Quest for joyful life & financial independence. I started reading books on personal finance and investment topics to increase my knowledge. I also started my own self-managed dividend portfolio while focusing on being as tax efficient as possible. Through frugality, dividend stock investing, and other passive income streams I am targeting to reach financial independence in 2025.
Brrr it has been cold in Vancouver the last few days. Hard to believe but we have had a few days where the temperature dipped below 0°C (it’s -6°C/21°F outside as I write this). Such below 0 temperature is uncommon for Vancouver. The temperature drop has been a surprise considering that just the other weekend Mrs. T ordered 4 yards of manure and the both of us were shovelling manure into our backyard all weekend. In addition, some flowers like tulips are already coming out from the ground. Hopefully, the freezing temperature is just a blip and we’ll get back to seasonal average temperature soon…
(Folks that live in frozen tundra are probably rolling their eyes by now…)
Between work, everyday life, and writing guest blog articles, I haven’t spent as much time publishing posts on this blog. I am toying with a few ideas in my head but I need a bit more time to incubate these ideas. For now, these ideas will just live in my head…
Here are some articles that have caught my eyes over the last few weeks.
When Mrs. T and I got married, we talked about how cool it would be to celebrate our 5 year wedding anniversary in Hawaii. As luck would have it, Baby T2.0 was born shortly before our 5 year wedding anniversary. At that time, we were too busy with taking care of 2 little kids, so we didn’t end up going to Hawaii. It didn’t mean we stopped talking about taking a trip to Hawaii though. Mrs. T and I still wanted to take a family vacation and visit one of the Hawaiian islands.
Being a personal finance blogger, I always want to find ways to maximize my money and my travel rewards points.
After some research on Hawaii Islands, flight options, and Marriott properties, we decided to go to Maui. Many travel websites suggested the Wailea Beach Resort on Maui is a fabulous place to stay and offers the most bang for the buck for redeeming Marriott points for stays.
When I first looked at how much the Wailea Beach Resort rooms cost per night, I was shocked.
A garden view room was going for $560 USD (~$700 CAD) a night!!! Some rooms cost over $800 USD!!!
I have stayed in San Jose hotels for over $500 USD per night before, but that was for business. I can never imagine forking out that much money per night for a personal trip. Wow!
The Basic Travel Details
Since Wailea Beach Resort is a category 8 Marriott hotel, each night would cost 40,000 Marriott points. We thought it would be great to stay for 7 nights, so we would need 240,000 Marriott points (you get 1 free night when redeeming for 4 nights). That means we would be able to save $3920 USD/$4,900 CAD, giving us a rate of approximately ~1.63¢ USD per Marriott point. This is a much higher value than the typical estimated value of 0.9¢ per Marriott point.
To get to Maui, we found out flying direct with Air Canada would cost $680 per person. This would mean over $2,000 for the whole family (only 3 seats since Baby T2.0 is less than 2, and will be sitting on our laps). Using Aeroplan miles, it would cost 45,000 miles per person plus taxes and fees for the Fixed Mileage Flight Rewards (we can only book non-direct flights). It would require more miles if we were to go with the Market Fare Flight Rewards (can book direct flights).
Considering we are travelling with two little kids, we would prefer to fly direct, rather than having to connect via Seattle or LA.
Thanks to work, I have been accumulating Marriott rewards points and Aeroplan miles whenever I travel for work. I happened to spend a lot of time on the road in 2017, so I accumulated a good amount of points. Years ago I used to be able to use my personal Marriott Rewards Visa to pay for my business trips to accumulate Marriott points. But in late 2016, my company issued company credit cards for a company-wide cost-saving measure. This meant I no longer could “double dip” Marriott points whenever I stay at a Marriott property. It became harder to accumulate over 240,000 Marriott points on business travels alone. I had to find another way to “earn” points.
So I started looking into travel hacking.
I started reading more about travel hacking and learning what rewards points can do. For example, you can transfer American Express points to many different frequent travel programs, like Aeroplan, Delta, and SPG.
Unfortunately for us Canadians, there are only a limited amount of travel rewards credit cards available. We don’t get as many reward credit card choices compared to our American friends.
Marriott Hotel & Air Packages
Upon further research, I found a way to maximize my Marriott points. With the Marriott points, you typically redeem them for hotel stays, but Marriott also offers Marriott hotel & air packages to allow you to use points for hotel stays and airline miles.
Air Canada (Aeroplan) happens to be one of the transfer options. Usually, Marriott points are transferred to Aeroplan miles at a 5:1 rate, so redeeming 360,000 Marriott points for 7 nights of stay at a category 8 hotel and 120,000 Aeroplan miles is an excellent deal (it would have cost 840,000 Marriott points otherwise).
Aeroplan Transfer Bonus
A few months into my planning of our Maui vacation, Aeroplan had a 35% transfer bonus promotion when points were transferred from various hotel partners including Starwood, Marriott, and IHG.
With the 35% bonus, that meant transferring 120,000 points from Marriott would give us a total of 162,000 Aeroplan points.
A very good deal!
At an estimated value of 1.5¢ per Aeroplan miles, 162,000 Aeroplan miles would equate to $2,430 CAD. The 35% bonus meant we would get an extra $630.
I knew I had to get 360,000 Marriott points fast before the promotional deadline so we can get the 7-night hotel & air package.
How To Get Marriott Points Via Credit Card Bonus Points
Here in Canada, below are some of the credit cards that offer good welcome bonus points that can be converted to Marriott points.
Marriott Rewards Visa – 50,000 Marriott welcome bonus points after the first transaction. No fee the first year, $120 after (This card is no longer available).
American Express Personal Gold – 25,000 Amex welcome bonus points after spending $1,500 in the first 3 months. No fee the first year, $150 after.
American Express Personal Platinum – 60,000 Amex welcome bonus points after spending $3,000 in the first 3 months. $699 annual fee with $200 annual travel credit.
American Express Business Platinum – 75,000 Amex welcome bonus points after spending $5,000 in the first 3 months. $399 annual fee. (Note: American Express has updated the annual fee to $499)
American Express SPG Personal – 20,000 SPG welcome bonus points after spending $1,500 in the first 3 months. $120 annual fee.
American Express SPG Business – 20,000 SPG welcome bonus points after spending $1,500 in the first 3 months. $150 annual fee.
With Amex points, we can transfer them to SPG at a 2:1 rate. We can then transfer SPG points to Marriott points at a 1:3 rate.
So, if we have 20,000 Amex points, we end up with 30,000 Marriott points (20k Amex -> 10k SPG -> 30k Marriott). If we have 25,000 SPG points, we end up with 75,000 Marriot points (25k SPG -> 75k Marriott).
In addition to the welcome bonus points, American Express offers referral points. Unfortunately, Amex no longer gives you referral points if you self-referral, but the referrals work if you refer your spouse or friends.
Between Mrs. T and I, we applied for the following credit cards. We also referred each other whenever possible.
Marriott Rewards Visa
American Express Personal Gold
American Express Business Platinum
American Express SPG Personal
American Express SPG Business
American Express Personal Gold
American Express SPG Business
In total, we spent $789 in annual fees by applying for these credit cards.
We also received a total of 463,000 Marriott points. This is more than enough for the 360,000 Marriott points we need for the 7-night hotel + air package.
At an estimated value of 0.9¢ per Marriott point, 463,000 Marriott points would equate to $4,167 USD or about $5200 CAD.
Change Of Travel Plan
In addition to the bonus points from credit cards, I also had some Marriott and Aeroplan points from all my business & personal travels. As it turned out, I had enough points to book 4 extra nights of stay at Wailea Beach Resort (160,000 Marriott points needed). This would give us 1 free night.
So rather than going to Maui for 7 nights, we decided to stay for 12 nights instead.
Who wouldn’t want to stay in paradise for extra 5 nights right?
For the 7-night hotel + air package, we needed 360,000 Marriott points.
For the 5 additional nights, we needed 160,000 Marriott points.
For flights, we ended up booking Aeroplan Market Fare for direct flights. Thanks to my Aeroplan Silver status, I got 20% off the number of miles required to redeem for Market Fare Flight Rewards. So, the Market Fare ended up costing less total Aeroplan miles than Fixed Fare.
In the end, we redeemed 520,000 Marriott points and 188,406 Aeroplan miles.
By redeeming points, we saved $10,440 CAD or $8,352.42 USD.
The dollar per point value would be approximately 1.68¢ USD per Marriott points and 1.08¢ CAD per Aeroplan miles.
According to the Points Guy, Marriott points is worth 0.9¢ per point and Aeroplan miles is 1.5¢ per mile. So we got a great value with our Marriott points, but perhaps not as good for Aeroplan miles.
Credit Card Minimum Spending Strategies
Of all the credit cards that we applied, every card except for the Marriott Rewards Visa had minimum spending requirements. Without crossing the minimum spending requirements, we wouldn’t be able to get the sign-up welcome bonus points. A thing to note is that the associated annual fees do not count toward the minimum spending requirements.
In other words, we had to spend
2x American Express Personal Gold -> $3,000
American Express Business Platinum -> $5,000
2x American Express SPG Personal -> $3,000
American Express SPG Business -> $1,500
Or a total of $12,500 in a span of a year and a half.
That’s a lot of money, considering we only spent $51,144.77 in 2017 (excluding business expenses).
Planned big expenses
How to meet these requirements? For that, we carried out our credit card minimum spending strategies. Basically, we timed the application of each credit card just before a planned big expense. Some big expenses included:
In addition to the planned big expenses, we also utilized my work’s extended health insurance. The extended health insurance covers a certain amount of health benefits per year (i.e. $500 annually for massage per person). So Mrs. T and I would each book massage sessions and use the new credit card to pay for these sessions, then get reimbursed. In 2017 my work’s extended health insurance changed coverage provider mid-year, so it allowed us to have double up on the annual extended health benefits (i.e. getting $1,000 worth of massage per person).
New purchases on the new card
Whenever we have a new card, this card becomes our default spender. This should be pretty obvious. In other words, all purchases will go on the new card until the minimum spending requirements are met.
I ended up calling American Express a couple of times and begged for forgiveness. Fortunately, I was awarded the 75,000 Amex points. Phew!
Lesson learned? Track the spending carefully so you don’t lose out on the welcome sign-up bonus points.
Start Traveling Hacking Today
It is pretty cool to know that we saved over $10,000 for our Maui vacation. This is why travel hacking is so attractive. If you want to start travel hacking, you can use my referral links to get significantly more Amex welcome bonus points.
Wow, January flew by! I can’t believe it’s already February. Here in Vancouver, January was an exceptional wet month. We had 249.4 millimetres (9.82 inches) of rain, making it the fifth wettest January on record. The previous record was set in January 2006 when 283.6 millimetres (11.2 inches) of rain fell on Vancouver. In case you are wondering, the normal amount for the month of January is 168.4 millimetres (6.63 inches). To put this into perspective, the annual rainfall for Phoenix is 204.22 millimetres (8.04 inches). No wonder there are so many Canadian snowbirds heading down to Phoenix in the winter.
Speaking of rain…here’s a Vancouver joke for you!
Vancouver doesn’t rain a lot…just twice a week. Once for 4 days, another for 3 days
This joke has some truth to it!!!
Fortunately, this kind of record rainfall in the city meant a crazy amount of snow up in the mountains, and I managed to head out to enjoy a fine day of kids-free-skiing.
Some of my outdoor friends have been enjoying wicked powder in the backcountry.
In January and the recent February days, there have been a lot of volatility in the stock market. Many people seem to be freaking out over the record stock market drops. If you are freaking out, please take a deep breath and read this article a couple of times. Once you have done that, you might understand why I tweeted out this on Feb 5th.
In January 2018 we received dividend income from the following companies:
Pure Industrial REIT (AAR.UN)
BCE Inc (BCE.TO)
Bank of Nova Scotia (BNS.TO)
Corus Entertainment (CJR.B)
Canadian Natural Resources (CNQ.TO)
Dream Office REIT (D.UN)
Dream Global REIT (DRG.UN)
Dream Industrial REIT (DIR.UN)
Enbridge Income Trust (ENF.TO)
H&R REIT (HR.UN)
Inter Pipeline (IPL.TO)
KEG Income Trust (KEG.UN)
MCAN Mortgage Corp (MKP.TO)
Nutrien Ltd (NTR.TO) – from Agrium shares
Prairiesky Royalty (PSK.TO)
SmartCentres REIT (SRU.UN)
TransCanada Corp (TRP.TO)
Domtar Corp (UFS.TO)
Vanguard Cana All Cap (VCN)
Vanguard All-World Ex Canada (VXC)
We received a total of 27 paycheques in January 2018 that added up to $1,340.83. Talk about having a great start to the year! The highest monthly dividend income so far! Woohoo!
Out of the $1,340.83 received, $84.32 was in USD and $1,256.51 was in CAD. So January was a CAD heavy month when it comes to dividend income.
Please note, we use a 1 to 1 currency rate approach. Therefore, we do not convert dividends received in USD to CAD. We are ignoring exchange rate to keep the math simple. This is our way to avoid fluctuations in dividend income over time due to changes in the exchange rate.
The top 5 dividend payouts in January 2018 were Bank of Nova Scotia, CIBC, TD, Telus, and BCE. Dividend payouts from these 5 companies accounted for 54.54% or $731.31 of our January dividend income.
Dividend Income Breakdown
We hold our dividend stocks in taxable accounts, RRSPs, and TFSAs. Every year, we maximize tax-advantaged accounts first before investing in taxable accounts.
We do this so we can be as tax efficient as possible. Why pay extra taxes when we can avoid them by utilizing these tax-advantaged accounts? It seems like a no brainer to me. This is why I am always shocked to hear people who are investing using taxable accounts when they have tons of RRSP and/or TFSA contribution rooms left.
For January 2018 dividend income, here’s the breakdown of the different accounts:
Taxable: $306.21or 22.84%
RRSPs: $317.87 or 23.71%
TFSAs: $716.75 or 53.46%
Effectively, only 22.84% of our January dividend income was taxable. We constructed our taxable accounts so we only receive from stocks that pay out eligible dividend income.
Compared to January 2017, we saw a very respectable YOY growth of 17.04%. I am very happy to see the YOY growth to be above 15%.
It will be interesting to see what the rest of the year holds.
In January, a number of stocks that we own in our portfolio announced dividend increase:
Omega Healthcare Inc raised its dividend by 1.54% to $0.66 per share.
Canadian National Railway raised its dividend by 10.30% to $0.455 per share.
Metro raised its dividend by 10.77% to $0.18 per share.
Chevron raised its dividend by 3.70% to $1.12 per share.
Visa raised its dividend by 7.69% to $0.21 per share.
Enbridge Income Fund raised its dividend by 7.13% to $0.1883 per share.
These announcements have increased our annual dividend income by $48.68.
At 3% dividend yield, that’s equivalent to adding $1,622.67 of fresh capital into our dividend portfolio.
Dividend Stock Transaction
As I hinted in our 2017 Year End Dividend Income Update, January was going to be a huge buying month for us. This is mostly because the additional $5,500 per person in TFSA contribution room. Once we maximized our TFSAs and making sure that our RRSPs are maxed out as well, we started making purchases in our taxable accounts.
Since the beginning of 2018, we have made the following transactions:
Closed out our Corus Entertainment position (115 shares in total)
Purchased 44 shares of Bank of Nova Scotia (BNS.TO)
Purchased 36 shares of Enbridge (ENB.TO)
Purchased 36 shares of National Bank (NA.TO)
Purchased 100 shares of Canadian Utilities (CU.TO)
Purchased 122 shares of Smart REIT (SRU.UN)
Purchased 22 shares of Laurentian Bank of Canada (LA.TO)
Purchased 50 shares of Emera (EMA.TO)
Purchased 50 shares of BCE (BCE.TO)
Purchased 100 shares of Magellan Aerospace (MAL.TO)
Purchased 29 shares of Vanguard All-World Ex Canada
Roughly $24.5k worth of transactions.
Or roughly $927.71 increase in our annual dividend income.
Corus Entertainment Inc (CJR.B)
After the latest disappointing quarterly results, I began questioning Corus Entertainment’s ability to generate profits. This was the third quarterly disappointment in a row. The consolidated revenues decreased 2% for the quarter, and the consolidated segment profit decreased 7% for the quarter. At over 100% payout ratio, this was simply unsustainable. While the dividend yield is extremely high, the payout ratio indicates CJR.B is extremely risky to hold.
Since our purchase in July 2014, the share price has tumbled. Given that more and more people are cutting cable and moving to Netflix, I was not convinced that Corus Entertainment can recover to its glory days.
So I decided to bite the bullet and liquidated all of our CJR.B shares.
Bank of Nova Scotia, Enbridge, National Bank, Smart REIT, Emra, & BCE
I made these purchases to simply add more shares to our existing positions. All of these stocks are considered long-term holdings for us. With the share prices taking a hit due to the recent market volatility, I figured I might as well take advantage of the opportunity.
I purchased a few shares of Laurentian Bank of Canada for the sole purpose to diversify within the Canadian banking space. LA is not as big as TD, RY, BMO, BNS, CIBC, or NA, but it does have a pretty decent dividend record. It also happens to be the cheapest Canadian bank from a PE analysis point of view. The share price has taken a hit due to concerns of high exposure to residential mortgages. As a long-term investor, however, I believe this is a good opportunity to initiate a small position of the company.
Magellan Aerospace Corp popped up when I was reviewing the Canadian Dividend All-Star list. I decided to purchase a full lot of MAL because I liked its dividend track record and that it’s in a very specialized sector. When a company is in a specialized sector, typically it is harder for a competitor to enter the sector. The MAL purchase was about $2,000 in, a small fraction of our dividend portfolio, but it provides us with some sector diversification. We will have to see how Magellan Aerospace Corp does in the next few years.
We started off the new year with a bang, receiving a total of $1,340.83 in dividend income. This is a fantastic result, considering in 2011 we only received about half of this amount for the entire year, and in 2014 we didn’t cross the $1,300 mark until the middle of March. In addition, we started the year with a major shopping spree and plan to continue adding new capital to our dividend portfolio. With 11 more months to go, 2018 is looking very bright.
Dear readers, how was your January dividend income?
As you may have heard, fellow Canadian personal finance blogger, Cait Flanders’ first book “The Year of Less” was launched in January. I have followed Cait’s journey on her blog for the last few years and absolutely loved her down-to-earth approach to life and her style of writing/storytelling. I have been fortunate to meet her in person a few times and talked to her for an extended period each time about blogging, money, and life.
It shouldn’t really come as a surprise though, as I seem to be able to connect with many personal finance bloggers in some ways. Afterall, we all are on our own personal finance journey, we all went through our own struggles with finances, and we are sharing our own stories as we learn more about finances, investing, financial independence, and hopefully one day, early retirement. No wonder we all share many things in common.
When we finally received Cait’s book a couple of weeks ago, Mrs. T and I decided that we would read the book together, out loud. So when the kids were finally in bed, sleeping, we would sit down together on the couch, and took turns reading each chapter (OK I’ll admit, I read most of the book out loud). I have to say, reading the book out loud gave me a completely different perspective of Cait’s story. It forced me to really listen and think. It forced me to stay in the moment and absorb every single word that Cait had written.
On the surface, The Year of Less might sound like a book about Cait’s year long shopping ban. But it is much deeper than that. Cait opened herself up and shared her experiences throughout the year of shopping ban and the many tough situations that she faced that turned her life upside down. The Year of Less is an honest and moving memoir that touched both my and Mrs. T’s my hearts. The book is more of a self-discovery and self-worth journey and in the end, gave Cait a greater sense of appreciation and gratitude of her life. Reading it, I felt a deep personal connection with Cait, because, like her, I had gone through similar experiences, similar struggles with self-worth and self-image, and similar up-and-downs growing up.
One of my favourite sections of the book…
Decluttering and purging 70 percent of my belongings came with different lessons. I realized I had spent the first 29 years of my life doing and buying whatever I could do be someone I thought I should be. I kept so many things, and consumed the wrong things, all because I never felt like I was good enough. I wasn’t smart enough or professional enough or talented enough or creative enough. I didn’t trust that who I was or what I brought to the table in any situation was already unique, so I bought things that could make me better. Then I spent a year sorting through the mess and figuring out who I really was. A writer and a reader. Hiker and traveler. Dog owner and animal lover. Sister, daughter, and friend. It turned out I had never been someone who valued material objects. I valued the people in my life and the experiences we shared together. None of that could be found in the belongings in my home. It had always been in my heart.
Reading The Year of Less has inspired both Mrs. T and me to declutter our home. Over 3 years ago we moved from a two-bedroom apartment to a two-storey home. We thought we had a pretty good control of not collecting things, but as it turns out, we were completely wrong. We have been slowly accumulating unnecessary things. Shockingly, we haven’t even unpacked some of the boxes from 3 years ago. We have been totally inspired to live with fewer things and become even more mindful consumers.
Being mindful consumers with things is the first step. I believe we can take the next step by being more mindful with our food consumption.
Because our choices of what to eat can have a great impact to the environmental.
Before you roll your eyes and think that I am about to go off on an environmental rampage…please take a deep breath and hear me out!
According to University of Michigan study, on average, US household food consumption emits 8.1 metric tons of CO2 each year. The production of food accounts for 83% of emission, while the transportation of food accounts for 11%.
All foods considered, what’s extremely shocking to me, is that meat products have the largest carbon footprints per calorie than grain or vegetable products. In particularly, lamb and beef have a significant environmental impact compared to other meats including chicken, turkey, and pork.
Lamb is ranked as the #1 meat that produces the most CO2. A kilogram (2.2 lbs) of lamb eaten is equivalent to generating 39.3 kg (86.4 lbs) of CO2. Or the equivalent of driving your car for 146 km or 91 miles Lamb is considered as the highest because there are less edible meat relative to sheep’s live weight. Furthermore, sheep are typically raised outside of North America, so lamb needs to be imported. One thing to consider is that lamb is not consumed by North American families on a regular basis.
The most popular meat for North American families is beef. Unfortunately, beef produces the second most amount of CO2. A kilogram (2.2 lbs) of beef eaten is equivalent to generating 27.1 kg (59.6 lbs) of CO2. Or the equivalent of driving your car for 101 km or 63 miles. The amount of CO2 produced by a kilogram of beef is more than twice the emissions of pork and nearly four times that of chicken. Furthermore, to produce the same amount of beef, you need 28 times more land to produce and 11 more times more water than pork or chicken. Not to mention the huge amount of grains needed to raise cattle. And of course, to produce the huge amount of grains needed to raise cattle, more land, water and nitrogen fertilizer are needed.
Simply put, given the popularity of beef, it has a very significant environmental impact. If we continue with the mindless lamb and beef consumptions, who knows what the Earth would look like in 10, 20, 50, or 100 years from today.
And it’s not just lamb and beef. I was shocked to learn how much CO2 cheese generates. Cheese generates the third-highest emissions at 13.5 kilos (29.7 lbs) of CO2 per kilo eaten.
In other words, major CO2 emissions from food aren’t just from meat eaters, but vegetarians too.
The thing is, we all need to eat to fuel our bodies. As mindful consumers, what we can do is make smarter food decisions. No, I am not suggesting stop eating meat and cheese completely. Heck, I will be the first one to admit that lamb, beef, and cheese taste really really good. What I am suggesting and recommending is that we should all collectively eat less lamb and beef (and perhaps less meat in general). For example, rather than eating beef every lunch and dinner, cut back on the beef consumption. Maybe eat beef every other meal. Or maybe instead of eating an 8 oz. portion for each meal, eat a smaller portion, or eat a 4 oz. portion and substitute the other 4 oz. with beans or other meats like chicken, pork or turkey. Alternatively, substitute beef with other lower CO2 emitting meats, like turkey, pork, and salmon. Also, we can collectively eat less cheese, and find cheese alternatives to consume.
Just how much CO2 can we reduce by eating less meat?
If you eat one less beef burger a week (52 burgers in total), it is equivalent of taking your car off the road for 515 km or 320 miles.
If everyone in the U.S. ate no meat or cheese just one day a week (52 days in total), it is equivalent to not driving for 146.4 billion km or 91 billion miles. Or taking 7.6 million cars off the road!
Interestingly enough, as a household, we have been eating less and less meat. This was not a conscious decision. We just have been making and eating more vegetarian meals on a weekly basis. In addition, we are also eating things produced in our backyard, rather than relying on vegetables purchased from grocery stores.
But we are just one household in millions of households on Earth. If all of us can take small steps to become more mindful with our food consumption, collectively, we can make a huge environmental difference.
Eat more local and in season
Thanks globalization, it is easy and possible to find fresh seasonal fruits and vegetables all year round. For example, strawberries and blueberries are available during summer. But nowadays, you can find fresh strawberries and blueberries in the supermarket any time of the year. When these seasonal fruits and vegetables are not in reason, they are imported from other parts of the world.
This means a higher CO2 emission. Because these food items need to be transported from one part of the world to your local supermarket.
As mindful consumers, what we can do to help the environment is to eat more locally and eat seasonal food items that are in season. For example, check out local farmers’ markets during summer to find fresh local seasonal produce. Be mindful of where the produce comes from, and ask yourself, do you really need to eat fresh strawberries in the middle of winter?
Financial Benefits of being mindful consumers
By being mindful consumers with food, we are not only helping the environment in a significant way, we can also save money.
Afterall, the less you spend on food by consuming less meat, cheese, the more you save.
And the less you spend and the more you save, the faster you can achieve financial independence.
I donated blood for the first time in 2001 in a mobile donation clinic. It was my first year of university, living in one of the residences at University of British Columbia. The mobile donation clinic was available because the university residence association had arranged a Save a Live blood donation event.
I have always thought it was a good deed to donate blood. I was also taught by my parents that blood donation is good for your health because it forces your body to generate new blood.
So I signed up without knowing anything about the blood donation process.
My first donation went very smoothly, and I was very happy to be able to help someone in need.
The university residence association arranged another blood donation event in my second year of university, and I donated blood again for the second time.
Then I stopped donating completely. The mobile donation unit never came to the UBC campus and I didn’t try to go to the donation clinic about 50 minutes away by bus.
After university, I moved back home with my parents to save money. When I finally moved out again in 2008, I found out that I was living near the Canadian Blood Services’ donation clinic in Vancouver.
Wanting to help someone in need, one Saturday afternoon in the summer of 2008, I took the bus to the clinic to donate blood as a walk-in donor.
Little did I know, I started a personal tradition…
The average adult has about 5 litres of blood. So each donation takes about 9% of your blood.
You can donate every 56 days for whole blood for males, every 84 days for females.
There are different blood types, AB+, AB-, A+, A-, B+, B-, O+, O-.
AB- is the rarest blood type in Canada (0.5%).
O+ is the most common blood type in Canada (39%).
People with O- blood are considered universal donors because anyone can receive O- blood. But people with O- blood can only receive from O- blood.
People with type AB+ are considered universal recipients for whole blood as they can receive them from any other blood type donor.
Donors are screened every single donation. The screening process is lengthy and may seem intrusive. This is necessary to screen out people who are at greater risk of transmitting infections through their blood.
Some Personal Facts
Since started donating blood again in 2008, I have visited the clinic regularly, usually whenever I became eligible to donate again.
I have donated 57 times and counting. This means it would have taken me 3,192 days or almost 9 years to donate this many times if I were to donate whenever I was eligible.
The entire donation process typically takes about an hour (i.e. checking in, screening, donating, resting). The actual blood donating part would usually take me about 7 minutes. This means I have spent about 399 minutes with a needle stuck in my arm, and have donated over 25.65 litres or 6.77 gallons of blood.
I donate from both arms.
My hemoglobin level is averaging about 150 g/L (you need a minimum of 125 g/L for females and 130g/L for males to donate).
When I was younger, I was told by my mom that my blood type is B (doctors’ checked when I was born). When I started donating blood, I was told that my blood type is O positive. Weird!
Because I have been going to the same clinic in Vancouver regularly, many of the nurses know me. I have brought Baby T1.0 and Baby T2.0 with me a few times, so some of the nurses would often ask how the kids are doing. Donating blood has become one of these things I do regularly.
A number of years ago, a gentleman in his late 50’s was donating next to me. When he finished, the nurses circled around him and gave him a big celebration. Turned out it was his 100th blood donation!
I was in awe of his accomplishment. 100 donations would require a minimum of 15.5 years to accomplish. Talk about commitment!
And it was then, sitting next to this gentleman with a needle stuck in one of my arms, I decided that I would set having100 blood donations as a personal goal.
Last year I hit my 50th donation milestone and was invited to Canadian Blood Services’ Honouring Our Lifeblood event. In a room full of donors, I learned that some people have donated 100, 150 times, 200 times, and some even over 300 times. I was stunned and amazed by the generosity of these people and their commitments. (Some of these people donated platelet so they can donate every 2 weeks. I just recently became eligible for donating platelets and might give it a try).
How the heck does blood donation have anything to do with Financial Independence Retire Early (FIRE)?
Ha! I am kidding.
When I ponder for a bit on our quest for financial independence and my regular blood donation and my goal of hitting the 100th donation milestone, I realized donating blood regularly and FiRE have one single common factor.
It takes commitment to go to the donation clinic and get your fingers and arms poked by needles every 56 days or so. It takes commitment to donate blood regularly. Similarly, it takes commitment to be financially responsible, like spending less than you earn, paying yourself first, saving for retirement, building passive income, etc. It also takes commitment to do exactly the same things for many years and get in line and stay in line with your investment strategies.
Similarly, nobody is forcing you to spend less than you earn. Sure, you might get into a lot of debt if you don’t, but it’s your choice. Nobody is forcing you to save and generate passive income so one day you can become financially independent and possibly retire early. It is simply a personal commitment.
It takes years to reach the 50, 100, 150, 200, 250, 300+ blood donation milestones. These milestones are not something you can achieve overnight. Similarly, becoming financially independent and retiring early both take time.
Another similarity is that you must take care of the small things. To donate regularly, you must look after your own body, make sure that you are not overweight, maintain a healthy blood pressure, and eat iron-rich food. To become good with your finances and achieve FIRE one day, you must take small actions every day to make sure you are tracking toward your financial goals.
I am still a few years away from reaching my 100th donation milestone (it’ll take a minimum 6.6 more years). As you may know, we have decided to prolong our financial independence journey. Therefore, for 100th donation and FIRE milestones, I know that we will achieve them one day, they simply take time and commitment. My wife and I are not in a rush. We keep reminding ourselves to enjoy the small things in life each day and that today is the greatest day of our lives.
Because it is.
*** Donating blood in Canada is completely voluntary and you don’t get paid. So no, I don’t sell my blood to expedite FIRE. I just thought it is a silly post title. :p
If you are a long time reader of this blog, you probably have noticed that I haven’t been writing as many investment related posts (i.e. dividend stock transactions, considerations, evaluations, etc) . Rather, I have been writing more about my thoughts on financial independence retire early (FIRE), and other things I have been learning and experiencing on our quest for financial independence and joyful life.
There are quite a number of reasons behind this shift. Mostly because I think writing non-investment specific posts is more insightful. They are also more fun to write because I write in a style that is more raw. Also, I figured, if you want to read stock analysis, there are other websites that can do a way better write-up than me.
However, over the past few months, many readers have emailed me and asked which dividend stocks we are considering for 2018.
I guess people are asking because of the new TFSA contribution room. In 2018, eligible Canadians are allowed to add $5,500 into their TFSA account. So, by popular demands, here are some Canadian dividend stocks we are considering to add in 2018.
Bank of Nova Scotia (BNS.TO)
We own a bit of Bank of Nova Scotia already but I think we can potentially add more.
Bank of Nova Scotia is one of the most diversified Canadian banks. It has been expanding into Latin America the last number of years and now serve people in North America, Latin America, the Caribbean, Central America, and Asia-Pacific. It is no longer just a Canadian bank. Bank of Nova Scotia also offers a large range of products and services, including personal and commercial banking, wealth management and private banking, corporate and investment banking, and capital markets.
We plan to buy more of BNS for the geographical diversification reason. The Canadian debt level and housing market are slightly worrisome, so purchasing a bank that is well diversified outside of Canada may be a good idea.
It certainly doesn’t hurt when BNS has been paying dividends to shareholders since the 1800’s.
Laurentian Bank of Canada (LB.TO)
Laurentian Bank has seen its share price retreating the last little while. At a PE ratio of 9.9, it is one of the cheapest Canadian banks available from a PE ratio evaluation point of view. With a 10-year dividend payout increase streak and a 10-year dividend growth rate of 7.8%, LB has a solid dividend track record.
LB certainly isn’t as big as the big 5 Canadian banks, with most of its branches in eastern Canada. So from a future growth point of view, LB may not grow as quickly compared to its Canadian peers.
One of the concerns with Laurentian Bank is that it has high exposure to residential mortgages. In the fourth-quarter earnings, LB disclosed that an internal audit found some documentation issues on some mortgages it had sold to a third-party company. As a result, the bank has decided to buy back $392 million of problematic mortgages from the third-party.
Having said all that, I think at the current share price, it may make sense to purchase some shares of LB, collect dividend income, and see what the future holds.
Canadian Utilities (CU.TO)
Canadian Utilities sits at top of the Canadian dividend all-star list with 46 consecutive years of dividend increase. At a dividend yield of over 4%, a payout ratio of 76.5%, and a 10-year dividend growth rate of 8.6%, I am really surprised that we don’t own any shares.
Utilities have not been a strong focus within our dividend portfolio. Perhaps it makes sense to increase our exposure to the utility sector. Since we already own the likes of Fortis, Hydro One, Emera, and Brookfield Renewable Energy, adding CU would allow us to increase diversification within this sector.
We have been nibbling on Emera shares throughout 2017, adding a few shares whenever the price drops. In the past few months, the stock price has continued to drop, which meant its dividend yield is almost at 5%.
Emera has raised dividend payout for 11 years straight with a 10-year dividend growth rate of 9%. While the dividend growth rate is only in the single digit, the high initial dividend yield can be quite enticing. Therefore, we may continue what we did throughout 2017 and continue nibble on Emera shares throughout 2018.
Magellan Aerospace Corporation is a Canada-based supplier of components to the aerospace industry and in certain applications for power generation projects. The Company engineers and manufactures aeroengine and aerostructure components for aerospace markets, including products for defense and space markets, and complementary specialty products. Its segments include Aerospace and Power Generation Project. The Aerospace segment includes the design, development, manufacture, repair and overhaul, and sale of systems and components for defense and commercial aviation. The Power Generation Project segment includes the supply of gas turbine power generation units. Within the Aerospace segment, the Company’s product groupings include aerostructures and aeroengines. It manufactures complex cast, fabricated and machined gas turbine engine components, both static and rotating, and integrated nacelle components, flow paths and engine exhaust systems for various aeroengine manufacturers.
Basically, MAL is in a very specialized sector. The company started paying dividends in 2013 and has increased dividend payout every year since. The dividend yield is below 2%, but MAL has been increasing dividend payout at above 15% rate each year (its 3-year dividend growth rate is 17%). Furthermore, at the current payout ratio of 20%, the company should be able to continue the impressive dividend growth for years to come. This stock would definitely fall into the low yield high growth category.
What I like about MAL, is that it is in a highly specialized niche market. In September 2017, the company announced that it was selected by Airbus to design and build exhaust systems for the A320neo Pratt & Whitney 1100G-JM engines Nacelle. It is expected this program will generate in excess of $200 million CDN in the first ten years of the life of the program. MAL also has a long history of working with Boeing on their fleets. With airlines looking to invest in more fuel-efficient planes, MAL may be a solid pick up.
The stocks listed above are some of the dividend stocks that we are very likely to add to our portfolio in 2018. Please note, these are simply considerations and by no mean a recommendation to purchase these stocks. Please evaluate these stocks and make purchase decisions on your own.
Dear readers, are there other dividend stocks you are considering?
A few months ago, a reader from Vancouver left a comment on this blog, stating that he has reached financial independence at 38 years of age. He also mentioned that he decided to continue working despite being financially independent. Intrigued by his story, I reached out to him via email. After a few email exchanges, I decided I had to get him to do an interview and answering some questions I have.
Please allow me to introduce you a fellow Vancouverite D.
Q1. Wow, it is amazing to hear someone that lives in Vancouver that is financially independent at age 38. When did you become aware of the term financial independence?
It was Mr. Money Mustache who introduced me to the term. In April of 2014, the Globe and Mail published an article about some guy who retired at 30. Intrigued, I visited his blog and was relieved to finally find someone who shared my philosophy of how lucky we are to live where and when we do, how much we waste as a society, and how little it takes to focus the “firehose of wealth” towards a goal of FI. I was riding my bike to work the next week.
My push to FI started there, but I had been living a simple life since moving out from my parents’ house. I was unintentionally already close to the finish line when I read the article, but MMM pointed me to the tools I needed to cross it.
Q2. You mentioned that you asked about RRSP at the bank when you were 13. Did this event kick-start your interests in personal finance and investing at a young age?
I wouldn’t say that particular moment started anything except confusion. The teller laughed me out of the bank while I was trying to be smart with savings from my summer job.
It’s my mom who I credit for my interest in personal finance. We opened my first bank account at 6 or so, and she told me about interest and compound interest. Free money seemed amazing to me! And she had a ledger that she would write in 25 cents every week into the credit column for me, my pocket money.
Soon after, I used many weeks of savings to buy a crappy robot that was garbage. That taught me that money in hand, the anticipation of what you can buy, is often better than the reality of having bought something.
Tawcan: I can’t believe that the teller laughed at you, that’s so cruel! That’s cool your mom taught you about interest and compound interest, I was taught about the power of compound interest at a young age too.
Q3. You were introduced to a financial advisor when you graduated from high school. Was the advisor helpful? Looking back, are there things you wish you would have done differently? Given the options available today, would you have used a robo advisor instead if you are given the choice?
Yeah, my high school graduation gift from my dad was $1,000 invested with a financial advisor (smarter gift than a car!). The advisor was amazing: he taught me about setting financial goals, what investment product classes there were, and had me consider ideas like automating investing. I remember hours sitting with him at a whiteboard explaining this magical world to me.
I’ve never used a robo advisor, so I can’t say whether I’d go that route instead of an advisor. It certainly wasn’t an option 20 years ago! Looking back, my returns were certainly eroded by the expensive fees on the funds I carried with that advisor, but I needed that initial conversation to get things started right, and I have spent probably over 40 hours with him. At some point, the fees exceeded the value of the advice, and that would have been a good time to move on.
If I were to change anything, it would be taking the time to learn about investing and have more responsibility for my investing choices sooner. To set up a simple online brokerage account with low fee funds would have “paid” me an hourly rate more than my regular work does (investment return increase divided by hours of research).
I imagine that an advisor or mentor is still a great first step for a new investor, as long as they have your goals and best interests in mind. Although perhaps online research now would be enough to start without an advisor, considering the easy access to ETFs, and good investing blogs.
Q4. You are still working although you are financially independent. Has the meaning of work changed since FI? Do you find yourself enjoy work more?
I only “hit my number” a few months ago so I’m still adapting. My career as a freelancer has the advantage of allowing me to have some control over when I’m working and when I’m not, and I’ve worked much less this year than those previous, but it’s very hard to do that.
On the good side, I am able to pick and choose the projects I work on and the people I work with, and so I will no longer need to choose projects for how I perceive they’ll affect my future career, I can just enjoy the process of working. Thus the working environment is better.
However, there’s a bunch of new challenges. Learning to say no to projects is a skill that I’m working on, but old fears die hard; fears around needing money, and ego, and validation. It’s an alien feeling to recognize that success at work doesn’t define me as a person, and that I need to work on valuing myself more for other things, like helping others. I’m working on a new mission statement for myself.
I can say that I work with an odd assortment of wonderful, unusual people and I tend to value my time with them more. There are a lot of times that work still feels like a grind, but I think that’s true of everything, no matter whether you’re getting paid or not.
I started in my field because I enjoyed the work, and did it for free for a while to learn. I feel a bit like I’m in that scary but fun part again, when everything is new while I learn this new phase.
Q5. Do you think you will continue working for the next 10 years?
Very likely. My girlfriend won’t be FI for about that long anyway, so it makes sense to balance my time with several things: interesting paid projects, volunteer work, travel, and whatever else I find myself doing. There is a bit of a luxury being a freelance worker, in that I can taper off the work as I choose. Ideally, work will slowly take less of an important role as I incorporate other projects.
If I stop enjoying my work, then I’d be open to something drastic like selling up and travelling full time.
I’ll admit that there’s an illogical part of me that has trouble believing that FI will actually work. Even with a detailed spreadsheet that shows expenses over the last few years compared against investment income, it’s hard to actually make the transition to relying on that. That’s where the “one more year syndrome” manifests for me, I think.
Tawcan: Having a FIRE calculator is useful but we need to remember that it is s just for simulation.
Q6. What is in your investment portfolio? Are you still using the financial advisor from high school for investing?
I am kind of mixing a dividend appreciation strategy with a couch potato strategy. I have a lot of Vanguard funds, both Canadian and some US. The new “active” Vanguard Value fund is very interesting to me (VVL), but I have a lot of the passive funds as well (VTI, VCN, VIU, etc, as well as bond ETFs). I have bought a lot of individual Canadian stocks for dividend appreciation, but in the US I have only the Vanguard ETF that works on the principle (VIG). Your blog has been a source for information on good individual stock choices. I also have a small amount left with my advisor, which adds a layer of diversity and investment protection by being in multiple insured institutions.
I’ll be shifting to a focus on income over the next few years, but with no hurry.
Q7. Since you are FI but working, are you spending 100% of the working income on expenses? Or are you saving still to increase your retirement margin of safety?
I don’t spend much so it’s easy to keep saving. I’m not even sure what I would do to spend 100% of my working income. The added savings do increase my safety margin, and also opens up room for more luxury things like fancier trips (but I’d probably have as much fun doing a cheaper bike tour with a tent anyway).
Q8. What are your biggest secrets for becoming financially independent at age 38? Having a high savings rate? Gambling on investments? Winning $50 million Lotto Max? Please share!
As everybody respectable in FI literature will tell you, savings rate and time are the keys. It was true for me, too: I had no insider tips, no secret sauce, no magic beans.
Even before knowing what FI was, I always tried to keep my overhead low, so that if I had trouble finding more freelance work, I’d be okay. I’d try to make it so that if I could work four days a month my bills would be covered. Another week of work would pay for the next month with some left over. I just stuck with that spending model as my income grew. That made for a very high savings rate: before discovering FI my savings rate was probably about 50%, which ramped to about 80% when I was saving aggressively.
Something that helped with this was starting my own company. By having the money I earned stay in the corporation, I pretended that the money wasn’t mine to spend. I still pay myself a very low monthly salary, and that’s what I live on. If all my investments and company burned, a minimum wage job would keep me afloat.
The road to FI for me started with fear, being worried that I wouldn’t get another gig for too long and putting money away for rent. But the feeling of months, then years, of spending in the bank was a security that I loved, and kept increasing. It was only 19 months from learning about FI from Mr. Money Mustache to becoming FI, when the years of security became self-sustaining through investment returns.
I did win the lottery: the lottery of being born in Canada to a nice, reasonably well-off family in the late 70s.
Tawcan: Living in Canada and not having to worry about health care is very beneficial compared to our friends down south.
Q9. Are you taking advantage of tax-sheltered accounts like RRSP and TFSA? Do you plan to withdraw early from RRSP before age 71? If so, do you have any early withdrawal strategies?
Yep, maxed RSPs and TFSA for sure. My company has a bunch of investments at a favourable tax rate, too. Since I haven’t started drawing down yet, I’m still learning about what the best tax setup is for me. I haven’t found a lot of literature on how to organize a corporation for FI! But I like the idea that the company earns dividends through investments, pays me a salary, and then I invest what salary I don’t spend in tax-advantaged accounts. That can keep going as long as I work a bit each year.
Considering my low annual spending, I haven’t read about any huge penalty for using RSPs, so once I’m no longer working I’d consider withdrawing some.
I’m happy to hear from your readers if they know of any good resources on tax strategies for corporations with FI minded owners!
Q10. Do you keep it a secret to co-workers and friends that you are financially independent? Do they feel uncomfortable whenever you share with them about your financial success? If so, why do you think money is such a taboo subject in society?
I do feel uncomfortable telling people about my financial status. There’s a huge stigma against both being “rich”, and being “frugal”. Only a couple of friends have an inkling of where I’m at financially, and it seems to make them uncomfortable. I’ve tried to show them that FI is possible for almost everybody in our amazing circumstances (the majority of Canadians), but I’ve only been able to encourage small changes. At worst, being FI seems to make others resentful or depressed. I think a lot of people have trouble seeing that they are in control of their financial decisions and can work towards FI too.
My mom recently told me she is proud of me, even though I’m not successful financially. That took me by surprise, since I feel very financially successful! But she doesn’t know, she just sees me driving the same car, living in the same condo in my old clothes. And I realize that most people would see me the same way. As a society, I think it’s assumed we’re spending almost all we earn, so our value is shown by the price of our lifestyle. So we spend more than we earn to look more valuable. Thus, the taboo: most of us are faking wealth, and we don’t want others to catch on.
Tawcan: It really isn’t a surprise to me that so many FI’ers don’t look “successful financially.” This is mostly due to them focusing on purchasing things that would provide the most values to them, rather than purchasing things to show off.
Q11. You mentioned that you live simply but not to be frugal. Why is it so important to find that personal balance between saving and spending?
I think, for most people, personal balance is important. My girlfriend did a sort of personal frugal-challenge to see how low she could get her spending. It was really empowering for a couple of years but, in the end, she likened it to a long fast where she pulled out her credit card sighing “Oh thank God, ice cream!” and ate the whole tub. Luckily, she’s found a better balance now. During that time her FI goal was a lot closer but we learned you can’t base your financial future on spending habits that aren’t going to hold true.
For me there’s not a lot of balance required, it comes very naturally to not spend very much. I’ve always equated money with the effort required to obtain it, and so have thought through every purchase as a value transaction. Every purchase, even a chocolate bar. I’ll usually not buy the chocolate bar, but have no problem going on a trip somewhere.
From a young age, I saw the cost of things as a cost of time, not money: going to a movie would cost two hours of work (about a 1:1 ratio of entertainment to work), while a video game would cost almost a whole day (but the many hours of play could provide a ratio of 20:1). I don’t think of things as a ratio anymore, but there’s a reflex to think about the actual act of working for money when I’m looking at a purchase. And if I spend my money on crap, then the work I did to earn that money was for nothing.
It means most of my possessions last for a long time. I’ll look at buying something new, but often decide that the thing I’ve got will last another few years. My furniture is mostly from when I first moved out 20 years ago; I try to only drive when I need to go beyond the city; I prefer eating at home.
Simple living is just a reflection of what I enjoy. A perfect day is a bike ride, a picnic, some time with friends, a perfect pot of tea at home, that sort of thing. It just so happens that what I enjoy tends to be very cheap.
Q12. What would you tell someone like me who is trying to achieve financial independence?
I’d say, “Congrats! Enjoy the journey!”
I have found FI to be more of a philosophical pursuit than a financial one. The success is from learning to be happy without spending, to appreciate the important things that are free, to understand that swaddling your ego with stuff won’t fix your insecurities. I think it would be very difficult to achieve FI without learning to be grateful for what you have.
You can be independent by reducing your need for money. For example, I had a friend in my 20s who worked 5 hours a week and lived on $300/ month in Winnipeg. To me, she was already free without saving anything. She was happy, with plenty of time to be an active member of several great communities. She wasn’t trying to be FI, but her low spending made her independent anyway: she could live her life on her terms. She got the philosophy long before I understood it; she had “enough”.
We’re still wonderful humans even without stuff, perhaps even better because we’re not distracted by how impressive our new phone is.
Working on the philosophy has a better happiness outcome than being FI.
Being FI doesn’t change your happiness directly. If you have a savings rate that will allow you to become FI, then the financial stresses should already be gone… you’re already saving enough to protect against future problems. And there will always be things that limit you, whether you’re working or FI. The key is to be able to enjoy what you’re doing within those limitations.
So take care not to find yourself miserably saving for the mythical Nirvana of FI. The good stuff is already within reach.
Q13. Do you have anything else you would like to share with me and my readers?
I really enjoy games, so I made a game of the process of becoming FI. There’s plenty of examples out there (budget trimming challenges, minimalism challenges, etc), but I love working on my FI spreadsheet and watching the numbers change in my favour. I also enjoy trying to find new ways to think about the core concepts. One example would be imagining FI as a currency, which I call Perma$. Every $25 buys you one Perma$: a dollar that regenerates itself every year, forever. This is just a twist on the 4% rule, but helps put little purchases into perspective. That dinner cost three Perma$, darn.
Regardless of the method you have for achieving FI, you’ve got to enjoy the process. It’s going to take years of discipline to become FI, so why waste those years?
Also, thanks for reading, and a salute to all who are working towards their own financial goals!
Thanks D, some excellent insights you have provided to me and my readers! Dear readers, did you enjoy this interview? Please also check out the other FI interviews I did with fellow Vancouverites.
Hey everyone, today’s post is from the talented J from Millennial Boss. I had the pleasure to meet her and get to know her at FinCon17. It’s always neat to meet another person in the FIRE community that works in high tech. She definitely knows the struggles of working in high tech and finding time to work on the blog and other side hustles. I hope you enjoy her post. Take it away J!
My mother kept her wedding album in a drawer in our living room growing up.
I remember flipping through the pages at an early age and marvelling at how pretty my mother looked, and how handsome my dad looked.
I thought towards my future wedding and what I wanted it to look like and be like someday.
As I got older, I had more concrete plans for my wedding. I attended other people’s weddings and took mental notes of what I liked and wanted to include in my own celebration.
White flowers, check. Lush, green centerpieces, check.
Something happened in my mid-twenties though that changed my plans.
I discovered Mr. Money Mustache and the concept of financial independence.
Suddenly, it seemed absolutely pointless to spend thousands upon thousands of dollars on a wedding.
I had more important goals for myself and my future husband.
I made a few difficult choices in my twenties that have distinctively altered my path and put me years ahead of my peers in savings.
By 27, I hit a $200,000 net worth and paid off nearly $100,000 in debt.
I’m now just a few months shy of 29 and my numbers have grown significantly.
I’m looking at a future of financial security and abundance and it feels amazing.
It feels way better than the feeling of having those tall, lush green centerpieces at my wedding.
I want that feeling for as many twenty-somethings as possible and think I know how they can get it.
Here are the four major life decisions that twenty-somethings make out of fear of regret and what I did differently to get where I am today.
Decision #1: Staying put when you’re comfortable instead of taking risks
I struggled with career indecision in my early twenties.
Should I be a doctor or a lawyer? Should I work in finance?
Finally, I decided at 23 on working in technology.
I had worked my way into my first tech job and I was thrilled to find that I loved it.
My boyfriend (now husband) and I owned a beautiful home in a state that we loved.
I loved my job and we were surrounded by good friends and things to do.
We were comfortable – but we really weren’t.
I learned about financial independence and realized we could be doing so much better.
We started paying off the $100,000 of debt between the two of us and put a little into savings.
Progress was slow though.
We could have cut our expenses down to the bone but what we really needed was a bump in income and a lifestyle change.
I decided to look for jobs in the mecca of the technology world – Silicon Valley.
If I wanted to work in tech and make money quickly, I needed to be in the heart of it all.
I applied for a scholarship and attended a networking event for women in technology.
I ended up landing a job at one of the top companies in the world.
We made the move from our comfortable 3,600 square foot house in the Rocky Mountains to a tiny, studio apartment in Silicon Valley in the spring.
Honestly, my husband and I were terrified to move.
We were happy with our life as it was and moving was scary.
We had no idea what he would do when we moved out there too. We knew no one.
We committed to moving out there for a year at-least.
To see if we liked it.
It ended up being one of the best decisions we’ve ever made.
We no longer live in Silicon Valley (it wasn’t for us) but that move was instrumental to the financial security we have today (and our fearless attitude that enables us to be willing to move again for work!)
In my opinion, twenty and thirty-somethings worry too much about regrets when making the decision to move for work.
Decision #2: Proposing to a partner with a diamond ring
According to the Knot, the average cost of an engagement ring is over $6,000.
Somehow, we let the advertising industry hoodwink us over the last 100 years into believing that diamonds are a symbol of love.
I just overheard a girl in my office who got engaged the other day have to sadly explain to a curious coworker why she wasn’t wearing a ring. The other person said something reassuring like “don’t worry. You’ll get one eventually” in which she replied excitedly “it’s coming. I already have it picked out!”
I wanted to shout out, “You don’t have to do this!” but it was none of my business, so I just put my head down and continued to type.
When I got engaged, the first thing that people did was grab my hand to take a look at the ring. The act felt ridiculous, especially to someone who is well versed in the concept of financial independence.
I told my husband before proposal that I did not want a diamond engagement ring. I had done some research and wanted a moissanite engagement ring instead.
Moissanite looks almost identical to a diamond and comes without the financial and the ethical baggage of the diamond industry.
We sold my car, eliminating the remaining balance on the car loan and saving a calculated $750 in monthly expenses.
We also moved and rented out the house, eliminating the big monthly payment.
We downsized into a smaller, way less nice arrangement but it was enough for us.
Some days we regret not having the space and the convenience of two cars and a big house, but we also know that our twenties and thirties are a perfect time to sacrifice to get ahead.
The money we save now is worth more due to compound interest over time.
We’re also in a better place to skimp on housing comforts that we may want when we’re older.
We still struggle with lifestyle inflation with every income bump we receive but we’re more aware of the impact that it has on our finances.
We also truly understand the phrase of “keeping up with the Joneses” after we regrettably tried to be them for a few years.
These are the top 4 decisions that millennials worry about regretting that in my opinion, could mean the difference between a strong financial future or a weak one.
Bio: J is a twenty-something blogger living in the Pacific Northwest part of the United States. She built a $200,000 net worth and paid off $100,000 debt by 27 years old. She hosts a money podcast, FIRE Drill podcast (https://firedrillpodcast.com), and blogs about millennial finances at millennialboss.com.
Dear readers, are there other decision that you made younger out of fear or regret?