Guest blog: Why I pushed back my Findependence Day 5 years

robb-engenBy Robb Engen, Boomer & Echo 

Special to 

Findependence Day

Last summer I thought I’d be financially free by 40. Reality – and unplanned expenses – set in this year and I’ve adjusted that ambitious projection by five years. I’m still on track to reach a net worth of $1 million by the time I turn 41, but financial independence will have to wait a few more years. Here’s why:

Remember, financial independence doesn’t necessarily mean retirement. It simply means the date your income from investments exceeds your day-to-day expenses so that you no longer have to rely on regular employment to meet your needs.

My initial projection was indeed ambitious – with us having a paid-off mortgage by 2020 and increasing the income withdrawn from our business by 100 percent (from $3,000 per month to $6,000).

But borrowing $35,000 to develop our basement this year meant we couldn’t continue our aggressive mortgage pay-down, and a four-year car loan has cut into our ability to save as much as we wanted.

That’s okay – on paper the original plan didn’t factor in these expenses, plus I hadn’t fleshed out exactly how I’d make those numbers work. Now I have a better idea, but unfortunately it’ll cost us five years. Here’s our financial freedom 45 plan:

Financial independence at 45

In late 2016, once we pay off the HELOC and car loan, we’ll have $27,000 per year to save toward our ‘findependence’ goal. With that amount, we’ll put $12,000 into my RRSP and $10,000 into our TFSAs, plus throw an extra $5,000 payment toward our mortgage.

That pushes our mortgage freedom date back to January 1, 2025. At that time, our home should be worth $600,000 (using a conservative 3 percent annual growth rate), my RRSP should be worth $380,000, tax-free savings accounts should total in excess of $150,000, and the commuted value of my defined benefit pension will be roughly $310,000.

The key to paying our monthly expenses after financial independence will come from our business income. We currently withdraw $3,000 per month from our small business, which includes income earned from three websites, freelance writing, and from my fee-only financial planning business.

My original plan showed business income increasing to $6,000 per month in five years, but without any clear path to explain how to double revenue. And, after losing my main freelancing gig at the Toronto Star, this goal seemed unrealistic.

But the fee-only planning service has gone better than anticipated – earning $10,000 in less than one year and expected to grow to $18,000 in year two as existing clients stay on and I continue to add one or two clients per month.

After completing the CFP certification in two years I’ll have the opportunity to ramp-up my efforts and potentially offer fee-only planning services full-time. At that point, between existing and new clients, the service could bring in roughly $36,000 per year.

My three blogs collectively earn about the same – $36,000 per year – after expenses and so if I can maintain or increase that income then I’ll be able to meet my $6,000 per month goal for business income.

Our projected expenses haven’t changed. After the mortgage is paid off we could live comfortably on $36,000 per year, which leaves the additional $36,000 of income to go toward taxes, short-term savings, and retirement.

Final thoughts

 A financial plan is just words on a page unless you commit to taking action. Even if your financial independence date seems like a moving target, it’ll become more precise as you monitor and update projections based on your true reality.

While it’s disappointing to push financial independence back five years, it’s comforting to know that I’m zeroing in on a target date that’s based on reality and not a wild projection.

 

Editor’s Note: You can find the original version of this blog at Boomer & Echo earlier this week, here. Note too the several comments at the bottom.  In his original headline, Robb used the phrase “Findependence Date.” When I asked why not “Day,” he said he “didn’t want to steal your thunder.” I realize that good bloggers respect others’ intellectual property but let me make it clear that I’m fine with people using the phrase Findependence Day and Findependence. Half the point of this site and sister site Financial Independence Hub is to bring these terms into general usage and displace “Retirement.” — JC

The word Retirement scares off young people: let’s replace it with Findependence

ToastmastersLogoThe following is adapted from a speech I delivered to Toastmasters Port Credit this week. The actual talk was eight minutes long; this expanded version would take 15. 

 

 

As I look around this room, I see a mix of people: everyone from students and those just embarking on the workforce to people who are already retired.

I’ve worked as a financial journalist for more than 20 years and can tell you the word Retirement is a favorite word of both the financial industry and the media. It’s a handy way to depict a far-in-the future “dream” that conveniently helps banks, mutual fund companies, insurance companies and others sell various financial products, from funds to annuities. And we in the media are almost as fond of the term Retirement: I’ve seldom witnessed a newspaper, magazine or web site that turned away financial advertising!

I’m 61 and you could call me semi-retired. But my message to the younger people in the audience, and even some of the middle-aged ones who fear they’ve not saved enough, is FORGET RETIREMENT!

Is this heresy? Not at all. Because there is a better term: Financial Independence. As some of you may know, a month ago I launched a new web site called the Financial Independence Hub and everything I’m saying here can be found at the site.

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Alan Moore, XY Planning Network

In fact, it includes a guest blog by Alan Moore of XY Planning Network in the US who posted a blog on exactly this topic. The X and Y refers to Generations X and Y, so he is providing financial planning advice to millennials and young people. And he too is telling them to forget about retirement but instead to seek Financial Independence.

Aren’t the two terms the same thing? Not really. To me, Retirement is the full-stop retirement our parents or grandparents enjoyed if they were lucky. They got a job out of college, enrolled in a Defined Benefit pension that guaranteed a certain steady future stream of income, hung in for the gold watch for 30 or 35 years, then retired at the traditional retirement age of 65. They could now watch day-time TV, golf, nap, play bridge or putter in the garden to their heart’s content for a decade or three. This is what I call the “full-stop” sudden retirement.

Perhaps some of you here are now enjoying such a retirement. Like Mark over there.

Show of hands: how many of you younger people here think they’ll be able to rely on a DB pension when they’re as old as Mark or me? And how many think they’ll stay with a single employer long enough to collect a big enough pension that they’ll never have to work again?

To the young, Retirement is a remote unattainable concept

The problem with the term Retirement is that it seems so terribly far away for young people. The official retirement age keeps rising: it’s now 67 for younger folk instead of 65, if you’re talking about the eligibility age for Old Age Security, and I wouldn’t be surprised if it reached 70 at some point. So telling a 20-year old they should cancel their SmartPhone service in order to save money for a retirement half a century away is hardly an inspiring message, is it?

But that’s what all the retirement peddlers want you to do: put away 10% or preferably 20% of your income by practicing delayed gratification. They may tell you that you’ll need a million dollars or more in order to retire one day. Too often, sadly, young people hear that and figure it’s so impossible they may as well give up and spend it while they have it.

In other words, they are telling young people that in order to enjoy a decade or two of leisure when you’re old and grey, that you need to deny yourself pleasures like travel or eating out while you’re enjoying your youth.

Let me tell you, any of the grey hairs here would probably love to take their retirement savings and use it to book passage on a time machine that would let them relive the Swinging Sixties. If you’re 20 today, I imagine that your 70-year old future self would feel the same way about your life right now.

A more attainable goal

So what do I suggest as a substitute for the word Retirement? I call it Findependence, which is just a contraction of Financial Independence. I’ve written a book, Findependence Day, which is just the day you’ve reached Financial Independence. The ebook I talked about in my third speech here is a sort of “Coles Notes” summary of that book.

But what do I mean by Financial Independence?

I like to refer people to the definition in Wikipedia:

Financial independence is generally used to describe the state of having sufficient personal wealth to live, without having to work actively for basic necessities.[1] For financially independent people, their assets generate income that is greater than their expenses.

In practice, I think this means being able to survive without the single stream of income most call a full-time job.

Leaving the nest at 27 is NOT Financial Independence!

Depositphotos_13980277_xsDefined this way, Findependence can occur decades before the traditional Retirement, so it’s a goal that young people may find is more worth shooting for. Interestingly, last week I blogged at MoneySense about a study about young people and their financial readiness to leave home. They used what I consider an incorrect definition of financial independence: that if they left the nest and stopped depending on the Bank of Mum and Dad, that they were therefore financially independent. If they could get a job and pay their rent, that was the definition, which resulted in the absurd headline that most millennials hope to be financially independent by age 27.

I don’t think so. Even with DB pensions, the earliest most people aspired to Financial Independence was 55, which is the earliest some pensions permit early retirement. Anyone hear of Freedom 55? That London life campaign was one of the most successful sales pitches for Early Retirement. Yet only a few government workers or business executives who strike it rich ever retire that early.

Why do billionaires keep working?

Why is that billionaires like Warren Buffett continue to work? Or young tech entrepreneurs like Mark Zuckerburg? Don’t you think Zuckerburg, who’s all of age 31 or so, couldn’t be findependent by now? Obviously, they have passion and are driven by purpose.

What does that tell you? Age 55 is way too young to “retire’ in the classic sense of doing nothing: playing golf, watching daytime TV, reading all day. Yes, many people THINK they’ll travel all the time once they retire but as I wrote on another blog last week, travel is overrated and expensive, and is really something you would only want to do some of the time, not ALL of the time.

Integrating the Three Boxes of Life

threeboxesoflifeFindependence is about integrating education, work and play. On my sister site, Findependence.TV, I’m interviewed about a concept called The Three Boxes of Life, which is the title of a classic book by Richard Bolles. In the old days, we started life in the first box, Education, spent 15 or so years there, then graduated to the second box, Work. We stayed there for 35 to 50 years, and then came traditional Retirement, the third box of total play and leisure.

On the video, I talk about there being really only a single day: you work a bit each day and make money, you learn a bit each day and at the end of the day, you may “play” by getting some exercise, reading, watching TV or whatever.

On the site, there are blogs on concepts like mini-retirements and the four-hour workweek. Wouldn’t it make more sense to take the occasional mid-career sabattical or series of three-month vacations earlier in life, rather than saving it all for ten or 20 years of doing nothing when you’re too feeble to appreciate it? That’s why the subtitle of Findependence Day as well as The Financial Independence Hub is “While you’re still young enough to enjoy it.”

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Meta celebrates her 98th birthday. With Alizon Sharon (c) and Ruth Snowden (r).

Plan for Longevity, not Retirement

Life expectancies are on the rise because of advances in medical science and more of us are practicing better health habits, with a focus on proper diet and exercise.

We can all expect to live a lot longer than we once thought, which is why the “Hub” ends with a section on Aging and Longevity. There you’ll find some blogs by Mark Venning of ChangeRangers.com, who coined the phrase “Plan for Longevity, Not Retirement.” I think it’s a great concept.

And it isn’t just a theoretical concept. On Sunday, we had a dinner party for a female friend of ours who celebrated her 98th birthday. She showed us a custom-printed card from – get this – her co-workers. You see, Meta still works two half-days a week at a local printing company. So she still spends a little time in the Work box. She also reads a lot, swapping books with my wife (Ruth, above), so part of her days are in the Education box. And she still travels and parties, so that’s the Leisure box.

Sounds like Findependence in action!

Merely leaving the nest is NOT my idea of Financial Independence

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Is the little bird kicked out of the nest truly “Findependent?”

 

My latest blog for MoneySense posted today carries the curious headline that most Millennials expect to achieve “financial independence” by age 27. I put “air quotes” around the phrase financial independence because of course it’s nonsense that merely leaving the nest and putting fewer demands on the Bank of Mum and Dad constitutes true financial independence.

Keep in mind that the research firm cited in the piece seems to use quite a different definition of Financial Independence than the one used at this site or as formally defined at Wikipedia. For research firm yconic, it seems financial independence means merely leaving the nest and landing a job that pays at least the monthly rent: they are  merely “financially independent” of mum and dad.

Even with that loose definition, only 56% of older millennials (aged 30 to 33) say they have “achieved financial independence.”

With these savings rates, true Findependence for many millennials is a pipe dream

It’s just as well they’re using such a loose definition because the way the younger generation spends, it’s going to be a long long time before they achieve the kind of financial independence this blog describes.

To sum up the difference, I’d say “our kind” of Financial Independence is being able to stay afloat financially without the traditional source of single income known as “a job” or full-time employment. It’s quite a leap to go from moving out of the parental nest to being able to survive with neither parents nor an employer to keep those regular financial injections into your bank account.

Far from being findependent, almost half the millennials surveyed (46%) admitted “saving money is a struggle” even if they are able to afford to pay the bills. A third say they are living paycheque to paycheque and are barely making ends meet. Fully 43% still rely on their parents for financial assistance, including 37% who look for help paying their student loans off. Does that sound like “our” kind of financial independence?

Non-saving millennials should find a Government job with a DB pension and stay there

I hate to break it to the non-savers but if they don’t start saving soon, they’ll never be able to achieve true financial independence. They had better be prepared to work until age 67 and be able to live on Social Security (in the US) or on the Canada Pension Plan, Old Age Security and possibly the Guaranteed Income Supplement (GIS), or find a good Defined Benefit pension plan somewhere and hang on to the job for three or four decades.

If there’s hope for them, it’s in the finding that most millennials hope to buy a home at some point. I like that because I always say the foundation of financial independence (our kind, that is) is a paid-for home. But even among those who already own a home, 32% got parental help rustling up the down payment. Among those who don’t, a quarter of them (24%) expect their parents to help them with the down payment.

Some millennials do have their act together

I don’t mean to disparage millennials’ aspirations for Financial Independence altogether. Read on our sister site how two millennials aim to be mortgage and debt free in their early 30s. Both of them know all about frugality, saving and deferring instant gratification. Of course they both read the book featured on this web site!

I also suggest reading a guest blog posted on our sister site earlier this week on why millennials should be planning NOT for retirement, but for Financial Independence. The true kind, that is!

Some Christmas book suggestions

rob_carrickparents12Parents who have yet to kick the little birdies out of the nest might consider giving them a hint about what true Financial Independence entails by investing US$2.99 or C$3.37 in either of these e-books. Might make a great stocking stuffer! (Just gift the e-book via Amazon and maybe insert in the stocking a card telling them to check their Kindle).

I suggest too that millennials get a copy of Rob Carrick’s book, How Not to Move Back In With Your Parents. As we speak, my own daughter is reading it.

 

 

A salon for would-be Boomerpreneurs and business owners seeking exit strategies

Dining room

Brainstorming over a dining table like this

The other evening ten 60-ish baby boomers got together in a private home in mid Toronto to discuss Boomer retirement and related matters. There were two main groups: most were business owners who have been self-employed for 30 or more years. A handful (including myself and the hostess) had spent most of our careers working as employees in large organizations.

Long-time business owners looking for exit

In both cases, the great question before us was “What do I do with the rest of my life?” The business owners were concerned about exit strategies to monetize their years of sweat equity, which could include outright sale or passing the reins to younger family members.

Long-time employees looking to find a transition business

The other group is considering becoming business owners or entrepreneurs even at this late stage of life, or what I term “Boomerpreneurs.” We may or may not have left the workforce voluntarily but suddenly had some leisure and money to contemplate our next move.

In almost all cases, this was a high-achieving group and while one younger attendee (in his mid 50s) had spent a “mini retirement” of several months in Central America, most of us agreed we were in no way ready for endless days of daytime TV, golf or bridge.

Some were conscious of the extended Life Expectancy theme underlying  the “Longevity & Aging” section at our sister site, The Financial Independence Hub. However, others were acutely aware that we all entering the final few laps of the great race of life. The long-time business owners in particular seemed ready for a change, but were aware the transition or exit could well require four or five more years of continued effort.

Actually, this was the second time the group had met. I would have love to have attended the first one in October but had already committed to a three-week trip to Turkey. The focus of the first one was that many can expect another 10,000 days of life on the planet, so what’s your plan on how you’re going to spend that time? As the facilitator, Alan Kay (more on him below) put it, it’s all about “repurposing yourself, not a blank canvas.”

Acquiring new skills — at 60

Interestingly, the hostess (one of only two women in the second meeting; the rest were obviously men) experienced almost the same events as I have in 2014. Both of us had quite independently chosen to attend Toastmasters weekly, to hone our public speaking and leadership skills. She is also attending a Rotman course that prepares you to assume positions on corporate boards. As if that weren’t enough, this high achiever is also taking acting lessons.

Does Business Ownership run in the family?

Her husband, and our host, has long been a business owner. In fact, long ago when I worked on a computer newspaper, I had naively written a piece about him extolling the fact that he was a “27 year old president” of his own computer company. At the salon, he said his own father was a business owner so it seemed a natural step for him at the time. I replied that my father was a high school teacher with security and a Defined Benefit pension plan, which may have explained why I tended to stick with salaried employment within other people’s businesses.

Regrets of the dying

We discussed life purpose, why we are even on the planet, and the five regrets of the dying, a piece published recently in the Globe & Mail. Some felt that one of the advantages of building something even at this stage of life would be to employ the generations following us, including our children.

There was a feeling it’s time to simplify, perhaps to slow down a tad but few seemed to seek a traditional “full-stop” retirement. Call it semi-retirement or phased retirement, depending on circumstances. I didn’t get the impression anyone was suffering financially, so the continued interest in remaining active was more about community, giving back and the like.

Naps in the home office

Some of us work from home, some still go to an office, even if they owned the building in which it was housed. Among the “work-from-home” crowd, which included our host and myself, we confessed there was the advantage of the occasional afternoon nap.

As for the session and what’s next, it’s all rather fluid although the hosts did facilitate an exchange of emails with the intent of connecting on Linked In.  Certainly this web site will happily describe further developments and facilitate communications between members and would-be members. It was just such a salon that spawned the Huffington Post.

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Alan Kay, The Glasgow Group

Pending permission from the other participants, I’ve erred here on the side of protecting actual identities but may update this blog or post new ones with actual names and coordinates as they arise. I can say the session was moderated by Alan Kay, who is happy to be identified as “a fully recovered ad guy, facilitating change through tools like stakeholder consultations and roundtables using his Solution Focus expertise.”

And yes, this often means sitting around a kitchen table like the one illustrated above; you can find him via his website here. Or contact me at jonathan@findependenceday.com.

A Novel Approach is a Bestseller in Amazon.ca’s Love & Romance category

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A Novel Approach to Financial Independence is one of the bestselling e-books in Amazon.ca’s Love & Romance category, as you can see in the screen shot to the left. Here’s the link to Amazon’s listing. Depending on the day, it sometimes hits #1 in the category.

Love & Romance? What about personal finance?  Well, I’ve always described the original Findependence Day as a financial love story so it’s not as out of the box as it may seem at first blush. Click on the blue link in the title above to find out more about the Romance plot that’s at the heart of the original novel.

The full book features a couple, Jamie and Sheena, who are 28 at the start and follows their ups and downs as a couple over 22 subsequent years. It takes a “life cycle” approach to personal finance and centers around Jamie’s declaration that he will become financially independent (“findependent”) by the time he turns 50.

There are numerous setbacks along the way, including business failure and betrayal, separation, children and more. As CTV Senior Financial Commentator Patricia Lovett-Reid says in the foreword to both the original book and the e-book, money troubles are often the cause of marital disharmony. You can read that foreword, by the way, for free because it’s near the start and Amazon lets you “look inside.”

e-book is a “Coles Notes” synopsis of the original book

The e-book pictured above is sort of a “Cole’s Notes” synopsis of the original book, summarizing the plot but focusing more on the content on financial independence. It’s short (15,000 words) but costs only C$3.37.

Amazon lets you designate purchases as gifts and with Christmas just around the corner, you have to admit it’s pretty cost-effective! Especially if you can change a young person’s life for the better, as we say in the ad below (also shown on the front page of Findependence.TV).

There is also a U.S. edition of the full novel available here, as well as a U.S. edition of the e-book.

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A young investor well on the road to Findependence

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Saxon Funk and wife Hailey.

I always enjoy chatting with readers of my blogs, columns and books. The other day I had an especially enjoyable dialogue with a 28 year old Winnipeg-based real estate investor named Saxon Funk. Saxon had bought the Canadian edition of Findependence Day and after a few emails introduced himself on the phone by noting he was the same age the protagonist in the book — Jamie — was when he embarked on the 22-year voyage to financial independence described in the novel.

After graduating from high school, Saxon tried door-to-door selling and selling insurance. He discovered day trading and foreign exchange trading in his early 20s but despite some success, learned that the activity was just as apt to leave him broke. Ultimately, real estate became his preferred road to financial freedom.

3-month mini-vacation in Asia

What really got my attention was the fact he had read a book featured in this blog earlier this summer: Timothy Ferriss’s The Four-Hour Workweek. Not because of my blog, I might add: Saxon read the book three years ago and actually enjoyed a three-month “mini-retirement” in Asia last year, in company with his wife.

Saxon works from home although he is still a salaried employee with one of the telecommunications giants based in the west. But he has a firm plan for achieving financial independence through various passive streams of income. Part of his search included a perusal of Ferriss’s material and Robert  Kyosaki’s Rich Dad, Poor Dad, as well as this site.

Saxon is attempting to build his passive investment income through vehicles like Warren Buffett’s Berkshire Hathaway and actively managed reasonably priced mutual funds from Mawer Investment Management. But his real play for findependence comes through real estate. He started while being frustrated in a previous job and reading various books about financial freedom. He was attracted to real estate when he discovered he could buy properties at 10% down, and he caught the Winnipeg real estate cycle at just the right time. Some properties in the city have doubled and tripled since he began buying properties.

Real estate is his main path to Findependence

He’s not a member of the Real Estate Investment Network (REIN) or its rivals but Saxon could be the poster boy for any of those educational outfits. He certainly speaks their language, speaking of the 14 “doors” he owned at one point, before selling one of his buildings (a triplex) at a tidy profit. He’s now at eight doors, as he wants the stability of lower levels of debt servicing. Similar to Jamie and Sheena in the novel, he and his wife live in one of the units of the building he still owns, renting out the rest.

He’s not implemented too much of the Ferriss material, other than absorbing the power of outsourcing and technology. So he has a 1 800 number he gives to tenants and when he’s out of the country can manage his properties by outsourcing to property managers closer to home. He’s not yet down to a four-hour workweek (neither am I!) but he does have a vision of living in places like Thailand, where you can get by comfortably on a Canadian income of $1,500 a month.

He doesn’t consider himself findependent yet, but notes that if he were 65 (or 67), the combination of being debt-free, rental income and the usual government sources of retirement income (CPP, OAS), he would be able to enjoy the kind of lifestyle championed by Ferriss et al.

“I could be. We would still have food on table. I don’t worry about getting fired or let go; the main property we live in covers all our bills and puts money in our pocket. If I were 65 and qualified for CPP and OAS,  yes we would be more than free but since we still have another 40 years to go; most of our money goes to giving, investing and trips. So we’re at the point where our money is all play money.”

Despite being a member of the generation that has grown up with the Internet, Saxon views himself as “an old soul” who is not totally sold by the promises of web-based freedom. He does have the beginnings of a website at www.saxonfunk.com but has yet to pursue the blogging that would be part of it.

Another millennial’s dream of Findependence

For another story of a millennial inspired by Findependence Day, read about Sean Cooper’s plan to be findependent, or at least mortgage free, by age 31. You can find it here at the new Financial Independence Hub (which was launched a week ago). And you can read a new post there about how there seems to be a trend developing here.

 

 

 

Canadian e-book on Financial Independence launches

CdnEBookCover2Today, the Canadian edition of my new “Novel Series” of e-books on Financial Independence launched on Amazon.com and Amazon.ca. You can see the full title and cover in the image to the left. Those who pre-ordered should already have it on their devices.

This is the first update to the original full novel published first in Canada in 2008, and the basis for this web site. However, it is a kind of workbook companion to the novel, and at 15,000 words much shorter.

The main body of the e-book is a chapter-by-chapter summary of the story, followed by the main lessons learned by the characters. Since it’s relatively short, the price is just C$3.37 or US$2.99. (A U.S. version of the e-book launched on Nov. 3rd.)

Remember Coles Notes?

Think of it as a “Coles Notes” (or in the U.S., Cliff Notes) for people who are more interested in the content on financial independence than the story. (Come on, admit it. Remember the time in high school when you didn’t bother to read King Lear and read only the Coles Notes version! And you still got a B!)CliffnotesRomeoAndJulietCover

Or maybe you read the story once just for fun (Findependence Day, that is, not King Lear) and forgot to underline key passages containing financial lessons. This e-book is a quick refresher course and of course available on mobile devices that go where a physical book may not.

Aimed at educators, financial advisors, credit counsellors and parents

Apart from being a companion guide and refresher course for readers of the full novel, the e-books were designed for four main groups and their constituencies: teachers of finance, financial literacy or personal finance and their students; financial advisors and their clients; credit counsellors and their debt-encumbered clients; and finally parents and their children. The full books are meant to act as the “spoonful of sugar that makes the medicine go down,” the medicine being the financial lessons that have been highlighted in the short ebooks.

At its sites, Amazon provides a “Look Inside” feature that lets potential buyers sneak a free peek at the content. So you can see my new introduction, foreword and the first chapter summary. And of course, with Christmas just around the corner, Amazon also lets you specify the e-book as a gift. As you can see in our ad at the top of the new site at Findependence.TV, $3.37 is a small price to pay for something that could literally change a young person’s life. It takes just a minute to download and perhaps an hour to read.

Think that’s an exaggeration about being potentially life-changing? Read this article by a millennial who read the original novel and is now well on the way to becoming “findependent” (or at least mortgage free) by age 31.

Supplements the Novel

This ebook makes a good supplement to the novel, since it includes a few extras that were in the full U.S. edition of Findependence Day published in 2013. That includes a glossary that didn’t appear in the original Canadian novel, plus an updated bibliography of about 75 financial books from “Theo’s Kindle.” (Theo is one of two financial planner characters in the story). Most of those book listings have live links to the actual books at Amazon.

Some readers tell me they don’t own a Kindle. That doesn’t mean you can’t read these ebooks on other devices. Amazon provides a free Kindle App that lets you read Kindle ebooks on devices like the Apple iPhone and iPad, as well as the various Kindle e-readers made by Amazon.

While the U.S. edition of the full novel was available in paperback and hard cover and all e-book formats, including both Kindle and all the rest, there is still no Kindle version of the full Canadian novel. That may happen in 2015 but for those who have asked for it, we hope this new e-book is a start. And of course, it has been revised to stay current.

 

 

FinancialIndependenceHub.com and Findependence.TV launched

HubLogoJerryOn November 7th, 2014 my associates and I launched two new web sites, both devoted to the topic of Financial Independence.

The philosophy behind the new site was explained in the previous post about reframing the “Retirement” discussion as the emerging alternative paradigm of “Financial Independence.” That blog featured two prominent U.S.-based financial planners, Michael Kitces and Roger Wohlner (aka The Chicago Financial Planner.)

Click here to find the introductory post for what we’re calling “The Hub.” In addition to www.financialindependencehub.com there is a mirror site, www.findependencehub.com. They are the same but the latter takes fewer syllables to verbalize and fewer keystrokes to enter into your browser. Another reason to adopt the term “Findependence,” right?

There is also a new sister site devoted to audio and video content about financial independence. It’s at www.findependence.tv.

And yes, there will be discussion forums, five of them to correspond to the life cycle approach to investing contained in the two Findependence Day books and now the two new companion Kindle ebooks described earlier this week in this space.

This site will continue to exist

To clarify, the existing site will continue to exist, but chiefly as a vehicle to sell the two existing Findependence Day books, the new e-books and any other spin-off products that may be developed over the years. The new sites attempt to look at the entire topic of Financial Independence from a North American perspective, so will (hopefully) range far beyond the particular books featured on this site.

A prominent feature of the new site will be reviews of other books on Financial Independence, both by me and by guest reviewers I would love to hear from. It will also feature all the other blogs out there on the topic, even those that still bill themselves as personal finance, frugality or retirement blogs. We started with the list of Plutus award-winners that Roger Wohlner featured on his site recently.

We will also have a monthly email newsletter free to anyone who enters their email on the home page of the new site. Better get over there now, and thanks for reading!

Reframing the Retirement discussion as Financial Independence

Michael Kitces

Regular readers of this blog won’t be surprised to see an installment dedicated to the difference between Retirement and my preferred term Financial Independence. However, I’m by no means the only person endeavouring to make this distinction. The other day a prominent American financial planner and influential blogger, Michael Kitces, called for a shift in focus for his profession in this essay published on his blog.

He noted that for most of its history the term “retirement” has been synonymous with “not working.” For all the pleasant imagery of golf, vacations and walking on the beach, the historical context for the term retirement was, Kitces wrote, “a mechanism to ‘force’ people out of jobs they were no longer competent to perform. Programs like Social Security were originally a way to soften the blow for those forced out of the workplace into retirement … and they weren’t expected to live long in that retirement in any case.

Total leisure may not lead to happiness

But research is showing that a total cessation of work in favor of a life of 100% leisure “does not actually create the happiness that we might have expected,” Kitces says, “Leisure as an occasional break from work is appealing, but a full-time life of leisure can become boring once the novelty wears off.”

allentuck

Andrew Allentuck

This is exactly what Financial Post writer Andrew Allentuck once told me: Allentuck himself has passed the traditional retirement age of 65 but he continues to write a weekly Family Finance feature focused on the retirement readiness (or lack thereof) of various couples in their 50s and 60s (usually.) When I asked him about this, Allentuck said simply, “Retirement is boring” and added that self-evident truth that the more you work, the more money you have.

Kitces observes that being productively engaged in work brings about the meaning and purpose in life that fuels positive well-being. The work environment also provides a source of interaction with others to fuel our social well-being. This explains the rise of part-time work in retirement or even entire new “encore” careers on the part of those who, financially speaking, could afford never to work for money again.

The financial industry has held out the state of “not working” as the ultimate goal and reward for decades of career success, yet those that reach the retirement finish line often find themselves “unhappy and unfulfilled” after a few months or years. The words in quotes is Kitces’s phrasing, which he follows by suggesting it may be time to rename retirement.

Findependence more achievable than Retirement

His suggested alternative? You guessed it: financial independence. My own call to shift the discussion from Retirement to Financial Independence was articulated in a guest blog I wrote more than a year ago for Roger Wohlner, aka The Chicago Financial Planner, which you can find here.

Here’s how Kitces frames the discussion: “Being financially independent is about being independent from the need to work, which then opens the door to more productive conversations about whether we want to work, and what meaningful work might be.” (his emphasis).

I have noted before that for young people for whom retirement is a distant and seemingly impossible prospect, Financial Independence is a much more doable goal. Kitces says as much when he provides a nod to my book, writing that “For many, their ‘Findependence Day’ may be much more achievable than a full-on retirement, in addition to being more personally satisfying and conducive to well-being!”

But he adds that you can’t plan for financial independence until it’s identified in the first place. Addressing other financial planners and their interactions with clients, he closes: “So the next time you’re talking about ‘retirement,’ think about ‘financial independence and see where the conversation goes!”

Motley Fool podcast, new websites

marketfoolerySome of these themes were discussed last week on Motley Fool’s Market Foolery podcast hosted by Chris Hill, which you can find here. He closed with a mention of the US edition of my new ebook.  (Note that I now also write for Motley Fool Canada, whose website is here. As per previous post, the Canadian e-book will be available on Thur., Nov. 13 but can be pre-ordered now)

Also, as detailed in November 3rd’s post, my associates and I have just launched two new websites focused on Financial Independence. By the time you read this, the initial versions should be available at www.financialindependencehub.com and www.findependence.tv. A third site, www.findependencehub.com, is a mirror site of the first one, for those who wish to save keystrokes and are comfortable with the neologism of Findependence.

 

 

 

Introducing new e-books on Financial Independence

jonchevreau_cover-2On Tuesday, Amazon Kindle Digital Publishing released the first of my two new e-books, entitled A Novel Approach to Financial Independence.

These are not brand new projects but are short (15,000 words) summaries of Findependence Day (the financial novels shown on the right) and priced accordingly. First out is the U.S. e-book. A Canadian edition will be available next Thursday, Nov. 13 (date moved up from Nov. 24) but can be preordered now. Amazon’s “Look Inside” feature lets you read the forward, my new introduction and the first two chapters free.

Companion guide serves as teaching tools to full novel

The purpose of the new e-books is to act as a teaching tool or companion guide to accompany the full novels. Thus, they are aimed primarily at three groups: financial advisers working with individual investors; teachers of personal finance or financial literacy who work with students; and finally parents, who may want to use the full-length book to teach their children or relatives the basic principles of financial literacy or findependence.

The ebooks are priced at US$2.99 or C$3.37 (the minimum amount you can charge at Amazon and still qualify for maximum author royalties). (Note the Kindle version of the full U.S. edition costs $7.09 but sells for less on other e-book platforms, primarily through Trafford.com, Amazon.com and Barnes & Noble.com.)

Financial focus, but includes short plot summaries

The focus of the e-books is less on the story or novel, and more on the underlying financial principles. However, it does include short plot summaries of each chapter. It also summarizes in bullet point form the financial lessons associated with each chapter. (These end-of-chapter recaps already appear in the full U.S. edition and e-book but not in the original Canadian edition.)

The new e-books also include the glossary and bibliography from the full U.S. edition, and a new introduction by myself. The U.S. edition includes a forward written by certified financial planner Sheryl Garrett, and the Canadian edition again features a forward by CTV News senior financial commentator Patricia Lovett-Reid.CdnEBookCover2

While the ebooks are for the Kindle, you don’t need a Kindle to read them:  Amazon provides a free Kindle reader app that lets users of iPhones, iPads and other devices read Kindle ebooks. Amazon customers can also access the Kindle Cloud Reader, which you can find here.

Astute observers may note that the title of the ebook inverts the wording of the full U.S. book. My reasoning was that while the term “Findependence” may slowly be catching on in Canada, where the book was first published in 2008, the term is less familiar in the U.S., so the main title focuses on the more well-known phrase Financial Independence.

The ebook also includes live links to two new web sites on financial independence that are in the process of being launched in a matter of days.

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