The 6 steps to Financial Independence

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L to R: Ed Rempel, Jon Chevreau, Mike Drak

By Ed Rempel, CPA, CFP

What is financial independence? How do you get there?

Financial independence means work is optional. You have enough money to live the way you want without having to earn money.

When you get there, life changes. You have freedom. You can do only what you enjoy or find meaningful.

If you don’t like your job or your boss, just quit. Your life is full of options. You can make the most of your own life.

When you get there, you can have a quiet confidence. You are financially secure.

Your plan should start with understanding your inner motivation and defining specifically the lifestyle you want to have once you are financially independent. It is your opportunity to determine your future.

Becoming financially independent requires planning and effort, but it is worthwhile to live a more fulfilling life. “It’s not about the money. It’s about your life.”

“Real freedom is financial freedom.” When is your Findependence Day?

Achieving financial independence is a very broad topic. Writing nearly 1,000 comprehensive, professional financial plans specifically for real Canadians has given me a deep insight into what really works.

Seminar Wednesday in Toronto

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ChangeRangers’ Mark Venning on Findependence & Victory Lap Retirement

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Mark Venning of ChangeRangers.com

By Mark Venning, ChangeRangers.com

Special to the Financial Independence Hub

“We’re on a bit of a crusade to change the way our society thinks about retirement.” — Jonathan Chevreau & Mike Drak

Mike Drak and Jonathan Chevreau, co-authors of Victory Lap Retirement (published, October 2016) are not the first to head out on this crusade. Apart from the material on the larger subject of aging and longevity, in my library I must have at least 19 books, in addition to the stacks of reports, studies and new models on the subject of Retirement.

Over the twenty years in the career services industry, where I worked directly with business executives in their later life transitions – leaving the corporate crow’s nest, as I call it, I can appreciate where Mike and Jonathan are coming from in their take on this. I have produced three retirement programs since 2001, and in the process suffered from metaphor madness, developing novel ways of reframing the concept of retirement and our later life journey.

However, this Drak & Chevreau volume is a welcomed new addition to this crusade. The book, by way of its novelty, weaves the conversation from the threads of a concept called Findependence, as the cornerstone of a Victory Lap Retirement.  So here we go. Rather than a traditional book review, here in this blog post, I present views of the authors as shared through interview questions with them in late October.

Authors Interview

Mark’s Q: Your co-authored book, early on, takes a shot across the bow at the “financial media & financial services industries” in the way they persist to push “Retirement” as if it were some final destination. (There seems little shift between the 1970’s London Life’s Freedom 55, to Prudential’s 2016 Race for Retirement campaigns for example.) What one new key message should marketers take from reading Victory Lap that could become a differentiator in their marketing?

Mike: The industry is using the same commercials that they used 40 years ago. The only difference is that they are now in color. The world of retirement has changed significantly over the years and most people cannot afford nor do they want to live the lifestyle portrayed in their commercials.

Banks assume more money equals better retirement, which is wrong thinking. Banks are good with the investment piece but they need to become more involved with the lifestyle piece. How can you ever know if you have enough if you do not have a firm handle on what type of retirement lifestyle you want in retirement and what that lifestyle will cost?

Mark’s Q: At one point in Chapter 3, you make the point that: “Compounding the problem is the lack of financial education our children receive in school.” You also say in Chapter 4 that the importance of financial independence is a prerequisite to the new stage of life you call “Victory Lap Retirement.”  Let’s play here. What do you think about an opportunity for you to design/deliver a “Findependence” course relatable to high school teenagers that didn’t use the word Retirement? What then would the main message sound like to them? Read more

Boomer & Echo’s review & giveaway of Victory Lap Retirement

By Robb Engen, Boomer & Echo

There’s a growing body of evidence that suggests postponing retirement – even by just one year – can lead to a longer, healthier life. The reality is that we’re living longer and saving less. Something has to give. But another year or two spent pushing paper in a cubicle is probably not the holy retirement grail we’ve been searching for.

Related: Growing older in America – The Health and Retirement Study

Indeed, if you’re healthy and can afford to stop working, the idea is to find something else you’re passionate about and do that instead – whether it’s switching to a new career in an unrelated field, writing a book, starting a blog, or simply volunteering at your favourite charity. Call it your work-optional years.

Victory Lap Retirement

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Sheryl Smokin interview with Mike Drak on Victory Lap Retirement

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Jon Chevreau and Mike Drak (with beard) at Zoomer Show with Victory Lap Retirement and prequel Findependence Day

By Sheryl Smolkin

Today I’m interviewing Michael Drak for savewithspp.com.  He is an author, blogger and speaker based in Toronto and co-author of Victory Lap Retirement with Financial Independence Hub CFO Jonathan Chevreau. Thank you for joining me today, Michael.

Mike: Thank you Sheryl.

Q: First of all tell me, what made you decide to write this book?

A: The stress at work was affecting my health, and I was reminded of this each morning as I took my blood pressure pill. I began to look into the possibility of retiring and got my hands on every retirement book that I could. I found out that most of them were just filled with numbers and rules of thumb about how much money I would need in order to retire. None of them really told me anything about what I might actually do in retirement. I think Victory Lap Retirement fills that gap.

Q: What exactly does the phrase “Victory Lap Retirement” mean to you? How does it differ from full stop retirement?

A: To me Victory Lap Retirement means freedom. It’s freedom to do what I want to do when I want to do it. In contrast, full stop retirement means pulling back — disengaging, sitting on the sidelines and becoming a spectator. It wouldn’t work for me at this point in my life because I still have a lot of game left in me.

Q: Is Victory Lap Retirement essentially a synonym for an encore career or an encore job?

A: No, not really, because Victory Lap Retirement is all about lifestyle design. The goal is to maximize the quality of your remaining years by creating a low stress, fulfilling lifestyle based on your own unique needs and values. An encore career is really work either paid or unpaid. But it can be an important component of the victory lap lifestyle. Part of my own victory lap contains a component of paid work, which I view as my fun money to fund new experiences for me and my family.

Q: Your coauthor Jonathan Chevreau coined the expression “findependence,” which is a mash up of the word “financial” and “independence.” Why is findependence the cornerstone and prerequisite to victory lap retirement?

A: Having financial freedom is what allows you work and live on your own terms. In other words, you can do what you want to do with your time and energy, not what someone else on whom you are financially dependent says you have to do. In short, “findependence” equals personal freedom and freedom is what life is all about in the end.

Q: How can people calculate how much they’ll need to be findependent and then reach that objective? Read more

Work while you play, play while you work

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“Playing” at the Cliffs of Moher in Ireland. Photo J. Chevreau

As I write an early draft of this blog, I am in Dublin, Ireland, at the midpoint of the second week of a two-week holiday. Readers may recognize this blog’s headline as the subtitle of the new book I’ve recently published, Victory Lap Retirement.

It was written with ex-banker Mike Drak, whose blogs have been regularly posted or republished at sister site, Financial Independence Hub.

I believe it was our editor, Karen Milner, who came up with this inspiring subtitle but whoever first articulated it, we all agreed on it once it came up. I often think of it when I’m working and really playing, or vice versa.

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“Working” CIFFA executives at FIATA 2016 World Congress in Dublin this week

For example, right now I’m working on writing this blog while officially “Playing” at being on holiday. The ostensible reason for the trip was to tack on a week’s vacation to a business trip my wife took to attend the FIATA 2016 World Congress in Dublin. That’s Ruth on the extreme right of the photo, along with colleagues and a spouse at a reception at Dublin’s Trinity College.

Such “Work” came at the end of a solid week of being a tourist elsewhere in Ireland, with the couple with whom we’ve been travelling.

I suggested to them in jest that the job of being a “tourist” would be a tough one if it meant 49 weeks a year, eight hours a day of “touristing,” however much it might seem to be a dream job. Come the end of any week of touring historical sites, art galleries and such – much of it on one’s feet, either walking or standing – you’d greet the arrival of the weekend and the cessation of tourism for a few days with some relief!

Playing while you Work

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Dublin’s oldest pub. Photo J. Chevreau

So that’s an example of working while you play. What of the opposite: Play while you Work? Well, this is quite common as well, as anyone who has used an office computer to sneak a peek at Facebook can well relate to. In fact, Victory Lap Retirement describes the four-hour day that I used to write about when I was fulltime at the Financial Post. While many employers may believe they are getting seven or eight hours a day of productivity from their workers, you could argue that a few hours of that is preliminary or post-work activity that’s not really the core activities for which they’re being paid.

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