OUR JOURNEY TOWARDS FINANCIAL INDEPENDENCE!
Written October, 2021
By (B) and (E)
Our story began in 1980 when we first met. It became evident after our first modest date, that (B) was a rather frugal person, and luckily (E) was in agreement with that philosophy! It was that mutual frugality and a focus on saving money that has kept our marriage strong for over 40 years, and has led us to a state of financial independence for our upcoming retirement years.
We felt that investing in real estate early in life, rather than spending our money on rent, was the way to go, but when we bought our first house in Burnaby, B.C. in 1981, house prices had peaked, and our mortgage rate was a whopping 15%!!! We diligently worked and saved as much as we could to pay down our mortgage on each anniversary date, since we were unhappy with seeing most of our mortgage payments being eaten up by the high interest payments! (B) took on a part time teaching position at BCIT, lasting four years, along with his full time job at CPAir, to help conquer the mortgage. It provided a huge boost financially, and enabled us to pay off our mortgage in about five years. After that, we felt that we could treat ourselves to a dinner out a couple times a month (previously a rare treat for special occasions)!
Now we felt comfortable enough to start our family and have (E) stay home to raise the children. We first had a son, then twins three years later. With the coming of twins, we needed a larger house, so moved to Delta, B.C. Feeling the pinch of a mortgage again, extra mouths to feed, and only one income, we went into extreme penny pinching mode again! (E) saved money on groceries by buying on sale, cooked and baked at home, grew a garden for summer vegetables, and welcomed hand-me-down clothing for the kids. (B), being an amazing handy-man, fixed what needed repairs rather than buying new things, took care of all the home maintenance and repairs himself, and even took on an extra job of doing a few house inspections to pick up some extra cash. He was an incredibly hard worker, and his philosophy was to work hard while he was young so that he wouldn’t have to when he was older! (Well, that didn’t happen!!! He’s worked hard all his life!!!)
We continued our thrifty way of life, rarely eating out, and buying new things only when really needed, and not without a fair bit of thought. We did value our vacation time though, and made sure to have family get-aways each year, as well as a couple of trips to Mexico for the two of us!! We were very lucky and grateful during these child rearing years, to receive a monthly cheque from (B)’s mother, from a family trust investment. This we saved to pay our house taxes and insurance every year. We also saved any money that we were gifted from parents for future use (holidays, investments). We continued to make extra payments on our mortgage whenever we could, and managed to pay it off completely in about 7 years! We also managed to continue investing for our retirement – even smaller contributions accumulated and grew over time.
As our children grew older, so did our vehicles! After the mortgage was paid off, we started saving up for new ones. First came a new van, purchased with only a small loan, and a couple years later, a new SUV for (B). Now we had to focus on paying those loans off, which we did in some years. When our house required a new roof, we were again very lucky and grateful when (B)’s father presented us with the money to cover most of the cost! Once the kids were all in high school, (E) took on a part time job at the school cafeteria, which brought in a little extra money, and still allowed her to be home for the kids after school and all summer! She also had a home business making and selling chocolate truffles at Christmas and Easter, which helped to pay for orthodontic bills for the twins!
When our children all graduated from high school, (E) also graduated to a different job, which offered more hours, and she and (B) continued to support them at home as they attended university or college. They all had part time jobs, to take care of their own needs, and help pay for their education. When they attained full time jobs, they came on board with investing, through Fraser Financial Group (now Fraser Financial Abbotsford) IPC Investment Corp., as they had received a lot of financial coaching from us over the years, and recognized the benefits of saving.
We had been introduced to Chuck Webb from Fraser Financial Group – (now Fraser Financial Abbotsford - Investment Planning Council), by a friend; I think it was after we had paid off our first house and had extra money to invest. had been investing what little money we could afford prior to that, in RRSP’s with our bank. Chuck got us investing in mutual funds, still with a focus on RRSP’s. thought of our RRSP’s purely as retirement savings, and never took any money out once it was invested. Our financial strategy has always been based on long term investments for retirement, so if the market ever took a dive, we would ride it out, and inevitably the investments would recover. appreciated the twice a year meetings with Chuck to help keep us on track with the best strategies for our retirement savings. He provided us with invaluable advice over the years, and helped us grow our investment portfolio, adding Tax Free Savings Accounts to the list when they became available. In later years, we continued to maximize our RRSP and TSFA investments, as well as adding Non-registered investments to the portfolio. It was very satisfying to see our investments growing, and we felt that we might just reach our retirement goal!
We continued to rely on the advice of Chuck Webb, and then his successor, Dale-Lynn Ambury (Desabrais) to expand and grow our portfolio. In the more recent years since our kids all moved out, we have been able to add considerably to our investments. This is due in part to an inheritance from (E)’s father and (B)’s mom, as well higher earnings (with no debt) at this stage of our lives. We continued to save aggressively! We have finally achieved our goal of financial independence, and plan for early retirement from our full time jobs by the end of 2021. It’s nice to be at the stage where we can work a little bit if we want to, but not because we have to! Our goal now should be to give up the working all together, and enjoy spending some of our hard-earned and well-saved money! We look forward to some interesting travels once Covid will allow, and more time to spend with friends and family. We also eagerly anticipate sharing some of our wealth with our adult children to help them out the way our parents helped us. We are proud to say that all three of them have purchased condos of their own, and are still continuing to add to their retirement investments on a monthly basis!
Our advice to others, is this:
Live within your means; don’t overspend.
Pay off credit card bills every month; credit card debt is VERY expensive!
Make regular payments on loans/mortgages; if interest rates become higher again, then paying off those loans is a great advantage!
Save for future expenses such as home/car repairs or purchases, property tax, vacations, etc.
Put away money every year (every month is better!) for retirement.
Always have 3 – 6 months’ worth of expenses in easily accessible accounts in case of unexpected job loss.
Enlist the help of a good financial advisor, such as our amazing friends at Fraser Financial – Abbotsford – IPC Investment Corporation.