I started saving $25 a month

I came to Canada 22 years ago, I came searching for new opportunities, I came ready to work, ready to save, ready to prosper.

I started saving from day one. I was working as a janitor earning $7/hour, 30 hours per week. I wanted to work more hours but I couldn’t because I was also going to the university.

I didn’t know much about investments. I was buying some of the worst financial products on the market. I was buying actively managed mutual funds with high management fees.

Even today, when I am coaching someone about investing, I suggest they start saving small amounts, just to develop the habit of saving.

Today, 22 years later, I still don’t earn a lot of money. In a typical year, I earn a bit less than $20,000 CAN. But I have everything I need.

I feel that I live a life of luxury. I live in a spacious apartment in the trendiest neighborhood in Montreal. I have all the gadgets (smartphones, cameras, laptops, microphones, etc), but the most important thing I have is free time. I work less than 20 hours per week. I spend some of my free time at the park or in small coffee shops, something that many of my hight earning friends can’t afford to do.

How I reduce cost

• I gave up my car. I use public transportation or I walk
• I don use any branded clothing (it’s like paying to advertise someone’s product)
• I never buy Apple products (my non-Apple products do just the same for less money)
• I don’t mind showing that I don’t earn a lot of money. I like bragging about the hours I don’t work

My sources of revenue

I haven’t had a regular job in about 20 years. Right now this is how I earn my living:

Rental Income	$150
Dividend income	$455
Dance Classes	Varies
Photography gigs	Varies
SEO consulting	Varies
Sponsored posts	Varies
Random gigs	Varies
Total	Over $1,500

The 4% rule

Since I have been saving for the past 22 years, I have accumulated enough savings so that at a withdrawal rate of 4% I can withdraw $1,150/month.

Since my monthly expenses are about $1,500 per month, I only need to earn $350 to make ends meet.

At this moment, I am still saving and accumulating. Hopefully, within the next few years, I will be financially independent and I won’t need to earn any money to make ends meet.

How much do you need to make ends meet?

To work out your survival number doesn’t mean you have to deprive yourself of any pleasure, it simply means that you are constantly aware of your personal finances.

The formula to discover your financial independence number is simple, just multiply your yearly expenses by 25.

To figure out your survival number:

• find out your annual expenses
• Multiply your current assets by 0.04
• Find out the difference between 0.04 of your current assets and your annual expenses
• Divide the number by 12

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