# Investing Instead of Home Ownership Article



## Eclectic12 (Oct 20, 2010)

A bit more balanced than some other articles I've read.

I found this part interesting ...


> But University of British Columbia professor Tsur Somerville argues investment savvy renters aren't necessarily better off than homeowners. When he studied the topic, Somerville concluded that, on average, homebuyers and renters achieved equal financial gains.


What's typically missing (and IMO understated for this article) is ...


> He says renters only do well if they're disciplined investors.


http://www.cbc.ca/news/business/house-investment-wealth-1.3716641


Other comments?


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## tygrus (Mar 13, 2012)

I want to know how you live anywhere in canada, retired, travel etc on $30,000 per yr. There is no way.


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## james4beach (Nov 15, 2012)

I lived in Toronto for $32,000 a year back in 2012 -- that included travel & a few flights a year. (Downtown apartment, no car, just rented a car when needed)


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## GalacticPineapple (Feb 28, 2013)

tygrus said:


> I want to know how you live anywhere in canada, retired, travel etc on $30,000 per yr. There is no way.


I have a condo in Edmonton that costs $400/mth all-in. Add food, transportation etc on that and you're well below 30k. The catch, though, is that it's a tiny place in a less desirable part of town so I rent it out instead. Point is you could do it - just depends on how you're willing to live.


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## james4beach (Nov 15, 2012)

Interesting, renters vs homeowners for long term financial success.

The nice thing about a mortgage is that it forces you to save. You must make the monthly payments, which is interesting because it makes "pay yourself first" an absolute necessity, not a choice. I've seen many (renting) friends occasionally have big expenses pop up and totally neglect their savings activity.

Few people are able to say to their family -- no, sorry, I can't give you that money you desperately need because I must add $1000 to my TFSA this month to ensure a comfortable retirement.

Compare that to: no, sorry, I can't give you that money you desperately need because I have nothing left after paying all my bills (including the mortgage)

I'm a renter and have been able to stick to the savings plan. But this has also had consequences: some close friends & girlfriend actually think I'm greedy and cheap, because I've said that I can't give them money for things since I already earmarked it for savings. They would not have had that reaction if it was a mortgage bill that I had to pay.

If you're a renter who has a lot of family and friends who are constantly asking you for money, you must be very careful to structure the "pay yourself first" mechanism. Things like payroll deduction to RRSP, for example. If friends & family see that you have excess cash on the paycheque, they will think you're rolling in money and can easily give it out.


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## james4beach (Nov 15, 2012)

This is another reason that a pension is magical. I have one friend who is very generous giving money to his family, and thankfully he works at MB Hydro where he's going to have a great pension... otherwise, he would have nothing.


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## TomB19 (Sep 24, 2015)

As a landlord of quite a few units, I can say that renting does not generally attract the most financially astute group of folks.

Good for those who can stump up a stable life with a pension while renting. I think that's great and I know they exist but it's not common.


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## TomB19 (Sep 24, 2015)

BTW, I think that encouraging people to rent is going to badly financially damage 999 out of 1000 people. Again, I admire the 1 guy in 1000 who can achieve financial success while renting but that person is rare.

Oddly... most of my wealth is in RE and I have done extremely well, to say the least but, in 5 years, we plan to have only one house. That home could well be one we currently own, in which case we would move into a basement suite, or it could be something like a mobile home or condo in British Columbia. From there, we'll travel the world and only return home to drudge through our mail, once in a while.

That is, unless one of the markets strips us of our net worth. lol! :biggrin:


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## peterk (May 16, 2010)

james4beach said:


> I'm a renter and have been able to stick to the savings plan. But this has also had consequences: some close friends & girlfriend actually think I'm greedy and cheap,* because I've said that I can't give them money for things since I already earmarked it for savings.* They would not have had that reaction if it was a mortgage bill that I had to pay.
> 
> *If you're a renter who has a lot of family and friends who are constantly asking you for money*, you must be very careful to structure the "pay yourself first" mechanism. Things like payroll deduction to RRSP, for example. *If friends & family see that you have excess cash on the paycheque, they will think you're rolling in money and can easily give it out*.


1) Just lie. Lie about your cost of living, lie about having a line of credit to pay off, lie about your income (lower), lie about being incompetent with money...say stupid stuff like you're "still paying off my car that I sold 2 years ago", say you made some bad investments in the stock market.. I work in Fort Mac, so everyone wants to know how much I make, sometimes subtly and sometimes blatantly. I lie all the time about money.

2) Get new friends/girlfriends. My friends/family back home suspect I make a lot of money, but no one has ever asked me for money or to buy them something specifically. Does this actually happen to you on the regular?? I occasionally pay slightly more than my fair share of the cheque when we go out to eat and drink... but I don't mind that here and there.

3) Why on earth would anyone be in the position to see how much your net paycheque is? Not even your girlfriend nor parents or siblings need to see that...do they _ask_ to see it??

I agree that having the "mortgage excuse" could perhaps be helpful, but sheesh that seems like a pretty half-baked reason to put in the "pro" column for deciding to buy vs. rent.


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## james4beach (Nov 15, 2012)

Good points, peterk. I now keep this stuff more private. But I have friends who are constantly giving money to siblings at the detriment of their own savings, and I feel bad for them.

Among my close friends, the wealthiest guy works on Bay Street and has well north of 250k income. I wouldn't be surprised if he makes 300-400k with bonuses. He previously owned a condo in Toronto, but sold it and now rents an apartment.

His argument (I'm paraphrasing) was: "I always diversify my investments. Why would I concentrate my wealth in a single *illiquid* asset that is a huge proportion of my net worth? Additionally, due to the mortgage I am highly leveraged. I'm not comfortable with leveraged exposure to a single, non-diversified asset."

... and I agree with him. The perpetual bull market in Canadian housing makes it seem riskless, but that's only because the market has been going up.


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## Woz (Sep 5, 2013)

You can definitely build wealth by renting and investing the difference, but the article doesn’t really paint their full situation. To give them credit they do outline everything on their blog.

They amassed $1M in 9 years. They did that by saving $893k ($99k per year) and getting an annualized investment return of 4% ($125k total return). Really they did a poor job of investing. What they succeeded at is having a high income and living frugally. They could’ve just as easily held cash or purchased a condo and still ended up with $1M in their early/mid 30s.


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## Eclectic12 (Oct 20, 2010)

GalacticPineapple said:


> tygrus said:
> 
> 
> > I want to know how you live anywhere in canada, retired, travel etc on $30,000 per yr. There is no way.
> ...


Keep in mind they don't seem to have kids and so far, seem to have a modest appetite.

Though I have also seen some pretty cheap travel as well as food after arriving at the locale.




james4beach said:


> ... I'm a renter and have been able to stick to the savings plan. But this has also had consequences: some close friends & girlfriend actually think I'm greedy and cheap, because I've said that I can't give them money for things since I already earmarked it for savings. They would not have had that reaction if it was a mortgage bill that I had to pay ...


The GF part may be tougher ... but I typically don't provide reasons. It's "let me think about it to see if I can figure something out" then "yes" or "no". Sometimes it's an offer of a different thing that works out to being the equivalent (ex. no dice to pay for the plumber but I'll bring my tools to teach you have to fix it next time).




james4beach said:


> ... If you're a renter who has a lot of family and friends who are constantly asking you for money, you must be very careful to structure the "pay yourself first" mechanism ...


IMO, this is one of the key issues with these style articles. With the discipline - what is a big advantage is squandered. Though from the few I have talked to whose eyes didn't glaze over at the idea - their restaurant/car/electronics spending was the bigger barrier.




TomB19 said:


> As a landlord of quite a few units, I can say that renting does not generally attract the most financially astute group of folks ...
> I think that's great and I know they exist but it's not common.


Which is the problem I have with most of these articles ... the write makes it sound easy but glosses over or ignores big challenges. 

IMO, it is like the concert goer telling the celebrated pianist "I can do that" where the pianist responds "not without day in, day out practice that almost no one wants to do".


Cheers


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## amitdi (May 31, 2012)

tygrus said:


> I want to know how you live anywhere in canada, retired, travel etc on $30,000 per yr. There is no way.


thats doable. people who dont eat out (much), live frugally...


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## CalgaryPotato (Mar 7, 2015)

I'm curious what kind of travelling they do year round on that budget. Even budget travelling on $100/day for two people is impressive.


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## Eclectic12 (Oct 20, 2010)

From their blog ... http://www.millennial-revolution.co...pilogue-the-real-cost-of-traveling-the-world/

Or for some other ideas, http://globetrottergirls.com/2011/07/how-much-does-it-cost-to-travel-through-central-america/


Cheers


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## tdiddy (Jan 7, 2015)

interesting story... 

We have no kids, whole concept sounds a bit tempting but i'd certainly wait to have a more funds saved and probably min 10 years older.


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## tygrus (Mar 13, 2012)

They looks to be about 30 yrs old. To live the next 40+ years on $30k per year is going to be near impossible and you cant get your prime earning years back.


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## sags (May 15, 2010)

After experiencing the housing crash, Americans don't share Canadian views on home ownership anymore.

The US home ownership rate is 62.9%. It is the lowest ownership rate since 1995 and is still declining.

Interesting charts on the US government website. It shows records and charts going back many years.

Of note.........rents keep climbing year after year.

Of note.........home prices peaked in 2007, crashed and are still well below the peak prices 9 years later.

Home prices peaked in 2007 at $200,000, fell to $130,000 and currently stand at $165,000.

Canadian home prices are about 100% higher than US home prices.

Interesting how differently Americans and Canadians view housing due to their experiences.

http://www.census.gov/housing/hvs/files/currenthvspress.pdf


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## sags (May 15, 2010)

On the US Census website that I linked to.........if you draw a trend line from home prices from 1995 to today, home prices are currently where they should be. The entire "bubble" run up and decline would be an aberration well above the trend line.

In the US, home prices certainly did revert back to the long term trend, which is what most economists say will always happen.

If the same happens in Canada, the declines will be much greater than 20% or 30% as the run up in prices has continued longer and have been a steeper climb upwards. To revert to the long term trend line would probably mean declines of 50% or more.

Given how much GDP is generated by the real estate/housing/construction industry, that kind of reversion would be devastating to Canadians.


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## james4beach (Nov 15, 2012)

Whoa I didn't read the article until now !!!

That's my old friend & coworker Bryce. I worked with him for many years in the same office. Very nice guy. Yup, that's literally how small Canada is.

Oh I should mention something, we worked at a place with unusually high income for our field so don't, ehm, expect these results from everybody.


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## james4beach (Nov 15, 2012)

In fact the last time I saw Bryce (the guy in the news article) was at a Dollarama in downtown Toronto, and we compared notes on deals we found.

Their success is a combination of a very high income*, thriftiness, and partners who share values. They would have had excellent results whether they owned a home or not.

"Hey, do you know Bryce from Toronto?" ... "Well yes I do".

_* I understand from the article that they may now be travelling the world doing random things, but I promise you that his income was very good. And they had two incomes at one point._


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## james4beach (Nov 15, 2012)

I found their blog with the data. This makes more sense to me now.

They both had very high incomes, something like dual 130k gross salaries (they're both computer engineers). And they were living very frugally in Toronto. For example their rent ($850 for the couple) was way less than what I paid at the time ($1200 alone). The two of them were spending as low as 31k/year in Toronto... this is _ridiculously_ low for a couple.

Forget the investment stuff. *It's the high dual incomes and ridiculously low spending* that makes this work. 164k net after tax income - 31k spending = 133k saved in one year, or 81% savings rate. That's NUTS.

I never saw their home first hand but trust me, they've made sacrifices. $850 rent for a couple in Toronto can't be a very nice place... in my search, I don't think I even considered anything below $1000.

In other words they were seriously, seriously frugal. Below what most people will be comfortable doing, including myself. These results will not be easy to replicate. Also they're glossing over the fact that their incomes are VERY high for people their age.


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## james4beach (Nov 15, 2012)

I'll compare their data to mine, since I have spending stats from the same years, we were coworkers and lived in the same downtown area. We're the same age. But they're a couple, and I'm single.

I made a comparison table by doubling all of my single-person expenses (except rent), to compare mine to theirs. So I'm pretending I'm two people, living in the same apartment.

As a starting point, their annual expenses are 31k and mine (pretending to be two people) was 50k. How might have they achieved this?

*Rent. Them 850, me 1216. They save 4.4k/year*
Food. Them 750, me 784. They save 0.4k/year
*Entertainment. Them 100, me 600. They save 6.0k/year*
Utilities/bills. Them 250, me 382. They save 1.6k/year
Health costs. Them 75, me 182. They save 1.3k/year
*Consumer. Them 120, me 390. They save 3.2k/year*
Gifts. Them 270, me 136. Aha I'm cheaper than them by 1.6k/year
*Vacation/travel. Them 168, me 462. They save 3.5k/year*

I've bolded the area where they seemed most frugal, versus their "peers" (meaning me, turned into a virtual 2 person household). I realize there are efficiencies gained by being two people, but still... they were very lean on this points. How do I know? Because I am quite frugal myself.

So if I want to replicate their results, here are the steps I must take
(1) find a girlfriend who makes extraordinarily high income, instead of being broke like most girls I meet
(2) find a really cheap apartment
(3) slash entertainment and travel expenses to nil


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## james4beach (Nov 15, 2012)

Apologies for all the posts... I'm really fascinated by this. This is the first time I've seen one of my coworkers (same age, same job, same city!) share all their data.

I looked more closely at their average savings and net worth increases, and it more or less matches mine. Not too different, because my growth has been more consistent over the years and I had some low income earlier for a head start. This part is reassuring to me. Same age, same industry, and we're growing our wealth at about the same average rate.

Working for 9 years at high income brought them to 1M net worth (or 500k each). I'm on the exact same trajectory and expect to get to 500k by the same # of years at that income level. Everything here is matching, so far. I can end up with the same net worth as them, in the same time.

Where the comparison falls apart though is in the anticipated cost of living. Theirs is *35k for the couple*!

*Mine is 35k for an individual*!

Other analyses of Toronto living, like this article, point to a bare minimum of 31k for one person. I agree with that figure. So I really don't see how they're going to spend only 35k for TWO people in retirement.

This is driving me a bit nuts, can someone help me figure out the disconnect? Net worth is same, only expenses are different. Is there really this much efficiency to gain when living with a partner? Or are they insanely frugal?


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## james4beach (Nov 15, 2012)

I think they screwed up with this early retirement. They can't possibly maintain couple's annual spending at 35k. Even with their frugal habits, they should plan for something closer to 60k. And given that they are so young and could literally live another 60 years, they truly _need to avoid capital depletion_ and I'd think 3% SWR is about right to be conservative here.

That tells me they need more like $2 million capital, conservatively.

Would you folks agree? I think they have a major shortfall.


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## Eclectic12 (Oct 20, 2010)

sags said:


> ... Of note.........home prices peaked in 2007, crashed and are still well below the peak prices 9 years later ...


Must be across the US as a whole.

I can recall seeing a US cable show that was RE "bring in the expert to help sell the house" in mid-2006. The husband & wife were chagrined to hear "you should have sold earlier ... in this market/location, to sell your two houses to pay off the custom house being built, one has to have $600K knocked of the price and the other $400K".


Cheers


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## Eclectic12 (Oct 20, 2010)

james4beach said:


> ... Oh I should mention something, we worked at a place with unusually high income for our field so don't, ehm, expect these results from everybody.


Another point that limits who could attempt this. I certainly wasn't anywhere close to a high income in my '30s.




james4beach said:


> ... So if I want to replicate their results, here are the steps I must take
> (1) find a girlfriend who makes extraordinarily high income, instead of being broke like most girls I meet
> (2) find a really cheap apartment
> (3) slash entertainment and travel expenses to nil


You missed the part about doing all three while young!




james4beach said:


> ...This is driving me a bit nuts, can someone help me figure out the disconnect? Net worth is same, only expenses are different. Is there really this much efficiency to gain when living with a partner? Or are they insanely frugal?


I'd have to dig into the blog but if they aren't living in Toronto for significant periods - that would help on the expense front.

Certainly working for a consulting company that based me in Toronto, paid me like Toronto but flew me from K-W to client sites gave a lot more free play for savings/investing. 


Cheers


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## Eclectic12 (Oct 20, 2010)

james4beach said:


> I think they screwed up with this early retirement. They can't possibly maintain couple's annual spending at 35k. Even with their frugal habits, they should plan for something closer to 60k ...
> Would you folks agree? I think they have a major shortfall.


We'll have to check in later and see.

As for needing more like $60K ... YMMV. My brother is in Mississauga where he says that $30K for the two of them meets their expenses. They aren't traveling and I suspect any medical issues that aren't OHIP covered will be big issues but that's the way they are living.


Cheers


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## Oldroe (Sep 18, 2009)

My retirement plan always included new money coming on stream about every 10 years. That will be next year when I start collecting CPP.

Also the developers are trying to buy our house. This is a little early so we will likely buy another place and bank a bunch.

Then income from rrsp and tfsa should see us into old folks home living the same life we always did.


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## tygrus (Mar 13, 2012)

Their story conveniently leaves out a of of details, like how they paid for their school, where they lived while going to school. I guess they lived at home for 4-5 years first and probably got a little seed starter money from their parents. That is worth a couple hundred G right there. 

And they were contractors making $130k per year, which is an unheard of salary for 20 somethings in any industry so I imagine they were pulling a lot of OT. They must have paid horrendous taxes and had no life. So they basically worked the equivalent of 20 yrs to retire in 10. And that little trip on their blog, there is no way they did that and lived in toronto at the same time. Looks like it was just after they quit work so they probably dumped the rental for the trip. Bad enough you are stuck renting, now you have to move every 6 months for the rest of your life as well.


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## bds (Aug 13, 2013)

I'm not sure why everyone is trying so hard to discredit this article and their way of life. My partner and I are living quite similarly and are enjoying it, though we own our home and make less than them (about 150k combined). We rent out the basement so our cost of housing totals ~$700/month. Total expenses are around 30-35k for both of us and we aren't eating ramen noodles and staying home every night. We have a similar goal to "retire" and travel full time on our investment income when we reach 1M net worth, though we may still do some contract or part time work if/when we get bored.

This is very doable if you don't buy into the typical lifestyle of 'keeping up with the jones'


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## TomB19 (Sep 24, 2015)

I don't see a lot of energy going toward discrediting the lifestyle but I think it's clear the lifestyle being discussed is only appropriate for a niche group of people and it is hardly a panacea, in terms of risk and being sustainable on the long term.

For my part, I admire this couple and suspect they will do well in life based on their attitude and freedom of thought. Good on them.


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## My Own Advisor (Sep 24, 2012)

james4beach said:


> I found their blog with the data. This makes more sense to me now.
> 
> They both had very high incomes, something like dual 130k gross salaries (they're both computer engineers). And they were living very frugally in Toronto. For example their rent ($850 for the couple) was way less than what I paid at the time ($1200 alone). The two of them were spending as low as 31k/year in Toronto... this is _ridiculously_ low for a couple.
> 
> ...


That is nuts saving that much but you know what, if it makes them happy, if they are happy - who the heck cares? 

As long as they are not hurting anyone, good on them for following their dreams and ambitions - whatever that is.


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## Eclectic12 (Oct 20, 2010)

tygrus said:


> ... And they were contractors making $130k per year, which is an unheard of salary for 20 somethings in any industry ...


Possibly ... but with James4B saying he is a contemporary and comparable, it seems more rare than "unheard of" implies.

Then too, had my roommates in university been more financially adept - they could have have done well considering they had considerable work term salaries that more than covered their expenses at the time. Their job offers were not $130K but with no GFs/debts, their $80K+ salaries left lots of room to save/invest.




tygrus said:


> ... so I imagine they were pulling a lot of OT. They must have paid horrendous taxes and had no life. So they basically worked the equivalent of 20 yrs to retire in 10 ...


Possibly ... but then again, I've seen single friends marry where one spouse's salary comfortably took care of the increase in expenses. The end result was that until children came into the picture, had they made up their minds to do so, they could have banked/invested more than one spouse's income.




tygrus said:


> ... And that little trip on their blog, there is no way they did that and lived in toronto at the same time. Looks like it was just after they quit work so they probably dumped the rental for the trip. Bad enough you are stuck renting, now you have to move every 6 months for the rest of your life as well.


Not sure of what you are getting at .... subletting if one can't get out of the lease (or dropping the rental) seems like the frugal thing to do, n'est pas?

If it's a sublet ... there may be no moving to do. Or they may like to do so. I've had a co-worker decide when her mother died to quit, move back to Hawaii & resume managing a surfing shop on the beach for a lot less $$$.


Cheers


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## Eclectic12 (Oct 20, 2010)

bds said:


> I'm not sure why everyone is trying so hard to discredit this article and their way of life ...
> This is very doable if you don't buy into the typical lifestyle of 'keeping up with the jones'


I suspect for some it's jealousy, for some it is that they would not want to live that way and for some, it is a concern of what later live will be like.

In my case, it is the concern that there's a lot of variables that make the idea that everyone has the opportunity/should do the same. IMO, should do/should, some won't match up and certainly my brother/his spouse had nowhere near the $$$ of income to attempt anything close (never mind the financial skills/knowledge).

Good for you that you see the opportunity and are moving on it!


Cheers


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## Eclectic12 (Oct 20, 2010)

TomB19 said:


> I don't see a lot of energy going toward discrediting the lifestyle ...


Hmmm ... isn't that comments like post #2, #14 or concerns about not being able to get back prime years or "screwed up with this early retirement" are aimed at?

Knowing some who marched to their own tune that I would never try or others have failed to replicate ... I'm more concerned about the idea that "anyone can do it". Anyone with similar circumstances, skills and goals - which as you say, isn't everyone. 

From several of the posts, there are several who are clear they want something different ... which is fine.


Cheers


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## james4beach (Nov 15, 2012)

bds said:


> I'm not sure why everyone is trying so hard to discredit this article and their way of life. My partner and I are living quite similarly and are enjoying it, though we own our home ... Total expenses are around 30-35k for both of us


OK, and does your 30-35k expenses include the mortgage and everything? If so, that's very impressive.



Eclectic12 said:


> but with James4B saying he is a contemporary and comparable, it seems more rare than "unheard of" implies.


The guy in the CBC article worked in my office, a few cubes down the hall from me. I think at our office we were in general agreement that our salaries were outlandishly high. We worked in an unusual satellite office of a San Jose based silicon valley giant, enjoying nearly silicon valley salaries in Toronto. This is not a norm, it is a serious outlier.

Since I know this coworker's salary, and know the market salaries in Toronto for the same job, I can assure you that the salary level we're talking about is way above the norm.


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## bds (Aug 13, 2013)

james4beach said:


> OK, and does your 30-35k expenses include the mortgage and everything? If so, that's very impressive.


Thanks, yes, and it doesn't seem that hard to replicate. With everything considered (mortgage, taxes, insurance, utilities, etc), our modest sized home is ~$1500/mo. We rent out the basement for $800 to family so it's cheaper for us to own than rent. We drive cheap cars, use discount places for cell phones and internet, do not subscribe to cable, we have old and/or cheap electronics and furniture. None of these feel like sacrifices because we don't care about those things. Besides investments, we mostly spend our money on good food and activities to stay healthy, social events, and travel.


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## Eclectic12 (Oct 20, 2010)

james4beach said:


> ... The guy in the CBC article worked in my office, a few cubes down the hall from me. I think at our office we were in general agreement that our salaries were outlandishly high. We worked in an unusual satellite office of a San Jose based silicon valley giant, enjoying nearly silicon valley salaries in Toronto. This is not a norm, it is a serious outlier.


Agreed it is not the norm & an outlier.

At that same time ... it is clearly not "unheard of" as there were multiple people receiving it, n'est pas?
Isn't Mr. Money Moustache's story similar, or was he/his spouse older?

While being a much smaller scale ... paying K-W expenses while being paid a Toronto style salary and having no weekly expenses Sunday through Thursday as the client picked up taxis/flights/meals/hotels etc. is pretty similar in terms of opportunity, IMO. This opportunity then gets multiplied by Guelph, Ottawa, Cambridge, London, Winnipeg etc.

(Leaving the K-W job meant being paid more than the K-W job's boss, before the variable annual bonus was factored in.)


Cheers

*PS*

I almost forgot that the Winnipeg resident had stopped paying for electronics for years as he couldn't use up the CC reward points fast enough.


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## Woz (Sep 5, 2013)

I don’t have an issue with them or their blog, but that CBC article is really misleading.

For example, from the article:



> “Their secret? They say they're only living the dream because they rejected that dream we're all told to strive for: home ownership.”


Rejecting home ownership isn’t what led to their wealth. It was a combination of their high salaries and frugal living which isn’t described in the article beyond “They say they had managed to save $500,000 by working hard and living modestly”. The information’s on their blog. CBC could’ve easily mentioned them earning >$200k and living on $30k.



> “They put 60 per cent in stocks and 40 per cent in fixed income investments like corporate bonds. That ratio shifted when the market turned volatile. The two also continued to live modestly and invest their savings.
> By late 2014, Shen and Leung say they doubled their money to $1 million, by no means a typical feat when putting your money in the stock markets.”


To me that sounds like their saying the investment returns contributed significantly to them going from $500k to $1 million, when investment returns had very little to do with it. Their net worth is almost entirely from savings.


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## peterk (May 16, 2010)

Eclectic12 said:


> I suspect for some it's jealousy, for some it is that they would not want to live that way and for some, it is a concern of what later live will be like.
> 
> In my case, it is the concern that there's a lot of variables that make the idea that everyone has the opportunity/should do the same. IMO, should do/should, some won't match up and certainly my brother/his spouse had nowhere near the $$$ of income to attempt anything close (never mind the financial skills/knowledge).
> 
> ...


I agree, I don't think it's "very doable" as you are saying bds.

It takes:
1) Above average intelligence and disposition towards long term thinking.
2) The correct educational/career path starting in the late teens.
3) Adequate financial knowledge starting in the early 20s.
4) Above average luck in procuring the correct job in the mid 20s
5) Above average luck in procuring the correct spouse in the mid - late 20s.
6) No calamitous health/financial/family disaster striking you between ages 18-30.

In the end, not many people can check all the boxes to end up very financially successful by their early 30s.

Most university graduates from non-professional programs are age 23 with 20-30k in debt, lucky to work 40 hrs/week and make 40k/year. Unfortunately almost all of these people are barely able to gain any traction financially by age 30, with the lucky/responsible ones having their debts paid off by then, and perhaps a stable 60k/year job, and still in good health. Their only hope at financial success is to irresponsibly overleverage into a house they shouldn't be able to afford, and pray that prices will double in 10 years. Indeed that is the primary reason anyone age 30-45 currently has any real wealth at all in Canada. Savings would be minimal without it.


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## tygrus (Mar 13, 2012)

If you try to retire on some paltry sum, you are just trading the bonds of a job with the bonds of limited means. True freedom is about not having to work for someone else and being able to do just about whatever you want with the time and sorry $30k a year doesn't cut it. Only so many free sunsets you can look at before the novelty wears off. Experiences are a little deeper and they cost some money.


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## TomB19 (Sep 24, 2015)

tygrus said:


> Only so many free sunsets you can look at before the novelty wears off.


This is what I worry about. I admire this couple and it's probably going to be an ideal life for them. That's great but when I think about doing it, I worry about the day I realize I've been sitting on the beach for 18 months and would like to do something again, only to discover I'm no longer employable.


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## james4beach (Nov 15, 2012)

Yeah the article is misleading. Absolutely, it was the high salaries and low annual expenses -- that's the entire story. If you have 135K net income and only spend 35K, you have 100K savings/year.

Like Woz says, investment returns have nothing to do with their story. 9 years of work @ 100K/year savings --> $1M total, even at a pitiful 2% return (HISA or GIC). To be more interesting and useful, the article should have focused on their frugal lifestyle and outlined how they succeeded in living on 35K a year while renting an apartment. That's no small feat in Toronto.

I'm not jealous about their situation. My net worth is tracking theirs exactly and I'll end up with the same thing in the same number of working years. But I genuinely worry for them because I don't think 1M is enough for them to retire with, nor is there enough of a margin of safety considering they may live for another 60-70 years.


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## Pluto (Sep 12, 2013)

james4beach said:


> I'll compare their data to mine, since I have spending stats from the same years, we were coworkers and lived in the same downtown area. We're the same age. But they're a couple, and I'm single.
> 
> I made a comparison table by doubling all of my single-person expenses (except rent), to compare mine to theirs. So I'm pretending I'm two people, living in the same apartment.
> 
> ...


I don't think you need a girlfriend and a really cheap apartment. I know a few people who lived in shared accommodation situations - own room, share kitchen and bath. It can work with the right people, and cut your housing costs to the bone.


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## mordko (Jan 23, 2016)

Good for them, but they got lucky with timing by putting 500K into the market in 2010. And not working in your 30s with just a $1M? No benefits, work pension, etc...? That sounds like a recipe for disaster. What happens when the markets (inevitably) contract? Have they thought about inflation over the next 60 years? 

I got just as lucky having bought a house in 1998, which gained 140% by the time I sold it in 2004. And because of the mortgage (leveraging) the actual money I invested grew by a factor of 10 in just 6 years.


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## My Own Advisor (Sep 24, 2012)

You can "live off dividends" with about $1 M invested and make $40k per year and never really need to touch the capital. With dividend increases, you can keep up with inflation. 

It can be done.

From their blog:

"Hopefully, I’ve managed to convey the fact that we are not that special, we didn’t do anything magical to get here, and we didn’t sit in our basement clipping coupons and eating cans of beans like hobos. All we did was:

Not buy an overpriced house
Walked or took public transit rather than buy a car
Kept track of where our money went
Found an honest, independent financial advisor who helped us invest
Got that? Becoming a millionaire is not about hitting a home run picking stocks. It’s about not shooting yourself in the foot. If you’re reading this thinking “Hey, that doesn’t sound so hard! Can I do it too?”

The answer is: Yup.

*Mic Drop*"

I don't get all the negativity on them. Who are we to argue what they do or do not want out of life?

I congratulate them because they set a goal, they worked towards it, and they realized it. Regardless if it's money or other in life, that's something to respect.


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## Nelley (Aug 14, 2016)

What most don't realize is that if you aren't working you save about (guesstimate from experience) $12000-$18000 a year (after tax) per couple. This is as much as $27000 pre tax income-that is material.


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## mordko (Jan 23, 2016)

My Own Advisor said:


> You can "live off dividends" with about $1 M invested and make $40k per year and never really need to touch the capital. With dividend increases, you can keep up with inflation.
> 
> It can be done.


Under ALL scenarios? Highly questionable. Dividends can go down as well as up and may not keep up with inflation. When that happens they would be forced to sell their stocks low. 

The other, different, point to be aware of... This whole "do not even rent, go travel" concept is only possible because they don't have kids.


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## Joe Black (Aug 3, 2015)

tygrus said:


> If you try to retire on some paltry sum, you are just trading the bonds of a job with the bonds of limited means. True freedom is about not having to work for someone else and being able to do just about whatever you want with the time and sorry $30k a year doesn't cut it. Only so many free sunsets you can look at before the novelty wears off. Experiences are a little deeper and they cost some money.


Sorry, but I find the premise that the only worthwhile "experiences" have to cost significant money I find shallow. Many of the things I enjoy most in life cost little or nothing. I'll gladly live off that $30 K and won't regret missing out on the bonds of consumerism.


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## coptzr (Jan 18, 2013)

TomB19 said:


> As a landlord of quite a few units, I can say that renting does not generally attract the most financially astute group of folks.
> Good for those who can stump up a stable life with a pension while renting. I think that's great and I know they exist but it's not common.


Growing up with family owning everything from bachelor, single bedroom, double bedroom, mobile home, house, and retail storefront rentals this statement is 99.9% true. Unless you own a well established downtown upper class building with luxury indoor parking and amenities. 



TomB19 said:


> BTW, I think that encouraging people to rent is going to badly financially damage 999 out of 1000 people. Again, I admire the 1 guy in 1000 who can achieve financial success while renting but that person is rare.
> :


I could easily modify this statement to:

I think that encouraging people to own a rental property is going to financially and mentally damage 99 out of 100 people. I don't admire the 1 guy in 100 who can achieve financial success while owning rent property, they normally have multiple loans or mortgages and dependent on a long term strong housing market.


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## CalgaryPotato (Mar 7, 2015)

Joe Black said:


> Sorry, but I find the premise that the only worthwhile "experiences" have to cost significant money I find shallow. Many of the things I enjoy most in life cost little or nothing. I'll gladly live off that $30 K and won't regret missing out on the bonds of consumerism.


I think there is a difference between saying that only worthwhile experiences cost significant money and saying that living an extreme frugal life for decades on end might be hard for most people. 

Even Mr. Money Mustache is able to achieve a lifestyle in that range because he has a nice paid off house in a convenient location. 

Hopping from country to country with just a backpack would be amazing for a couple of years, but it's a rare person who could do that for a decade and still enjoy the wonder of it.


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## Nelley (Aug 14, 2016)

Yes, but most peoples jobs are not exciting or even fulfilling-just a lot of low level tedium broken up by irrational conflict with other persons you wouldn't otherwise associate with-the other thing is that physically you are trapped-you cannot just say I am going to Mexico for three months (on 1 day notice).


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## Eclectic12 (Oct 20, 2010)

My Own Advisor said:


> ... I don't get all the negativity on them. Who are we to argue what they do or do not want out of life?


In terms of what they are doing now as well as that it is possible for far more than just themselves ... I agree the negativity is a bit overblown. 

For the "anyone can do it" ... this ignores the high income early in life. With an income of $15K a year in one's mid-twenties - there's no way the "live off at the investments at age 30" is going to work. 

I understand that they are likely trying to shift people's perspectives but there's more required here than is listed. I personally know several people who have done what the quote says to do but didn't have the income level needed.




My Own Advisor said:


> ... I congratulate them because they set a goal, they worked towards it, and they realized it. Regardless if it's money or other in life, that's something to respect.


+1.


Cheers


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## Eclectic12 (Oct 20, 2010)

mordko said:


> Under ALL scenarios? Highly questionable. Dividends can go down as well as up and may not keep up with inflation. When that happens they would be forced to sell their stocks low.


YMMV ... posts on CMF have complained about dividends doing down or being cut in 2008/2009 whereas my experience was that except two stocks, all stayed even or increased.

I'm not sure (or at least I haven't dug out enough details) to see how solid and how much active action would take care of any issues. 


Cheers


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## CalgaryPotato (Mar 7, 2015)

Nelley said:


> Yes, but most peoples jobs are not exciting or even fulfilling-just a lot of low level tedium broken up by irrational conflict with other persons you wouldn't otherwise associate with-the other thing is that physically you are trapped-you cannot just say I am going to Mexico for three months (on 1 day notice).


You have a very negative view of work, but the fact is a lot of people really like their jobs and their coworkers. Many people retire and then end up going back to work because they miss it. 

I can't wait for the day I have financial freedom.. but I don't know if it's a fair statement to say that most hate their job, and would prefer to backpack for the rest of their life.

Also as far as negativity, I don't think anyone is disregarding their accomplishments it's very impressive. But like I said, I don't know if it's what the majority of people would want for their lives even if they could achieve it. And in fairness the couple themselves have just as much negativity to people who live the typical lifestyle.


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## mordko (Jan 23, 2016)

Eclectic12 said:


> YMMV ... posts on CMF have complained about dividends doing down or being cut in 2008/2009 whereas my experience was that except two stocks, all stayed even or increased.
> 
> I'm not sure (or at least I haven't dug out enough details) to see how solid and how much active action would take care of any issues.
> 
> ...


If you consider the overall stock market in the US, dividends have been growing at a much slower pace than prices since around 1987. I am not sure if dividend growth is keeping up with inflation right now.


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## Plugging Along (Jan 3, 2011)

Woz said:


> Rejecting home ownership isn’t what led to their wealth. It was a combination of their high salaries and frugal living which isn’t described in the article beyond “They say they had managed to save $500,000 by working hard and living modestly”. The information’s on their blog. CBC could’ve easily mentioned them earning >$200k and living on $30k.
> 
> To me that sounds like their saying the investment returns contributed significantly to them going from $500k to $1 million, when investment returns had very little to do with it. Their net worth is almost entirely from savings.



+1. I think the article is miss focused. It make it sound that because of them not buying a home they are able to have $1 M net worth and retire early. This is really the wrong cause.

Its because they had high incomes, are really frugal, and have no kids. The lack of house has very little to do with it. 





peterk said:


> It takes:
> 1) Above average intelligence and disposition towards long term thinking.
> 2) The correct educational/career path starting in the late teens.
> 3) Adequate financial knowledge starting in the early 20s.
> ...


I think you hit it right on the head. My spouse and I could have been the article of hitting financial success as the couple did, expect we did it through real estate. 

1. Yes, well, we are long term thinkers, I don't know about above intelligence. 
2. Sorta of. I had good guidance not which areas would have careers and potential, my spouse took a little longer, so he was not in his teens, but did figure it out in his early 20s with a little kick from his GF then (now wife).
3. Yes, I had good financial knowledge, just did always follow it, and my spouse had very poor knowledge. Fortunately, he had a GF that he would listen to. 
4. YEs. This was the biggest part. We both started in lower jobs ,mine first Job paid $27k a year, but they had potential. We focused really hard on our careers at first and that allowed us to hit hire incomes. 
5. I tell my spouse he married up :biggrin: however, we are generally on similar pages which has helped. 

We hit the magic number sometime on our very early thirties. However, this was pre kids. Now that we are in our 40s with two little ones, we don't save nearly as much. Our networth has remained fairly stable, and we are okay with it. Our kids expenses are very high, and we both stepped back and took less demanding jobs (at lower pay) to have the time with our kids. We actually make about 30% less now than we did at the height of our incomes 10 years ago. 

I think it's great what the other couple has done, I wish I would have spent less when I didn't have kids, but all of these profiles are strictly lifestyle choices. 

Our profile in an article would not have been nearly as interesting...
Couple graduates university, gets average jobs, works butts off, gets really high paying extraordinary consulting jobs. Spends stupidly, but saves just an average % , buy house, increase networth through appreciation. Keep working because they have kids and actually like their work and live very comfortable while continuing to save a regular rates. 

What fun is that to read. 



james4beach said:


> Yeah the article is misleading. Absolutely, it was the high salaries and low annual expenses -- that's the entire story. If you have 135K net income and only spend 35K, you have 100K savings/year.
> 
> Like Woz says, investment returns have nothing to do with their story. 9 years of work @ 100K/year savings --> $1M total, even at a pitiful 2% return (HISA or GIC). To be more interesting and useful, the article should have focused on their frugal lifestyle and outlined how they succeeded in living on 35K a year while renting an apartment. That's no small feat in Toronto.
> 
> I'm not jealous about their situation. My net worth is tracking theirs exactly and I'll end up with the same thing in the same number of working years. But I genuinely worry for them because I don't think 1M is enough for them to retire with, nor is there enough of a margin of safety considering they may live for another 60-70 years.


I think they have chosen a lifestyle choice, and only they should be worried. 

Ironically, in our highest earning years (only a couple) we were saving ONLY $100K and spent more than that. We had the times of our life though and still talk about it as memories. High income high spending. It still worked for us then. Now we are medium income medium spending.

Having lived, low income - low saving, high income median savings, med income med savings, high income high savings, and other combos, I can say it all doesn't really matter. We have been happy at all of those times in our life. That sounds like the couple now.


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## james4beach (Nov 15, 2012)

I don't mean to argue that you need to spend money to have fun, but my experience has been that "doing more" generally costs more money.

Back when I lived in Waterloo, only went to university and spent all my time around there (getting a degree), I was living on 20k/year. Life was good of course - I was happy. But I didn't do anything out of Waterloo. Could I have made the argument that I only need $20,000 to live on?

In later years, I started doing things like trips out to Toronto, Ottawa & Montreal, occasionally staying in hotels. This is where the spending increased. And absolutely, it was worth it. I love driving around visiting friends or seeing different cities. Not to mention my occasional trips to places like Cuba. I would never go without this now. Later I moved to Toronto and kept doing the same things. These were, and I think still are, some of the best times in my life. Annual spending became 30-35k.

For this couple, I know the guy. I know what his lifestyle was like: he only worked his *** off. That's all he did, and by the sound of the blog the wife had the same kind of experience. When that's all you do, life is inexpensive: you go to work, come back home, are tired and go to bed. In winter periods when I've lived like this, usually October-November, my life gets really cheap. No evenings out with friends, nothing social.

So yes the couple was able to live on 35k while they worked in Toronto, but I'd say this is because they were working like crazy and doing NOTHING else. This is how they lived on the bare minimum possible. And yet, they used these years as the template for the rest of their lives.

That's the flaw, in my view. That's like me forming my retirement plans on the mere 20k/year I spent in Waterloo when I spent all my time at home & university. But uh oh, once I started doing fun things, those expenses increased by $15,000 a year!

I really don't think they can sustain that in retirement, especially when they're having fun. Yeah, travelling around in countries can be inexpensive -- as long as you give up your apartment. Are they going to keep hopping from one apartment to the next? That's going to get awkward. One of my aunts lives like that and she's basically homeless now. Sure, she lives on very little money and can travel places, but she's always struggling to find a short-term apartment, leaving things in storage, struggling with banking & bills (which gets difficult when you have no fixed address).


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## CPA Candidate (Dec 15, 2013)

I don't think home ownership versus renting (and investing) can be analyzed solely with numbers. For me, renting was never an option for a variety of reasons including needing to have control.


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## tygrus (Mar 13, 2012)

One of the things that wasnt mentioned in this article, is if these guys have 1 million invested, they could have taken a margin loan, bought a nice condo or something with it, let the dividend pay the mortgage and then one or both of them could have went down to working part time or something. Cake and eat it....


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## Eclectic12 (Oct 20, 2010)

james4beach said:


> I don't mean to argue that you need to spend money to have fun, but my experience has been that "doing more" generally costs more money.
> 
> Back when I lived in Waterloo, only went to university and spent all my time around there (getting a degree), I was living on 20k/year. Life was good of course - I was happy. But I didn't do anything out of Waterloo ... In later years, I started doing things like trips out to Toronto, Ottawa & Montreal, occasionally staying in hotels. This is where the spending increased ... Not to mention my occasional trips to places like Cuba ...


That's where I'd say YMMV ... except for Cuba and having relatives or friends willing to put me up in Toronto, Ottawa and Montreal, I visited those places plus went to school on around $15K a year.

So from my perspective, I've not seeing a lot that in the list that required money. Most of it for whatever reason, seems to have been your choice.

Rises in tuition and housing are going to change all these numbers, of course.





james4beach said:


> ... When that's all you do, life is inexpensive: you go to work, come back home, are tired and go to bed. In winter periods when I've lived like this, usually October-November, my life gets really cheap. No evenings out with friends, nothing social ...


Interesting ... all work and no play/life for me results in rising costs as fatigue etc. means the drinking and meal budgets explode.




james4beach said:


> ... That's the flaw, in my view. That's like me forming my retirement plans on the mere 20k/year I spent in Waterloo when I spent all my time at home & university. But uh oh, once I started doing fun things, those expenses increased by $15,000 a year!


That's important for you to know/adjust for ... whether it will or will not matter to them is a different question, IMO.




james4beach said:


> ... Are they going to keep hopping from one apartment to the next?
> That's going to get awkward ...


Maybe ... maybe not ... my consulting colleague put just about everything into storage as he came to the conclusion it was silly to be paying for lots of space to essentially storing his stuff until his multiple flight connections would get him home for a day or two. I think he was on year five of having almost everything in storage when we crossed paths.


Cheers


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## peterk (May 16, 2010)

james4beach said:


> This is how they lived on the bare minimum possible. And yet, they used these years as the template for the rest of their lives.
> 
> That's the flaw, in my view.


Yup. Call it youthful optimism, I suppose? What happens when after 5 years they discover that they've now done all the things that can be done with a tight budget. Then what? Wallow in self regret at what could have been, not doing what they truly want to do for their remaining 50 years? Maybe.

And the focus on investment returns is scary, relying on a "rule" to give a sufficient withdrawal rate, as if it's that easy and assured. No, investment/spending of 500k/20k, 1M/40k, 2M/80k are NOT the same things. The absolute dollar amount is important too, not just withdrawal rate. Trying to live off 20k with 500k is not safe, one bad hiccup in your life could wipe you out and put you in the soup line at age 50.


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## TomB19 (Sep 24, 2015)

I invested heavily when I was young, similar to this couple, built up a nice bit of money during the early 90s when everyone was making crazy money, pulled it all out, and went 100% into real estate. I did not return to investing until about 2004 and didn't return aggressively until 2009. My telemetry from the early years is not really valid. Numbers from 2009 aren't that valid either, since the market was not in a normal state. 

... but I've still gained over 10% every year from 2013.

It is not inconceivable these two could be earning 9+%, spending 4%, and still growing their wealth more quickly than inflation. In fact, I recall reading the 4% was the dividends alone. They could be in better shape than is being portrayed here.

I can't imagine retiring on $1M. My goal is a multiple of that. I envy and admire their courage.

Retiring is like swimming across the ocean. Making it to 100 meters from the French shore is a fail. You need to be fully funded or it's not going to go well. Of course, there is always CPP and government assistance. I should probably include those programs in my plan.


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## Nelley (Aug 14, 2016)

What is overlooked is that if you live long enough (eg 85 years) you will not be facing money trouble-I have known quite a few persons over that age and not one had money as a major problem (and none of them were even close to being rich)-the bottom line is that if you get to 85 years old in superb physical and mental condition and you end up working at Walmart as a greeter you surpassed 95% of all 85 year olds in standard of living.


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## Eclectic12 (Oct 20, 2010)

TomB19 said:


> ... Of course, there is always CPP and government assistance. I should probably include those programs in my plan.


For your plan, probably ... for their plan, I'm doubting CPP is going to add much at all - unless they go back to work at say 40.


Cheers


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## TomB19 (Sep 24, 2015)

Even if they go back to work at 40, I expect that would be OK. They are young enough, they could still do well in the workplace.

I'm 49 so I need to eat while I'm at the feed trough because in 10 years, nobody is going to hire me as a professional.


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## gibor365 (Apr 1, 2011)

> Kristy Shen and Bryce Leung are a 30-something couple who retired last year with more than a million bucks in the bank.
> Now they travel the world





> They live on $30,000 to $40,000 a year, money that largely comes from dividend payments generated from their stock portfolio.


What a BS :biggrin: 30-40K per family per year, you can only travel every 3-4 years to Cuba 



> besides travelling the world, they do volunteer work, take on the occasional freelance job and have published a *children's book*.


 Seriously?! Do they have children?!


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## TomB19 (Sep 24, 2015)

They should rent children. Owning isn't a great investment.


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## gibor365 (Apr 1, 2011)

> I can't imagine retiring on $1M. My goal is a multiple of that


 Me either  ... From my calculations , retirement minimum between 1.6-1.8M + no any debt at all + owning house with option to downsize ... I'm turning 50 this year and yes I include CPP/OAS into calcs ... 



> Even if they go back to work at 40, I expect that would be OK.


 Depends  Not many employers would like to hire professional who last 8-10 years was "travelling the world"


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## gibor365 (Apr 1, 2011)

btw, I can give several examples of our friends families who has 2-3 children, immigrated to Canada after us 12-14 years ago, own houses that cost much more than 1 mil and have big portfolios....


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## tygrus (Mar 13, 2012)

I guess I have even different expectations for money. I expect to make more money every year than the year before forever, even after I stop work.


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## My Own Advisor (Sep 24, 2012)

mordko said:


> Under ALL scenarios? Highly questionable. Dividends can go down as well as up and may not keep up with inflation. When that happens they would be forced to sell their stocks low.
> 
> The other, different, point to be aware of... This whole "do not even rent, go travel" concept is only possible because they don't have kids.


No, not under all scenarios. I'm saying "living off dividends" can be done. Not for most 30- or 40-somethings, they are certainly an exception.


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## My Own Advisor (Sep 24, 2012)

TomB19 said:


> Even if they go back to work at 40, I expect that would be OK. They are young enough, they could still do well in the workplace.
> 
> I'm 49 so I need to eat while I'm at the feed trough because in 10 years, nobody is going to hire me as a professional.


As long as they never spend the capital, they will be more than OK.

@gibor, unless your spending is high, and it could be, invested assets worth >$1.6 M + no debt + paid off home and not including government benefits, you are likely very well set.


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## gibor365 (Apr 1, 2011)

My Own Advisor said:


> As long as they never spend the capital, they will be more than OK.
> 
> @gibor, unless your spending is high, and it could be, invested assets worth >$1.6 M + no debt + paid off home and not including government benefits, you are likely very well set.


=>1.6 M is only our target ... and I'm not talking only about invested assets, but ALL assets include LIRAs, RRSPs, cash and so on....



> I'm saying "living off dividends" can be done


 obviously it can ...it depends on dividends amount... , for us it will be combination of dividends and interest from HISAs/GICs..
Lets say your you need basic amount of 40K in dividend+interests, and you get currenly 60K, so you spend 20K on luxury travel and recreation .... if income from dividends are reduced because of dividends cuts, you just spend less $ on travel, like instead of Aruba going to Cuba ...or instead of golf playing ping pong


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## StayThirstyMyFriends (Jul 29, 2016)

gibor365 said:


> Not many employers would like to hire professional who last 8-10 years was "travelling the world"


+1 on that, especially IT/computer professionals. But they could always go for some credential/school upgrades and it might work. But they seem pretty independent, strong willed types. If they have to go back to work, trying to find something they are passionate about and starting a business themselves would make more sense than working for the Man - which they don't seem to enjoy.



TomB19 said:


> They should rent children. Owning isn't a great investment.


Ok, that made me laugh!!


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## james4beach (Nov 15, 2012)

Thing is, the couple may have a shortfall of cash down the road, but they don't need any kind of serious employment. All they'd need in future years is a bit of extra cashflow, even from a minimum wage job.

No need to worry about their resume. They won't be going back into the workforce in a full time professional job.

Examples might be tutoring, some web site development, contracted code development, Walmart greeter, housesitter, carnival, ... endless possibilities.


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## Eclectic12 (Oct 20, 2010)

TomB19 said:


> Even if they go back to work at 40, I expect that would be OK. They are young enough, they could still do well in the workplace.


Agreed ... though a lot depends on what they are going back into and how desperate employers are for the skills as for some jobs, seeking new employment at say 58 with a long gap in working would be a challenge.

IAC ... my main point is that if they do stick to doing what they want, without long term, full time employment - CPP is likely to be small.




TomB19 said:


> I'm 49 so I need to eat while I'm at the feed trough because in 10 years, nobody is going to hire me as a professional.


Or you need to find a hot skill where if you spell name of the product and come across in the interview as awake/able to interact professionally with demanding clients, the demand sweeps away any concerns of age.




TomB19 said:


> They should rent children. Owning isn't a great investment.


LOL ... or as my co-worker says, never legally or publicly acknowledge them (keeps the costs down)!


Cheers


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## Eclectic12 (Oct 20, 2010)

james4beach said:


> ... Examples might be tutoring, some web site development, contracted code development, Walmart greeter, housesitter, carnival, ... endless possibilities.


Or as some I know have done ... traded work for room/board while traveling. 


Cheers


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## StayThirstyMyFriends (Jul 29, 2016)

james4beach said:


> Thing is, the couple may have a shortfall of cash down the road, but they don't need any kind of serious employment. All they'd need in future years is a bit of extra cashflow, even from a minimum wage job.


Yes, that is all they would *need*. But this couple seems like they are a bit more extreme than that. They don't want to be dependent on a job, and they've worked for top dollar in the past. I would expect they would want to hit the workforce hard for a few years and then get out again, rather than take the easy path yet slightly trapped path of a low paying job. But that is just my guess.


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## Eclectic12 (Oct 20, 2010)

tygrus said:


> Their story conveniently leaves out a of of details, like how they paid for their school, where they lived while going to school. I guess they lived at home for 4-5 years first and probably got a little seed starter money from their parents ...


Apparently your guess is wrong as they say their co-op jobs paid for their school ... no reference to where lived while going to school yet.


Cheers


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## tygrus (Mar 13, 2012)

Eclectic12 said:


> Apparently your guess is wrong as they say their co-op jobs paid for their school ... no reference to where lived while going to school yet.
> 
> 
> Cheers


I took 5 co-op jobs over the course of my education as well and I will tell you its not enough money to live on and pay tuition with. My parents had to help top it up. Obviously they lived at home, had some help.


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## gibor365 (Apr 1, 2011)

tygrus said:


> I took 5 co-op jobs over the course of my education as well and I will tell you its not enough money to live on and pay tuition with. My parents had to help top it up. Obviously they lived at home, had some help.


Agreed, it's not enough....my son finished 3rd year university and had 3 co-op job in 3 different major banks including trading floor job... He's very frugal, but co-op money is not enough for him.


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## gibor365 (Apr 1, 2011)

> .. Examples might be tutoring, some web site development, contracted code development, Walmart greeter, housesitter, carnival, ... endless possibilities.


 this list contained or non-feasible jobs for them (web-developers, really?!) or some not really dream-jobs 

Oh, they can write another "children book" ...so what they don't have kids?! Some writing investment books without trading even 1 equity


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## TomB19 (Sep 24, 2015)

They are engineers. They will have no trouble sustaining themselves.


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## gibor365 (Apr 1, 2011)

TomB19 said:


> They are engineers. They will have no trouble sustaining themselves.


Seriously?! So do you think that engineer can travel for 8-10 years , and just start working again?! Wow!


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## tdiddy (Jan 7, 2015)

I guess this story really struck a cord with lots of people. Not sure why all the hate on CBC, yes they made more money than most but its not an absurd amount by any means. 

As to getting help from parents in university. If you have a good relationship with your parents and live near a reasonable university I would think its the financially astute thing to live at home for most of undergrad, and pretty common. So I wouldn't judge them for that. Also given that these two are clearly quite bright I wouldn't be surprised if they received generous scholarships for university. Personally I/family didn't pay a penny for my undergrad , because I worked hard in high school. There are more avenues to 'hard work' then taking on multiple low end jobs

enjoy your retirement if reading this! also don't be too prideful to pull the plug and change it to a sabbatical if having second thoughts (or develop more expensive tastes  )


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## TomB19 (Sep 24, 2015)

gibor365 said:


> Seriously?! So do you think that engineer can travel for 8-10 years , and just start working again?! Wow!


Yes, however, the article states they have taken on some contract work so their resume won't be completely blank for 10 years.

My company would hire them, even if 40 and out of work for 10 years. They wouldn't be head of the engineering department, though.

Gibor, you must work in a very grumpy environment. I worked in a grumpy environment for 7 years. Now that I'm gone, I am embarrassed that I didn't leave sooner.

At the other place, I recall seeing a job posting for a phd Bio-engineer. They asked for all sorts of experience and a certification. The job was posted for $53K. lol!


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## gibor365 (Apr 1, 2011)

Tom, looks like you work in a very "stagnant" field  , leave IT., but I cannot imagine any automaker will hire engineer after 10 years of bumming around the world


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## tygrus (Mar 13, 2012)

Computer engineers that are out of the workforce for 10 yrs are not employable again in their lifetime, at least not in that job. Tech moves too fast and eats itself regularly that you have to stay in the game continuously. Plus these guys have advertised their disdain for work all over the internet. Wont be hard to a future employer to look them up and see what they were saying about their hate for working. They are as employable as a 55 yr old now.


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## TomB19 (Sep 24, 2015)

Perhaps part of our difference in perspective is that I live in Regina, SK. We badly need professionals of almost any variety.

Worst case, the travel engineers could come work here for a couple of years and then move somewhere else to thaw out. :biggrin:

BTW, we are upgrading our infrastructure like crazy. The power company is investing $1B/year for the next several years to expand for future needs. It appears SK will be a hot job market for quite some time.


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## james4beach (Nov 15, 2012)

No, the technology does not move that fast. Things like C/C++ compilers have advanced a lot, but the same programming principles used in the 1970s still apply.

Our office has several senior developers who are effectively doing the same kind of software development they did back in the 1980s. If they had been out of the workforce for 10 or even 15 years, nobody would even notice -- they could get right back to doing what they do.


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## tygrus (Mar 13, 2012)

TomB19 said:


> Perhaps part of our difference in perspective is that I live in Regina, SK. We badly need professionals of almost any variety.
> 
> Worst case, the travel engineers could come work here for a couple of years and then move somewhere else to thaw out. :biggrin:
> 
> BTW, we are upgrading our infrastructure like crazy. The power company is investing $1B/year for the next several years to expand for future needs. It appears SK will be a hot job market for quite some time.


I just about fell out of my chair when I read this. 

I live in Regina too, and its no tech hotbed, or even a professionals hotbed. Its a one horse town and province with its chips all on commodities like potash, oil, ag etc. And it will always be that. We have demand for maids and drive through servers, thats it.


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## tygrus (Mar 13, 2012)

james4beach said:


> No, the technology does not move that fast. Things like C/C++ compilers have advanced a lot, but the same programming principles used in the 1970s still apply.
> 
> Our office has several senior developers who are effectively doing the same kind of software development they did back in the 1980s. If they had been out of the workforce for 10 or even 15 years, nobody would even notice -- they could get right back to doing what they do.


Sorry James, thats not true. The amount of automation going on is staggering to the degree that programmers have wrote self correcting and self adapting software that improves itself as it learns from big data it collects every millisecond. Programmers will be feeding pigeons in the park some day, just like web developers are. Remember that old job from about 20 yrs ago. Obsolete.


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## gibor365 (Apr 1, 2011)

> Programmers will be feeding pigeons in the park some day, j*ust like web developers are*. Remember that old job from about 20 yrs ago. Obsolete.


 This why I was laughing when somebody said


> Examples might be tutoring, some web site development, contracted code development, Walmart greeter, housesitter, carnival, ... endless possibilities.


 

.. and add outsourcing to India


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## TomB19 (Sep 24, 2015)

tygrus said:


> We have demand for maids and drive through servers, thats it.


Perhaps, one day, you can serve me at a drive through window. I'll be the one wearing the maid uniform.


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## Eclectic12 (Oct 20, 2010)

gibor365 said:


> tygrus said:
> 
> 
> > I took 5 co-op jobs over the course of my education as well and I will tell you its not enough money to live on and pay tuition with. My parents had to help top it up. Obviously they lived at home, had some help.
> ...


 < insert tongue in cheek here >

[ slaps head ]

So sorry I forgot that other's co-op experience & costs set what others experience. 

I am confused though ... is it tygrus' co-op experience or gibor's son's co-op experience my niece should expect her co-op experience/costs to follow when she hits university in about six years time?

< remove tongue from cheek >




tygrus said:


> gibor365 said:
> 
> 
> > ... this list contained or non-feasible jobs for them (web-developers, really?!) or some not really dream-jobs ...
> ...


What makes them non-feasible?

My habitat team leader used her iPad to finish a couple of contract web projects while building a house in El Salvador in 2014. Last I checked, she was leading two or three builds a year (the Hawaii ones were two weeks long) so it doesn't sound like she's out of work yet.

Then too, if web developer is done - it raises the question about Cobol programmers as that's been predicted to be done for a *long* time.
http://www.payscale.com/research/US/Skill=COBOL/Salary


Cheers


*PS*

Now that I think about it ... the "programmers are done" is what I heard in the late '90's for Cobol yet I see there are recent jobs listed on job boards.


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## TomB19 (Sep 24, 2015)

Somewhere, in the building I am sitting in right now, a Cobol programmer is adjusting a PICT clause to format a field in a program that was written in 1974 and updated to Cobol77 in the early 1990s. ... and that guy has more job security than anyone in my department.


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## Eclectic12 (Oct 20, 2010)

Sad but true ... even in the "new stuff" like ERPs - peel back the covers on some batch jobs or online transactions and there's compiled COBOL being run on Linux, Windows and/or AIX, interacting with an RDBMS.


Cheers


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## james4beach (Nov 15, 2012)

For user facing stuff, user interfaces, GUIs, smart phone devices ... yes definitely it matters that someone is up to date.

Other aspects of software really doesn't change so much over time. As long as you are intelligent enough to learn some of the latest tools (e.g. git) the skill set is still relevant. I wouldn't worry about this part at all, especially if you're doing more back-end and system software, linux systems, etc.


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## peterk (May 16, 2010)

Holy hell I have no idea what you computer folks are talking about. :stupid:

But your guy's kids should have come done their co-op jobs in the oil sands. $30+/hr plus free housing and transportation! :cool2:

I like the engineering fields that involve the construction of something dangerous that could explode or collapse... Those fields are only going to get more stringent from a regulatory perspective, and increasingly intrusive governments will always require licensed engineers to be involved and accountable in all aspects, regardless of their technical merit or necessity, as technology advances. Jobs that can happen in an instant in a computer that almost nobody understands anyways, and involves no risk of lives lost, those are the engineering jobs I'd be worried about...


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## Plugging Along (Jan 3, 2011)

tygrus said:


> Computer engineers that are out of the workforce for 10 yrs are not employable again in their lifetime, at least not in that job. Tech moves too fast and eats itself regularly that you have to stay in the game continuously. Plus these guys have advertised their disdain for work all over the internet. Wont be hard to a future employer to look them up and see what they were saying about their hate for working. They are as employable as a 55 yr old now.





james4beach said:


> No, the technology does not move that fast. Things like C/C++ compilers have advanced a lot, but the same programming principles used in the 1970s still apply.
> 
> Our office has several senior developers who are effectively doing the same kind of software development they did back in the 1980s. If they had been out of the workforce for 10 or even 15 years, nobody would even notice -- they could get right back to doing what they do.



I think that both your guys are right. I started in IT, and was good because I knew how to support the specific hot apps and technology at that time. My degree is in business. I have found my skills have definitely become obsolete, as I was learning just abut the technology and apps of that time, that was twenty years ago, I was in th for probably about 10 of those years. So because I didn't keep up to date with th technology then, those skills have become obsolete. Good thing, because my goal was always business, management, non tech. I still can still hold my own when talking to txt guys and they are surprised I don't get lost, bit can't do tech work now.


My spouse has a masters in comp Sci and was even thinking of getting a Ph.D. He understands the theories and the principles behind a language. Goes between stretches of being a developer to management. Though he has an area which he is really specialized in, he has had no problems learning a ne language. He thoughts are if you understand the principles, everything is just figuring it the little nuisaunces. He have has been doing this before IT became popular, and is still in demand. Could he take 10 years off, I would say probably, would his still be a specialist in the one area, no, but he could figure the newest language pretty quick.


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## amitdi (May 31, 2012)

*​*


My Own Advisor said:


> That is nuts saving that much but you know what, if it makes them happy, if they are happy - who the heck cares?
> 
> As long as they are not hurting anyone, good on them for following their dreams and ambitions - whatever that is.



right, i dont know why a bandwagon of people are spending a bunch of time question how that cant be done. but again, i see the cpl is sort of calling this a "revolution". i read their story, but i think its doable for "them". but i will take only bits and pieces from their story as inspiration, not try to emulate them.


and yes, their story is not a rent vs buy story, no sir nothing close to it. if anything its more of a disciplined investing & frugal living story. all they did can be done even by being a homeowner.


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## My Own Advisor (Sep 24, 2012)

It's not any revolution whatsoever.

_It may be a revelation for Millennials though_, I don't know. 

All this to say, they earned good money. Check. Step 1 done.
They figured out the best way to put that good money to use in hot housing market. Check. Step 2 done.
They stayed disciplined. Check. Step 3 done.

Surprise, we have money we can live from, frugally, now! Check. Goal attained.

They did a great job. I am happy for them. All good


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## Market Lost (Jul 27, 2016)

james4beach said:


> I found their blog with the data. This makes more sense to me now.
> 
> They both had very high incomes, something like dual 130k gross salaries (they're both computer engineers). And they were living very frugally in Toronto. For example their rent ($850 for the couple) was way less than what I paid at the time ($1200 alone). The two of them were spending as low as 31k/year in Toronto... this is _ridiculously_ low for a couple.
> 
> ...


I have no clue what you would get for $850 in Toronto these days. I moved there in 2003 to work for IBM, and a "cheap" basement apartment was $650 in the Markham area. I ended up in a "reasonable" 1 bd + den for $1,200/mth in the Younge and Finch area.


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## Market Lost (Jul 27, 2016)

james4beach said:


> Apologies for all the posts... I'm really fascinated by this. This is the first time I've seen one of my coworkers (same age, same job, same city!) share all their data.
> 
> I looked more closely at their average savings and net worth increases, and it more or less matches mine. Not too different, because my growth has been more consistent over the years and I had some low income earlier for a head start. This part is reassuring to me. Same age, same industry, and we're growing our wealth at about the same average rate.
> 
> ...


I still know people in TO that live on far less than $31K, but it's not easy, and there are are lot of sacrifices. No car, cheap apartment above stores, no cable, and eat almost every meal at home. I don't think I'd like to live like that.


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## Market Lost (Jul 27, 2016)

bds said:


> I'm not sure why everyone is trying so hard to discredit this article and their way of life. My partner and I are living quite similarly and are enjoying it, though we own our home and make less than them (about 150k combined). We rent out the basement so our cost of housing totals ~$700/month. Total expenses are around 30-35k for both of us and we aren't eating ramen noodles and staying home every night. We have a similar goal to "retire" and travel full time on our investment income when we reach 1M net worth, though we may still do some contract or part time work if/when we get bored.
> 
> This is very doable if you don't buy into the typical lifestyle of 'keeping up with the jones'


With all due respect, your last sentence is exactly the issue most people have with the story, and how it is portrayed by the media. First off, a couple making $260K a year are in the 5% bracket, which means 95% of the population is just not going to get there no matter how they live. Couple this with the fact they are childless, and extremely frugal for their income and location means this isn't about a "not keeping up with Jones" mentality, it's simply not possible for all but a hand full of people. 

Honestly, how this made it to the media, and why it's portrayed as something possible, let alone desirable is beyond me.


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## Market Lost (Jul 27, 2016)

james4beach said:


> Yeah the article is misleading. Absolutely, it was the high salaries and low annual expenses -- that's the entire story. If you have 135K net income and only spend 35K, you have 100K savings/year.
> 
> Like Woz says, investment returns have nothing to do with their story. 9 years of work @ 100K/year savings --> $1M total, even at a pitiful 2% return (HISA or GIC). To be more interesting and useful, the article should have focused on their frugal lifestyle and outlined how they succeeded in living on 35K a year while renting an apartment. That's no small feat in Toronto.
> 
> I'm not jealous about their situation. My net worth is tracking theirs exactly and I'll end up with the same thing in the same number of working years. But I genuinely worry for them because I don't think 1M is enough for them to retire with, nor is there enough of a margin of safety considering they may live for another 60-70 years.


There was something about Garth Turner being involved as per the CBC article, although I didn't quite catch what it was. This is exactly the kind of bad investments I would expect out of him.


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## Market Lost (Jul 27, 2016)

TomB19 said:


> They should rent children. Owning isn't a great investment.


Now you tell me. :frown:


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## bgc_fan (Apr 5, 2009)

Market Lost said:


> There was something about Garth Turner being involved as per the CBC article, although I didn't quite catch what it was. This is exactly the kind of bad investments I would expect out of him.


He is their financial advisor. That probably explains why saving $100k/yr over 9 years ends up being worth $1M portfolio.

I get that there is a lot of vitriol going their way and it is the same for any others who become financially independent. The same thing happened with the guy who worked three jobs, rented his house while living in the basement and was able to burn his mortgage in 3 years.

The problem with how these stories are written is that I did it, and so can you, even though situations are different.

Here's a counter example, Trump is a great self-promoter and says that he is a great example of the American dream because he's a winner. How many people criticise him over the fact that his father's connections and money have a great influence on how he got to where he is now? I imagine a very low minority. Yet I doubt that without those starting advantages his success could be duplicated by a regular middle class family.


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## james4beach (Nov 15, 2012)

I'm still confused (and skeptical) of the wording of the article. The CBC article made it sound like they first saved 500k, and then invested it.

But I don't see that in their blog. In their blog, it looks to me like they saved 100k a year in the 9 year run-up to 1M. For example they still had income and 100k/year savings right up until their retirement date.

In this latter scenario, the rate of return is almost meaningless.


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## bgc_fan (Apr 5, 2009)

james4beach said:


> But I don't see that in their blog. In their blog, it looks to me like they saved 100k a year in the 9 year run-up to 1M. For example they still had income and 100k/year savings right up until their retirement date.
> 
> In this latter scenario, the rate of return is almost meaningless.


I wouldn't say that rate of return is meaningless.

I just a quick calculator look at an average annual return of 3% would yield. Over 9 years, $100k would be $130k. For 8 years about $126k, so about half the portfolio increase due to investment return can be attributed to the first 2 years at a 3% return.

Of course, there are some taxes paid on investment return, but if they maximized RRSPs and TFSA, and kept mainly equities in nonregistered accounts, the effect may be reduced. 

Actually, now that I think about it, with their salaries roughly $130k they should be able to each shelter the max of RRSP room and would have significantly reduced their taxes.


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## bgc_fan (Apr 5, 2009)

On second thought, rate of return is very pertinent to the debate. The premise is that by not buying a house and investing will make you rich. Really though, they amassed their million by being very frugal. Investing has nothing to do with it if you are saying that rate of return doesn't matter.


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## tdiddy (Jan 7, 2015)

I think the confusion came from the fact that CBC was trying to cash in on the frenzy related to real estate when presenting this story. From what I can tell what CBC was trying to say is that they saved the $500K with the intention of using it as a down payment on a home. They would then have to work very hard over the next 10+ years just to pay off their mortgage. At that point they gave up on the home idea and invested instead, now with the intention of early retirement. 

It was presumably supposed to be an extreme example that would strike a chord with many millenials/gen x'ers who are getting increasingly frustrated with the prospect of huge mortgages (such as myself). But it also seemed to strike the ire of many a generation above without hope of an early retirement.


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## Eclectic12 (Oct 20, 2010)

james4beach said:


> For user facing stuff, user interfaces, GUIs, smart phone devices ... yes definitely it matters that someone is up to date.


YMMV ... where there is a need for it then yes. 

OTOH, where it's a corporate app that the development environment stamps out a web, a tablet and smartphone version each time the developer hits the "save" button - making it past the corporate hiring hurdles may be the bigger issue. :biggrin:


Cheers


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## Eclectic12 (Oct 20, 2010)

amitdi said:


> ... right, i dont know why a bandwagon of people are spending a bunch of time question how that cant be done. but again, i see the cpl is sort of calling this a "revolution" ...


That plus the article and them seem to be saying "anyone can do it" ... there are certainly some who could but I don't think that it is possible for that many. Particularly when one considers two high incomes plus the willingness to go their own path.




amitdi said:


> ... and yes, their story is not a rent vs buy story, no sir nothing close to it. if anything its more of a disciplined investing & frugal living story. all they did can be done even by being a homeowner.


Say what?

If they'd plunked down the $$$ for the type of house they were looking at in Toronto they'd still be able to retire/travel? 
I'm interested to hear you see as their source of income while owning the house would be.


I do agree that frugal living/disciplined investing is downplayed ... at the same time, a key decision that gives them their living $$$ is keep the $$$ instead of converting it to a house, is it not?


Cheers


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## Eclectic12 (Oct 20, 2010)

bgc_fan said:


> I wouldn't say that rate of return is meaningless.
> 
> I just a quick calculator look at an average annual return of 3% would yield. Over 9 years, $100k would be $130k. For 8 years about $126k, so about half the portfolio increase due to investment return can be attributed to the first 2 years at a 3% return ...


Another detail to wonder about ... would a Garth Turner directed portfolio have returned the same/less/more? :biggrin:




Cheers


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## My Own Advisor (Sep 24, 2012)

james4beach said:


> I'm still confused (and skeptical) of the wording of the article. The CBC article made it sound like they first saved 500k, and then invested it.
> 
> But I don't see that in their blog. In their blog, it looks to me like they saved 100k a year in the 9 year run-up to 1M. For example they still had income and 100k/year savings right up until their retirement date.
> 
> In this latter scenario, the rate of return is almost meaningless.


They had a VERY healthy net worth in 2012 before meeting the "bearded one" aka Garth Turner:
http://www.millennial-revolution.com/invest/how-we-got-here-part-4-the-bearded-one/

I've mentioned this before in this thread, but kudos to them.

They had a goal, they worked hard to achieve it, and they're now celebrating their success. If most young adults had the same drive and ambition, investing or otherwise, our country will have one helluva future  That's the bigger lesson to be learned here. Even if you disagree with their approach.


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## Mukhang pera (Feb 26, 2016)

My Own Advisor said:


> If most young adults had the same drive and ambition, investing or otherwise, our country will have one helluva future  That's the bigger lesson to be learned here. Even if you disagree with their approach.


I am not sure that if most young Canadian adults followed in their footsteps it would redound to the common weal of Canada. Would we, as a nation, really be better off with a generation or two of young folks who decide to work hard in their 20s, remain childless and save a pot of money to spend travelling the globe commencing in their early 30s?

It has been said here that they do not deserve to have any harsh words directed at them and, for the most part, I agree. They set a course for themselves, applied themselves to the task, accomplished what they set out to do and seem to be content with the result. That's fine. No need to be critical on that score. 

I do, however, criticize the "anyone can do it" premise, as others here have said. As has been pointed out, not all can achieve their high level of earnings early in the game, even with prodigious effort.

I am more hostile to some of the underpinnings of their philosophy, exemplified by such phrases spoken by the husband (Bryce) in the video, such as "buying a house and locking in for 25 years is insane...if at any point if you lose your job, your house is gone….tying into 25 years of stress" etc. What tripe. Who is this guy to call anyone else "insane" for buying a house? Maybe what he is doing is, to some, "insane". And the notion of losing the house with your job, that will only happen if you have not been prudent and left yourself exposed. When I owned houses in Vancouver, I lost jobs. The house was still there each time. Happily, I did not have to worry about paying the rent. A foreclosure takes a lot longer than getting a tenant out on a Form B - Termination Notice for Failure to Pay Rent. There is also the possibility of renting all or part of the house in the event of a pinch. Lots of possibilities for homeowners. I never tied myself to 25 years of stress. 25 years of contentment, sure. Those two, with high incomes and no kids and interest at giveaway rates could easily retire just about any mortgage in under 25 years. 

This pair is marching to their own drum and that is okay by me. They should be free to do so, untramelled by any contrary views I or anyone else might hold. The story says their strategy has allowed them "to live a nomadic life, travelling for months every year". As one commenter to the story wrote: "An endless round of hotels and airports... that's living the dream? Sounds more like living the nightmare." 

I recognize that, for seemingly a majority of people who tarry on forums such as this one, with much emphasis on money and early retirement with money, the "dream" is to have 50 years of endless travel in retirement. A few of us do not, however, share that dream. I for one am not a convert. I started international travel at an early age and I have done my share, in many parts of the world, but mainly as a diversion from other pursuits, not as the main course. My best travels and been when I have lived in another country for long enough to understand the place, the people and learn another language. I see many today as wanting to collect passport stamps and come home and boast about how many countries they have seen. For the most part, they have seen very little and experienced almost nothing. 

Several other readers comments I appreciated were:

"That article is pretty harsh. Just because this idea is right for them doesn't mean it right for everyone else." Agreed. They can go off and travel into the sunset, but spare homeowners from the "insane" calumny. 

"Wait till you get older. Then a "stable" home is the rock of Gibraltar. Unless, of course, you plan to die young." Also agreed. For me, a "stable home" was my rock even in youth. That meant, for me, owning it. 

"Let's see how they're doing in 30 years and then we'll talk." I'd give it less than that. Some here seem to suggest that living off dividends on a portfolio of $1 million will see one through for decades, because dividends will keep pace with inflation. A fond hope. I am doubtful that in 30 years the dividends will amount to the $200,000 or so a year needed to replace the equivalent of $40,000 today.

I'll also venture to say that, if they stay the course, they'll become discontent with having to be endlessly frugal when they had it within their grasp early in life to set themselves up for a much more comfortable lifestyle for a much longer period. Even $40,000 is pretty lean these days. Frugality loses its charm for many of us over the long haul. I know, we are all supposed to eschew consumerism, the quest for "stuff", keeping up with the Jones (or the Joneses as some would have it). 

I'll come out and admit that I like "stuff" and I can afford "stuff". In an earlier thread I spoke of the "crazy" notion of purchasing a new pickup truck. Well, I went ahead and did it, shelled out over $50k for a shiny new one and I just returned from 4 weeks driving around Canada and the U.S. with wife and kid, putting 10,000 km. on said truck. Sure, our 2008 Ford Ranger (which we still have) with the rumble seat in the back and only 74K on the odometer, would have got us there and back. But the new truck made the trip all that much more enjoyable. Yes, I had to earn the money. I enjoy my work, so no sacrifice. We had money to visit nice places, eat in good restaurants and stay at nice hotels without having to ask the price and chickening out if it seemed too high. Are Kristy and Bryce able to do that even now? Will they be able to do so in 10, 20 or 30 years? I still expect to do some travel, but I am well past wanting to be a frugal traveller. I know someone, in his 50s, who travels to other countries and his income is $12,000 a year. When not travelling, he couch surfs, camps out, or whatever it takes not to pay rent. While abroad, he sleeps on beaches, park benches or wherever, with whatever he is packing tied to him to he'll awaken if someone tries to yank it away. Très frugal. I think I can live without that kind of parsimony. But he thinks I am insane for working. To each his own.

The idea of keeping up with the Jones is, I am sure, not something that really exists to any great extent. I doubt many are motivated to make a purchase or adopt a certain lifestyle just to copy someone else. Most of us cut our coat according to our cloth. Harkening back to the topic of buying "stuff", where we live, off the grid and in a somewhat remote location, we must rely on our own boat for much of our transportation. There is a wide range of types hereabouts. Some have a net worth in the $20 million plus range and others have, by comparison, almost nothing. One of the deeper-pockets-than mine types goes by our house most days in a boat that cost about $500,000. Nice boat. I'd probably have something closer to it if I had his millions. Our boat is in the $100,000 range. Seaworthy, reasonably comfortable, warm and dry in winter and can haul a fair load. Quite adequate. I perhaps could come up with the money to keep up with the other guy's boat, but I feel no desire to do so. Others here, more frugal, get by, year round, in small open boats. They get wet in the wind and rain. They take a risk or stay home in some weather. I could be frugal and join them. Look at the money they save! I'll pass. I have the wherewithal to be more comfortable and to have a craft that is simply a greater pleasure to own and operate. If the engine quits, I do not have to sweat about coming up with $20k for a new one. Working past 30 has allowed me that. Could Kristy and Bryce even think about buying such a thing? They no doubt would call the idea "insane".

At the end of the day, we all have choices to make and we cannot all follow the same path. I am sincere when I say that K and B. have made choices, followed a plan and, at least for now, it suits them. I wish them well. Another factor in all of this, that seems to seldom get mention, is relationships. K and B appear to be in sync and that counts for a lot. It might even be said that it's not so much about what you _have_, but who you are _with_.


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## Mukhang pera (Feb 26, 2016)

My Own Advisor said:


> If most young adults had the same drive and ambition, investing or otherwise, our country will have one helluva future  That's the bigger lesson to be learned here. Even if you disagree with their approach.


From another, related, thread:




james4beach said:


> I also want to point out that I am qualified to raise the criticisms that I did. I know Bryce personally -- he was my coworker. I know how he lived, and I know he was very stressed at work and wanted (above everything else) to finish working and get the hell out of there. We are the same age, have the same job and the same income, lived in the same city... I think my criticisms should be useful to anyone who reads the CBC article.


I would be more sanguine about the future of our country if we had more james4beach types coming on stream.


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## bgc_fan (Apr 5, 2009)

Eclectic12 said:


> If they'd plunked down the $$$ for the type of house they were looking at in Toronto they'd still be able to retire/travel?
> I'm interested to hear you see as their source of income while owning the house would be.
> 
> 
> I do agree that frugal living/disciplined investing is downplayed ... at the same time, a key decision that gives them their living $$$ is keep the $$$ instead of converting it to a house, is it not?


There needs to be an apples to apples comparison. Assuming they keep their lifestyle, they could have bought a house and lived in the basement while renting out the rest of the house. The house rental income could possibly provide the equivalent travel income or as the market in Toronto is a little unique, sell the house after they decide to retire. There's nothing to say that they couldn't have done what they did because they didn't buy a house.



Eclectic12 said:


> Another detail to wonder about ... would a Garth Turner directed portfolio have returned the same/less/more? :biggrin:


So I looked at their blog and understand what they did. Yes, from 2006 - 2012 they didn't invest anything (aside from a few years, one before, during and after the 2008 crash). They started saving at $35k the first year and ramped up to $133+k at the end of the 9 years. So they didn't invest until 2012 with Garth. Here is what is interesting, they initially invested in e-series funds during their initial dabble in the market: 40% Cdn bond index, and 20% each Cdn, US, and Intl Indices.

So I thought I'd compare what they reported as their gains against what the e-series composite that they had started with would have yielded to see how useful Garth was:
2012: Garth 3.4% (partial year), e-series 8.21% (full year) - hard to compare without the exact dates, but they state that his other clients got 7-8% that year
2013: Garth 8.39%, e-series 15.88%
2014: Garth 8.10%, e-series 10.47%

Basically Garth is getting creamed by index funds. I wonder if someone should point that out to them.


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## none (Jan 15, 2013)

I wouldn't be surprised if this was at least in part due to Garths love for preferred shares which have been creamed over the last couple years.


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## Market Lost (Jul 27, 2016)

bgc_fan said:


> T
> 
> Basically Garth is getting creamed by index funds. I wonder if someone should point that out to them.


I'm not surprised, he was a poor performing junior minister, so he's definitely not trying to improve himself.


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## tdiddy (Jan 7, 2015)

latebuyer said:


> I think the couple is missing out on the pride and satisfaction that comes with home ownership. I think a lot of millenials are buying into this notion that experiences over things brings happiness but i don't completely buy it. When you travel part of what makes you happy is your relationships whether with your partner, friend or people you meet. Still i know of people who love to travel. Its like a drug for some people. They are addicted and they can't get enough.


interesting take on this from globe and mail/nytimes on this yesterday http://www.theglobeandmail.com/life...-hotel-rooms-worth-the-price/article31592842/ 

I would argue that home ownership is like a drug for some people of older generations. I take more pride in what I've done and who I am than the 4 walls around me. But we all have our own priorities, if everyone was the same life would be pretty boring


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## latebuyer (Nov 15, 2015)

I personally find travel pretty transitory while the satisfaction i get from living in my home lasts all year. It is also too expensive. Stlll you are right everyone has different priorities. I sit by a stream 2 minutes from my condo and read a book on vacation and i'm happy with it.

I have to respond to this globe article since it really irked me. Basically I feel content when sitting by the stream, but not necessarily happy. People who travel a lot sometimes need that adrenalin hit of happiness because they are not satisfied with their lives. This globe and mail article is an example of how there is a push to buy happiness through travel. It can be a consumerist trap. I'd rather take my free stream thanks.

I also think there is probably pressure for millenials to travel, just as there was pressure on gen x and baby boomers to buy a home. 

I think mindfulness and social relationships can make you feel satisfied, but not necessarily overblown with happiness but i'm okay with that.


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## tygrus (Mar 13, 2012)

Your love for globetrotting is highest in your youth, but it gets boring when you get older, and the fact that a lot of the world aside from its natural beauty lies in 3rd world countries which takes away from the travel experience IMO. 

I dont go on vacation to see poverty or fight throngs of people in ciites that have 10 million people or be cramped into an airplane seat for 18 hrs. Thats not a vacation to me. Would rather sit on any lake in canada. Thats what most of my neighbors do. They might take one or two major trips a year but most of their vacation time is at a cottage or cabin close by. Kids will remember that far more than some old museum in europe.


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## latebuyer (Nov 15, 2015)

I forgot I did do some travel when I was younger. To be honest, sometimes I wonder if I should have invested the money and waited until the 40s or 50s to travel.


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## Mukhang pera (Feb 26, 2016)

tdiddy said:


> interesting take on this from globe and mail/nytimes on this yesterday http://www.theglobeandmail.com/life...-hotel-rooms-worth-the-price/article31592842/
> 
> I would argue that home ownership is like a drug for some people of older generations. I take more pride in what I've done and who I am than the 4 walls around me. But we all have our own priorities, if everyone was the same life would be pretty boring


I read that "interesting take" and I am not sure I agree with some of the points made. For example, the author says this:

"Six years ago, I wrote about how social scientists found that spending money on an experience, such as a vacation, makes people happier in the long run than spending money on objects like a watch or a piece of furniture. The logic is that humans are highly adaptable; we quickly become used to things, and with time, they lose their allure. And as some researchers have pointed out, another person can have, say, the same watch as you, which makes yours less special.
That doesn’t happen with experiences. Experiences are unique. Even when they are shared, you interpret them in your own way. You own them forever. Indeed, researchers have found that reminiscing, reliving scenes that brought you joy, also boosts happiness."

I do not really accept the premise that people buy many things for their "allure". I buy for their function. I'll agree with the proposition that a month spent in the Italian countryside is likely to provide greater enjoyment than a new watch. I am wearing a $60 watch from London Drugs. It tells me the time. That is its function and it does it well. I could afford a Rolex, but what for? It too would only tell the time. If it will cook up a fabulous meal, or do my taxes, I'll reconsider. 

I do not know in what pool the "researchers" were fishing, but what kind of shallow dolt buys anything to feel "special" and then feels "less special" about someone owning the same thing? If that is true, despite the concept of "experiences" being "unique", our shallow dolt would probably feel downcast if he returned from his month at an Italian villa and then many of his friends and acquaintances followed suit and rented the same villa for a month. Now that everyone has done it, presumably it is "less special".

A travel addict I am not, but I have lived a long time and taken some trips in most years and have lived abroad. A lot of places I have been I really cannot remember. Yes, I recall that I have been in many countries in Europe, for example, but only a few of my European experiences really stand out. Maybe I need to look back and "interpret" some of my trips "in my own way". Perhaps with some revisionist thinking I'll even recall fondly an experience with food poisoning in Bangkok. 

I also do not fully accept the proposition that "spending money on an experience, such as a vacation, makes people happier in the long run". First of all, why does "an experience" have to cost anything? Some of my most memorable experiences did not involve me or anyone else paying for it. I have met a lot of folks who have modest means, who can afford neither "stuff" nor vacations, but seem to be genuinely happy and have enjoyable experiences. 

I'll also reject the universal application of the notion that spending money on a vacation will trump an expenditure for an "object". Let's say, for example, I have not much discretionary income or resources, but I have about $1,500 to spend on a non-essential. For that I could take the family to Vancouver for a weekend. We used to do just that when we first moved from Vancouver to the hinterland. We would journey back for a taste of the city. We do not do that anymore, as in our more recent trips we found that we could not wait to get out of that place. But let's assume for the moment that it still has its "allure", so a weekend there would be a vacation. But maybe I am also thinking that, for that same $1,500, I could replace our ancient, small, CRT tv with a nice new flat and widescreen tv. Hmmm. Que faire? A memorable weekend in Vancouver or a tv that will allow us as a family to gather round now and again, to watch a movie, for a long time to come? With all due respect to the learned researchers, I might just opt for the "object".

I expect to continue to travel each year to a few places near and far, but I expect to be, as always, reinforced in the truth in what my daddy used to say: "ut er godt men hjemme er best". I think that phrase will need no translation. It is in accord with latebuyer's view:



latebuyer said:


> I personally find travel pretty transitory while the satisfaction i get from owning a home lasts all year. It is also too expensive. Stlll you are right everyone has different priorities. I sit by a stream 2 minutes from my condo and read a book on vacation and i'm happy with it.


The "lasts all year" comment rings true for me. Recall tdiddy's comment:



tdiddy said:


> I would argue that home ownership is like a drug for some people of older generations. I take more pride in what I've done and who I am than the 4 walls around me. But we all have our own priorities, if everyone was the same life would be pretty boring


Guilty as charged. A relic of an "older generation" and, in a way, home ownership is a drug to me, or at least a sine qua non of a happy life. But it would be fatuous to say that it's an object of "pride", surpassing "what I've done and who I am". It is, however, perhaps a reflection of those things. It is more difficult (but not impossible) to make premises you do not own into that reflection. My wife and I have spent a fair amount in purchasing a large chunk of oceanfront and building quite a nice (at least for us) house on it. Building a house let's you tailor it to your own wishes. This is where we spend most of our time. It's our refuge from the world. It's where we wake up most days of the year, surrounded by what we find very beautiful, peaceful and divers other adjectives. Just looking around this place is, to us, uplifting. So, in a way, owning this place is our rock, our anchor. We recognize that some have no need or want of an anchor. It will drag them down. While trite, tdiddy aptly observed that "we all have our own priorities, if everyone was the same life would be pretty boring". 

I alluded before to my own observation that one need not spend money to have happy, memorable experiences. A lot of my own relate to times in and around home, starting with my childhood home. In our present home we are, I think, forging good memories. We enjoy what we have in it throughout the year. When friends and family visit, we enjoy good food and wine. We sit around fires on the beach, we take them out to catch crabs, prawns and salmon. They can see whales, maybe a cougar or a wolf in the wild. They can see stars, undiluted by city lights. They won't be in sight or earshot of a neighbour. For our visitors, it's a vacation. For us, it's time spent at home with friends and family. While they depart taking away happy memories, some are left behind for us to share.


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## Mukhang pera (Feb 26, 2016)

I see that while I was composing my prolix post, tyrgus and latebuyer intervened, expressing much of the same sentiment, but with an admirable economy of language.


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## tdiddy (Jan 7, 2015)

Thanks for your well written reply, quite erudite. 

Personally I can remember vivid details from most of my trips. The idea of going to the same cabin on the lake every summer is as revolting to me as a impoverished metropolis is to others.


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## Eclectic12 (Oct 20, 2010)

bgc_fan said:


> There needs to be an apples to apples comparison. Assuming they keep their lifestyle, they could have bought a house and lived in the basement while renting out the rest of the house.


Possibly ... but then they'd lose access to whatever they were going to plunk into the house.




bgc_fan said:


> ... The house rental income could possibly provide the equivalent travel income or as the market in Toronto is a little unique, sell the house after they decide to retire.


Maybe ... but then again with so many posts here on CMF about how cheap it is to rent versus buying in expensive Canadian markets, I'd want to do some checking before thinking all of the house costs would be covered (like property taxes, who is paying the utilities etc.) to make sure the numbers work.




bgc_fan said:


> ... There's nothing to say that they couldn't have done what they did because they didn't buy a house.


They think so ... which means I can't rule it out without some other info.




bgc_fan said:


> ... Basically Garth is getting creamed by index funds. I wonder if someone should point that out to them.


 ... which is pretty much what I've read from those I've been able to check the numbers for.


Cheers


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## Eclectic12 (Oct 20, 2010)

Mukhang pera said:


> I read that "interesting take" and I am not sure I agree with some of the points made ...
> I do not really accept the premise that people buy many things for their "allure". I buy for their function ... I am wearing a $60 watch from London Drugs. It tells me the time. That is its function and it does it well. I could afford a Rolex, but what for? It too would only tell the time ...
> I do not know in what pool the "researchers" were fishing, but what kind of shallow dolt buys anything to feel "special" and then feels "less special" about someone owning the same thing? ...


Which is great for you ... try watching a woman show up at a party with a spectacular dress & see another woman wearing the same dress. Most of the time I've seen this, it is clear they don't feel special anymore.




Mukhang pera said:


> ... If that is true, despite the concept of "experiences" being "unique", our shallow dolt would probably feel downcast if he returned from his month at an Italian villa and then many of his friends and acquaintances followed suit and rented the same villa for a month. Now that everyone has done it, presumably it is "less special".


Everyone who goes to Italy stays in the same villa, sees the same sights, has the same experiences, has the same weather etc. etc., right?




Mukhang pera said:


> I also do not fully accept the proposition that "spending money on an experience, such as a vacation, makes people happier in the long run".


For some it works and for others it doesn't ... knowing yourself is half the battle.


Cheers


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## doctrine (Sep 30, 2011)

I love stories like this CBC one. However, for the reasons stated here, it's unlikely they can sustain their lifestyle - it has all been about high savings and low expenses, and not about returns on capital. I still find Derek Foster's story far more interesting, a Canadian guy who was frugal but also invested in equities - for him, the higher returns definitely contributed to his early 'retirement' ~10 years ago, and his wealth has easily doubled since then while supporting his lifestyle. Interestingly, he sold his house a few years ago and basically invested most of it in US equities; he has recently bought a home in Canada again, with the exchange rate and US S&P type gains he has made out like a bandit.


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## My Own Advisor (Sep 24, 2012)

He has doctrine.

I was talking to him (in-person) a year or so ago. He's done very well for himself.


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## tygrus (Mar 13, 2012)

The title youngest retiree title needs to be renamed the youngest retiree with a proper income to support full life in a first world country like canada.


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## Market Lost (Jul 27, 2016)

tygrus said:


> Your love for globetrotting is highest in your youth, but it gets boring when you get older, and the fact that a lot of the world aside from its natural beauty lies in 3rd world countries which takes away from the travel experience IMO.
> 
> I dont go on vacation to see poverty or fight throngs of people in ciites that have 10 million people or be cramped into an airplane seat for 18 hrs. Thats not a vacation to me. Would rather sit on any lake in canada. Thats what most of my neighbors do. They might take one or two major trips a year but most of their vacation time is at a cottage or cabin close by. Kids will remember that far more than some old museum in europe.


I don't know if the love for globetrotting necessarily diminishes that much. I still like to travel around the world as much as possible. However, the type of travel I can put up with is definitely different. Twenty years ago, I'd be happy with a basic hostel, and eating cold canned food, just as long as I was in a new place. These days, I just can't put up with that sort of travelling because I find my body can't take as much.


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## new dog (Jun 21, 2016)

What do we need?

We need food and shelter.

Will investment beat shelter?

So far no, shelter has always trumped investment. 

Rent is better today but the risk is there for many having to move not of their own choice.

Investments outside real estate are liquid and can be bought and sold quickly. The problem is the investments can be sold quickly, less reflection and attention.


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## sags (May 15, 2010)

Mukhang Pera, thanks for your posts. They mirror my thoughts pretty closely.


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## bgc_fan (Apr 5, 2009)

Mukhang pera said:


> I do not really accept the premise that people buy many things for their "allure". I buy for their function. I'll agree with the proposition that a month spent in the Italian countryside is likely to provide greater enjoyment than a new watch. I am wearing a $60 watch from London Drugs. It tells me the time. That is its function and it does it well. I could afford a Rolex, but what for? It too would only tell the time.


In fairness, you and many on this board would be considered outliers when it comes to consumption. It is evident that there is enough people who feel about luxury goods / status symbols to support that market, i.e. why is there still a decent market for cars like BMWs/Mercedes etc when something like a Toyota could provide the same functionality. To a lesser extent, we have people buy iPhones when generally low end Androids can handle the need for most people.



Mukhang pera said:


> A travel addict I am not, but I have lived a long time and taken some trips in most years and have lived abroad. A lot of places I have been I really cannot remember.


Because you had bad experiences on your trips, or you took many trips to make them unmemorable doesn't mean others feel the same way.



Mukhang pera said:


> With all due respect to the learned researchers, I might just opt for the "object".


Sure that's your opinion and the fact of the matter is when researchers come out with these types of studies they only make conclusions that apply to the majority of whom they study, i.e. could be as low as 51% of the studied persons.


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## bgc_fan (Apr 5, 2009)

Eclectic12 said:


> Possibly ... but then they'd lose access to whatever they were going to plunk into the house.


I may have been unclear. I mean if they had plunked down the $500k as the downpayment for a house, and rent out the majority of the house until they "retired", and then sold the house, they may have had a better return than what they got with Garth. Like I said, Toronto is a unique market where there doesn't seem to have any slow down in house prices and given that the "average" house price went up 15% last year, they could have had a better return.



Eclectic12 said:


> Maybe ... but then again with so many posts here on CMF about how cheap it is to rent versus buying in expensive Canadian markets, I'd want to do some checking before thinking all of the house costs would be covered (like property taxes, who is paying the utilities etc.) to make sure the numbers work.


True, but there have been some CMF members who have been able to make the rental market work in expensive cities as well.


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## bgc_fan (Apr 5, 2009)

doctrine said:


> I love stories like this CBC one. However, for the reasons stated here, it's unlikely they can sustain their lifestyle - it has all been about high savings and low expenses, and not about returns on capital. I still find Derek Foster's story far more interesting, a Canadian guy who was frugal but also invested in equities - for him, the higher returns definitely contributed to his early 'retirement' ~10 years ago, and his wealth has easily doubled since then while supporting his lifestyle. Interestingly, he sold his house a few years ago and basically invested most of it in US equities; he has recently bought a home in Canada again, with the exchange rate and US S&P type gains he has made out like a bandit.


Here's a key similarity between all these early retirement stories: all of them have some sort of significant non-investment income, i.e. blogging, or book sales. In the case of Derek Foster, he made the majority of his starting money betting on Philip Morris and borrowing on margin. Also, during that particular timeframe, Canadian equities were in a long bull market. He even sold out in 2009 after the crash.

The problem I have with this is that they are trying to sell the idea of early retirement, but for most people, early retirement means being able take time for themselves, i.e. travelling or just staying at home to take care of the family. I doubt that there is a market for a flood of people trying to make money on blogging about their "early" retirement strategies, or writing books about how they did it.

Now in general, what the couple is doing makes sense for some people, i.e. those who plan on retiring and travelling. Doing it when you are young and healthy and can undertake physical trips makes more sense than trying to do it when you're 50 or 60.


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## Mukhang pera (Feb 26, 2016)

bgc_fan said:


> Because you had bad experiences on your trips, or you took many trips to make them unmemorable doesn't mean others feel the same way.



bgc, I think "bad experiences" would have impressed themselves on my memory. Actually, I regard myself as rather fortunate in that in all my travels, I have had no real bad experiences. Some inconveniences, sure, but nothing to get upset about. I have even travelled to some places considered "dangerous" and have had friends suggest I was taking too much risk. Perhaps so, but danger never manifested itself. Permit me to say it before you do: perhaps I was too ignorant, stupid, foolish to recognize the dangers all around and just dumbass luck saved my worthless butt. There, that should in some measure reinforce your sense of superiority.

On more mature consideration, I see that I could have couched my comments in more precise language, not appreciating the fine parsing to which they would be subjected by you and Eclectic. When I say there are many places to which I have been that I do not remember, I do not think that translates into a host of bad experiences or a taking of so many trips as to make them unmemorable. I can certainly recall something about every country I have visited. As to some of those countries, I was not there for long and did not travel widely within their borders. So I recall those quite well. For example, I have been in the UK, but only in London. So I have no difficulty remembering that I was in London. As an aside, someday I'd like to return to the UK and skip London. Today I think I might find the Yorkshire Dales more in concert with my present tastes. It is also the case that, if asked, I can say I have been to the UK, but 5 days in London hardly qualifies me as knowing bugger all about the UK or its people through personal experience.

When I was 19, I flew from Toronto to Frankfurt, rented a car and drove around Germany, Switzerland and France for 3 weeks before returning the car and flying to Norway. I recall very little of the many, many, small towns through which I passed on that trip. I am sure if you named some today and asked me "Have you ever been there?" I would answer in the negative, or say, more truthfully "I don't recall". There are a few that I DO recall, because of something of particular note I did or saw there. I have, to this day, significant recall of some of the bigger places where I spent more time, such as Paris. I recall, in vivid detail, time spent visiting relatives in Scandinavia in the last 3 weeks of that same trip at age 19. Even there I am sure there are places to which they took me that I really do not remember. Maybe I have tuned those out as "bad experience" places, or they have been relegated to the "unmemorable" dustbin due to taking "many trips to make them unmemorable", a phrase to which I have some difficulty in ascribing any meaning.

Apart from time spent in Canada, and time in the US, which adds up to years, I have spent much more time in SE Asian countries than anywhere else. I lived in one for several years. While there, I went almost everywhere. Very cheap to travel in SE Asia, at least for foreigners. Most of the locals do not get to see that much of their own homelands, more's the pity. Maybe the whole endeavour was miserable, a prolonged "bad experience" or an unmemorable waste of my time because I know for sure, without reading from a map, that I cannot recite anywhere close to every location to which I have been in that country that has a name. I can bring to mind overall impressions and recollections of the various regions and specific events tied to some of them, but do I recall everyone I met, all that I did, every place I stayed, every place where I had a meal? No.




bgc_fan said:


> Sure that's your opinion and the fact of the matter is when researchers come out with these types of studies they only make conclusions that apply to the majority of whom they study, i.e. could be as low as 51% of the studied persons.


You commented thus in response to that portion of my post in which I said: With all due respect to the learned researchers, I might just opt for the "object".

So what's your point? All I said was what I might do in one narrowly-defined instance. I did not find fault with the researchers, criticize their methods (not that anything was said on that score) or their results. I did not suggest that what I might do was in any way normative or as setting an example to be followed.


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## Woz (Sep 5, 2013)

I think a lot of the experiential vs materialistic research has been twisted a bit. Experiential purchases has morphed into meaning exclusively travel/vacations (typically overseas) and materialistic purchases has morphed into meaning any purchases of goods.

In the examples Mukhang gave, of a TV that lets him sit around with family for a movie night, a new TV is considered materialistic, but the reasons for purchasing one is clearly about facilitating an experience. Same with the new truck to drive around Canada and the U.S for 4 weeks. You could argue there’s cheaper ways to get the same experiences, but that’s the case for a lot of vacations too.

Now admittedly, I’m not a big traveler. I don’t tell people (other than anonymously on the internet) that I don’t really like to travel because people look at me like I’m an alien. I think there’s a large group of people that only travel for the status aspect. Some people can never really describe meaningful experiences they’ve had on vacations, it’s always clichéd “the culture was amazing” … “completely changed my perspective”, as if a week vacation in wherever changes your life; and I often hear the exact same thing from the same people every time they get back from vacation. There’s just no way your perspective on life changes every 6 months just because you spend a week somewhere exotic. 

We have these work ice breakers now and then where people say their name something about themselves. Half the people list travel as their hobby/something interesting about them. The conversations end up just being people listing off places they’ve visited.

Now, I don’t mean to belittle anyone’s experiences. I do think you can have meaningful vacation experiences. I just don’t accept that all vacation spending is good spending and all spending on material things is bad.


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## Mukhang pera (Feb 26, 2016)

Woz, I think you have spoken well on the point.

I agree with your view that many travel for the status aspect and you really captured nicely some of what I have heard said when you say "Some people can never really describe meaningful experiences they’ve had on vacations, it’s always clichéd “the culture was amazing” … “completely changed my perspective”, as if a week vacation in wherever changes your life". Very true. 

Most people (me included) who vacation far from home usually stay in that other country, province, state or whatever for a fairly brief period of time. For me, it provides a pleasant diversion, but I do not kid myself that on a vacation in a far off place I have really learned much about the place, its people, its history or its culture. Frankly, that is not what I am there for. You can barely scratch the surface in a week or a month or so. As I said before, I was in London once for all of five days. That was insufficient time to really get to know much at all about London. It certainly did not qualify me to come home and expound about life in London, much less in the UK. It would almost be hubris to call myself a dilettante in that circumstance. I'd have to rank a step lower than dilettante. That does not mean my London trip was a waste, or a bad experience. It was simply a brief, enjoyable visit, but nothing to give rise to much interesting discussion around the water cooler, or the workplace ice breakers of which you made mention.




Woz said:


> Now, I don’t mean to belittle anyone’s experiences. I do think you can have meaningful vacation experiences. I just don’t accept that all vacation spending is good spending and all spending on material things is bad.


I am with you there. I do not wish to be seen as belittling the experiences of anyone else. If someone really enjoys living out of a suitcase and touching a home base only for a few days a year, it does not lie in my mouth to tell them there are better ways to spend their time or money. I'll not evan take tdiddy to task for the remark he made above, viz



tdiddy said:


> The idea of going to the same cabin on the lake every summer is as revolting to me as a impoverished metropolis is to others.


I have a hard time perceiving the idea of returning to the same lakeside cabin as even a bit tedious or boring, much less "revolting". But I'll accept that for tdiddy, it's not a pleasant prospect. I suspect that how one views many of these things is a corollary of one's upbringing. 

I grew up in Ontario. We had a summer "cottage" (a bit further north the nomenclature was "camp"; elsewhere "cabin") on a lake that had been in the family for a long time. I spent every summer there until summer employment and girls made summer life in the city more interesting. I loved that place. There was something of a cottage community there. A lot of other long-timers around. 

I had a small group of summer friends I saw every summer, but in the vastness of Toronto we were lost to one another for 10 months out of each year. One of those I remain in touch with to this day. I would have bridled at the idea of being told by my parents that we would not return to "our" lake, but to a different lake each summer, to stave off tedium or revulsion. I would have said "You go, leave me to here to be revolted!" That cottage, again, was an anchor for me. There, I had my own room and all that was familiar to me was there when the ice went off the lake and we returned the next spring. My fishing things were where I left them. My canoe and rowboat in the boathouse. I can still smell the old timbers in that building, if I think about it.

Notwithstanding my personal take on cottage life, some of my city friends did exactly that to which tdiddy alludes. Their families rented lakeside cottages, a different one each year. They apparently thrived on the variety. I never heard any complain that they wanted to trade places with me. The variety and changing landscapes were what they knew growing up and I am sure they have good memories of summers spent in a more itinerate fashion than what I knew. 

Thinking back, I did have something many did not. We had the cottage and a lake with good fishing in those days. My father loved to fish. He was always on the lookout for a "fishier" lake, where the lake trout grew bigger perhaps than in our lake. Or where pickerel were abundant, while none inhabited our lake. So he kept one boat on a trailer and from the time the ice went out on most Ontario lakes until it returned in the winter, we would make periodic sorties to other lakes. There we would camp, rent cottages, stay in lodges or whatever local circumstances dictated. I have a treasure trove of good memories of those times as well. It is really only at this writing that I now recognize that each of those trips could fairly be viewed as a vacation, even when occurring within a vacation.


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## GalacticPineapple (Feb 28, 2013)

Woz said:


> Now admittedly, I’m not a big traveler. I don’t tell people (other than anonymously on the internet) that I don’t really like to travel because people look at me like I’m an alien.


Dude, I am with you. I hate traveling.


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## Eclectic12 (Oct 20, 2010)

bgc_fan said:


> I may have been unclear. I mean if they had plunked down the $500k as the downpayment for a house, and rent out the majority of the house until they "retired", and then sold the house, they may have had a better return than what they got with Garth.


Part of what would have to be factored in is how long between the considered house was dumped and the retirement. It's also a crap shoot to figure out what reasonable rentals and costs would have been.





bgc_fan said:


> Eclectic12 said:
> 
> 
> > Maybe ... but then again with so many posts here on CMF about how cheap it is to rent versus buying in expensive Canadian markets, I'd want to do some checking before thinking all of the house costs would be covered (like property taxes, who is paying the utilities etc.) to make sure the numbers work.
> ...


I recall most of those posts highlighting one had to be careful and experience ... somehow I doubt the couple would have been up to par on the expertise end.

It doesn't stop them from potentially falling into a good situation that would have worked but it's not clear what the "apples to apples" could have been.


Cheers


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## nobleea (Oct 11, 2013)

Many people confuse traveling with vacationing. If you're just going to Mexico, Cuba, or DR and the only thing you change is *maybe* the resort you stay at, I wouldn't call that traveling. I'm certainly a traveler and many of our happiest memories are from traveling. I get that many people are not, but I'm a firm believer in spending on experiences rather than things. It's one of the best long term investments you can make since it will bring you joy for decades. There's different types of happiness. Short term happiness is forgetful. Do you remember what is was you watched on the tv 2 weeks ago? a year ago? Did it bring long term happiness? No, it's just filler. Happy filler, but filler none the less. Experiences become sign posts throughout one's life in the absence of significant events like a birth or marriage. Otherwise, years just blend together. One doesn't have to travel to get memorable experiences. Perhaps it's your favourite artist on a farewell tour and you get front row seats. There's a high end sports car driving school coming to our city next year. $2K for a day, but you get to throw around these high-hp sports cars around a proper race track with professional instruction. I'd never forget that. A hot air balloon ride over your city if you've never done it (fantastic, and I'm afraid of heights). Every city has skydiving available. Going with a bunch of friends to watch your home town team play in the rival's city. I'd argue that a cottage can be an experience too, as long as it's not every week and there are friends to do things with. We remember times of intense emotion and wonder and later in life that's all we really have (assuming the mind doesn't go). But I can guarantee you, that no one, in the history of the world, has ever sat on their death bed and thought " I wish I bought a bigger tv when I was young" "I wish we watched more Netflix"


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## Woz (Sep 5, 2013)

In general I agree with what you’re saying. The examples you gave are varied and sound like fun. The comment I’d make though is all those things are what I’d call facebook experiences. They look great on your facebook page and everyone ogles the pictures but I don’t think experiences have to be limited to those types of things. When it comes to happiness, what you’re doing isn’t as important as the variety of the activity and who you do them with. 

You don’t remember what you watched on TV two weeks ago because watching TV is fairly common and can be a solo activity. If you only watch TV once a year or if you have friends over every Sunday to watch Game of Thrones, I bet you’d remember/have good memories of it.


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## latebuyer (Nov 15, 2015)

Just a note tthat i think things can give you enjoyment if you are mindful of them. I'm not talking about big things but small things like my dishes, my tablerunner and a particular top i enjoy wearing. I have a beautul coffee mug that makes drinking coffee really enjoyable. Mindfulness to me just means being conscious of your surroundings so things don't become wallpaper to you. Still, i recognize mindfulness isn't a mainstream concept and is perhaps an introvertish thing to do.


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## tygrus (Mar 13, 2012)

I havent traveled much abroad but if the world I see on tv really exists, I dont have a desire to go too far. The politics and economy and beliefs and development of a place are important factors for me to consider first. 

I spent 3 weeks in the Philippines a few yrs back and couldn't stand it. Some natural beuty to the country but that was quickly negated by the poverty, oppressive heat, lack of amenities crowds and congestion and an over all feel of insecurity. Western Europe, US and Canad probably as far as I go.


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## nobleea (Oct 11, 2013)

Woz said:


> If you only watch TV once a year or if you have friends over every Sunday to watch Game of Thrones, I bet you’d remember/have good memories of it.


Possibly. Memories are stronger the more of your senses that are involved. Watching Tv is generally only two senses, hearing and eyesight. Compared to being at a hockey game, for example, and all your senses are engaged. Why certain smells can remind you of a particular place or event.


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## tygrus (Mar 13, 2012)

nobleea said:


> Possibly. Memories are stronger the more of your senses that are involved. Watching Tv is generally only two senses, hearing and eyesight. Compared to being at a hockey game, for example, and all your senses are engaged. Why certain smells can remind you of a particular place or event.


My kid peeing on the floor is more memorable than any hockey game I have ever been too.


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## nobleea (Oct 11, 2013)

tygrus said:


> My kid peeing on the floor is more memorable than any hockey game I have ever been too.


That is free and tough to schedule. We are referring to spending money here.


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## Mukhang pera (Feb 26, 2016)

tygrus said:


> My kid peeing on the floor is more memorable than any hockey game I have ever been too.


+1 tygrus.

This just points up how we all have differing views on what amounts to a worthwhile experience. 

I have never understood so-called "professional" sports. Nothing "professional" about any of it. You could not pay me to attend a hockey game or anything of the sort. And it's not because I do not know what I am missing. I have attended Stanley Cup finals at Maple Leaf Gardens (is it still around?) and baseball games at Dodger Stadium and a few other such things when I have been invited, and those doing the inviting have always provided the best seats in the house, or nearly so. Wasted on this kid. And I have told them in advance it's not my thing. But those doing the inviting have pressed on, thinking, I suppose, I'll get caught up in the wonder of the experience once there.

There was some kind of olympic event in Vancouver a few years back. A friend paid what I believe came to thousands of dollars to attend many days and events with his son. To me, I'd prefer to pay the same amount to be excused from attending, if I were told that attending was otherwise my civic duty and admission was free. But are all who can take any enjoyment from that stuff wrong? I don't suppose. They probably think there is something lacking in my makeup for not enjoying pro sports, but I am also nuts for living in the sticks, missing out on the exhilarating experience of living 30 floors up in a small box in Toronto or Vancouver.


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## Eclectic12 (Oct 20, 2010)

Mukhang pera said:


> bgc, I think "bad experiences" would have impressed themselves on my memory. Actually, I regard myself as rather fortunate in that in all my travels, I have had no real bad experiences. Some inconveniences, sure, but nothing to get upset about. I have even travelled to some places considered "dangerous" and have had friends suggest I was taking too much risk.


Good for you. Some let things that are uncontrollable or minor give them a risk of a health problem or worse! 




Mukhang pera said:


> On more mature consideration, I see that I could have couched my comments in more precise language, not appreciating the fine parsing to which they would be subjected by you and Eclectic.


Part of it is the medium ... there's not much beyond words to parse, compared to in person conversations. Part is that some have families who love to parse and/or explore to get a fuller understanding.





Mukhang pera said:


> ... For example, I have been in the UK, but only in London. So I have no difficulty remembering that I was in London. As an aside, someday I'd like to return to the UK and skip London. Today I think I might find the Yorkshire Dales more in concert with my present tastes.


They looked awesome on the train trip to visit relatives but I haven't seen more than the train window. Leicester, OTHO - I walked around, arranged a tour of the local university and met with the neighbours. BTW, I found it odd that the two little old ladies across the street had been retired from the gas company for about five years before deciding to convert to gas heating for their half of the semi!


Though part of the memories bit is not so much good or bad but other experiences pushing. I know when I read my travel journals even six months later, there's all kinds of stuff that has drifted into the background. Some stuff so impressive - it stays at the foreground (ex. thinking our DC-3 was going to crash into the jungle, then spotting the small runway and finally watching locals grab the wings/tail to spin the plane around on the spot before loading up again as there was no taxiway to turn around).




Mukhang pera said:


> All I said was what I might do in one narrowly-defined instance. I did not find fault with the researchers, criticize their methods (not that anything was said on that score) or their results. I did not suggest that what I might do was in any way normative or as setting an example to be followed.


However, with the lack of a qualifier for:


> I do not really accept the premise that people buy many things for their "allure".


or 


> ... I do not know in what pool the "researchers" were fishing, but what kind of shallow dolt buys anything to feel "special" ...


It reads like you are applying your personal view to all of the research subject and the researchers findings ... which is why I responded.

As much as I personally don't feel special for what I buy or expect it to be exclusive ... I have observed those who do.

Cheers


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## tygrus (Mar 13, 2012)

There seems to be a cut off on what people enjoy based on age and family status. Seems like when you are younger and single, you are more restless and crave adventure but after you are a bit older and your friends are married with kids and so are you, you are content with simpler things. A day in the park on the grass with my kids beats a trip to macho pichui or something like that every time for me now. Adventures I can share with my kids are the best of both worlds.


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## Eclectic12 (Oct 20, 2010)

Woz said:


> I think a lot of the experiential vs materialistic research has been twisted a bit. Experiential purchases has morphed into meaning exclusively travel/vacations (typically overseas) and materialistic purchases has morphed into meaning any purchases of goods.


I suspect there needs to be something in the research to classify it and check that the research subject is being accurate as YMMV by each subject.




Woz said:


> Same with the new truck to drive around Canada and the U.S for 4 weeks.


I bought the bigger car to have a more comfortable ride when visiting relatives (mostly an experiential trip) ... however, most of it's daily use to to get to/from work (pretty much exclusively not an experiential thing!).

If I was part of the study ... which is it?




Woz said:


> ... Now admittedly, I’m not a big traveler. I don’t tell people (other than anonymously on the internet) that I don’t really like to travel because people look at me like I’m an alien. I think there’s a large group of people that only travel for the status aspect.


Interesting ... it seems pretty much even between the people I know who stay in-province (in some cases within a 100 km radius) and those who travel to sunny areas in winter and places like Europe etc.

The one who puzzles me is my brother-in-law. As long as the activities are something he can't do at home - he's happy to travel. When his wife sits down with a stack of books to read as she can't do anything about about say the laundry at home, he gets annoyed and thinks it's a wasted trip.


Cheers


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## nobleea (Oct 11, 2013)

Eclectic12 said:


> I bought the bigger car to have a more comfortable ride when visiting relatives (mostly an experiential trip) ... however, most of it's daily use to to get to/from work (pretty much exclusively not an experiential thing!).
> 
> If I was part of the study ... which is it?


For sure materialistic. If I bought a new luggage set for traveling, that would be materialistic as well as it's just a tool to get to the experience (in your case, the experience being with your relatives). Would the experience be vastly different if you hadn't bought the bigger car?


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## Eclectic12 (Oct 20, 2010)

nobleea said:


> ... Would the experience be vastly different if you hadn't bought the bigger car?


Yes as the newer car results in fewer aches and pains.


Cheers


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## Woz (Sep 5, 2013)

Eclectic12 said:


> I suspect there needs to be something in the research to classify it and check that the research subject is being accurate as YMMV by each subject.


In the research an experiential purchase is anything that the subject considered to be an experiential purchase.


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## StayThirstyMyFriends (Jul 29, 2016)

As a kid, I lived in the UK for 6 months. As a teen, in south america for 6 months, in my 20's I lived in asia for 3 years. In my 30's, I lived in europe for a year. Working and/or going to school. I remember a lot about those experiences. Since then, sure, I travel for work and for vacation, but it definteyl isn't the same. Living abroad, meeting people, making life-long friends, learning languages, learning cultures, and finding out about other people's "normal"... that is really satisfying to me. If I were these Millenial Revolution bloggers, I'd probably stop globe trotting and start settling down in different areas abroad to teach or something, and really connect with the people like you can't really do as a tourist. I think it is a wonderful experience... much more fulfilling than typical "travel" in my opinion.


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## bgc_fan (Apr 5, 2009)

Mukhang pera said:


> bgc, I think "bad experiences" would have impressed themselves on my memory. Actually, I regard myself as rather fortunate in that in all my travels, I have had no real bad experiences. Some inconveniences, sure, but nothing to get upset about. I have even travelled to some places considered "dangerous" and have had friends suggest I was taking too much risk. Perhaps so, but danger never manifested itself. Permit me to say it before you do: perhaps I was too ignorant, stupid, foolish to recognize the dangers all around and just dumbass luck saved my worthless butt. There, that should in some measure reinforce your sense of superiority.


I'm not sure where you get the impression that I had some sense of superiority. The impression that I got from your post was: I'm an experienced traveler and can't believe people think that traveling experiences are worth more than buying stuff with an undercurrent that anyone that thinks different from me is an idiot. The only reason why I said that you travel a lot is that when someone does do that, they can get blase about the experience and it's nothing new. The only reason why I said bad experience is the fact that you ended off your post with a sarcastic sentence saying that maybe in the future you'll look fondly on the food poisoning that you had on one of your trips.

I was trying to point out that your experience is not necessarily the same as others which is why others may value traveling.



Mukhang pera said:


> So what's your point? All I said was what I might do in one narrowly-defined instance. I did not find fault with the researchers, criticize their methods (not that anything was said on that score) or their results. I did not suggest that what I might do was in any way normative or as setting an example to be followed.


My only point, which I obviously didn't articulate, is that while you opt for the object it is not particularly abnormal and that I'm sure many others would as well. I was pointing out that the researchers results probably wasn't that 100% would opt for experience over goods, but the percentage could be as low as 51% and still have the same conclusion.


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## bgc_fan (Apr 5, 2009)

Eclectic12 said:


> Part of what would have to be factored in is how long between the considered house was dumped and the retirement. It's also a crap shoot to figure out what reasonable rentals and costs would have been.


I think I was still unclear. They retired in 2014 right? What if they had bought their house back when they originally wanted to in 2010-ish and then sold it at 2014 (as an option)? Would they have did better that way instead of going with Garth and investing with his sub-market returns? Yes, it takes some work to figure out the exact figures, but when I glance at the blog site, all the visitor comments seem to hold them as geniuses. I would think they could have had the capacity to work it out, but they just seemed to discount the option. 



Eclectic12 said:


> It doesn't stop them from potentially falling into a good situation that would have worked but it's not clear what the "apples to apples" could have been.


When I say apples to apples comparison, I mean their living style while they were saving up, i.e. they found cheap rent (maybe a basement apartment or something), so what if they bought a house and still maintained that living style? Instead of changing their lifestyle to use up the whole house, they rented the rest out, so that really they would be as frugal as before, but instead of their savings going into the market, they are used for paying down the mortgage?


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## Mukhang pera (Feb 26, 2016)

StayThirstyMyFriends said:


> A Living abroad, meeting people, making life-long friends, learning languages, learning cultures, and finding out about other people's "normal"... that is really satisfying to me. If I were these Millenial Revolution bloggers, I'd probably stop globe trotting and start settling down in different areas abroad to teach or something, and really connect with the people like you can't really do as a tourist. I think it is a wonderful experience... much more fulfilling than typical "travel" in my opinion.


I concur wholeheartedly STMF. Like you, I have spent time living in other countries and that is where the real appreciation of those places can be found. Apart from Canada, I have lived in the southern US and in SE Asia, in each case spent time measured in years. I bought homes, cars, settled in like a native. I learned to be fluent in one foreign language (and not-so-fluent in another) that I still use. As an aside, for me, learning a language is a bit of a waste if it lapses into disuse. And I have found it difficult (and a bit pointless) to contrive situations in which to use a language you might not otherwise use.

A couple know might fit STMF's "Millenial Revolution bloggers" tag. They are now in their 40s. They work for a year or so, live like paupers, then take off for months, hitting as many countries as they can, then come home broke and repeat the cycle. They have a website detailing their trips and purporting to gave advice to the like-minded. It makes them happy, I suppose, but to me their life would be punishing. As for saving for retirement? Maybe they'll be able to live off the memories of how many airports they cleared in record time.


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## latebuyer (Nov 15, 2015)

Has anyone seen the details of the study on experience brings happiness in terms of if there has been more then one study, if it is a valid study and how many people were studied? I sort of see this as the story du jour reported in the media and possibly taken out of context. As one poster said how is experience defined? One study doesn't make it so. Having done my own reading on this topic i think the long term research shows its relationships that make you happy. No i'm not saying people should run out and buy things but i don't like to feel somehow inferior because i like a nice liking home. And no i rarely have visitors so it isn't about status.


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