- Rethinking retirement
Like any father of three children, Dominique Favreau is careful in its expenditure. The house, the transportation, the food, the toys, everything. But unlike the thousands of Quebecers who are trying to save money to make ends meet, Residents of 36 years does not count the days before his next pay day. At the current pace, he should reach financial independence in a few years, before his 45 years.
Since he finished his studies, his wife Karen and him are able to save annually more than half of their net family income of nearly $ 80,000. “After seven years, we have been able to accumulate close to half a million total net assets “, he says, without hesitating to open his books. The recipe of their success ? “Choice “, and not ” sacrifices “, supports this manager in the health network.
Self-taught, Dominique has renovated the family cottage of his hands up and resold for a profit. The logic is the same for their home in Laval, of which the mortgage is two times less than what the bank was willing to grant them : he repaired everything himself.
Almost all of his furniture was bought used or were given to them. He received a car in inheritance, and acquired his minivan at a ridiculously low price in an auction of the government of Quebec.
Listen to Dominique Favreau shares his tips for saving money
He does his grocery shopping at a food wholesale and delivery of dozens of pots and kilos of bulk products in his basement.
“People were laughing very much François Lambert with her groceries at $ 75 per week. This was, perhaps, not a comment super cool, but it is three children and two adults, it costs us $ 100 per week and eat well. “
“I think the most important thing to achieve this [financial independence], it is to change its behavior. That is to say, spend less, save, and invest the money we have without fear of the investment, ” he says. The people are not afraid to spend $ 1000 for something which will not be good in a year, but they are afraid to put $ 1,000 in the stock Exchange, which may in fact bring back 1000 $ or 1500 $ in the next five years. “
More and more Quebecers like Dominique dream of financial independence which is inspired by the movement that refers to the United States by the acronym FIRE (Financial Independence, Retired Early). The examples vary, but the basic principles are always the same : live simply, save heavily and invest his savings, generally on the stock Exchange.
The history of the standard-bearer of the anglophone movement, the blogger Peter Adeney, aka “Mr Money Mustache” — which reached financial independence at age 30 — has led Jean-Sebastien Pilotte and his wife Van-Anh Hoang to do the same. They have taken their “retirement” two years ago, when they were aged respectively 39 and 37 years, and describe their experience in one of the main blogs quebecers on the subject. One of their slogans : “Less than bébelles, more freedom “.
Resist the temptations
At the beginning of his career, Jean-Sébastien was first coveted a big house and a sports car, but his priorities have changed when he met Van-Anh. Together, they have decided to resist the temptations of the consumer society and are now living with less than $ 30,000 per year.
Jean-Sebastien Pilotte and his wife Van-Anh Hoang have been inspired by the blogger Peter Adeney to achieve financial independence early in life.
“We went to see the world Cup in Brazil, the Euro in France, we are going in of good restaurants. For us, letting it go slack, it is this, because it makes us feel good about “, stresses Jean-Sébastien Vietnam, while the couple completes a journey of two months in Asia, which will see five countries.
Not all are embarking in the adventure of the retired early face to face. The Quebec 32-year-old behind the blog “Retirement 101” believes that it will be able to stop working in ten years, three years earlier than he had originally planned, but he prefers to stay in the shadows to avoid possible reprisals from his employer, and the judgment of the entourage.
A Montreal 45 years of age who introduces himself as “Mr R” wants to remain anonymous, even if he has already reached his goal : he is retired since two years. In fact, neither his family nor his family are aware of his / her choice.
“If I said that I no longer work for the past two years, people would say, “how so ?” “, he says. This accounting training is therefore relieved of the financial burden, but it does not feel free to speak openly about it. “It’s hard. I would say that socially, I am limited. I don’t have a lot of friends because of it, because I don’t share a lot of things. “
He ensures that in spite of everything that he loves his new daily punctuated hiking, reading, or napping. “I am happy, I have no regrets. “
Have a ” discipline of hell “
The strategy used by Quebecers who seek financial independence at 35, 40 or 45 years ” holds the road “, observes the professor of finance at the University of Sherbrooke Mario Lavallée. “Except that it is necessary to save and it is necessary to have good yields, he notes. The more you savings, the more you’ll be able to take your pension young, and the more you have to start early saving, the better it is because of the compound interest [the performance on past performance]. “
“It is not everyone who can do it. It takes a discipline of hell “, he says.
In addition to being disciplined, young retirees, present or future must face the criticism of those who accuse them of making a selfish choice in leaving the world of work so quickly. “I do not plan to have a retreat passive. I want to give back as much as I can to the community while spending more time with my family and my friends, ” replies the blogger of Retirement 101.
“I don’t want to impose my lifestyle on anyone, but I want to offer an option to those who are looking for an alternative to overconsumption, to the life that is often aberrant in that it leads, and allow them to be happy,” adds Jean-Sébastien.
Dominique Favreau, finds his happiness in the job and he has no intention to leave his employment if it becomes independent of fortune. “It will be a way of living life with a huge parachute and throw myself into the void as soon as I want. “
The recipe for FIRE
Massive saving, generally between 40% and 60% of the net income, targeting primarily the residential, transport and power supply.
Invest the money saved (several invest in Exchange-traded funds, including management fees are very low).
Maintain a standard of living modest after retirement (often between 30 000 and $ 40 000 of net family income).
See the following folder
Become independent of fortune before 45 years of age
Large plan on these Quebecers that aim for the financial autonomy thanks to the massive savings.
The stop work early: a project feasible, but beware of the unexpected
Multiple factors can affect the accumulated capital.
A project of life
Rest the acceptance of consequences and risks.
Other generations, other vision of the job market
The design of the work has changed over the generations, and the access to retirement could be adversely affected.