed break from a strenuous daily routine.

Although you may not be planning on taking a mini-retirement, brainstorming ideas of what you’d want to achieve during this period may help you align your purpose and goals within your professional career.

Below, we asked 10 thought leaders to share their ideas for things to enjoy during a mini-retirement.

Explore a new industry

Leave your normal career to explore investing or real estate. Choose something that you might not have the chance to focus on while working full time as a great way to spend a mini-retirement. Diving into topics that you are interested in and really taking the time to research and learn more about these topics could prove to make you money in the long run. – Rex Murphey, Montauk Services

Do something Book Worthy

My barometer for doing anything is considering whether the endeavor is worthy of a book. If I had six to 24 months to do anything, I’d first think about what the topic or title of the book would be. Then, I’d outline the table of contents. After the outline, I’d live out each chapter idea to the extent that I could fill the pages about the desired topic. That framework could be applied to any retirement idea from “The Ultimate Guide To Tapas in Spain” to “Everything To Know About Making a Documentary In a Third World Country.” But, as long as the mini-retirement idea is book-worthy, then I’m guaranteeing myself that the topic is deep enough to keep me continuously engaged and satisfied. — Brett Farmiloe, Markitors

Pursue knowledge

I love learning but due to my hectic work schedule, I usually don’t find time to study. So I’d want to learn and focus on self-development during my mini-retirement. I’d want to apply for a scholarship to fund my postgraduate program. Other than that, I’d want to learn new languages and travel. Maybe I’d go abroad for studies as it’ll give me a chance to travel as well. — William Taylor, VelvetJobs

Take an extended Holiday

Plan a holiday that you have been waiting for. This could be to a domestic location or an international destination. Make sure your finances are sorted and that the holiday fits into your current budget. Set aside enough money to last during this time, then take some time to focus on getting your career back up before the mini-retirement is over. — Joe Flanagan, GetSongbpm

Take a Road Trip in an RV

Retirement would lead to a few exciting travel options. The most exciting would be buying a Cruise America refurbished RV and traveling the United States.  Pack and unpack once for a journey of a lifetime and stay as long as you want in each location.  I think a one year trip around North America would be one of the most bucket list items one could experience and imagine all the amazing places you could visit and the memories that would be created. — Randall Smalley, Cruise America

Switch to freelance or part-time Work

A good way to do this is to either freelance or work as a consultant on a part-time basis. The main benefit of doing this is that, in most fields of work, you’re able to do this online. This means you’ll be able to work from wherever you wish to enjoy life for some time. Whether it be a beach in southeast Asia or in an RV around Europe, working in this way gives you the flexibility to enjoy your time off from full-time work. It also lets you choose just which assignments to accept during this period, allowing you to work as much or as little as you want. Is your budget running a bit low? Maybe it’s time to ramp up your hours. Alternatively, are you about to go off the grid for some time? Close your laptop and off you go. — Anna Barker, LogicalDollar

Revisit your childhood interests

I would dust off my childhood fantasies about what I liked to do. One recurring theme on the Rock Your Retirement podcast is that many of us are not prepared mentally for retirement. We need to have a purpose in life. Continue Reading…

Buying a home in Retirement? You’ll need these Resources

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Photo Credit: Rawpixel

By Sharon Wagner

Special to the Financial Independence Hub

Buying a home and preparing for retirement can be stressful enough on their own, so when the two intersect it can be easy to feel like you’re in over your head. With some careful planning, you can avoid a lot of the headaches that often go with buying a new home. These resources can assist with making informed choices when it comes to budgeting for your new home and your move.

Planning & paying for your new home

Money can be tight in retirement, so it’s important for you to think carefully about all of the potential expenses that can come with purchasing a new home.

Address retirement finance concerns before diving in; you can access reliable information through Financial Independence Hub.

Preparing for the costs of Aging in Place

Aging in place features are important for seniors, so make sure you know which features to look for and what costs to expect.

Decluttering & downsizing your current home

Cut stress and expense by decluttering and budgeting for help.
Continue Reading…

College will look a whole lot different after the Coronavirus pandemic

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By Mike Brown

Special to the Financial Independence Hub

The devastating coronavirus pandemic has flipped every aspect of life on its head and caused great uncertainty, especially when it comes to higher education in North America. 

In Canada, for example, higher education institutions can’t appear to get on the same page, as some colleges will be fully online, some will be a mix between in-person and virtual classes, and some just aren’t sure what they are going to do yet. 

Then there are some colleges, like Brock University, that are implementing mandatory mask policies, while others like St. Francis Xavier University are requiring all students to sign a liability waiver by August 1 to protect the school against any loss or injury related to COVID-19. 

In the United States, the situation is no different, and many students and parents have no idea what colleges are going to do come the Fall. Some institutions, like Yale and the California State University system, are gearing up for another virtual semester, while others like Rice plan to reopen with social distancing regulations in place.

Harvard released a confusing plan that will bring back 40% of students next semester, while the rest will take online classes, and all will somehow pay the exact same price. 

LendEDU, a personal finance website, recently published a survey that highlighted how this uncertainty surrounding higher education in North America could change the college landscape for good. 

Many students considering Online College or a Gap Year during Pandemic

LendEDU’s report surveyed 1,000 respondents that were either current college students from the graduating class of 2021 or later or graduated high school seniors from the class of 2020. 

The results showed that many college students are considering nontraditional alternatives to college in light of the coronavirus pandemic.

For example, 41% of undecided high school seniors are considering enrolling in online college for the Fall semester, while another 28% are not sure if they would do that yet, and 31% will not. 

 

Another 43% of undecided high school seniors are thinking about just taking a gap year next year, while 28% are not sure either way, and 29% are not considering that. Continue Reading…

We can no longer ignore our Financial Health

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By Tanya Oliva

Special to the Financial Independence Hub

Prior to the pandemic, the financial health of Canadians was of great concern to the Bank of Canada, who often cited the record level of household debt as a serious threat to our economy. In 2019, the average Canadian household was carrying $1.76 in debt for every $1.00 of disposable income.

Other statistics related to the financial health of the average working Canadian were just as alarming: 52% were living pay-cheque to pay-cheque, 44% say it would be difficult to meet financial obligations if their pay was late, 40% were overwhelmed by their level of debt, and 48% were losing sleep because of financial worries.

We all know now that the COVID-19 Pandemic of 2020 is the gravest economic and financial shock anyone could have imagined. With no time to prepare, millions of Canadians and countless businesses are facing extreme financial stress and a global economic recession has taken hold. Now, more than ever, Canadians must focus on their financial health.

We need to think of health as a three-legged stool

Our overall health is connected on three levels: physical health, mental health, and our financial health. Financial challenges and difficulties are experienced by individuals across all income levels and age groups. Financial stress is the most obvious symptom and proves that financial health is strongly linked to our mental health.

Poor financial health can lead to more serious mental health issues such as anxiety and depression and can also negatively impact our physical health, from fatigue, poor nutrition, to substance abuse and dangerous conditions like high-blood pressure and heart disease.

A state of being in good financial health is when an individual:

  1. has control over their day-to-day, month-to-month expenses,
  2. has the capacity to absorb a financial shock,
  3. is on track to meet financial goals – short, medium and long term, and
  4. has the financial ability to make choices that allow them to enjoy life and seize opportunity.

Just like our physical and mental health, we need to put in the time, effort and commitment, and apply proven strategies, to maintain and improve our financial health. The Financial Health Network has created a measure of financial health called the FinHealth Score™.  An individual’s score is based on four financial behaviours: how you Spend, Save, Borrow and Plan for the unexpected and your future.  Your overall score will change with your circumstances and ranges on a spectrum from financially healthy to financially coping to financially vulnerable. Continue Reading…

5 steps to take to retire before 40

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By Veronica Baxter

Special to the Financial Independence Hub

So you think you want to retire early? Here are five proven steps to take to make that happen, if by “retiring” you mean no longer working.

Step #1:  Work Wisely

Notice that this does not say work hard, or work 80 hours a week. To work wisely means to choose a job or a career that is lucrative and that you get some satisfaction from. You don’t have to love or even enjoy your job but you do have to tolerate it and feel a sense of self-respect in being paid to do it.

If you are still in school there are career services where you can seek counseling about what sort of careers pay well that you might be able to do and feel satisfied doing. Oddly enough, right now our economy needs more tradespeople because the boomers brought their children up to expect to go to college and get a white-collar job. As a result, there are fewer workers in trades such as plumbing, electrical, carpentry, and these people are in high demand.

Whatever you choose to do, ideally, you want to be your own boss eventually. That way you have control over the quality and quantity of work and you also have control over business expenses, which you can then keep to a minimum. Then if you can grow your business and eventually have employees work for you, you can multiply your earnings by however many people work for you. Then, eventually training someone to supervise the work means you can step back and… perhaps retire!

Whatever you decide to do, craft a 2-year plan, a 5-year plan, a 10-year plan, and a 20-year plan. These plans should include training or education goals, financial goals, and a vision of what your work life looks like at every stage. Revisit these plans in an annual self-audit to keep yourself on track, and revise them if necessary. You’ve heard of the phrase, “fail to plan, plan to fail”? Well, it’s true. Harness your imagination and dream big. Reach for the stars, you may get the moon.

Step #2:  Pay Yourself First

This is crucial. When you craft your household budget, the first expense you must pay is into your savings or retirement account. What percentage of your income you put aside is up to you, but first, you will need an emergency fund of 6-8 months’ living expenses, then you will need to put money aside for retirement.

There are online calculators that can help you figure out how much you will need to live off the income from investments, or, you can seek the advice of a financial planner to help you figure out how much to set aside and to select the right investment vehicle for your goals. Keep in mind that if you plan to retire before age 40, you will need investment vehicles in addition to traditional tax-deferred retirement plans because you will be too young to withdraw from those.

Step #3:  Live Below Your Means

Whatever percentage of your income you decide to set aside, you should figure out how to live comfortably on 80% of the remainder. Why? Because having what you perceive as “extra” money at the end of the month gives you a mental boost like nothing else. When you feel like you are in control of your finances and you have more than enough money to do what you need to do, you are activating the law of attraction.

What do you do with that “extra” money? Take a small portion and treat yourself in some small way to reward yourself for being frugal, then invest the rest in your business or deposit it in your investment accounts.

Step #4:  Maintain Good Credit

It is crucial that you pay all bills in full and on time. Take out and use credit cards, especially if there is some sort of reward for use such as cashback or airline miles, but pay them off every month. Get a car loan. Continue Reading…