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You had your best-laid plans and then COVID-19 came along and hammered the entire economy. But you’ve got this – if you have the right information. Join Rob Carrick and Roma Luciw on Stress Test, a podcast guiding you through one of the biggest challenges your finances will ever face.

Rob:[00:00:01] Do you feel beaten down by work or are you dreading a lifetime of long hours and not having enough independence and freedom? Do you wish you could ditch your full time job and retire early? In today’s episode, we’re talking about young adults who crave financial independence and are willing to save and invest aggressively to gain some freedom.

Roma: [00:00:20] Welcome to Stress Test, a Globe and Mail podcast that looks at how the rules of personal finance have changed in the pandemic for Gen Z and millennials.

Rob [00:00:28] I’m Rob Carrick, the personal finance columnist at the Globe and Mail.

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Roma: And I’m Roma Luciw, the personal finance editor at The Globe. So, Rob, why don’t you talk us through the ABCs of fire, what kind of steps to people need to take to get there and how does it work?

Rob: [00:00:44] I think the thing that we need to understand about fire is that it’s much more about the F.I. financial independence than it is about the R.E., retire early, retire early. That’s good marketing. I think that gets people’s attention. But really, it’s about saving hard for a period of years and it’s different for everybody so that you build up a stock of money that you can live off of. Now, maybe you have enough to quit work, maybe you have enough to work half time, maybe you work four days a week. But the idea being that you have enough financial independence, that you can write your own ticket, you have financial independence.

Roma: [00:01:19] OK, so how much do I need to save? Let’s say I’m a recent grad. I have my first job. What kind of amounts am I looking at saving and for how long?

Rob: [00:01:27] It’s going to be brutal and you may have to do it for years. When you’re in fire, you have to pick your savings rate. What percentage of your income are you going to save? I think we need to start off with 20, 30, 40, 50 percent and maybe even more of that. You’re going to have to live a very frugal life. Now, how much do you need? It all depends on what kind of life you’re going to need. How much do I anticipate spending every year while I’m financially independent. Will I work part time? Will I supplement my income with some consulting work while I work two days a week? That has a big impact on how much you need. It’s fairly simple math. You need to figure out how many years of financial independence you’re going to need to finance and you’re going to need to figure out how much you can save. And then you figure out how many years it’s going to take you. Everybody’s different. There is no definitive roadmap.

Roma:[00:02:10] What do you do once you have your set amount saved?

Rob: [00:02:14] Well, here’s the thing. You build an investment portfolio, you decide it’s now big enough. I can fire, as they say in the fire movement, you’re going to be living off the income generated by your investments, the dividends and the bond interest paid out by your portfolio do matter what you own when you’re going to own stocks, exchange traded funds, whatever. The idea is not to touch the principal. You have enough income to survive year by year.

Roma: [00:02:39] Now, do people that follow the fire lifestyle, do they own a home? Do they have a kid? What does it look like once they are living it?

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Rob: [00:02:47] OK, I’ve spoken to a lot of different people who’ve done fire and they’re all different. There’s no definitive profile. I’ve met people who have kids and own homes. I’ve met young adults who are renting and want to be out of the workforce in their thirties. It’s different for everybody. I think what unites them all, though, is this desire to get off the treadmill. They feel they’re being run ragged in the workforce. They don’t see the rewards and they want their independence. Fire is about taking control of your finances, exactly how you do it. The details are secondary to the fact that you are getting involved, thinking about what I do now and how that affects me in the future.

Roma:[00:03:24] Now, one thing that came to mind when you were describing what you need to do to achieve this lifestyle, we’re talking about a number of years where you’re really living a frugal lifestyle. That’s something that critics have raised as an issue. I mean, not everyone wants to or can really sustain many years of not spending anything. What are some of the other criticisms of fire?

Rob: [00:03:49] Well, one of the criticisms of fire is that you’re going to retire, let’s say, at age 40 or forty five, and you’re going to have this investment portfolio that you’re using to generate the income. What if the stock market crashes? Are you wiped out? The answer is no. The idea is that the investment portfolio produces income and the income isn’t necessarily going to be affected. If there’s a stock market crash, in many cases, it might be affected only a very small bit or not at all. And if your investments go down, you have time to let them come back up in value. Really, it’s about building a fairly safe, conservative, reliable stream of income with your investments. But the investments do from week to week and month to month and year to year is not nearly as important as having that reliable stream of income. And if you build the stream of income intelligently and conservatively, you should have minimal, not zero, not by any stretch zero, but minimal exposure to the ups and downs of the economy and the financial markets.

Roma: [00:04:46] Now you went to a gathering of fire, folks, a few years ago in southern Ontario. You wrote a very interesting column about it. What struck you when you were there about the kinds of people who were at that meeting and the kinds of things they were saying

Rob: [00:05:05] they were fed up with the day to day grind of working. They felt it was sucking too much energy out of them and not giving them enough back. And they wanted out and they were very aggressive and strong on mapping out a plan of sacrifice in the near term for longer term financial independence. And they were all different kinds of people. They were from all parts of the country. They were in their 20s, 30s and 40s. Nobody older than that. What struck me was how determined they were. They weren’t fooling around. They wanted to do it. You know, I call it an economic protest movement. It’s a way to get out of this economy, to get out of the rat race and build your own life customized to the way you want to live it.

Roma: The best thing about this kind of a fire movement is that it could force you to steer clear of debt and B, save a whole pile of money in a short period of time. So it ultimately leads to financial empowerment and lays the foundation for a secure financial future.

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Rob: [00:05:53] In this episode, we’re going to talk to Kristy Shen and Bryce Leung, a Toronto couple that has successfully pulled the trigger on retiring early and are still financially stable even in the midst of the pandemic. We’ll hear from them right after the break.

Commercial:[00:06:08] This podcast is brought to you by CPP Investments. Take comfort knowing the Canada Pension Plan Fund will be there for you. We invest to help ensure the CPP fund remains resilient over the long term, sustainable and secure for millions of Canadians. Learn more at CPPP InvestmentsDotcom.

KristyL[00:06:35] Hi, I’m Kristy and I’m Bryce, and we are the authors of Quit Like a Millionaire,

Roma: These are two thirty eight year olds, but they’ve been together for a while.

Kristy:[00:06:43] We met in the nerdiest way possible in engineering school as lab partners.

Bryce:[00:06:48] It’s true. Yeah. Yeah, it was love at first sight across the lab bench in the semiconductor lab. That was the worst love story ever written. Anyway, with Kristy, we both graduated in computer engineering and I was always the, you know, the kind of classic computer nerd in high school where I was like programing in basic like grade eight and this kind of thing.

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Kristy: And I’m the sellout that just did it for the money.

Roma: [00:07:10] Kristy’s dream was actually to be a writer. The original plan for retiring early was to write a best selling kid’s book and retire from that. Well, when that didn’t work, Bryce started looking into entering the housing market, but he also started reading about investments in 2012. They had five hundred thousand dollars saved up. That’s a lot, certainly more than I had saved up in my 20s or 30s. And certainly it’s not the average situation. We’ll get into how they did that later in the episode. But anyway, at the time they were trying to decide what their next move should be.

Bryce:[00:07:43] It was like we could either invest in index funds and then theoretically become millionaires in three years, or we could toss it into a house and be in debt for the next twenty five. When you’re faced with a situation like that, you kind of go, Oh, that doesn’t sound very appealing. Let’s try the let’s try the fire thing. But it did take me some time to convince her that the math was sound. In our marriage. That’s how we communicate via math.

Roma:[00:08:02] It took a while to convince Kristy that this was a good idea. But she says the more frustrated she became with work, the more appealing fire became.

Kristy:[00:08:11] Bryce came more from a middle class background. So for him, investing was like not that scary. And then understanding money like I came from a background where at one point my family was living on forty four cents a day. So for me, investing is terrifying and becoming financially independent and not having a job. Not only is it terrifying, it’s kind of like a slap to your parents face because they spend all that energy getting you to Canada and they worked really hard for you to have this kind of life so that you could have a job that you’re going to just throw away. So for me, there was like a cultural baggage there, too, that I had to get over. But I think it took about a year because it really was it really showed me that for our generation, we cannot rely on jobs. It’s like do or die. Like I don’t do this fire thing. Eventually I’m going to get laid off and I probably would have during the pandemic. So thank God I did this.

Roma: [00:08:56] Now, they’ve been retired for more than five years and they’ve been spending their time traveling the world well before covid. Coming up, Rob’s going to talk to Christine and Bryce about how they managed to feel confident, retiring early and how it’s been working out for them financially given the pandemic.

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Commercial: [00:09:12] This podcast is brought to you by CPP Investments. At CPP Investments. We never lose sight of the long term. We invest the Canada Pension Plan Fund to help provide financial security for generations of Canadians. We diversify the CPP fund across geographies and asset classes to access the best investment opportunities and generate sustainable long term returns. The fund is now more than 400 billion dollars. To learn more about our investment performance for Canadians, visit CPP Investments dot com.

Rob:[00:09:51] So I’m going to start off by asking you to give me the elevator pitch for fire. Why is it a great thing to do?

Bryce:[00:10:00] Because you can’t rely on job stability anymore. I mean, like in our generation, we started investing or we started working in 2008, so that was the great financial recession, that in twenty fifteen there was a big oil crash thing that hit the Canadian economy. And now in twenty twenty, of course we’re dealing with this pandemic. Is it just me or are these like once in a generation events happening like, like every 10 years or something like that? They keep telling me that is the only time that’s ever going to happen in our lifetime. And then there’s this third major catastrophe that we’ve been through. And the idea that you can even predict what’s going to happen over the next twenty, twenty five years and that you’ll have a job that entire time is just laughable now. So financial independence was kind of borne out of the realization that our generation there is no such thing as financial stability. If you want it, you’re going to have to build it yourself.

Rob: [00:10:46] Let’s flashback to when you first decided you were going to do fire and you were starting to look ahead to being financially independent. Tell us what was going through your minds back then.

Kristy: [00:10:56] I thought it was a joke. I was like, there’s no way we’re going to hit a million in five years from now. That’s insane. And then just reading the fire blogs, reading the books, I was like, there’s no way this is ridiculous. I just was complete in disbelief that this could even be possible. I think my work got worse and worse and worse and I became more and more motivated. So that kind of helped me like get rid of the skepticism and actually work towards it. And then as the money started growing, that gave me more confidence that we could actually do this. So we became financially independent at thirty one. And then we stayed a little bit longer to work because Bryce’s boss asked him to stay on because of paternity leave. At that point, I knew that we were going to make it, but it was still very terrifying because one of the things that happens when you’ve been working in the same industry for ten years is that you feel like you’re jumping off a cliff, really, like you look at the money, you look at the numbers, you look back and you can’t believe that you actually got here. But then there’s still this little voice in the back of your head that says you are going to fail, all your money is going to run out and you’re going to be a nobody and you’re never going to make another cent again. And everybody else is going to move ahead of you in their career and you’re going to lose your identity and be worthless. It also didn’t help that my mom was calling me worthless. So that may have added a little bit to it, because when I told her, like, Mom, I’m a millionaire now, she’s like she’s like, yeah, she’s like, you don’t even have a house. So it doesn’t matter. Like you basically worthless. So that didn’t help. But eventually after we became FI, the amount of things, the opportunities that came our way, the ability to travel the world, all the stuff that has happened, I wouldn’t have imagined. Like if you had told me back then that this was going to happen, I would have laughed in your face. Now, if I could go back and tell my twenty nine year old self that this is going to happen, I would say don’t stress out about it and don’t be so anxious. Everything is going to turn out just fine.

Bryce:[00:12:37] Yeah. And we met celebrities like you, Rob. I mean.

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Rob: I hope you’re better than me. OK, I want to I want to talk more about the pandemic and fire in a minute. But first, let’s personalize fire a little bit. How many people are doing this and what is the demographic?

Bryce: [00:12:52] You know, I’m not sure what exactly the numbers are. It was a niche movement that was started maybe like ten, fifteen years ago. And it’s been growing and growing, growing and getting more mainstream media attention. There are a lot of more people now that are aware of it, especially the mainstream media. I don’t think I would ever say it’s like it’s like a mainstream thing, but it’s growing in popularity day by day.

Rob: [00:13:12] A lot of fire naysayers spoke up early in the pandemic to say, I told you so. How can you live off your investments when the stock markets are crashing? How have things turned out for you?

Kristy: [00:13:23] This is actually the perfect test for fire, because when we actually retired, people were saying the naysayers, as you said, just kept saying when there’s a bear market, everyone is going to get screwed. And they were wrong. So we were not only not screwed actually to fire people are one of the few groups that actually did end up doing better during the pandemic. It didn’t have to worry about everything, losing their jobs or having everything shut down.

Bryce: [00:13:45] Yeah, the reason why that happens is that in a bear market, yes, the stock market does go down, but the job market is usually follows closely behind it. So if you were relying on a stock portfolio, yes, it’s going to go down. But if you structure your finances properly so that you’re not dependent on the day to day gyrations of the stock market, you’re going to be fine because you managed to save money in the first place in order to do this whole fire thing. But if you are like a lot of Canadians or Torontonian specifically, who just end up putting all your money into the house and relying on their job, providing them income every single week, and when that goes away, then the entire thing falls apart. So everyone gets hurt by a recession. But the fire people are the ones that end up weathering it the best.

Rob: [00:14:24] But you’re living off your investment income. And if something were to happen to some of your income producing investments, theoretically, you could have a little trouble there, right?

Bryce:[00:14:31] Yeah. But oddly enough, like dividend yields really didn’t get cut nearly as much as I thought it would be, especially at the beginning of this of the pandemic when governments were putting recovery programs and income supports for companies and then saying, oh, if you do this, you can’t pay dividends. I thought that that would have a huge impact on dividend yields, but I haven’t noticed any major impact. I think Dividends for 2020, from what I was expecting, it got cut by maybe like five percent and then back in 2008 dividends got cut, maybe like 10 percent in our portfolio. So it wasn’t like a huge loss of income. And meanwhile, people who are relying on their job, of course, they went from one hundred percent down to zero percent.

Rob:[00:15:08] I want to jump now to what has the pandemic done for the concept of fire. It seems to me that fire looks more attractive than it ever has before because the economy looks fragile and people are so vulnerable to jobs and income. From your perspective, do you think that the pandemic has actually done more to promote the idea of fire?

Kristy:[00:15:27] Well, judging by the fact that our blog basically grew twenty five percent this year, I would say, yeah, there is definitely more interest in fire because previously people just thought of it as, oh, well, obviously these it’s not going to work during a bear market. It’s only because you guys were lucky. It’s only because the markets were doing well. But this is actually the perfect test and logically proves that during a recession, as we were talking about before, we could actually live off our dividends without selling anything, without worrying about capital gains, capital losses. And not only that, during a recession, your cost of living actually goes down. So this year, we’ve actually only spent thirty four thousand, even though we spent most of our time in Toronto because of family and our dividends came in around thirty eight thousand. So we’re actually saving money during a recession. So I think that’s what actually makes the movement more attractive because you’re actually testing it with a downturn rather than just saying that it was all based on luck.

Rob: [00:16:18] What about the idea that the pandemic’s has exposed how fragile the economy is, how fragile our lives are? Fire is about giving people control. Do you think people are going to gravitate to fire because they’re thinking, I want to take financial control of my life. I don’t want to have to ride up and down the economic cycles, the economic disasters that you were talking about, Bryce, will fire come into its own in the post pandemic world? I hope we’re moving into sometime soon.

Bryce:[00:16:44] What I think we’ve learned is that the world, governments and world banks know how to bail out the stock market and bail out the financial assets pretty quickly. What they are still struggling with is how to fix the underlying problem of pandemic. But in a situation like that, it really makes sense to make your, I guess, financial life revolve around the financial markets rather than the job market, because we know how to fix a really sharp, scary correction on the financial markets. But we don’t know how to fix a really sharp, scary correction on the job market.

Rob: [00:17:13] It’s interesting me that you’re focusing the discussion on sort of the financial side of fire, but what about the spiritual side, the freedom, talk about that.

Bryce: [00:17:21] I mean, what happened at the beginning of this year was I found that my dad was diagnosed with brain cancer. So it was a really devastating diagnosis because my dad is and still is one of the healthiest, most fittest kind of people that I know. And so we were dealing with that at the same time that the pandemic hit. And if I had to deal with all of that kind of stuff and at the same time worry about my job going away, it would have made an already difficult situation like ten times harder. What fire does is it allowed us to give us the space and the time to kind of process the news and more importantly, kind of spend time with the people that we love, because at the end of the day, we don’t know how much time we have left. Like, you don’t know. I don’t know. One of us got hit by a car tomorrow. And what always frustrates me is when people and Torontonians are especially really bad at this, like selling their time, like signing themself up for these mortgages that run for twenty five, thirty years. And just assuming that they’re going to have all this time in the world to pay it off and do all that kind of stuff, you don’t know how much time you have left. The events that happened to this year really, really made me realize that time really is the only resource that matters at all. Like money is irrelevant. Money is just pieces of paper. What gives money significance is what we choose to do with it.

Rob: [00:18:35] FIRE gave you time to spend time with your dad. Who I’m sorry to hear about this diagnosis. How is he doing?

Bryce:[00:18:41] Surprisingly well, actually. This was a really scary time at the beginning of the year because as you recall, hospitals were shutting down, ICU beds were filling up, and all of a sudden we had this devastating, not just a devastating diagnosis, but also a time sensitive one. Right. It wasn’t one of those things where you could just wait for it and just deal with it like a few months later, like he needed to go into surgery. He needed to go to chemo. He needed to go into radiation therapy right away. And because my mom is a is a pharmacist and really good at navigating the medical system here in Ontario, we were just barely able to get in on that window before things really started shutting down. I’m happy to report that he’s symptom free and we’re all kind of crossing our fingers, that he stays this way and he’s he’s fine and we’re very happy about that.

Rob:[00:19:24] Well, that’s great to hear, Bryce. It seems to me that this theme of working at home and going out last year, it’s almost like the world has tilted in a way that makes fire a lot more practical. It’s much easier to start socking away the money to build your retirement fund, your early retirement fund than it was, say, 12 months ago.

Kristy:[00:19:42] I like to call it forced austerity. That’s the one very, very tiny, tiny few bright side of the pandemic because there’s nowhere to go. You’re not commuting to work, that’s probably better for the environment, too. There is no sports venues open. We can’t go to restaurants, so you have no choice but to actually be forced to be financially responsible and see what that’s like. And people have learned to be really creative with that, without the ability to go out to restaurants. They’ve learned how to cook. They’ve increased their cooking skills. I know for us specifically, we have been the most domesticated we have ever been in our entire lives. And then, you know, learning how to work out from home, if you can’t actually work out elsewhere, you are saving money on going to the gym. Necessity breeds creativity, and that is one tiny upside of the pandemic that we’ve all learned to be creative and learn how to be financially responsible as a result of that.

Rob:[00:20:30] One thing I’ve observed about fire and writing about it over the years is that it rubs some people the wrong way. They feel compelled to say why it can’t work. What do you think of those people?

Bryce: [00:20:41] I think it has to do with the fact that we are deliberately making different choices than they did. And it irks them that it’s working out so well for us. Like if it’s coming from other Canadians most of the time, what they are offended at is our message of not buying a house, especially Toronto, Vancouver and high cost areas like that. We get all sorts of pushback from real estate agents and people who have kind of gone down that massive mortgage debt and putting everything into one asset strategy. When it comes from America, it has more to do with student debt. We didn’t get into massive amounts of student debt because we went to a university that has a program that allows us to work while we are studying at the University of Waterloo. So they get offended about that. Americans, they also they get offended about the fact that we’re saying, oh, health care isn’t that big of a deal outside of the US because, of course, in the US, health care is a huge, huge deal and is tied to employment. So, yeah, there’s lots of pushback for different reasons. And it really depends on where the pushback is coming from, what they’re mad about.

Rob: [00:21:37] Now, I want to talk about home ownership and fire. Are they mutually exclusive or can you own a house?

Bryce:[00:21:45] When you live in a city like Toronto, you were kind of brainwashed into thinking that housing has to be expensive because people who live here, they’re used to million dollar shacks that are falling apart and on fire. But housing is not necessarily that expensive anywhere else in the world.

Kristy [00:21:59] A lot of other people that we know in the fire community that own houses and are retired as well, like some of them bought a house for one hundred and eight thousand dollars in North Carolina. Yeah. So it’s actually not mutually exclusive. It’s just the whole point is not to buy too much house such that everything is trapped in one asset and then you can’t actually use that income to live off for retirement.

Rob:[00:22:21] So the pandemic’s really help with that because you can move to like St. John, New Brunswick, where houses are very affordable and do your job and enjoy the best of both worlds.

Bryce:[00:22:30] We’ve been talking about digital nomadism for a while now. And then everyone was kind of going, oh, that works great for you because you work in this certain job and then 2020 hit. And then all of a sudden everybody is is experimenting with working from home. My coworkers from the tech company that used to work at they haven’t been into the office for the entire year and it looks like that might become permanent. It’s debatable whether it will become permanent for everybody, but for large swaths of the population if it’s possible to work remotely, it’s far, far cheaper and more efficient to do that. We’re seeing a major cultural tectonic cultural shift in not just Canada, but also in the world as well above what is the nature of work and whether it ties you to a certain location, because everybody assumed that that was true before and and now it’s no longer true. I mean, like what we’re experiencing right now in Toronto, in San Francisco, which is mostly tech workers, like everyone is kind of looking around right now, kind of going, why are we here? California is on fire half of the year now. Like, everything’s ridiculously expensive. It’s like we hit by hurricanes and earthquakes all the time is like, why are we here? So we’re seeing this massive culture shift of the nature of work. What does it mean to work? You know, and that answer is going to be different.

Rob: [00:23:35] You sort of touched on this a bit earlier, but I want to float the idea of fire as a kind of economic protest movement, especially among millennials and Gen Z. They’re graduating into an economy that’s increasingly offering them gig jobs with no pensions and no benefits. There’s no corporate loyalty towards the employee. Do you see fire as a way of pushing back, of saying, I will be in control of my destiny, I’ll work super hard and I’ll build up enough and assets that I will be independent and work as much as I want?

[00:24:06] Yeah, I mean, like that’s kind of where we started at this when we were first getting into this space. The company where Kristy worked at, which is one of the big which is a financial company, they were just like, you know, they were just reporting massive, like billions of dollars of quarterly profits while at the same time announcing layoffs. So we realized at that point that it didn’t matter how well the company was doing or how well the economy was doing. There is no loyalty of the corporation to the employee. So why would we be loyal to the corporation if there’s no expectation of any loyalty coming the other way? And now with the gig economy and all this kind of stuff, that loyalty is now even like it’s even worse. So this started off as a way for us to seize control back of our own personal lives, and then when we started the blog, we realized, you know what, a lot of people are in the same situation as well.

Rob:[00:24:55] I want to talk a little bit about how to put fire in motion, how to become financially independent and retire early if you so choose. And I think it’s worth highlighting here that it isn’t a full stop retirement when you’re thirty five. It could be a phased retirement. It could be working a little part time. It could be any combination of working and leisure time. How long is the runway of building up assets so that you can afford to be financially and it’s better for you Kristy. How long did it take you to build up enough money to say we’re done in the workforce?

Kristy[00:25:28] So it took us almost nine years to get there. That amount of time varies between different people in the fire community. So it really is dependent on your savings rate. So when people are saying, oh, but everybody has to be an engineer, everybody has to earn like a six figure salary. There are people who don’t earn that and actually get to fly faster if their savings rate is higher. Yes, it’s definitely easier if you have a higher salary. But as we know, people with higher salaries don’t necessarily save all of that. Becoming FI Like for me specifically, it was like because I had grown up poor in China, it was the fact that I didn’t ever want to be poor again. So for me, it really drove me to be financially independent and not have to rely on a job, not have to rely on the government, because as we can see with the pandemic, you can’t really rely on a job. Anything could happen and there’s nothing you can do about it. So for us, that was the most logical way to become financially independent.

Rob:[00:26:20] But you talk to a lot of other people who are doing fire. What’s their runway been like? How long does it generally take people? Is it 10 years are some people working on a 20 year plan? I want people to think that they can sort of customize their fire plan. Doesn’t have to be nine years or five years. It could be 20 years. What are people doing?

Kristy[00:26:37] Yeah, there’s some readers that have written into us. They don’t actually plan to ever retire. They just plan to go down in terms of the hours and their job. They actually really enjoy it. They just want more flexibility and time to spend with their kids and their families. So for them, the runway could be 20 years or 15 to 20 years, and they’re perfectly happy doing that. Some people are trying to cut their timeline as short as possible because we really just like their jobs and for health reasons, they want to get out as soon as possible. So it could be as short as five years. Some people have even started a side hustle because they developed skills that they can actually produce value online and they’ve been able to become freelance writers or they become online business coaches. And that actually ends up shortening their timeline as well, because they can become partially F.I.. So maybe they don’t save the entire amount to cover all their expenses. They save half as much and they can cover half of their expenses with the portfolio. But the other half is covered by their side gig that they can you tend your earning money from. So it’s actually very flexible and you can you can basically choose your own path to apply depending on what your situation is and whether you like your job or not and how flexible it is.

Bryce: [00:27:44] Yeah, it’s helpful to think of fire not so much as a binary state of being on fire.

OK, that sounds bad, but like having a having achieved or not achieved far fire is more like a spectrum. So I mean, like there are many different iterations of it, Kristy, you touched on the fire with a side hustle. So that’s side fire. There’s a fire like just stepping back to your job to part time partial fire. That’s another thing we have kind of introduced, stumbled upon a style of fire that we call traveling fire, which is you save up in a high cost, high earning city like Toronto, New York, San Francisco, that’s traveling fire. And then there’s some people that decide that they want to, this is a uniquely American thing for some strange reason that they build like a log cabin in the middle of the forest and then they live in that thing on almost nothing. And that’s forest fire or something like that. Right.

So, yeah.

Rob: So many flavors of fire. Yeah. Yeah. I want to ask I want to ask you the nuts and bolts question now, what investments were you using to build up your fire fund and keep it after you after you became financially independent?

Bryce: [00:28:46] Mostly just index ETFs. Those are the big ones. We name names on our blog and we actually have like the symbols that we actually use. But they’re predominantly index funds that track either the US stock market, the Toronto Stock Exchange, the bond market or the international market as tracked by. And the companies that we use for that are either through iShares Vanguard or surprisingly, BMO.

Rob:[00:29:08] I want to close by hearing from you about what your plans are to take advantage of your financial independence once the pandemic’s over.

Kristy:[00:29:16] The pandemic has shown that fire is very, very resilient to downturns. And even though our life hack of traveling to inexpensive cities and using geographic arbitrage kind of didn’t really work during the pandemic, we can actually stay in Toronto for a lot less than we thought because I didn’t realize that we were actually paying to work. So not having to work and not having to commute and not having to dry clean your clothes and you have to go out and get takeout all the time because you don’t have time to cook. That actually saves you a lot of money. So I think going forward, it’s wide open. If we need to stay here for our family, we’re very happy to do so. And if we can start traveling again once it’s safe, we can do that, too, it’s wide open, we’re just going to go and see what happens and make decisions as we go.

Rob: [00:30:03] Thanks to Kristy and Bryce for joining me, they are great examples of how fire can be a path to a more fulfilling life. Wrapping up, here’s my top takeaway from this episode. Think of fire as a way of taking more control of your finances in your life. It’s all about being mindful about how you’re spending today impacts your financial freedom in the future.

Roma: [00:30:27] Thank you for listening to this episode of Stress Test, I’m Roma Luciw

Rob: And I’m Rob Carrick. This show is produced and edited by Amanda Cupido with mixing and editing by TK Matunda. Kiran Rana is the executive producer.

Roma:[00:30:41] If you like what you heard, make sure to subscribe to the show. Share it with a friend or leave a review on Apple podcast. We love hearing from you. Bye for now.

Commercial: [00:31:07] This podcast was brought to you by CPP Investments as a member of the investment management industry. We’re committed to helping drive financial literacy among young Canadians, including providing information about our role in helping ensure the sustainability of the. To learn more, visit CPP investments dot com.

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