Tag Archives: Financial Independence

Work while you play, play while you work

Posted By Jonathan Chevreau | October 8, 2016

“Playing” at Dublin’s oldest pub (photo J. Chevreau)

As I write an early draft of this blog, I am in Dublin, Ireland, at the midpoint of the second week of a two-week holiday. Readers may recognize this blog’s headline as the subtitle of the new book I’ve recently published, Victory Lap Retirement. It was written with ex-banker Mike Drak, whose blogs have been regularly posted or republished here at the Hub.

I believe it was our editor, Karen Milner, who came up with this inspiring subtitle but whoever first articulated it, we all agreed on it once it came up. I often think of it when I’m working and really playing, or vice versa.

“Working” CIFFA executives at FIATA 2016 World Congress in Dublin this week.

For example, right now I’m working on writing this blog while officially “Playing” at being on holiday. The ostensible reason for the trip was to tack on a week’s vacation to a business trip my wife took to attend the FIATA 2016 World Congress in Dublin. That’s Ruth on the extreme right of the photo, along with colleagues and a spouse at a reception at Dublin’s Trinity College.

Such “Work” came at the end of a solid week of being a tourist elsewhere in Ireland, with the couple with whom we’ve been travelling.

I suggested to them in jest that the job of being a “tourist” would be a tough one if it meant 49 weeks a year, eight hours a day of “touristing,” however much it might seem to be a dream job. Come the end of any week of touring historical sites, art galleries and such – much of it on one’s feet, either walking or standing – you’d greet the arrival of the weekend and the cessation of tourism for a few days with some relief! (If you happen to be a Facebook friend, you can see about 40 photos of the trip under Ireland, here.)

It’s all relative really: if you were a writer for a Tourist guide book like Lonely Planet, you’d no doubt regard tourism as “work.”

Playing while you Work

Do you live next door to a Millionaire? Or is it you?

Posted By Marie Engen | October 6, 2016

Two decades ago, Thomas Stanley and William Danko set out to interview wealthy people for their best-selling book The Millionaire Next Door. They started out in the affluent neighbourhoods on streets dotted with extravagant homes with luxury vehicles parked out front and in-ground swimming pools in the backyards.

They were shocked to find out that the people living in these homes were not wealthy at all. Many of these upscale homes had huge mortgages. The luxury cars were leased and, while the occupants had high salaries, they had very little net worth. They only seemed wealthy.

Instead, they found millionaires in modest homes in reasonably priced neighbourhoods, working and living next door to people who have a fraction of their wealth. They were living well below their means and not calling attention to themselves. They didn’t have the big-spending lifestyle most of us associate with rich people.

To be clear, for this purpose a wealthy, or high net worth, individual is described as someone who has at least $1 million in investable assets that is not inherited. These assets do not include their home or cottage.

Also not included are the ultra-high-net-worth, super wealthy individuals with a bankroll of more than $100 million who actually represent only a small minority of Canadians.

The road to riches

What can the average Canadian learn from the habits of the wealthy? Danko and Stanley found these factors common to wealthy people:

1.) They live well below their means

When I first read this book years ago I thought – what a bunch of cheapskates with their Timex watches, $50 suits, and 10-year-old Ford trucks! If I had that kind of money, I’d at least upgrade a little. I’ve known a few people who had a large amount of assets and spent hardly anything, ultimately leaving their wealth to relatives, and often distant ones at that.

I understand now that the millionaires mentioned do tend to be frugal, but they enjoy luxuries that are meaningful to them, and only once they are well on the road to security and financial freedom.

2.) They chose the right occupation

Many are small business owners or entrepreneurs, but you don’t have to own a business to get into this circle. Often they are hard-working, well-educated, middle-to-high income earners.

I’m not suggesting you choose a career primarily for the high salary. But, it’s obvious that if a person is educated and trained in some sort of profession, they will do much better than say, a cashier or shipper-receiver.

3.) They have a good marriage

Dual incomes enable couples to get ahead financially much more quickly. However, even more important are spouses who have similar values and goals and are willing to resolve any differences and work together in building their wealth.

There is no quicker way to lose half the assets of a household than to go through a divorce.

4.) They are skillful in targeting opportunities

People shouldn’t worry about the doom and gloom reporting on the news and things they can’t control. Instead, have a long-term view of investing and don’t let emotions sway your decisions. Have cash available to buy when markets are down and to take advantage of any bargain opportunities.

Start saving and investing in your early years to take advantage of compounding and reinvested dividends.

Pay less for purchases by shopping for bargains and learn to negotiate. Avoid high-interest credit-card debt. Use smart tax reduction strategies.

Allocate your time, energy, and money efficiently, in ways conducive to building your wealth.

5.) Their adult children are economically self-sufficient

Children are taught money management at an early age and encouraged to enrol in secondary education. As adults, they don’t ask their parents for money or bail-outs or help with the bills.

Final thoughts

Danko claims that it’s really about buckling down and living on less:

“How in the world can you be an investor and let compounding work for you if you are not a saver? And how can you be a saver if you are in debt? Many people who are strapped with debt are looking for a magic bullet, but continue the free-spending ways they have become accustomed to. Live on 80% of what you make, and save and invest 20%. Let the time value of money work for you.”

Calculate how much money you will earn over your working life. Most people will earn well over a million dollars in their lifetime, but very few will become millionaires.

Accumulating wealth takes discipline and hard work.

We all want a sense of long-term security and peace of mind as well as the comfortable lifestyle that wealth provides.

Saving diligently, being frugal, setting aside a portion of your income for the future and investing wisely are the strategies to becoming the millionaire next door.

Do you think you live next door to a millionaire? Or, is it you?

Marie Engen is the “Boomer” half of Boomer & Echo. In addition to being co-author of the website, Marie is a fee-only financial planner based in Kelowna, B.C. This article originally ran at the Boomer & Echo site on September 20, 2016 and is republished here with permission.

Time: your most valuable asset

Posted By Michael Drak | October 4, 2016

“Time is more valuable than money. You can get more money, but you cannot get more time.” – Jim Rohn

It wasn’t until I began working on Victory Lap Retirement that it came to me that time, not money, was now my most important asset. The relationship between time and money had changed for me over the years.

When I worked in the corporate world, I willingly traded my time for money and I would use that money to provide security for my family. My efforts were focused on working hard and getting a promotion in order to get a bigger salary. I was willing to invest more and more of my time in order to make that happen because that was the way the game was played.

But when I was finally able to achieve “Findependence,” trading my time for money no longer felt like a fair exchange, Other things became more important and something inside started pushing me to become the real me. The only problem was that after all those years in the corporate world I had forgotten who I was, but thankfully I was able to figure that one out eventually.

This change in thinking probably had something to do with visiting my mother in the nursing home and realizing that in finally getting to my own Victory lap I had essentially used up two thirds of my allotted time. Let’s just say that I’m very concerned with how I invest the time I have left.

Expiry dates and Best Before dates

Everyone is born with an expiry date; the problem is that date is kept hidden from us, and when it happens, it just happens. But everyone also has a best-before date, a date up to which you are still physically able to do most things you enjoy: studies have shown this period can be influenced to a large extent by a person’s lifestyle.

When I think about the word “retirement,” and my definition for retirement is admittedly very narrow, I tend to think about that period that lies after a person’s best-before date up to their expiry date. This is the period where a person is no longer capable of being independent, and are dependent on others for care and support for their remaining years.

My main focus in my own Victory Lap is to make good investments of my time to create an optimal lifestyle with the goal of pushing back as far as possible my own best before date.

Each day has only 24 Hours – Use them well!

It’s important to understand how limited our hours are on this planet and to get a good feel for the problem watch the You Tube video “You have 28,835 days. Here’s how you will spend them.”

The video was a real eye opener for me. After watching it, I began to really appreciate the value of my remaining time. I promised myself I would take the appropriate corrective actions, but habit change is never easy and it is a work in progress for me. Please be assured that I will talk more on this important subject in future posts.

It takes ten years to become an overnight success

One day at a yard sale, I bought some old poker chips with the intent of using them to help track the time invested in pursuit of some of my goals. I came up with this idea after reading the book “Outliers” by Malcolm Gladwell and his chapter on the 10,000 hour rule, which is the hours of practice required to achieve mastery in anything.

A key component of my Victory Lap is the job I created for myself (my reason for getting out of bed in the morning) and creating the VLR community. To succeed, I need to improve my writing, blogging and public speaking skills. I also need to get healthy again so I will have the energy to get it all done. I have committed to investing 10,000 hours on this project, which equates to 1,000 hours per year over a 10-year period.

Those poker chips I bought? I counted out 520 chips, which represent the number of weeks covering a 10-year period and keep them in a glass jar in my home office. Each Sunday night after reviewing what I accomplished with my time that week I throw that week’s chip away and replace it with another one from the jar.

Watching that jar of chips shrink over time makes me focus on the important things in my life. It creates awareness especially as I carry the current week’s chip around in my pocket. When I hold it, it reminds me to focus on doing what I need to do in order to make things happen. Sometimes I might write something on the chip to serve as a theme for the week. It helps me to focus on what’s important and to forget about the rest.

The most important decision that you make each day is how you are going to invest your time. If you can’t see a reasonable return from your time investment don’t make the investment period.

Mike Drak is an author, blogger and speaker based in Toronto. He can be reached at michael.drak@yahoo.ca. Victory Lap Retirement, co-authored with Hub CFO Jonathan Chevreau, is now available for is now available for orders online. It’s also available now as a Kindle e-book, and on Kobo. The paperback edition will be available in bookstores in the second week of October. This blog is reprinted from Mike’s site with permission.

Millennials may need to save 22% of income just to retire by 70

Posted By Jonathan Chevreau | September 28, 2016

As my Financial Post blog today recaps, a new study being released today by the San Francisco-based personal finance site NerdWallet warns that just to retire by age 70, today’s millennials would have to save a whopping 22% of yearly income. Click on the highlighted text for the FP piece: Millennials may have less time on their side, U.S. retirement study shows.

The adjacent chart shows the math and how much millennials would need to save every year, depending on whether the stock market generates its historic 7% annual rate or the more pessimistic projections of 5%.

“Era of supernormal returns is over”

Debt-free in 30 podcast on Victory Lap Retirement

Posted By Jonathan Chevreau | September 24, 2016

jonmikecropped — Doug Hoyes (in red), Mike Drak (C), Jon Chevreau (R)

As of Saturday morning, you can find a half-hour podcast conducted by Debt-free in 30’s Doug Hoyes about the new book, Victory Lap Retirement.

My co-author, Mike Drak, and I were in Waterloo last week to tape the session and sign a few books.

Click on the highlighted text here to listen to Victory Lap Retirement. EXCLUSIVE First Podcast Interview.

Or you can scroll down below for a lightly edited transcript of the proceedings.

But first, here’s an overview written by Doug Hoyes, co-founder of insolvency trustees Hoyes Michalos:

Doug Hoyes:

Today’s podcast is the first ever podcast interview with Jonathan Chevreau and Mike Drak together, talking about their new book Victory Lap Retirement. This is so exclusive an interview that the book won’t even be officially released until October 10, 2016 but it is available for pre-order at amazon.ca, and the Kindle version is available now.

Jonathan was a guest back on Show #5 where we discussed his previous book, Findependence Day.

Mike Drak created the concept of a Victory Lap as an alternative to retirement, and teamed up with Jonathan to write their new book.

So what is a Victory Lap?

You will have to read the book for a full description, but as Jonathan and Mike and I discussed the concept of retirement has changed significantly. Our grandparents and parents had a good chance of working at the same company until aged 65, and then retiring with a full pension before dying at age 70.

Today almost no-one works at the same company for their entire working life, and most employers no longer offer full pensions, so the old fashioned view of retirement at age 65 with a full pension is no longer reality for most workers.

Instead, we are working longer, and living longer.

The essence of Victory Lap Retirement is to leave corporate employment, which usually entails working for someone else, and enter a new and different phase of your life.

Mike and Jonathan wrote Victory Lap Retirement to show readers how to transition from a high stress work environment to a low stress sustainable lifestyle to enjoy a happier, healthier life. For many, that may involve turning a hobby or passion into income during your “retirement” years, or working part time to “stay involved.”

Debt and Retirement

Debt is a prominent subject in Victory Lap Retirement, including this quote:

…make breaking free from the chains of debt your first priority. Not only will debt limit your financial freedom severely, it will suck the life right out of you.

As we discussed, debt and retirement don’t mix. When you retire your income decreases, so it’s likely you won’t be able to afford payments on a mortgage or other debt in retirement. Get out of debt long before retirement.

Unfortunately that’s not always possible, which is why seniors are the fastest growing age group of people filing bankruptcy and consumer proposals. Older debtors, aged 50 and older, now account for 30% of all insolvency filings, up from 27% two years ago, and that number keeps growing.

Senior debtors, people aged 60 and over, have the highest amount of unsecured debt of any age group when they go bankrupt, almost $70,000. A growing percentage of them even resort to payday loans to stay afloat.

If you’ve got debt, retirement is very difficult. If you have trouble making your debt payments while you are working, it may be impossible to keep up when you retire and your income drops, which is why we all agree that eliminating debt is essential long before retirement.

In addition to eliminating debt, Mike and Jonathan suggest you ask yourself “what do I like to do?” and start planning your Victory Lap now.

For more, listen to the podcast or read the transcript.

Transcript: