I have reached a stage in my life where I only do work that pleases me.
Yesterday I was invited to do a music video (as a videographer) with a well-known musician and I simply said: “no, thank you.”
The reason?
I simply don’t like working with that musician.
Of course, I am extremely lucky to be in a position where I can say no to work, specially on times of COVID-19, when so many people are unemployed and don’t have an emergency fund.
On the other hand, I started saving money since I arrived in Canada. I saved precisely to have this kind of luxury, the luxury of saying no to work that doesn’t appeal to me.
I don’t care about cars, fancy apartments, branded clothes, nor apple products. I only care about the luxury of having control of my time. I want to do the things I want to do, whenever I want to do them. This is a luxury that most people, even with high-paying salaries, don’t have.
My time freedom makes me richer than most people around me.
Achieving Coastal Fire
FIRE means Financial Independence Retire Early. And coastal FIRE means that you don’t have to save any more in order to have a regular retirement at age 65. The irony on the name is that if you are retiring at age 65 you are not really retiring early.
If my retirement money is taken care of, then I don’t have to save anymore money. All the money I earn can be spending money.
How do I discover my Coastal Fire number
Firs of all. If I was going to retire today, how much would Ineed?
I multiply my current expenses by 25.
In my case, my life style costs $18,000 per year ($1,500 /month)
$18,000 X 25 = $450,000
Find out how many years before retirement.
I am 53. Retirement age is 65. That’s 12 years.
Assuming inflation of 2%. I have to figure out the future value of my money at a 2% growth rate.
I use the financial calculator at Calculator.net and plug in the number
The answer is $570,708
Now, assume that I expect the market to increase by 6% for the next 12 years. I will have to discount $570,708 by 6% for 12 years.
The answer is $283,624.
That’s it!!! I am there!!!
You can make different assumptions. I made the assumption that inflation will be about 2%, but I have no idea of how much inflation will be.
I also made the assumption that the market will go up by 6% every year, which is extremely unlikely to happen like that. Your assumptions are as good as mine. Every years, I have to evaluate and readjust my assumptions. In you case, you will have to do the same.
What do I do now that I have reached coastal FIRE
- I don’t have to continue saving for retirement
- My objective is to maximize happiness, not income
- I don’t have to accept gigs that don’t give me pleasure
- I will continue working on my blog/podcast
- Every dollar I earn in excess of my living expenses will help me retire earlier or retire with more money.
Stock market return year to date
I find it incredible that the market has rebounded and my portfolio is now on positive territory.
I know that no one could have anticipated COVID-19 and no one could have anticipated the rapid rebound of the market. That’s the reason I don’t listen to the news because everyone is predicting stuff, but no one gets it right.
I just do the same thing every year. Every January I invest in the same three index funds. One for Canada, one for the US, and one Internationale. I am completely diversified and my portfolio is ready to confront the unexpected.
The year to date return of my portfolio is 0.36%.
Last year the return of my portfolio was 20.30%
I can’t complaint.
Increasing the size of the emergency fund
One way to protect myself against the fluctuations of the market is by having more cash at hand.
Many financial advisors, suggest a combination of stocks and bonds, but I hate bonds. For me, you are either invested or you are not. Investing in bonds doesn’t cut it.
My plan is to accumulate 3 years of emergency fund money, that way I will be prepared to withstand a three-year downturn in the market without selling anything in my portfolio. So far my emergency fund is at about $8,500.
Income for August 2020
My income was a bit lower. I am only working on things that give me pleasure.
| Revenue source | Amount |
|---|---|
| SEO consulting | $120 |
| Rental income | $150 |
| Portrait photography | $50 |
| Dividend Income | $403 |
| Website building | $0 |
| Advertising income | $970 |
| Total | $1,693 |
Online influence
Since my plan is to live out of the internet, I have to continuously monitor my internet presence. I would love it if you join me.
| Alexa Ranking | 1,851,389 |
| Domain Authority | 21 |
| Website visits | 1,629 |
| Podcast downloads | 979 |
| Email Subscribers | 43 |
| LinkedIn Followers | 4,392 |
| 395 | |
| 153 | |
| YouTube subscribers | 92 |
Related Posts
- Financial Monthly Update for July 2020
- Financial monthly update for June 2020
- Drowning in a sea of positive thinking
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Comments
10 responses to “Financial Monthly Update August 2020”
Thanks Mr. Guillot.
So from my calculations, this is about 20K split in those 3 ETFs?
What is the basis on contribution? 2K per year? How do you know how much to contribute?
I only ask because I am curious about your method, like everyone, we want to all retire early and let the money work for us!
Hello Kayla,
The formula that most people use in the FIRE community is the 4% rule. An easy way to calculate it is to calculate your annual expenses and multiply it for 25.
Example.
Imagine your annual expenses are $24,000 ($2,000 per month).
You multiply $24,000 X 25 = $600,000.
That’s how much you need to retire and not have to work for the rest of your life.
If you expenses are $1,500, like mine, then your annual expenses are $18,000. This means that you would need $450,000 to retire and not have to work for the rest of your life.
It’s a bit more complicated than that, but this definition covers 90% of what’s to know about retirement.
Hey Kayla,
I have three investments that I try to have equally divided in thirds.
VIU This one pays right now 2.11% plus capital gains.
VFV 1.54% plus capital gains. This year, this one is up 8.44%
VCN 2.99%
I contribute to this three investments every January.
That’s a crazy dividend income! How much did you invest in your portfolio to obtain $400 per month dividends? I will try to save up to do the same..
Hey Andy,
Thank you for your comments. Unfortunately, my advertising revenue is not recurring, It can disappear from one day to the other.
Wow long time listener first time replier!!!
What are does insane advertising revenues? Are they monthly recurring ? You are killing it Alain !
By being so selfish, do you realize that you’re taking advantage of the society you live in? If everyone acted like you, there would be no universal healthcare, public education or road maintenance. We would all be doomed. Please consider the societal cost to your carefree existence and find some way to contribute to society besides sharing your nihilistic outlook on life.
Thank you for your comment Arthur,
I think that I am an active contributor to the economy.
Most of my money is invested in the stock market. That means that my money is directly invested in the companies that are creating the most jobs.
I have one rental property. This means that I am providing housing for a family.
I have advertising income. This means that I am providing a place for companies to advertise their products and services.
I have a blog that for the most part, encourage people to invest wisely and not to get in debt. This means that more people can be a function more efficiently in de economy without getting in debt and depleting government resources.
In short, I think I am doing my part.
Thank you again for being a reader.
Oh, one more thing Arthur. Becoming financial independent doesn’t mean stop working. It only means not needing to work for a living. I still enjoy work, but I love choosing the work I do. I also enjoy volunteering. Although volunteering is not paid, I am sure it has a lot of value for society.
My point is that what you do only works for a small portion of people, which you are lucky to be part of. For a family living in Montreal, 18000$ per year might only cover housing. If everybody wanted to enjoy their time and work as you do, who would take care of the sick, teach the children, or pick up your garbage? Society needs these people to function, so please consider that you’re greatly benefiting from the stupid people doing these boring jobs for YOU.
I think you have good intentions Alain, but do you fully grasp the consequences of what you are promoting? I fear someone vulnerable may try it for themself and regret it later when they realize they can’t even afford a haircut and have to shave their own head. I also hope that you are accurately reporting your income to the government and not cheating the system even further.
Regardless, I appreciate your content even though I don’t always agree with it. I think you can do more and you should look to increase your photography and website building income, as these are the services that are more tangible and beneficial than advertising or dividends.
God bless you my friend.