Sunday, February 15, 2009

Early Retirement.

I've been reading some blogs lately in the hopes to learn tips and tricks on how to be a little more frugal with our own money, especially in light of the fact that my income will be chopped in half for a good part of my mat leave. However, lot of financial/money type blogs out there tend to be a little t0o technical for my tastes. While I commend the fact that people are taking the time to educating themselves and others about how the markets, the economy and investments really work, the time they put into researching the topic tends to boarders on a part-time job. They are passionate (or obsessive, whichever way you want to look at it) about their hobby the same way I am looking for the perfect cloth diaper.

So what I like particularly about this blog is that this guy writes in a matter-of-fact kind of way, in language that most people can follow (plus, it's Canadian, an added bonus for me as it makes it even more relevant). His goal in life is by the age of 45 (he's 31 now) is to retire. He's even recently written a series on an update of his road map to retiring by age 45. It's interesting to see the assumptions and decisions that he's made for his plan.

But whether right or wrong (after all no one can predict what the future will hold, either for the financial markets or what sort of tomfoolery the government will come up with next), he at least has a plan, which is more than most of us have. Keeping a pulse on how much your net worth is and actually coming up with a plan for the short, medium and long term is always good personal financial acumen for anyone, no matter how much or how little you make.

I find it interesting that he's figured to retire at 45 and to live off of the money for the next 30 years, he needed close to $1 million between himself and his wife, and he's already taken into account inflation. I feel that his numbers are conservative at best, but I also feel that it's a reality that most of us have to live with when we retire. I also feel a little more justified as I have had other people scoff at me when I mentioned such a large dollar amount is needed for retirement.

This is why Hubby and I are adamant about not touching our retirement savings for anything (except for a last, last resort, which I hope we will never get to), and that includes for the Home Buyer's Plan and for the Life Long Learning Plan (to pay for a house down payment and for post-secondary education respectively). Once you dip into the retirement savings, any tax-sheltered compounding gains you've earned is lost, and to reach that lofty $1 million goal takes that much longer. But to each their own, everyone's comfort level is different. This is simply our attitudes towards money.

1 comment:

David said...

If people really want to get serious about saving money then they should add Bathroom Bidet Sprayers to all their bathrooms. Available at with these you won't even need toilet paper any more, just a towel to dry off! It's cheap and can be installed without a plumber; and runs off the same water line to your toilet. You'll probably pay for it in a few months of toilet paper savings. And after using one of these you won't know how you lasted all those years with wadded up handfuls of toilet paper. Now we're talking green and helping the environment without any pain.