Debt & Frugality

As Didi says in the novel (Findependence Day), “There’s no point climbing the Tower of Wealth when you’re still mired in the basement of debt.” If you owe credit-card debt still charging an usurous 20% per annum, forget about building wealth: focus on eliminating that debt. And once done, focus on paying off your mortgage. As Theo says in the novel, “The foundation of financial independence is a paid-for house.”

Keeping the spark: Pursuing FIRE and staying aligned on money

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Image courtesy Tawcan/unsplash

By Bob Lai, Tawcan

Special to Financial Independence Hub

On paper, Financial Independence Retire Early (FIRE) is a simple concept: spend less than you earn, grow your savings gap, optimize your taxes, invest your savings, and wait for your money to compound over time.

But one thing that doesn’t get covered enough with the FIRE movement is the relationship side of money.

To be more specific, if you’re on the FIRE journey with a partner, how do you make sure the two of you are aligned? After all, if you and your partner aren’t on the same page, none of it matters.

For us, Mrs. T and I have been on the FI journey since 2011. This year marks the 15th year of our journey. That’s 15 years of saving, budgeting, investing, making difficult financial decisions, and occasionally having disagreements on money-related decisions.

I figure it’s worthwhile to spend some time discussing how we stay aligned on money and some of the relationship challenges we have faced since we started our FI journey.

How it all started: The financial epiphany

Although both of us came from frugal backgrounds and we both learned in our youth to spend less than we earn, we didn’t really focus on optimizing our finances or investing intentionally when we started dating and when we started living together.

It wasn’t until we read the Secret of Millionaire Mindset that we started having deeper and more detailed conversations about money and how we want our financial future to be. Around the same time, we were also considering getting married, so it was important to make sure we were both aligned on our future financial plans. We both recognized that building wealth through saving and investing could give us more options and freedom in the future.

But just because we talked about money didn’t mean we always agreed on every financial decision we made.

Far from that!

How we are different due to our money personalities 

Mrs. T and I don’t think about money the same way.

Deep down, I’m an “extreme” saver and optimizer. I’d always find ways to optimize things and try to save as much money as possible. Even if I could save 50% on something, I would try to find more ways to save another 20%.

Mrs. T, on the other hand, is a more balanced saver. She doesn’t like spending money unnecessarily, but typically won’t climb the mountain to see if she could save even more.

Another way we are different is that I’m a self-proclaimed spreadsheet nerd. I am a numbers person and I love spreadsheets. I have many different spreadsheets tracking different things and data, charting our historical trends and projecting future ones. Whenever I see data in spreadsheets, I see data and optimization opportunities.

Mrs. T likes spreadsheets too but not nearly to the extent that I do.. She’s more practical and intuitive. She cares whether we have enough and whether we can enjoy life now without sacrificing our future. She likes to see things from the 30,000-foot view rather than getting into the nitty-gritty details, as I do.

Our different money personalities created some disagreements and discontent when we first started our FI journey. For example, Mrs. T enjoyed going to a cafe to have great conversations while having a good cup of coffee and delicious pastries (i.e. having hygge). Meanwhile, I would calculate in my mind how much money we could have saved and invested if we hadn’t spent the money.

Realizing what we needed to keep us aligned 

Over time, I realized my save-save-save-then-save-more default mentality wasn’t healthy. I learned that I need to relax and spend money to enjoy the present moment. On the flip side, Mrs. T began to understand my worries and my insecurity with not having enough money and started to cut back slightly on the “nice to have” expenses.

We found our “balance” by meeting each other in the middle. We both learned that it’s vital for us to stay aligned financially. These are some systems and habits that have helped us:

Regular money conversations 

We talk about money regularly but we try to keep it natural and relaxed rather than turning these chats into formal meetings. We’ll talk about money over meals, over coffee hygge, or while driving. Quite often, we involve both kids and explain to them why we are talking about these topics. In our household, we don’t shy away from money talks, we encourage them.

These money conversations happen regularly, sometimes multiple times a day. We keep them very casual and relaxed. Although we have regular money conversations, we don’t discuss our investment portfolio and net worth daily. We want to ignore the noise and focus on the long term. I’m in charge of the details and I provide Mrs. T the big picture updates without overwhelming her with all the details. So when it comes to investment portfolio and net worth, we typically discuss them in detail every quarter.

Reviewing our expenses: focusing on the trends rather than amount spent

When we first started tracking our expenses and using our budget system, I was very much focused on how much we spent on the different categories every month. I wasn’t looking at the big picture and certainly wasn’t focusing on the spending trend.

As our net worth grew larger and we had a few years of spending data on our hands, we finally developed a system that works for us. Every 6 months, Mrs. T and I will sit down for about 10 to 15 minutes to look at our spending spreadsheet. We look at the trends and see if there are categories we are overspending or underspending. If we are overspending in a certain category, we try to find out why. For example, if we were spending more than usual on dining out, perhaps it was because we had friends or family visiting.

Making the financial big decisions together 

For the most part, I manage our investment portfolio and make the buying and selling decisions. Sometimes I would consult with Mrs. T if I were to make drastic decisions like adding a new position or closing a position. Mrs. T trusts my judgment on the day-to-day investment decisions, but I found it is always a good idea to talk to her about my investment thesis and get an agreement on big portfolio moves.< Continue Reading…

Inflation is Kryptonite to anything but Short-term Bonds

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By Dale Roberts, Retirement Club/Cutthecrapinvesting

Special to Financial Independence Hub

Bonds may be the adult in the room, but they are certainly afraid of inflation. Bonds usually do their thing: they go up when stock markets get hit hard. They provide ballast. During periods of expected high inflation, or during rising inflation bond prices go down. That can create and contribute negative returns. The bonds can contribute to a portfolio decline.

But not all bonds are the same. Ultra-short bonds carry no price risk, while long-term bonds can carry extreme price risk. It’s crucial that investors understand the ‘types of bonds.’ To intermediate- and long-term bonds, inflation is Kryptonite. How do we battle that force?

As always, the following is not advice.

As a refresher, be sure to have a read of:  Stocks are the unruly kids. Bonds are the adult in the room.

Too funny, a rare case when Cut The Crap Investing actually ranked high on search.

Inflation up. Bonds down.

Bond yields rise during inflation primarily because investors demand higher returns to compensate for the reduced purchasing power of future fixed interest payments. Furthermore, inflation often prompts central banks to raise interest rates, which directly drives up yields, while existing bond prices fall to align with new, higher-yielding securities.

As interest rates rise due to inflation, new bonds are issued with higher coupon rates to attract investors. Existing bonds, which pay lower interest rates, become less attractive and must drop in price to remain competitive, which simultaneously increases their yield.

Join us at Retirement Club

We’ve had some recent experience with the inflation scare of 2021 and into 2022. The bond market (XBB-T) experienced one of its worst performances in 2022, losing around 11% or more as inflation surged, reversing a four-decade bull market in fixed income.

In the above chart we see that bonds provided no ballast. Quite the opposite. That said, we have to keep in mind that bonds have done their thing in every major recession. They stink the joint out, one time, and investors turn on them.

Traditional global stock and bond portfolios have delivered wonderful returns …

Asset Allocation ETF Page – to the end of December 2025

Inflation fighters and the all-weather portfolio

In mid-March we had a refresher on what works during inflation with:  How do we defend against stagflation?

If you have dedicated inflation fighters in the portfolio you’re not too worried about bonds delivering negative returns. We know that stocks don’t always go up. It’s the same for bonds.

In the following chart, we’ll start in 2021. Markets think ahead, of course, and enough investors loaded up on inflation-fighting assets as inflation storms gathered in 2021. The Purpose Real Asset ETF (PRA-T) is a nice one-stop inflation-fighting shop.

PRA-T was up 23.5% in 2021 and 15.9% in 2022.

Add 20% PRA-T to 80% XBAL-T and we have annual returns over 10% with no negative years from 2021 through 2023.

Continue on into 2026 and it gets even better. PRA-T is up almost 16% in 2026.

Go short and clip the inflation price risk

Ultra-short-term government bonds (CBIL-T) do not carry price risk: they are cash-like. In fact, they will provide greater and greater income as inflation expectations and yields rise. Continue Reading…

Can Millennials become Financially Independent?

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Image Pixabay/iStock

By Billy and Akaisha Kaderli

Special to Financial Independence Hub

Millennials, those born roughly between 1980 and the year 2000, face a different future than Baby Boomers did at their same age. In terms of Wealth Building and saving for Retirement their challenges are wage stagnation, unemployment, underemployment and a seeming sense of entitlement. Because they came of age during the Great Recession, their faith in brokerage firms, Wall Street and global banks has been bruised.

Being optimists, we believe the financial future of this generation can still be bright, but with loads of student debt and lack of investment understanding they need to get started learning about finances and money management now.

Time is on your side and is your greatest asset

One thing Millennials have today that Boomers don’t is great stretches of time before Retirement. It is their greatest resource and this fact needs to be made clear to them. Time cannot be replaced, and if you are a Millennial, then knowing about the power of compounding will change your financial life. $10,000 – the cost of a used car – invested today in the S&P 500 Index and based on market historical returns from 1950 to March 2023 could grow to US$1,000,000 or more throughout your career, thereby building a solid foundation for your retirement needs. This return is without adding another dollar to your investment.

S&P Market Return Chart

If you do nothing else for your retirement, scrape and scrap to make this investment into SPY (S&P 500 Index ETF) or VTI (Vanguard Total Stock Market ETF) and you will be handsomely rewarded, since you have this time on your side.

Just get Started

A new investor with limited funds can utilize an online, no-frills brokerage account and — depending on which brokerage you pick —  you can open an account with less than $1,000. Not every house requires initial investments of more than $2,500, and as of this writing, Fidelity is offering a no minimum for opening an account. Continue Reading…

Retired Money: FIRE Bloggers starting Early Retirement in their 50s and even 40s

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Deposit Photos

My latest MoneySense Retired Money column looks at a handful of FIRE bloggers who should be familiar to readers of this site, Findependence Hub: notably Mark Seed of myownadvisor and Bob Lai of Tawcan.

As you can see by clicking on the column headline, How are FIRE adherents making out?, Seed recently announced he has reached his Financial Independence in his early 50s. Bob Lai, meanwhile, is still working in his 40s but blogged on how he hopes to reach Findependence before 2030.

The MoneySense column also updates the status of veteran personal finance columnist Rob Carrick, who ended full-time employment at the Globe & Mail last year, the subject of an earlier Retired Money column.  And we mention a good blog by The Retirement Manifesto’s Fritz Gilbert about the 12 Good Years between age 60 and 72. As I ironically close the column with, it seems I have just used up my own 12 good years!

The real focus of the MoneySense column is however Mark Seed, just as it was Carrick last summer. In both cases, we exchanged views in Zoom or GoogleMeets over the course of an hour or so.

By now, it’s hardly necessary to remind readers that the FIRE acronym stands for Financial Independence Retire Early, as the image above  illustrates.

Note that our FIRE subjects in the column span four decades: Lai his 40s, Seed his 50s, Carrick his 60s and I am in my 70s, evidently still running this website and writing for MoneySense, a former employer.

The end of Salaried Employment does not mean no more Working

The observant reader will note that none of the bloggers mentioned here have actually begun the traditional “Full-Stop Retirement.” When FIRE proponents describe Early Retirement, they usually mean leaving the comfort of full-time salaried employment and all that it entails: commuting, bosses, endless meetings, tax deducted at source, annual performance reviews and so on. Continue Reading…

Mark Seed: “I just did a thing: I retired in my early 50s”

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By Mark Seed, myownadvisor

Special to Financial Independence Hub

I  just did a thing: I retired in my early 50s

I can’t speak for others … but I’m sure there is a moment people imagine what their retirement day is and what that will feel like: a clean break, a celebratory toast, maybe even a sense of instant relaxation.

For me, while you could say stepping away from the workforce in my early 50s wasn’t a single moment – although April 23 was a special moment for me – it was actually the slow-progress and realization that I had crossed an invisible line into a completely new way of living.

And to be honest, even a few days after I handed in my laptop and badge, the feeling remains quite surreal about what just happened.

via GIPHY

I just did a thing – I retired in my early 50s

I just retired today - April 23, 2026

For most of my life, work shaped pretty much everything.

Work dictated my schedule (including requests for time-off and vacations), my priorities for the week, and even a big part of my own identity. These are not terrible things whatsoever but rather work involves trade-offs of my life energy, provided to an important cause, with financial compensation in return.

For more than 25 years while working at my former employer, a great one at that, conversations with others often began with:

“So, what do you do?”

“How is work?”

“What’s new with your job since we talked last time?”

And, I always had an answer.

For 25+ years.

Half of my life. 

Now, that answer is … well ….less straightforward.

While I enjoyed my job, the people I supported, my new identity is no longer defined by a job title whether that was going to the office physically or virtually from home.

Working for others is now my (very recent) former-self.

And certainly taking a leap-of-faith as I have told others, in my early 50s, to join my wife in Early Retirement was hardly accidental.

Early retirement was born out of many, many years of deliberate choices in life:

  • Consistent savings.
  • Keeping our investing costs low.
  • Investing in equities (stocks that paid dividends, Exchange Traded Funds (ETFs) that paid distributions).
  • Getting out of debt.
  • And on and on …

What I am saying is there were both choices and important trade-offs made along the way. Early Retirement doesn’t happen overnight. It doesn’t happen in a year or so. It’s not something you just wake up and do.

While some folks around me took the flashy options, I often choose the less obvious road.

Maybe I missed out on things in doing so. Maybe I should have spent more money on things or experiences: although after already visiting many countries around the world to date I’m not quite convinced I’m that hard done by …

So, to be honest, instead of feeling like I really missed out over the years I see my lifestyle choices much differently this weekend: they bought me time.

And time, I believe, is the real currency of any retirement: My Own Advisor.

I just did a thing: I retired in my early 50s. So, now what?

My journey beforehand, including what I wrote about on this site, was mostly financial and not too personal.

I suspect moving forward it’s going to be a better balance.

Financially, it’s more about the shift from saving to spending.

The shift from saving to spending

The shift from saving to spending My last paycheque from a decades-long career at my current employer will be arriving in a few months for me – so there is a real need (soon) to shift from saving to spending. I’ve been thinking about some form of retirement for some time. There are many ways … Continue reading The shift from saving to spending

My Own Advisor

Continue Reading…