slacking off recovering from a stressful two weeks at work, so today's post is an interview with Mr. and Mrs. XYZ of Our Financial Path. They very graciously agreed to trade interviews with me! You can find my interview on their site. It's full of fascinating information and fun tidbits you might not know about me. Happy reading!
Who are you and what do you do? What is your story? Where did you start, where in the journey are you, and where do you ultimately want to end up?
I am Xyz, one-half of Our Financial Path. I write with my wife about our journey towards early retirement, travels, and life experiences through this all this. We are Canadians that inspire to live a fulfilling, plentiful, and happy, life all while saving for early retirement. We have currently saved about one-fifth of our FI goal and are aiming to retire before 35.
How did you get started on the path to financial independence?
I started my journey at 23 when I started investing a large part of my income simply because I wanted to buy stocks. I saw the appeal of owning companies I liked such as Apple, Tesla, Facebook but I did not have any long-term plan or vision. After a while, we started shopping for a house so we saved aggressively for a down payment and after that, we simply continued saving without a precise goal in mind. We then found Mr. Money Mustache's blog and were hooked! We read a bunch of FI blogs and really started saving towards retiring early.
What does FI really mean to you?
For us, financial freedom is the opportunity to choose. We don’t know if we will have kids by then but retiring early is definitively a great opportunity to spend time with your kids. We may work part-time or just do side-gigs we really enjoy. The great thing about FI is that it gives you those options.
In terms of traveling the world, we are not waiting until retirement to enjoy this passion. We travel multiple times a year and really enjoy discovering new cultures. You can read about our latest trip here.
What is your criteria for saying you are FI?
Being FI means freedom. Once we have enough to pay our bills with a decent leeway, then we will be ready to hang the towel. We plan to follow the 4% rule into retirement even if some prefer the safer 3.5% or 3%. We are very flexible and have no issue going back to work part-time if things get really tight.
Would you say you are more inclined to the not-working-anymore part of FI or the freedom part of FI?
Work is not our passion, we are not workaholics. For us, not working is definitively the motivation to have the freedom to do whatever we want. We always had side-hustles and always plan to continue working on those (apps, blog, sharing economy) even once FI.
What is your preferred way to invest? Do you have a preferred asset class in particular or asset allocation?
We follow a fairly simple 3 fund portfolio as our base holdings. We invest through Vanguard mainly into the US Total Market (VTI), All Cap Canadian Index (VCN), and International Indexes (VWO)(VEA). You can see our exact holdings and asset allocation in our Open Book series.
Do you invest automatically on every paycheck?
Yes. This is one of the keys to expanding wealth. Saving mindlessly every single week and not looking at your balances too often is the best advice I could give you.
What are your favorite financial tools?
The tools we always use are Mint and FIREcalc. We track all of our spending through Mint since it works great with all our Canadian banks and credit cards and use FIREcalc to test out different scenarios. It backtracks investment scenarios and allows us to test asset allocations, spending scenarios, and different timelines.
What are your thoughts on house ownership vs. renting?
We own a house in the suburbs. We went through all of the calculations and scenarios and it simply made sense for us. Depending on your location and cost of living, renting can be better than owning. One can really get ahead if he (or she) invests instead of spending considerably on a home but it all depends on your personal situation.
What is the worst financial decision you have ever made?
Our biggest mistake was to buy stocks without knowing anything about them and try to day trade. The very first year I started investing, I blindly bought stocks on hopes of good earnings announcements but, honestly, I didn’t even know what the companies were selling. After a few months, I had one bad day where I lost $2000 in a single day. After that, I stopped trading without research and stopped day trading for good. We now invest in index funds and if you would like to learn all about those; we highly recommend JL Collins' stock series.
What is the best financial decision you have ever made?
To follow-up on our previous answer, our best financial decision was to start investing in low-fee index funds. This diversified our portfolio and keeps the fees to the bare minimum. Another great decision I made was to marry my wife. Having a great partner who follows common goals and strategy is a great way to build wealth.
What are your plans once you retire?
For now, we want to slow-travel. Go to countries for 3 or 4 months at a time and take the time to learn their cultures. If we have kids, we definitively want to be there for them.
What is the best advice you can give a millennial starting out?
If you are starting out, the best advice we can give you is; start now. Compounding returns are magic and are the best tool to build great fortunes on average salaries.
It's always fun to get to know other FIRE bloggers! Any other burning questions for Our Financial Path?