On July 1st 2017, I started a new life. I had officially quit my job and start working full time on my dividend investing service Dividend Stocks Rock. On that day, I officially retired from the corporate world, but I didn’t exactly reach F.I.R.E. (Financial Independence and Retiring Early). The FIRE story is getting lots of traction among financial bloggers and it’s even more popular for dividend bloggers.
The idea is quite simple; not having to wake up and work all day to pay for your stuff. When you are FIRE, you wake up in the morning and do pretty much whatever you want because you don’t need to work to earn money. Or…. What other people call “work”, you give it a different name. When you think about it, if you manage 5 rental properties, it is work… unless you like it and call it “managing my properties”. Same rationale can apply to pretty much any money-making activities. So before I explain to you why I still have one year left before reaching Full FIRE, let me explain my own definition of this well-debated concept.
My definition of FIRE
Many FIRE bloggers discuss how to become frugal and save most of your money. Then, the whole idea is to build a nest egg that equals about 25X (or more) of your yearly budget. You put this money to work and you basically have nothing else to do.
Some others will tell you how they worked like crazy, made lots of money (from their job or by selling their company) and retired early on their savings. Interestingly enough, most of those people still “work”. They either actively blog, get paid to speech at events or have all kind of other side hustles. Why would they do that if they are financially free? Are they a fraud? Not at all. The point is quite simple; regardless the amount of money you have, you still want to live your dreams, do activities you like and keep busy. Staying at home on your rocking chair all day isn’t exactly what people are looking forward to.
This leads to my definition of FIRE. It is quite simple and includes only 2 elements:
#1 Waking-up each morning and be excited about my day. Then, going to sleep telling myself how great/amazing/awesome my day was
Okay… that’s a bit idealistic. Let’s say 5 days out of 7 then!
By quitting my job and now “working” on my own business, I almost reached my first point of being FIRE. Building your own business is like gardening your life project. You want to wake up and start doing it as soon as possible to watch it grow. This is why I wake up at 5am and I’m on my computer before 6. I will most likely “work” on my sites until I turn 75 or I can’t anymore.
#2 Being able to do whatever I want, whenever I want
The idea of having a business I can run online is to be able to do whatever I want, whenever I want. I have never been good at being frugal. Since I came back from my year-long RV trip, I don’t buy stuff anymore. I have what I have and tend to sell a few things and not buy anything new. The only new thing since I returned was a computer for my business and a conference table… for my business.
I don’t need to possess things to be happy, but I need to live experiences. I need to feel the adrenaline. The trip to Guatemala or the road adventure in the Maritimes I just had with my family is part of the adrenaline rush I want. This is where I spend most of my money: adrenaline and my family. Unfortunately, those things don’t come frugal when you have three children including two teens eating more than me!
Dealing with frustrations like
When I read other blogs about FIRE, I usually read about how “easy” it is to make frugal choices, save your money and become FIRE. I rarely read about frustrations and the “cost” of cutting down on all expenses. Most FIRE adoptees will tell you that “you are not ready” if you still think about sacrifices. Sorry people, I’m not the new Karate Kid!
If I wanted to be fully FIRE today, I would have to sell everything I have, buy a small house in the mountains in Costa Rica or Thailand and then, I could live on $2,000-$3,000 per month. The problem is that my children would never forgive me for taking them away from their friends. This is the kind of cost I’m talking about.
In order to be “free”, first you need to be “caged” by several restrictions. Regardless of what you like; you will have to become more patient and not have it as fast or as often as you’d like.
Saying “No” to Vietnam
When I came back from my trip, I had only one thing in mind: my next one. The goal was to fly to Vietnam for 2 months in early 2019. Since March, I was looking at airplane tickets. I stalked their prices going up and down for several month until I found an amazing deal: $776 CAD per ticket! And this is when the realty hit my face with a baseball bat; I’m not financially ready yet.
Since I’m very good with numbers, I could make them work. I could find the money and make it happen. But I realize that if I do that; I will not become fully FIRE. This means that I will continue to walk on a tiny rope, trying to cross the Grand Canyon.
So instead of buying my airplane tickets at a crazy price, I had to tell my family that we have to postpone our trip to 2020. When I came back in 2017, I had no money left aside and the business was just starting. It’s already a great feat that I turned this situation around and we can live from it already. I just can’t push the button a little further. I need a strong financial structure first.
Renting my RV this year, Selling it in 2019
I still have one expense remaining from my trip in Central America; my RV! Including my loan payment, insurances, maintenance and taxes, I estimate the cost of my RV is about $7,000 per year. A part of the loan payment is paying off capital, but the $7K still gets out of my pocket yearly. I didn’t want to keep it, but I owe more than it’s worth (this was expected). I finally found a solution to my problem! I recently started to rent my RV on Outdoorsy. It took me 15 minutes to put it online and I got requests right away! I already booked it for 3 weeks and will make about 2K in August. I expect to keep renting it until I can sell it in 2019. By renting the RV, I can finance a part of its costs and eventually clear that payment from my budget sheet.
Unfortunately, that’s about the only place where I can cut in my current budget. Therefore, I need to find other ways to get FIRE faster!
Patience… this is definitely not my strong suit
Working hard, keeping my head down and saving for several years are not part of my motto. It was a very difficult decision for me to say “no” to Vietnam and the whole purpose of writing this article is to get over it. I have one thousand projects, and I want to make them happen today.
I took a week to be frustrated about not leaving in 2019, but this ends today. I need to focus back on my business, make it grow and then, reach full FIRE in 2020. I will obviously not build a nest egg that worth 25 times my yearly budget in a such a short period of time. Instead, I will build a business that generates 2-3 times my monthly budget. If you make 20K per month and you spend only 6K, then you don’t need to worry about what is coming up next. You can then really do what you want and when you want!
The whole purpose of postponing my trip to Vietnam in a year is not just about this trip. The idea is to wait another 18 months and then be able to do such trips each year without looking back. I can only imagine where I will go in 2021, 2022 and so on…
This is the definition of being fully FIRE, what about yours?