In the last few weeks, I was asked to participate in several interviews by other PF bloggers. Truth be told, they scare me a little (No not the bloggers!! The interviews!). Unlike many other PF bloggers, I didn’t have a master FI plan to get me where I am today. I followed some simple money rules over the years, made some mistakes (ok, maybe lots of them) and eventually realized I could become FI early. There is no year by year breakdown of my investments and expenses, or records of what my money goals were along the way. I have only been tracking everything closely in the last year, after I was already FI (I guess I won’t be the poster child for future FI campaigns). But it’s possible, you can reach FI without a master plan!
In My 20’s:
In my early 20’s, my first jobs paid minimum wage or close to it. Once rent and food were paid, we didn’t have much money left. And if there was any, we would usually spend it (socializing mainly). None of it was excessive spending but, except saving for a down payment on a house, we weren’t saving anything else! We were young
and foolish and trying to enjoy a little of what life had to offer, with limited means.
We bought our first house at the age of 24! Probably not the best decision but at the time owning your house was still the thing to do. Our parents were so proud!
I bought my first car at the age of 25, a brand new Mazda 3! It was the first and last time I ever bought a new car.
It was only in my late 20’s after reading The Wealthy Barber, that I finally started saving money. I tried to maximize my RRSP (even if I didn’t understand it all), had an emergency fund set up and avoided unnecessary debt.
Then Came The Kids:
We didn’t have much disposable income so we HAD to be frugal and bought everything second-hand. After our first daughter was born, we set up an RESP and started contributing to it bi-weekly. I don’t remember how much we contributed at first. It wasn’t much but we automated the process and did it consistently. Out of sight out of mind. Dollar Cost Averaging (DCA) worked out really well for us all those years.
By the time Child #3 came around, we still didn’t have much spare cash to throw around. But we increased our RESP contribution so each of our kid would get the same amount invested every two weeks. We opened a family RESP in case one of them didn’t go to university/college, the others could take advantage of the grants . Remember, in Canada, the government “grants” you 20% every time you deposit money into an RESP (to a maximum of course but still 20%!). And you get to invest that money.
My two daughters are currently in University and we haven’t touched the principal yet!
In My 30’s:
We focused on paying down our mortgage faster, contributed bi-weekly to our three kids RESP (529 plan equivalent) and tried to max out our RRSP (401K equivalent) contributions. We did the best we could. We also scheduled regular trips back to France (where most of my family lives) and Martinique (where my mom lived) so my kids would get exposed to my culture and get to know my family. As my parents got older, I often made the trips a priority over any additional savings. It was very important to me.
So far, no master FI or FIRE plan, I was just following the basic money rules:
- Live below our means
- Focus on Needs vs. Wants
- Reduce/eliminate debt
- Increase our income
- Save (take advantage of RESP, try to max out RRSP)
FIRO (Financial Independence Retirement Optional)
Then in my early 40’s I came across FI and , with a little more focus, became FIRO in my late 40’s. If you set your mind to it, there is no reason you can’t get there.
What changed in my 40’s:
- Paid down my mortgage
- Bought three rental properties (so I could increase my equity without investing any of my money! I used my HELOC)
- Became a lot more frugal so I could increase my savings rate. It
almostbecame an obsession! Still is!
- Slowly started learning more about dividend investing but only revamped my portfolio in my late 40’s. I used to like playing the stock market (I would hate to know how much I could have made all those years with good dividend paying stocks instead of potential stock winners!)
- Aggressively automated all my savings. I estimated how much I should be able to live on and had the rest automatically transferred to my various investing accounts. I still do, whatever is left in my chequing account is all I can spend. It’s so simple, I wish I did it in my 30’s!!!!
Could I Have Been FI Earlier??
Of course! 100%. Much earlier! Even with 3 kids. I could have been way more frugal along the way, mostly with groceries, entertainment and travel and save a lot more. But we had fun and kept our s**t together and that is what matters. I also could have been a much smarter investor. I was a slow learner.
Do I Have Any Regrets About How We Did It?
I wish I paid more attention to some of our day-to-day expenses, the ones that wouldn’t have made a difference in our life but would have increased our saving’s rate!
I also wish I was smarter about my investment strategy and didn’t try to beat the market all those years. Some losses took years to recover from.
But overall, I am happy with my journey. We all learn at our own pace and it doesn’t always matter what people tell you, sometimes you have to learn the hard way and make your own mistakes.
I lost both my parents and my husband in the last 6 years, so I am happy we (sometimes) prioritized the trips home instead of trying to save more. I have amazing memories to hang on to. It would be too late if I wanted to do it now!
I am glad I didn’t
think know about FI/FIRE when I was younger. I probably would have missed out on a lot of great life experiences and memories so I could save more money and be FI earlier. (My overachiever side). It’s all about balance and I may not have been able to manage it as well when I was younger. At the end, I still reached FI without a master plan!
While it is important to plan for the future, you need to also take the time (and money) to enjoy the present! Remember, s**t happens!
How about you, did (do) you have a master FI plan?