Well, it’s 2020 and this year I am financially independent. Woo hoo!
Just over 5 years ago I was $75,000 in debt. Back then I decided to forget everything about money that was taught to me and start again. I started to learn from people who demonstrated personal financial expertise themselves, also they could not benefit in anyway from me. So, I couldn’t trust financial advisors, or my broke friends and family for advice at the time (no offence to my friends and family because I know they mean well). I also could not trust any kind of paid advertising about investing (and neither should you). So I began to look for mentors and role models that fit the bill.
I started reading the following blogs: Mr Money Mustache, Millennial Revolution, Incoming assets (local Vancouver couple), as well as joined financial groups where we could openly talk about money and real-estate.
Never in history has it been so easy to retire early, especially in Canada. Retiring is no longer an age but a number, and I hit that number in only 5 years. So here are the numbers:
My passive income:
Net Rental income: $14,000 per year
Investment portfolio income: $23,800 per year
Total passive income: $37,800 per year
That $37,800 I have to say is completely tax free. In Canada it is possible to earn nearly 100k a year (sometimes more) from investments completely tax free. This knowledge is so powerful, to demonstrate this with an example: A person making 50k a year in Canada from “normal” employment will net about $39500 after taxes, CPP and EI. Also they will have expenses related to employment such as clothes, transportation, etc. So my passive income stream is as fruitful as a person making $50,000 a year! Damn that money is working hard!
My expenses per year:
Housing: $0 (I get paid to live since I have renters and house hacked)
Car: $2892 (I drive an older Toyota and do all the maintenance my self)
Optional travel and entertainment: $8,000 (includes two cruises a year plus various camping and mini vacation trips)
Clothes: $500 (spent on camping and hiking clothing mostly)
Misc: $3500 (professional nursing license dues, accounting, and donations)
Total expenses: $21,192 per year
I spent a total of $21,192 per year, which leaves me with a generous $16,608 yearly surplus should the market temporarily correct and/or my expenses go up. Fortunately, my health care is covered in Canada, so I won’t have any surprise expenses there.
So the big question is, do I go into work tomorrow and quit my job?