Lydz's journal

Where are you and where are you going?
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Lydz
Posts: 21
Joined: Fri Apr 05, 2013 6:34 am

Lydz's journal

Post by Lydz »

Hello all :)

As many people do, I've been lurking on this forum for a couple of years now but I feel I needed to have some feedback on how I was doing towards FI. So I'm a female in my late-20s. I work full-time in a hospital with an annual gross income of 48K (net income would be about 33K). I was recently checking up on how much passive income my savings were generating and was very satisfied considering my situation right now so here's my story.

I tried budgetting before and that was not something I liked to do (And respect) notably because I would set my budget way too tight and felt really cheap at times when I actually didn't have to worry that much fiancially speaking. I knew that I was not the kind of person who would buy useless things. So therefore I followed my expenses for a certain time and made an average of the months where I had spent the most and figured out what would be the maximum I would need to spend in a month. As for the rest, I set up an automatic transfer to a saving account so that all I had left in my checking account was the amount necessary for my monthly expenses. Considering that time to time I would get a higher pay because of the overtime that I had to do at work, that system worked fine for me up until now. That way I could allowed myself some extra spending at times when I felt I needed a few things that weren't accounted for.

So here's some numbers:

800$ is how much I allowed myself to spend per month (most of the time I spend more like 600-700$)

800$ covers:
Rent: 250-270$ which includes all the amenities, toilet paper, dishwashing soap etc (I live with 5 roommates)
Transport: Close to 0$ (I bike or walk everywhere and I live close to everything including workplace).
Food: Approximately 160$-200$ but might be more. I have stopped counting as I cook most of the time. If not, cafeteria food cost 3$ for the main meal so it's not that much more than if I had cooked a meal for myself.
Activities: 75$ at most (indoor climbing, shows etc..)
Other: between 315-255$ for clothing, restaurants, small trips to see parents or to get out of the city... But most of the time this amount adds up in my checking account until I think it's time to transfer it to my saving account.
Debt: None (beside credit card that's being paid automatically every month, full amount)
Saved income/Net income %: about 65%-70%

Every year or so I spent 1500-2500$ on a trip somewhere in the world. Most of the places I went were pretty cheap (Central america, Morocco, Spain...) but this year I went to France and I had many friends who hosted me so my trip cost about 1500$ for 3 weeks. Although I thought about not traveling anymore (Because the main reason I do it is to enjoy being away from home and being able to meditate on my life and have another view outside of my everyday environment) I realize that I still love meeting strangers/locals and talking about life and feel like time had stopped for a moment in front of a beautiful landscape.

I top my RSPs (canadian equivalent to your 401k I presume) every beginning of the calendar year so I don't need to think about it. I also have a pension at my workplace (I work in a hospital). I also have a tax saving account in which all the interest made in that account is not taxed and I fully top that account as well every January.

Health insurance is taken directly from my pay check. I have disability insurance through my employer as well. I don't have dental insurance but I take care of my teeth and the amount I would put into an insurance would come up much more than if I paid my cleaning on my own.

Hobbies: Most of them are free (except indoor climbing). I draw, learn to play piano, study, read and go to the many free shows we have in here. I also participate to a collective garden. I learn to fix stuff and do my own maintenance on my bike. I do yoga in my bedroom. I also think that the fact that I live with many people doesn't push me to actively go out in bars to meet up with people so less chances to spend money on beer. Talking about alcohol, I don't have the enzyme to process alcohol so I don't (can't) drink much so there's barely any money spent on drinking. And I don't smoke either.

I wanted to jump into trading stocks eventually but I'm still a bit nervous about doing that. I have money in my saving account that is earning a meager percentage of interest and would really like to do something about it.

I also considered buying a condo but since I want to live close to my workplace and that it's really expensive to buy in my neighbourhood and that my living expenses would be much higher (with taxes and condo fees), I'd rather stay where I am right now until I meet someone and have a family or something. I don't see myself buying a condo and living in it alone with my own appliances, my own bathroom that I would use what.. 30 minutes per day max? Whereas right now, we are optimizing the use of our apartment and appliances (and we rarely step on each other). But I can see that this way of living won't last forever either.. but we'll see!

So I was calculating my passive income, including what my RSPs is generating as well although I suppose I should consider those calculations separately?

So since the beginning of the year, I have in theory made 4750$ in interest from the different investment in mutual fonds mostly (half of my invested money) and the other half in exchange traded fund with medium to high risk. If I pretend that it will earn the same interest rate over the next 6 months, I would gain in total 9500$ this year (a portion of that will be taxed..). But knowing that I need (traveling excluded) 9600$ to live, I think I'm pretty close to FI....

I therefore decided to work part-time this summer (4 days a week) and I feel less and less stressed about money and work which is a relief. To me FI means to work less and learn more about anything (There's so much to learn in life...), but if work sucks I can quit and find something else without any stress. The other reason I wanted to achieve FI is because although I love my work (I work in medical labs) it is listed as one of the most dangerous career as far as exposure to infectious material and health hazard due to the repetitive movements and tasks we need to do routinely (Most of my older coworkers have tendinitis or back/neck pain). I recently got a promotion as a manager of quality assurance in medical labs which is nice and I love the challenge but I'd still prefer doing my things outside of workplace :P

If you have any feedback let me know... Otherwise I hope it can inspire young men and women who are not making much more than I make that they can achieve FI too..! I worked for all the money I have. I started when I was 12 with babysitting, then at 14 I was also distributing newspapers in the morning, and starting at 16 years old, I worked really hard at minimum wage, some years I had 2 jobs so that I could afford school (though my parents helped me a bit here). Then I had some grants for school and earned scholarships for different reasons. After undergrad, I cumulated 2 jobs at certain times because I wanted to try everything related to bacteria - research, medical labs, industries, taking any interesting opportunities. But now I calm down and I'm happy to work part-time hehehe.

slsdly
Posts: 380
Joined: Thu Mar 14, 2013 1:04 am

Re: Lydz's journal

Post by slsdly »

Lydz wrote:Hello all :)

As many people do, I've been lurking on this forum for a couple of years now but I feel I needed to have some feedback on how I was doing towards FI. So I'm a female in my late-20s. I work full-time in a hospital with an annual gross income of 48K (net income would be about 33K). I was recently checking up on how much passive income my savings were generating and was very satisfied considering my situation right now so here's my story.
I bid you a belated welcome.
Lydz wrote: So here's some numbers:

800$ is how much I allowed myself to spend per month (most of the time I spend more like 600-700$)

...

Saved income/Net income %: about 65%-70%
I am impressed at your numbers as a fellow Canadian. I spend a lot more on rent, in fact, I spend close to your monthly budget on rent and utilities alone, although I only have one roommate :). I suspect I spend more on food as well. On the other hand, that is offset by my higher income.
Lydz wrote: I also considered buying a condo but since I want to live close to my workplace and that it's really expensive to buy in my neighbourhood and that my living expenses would be much higher (with taxes and condo fees), I'd rather stay where I am right now until I meet someone and have a family or something. I don't see myself buying a condo and living in it alone with my own appliances, my own bathroom that I would use what.. 30 minutes per day max? Whereas right now, we are optimizing the use of our apartment and appliances (and we rarely step on each other). But I can see that this way of living won't last forever either.. but we'll see!
Here in Toronto, I've often thought about this. However every time I crunch the numbers, condos just seem insanely priced. They also don't seem intended for life long dwellers like myself. Sometimes I think I will just change lifestyles and retire to a smaller town which has family, as I am a transplant here.
Lydz wrote: I wanted to jump into trading stocks eventually but I'm still a bit nervous about doing that. I have money in my saving account that is earning a meager percentage of interest and would really like to do something about it.

...

So I was calculating my passive income, including what my RSPs is generating as well although I suppose I should consider those calculations separately?

So since the beginning of the year, I have in theory made 4750$ in interest from the different investment in mutual fonds mostly (half of my invested money) and the other half in exchange traded fund with medium to high risk. If I pretend that it will earn the same interest rate over the next 6 months, I would gain in total 9500$ this year (a portion of that will be taxed..). But knowing that I need (traveling excluded) 9600$ to live, I think I'm pretty close to FI....
I consider my TFSA and non-registered investment accounts as one grouping, and my RRSPs as another. The TFSA/non-registered combo will sustain me after FIRE. My RRSP is my rainy day "OMG I'm 70, I ran out and I need assisted living" money which I hope not to touch until the government forces me to.

The TFSA contains the higher yield / higher taxation investments, with a focus on REITs and eventually bonds. The non-registered account contains lower yield / low taxation investments like eligible dividends and foreign dividends (to claim the foreign tax credit). My RRSP just combines all of those things. But your strategy will change where you want to put things obviously :).

That said, you appear to be doing quite well (not knowing what the WR is on those numbers)! When you say interest, I assume you mean distributions from the mutual funds and not unrealized capital gains from the fund itself. Living off yield is my plan as well.

You need to do what you are comfortable with, but personally I would be focusing on lowering risk for future investments over maximizing return, once I hit the yield-FI crossover point. The key things I worry about are the quality of the dividends, such that are they able to keep pace with inflation and preserve my spending power. While I presently buy a majority of total market / bond ETFs with a minority in stocks, I would probably switch solely to buying individual Canadian equities outside of my RRSP. Generating eligible dividends will be more or less untaxed or possibly generate a tax credit when your taxable income is low, allowing you to offset any interest/foreign dividends you earn.
Lydz wrote: If you have any feedback let me know... Otherwise I hope it can inspire young men and women who are not making much more than I make that they can achieve FI too..! I worked for all the money I have. I started when I was 12 with babysitting, then at 14 I was also distributing newspapers in the morning, and starting at 16 years old, I worked really hard at minimum wage, some years I had 2 jobs so that I could afford school (though my parents helped me a bit here). Then I had some grants for school and earned scholarships for different reasons. After undergrad, I cumulated 2 jobs at certain times because I wanted to try everything related to bacteria - research, medical labs, industries, taking any interesting opportunities. But now I calm down and I'm happy to work part-time hehehe.
I had it much easier than you. My paper route and birthday money savings paid for my first year of university, and then my coop terms covered everything else (and then some). I admire your work ethic; while I consider myself driven and have worked 80 hour weeks for up to a half year, I never want to do more than 45-50 again haha :).

Lydz
Posts: 21
Joined: Fri Apr 05, 2013 6:34 am

Re: Lydz's journal

Post by Lydz »

A little update is necessary I guess!

So after living 5 years and a half with 5 other roommates, I decided to leave the place and downsize to 3 roommates last February. My rent is now between 315 and 400$ per month, utilities included. I got a bit sick of people moving in and out, having to explain all the rules of the flat again. I felt I was stuck at the same place and I decided to move out. Of course my expenses are higher than my previous place (250$ all included) but at least I get a peace of mind. However I am also earning more as I'm getting more experienced in my field, and more experience = more salary (until next year when I'll hit the top echelon)

I still need to save 50K in order to "retire", although my idea of retirement has matured over the years. I don't feel the urge to quit my job as much.

After reading a quotation from Lao tze in an bookstore which grossly said "The one who accumulates wealth has a lot to lose", that made me think about this whole early retirement extreme project. I still think that it's a great idea, but I don't want to feel like I'm missing out on certain pleasures of life. Therefore I dropped my saving rate to 55%, which is still good IMO, and I'll be willing to drop again once I'll be moving out with my boyfriend this coming fall in a cozy little apartment that we have yet found. I'm basically saving 1500$ per month right now.

I mean, even though I reach 50K more of savings, with what might be coming in the next years (baby?) I'll have to save more in order to sustain my living without working though my boyfriend should provide as well. So in that case I also feel it's a never ending process, unless you make all the choices of your life accordingly.

At least, I am fortunate that I saved all that money already. It'll all work with compound interest until then. I also have a pension through my workplace. Though I don't think I'll be staying there my whole life, I kind of never considered I also had money "there".

I shall say that I'm really close to my goal and I feel good about all this. My intention will be to let my money grow until I really need it and only use the money I earn to have fun and enjoy life.

Lydz
Posts: 21
Joined: Fri Apr 05, 2013 6:34 am

Re: Lydz's journal

Post by Lydz »

So a headhunter came to me 2 months ago and offered me an opportunity in the private biomedical sector. The job is no more about working with my tiny friends but has a good business and marketing side. I'm not sure if that job fit my values at all. However it pays almost double my actual salary which makes me doubt a bit. I mean I know you shouldn't take a job only for the salary. There is a good scientific side on this opportunity which I should not neglect and they would send me to different international congress around the world which could satisfy my intellectual curiosity... It's not a sale position. Although I'm not a fan of the private sector, that could in fact accelerate my ERE project. I don't know what I should do. I'll need to reflect on that over the week-end.

Lydz
Posts: 21
Joined: Fri Apr 05, 2013 6:34 am

Re: Lydz's journal

Post by Lydz »

Hey Augustus, thanks for your advice. Well as far as commuting I would need to buy a car because the workplace is not accessible by public transport. I'll have to travel up to 30% of my time in the country to meet up with customers which might have an affect on my relationship with DH. I didn't see people working there, but they seem to have a low turn-over of their staff (at least that's what the headhunter says). I met up with the scientific director who would be my boss and he said that he would never call me on evening or on the week-end or even during my vacations, and that the time spent at the office depends on how efficient I am basically. He does not expect me to be there past 6PM. Last thing, he seemed to have very relaxed traits on his face. He said that some times will be more stressful and other less... It really depends. I'm not afraid of not being efficient.

I have one more interview tomorrow (4th interview) with the president of the office. Then I figure I'll finally have an offer? We shall see.

Noedig
Posts: 191
Joined: Tue Aug 26, 2014 10:15 pm

Re: Lydz's journal

Post by Noedig »

Lydz, I think with any job it is hard to predict what it will be actually like in advance, no matter your degree of research, insider knowledge or assumptions. After all during this phase, both the company and yourself are essentially advertisements for yourselves - so expectations may diverge from reality. This can happen.

What I am saying, not very effectively, is that the things that make a job satisying - worthwhile work, good colleague interactions, sense of achievement - can't really be predicted in advance, no matter your research. So go for it ... it may be just the job you like. Also, money is just useful, and so long as you trust yourself to identify and learn from any troublesome situation - and even quit if needs be - then at your age, don't worry too much, go for the opportunity.

Well that was my two pennies anyway. Good luck with your decision.

Lydz
Posts: 21
Joined: Fri Apr 05, 2013 6:34 am

Re: Lydz's journal

Post by Lydz »

Thanks guys for your advice. In the end, I decided not to take the job. The last interview with the president of the office was highly arrogant. Some might say he wanted to destabilize me in order to have a better margin to negotiate, but I took it as an unnecessary attack and didn't feel really good about working for someone like that. Plus, what they offer was below my expectation, even though I dropped of 5K from what I wanted to ask in the interview with the president because of his attitude (I have to say that he succeeded for that). Now I am back on my previous replacement at my current workplace and though the salary isn't as good (I mean, it's still good!), I have coworkers who are like family to me. Coming up challenges are really interesting and I'm really excited to be part of that.

I'll keep in mind your advice, Augustus, to show up earlier to my next interviews and get a feel of the place. I never thought of that before!

------------

Now financially speaking, I am ngoal 50K close to my ERE goal (I slightly increased my goal since last time to prepare for baby) At 30 years old, I couldn't have ask for more :). However, though I was able to stash nearly 65-70% of my salary away in the past 4 years, I have slacked a bit due to new inputs in my life. I don't live with 5 roommates anymore which increased my expenses for renting a place. Thankfully we found a small flat 525$/month with a locker for our bikes in the basement plus a private locker of about 5'X3'. There are shared washer and dryer too, free and therefore I don't pay electricity on those either. Renting a place also needed some investment as I didn't have any furniture to start with except what was in my bedroom. Also, being with my BF changed a few habits. We like to go for outdoors activities and though in the past I also liked it, I didn't have a car to get there or people who wanted to go and share the cost. Now we're 2 and we regularly rent a car for week-end trips.

So that said, I am happier because my neighborhood is quieter. It helps me sleep at night. It's true I'm further away from my workplace and I won't be able to walk during wintertime but at least that only last for 3-4 months.

I figure that in 2 years max I'll be able to reach my goal, although I think I'm even being generous. In the next year I'd like to learn more about investment (I now invest in index fond? ) through my internet bank but I'd like to do it on my own, or at least part of it.
Last edited by Lydz on Tue Jul 19, 2016 8:50 am, edited 1 time in total.

Lydz
Posts: 21
Joined: Fri Apr 05, 2013 6:34 am

Re: Lydz's journal

Post by Lydz »

I wanted to come back on my expenses for moving out into an apartment. I mention I didn't have furnitures else than what I had in my bedroom. Actually that was not true. Over the last year, I knew I'd be moving out on my own. So I did what a good member of this community would do and I prepared it. I dumpster dived my small kitchen table made of wood and a whole bag of utensils, plates, glasses and mugs. I went regularly to the thrift-store to get utensils I was missing. My boyfriend had a futon, a fridge and a stove and my ex-roommate went traveling for an unknown length of time and lended me a desk and a small leg rest until she comes back. Therefore truly I only had to pay more or less 250$ for the other stuff/or appliances I didn't have and that I couldn't get used or for free.

Also, last year I worked part-time (9 days over 2 weeks). That was really nice to be allowed to do that. I figured that I'd start enjoying now rather than waiting for the final goal. Considering that I have 5/6 of my goal achieved at my age, even if I wouldn't contribute more to my savings, I would automatically get to ERE within 5 years only by letting it grow... Surprisingly, working part-time in the end didn't even affect my paycheck for some reason if I compared the total gross salary with last year's. it's true I had more premium for being on-call which compensated the loss without having me actually work (I hadn't been called.. It's like a lottery ticket..)and I also had a slight salary increase but nothing major as they are massively cutting money from health sector.

So that's pretty much the path I'm taking for now; enjoy life, keep working to finance those activities while keep on saving, but might be saving a bit less (meaning 50%-60% instead of 60-70%) because I'm almost there and don't quite feel the rush yet.

Eureka
Posts: 340
Joined: Fri Jun 10, 2016 11:03 am

Re: Lydz's journal

Post by Eureka »

Congrats to rejecting the job offer! It seems so right to me to not only follow the money.

I enjoyed your Lao Tze quote above. I have a lot of the same considerations. I just discovered ERE - and its way to reach FI - very recently and until then I had never considered piling up money with the goal of living of its passive income. As I am not inclined to work any more full time jobs than needed, I am tempted to learn about investment and plan for my future freedom. OTOH, so far I have managed well without this kind of planning as I have always spend way less than I have earned and have lived all over the planet for years on end without 'real' jobs.

Lydz
Posts: 21
Joined: Fri Apr 05, 2013 6:34 am

Re: Lydz's journal

Post by Lydz »

Nice Eureka! I have so many things I'd like to accomplish such as living all around the world. I'm thinking that the best thing would be to travel with the baby while I'll be on paid maternity leave (that I'll prolong unpaid). But if the baby plan doesn't work I'm still setting a time limit for that to happen ;)

Eureka
Posts: 340
Joined: Fri Jun 10, 2016 11:03 am

Re: Lydz's journal

Post by Eureka »

It is wonderful to travel with a baby. I can highly recommend it.

I travelled with my son the first two years of his life without having any fixed base: Tokyo, New York, National parks in California, beaches at the Big Island, Hawaii, bicycling more than 2000 km in Greece (with a 15 months old baby in a front seat and bicycle bags and diapers on the back wheel), yoga camp in the snowy winter of Sweden and many other special places. The baby was happy that he was with his mom 24/7 and his mom was happy that she did exactly what she wanted to do.

Lydz
Posts: 21
Joined: Fri Apr 05, 2013 6:34 am

Re: Lydz's journal

Post by Lydz »

What you wrote really inspires me Eureka. We're working on the baby plan but it's taking more time than expected... That's when you realize that you cannot always control life.

-------

Some updates:

Update on personal life:
I'm taking a university course. I'm back on a quality control/assurance position right now, working full-time. Again it's a maternity replacement. However I am dreaded to be back on my orginal position in September. I figured out that taking a course about how the health system works wouldn't hurt. This course has been helping me a lot to understand the real role I had in the healthcare system and why certain decisions were nade, I also took part of a personal growth course which help me set my objectives in life and live fully. That last course may sound cliché a little bit, but I realize reading about personal growth doesn't put me in action. Books help me create projects that never get accomplished.

Update on personal finance:
I have been spending a lot more than I usually do in this past year. I was a bit freaking out, seeing a 4 number-digits on my credit card account for the past months. But in the end, things are going very well.

- Considering I worked less for half of the year
- Considering I moved into an apartment where the rent was a few hundred $ above what I usually paid in the past
- Considering I need to pay for electricity bill
- Considering I have given to charity
- Considering I have enrolled in a university course
- Considering I have helped my BF a lot financially this year

The conclusion is that I have "saved" 5000$ more compared to last year. I believe this is all from passive income from investment in index funds. In fact, the difference between what I have in 2016 minus what I had in december 2015 is equal to my net salary.

Meaning... that I am FI... I only need to save in order to cover the inflation rate (Or/and decrease my spending back to before... but I only need a few things that are quite expensive and after that I should be alright for a while). This is a bit unbelievable.

Eureka
Posts: 340
Joined: Fri Jun 10, 2016 11:03 am

Re: Lydz's journal

Post by Eureka »

Congratulations!

Lydz
Posts: 21
Joined: Fri Apr 05, 2013 6:34 am

Re: Lydz's journal

Post by Lydz »

So what's up since last time?

I was indeed dreaded to go back to my former job so I decided to take a leap and apply on a professional position where I'd have a steady schedule (my former position's schedule was always unpredictable from month to month with shifts starting at different times) and where my analysis skills would be used.

It turned out my new position is paying me more, as in 9K more, is less stressful than the replacement I had and I am learning (i should rather say 'improving') programming skills. It also uses my optimization skills that is really strong in me. It's funny because it's like getting a crash course on programming but getting paid for doing it.

It's been a year now that I've been doing this. It's great and I haven't learned everything yet which fuels me into continuing that job for at least another year. When there is still space to learning, then I'm be happy.

This has reflected in spending more though and not saving more which is fine to me because there are certain things I wanted to acquire in order to be healthier overall (water filter and a good vacuum cleaner)

Last August, I hit my goal number for being FI. Since then, I still invest the same amount of money as before so this is resulting in more than I would need. I said to my boyfriend that I'm now saving for my share of the house that we may buy if we leave the city.

My bf though has just started a new job and his finances are not as good as mine. Also he works 2h away from the city which requires him to rent a room that is almost equivalent to the rent of my apartment. I told him I would stay at least another year in my current job (for knowledge and experience) but after that I can move and get something part-time around his area. Paying double rent is not an optimal situation, especially when he spends only a total of 2 weeks per month there. The only thing is that where he works, there is not many opportunities (it's a small town area) and rentals are rare and therefore prices are jacked up. We'll see when we get there.

Beside that, I have converted to cloth toilet paper for #1. I found over 25 pieces of cotton already cut in squares at thrift store for 2$ and I've been using those for over a month now and it works really well. For #2 I was considering a bidet gun but I didn't like the fact that during winter the water would be freezing cold (plugging the bidet to the bath faucet is not ideal where I live) I just saw that there were portable bidet that existed. That will probably be the solution. Sure I'm not saving tons of money out of this but it feels cleaner and it's better for the environment (considering all the chemical it takes so that you can have white toilet paper). We will still have regular toilet paper for guest. My personal goal is to stretch the 24 rolls pack until January 2019 😉. I'll let you know if it has been reached.

And finally the baby project hasn't been very sucessful. My doctor is refering me to a fertility clinic but I haven't taken an apointment yet... I don't know if it's worth forcing the nature in having kids if it's not meant to be. Anyway I need to reflect on that situation as having kids is not my top priority in life.

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