Welcome to the second interview from the FIRE Around the Globe series! You can read the backstory to the series here and last week’s feature from the Netherlands here. But, without further ado, let’s jump into this week’s interview from Canada.
Hi, we are Mr. and Mrs. Xyz from Our Financial Path. We are young professionals that saw the opportunity to work hard, play hard, and retire early. We both were reading a lot of forums and blogs about financial independence and we started our own blog last year to share our knowledge, adventure, and journey towards early retirement.
Q1. How did you first hear about/become aware of the concept of FIRE (financial independence | retire early)?
We first found out about financial independence with the random button on Reddit, I was just discovering new sub-Reddits and really got interested in this amazing community. From there, we both read MMM, jlcollinsnh, and all the good stuff out there. Once we started to realize the possibilities, we were just amazed to see how people are able to retire in their 30s, 40s, and 50s. We then made it our goal to retire early.
Q2. After becoming aware of it, how long did it take for the idea to take hold and become a plan?
We didn’t really start before the first year. We were saving and investing but our savings rate was not nearly as much as the 50% and over we are currently doing. The real savings started once we moved out of the city and focused on our future. We started saving aggressively, investing in index funds, and cutting our expenses to drastically increase our savings rate.
Q3. Why do you want to achieve FI?
Financial independence for us means freedom. The freedom to work, or not, on whatever we want. We are planning to leave the workforce and enjoy the freedom of not having a 9 to 5.
Q4. What’s your own personal strategy for achieving FI (stock market investing, real estate, extreme frugality etc)?
We are passive investors with a long-term horizon. We believe that the markets are efficient and active investing is not worth the mountain of fees that is attached to it (brokerage fees, commission fees, annual management fees…). Currently, we are 100% invested in index funds from Vanguard. I used to trade individual stocks but quickly realized that the best investment type for us was low-cost, broadly diversified index funds. We built a portfolio that suits our needs and risk tolerance and we automatically invest a part of each paycheck into it.
On the savings side, we are currently saving over 50% of our incomes by living a minimalist lifestyle; purchasing consciously, and frugally. The best (and easiest) tip we could give to accelerate your wealth accumulation is to automate everything! Save first, then only spend whatever is left.
Q5. Do you know how you’d like to spend your time in ‘retirement’?
We definitively want to continue traveling the world, working on side-hustles, and start volunteering and raise our future children. The journey to early retirement is a long one so we made sure to enjoy every moment of it right now. Once retired, we’ll simply continue to live as we do… but without the 9 to 5!
Q6. If you could achieve FI in any country in the world, would you stick with where you are or relocate? (Do you look at anyone in another country and think their path seems a whole lot easier than yours given their location?)
We think that Canada is one of the best places to achieve FIRE (sorry US). On one hand, we have a similar, favorable tax code, that is essential to wealth accumulation and have access to all the amazing funds the US has. On the other hand, we have more flexibility in our tax-advantaged accounts (401k and IRA equivalents) and we have free health care which greatly helps planning our future expenses.
We have a few Canadians out there but we are a minority. In population alone, we have about 35 million residents compared to 321 million in the US and the small FIRE community only attracts a fraction of the general population so it makes sense. There is a cool sub-Reddit for Canadians interested in FI but it is much less active than its US counterpart.
Well, thanks for having us over and we were glad to share our story. Cheers, Mr. and Mrs. Xyz.
Thanks so much to Our Financial Path for sharing their story with us this week. They’re over at @myFinancialPath on Twitter and stay tuned for another story from another member of the international FIRE community next week!