Financially independent at 32. How he did it. Part 2 of 2

Financially independent at 32. How he did it. Part 2 of 2

For years I’ve considered investing a “get wealthy eventually” strategy – at least for us it is.  Some people get there sooner than most.  So when I hear about those stories I want to learn about them.

In Part 1 of 2 in my interview with Kornel Szrejber I asked him about his investing journey, why low-cost Exchange Traded Funds (ETFs) make sense for many Canadians and what downsides exist for ETFs.

That post drew considerable criticism from some readers and they demanded details.  You know what?  Good on the readers.  Although the post was not designed to explore every single detail about this investor I can appreciate some readers got rankled when reading this article without  a few.

So, I asked, and Kornel responded to many comments on the site.  He shared the ETFs he owns, how he and his wife grew their assets; he responded about his rental income, and ultimately shared the main reason how he arrived at his destination.  They are frugal.  They live on a meager $25,000 per year.

In Part 2 of this interview below I asked him about my own investing approach (what advice he has for me), and what advice he has for others by the decade.

I’m a hybrid investor Kornel – I own dividend paying stocks for increasing passive income and I own a few broad market, low cost U.S. Exchange Traded Funds (ETFs) for U.S. and international diversification.  What’s your take on that?

It’s a very interesting investing strategy and it definitely has some significant benefits. As with any strategy there are pros and cons to it.   In particular, here are some key things that I like about it:

  1. If you’re going for an early retirement, then you’re likely maxing out your TFSA and RRSP. (Editor’s note:  we are).  Once those are maxed out, it can be beneficial to hold Canadian dividend paying stocks in your non-registered account(s) due to the massive dividend tax credit that we Canadians receive (this can especially help in retirement when your taxable income is low).   (Editor’s note:  this is also what we do).  Ultimately, you can keep your Canadians investments in your non-registered accounts due to the preferential tax treatment, and keep your U.S. and international index ETFs in your registered accounts (TFSA and RRSP).  In particular, the tax treaty between US and Canada also makes it tax efficient to hold your U.S. index ETFs in your RRSP (assuming you’re buying the properly structured investments).
  2. If you’re actually good at picking the right dividend stocks (or are getting help from someone like 5i Research (partnership), then not only might you outperform dividend focused ETFs like the Canadian Dividend Aristocrat ETF (CDZ), but you can also bypass the fees that those ETFs charge.Long term this can make a big difference, so ultimately this comes down to are you willing to invest the time and energy to get good at this?  You might be better off investing in a few ETFs and focus your time and energy elsewhere.

Editor’s note:  Kornel currently holds the following ETFs:  XIC, VUN/VFV, XEF and XEC.  Some of these made my list of my favourite ETFs here.

You recently told me you’re in ‘pretty good financial shape’.  Can you expand on that?

When I mentioned that it was shortly after crunching the numbers and finding out that we were financially independent (i.e., the returns from our investable assets are enough to cover our day-to-day expenses).  Ultimately what got us there wasn’t really high salaries, or building a company and selling it for millions, or even having some good stock picks that flew to the moon.

All-in-all, it helped a lot that we were dual-income right from the start. (We lived together immediately after university.)   We lived as if we were only living from one income and invested all the savings.  Living from one income isn’t bad at all, bachelors and bachelorettes do it all the time. We just did it even though we didn’t have to.

If you don’t have a significant other to move-in with, definitely consider roommates as you then get to take advantage of many of the benefits that dual incomes couples/families receive.

Our concrete goal of a 50% savings rate was also critical. Every time that we had a month we didn’t hit that rate, we would have a “family meeting” to discuss what happened, and what we can do to fix it. Ultimately, we stuck to it (even though my frugality drove my wife crazy at times).   The end result is that we were able to retire after working less than ten years.

Being frugal played a big role but it wasn’t that extreme. It was fine to spend as long as we fit within that 50% savings rate. We occasionally took a vacation where for that month our savings rate declined below 50%. But, for the most part, we kept it at 50% or more.

Doing side hustles like creating the personal finance podcast and creating other online courses helped too, along with really minimizing the fees that we were paying by buying low cost investments like ETFs where we could cheaply invest in the indexes.

What financial advice would you have for these age brackets?

  1. 20-somethings?

Don’t buy a house just because it’s something that “everybody” does. There are lots of pros and cons to renting vs buying. Renting doesn’t necessarily mean you’re throwing money away. There are lots of caveats so study this hard, learn all the details, and then make an informed decision.

You can check out the Should You Rent or Buy a House? Episode on my site for a comprehensive guide.

When you’re young, learn to invest ASAP. The earlier you start, the longer you have for the money to compound, and the earlier you can generally retire (if you want to).  You’re going to need to learn this anyway eventually, so might as well start now so you can reap all the benefits for as long as possible.

Also, if you’re paying prime (on your mortgage for example) but can earn 8% or so on your investments then maybe investing is the better option for you.

The bottom line is start learning all this now (hint: millennials check out this link for a FREE ebook) so you can maximize the benefits you reap from gaining this knowledge.

  1. 30-somethings?

Life is too short to do something you don’t enjoy doing. In retrospect, I should have switched careers much earlier. If you dislike your job, I think you should devote significant time to discover what you actually enjoy doing.

Notice how some of the most financially successfully people continue to work even though they don’t need to?  Why is that?  It’s because they consider the work they do to be a hobby instead of a job.

Devote your time to figure out what type of “job” is actually a hobby for you. Once you find this, you’ll no longer be slaving away to eventually reach that retirement dream that you have in your head. Instead you’ll be getting paid to do something you enjoy.

It’s hard to find this sometimes (it was for me), but it’s worth searching for.

  1. 40-somethings?

At this point make sure that you actually have a financial plan, and that it’s updated. It’s much easier to correct course now, as opposed to your mid-50s and getting ready for retirement.

You’re probably earning a fair bit of money at this point in your career so make sure your investing fees are minimized, you’ve optimized your investments from a tax perspective, and ideally you have that financial to work from.  If you need help with creating a plan, get a fee-only financial planner to create a plan for you to ensure you’re on track to retire while hitting all your lifestyle goals.

You don’t want to be forced to invest in aggressive investments that are beyond your comfort zone, or to work longer in a job you don’t like just because you didn’t start planning early enough.

  1. Ages 50+?

At this point you should be monitoring your financial plan closely, and updating it once a year. You’re getting really close to the traditional retirement age now – there’s no room to mess around. Your portfolio at this point is likely pretty large, and you’re probably making a pretty decent salary, so make sure that your investment fees are minimized (if they aren’t already) and again you have a solid tax minimization strategy in place.

Remember that waiting until you’re 65 to live and do all the things you’ve wanted to do in life is very risky. Unfortunately, you may realistically not live that long, or your health might not be good enough to do all the things you’ve always wanted to cross off your bucket list.  Like Mark says on his site often:  life is for the living – including travelling to Portugal right?

Remember you need to live.  What if you develop a heart condition and can no longer scuba dive in the coral reefs for example? I would rather experience all the things while I’m young, healthy and full of energy rather than risk it by waiting until I’m 65; just hoping I’m healthy enough let alone have enough energy to travel, try different activities, etc.

You may also consider having an advisor at this point ensure all your bases are covered as far as worst-case scenarios go.  For example, what if you have to be put in a home for around the clock care? What if you develop Alzheimer’s? You ultimately want to make sure you have the necessary financial cushions built-in so that you can handle such unfortunate and expensive events as opposed to putting that financial strain on your kids, family, etc.

What are your financial plans for the future? 

Well I’m definitely going to keep running the Build Wealth Canada Podcast which has now become one of the top personal finance and investing podcasts in Canada. I’ll continue to interview the top experts on the show so we can all learn from each other and optimize our investing and finances.

I also do financial planning and coaching for Canadians that want to retire early too. Having achieved a good amount of financial independence at the age of 32, it’s rewarding to help others retire early as well, or at the very least set Canadians up financially to allow them to pursue the things they’ve always wanted to do, instead of being forced to work in a job they dislike until that traditional retirement age of 65.

Lastly, I’ll continue to work part-time at 5i Research (partnership) for now where we help Canadians who are interested in investing in individual stocks for dividend or growth purposes, and investing in ETFs. Their research and analysis team is also able to answer investment questions about specific stocks and ETFs which is great because they are actually unbiased.

Closing Thoughts

Thanks for this Kornel.  I can appreciate your story and financial path may be rather polarizing for many readers.

Readers on this site demanded some details from you and you know what, I don’t blame them.  That said, I wanted to share your story for the very same reason I share other retirement or financial independence stories – so people can think for themselves, question things, learn and therefore act – to tailor their own financial path.  If you happened to cause some controversy on this site – in the name of provoking some people to think for themselves and challenge you then mission accomplished I guess.  That includes what folks might not do if they were in your shoes.

Best wishes to you.

Readers, what further questions do you have for Kornel?  Maybe better asked – what won’t you do as it applies to your financial journey?  Thanks for reading. 

You can find more retirement essays from folks that have successfully “been there, done that” on this Retirement page here. 

My name is Mark Seed - the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I'm looking to start semi-retirement soon, sooner than most. Find out how, what I did, and what you can learn to tailor your own financial independence path. Join the newsletter read by thousands each day, always FREE.

49 Responses to "Financially independent at 32. How he did it. Part 2 of 2"

  1. I read this thread on the weekend and cannot resist to comment…
    If Kornel’s income from investments do indeed exceed his expenses( many have doubts), then he is FINANCIALLY INDEPENDENT and does not need to work to support his current lifestyle although it appears he chooses to.
    However the choice of the word RETIRE does not fit the current definition.
    1. leave one’s job and cease to work, typically upon reaching the normal age for leaving employment.

    My friend’s son is 29, unemployed, on welfare and living with his grand parents for free. So I guess he is financially independent AND retired since his income exceeds his expenses AND he left his job and ceases to work.
    So let’s get back to work people, so we can retire someday by our own definition, not someone else’s.


    1. I think it all depends on context Carl but I largely agree with the “cease to work” definition. Whether or not you really need the money you are not “retired” per se if you are working. Financial independence is a different conversation – income > expenses.

      I was back to work today for 9 hours. Glad to be home now Carl 🙂

  2. Hey Mark – More detail would help. Several of us are trying to determine what a “very frugal” budget would you like at $25,000. My budget is closer to the one in the link that May provided. Thanks!

    1. Fair enough Rich. I’ll see if Kornel can respond to this one.

      If not, I can share mine but unfortunately mine is x2 as much as we even have no kids. A mortgage will do that 🙂

      How are things with you? How is the investing?

  3. Wow very impressive that he’s able to live on $25K per year even with a baby! We just dropped $16500 on our baby’s first year RESP so that’s way more than 50% of the $25K.

  4. I’d like to thank Mr. Szrejber. For all the unsavouriness his appearance here brought, it also revealed two positive things:
    1. the real-life honesty & freshness of May;
    2. the realisation that I like what cannew has to say (who knew?!).

    In the end, Mr. Szrejber did help the readership, but in a completely different way than he intended.

  5. What’s the big deal about retiring at 32, 42 or even 52, especially if your are living at a basic level of income and handouts from the government? Life is certainly more than work but who says you can’t work and enjoy life, family and accumulate money to retire.

    In fact for many work and accomplishing something worth while from work can be as satisfying and raising a family and doing the things one enjoys besides work.

    At 32 life has been too short to know how one wants to end up doing during retirement, in fact anyone who says they are retired before age 40 is just fooling themselves. They will be looking for work, but it might be working from home, part time, writing books or just trying to convince others they can teach them how to accomplish what they’ve done by selling that they think others don’t already know.

    I’m for working, taking care of ones own family, not relying on gov’t handouts and saving for ones own retirement.

    1. You raise some interesting points cannew – many of them have been raised in this thread. Most if not all of the early retirees I know don’t simply “retire” as in cease to work. Rather, they work on their own terms. It’s not a knock or criticism. Just their reality. So, while “retired” isn’t exactly the best word for this context it tends to do.

      In this context, stopping to work, it will never happy to me then. I should write a post about that. I will always work for some form of compensation or not for as long as I live.

      Thanks for reading and being a fan.

  6. Readers, what further questions do you have for Kornel? 
    “They are frugal.  They live on a meager $25,000 per year.” – Just one and I think May has already asked it – what does their budget look like and what does the 25K cover? My budget is closer to the one in the link she provided. Thanks!

  7. re: Somehow people think that it’s wrong for early retirees to accept this money.
    Not at all. It is wrong that early retirees who boast and claim to be millionaires and retired — such as derek foster — make no mention that they live off a very low level of income (usually from dividends) so that they can qualify for low-income government payments to provide upwards of 50% of their total income. That is the disgusting part, that these people are parading in public as millionaires (in order to sell their products) and then pretending to be “poor” in the face of the government. They are quite literally taking food out of the mouths of hungry children. And we should admire these “people” why?

    re: the tax code is not just about raising money but to encourage specific behaviour. The so called “Sin taxes are probably the best known example of this.
    Which shows the limited thinking of the government. More money is spent on health care and social costs from the damage these “sin” goods and services cause than is made from tax revenue from the same sources. Their standard answer is “raise taxes”.

  8. I never got any children benefit other than the $100 monthly from the conservative government. But I do not think it’s wrong though to give money to needing parents to provide for their children. I think it’s the society’s responsibility to make sure every kid can be provided well as the children are literally the future of humanity.

    But I do think the government should increase supporting for middle class parents to raise children. Right now they pay the most tax and get very little to none support from government for having children. I thought this is wrong. From what I see, middle class parents normally try their best to provide the best opportunities for their kids. The result is expense of a kid becomes quite high thus they hesitate to have more children. Among my young colleagues, quite a few stop with one kid as they feel they could not afford to have two. It’s our society’s loss.

  9. According to the logic I’m reading here my 89 year old father in law isn’t retired either, after his pensions could be cut in the next budget. What I’d love to know from Kornel is he lives on 2000 grand a month, that is serriously impressive!

    Secondly his wife gave up her career to be a SAHM, nothing unusual there!

    As to the point he gets money from the government, congratulations he’s thinking like a bank CEO, I may make millions but I’ll happily accept handouts from the government. I may be a SJW on social issues but when it comes to taxes I’m 100% Trump!

    1. Canada is a great country to take care of its juniors and seniors. That is one of the reasons I call myself a proud Canadian. I have no problem with getting money from government.

      I do have a problem with not getting straight math though. Either his annual income is $26000 plus $6000 children benefit, or his annual income is $26000 but only $20000 is from investment and pension.

      Being a financial adviser, it’s important to get the complete financial picture of the people you help. For low income family with children, children benefit is a big part of that financial picture. I will not trust my finance to somebody who cannot even get his own financial situation straight.

      I am not ready to be impressed with living on $2000 monthly yet, before I am shown the broken down expense. Even without mortgage, you need to pay for property tax, house insurance, house maintenance, utilities (gas, water, electric), car insurance, car maintenance, gas for your car, cell phone and internet, grocery, clothing, vacation and entertainment. With a kid, you also spend on toys and more on clothing and shoes as they grow fast. Show me how much is spent on each of the item, and how they add up only to $2000, then I will be impressed. I would like to see it so I can learn how to cut my own budget.

      Regarding to tax, I want to point out without people like me and my husband working hard and pay lots of tax, the government will not be able to pay children benefit and OAS.

      Personally, I will not include children benefit and OAS into my raising children and retirement budget. I volunteered regularly at my local food bank, I feel so sad when I see kids and seniors in the line. I definitely do not want to be in that line myself. If one has to depend on these income to cover basic needs, then there is no guarantee the basic needs can be met as government might be forced to change the policy if economy getting bad.

      1. re: I will not trust my finance to somebody who cannot even get his own financial situation straight.
        It all comes down to trust, through all aspects of life (it’s our hardwired biology).

        I’m sure there are tons of readers on here who find my commentary style acerbic and “hostile”, but I’m also sure they trust me because I’m genuine without any kind of agenda. Unpleasant but trustworthy. The recent “financially independent retiree” was the the exact opposite — pleasant but untrustworthy.

    2. Regarding to how much required for a family with kids living relatively well while being frugal, I feel this break down is more typical and looks very real to me.

      It’s between $50K and $60K a year. This was from 2013. With the inflation, at 2017 you spend a little bit more I assume. Note this only covers basic needs, does not include one time big expense like a vacation at Hawaii or Cancun.

  10. I do feel I did not get straight answers from this early “retiree”. With one child under 6 and with family gross income annually $26000, you get more than $500 from the government for child benefit. I did not see anywhere this being mentioned. $6000 is not small money if that’s 25% of your total income.

    Anyway, I am shocked with the claim that a family of three can survive with only $25000 a year, because property tax, house insurance, house maintenance and utility already adds up to $1000 a month. And I don’t think that’s a life good for everybody even if you really can do it. To each its own. I for one, being a parent, want to provide a nice vacation at least once a year for my kids. I want to enrich their lives with delicious and nutritious food, sports, music and arts, educational toys like lego and knex. I do accept hands down clothes and toys from friends, but I also want to be able to buy pretty dress and shoes for my daughter’s piano recital. When the school is closed, I want to be able to send them to summer camps where they can have both fun and learning opportunities. And what is the financial plan for the kid’s future? RESP any where? All this requires money, and not small amount. Last time I looked, the cost of supporting a child in Canada is similar to cost of a house.

    It’s good to be frugal, I don’t think anybody should waste money. But as I said before, I think the more important thing is that investing on yourself and getting a good job that you enjoy, face some challenges, feel achievement, and also get paid well. Then you can save money while enjoy life, and very importantly, as a parent, provide for your children.

    It’s so funny when he said he wants to help other people to do what he did. I came to Canada at age of 29 and went back to University, with my first class only understand less than half what the professor talked. I got my first job at age of 32 and rapidly became the best team member in a domain where female professionals are quite rare. I began my new Canadian life at age 32. I would definitely chose my current life instead of retiring at 32 but have to calculate pennies I need to spend. So thank you but no, maybe other people have different dreams.

          1. re: Nothing special about me though.
            That’s exactly what makes you special! Would love to read more comments from you in the future, May.

            re: You can easily find thousands immigrates just like me in the street every minute.
            Why are you all in the street?? :/ Just kidding…having worked with many immigrants over the years, I’m always amazed at their abundance of and interpretation of work ethic. This isn’t just some race-flavoured bias, in the US, Asian and East Indian households comprise the two highest income rankings. There’s even a slew of articles showcasing recent Syrian immigrants and their financial success over a short period of time.

          2. @SST Thanks. I think we Asians believe in living a fulfilling life, contributing to the society, always trying the best with study and work, and making a good life through hard working. At the same time, we also want to have fun with life, live a little bit, e.g. travelling the world or relaxing at home with a well equipped home theatre. 🙂 This is our life philosophy, and we pass it generation by generation.

            I was quite struggled whether or not to continue to work after I had two children. My husband can support the family for sure. But I feel my life would be more meaningful and valuable being a professional and a mom at the same time, although it’s very demanding on my time and energy. Two incomes also provide extra financial security for my family as you know there is no such thing as job security existing any more. I also feel I would be a better role model for my daughter to be a working mom, to show her I am making positive impact both to my family and my work.

    1. Great comment May and I fully agree: “I think the more important thing is that investing on yourself and getting a good job that you enjoy, face some challenges, feel achievement, and also get paid well. Then you can save money while enjoy life, and very importantly, as a parent, provide for your children.”

      Kudos to investing in you and providing for your children. In doing so you are taking on the largest responsibility that money will never compare.

      Best wishes.

  11. This line is music to my ears, “If you’re actually good at picking the right dividend stocks, then not only might you outperform dividend focused ETFs like the Canadian Dividend Aristocrat ETF (CDZ), but you can also bypass the fees that those ETFs charge.” 🙂

    Great job Kornel, hopefully your story will inspire others.

    1. @kanwal; you ignored the rest of his statement “so ultimately this comes down to are you willing to invest the time and energy to get good at this? You might be better off investing in a few ETFs and focus your time and energy elsewhere.”
      He prefers etf’s!

  12. I have refrained from engaging in these types of stories since the Derek Foster fiasco long before MOA even existed. Suffice to say I am not a fan of these types of articles.

    1. LOL. Derek Foster claimed to be retired at a young age and moved to Wasaga Beach to live off his Divs with his young family. When over 1/3 of his Divs were cut – He sold shares at the wrong time (loss), sold his house and moved back to Ottawa – until he recovered. (by writing more books). Great lessons that he learned – but he made mistakes like we all do. He was not fully able to retire with passive cash flow because it showed when he had to sell stocks at the wrong time – just to live and he did not have a large enough portfolio to claim retirement!. (and either does Kornel)
      *He sells a lot of books though and that gives him another income stream. Glad he is doing better now :). (but his books are useless to me). I think Kornel has done a great job at an early age but he is not retired and as noted above in SST’s comments is not licensed to be an investment adviser or give financial advice. Although Kornel may have good intentions – He is still learning and it shows. His net worth (excluding his home) is great for a young guy his age but he is nowhere near being RETIRED! and should not be giving out advice that can hurt Canadians. Kornel, all it takes is one Canadian you think you are helping that takes your advice and fails – to have a lawsuit on your hands. (what will that do to your income, net worth and reputation?). STOP! the “I am Retired at 32” as one that you are helping could use this against you and claim you are a fraud!. (just trying to help you – your welcome)

    2. Ditto, Lloyd.

      When a person approaches a personal finance blog under the guise of sharing their story in order to “inspire” and/or “help” their fellow man…it’s rarely the case. All most all of us quickly saw through this thin veil of altruism to the true aim — drumming up business for blog followers and (unlicensed) financial planning clients.

      Thing is, when your story is “I became financially independent and retired super early! I can help you do the same!”, but you provide almost no details on the narrative (beyond vague circular comments), what you are doing is saying, “Don’t worry about how I did it, just trust me!” Derek Foster claimed to be The Idiot Millionaire, maybe your handle could be The Magic Millionaire?

      This painfully reveals you have no understanding of the fact that respect and trust for the financial sector has been dead for at least 10 years. It’s also an insult to think the readership of this site — or any site — would be naive enough to fall for that marketing ploy — or any ploy. You want people to follow you and give you not only their time but their money and yet you’ve provided us with nothing but a cloudy story with more holes than a Lollapalooza audience. And you wonder why the readership is “hostile”?

      It’s not about you, it’s about who’s across from you.
      It’s about trust and authenticity, not…whatever mishmash you brought to the table.

      Sorry you go duped by this character, Mark. Live and learn.

      1. Just listened to one of his podcasts. Way too long and I lost interest after 10 minutes of listening. His blog is set up to make money under the disguise of helping people. So sad!
        He’s not retired! and IMO isn’t even 1/3 of the way there yet. Most people I know who have retired properly have zero debt.
        Please tell us there is no part 3.

  13. re: How he did it.
    1. Dual-income right from the start
    2. Living from one income
    3. 50% savings rate
    4. Doing side hustles

    How very generalized, nondescript, and vague. Thanks for….nothing?

    Here’s my prescription to becoming financially independent/a millionaire:
    1. Make more money
    2. Keep more money

    re: I also do financial planning and coaching for Canadians
    Please don’t. That decision is rife with biases (esp. Dunning–Kruger). There is enough poor behaviour in the financial sector as it is*. If you actually truly cared about the financial well-being of your fellow citizens instead of bolstering your own ego and wallet, you would, at the very least, take the CSC exam instead of parading around as an unlicensed planner/coach who doesn’t understand things such as risk or ETF structure (let alone the definition of “independence”).
    *(During the last 20 years I have twice been a licensed financial professional working in the financial sector. Both times I exited due to an abundance of unethical/illegal behaviour from those within the sector (big banks and private companies). In other words, I speak from experience.)

    re: I’ll continue to work part-time at 5i Research
    If I was 5i I’d drop this guy like a girl with popcorn (Google it). Not worth the negative publicity.

    Gotta go register my money blog name now. It’s gonna be awesome.

  14. One thing that I think that is crucial to any individual’s financial success is tax planning/minimization. I have always believed that it’s not how much you earned, it’s how much you get to keep after taxes. Kornel mentioned this a few times and I hope that other readers picked up on that.

    Some readers may be upset at this story and think that this is totally absurd that someone is able to retire at the awesome age of 32. I think that this resentment is unnecessary and it’s unfounded. What people should take away from this story is that “it’s possible to achieve your financial goals early if you have the discipline and commitment to follow through with your plan.” Use this story as inspiration to write your own story and achieve your own financial goals.

    1. Thanks Leo. I think folks are welcome to question things, the details, the math, etc. I have no problem with that actually – as long as it is done constructively and respectfully. At least that’s what I would like to see….

      The big reason why I shared this story wasn’t because it was my job to do any thorough investigative journalism on Kornel. I could but I don’t have time for it.

      This is a blog, it’s designed to share perspectives, opinions and stories to provoke some thought. I intend to have all content true and factual and evidence-based as much as possible – but at the end of the day the content is shared to help people think, reflect, challenge, learn and act. You can either be very upset about the content on this site (any content on this site) or take it for what it is with those objectives in mind – some perspective.


    2. re: crucial to any individual’s financial success is tax planning/minimization.
      Yup. Billionaire Ross Perot once got his income tax down to 1%. Goes to show that the wealthy have many more taxation tools than the non-wealthy.

      re: Some readers may be upset at this story and think that this is totally absurd that someone is able to retire at the awesome age of 32.
      Not at all. In fact there are a couple twentysomething bothers where I live who retired this year due to winning the lottery. Well, they didn’t “retire”, they started their own real estate developing company. That’s a lot more awesome than some other “retirement” stories.

    3. Thanks Leo.

      I think the other challenging thing too is that different people have different definitions of financial independence and that’s where the arguments start. For example, if somebody just lives off dividends then one could argue that they are not FI because companies can cut their dividends like in 2008, and then that person is no longer financially independent. The same types of arguments can be made for people with ETFs, their own businesses, etc. It’s hard to find something bulletproof where you have so much money that you can just keep it all in GICs and high-interest savings accounts and live off that forever.

      In our case we hit FI, but it’s not like there are no risks ever to the portfolio. So hence I keep the side businesses and part-time thing going which keeps things fun and provides that extra layer of security in case the investments don’t perform the way I want them too in the unpredictable future. Thanks again for your insightful comment.

      1. re: different people have different definitions of financial independence
        Those two words have already been defined for a very, very long time. There is no reason to invent your own definitions, beyond making yourself feel better about yourself. No one — not even Buffett — will ever reach ‘financial independence’. Ever.* It’s a Zeno thing. “Financial Independence” is a marketing term.

        re: It’s hard to find something bulletproof where you have so much money that you can just keep it all in GICs and high-interest savings accounts and live off that forever.
        But that’s precisely what ‘financial independence’ takes. The closest you’ll ever come to “bulletproof” is having a ginormous pile of cash. That will leave you with only one, perhaps two, dependent factors tied to your finances. The more complex your finances become, both in form and structure, the greater number of dependents arise.

        *(That’s not true. There were tribes in South Africa who, even in modern day, operated in a money-less culture, not even shells or rocks. They had no concept of money until Apartheid saw their land taken from them in return for jobs in the army. They are still trying to figure out how to incorporate money into their society. One can only be truly independent of money only if they operate in a money-less system.)

        1. I’m not convinced there is one singular definition for everything but that’s just me. Everything has a context SST.

          Are you wealthy? What does that mean?
          Are you poor? What does that mean?
          Are you financially independent?

          Does “financial independence” mean complete freedom from debt?
          Could it mean having having enough money to survive without further income?
          Does it mean having enough money to thrive and chase future endeavours once basic necessities are covered?

          It’s not always “black and white”. What does that even mean? 🙂

          You’re pretty bright and articulate. Not everything is right-answer thinking. Again, just me. Everyone else’s mileage may vary.

          1. re: “Not everything is right-answer thinking.”

            Except when it is.

            Why can’t there be a “right-answer” for the term ‘financial independence’ when there are legally bound “right-answer” definitions for the terms ‘advisor’ and ‘adviser’? Just as other financial professionals have argued against the term ‘passive’…which was misunderstood and misused…why shouldn’t there be an argument for true FI?

            Clearly I don’t understand why people would wrongly use language and/or use the wrong language…well, I do, but if you have to bend definitions to fit your “context”, then your context isn’t what it seems. Could you imagine if engineers and doctors were all wishy washy and loosey goosey about their language usage and definitions?

            Perhaps PFers require a more gentle and coddling approach to ‘financial independence’. Maybe a sliding scale, “I’m 13% financially independent!” Perhaps the term needs to be deleted from the lexicon simply because there is no agreed upon definition — a millionaire may not be FI at all, whereas a homeless person may experience a high degree of FI — it’s marketing gibberish.

            1. SST. My point is, there is some right-answer thinking (1+1 = 2) and there is not 🙂

              FWIW – I’m not financially independent and won’t be for many years so you don’t have to worry about any sliding scale with me!!


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