Wealth for Your Life

Disclaimer: I am not a financial advisor. None of this is financial advice. I encourage you to do your own research.

It’s still dark in our hotel room with the curtains closed. Victor is usually up before me, at the gym or reading an article in another language. But this morning I’m up even earlier than him. I put on my hotel robe, quietly make a coffee, tip toe outside to the balcony. The sun is rising on the horizon. Pinks and purples paint the sky.

I pull out my phone. Today is the day. The day I have been waiting for. The day I wished for years ago in Winnipeg, and again along the shores of Lake Nippissing. Back when I was worried about my future.

But today the future is as bright as the sky. For the first time, my portfolio is 7 figures. A million dollars staring back at me. And my annual expenses for this past year, including this last-minute trip to Barbados, came in under 40k. I am financially independent.

I watch the sun light up the sky, hear the world come alive. Two women bob in the morning waves below. Birds chirp, palm trees sway. The balcony door opens and Victor appears in his hotel robe, his hair ruffled, holding a cup of coffee.

“Morning sunshine!” I say. He puts his arms around me and we breathe in the warm, humid Caribbean air. I pray I have a million more days like this. Days to sip coffee on a balcony with Victor, to listen to the birds, to just…be. I’m going to enjoy every single moment.

“What do you feel like doing today?” Victor asks. “Get a workout in, grab a nice breakfast, hit the beach? Looks like it’s gonna be a hot one!”

I take one last look at the sky, now a bright blue, cotton ball clouds passing. I will never be separated from Victor again, never be forced to take a job I don’t want. I have no worries, no fears. My life is my own, the world a glittering treasure waiting to be discovered.

“Yes,” I say, turning to Victor and running my fingers through his hair. I pull him close and kiss him softly on the cheek.

“All of those things. I want to do absolutely everything.”

The End

Thank you from the bottom of my heart for reading this far! I sincerely hope my journey to financial independence will help you build wealth for your own life. And I hope you continue to join me on this blog as I follow the ups and downs of the turbulent stock market while exploring ways to live a healthy, wealthy life.

Disclaimer: I am not a financial advisor. None of this is financial advice. I encourage you to do your own research.

The empty two-bedroom condo echoed as I walked along the hardwood floors and opened the balcony door. July’s oppressive heat hung heavy. Our second-floor unit looked out on a cluster of trees, some pine, a gentle reminder of the northern land I had left behind. Just one month ago we had given away everything no longer needed for our new down-sized life in Toronto. Salad spinners, pots and pans, backyard furniture littered our manicured front lawn with a ‘free’ sign. Neighbours were confused. Who just gives away perfectly good stuff?

“You sure you don’t want money for the couch?” one neighbour had asked.

“Please take it,” I said. “You’ll be doing us a favour.”

We took any extra clothing and kitchen items to Salvation army. Blankets, towels and pillows went to the Humane Society.

“I just love giving away stuff,” Victor said. “I feel so free!”

Finally, on a sizzling day in July we locked up the house one last time, placing our key in the lock box. We would spend two nights in a hotel in North Bay, then in Toronto, then move into our new place once our stuff arrived. We were back to living out of our backpacks in a hotel, and I was in my element.

Closing day arrived. I awoke nervously. What if the new buyers found an issue with the house and refused to close? What if we had to drive back? What if our lawyer made a mistake with the wire transfer and sent my 178k to someone else? I breathed calmly throughout the day as the clock ticked slowly.

Finally, a brief yet clear email from our lawyer: “House has closed. Will wire funds shortly.”

“Is the money there yet?” Victor asked over text.

“I don’t see anything,” I wrote as I refreshed my bank balance over and over. Nothing but a few dollars in my chequing account. Until…

“Holy crap it’s there!” I said aloud. “It’s there!!!” I texted Victor.

“OMG mine too!” he wrote back.

I sent him a giff of a champagne bottle popping, and went to put a real bottle in the fridge.

Even though I invested the 178k over two days, it was the largest single purchase of an index fund I had ever made. I used limit orders to ensure nothing went wrong with the purchase. While you will always get the ‘market price’, a random blip can shoot the market up or down seconds after you place your order, as the Canadian Couch Potato explains. To set up a limit order when purchasing, look at what the ETF is selling for. In July 2023 I was purchasing Vanguard S&P 500 Index ETF (VFV) which was selling for 106.37. I set my purchase price a few cents higher, at 106.40, to ensure there would be no issues with my purchase.

With the click of the button, my down payment, profit, and three years in North Bay was now invested in the S&P 500. My portfolio was now up to 940k, gaining by the day and churning out dividends every quarter. At the time of this writing two years later, the S&P 500 has risen and the Canadian dollar has fallen, resulting in a 38% return for VFV. My 178k investment has since grown to 245k, plus dividends. Sure there have been dips, but the 70k profit has endured, essentially paying back any money I spent renting over the last two years.

I am so glad we didn’t buy a condo.

Repeatable steps I took that you can too!

• When using large amounts of money to buy or sell ETFs, always use limit orders to ensure you are setting a limit on the price. Justin Bender of PWL Capital has some great YouTube videos on how to purchase ETFs by using limit orders. His playlist can be accessed here.
• Celebrate the wins and milestones along the way

Disclaimer: I am not a financial advisor. None of this is financial advice. I encourage you to do your own research.

My head was spinning. Having scrolled through page after page of realtors, we were having trouble deciding which one we should contact to help us sell our house. They all looked eerily similar. Blazer, chicklet smile, coiffed hair, arms crossed in a confident, yet approachable stance.

“What about him?” I pointed to an older gentleman.

“Kenneth Clarke,” Victor read, leaning forward. “Says here he’s got 25 years’ experience, and was voted number one in sales last year. Wow, look at all the 5-star reviews!”

“It’s ringing,” I said, after dialing his number. I left a message.

Two minutes later Kenneth rang.

“Hello, thanks for calling! Yes, real estate is what I do. I would be happy to help you sell your house. I can be there in 20 minutes. As mentioned, it’s what I do!” Kenneth sounded extremely eager for a real estate agent who had placed number one in sales last year.

“Uh, today might be a bit early, how about tomorrow?” I asked, glancing cluelessly at Victor.

“Perfetto-mundo!” he said, hanging up.

The next day we were giving Kenneth the grand tour of our beloved, yet high-maintenance home. Although we would be moving to Toronto in a few months’ time, we were still proud homeowners.

“You’ve lost the seal on your windows,” he pointed out. “And your steep driveway is going to scare away families and seniors. There are only a few types of buyers who would want this house.”

Maybe I’m a glutton for punishment but I was grateful to have Kenneth critique every spare corner of our house. He seemed to know his stuff, and I appreciated his honesty.

“So,” he said, finally sitting down with us in the living room. “Here are some comparable houses in the neighbourhood that sold last year.” He handed us each a printed handout stapled together.

“As you know, the North Bay property market exploded after Covid. Your house has gone up in value. You bought it for 450k, I think it will sell for 650k.”

Victor and I both almost dropped our hand-outs.

“I’m sorry,” I said, “Are you saying you think we could make 200k on this house? After living here for only three years?”

“I’m hoping,” Kenneth said, glancing nervously out the window. “But the market could change any day now…I suggest we price it lower, say 625k. If we price it too high, we’ll scare away potential buyers. In the meantime, it would be good if you could fix the seal in the window, fix the living room blinds. Maybe arrange for a home inspection. My personal cleaning lady can come by next week. That’ll be $200. We’ll take photos and video the day after, have this place in tip-top shape and on the market next week.”

“That’s…a bit fast?” Victor said. “Let’s maybe take one thing at a time.”

“Absolutely,” Kenneth said straightening. “My number’s on my card, we’ll move forward whenever you’re ready.”

“He seemed to know his stuff,” I said to Victor after Kenneth had left. “Imagine if we make a 200k profit on this house?”

“He seemed pushy,” Victor said, thoughtfully.

“I know, but when we told him to slow down, he seemed to respect that,” I said. “We do need to sell the place, and he has great reviews. Do you want to call a different real estate agent?”

“I don’t know,” Victor sighed. “They’re probably all like that.”

After spending another hour scrolling aimlessly through a sea of realtor glamour shots, we agreed we would go with Kenneth. He clearly anticipated that the market was about to turn, and if we could get our house on the market before any similar listings popped up, maybe we really would get 650k for the house. Even 625k would be life-changing money for us. We didn’t want to waste any precious time.

If you think managing a house in the day-to-day is a lot of work, try getting one ready to sell. It’s an exhausting marathon of cleaning, carrying couches up and down the stairs and re-arranging furniture to create “airflow”. Potential buyers need to be able to picture themselves living in your house, so you have to hide any personal objects that may distract them from that fantasy. Family photos, blenders, blankets, sweatshirts all must be put away. Then you need to fix whatever issue the realtor points out, in our case the living room blinds. It was not possible to replace the windows in time due to shipping delays, a set-back I was grateful for. After Kenneth’s cleaning lady had polished the floors, it was time to take some photos. Kenneth and his assistant Norm spent an hour photographing every angle in every room, putting together a 3D model and flying a drone over our neighbourhood for the promotional video.

“Do you think we should wait for a brighter, sunnier day?” I asked Kenneth, looking through the window at the grey clouds.

“No, this is fine, the house shows well,” he said quickly.

Just three weeks after we had called Kenneth our listing was ready to go. Kenneth agreed to wait until after the weekend to post the listing so we could enjoy a few days of quiet before potential swarms of buyers showed up. But that didn’t stop his realtor wife from calling and trying to get her clients in to see the house off-market. Victor was right. All realtors were this pushy!

On Monday morning at 10 a.m. our listing was live! By noon we had a showing, and another scheduled for Wednesday afternoon. Victor and I left the house to give the potential buyers privacy, just like our sellers had given us when we first toured the house three years earlier. We walked up and down the street, glancing at the two cars in our driveway. After 45 minutes, the potential buyers and their realtor were still there.

“What’s taking them so long?” Victor asked.

“Let’s just give them 5 more minutes, and then we’ll go back,” I said. Whether these people ended up buying the house or someone else did, it was clear the house was no longer ours. I squeezed Victor’s hand as we walked in the rain, down the hill that we had once driven up three years ago. As we walked further away from the house, I realized I had everything I needed, right here with me.

We returned to Kenneth’s assistant Norm locking up the house and placing the key in the lockbox.

“They love the house,” he said, transparently. “I think they’re going to make an offer!”

Victor went back to work for the afternoon, and I collapsed on the couch. I wasn’t sure how many more of these showings I could take. They were exhausting! We still had another one lined up for Wednesday.

At 4 p.m., my phone rang. It was Kenneth.

“I have an offer for you,” he said. “I’m on my way over.”

“Already?,” I asked, “We’ll need to wait for Victor though. I think he gets off work at 5 p.m.”

“I’m in the neighbourhood anyway, be there in 10,” he said, hanging up before I could protest.

I rang and texted Victor. I wasn’t about to review an offer without him here. He said he needed to wrap up a few things at work. Could I call Kenneth and ask him to come over a bit later? I rang and texted Kenneth, with no answer.

Minutes later, Kenneth was outside my door.

“I’ve been trying to call you,” I said. “Victor needs some more time.”

“Oh, my phone must be off,” he said. “I’ll just wait in the car until he gets here.”

30 minutes later Victor was home and the three of us were back in the living room. Kenneth pulled out a piece of paper from an envelope like a magician performing a trick.

“As I said, I was hoping we would get 650k for your house. I think you’ll be pretty pleased with this one,” he said, placing the piece of paper in front of us.

I took a double take. The offer read 690k, no home inspection required. A profit of 240k to live in a beautiful, cozy house for three years. In that moment I forgot all the stress and maintenance it had taken to run this home. Instead, I felt…dirty? How was it that we could each be making the equivalent of an annual corporate salary for simply getting into the housing market at the right time? And how could I ask a nice couple to give us that much money?

“Should we just give them the house?” I whispered.

“No!” Victor laughed.

“It’s a really good offer,” Kenneth urged, pushing the paper towards us and handing us a pen. Before we knew it, we had signed. We had sold the house.

“The buyers will be really happy,” Kenneth said. “They have been looking for a house on this street for over a year.”

“Are they your clients?” Victor asked, suspicious.

“They’re Norm’s clients,” Kenneth responded casually.

So that’s what had happened. Kenneth and Norm were in cahoots together. Norm had the buyers lined up the whole time. That’s why Kenneth was so eager to get the house on the market, and to get their offer in before any other showings. He was desperate to make the sale! I would be lying if I said I wasn’t a tad miffed. As first-time home sellers, we felt taken advantage of. Could we have waited for more, higher offers? Or would these buyers have walked away if we had declined their time-sensitive offer, never to return? Afterall, they say your first offer is your best offer, and the house did need a bit of work. It needed a new driveway, fence, windows, all of which would have cost a good 10k or more. Would they have had time to think about it and change their minds? Who knows. In the end we both learned to make peace with the experience, but it was a life lesson in real estate, one I don’t care to repeat.

In the end, our 450k investment on the house had paid off. Even with 20k spent over three years on property tax, home insurance, utilities and maintenance, we had made a profit of 220k and built equity in the process. When the house closed in a few months’ time and our mortgage balance had been paid off, we would each receive 178k. What would we do with this windfall? Should we invest it in the stock market and rent our next place in Toronto? Or should we put it towards the down payment of a condo? We broke out the spreadsheets and considered the following:

• What would our monthly carrying costs be to buy a condo in Toronto vs to rent one? Even if a condo was a good investment, were we comfortable spending that much money on a larger mortgage, maintenance fees and property taxes every month? We wanted to have at least some money to enjoy the city.
• We had gotten extremely lucky in real estate in just three years. Would lightning strike a second time? Would a second property yield stellar returns in a few years’ time?
• The stock market appeared to be in the early stages of a new bull market. If we each invested our 178k in the stock market and the markets returned even modest gains over the next three years, how much would we need to sell our condo for to match what we could potentially make in the stock market?
• What if we invested our 178k and the stock market took a dive? Were we comfortable with that?

Using these questions as a guide, we ran the numbers for a two bedroom condo in Toronto which we expected to pay 900k for (yes, that’s how much condos were going for in Toronto at the time). We looked at the listing to get the exact property tax, maintenance fees, utilities etc.

• $350,000 down payment meant we would need a $550k mortgage
• $550,000 mortgage payment at the 2023 rate of for 3 years = $3,208 per month. Note: While changing interest rates can increase or decrease your mortgage payments, once you eventually pay off your mortgage your costs will decrease. If you choose to rent, your rent can increase over the years, although if you can find a rent-controlled building then your rent will only increase a small amount each year.
• Property tax = $259 per month (this cost will increase over the years with inflation).
• Condo maintenance fees = $1,200 per month (Note, this particular building had higher maintenance fees but they covered everything from utilities to cable and internet). This cost will increase over the years with inflation.
• Ongoing maintenance or replacing of appliances = $100 per month (this cost will increase over the years with inflation).
• Water bill (we wouldn’t have to pay this if we were renters) = $100/month.
• Total monthly costs = 5k a month to own the condo when we could rent a similar unit in the building for $3,400/month. This meant we would be spending $1,500/more on owning the unit, which we would not be investing in the stock market.
• Closing costs such as 5% realtor fees, legal fees, land and transfer tax when purchasing (the Canadian Forces generously covers these costs because military families move around so much, but regular folks will need to take these extra costs into account when buying or selling a home) = 45k for 5% land transfer fees, 20k for Toronto land transfer tax.
• Opportunity costs of the 350k invested in the stock market plus the lost $1,500/month in equity and opportunity costs (18k/year over 3 years = 54k) making 6% annually compounded over 3 years = $127,600

Ultimately we decided that we would have to sell the already overpriced condo for $1,027,600 in three years’ time to compete with the expected returns of the stock market. Even a basic GIC was offering 4.93% annual returns at the time. I was also looking forward to going back to renting. No appliance fixes, no trips to Home Depot, no gas leaks. We ended up signing a lease for a nice 2-bedroom condo plus den with two bathrooms, free parking, cable and internet, a pool, gym and outdoor mini-put for $3,400/month. We would be moving into our new place one month from now. Closing day was fast approaching. Soon we would be careless renters with $178k each in our bank accounts. I couldn’t wait!

Lessons learned to help you with your home sale

• I hope you can learn from my mistakes. We had such a great experience with Suzanne our first real estate agent that we may have been too trusting when it came time to sell the house with Kenneth. Don’t be afraid to interview a few different realtors. Ask them why you should pick them over all the others. Tell them you want to wait at least a week for offers to come in. Review recently sold comparable properties on Housesigma to get a sense of what your home could potentially go for. And realize that whatever offer you go with, you’ll always wonder ‘what if’ you had gone with a different one. It’s probably best not to think about it.
• If you’re considering purchasing a place, feel free to use our analysis. You can substitute our numbers with your own to see if it makes sense for you to rent or buy. Remember, the right answer is the one that makes sense for you and your life, no matter what anyone else says.

Disclaimer: I am not a financial advisor. None of this is financial advice. I encourage you to do your own research.

By the spring of 2023 the markets were green year-to-date! We were still far from our historic highs of December 2021, but with the bear market of 2022 in the rearview mirror and inflation coming down, 2023 was shaping up to be positive. Around this time, on a warm Sunday morning Victor and I were getting ready to leave on vacation. After years of Covid-related travel restrictions we had booked a dream trip to Greece. I was busy checking everything off my list to shut the house down for two weeks. Clean out fridge and empty garbage, check. Turn the air conditioner off, check. Make sure back door is locked, check.

“Want me to turn off the water?” Victor asked. Over the years he had picked up a few home maintenance tricks himself.

We went down the stairs to the basement and opened the door to the furnace room. An undeniably strong smell of rotten eggs slapped me across the face.

“What’s that smell?” Victor asked, alarmed, his eyes widening. I sniffed the air.

“Gas!!” we both exclaimed.

“We gotta get out of here!” I shrieked, taking his hand and bolting up the stairs.

“Calm down,” Victor said. “Where are you going?!”

“She’s gonna blow!” I screamed, dragging us both outside and collapsing onto the driveway. My heart racing, I fumbled for my phone, dropped it, somehow managed to Google Enbridge and called their emergency line.

“We have a gas leak!” I screamed into the phone. “Our house is going to explode!”

“Calm down ma’am, natural gas is fairly safe. Just open some windows and we’ll send someone over within the hour.”

“Within the hour??” I cried, my voice cracking. “We’re supposed to be leaving on vacation!”

“It’s okay sweetheart,” Victor said calmly. “I’ll go open some windows.”

“Oh my God, be careful, and do NOT light a match!” I yelled as he disappeared inside.

75 minutes later the Enbridge guy was in our furnace room, waving a long yellow wand across our furnace equipment. As he passed over our hot water tank the wand started beeping uncontrollably.

“There’s a leak in your hot water tank,” he said. “Looks like the leaking water has put out your pilot light. The gas valve keeps releasing gas but there’s no flame to light it, so it just keeps releasing more…”

“Okay, so what do we do?” we both asked, as clueless as the mice scurrying in the dark corners of our basement.

“I’ll turn the gas off, but you’ll need to call Reliance to replace the tank. Hopefully they can do it today.”

I explained that we were planning to go on vacation. We had a plane to catch from Toronto the following evening.

“If you call them now, they should be here soon,” he said, writing up a report.

I asked him what would have happened if we had left for vacation for two weeks without noticing the gas leak.

“Let’s just say it’s a good thing you caught it when you did,” he said handing me a stack of papers.

Even though the gas was turned off the whole house still reeked so Victor and I went outside to call Reliance.

“Thank you for calling Reliance Home Comfort,” the voice on the other end cooed. “Oh, I’m sorry to hear you’re having trouble with your tank…yes they should be able to make it as early as…tomorrow.”

“Tomorrow??” I said, panicking. “No, no, you don’t understand, we need to have this fixed today! We’re leaving on vacation tomorrow. We have a flight to catch!”

“I’m sorry m’aam, it’s a long weekend, there’s no one available.”

“Please,” I pleaded. “We can’t leave a leaking water tank for two weeks.” My chest tightened as I pictured 50 gallons of water bursting from the tank, a tidal wave crashing against the furnace room door, leaking out into the basement causing thousands of dollars in water damage while I toured the Acropolis unaware.

“Let me see what I can do, stay on the line,” the voice said.

As I listened to the Call on Reliance jingle on repeat, my buttocks digging into the cold concrete of our driveway, I remembered a quote from JL Collins’ Manifesto:

“You own the things you own, and they in turn own you.”

It had never been truer than in this moment. Our beautiful house that had given me so many memories over the last three years was now owning me. I couldn’t just up and leave for a vacation with my passport and backpack, I was at the mercy of the heating & cooling industry. And perhaps even more concerning, if we had not noticed the gas leak and left on vacation for two weeks, the gas would have continued to emit each day that we were away, building up to potentially toxic levels. Would we have returned to a poisonous situation making our home unlivable? Would teams in yellow hazmat suits have to be called in? What if the slightest spark from an electrical wire or light bulb ignited the gas and blew up the house, our 450k investment ending up on the 6 o’clock news? It was all too much for my anxious mind to handle.

“I have good news,” the voice said, returning. “There is a weekend Reliance expert just three hours away. He should be there this afternoon between 1 and 4 p.m.”

Four hours later, Keith the Reliance home comfort guy was examining the damage in our furnace room. “Yeah, I’m not going to be able to replace your tank today, we’ll have to order a new one,” he said. “But I can drain ‘er so it don’t leak while you’re gone. You don’t happen to have a garden hose, do ya?”

Together, Victor, Keith and I hooked up our hose to the hot water tank and spent 45 minutes draining 50 gallons down the laundry sink, trying not to slip as we mopped up buckets of spilled water from the linoleum floor. When it was all done the gas was off, the water was off, and the hot water tank was disconnected. But as a double-checker I still wasn’t convinced.

“So you’re sure there’s no way the water can suddenly start flowing while we’re gone?” I asked, seeking some sort of reassurance that Keith could never give me.

“Sure am,” he said. “Have a good trip and we’ll install’er when you’re back.”

Somehow, we locked up the house a second time, drove four hours to Toronto and boarded our flight to Greece. The trip was a dream. We flew to Crete where we explored Knossos Palace on a beautiful warm spring morning, the mountainous terrain surrounding us as we took in the ancient wonders of the peaceful ancient Minoan civilization. In Athens I felt a sense of freedom after hiking all the way up to the Acropolis, the wind in my hair as I looked out over the blue Aegean sea, the ferries below sailing to distant mediterranean islands. We floated in the rooftop pool while gazing at the Acropolis from the sun-sparkled water. We walked through the ancient Agora, in the footsteps of Aristotle and Plato, and stood where Socrates famously drank the poison that would kill him. And in a humorous display from the Greek god himself, we ran laughing through a dark, practically electric thunderstorm while visiting Zeus’s playground. Ancient marble and bronze sculptures beckoned me to return to this beautiful, sacred land, to the relaxed Mediterranean way of life. But all the while I kept thinking about the house. Were the water and gas valves secure? What if something else went wrong? I was in Greece, but every night my anxiety flew me back to Canada and I would wake up in a cold sweat, worrying, unable to relax.

The Greeks have an ancient philosophical expression, “know thyself”, inscribed on the Temple of Apollo in Delphi. Throughout my journey towards financial independence I had come to know my true self. I had discovered that minimalism made me feel at peace. The fewer material possessions I had weighing me down, the happier and more at peace I was. I thought back to that carefree month I spent living out of my backpack in a 3-star hotel on the shores of Lake Nippissing. Whether I was exploring my own backyard or discovering a new country across the ocean I wanted the freedom and flexibility of a nomadic traveler. I knew it was time for a change.

It was time to let go of the house.  

The gods must have been listening, because during our trip Victor got his long-awaited posting message. Somehow three years had gone by since the start of the pandemic and our life in North Bay had begun. We would be saying good bye and moving back to Toronto for one to two years. But first, we would need to sell the house.

Repeatable steps I took that you can too!

• Okay I actually didn’t take any steps that I recommend you taking. I wish I had been a less anxious person better equipped to run a home. So instead I’ll just offer the advice that I wish someone had given to me. Remember that home ownership means there will inevitably be surprises. Most days homes run smoothly. But when disaster strikes, it is always unplanned. Be prepared for gas leaks, bursting pipes, leaking roofs, falling fences. Make sure you have an emergency fund to address these, and that your home insurance is up to date. And ask a neighbour to check on your house while you’re away. You will be more likely to avoid disaster and enjoy your time away without worrying.

Disclaimer: I am not a financial advisor. None of this is financial advice. I encourage you to do your own research.

What is a bear market like? If a bull market is identified by its bull-like tendencies, your portfolio aggressively raging upwards in a sex-crazed rampage, then the bear market is much like a bear itself. It’s scary, temperamental, and your portfolio goes into hibernation until further notice. Like a mama-bear protecting her two cubs, investors sell off their stocks and desperately search for what they believe to be safer assets, like gold and consumer staples. But the damage is already done, with equities having crashed anywhere from 20-30 percent. Your portfolio is cooked, and you have one long winter ahead of you.

But a bear market isn’t always a bad thing. Just as the short-lived Covid bear market of 2020 presented a buying opportunity for investors, so too did the bear market of 2022. I had to remember that even though my portfolio was down, I still had a job, one I was now humbly grateful to have. I thought back to the start of the Covid crash just two years earlier. It had seemed like the world was ending and yet the stock market had recovered in a matter of months. With each paycheque I had been able to scoop up even more shares during the Covid bear market at a discount. Those shares ended up blooming by the end of 2020 and into 2021. Although they had temporarily gone back into hiding, I knew they would one day rise again.

Now here we were in another bear market. I had a steady paycheque so I decided to invest the same amount as I always had in the hopes that another bull market was just around the corner. Sounds easy, right? Well, it’s not so easy when you receive your paycheque, little green numbers in your chequing account, you transfer that money into your brokerage, you buy $2,000 worth of index funds and a few minutes later your portfolio drops further. You feel like all the hard-earned money you just invested is gone forever. And at the time, my money was indeed hard-earned. I had finally received a promotion into a new role and my head was spinning with a roster of global projects I was tasked with managing.

In a bull market the simple act of checking your green portfolio after a hard day’s work can be a soothing experience. You really feel like you’re getting somewhere, even if your career is stagnating, and the dopamine hit is euphoric. But in a bear market? Ha! You feel like you’re falling off the treadmill of life, your portfolio plummeting hour after hour, day after day. You wonder if you’ll ever be able to retire. Sometimes the market opens green! You keep BNN on in the background hoping that maybe, just maybe, today will be the day when the market turns around, when the euphoric days of yore will return once more. You can feel it. Today is going to be the day when we’re back, baby! But alas, it is not to be. The day closes redder than a blood-stained tomato. Days turn into weeks, weeks into months, and eventually the year closes in the red. By December 2022 the S&P 500 had returned -19.44 percent.

And my portfolio was larger than ever.

How could this be? I would like to thank a reddit meme I found for inspiring me to keep investing through the great bear market of 2022. It’s a picture of Leonardo DiCaprio as the Great Gatsby. He’s wearing a bow-tie and holding a glass of champagne towards me as if to say ‘cheers’.

“Never forget,” the caption reads. “Bull markets make you money. But bear markets make you rich.”

I kept this picture on my phone and turned to it throughout the cold, dark days of 2022. Even though my money immediately disappeared into Wall Street’s swirling abyss every time I made a purchase, I was still picking up shares at 20 percent off, just like during the bear market of 2020. With every paycheque I invested more money and contributed to my company pension. I invested my March bonus, May tax return, government rebates, any dollar I could find. And that Dividend Re-investment Plan that I had set up seven years earlier? Those dividends continued to be re-invested every quarter, this year at a discount.

I remembered the turbulent plane ride I had taken from Winnipeg all those years ago, when Andrew Hallam had taught me that a bear market is a gift for young investors. I thought back to Warren Buffet’s famous quote, to “be greedy when others are fearful.” This is what I had been preparing for. I was ready. And my strategy paid off. Although the S&P 500 would not return to its December 2021 all-time high of 4,766 for another whole year, by December 2022 big dips from June, September and October had already started to recover. As I had faithfully invested every paycheque, and my quarterly dividend payments were paid out in June and October, I happened to catch these dips on the upswing. Of course I hadn’t timed the market, I had just kept investing. Now, my portfolio was experiencing some kind of renaissance.

Repeatable steps I took that you can too!

• Remember: while the market does go up 75 percent of the time, bear markets are normal and expected. Look at every bear market as a buying opportunity, and take solace that the Dividend Re-Investment Plan that you set up ensures that your dividends will be re-invested, picking up even more shares during the dips.
• While your portfolio may currently be cut in half, every penny you save during a bear market could very well catapult your net worth into the stratosphere when the market inevitably recovers. And it always recovers. Don’t worry when the pundits on CNBC say “this time is different.” The market has always recovered.
• To avoid selling in a bear market, make sure you have an investment strategy that you can stick to. Re-take Vanguard’s investor test. Are you still an aggressive investor? Or would you prefer to have some bonds and cash on hand to help you through the next bear market? Adding bonds and cash can help ease volatility.
• As bear markets can often be accompanied by recessions and weakened economic activity, ensure you have an emergency fund to help you weather the storm.

Disclaimer: I am not a financial advisor. None of this is financial advice. I encourage you to do your own research.

Around this time I started to think about early retirement. I looked at my budget and I compared it to my healthy portfolio now bursting at the seams. I had been working towards financial independence for a while now, basing my plans for early retirement on the Trinity Study. I recalled from reading JL Collins, that based on the study, you can safely withdraw 4% of your portfolio annually, indexed to inflation, and you will have a 96% chance of not running out of money over a 30 year time period (source). For example, if you have $1,000,000 invested in a mix of stocks and bonds, based on the study you can safely withdraw 40k/year and let your portfolio do the heavy lifting while you’re frolicking in fields of dandelions, enjoying early retirement (source).

While I didn’t quite have a million, I did have 650k, more than I ever thought I would at the young age of 38. By consistently saving half of my paycheck every two weeks and investing in low-cost broad-based index funds I had grown my wealth by 550k in just six years. My company pension had also grown, putting my total net worth around 800k. And I had some equity in our house too, although at the time I wasn’t looking at the house as an investment, despite the countless Sold – over asking! signs popping up like daisies in front of everyone’s garden. I hoped that, when we did sell the house two years from now, we would at least get our down payment back. I have never trusted real estate as a solid investment, and although the housing market was on fire, 2023 was still a long way away. I couldn’t control the future housing market.

There was one thing that I could control though, which was my everyday cost of living. Somehow, I had cultivated a modest monthly budget of $2,150 per month, just under 26k per year. Our mortgage payments were affordable, and because we couldn’t go to restaurants and the take-out options in North Bay were limited, I made all our meals at home. Every Friday morning, I would look at the Sobeys flyer, see what was on sale and meal-plan accordingly. I would freeze leftovers. I never threw out any food. I was thriving in home economics. Some may argue that thriving as a glorified housewife made me a bad feminist, but I truly felt fulfilled being the one to manage everything in the home from meal planning to the budget. And as I continued to see man after man at work get promoted into management roles my company had promised me for years, I began to think that this financial independence thing that I had been working on for so long, may very well be what paid off for me in the long run.

And pay off it did. When I applied my budget and portfolio to the Trinity study I saw that 4% of 650k was indeed my annual spend of 26k/year. I was officially financially independent! I could quit my energy-draining job tomorrow and spend my days going for walks in the sun, reading in the backyard, cooking healthy meals, just….living! But although I was technically financially independent, I still wondered if 650k was enough to support me for the rest of my life. I still had a mortgage. What if the markets took a dive and I couldn’t make my immediate mortgage payments? What if interest rates rose along with my monthly payments? Surely the next market crash was right around the corner. Skeptical of the 4% rule, I started researching where it came from, to see if it was even possible for me to live off my portfolio.

I learned that the 1998 Trinity Study, based off initial 1994 research by a man named Bill Bengen, has faced its share of criticisms (source). In a 2008 paper a team of Stanford researchers argued that the study advocates for a consistent withdrawal against a “risky, volatile investment strategy”, meaning your withdrawals remain the same regardless of how your portfolio fluctuates. This can lead retirees to accumulate too much money during the good times, and spend too much of their portfolio when markets fall (source). The Trinity Study is further criticized for not taking emergencies into account like major home repairs (Gordon B. Pye, The Effect of Emergencies on Retirement Savings and Withdrawals. Journal of Financial Planning. Vol. 23, no. 11. pp. 57–62.)

Despite its criticisms, Morningstar’s director of personal finance and renowned personal financial journalist Christine Benz has maintained for years that a 4% withdrawal is a reasonable guideline provided you consider the following (source):

1. Where is the money coming from? Rather than simply sell off 4% of my portfolio every year, Benz suggests retirees use a “bucket approach” to draw on different sources of investment income, such as bond and dividend income, in addition to selling securities (source). For example, if I am invested in Vanguard’s Balanced ETF Portfolio (VBAL), at the time of this writing it is paying 1.88% in bond and dividend income. A million-dollar portfolio invested in VBAL would allow me to collect $18,800/year in dividend and bond interest before touching my principle. I would then sell $21,200 from my principle to make 40k. If the markets are up, then selling $21,200 is unlikely to put a dent in my portfolio. If the markets are down, perhaps I can adjust my spending so as not to sell the entire $21,200.
2. Proper asset allocation. The Trinity Study was based on a mix of at least 50% stocks to provide growth, and US bonds to provide balance. Further, the equities in the study were large-cap US stocks, similar to the S&P 500. I noted that my portfolio was a mix of Total US stocks (large, mid and small cap), Canada and International. Back when I did have bonds, they were Canadian bonds, not US bonds. Would these diverse assets keep pace with the S&P 500 and allow me to withdraw 4% every year throughout my life? As a Canadian investor, would I also need to take currency fluctuation into account?
3. Time horizon. Both Bengen’s research and the Trinity Study looked at different time periods, the longest being 30 years. The findings showed, unsurprisingly, that those with longer time horizons could not successfully withdraw as much as those with shorter time horizons. At 38 years old I hoped to live a long, healthy life into my 80s or 90s. That meant I could very well have more than 40-50 years ahead of me. Would my small but mighty 650k portfolio be enough to move me into the nursing home of my choice? Suddenly I wasn’t so sure. I did have a secret weapon though. Having worked in the corporate world for 15 years I had a few different company pensions, the largest one being from the company I was currently with. I would be able to access that pension age 55. Although I had not been counting my company pension when I calculated my retirement plans, technically if my 650k portfolio started to decline, I could tap into my company pension in 17 years’ time. It was something to think about.

Right around this time, in 2021, Christine Benz and the Morningstar team re-evaluated the 4% rule. They forecasted future market returns rather than using historical data that Bengen and the Trinity Study authors had used. Their research concluded that a balanced portfolio would likely give me a 90% chance of success over a 30-year period, but they adjusted their safe withdrawal rate to 3.3%. Since then that number has changed. In fact, it’s become more generous. In 2022 the Morningstar team agreed that 3.8% was a good safe withdrawal rate. Then in 2023 they aligned on 4%. Then in 2024, after a strong year in the markets they settled on 3.7% (source). And of course, any time horizon after 30 years will change this number. The latest Morningstar data suggests that a 3% safe withdrawal rate will give a portfolio of 60% US equities and 40% bonds a strong chance of success over 40 years (source).

I thought again about little 80-year-old me. I wanted her to have enough money to not have to eat cat food. But I also wanted her to have a lifetime of memories. I didn’t want her to have too much money and wish she had spent it having more fun. While running out of money in retirement is indeed a risk, so too is not spending enough living your life. This is a choice that every retiree – young or old – must make. Should I save more? Spend more? Take that trip? One day there won’t be any more choices to make. I couldn’t predict the future, but having done the research for myself, there was enough data giving me faith that a safe withdrawal of 3-4% on a million-dollar portfolio was at least a good starting point. I could withdraw 3-4% depending on the year, cutting back if needed during a bear market or times of inflation. And as a back-up, I would have my company pension which would continue to grow until I was 55.

I also investigated ways to protect myself against future downturns in retirement. In his YouTube video Defensive Investing – How to Prepare for a Market Crash (In Advance), Financial Freedom expert and retiree Rob Berger offers the following suggestions for surviving a 50% bear market:

1. Have as little debt as possible. “If I don’t have much debt,” Berger says, “I can survive a really ugly market, far better than a neighbor who’s got three mortgages and car loans and a loan for the boat…credit card debt.”
2. Think about multiple streams of income, such as owning rental real estate or a side business.
3. Keep your income-producing skills sharp. Could you go back to work if you needed to?

Berger’s video gave me a lot to think about. I decided I would continue working for now, at least until I no longer had a mortgage. Maybe one day we could even rent the house out for income when we got posted to another city. And I decided to stick it out with work. My job was giving me the opportunity to sharpen my skills in project management and communication, skills that would surely come in handy one day. And it’s a good thing I did, because while 2021 was a green, abundant year for the markets, 2022 pulled a one-two punch with a bear market that dropped 24.82 percent from its highs and ended the year at -19.44 percent coupled with hot inflation that reached over 8 percent in both US and Canada (source). In hindsight, if I had pulled the plug at 650k it wouldn’t have been nearly enough to cover my mortgage payments and bills, especially since my portfolio ended up tanking by 20 percent in 2022. By January 2022 the markets started to fall and by June we were officially in a bear market, which is marked by a 20 percent decline or more (source). The euphoria from 2021’s bull market was gone.

Disclaimer: I am not a financial advisor. None of this is financial advice. I encourage you to do your own research.

In the meantime, as I attempted to fix more broken appliances, the stock market continued to soar to new heights in 2020 and 2021. Despite the Covid bear market in early 2020, the S&P 500 gained 18.4 percent in 2020 and went on to reach even newer highs in 2021, returning 28.71 percent by the end of the year! Covid had sadly ravaged small businesses and inflicted pain among sectors of the economy like the service and travel industry. But corporate America was alive and well and several factors ensured both the stock market and housing market continued to thrive. Lowered interest rates, pent up consumer demand and a shift to digitalize work and play were driving up the prices of stocks –  and real estate.

Throughout the pandemic governments around the world lowered their interest rates and gave out loans and relief packages in a series of measures aimed to stimulate the economy (source). Up here in Canada, lowered interest rates allowed Canada’s big banks to drop their mortgage rates. Some independent mortgage brokers were handing out rates as low as 0.99 percent (source). The lower the mortgage rate, the greater the loan you could qualify for. And while many people had lost their jobs and were not able to take on a million-dollar mortgage, there was a special class of corporate workers fortunate enough to continue making their high corporate salaries from home. With the pandemic now in its second year it appeared work-from-home was here to stay. Why not use your high salary to move out to greener pastures and take calls in your underwear?

As a result, Torontonians began to sell their tiny downtown condos and semi-detached houses and head to the suburbs and countryside for cheaper housing and even more space. The price escalation was “widespread” with some smaller cities like Brantford and our beloved North Bay reporting a 40% year-over-year gain (source)! But I didn’t need a sales report to tell me that my small northern city was booming. On my morning walks around the neighborhood I would see For Sale signs quickly replaced by Sold – over asking!…among a sea of Amazon packages piled up on doorsteps.

Amazon and the rest of Big Tech benefitted greatly from the pandemic throughout 2020 and 2021. In fact, the combined revenue for Amazon, Apple, Alphabet, Microsoft and Meta (Facebook) was 1.2 Trillion in 2021, up 25 percent from 2020 (source). How had this happened?

The pandemic had changed the way we worked, played and shopped. People were forced to log into work and school from home which required Microsoft Teams, Zoom, and a suite of cloud computing and cyber security solutions. Too afraid to venture outside to malls and grocery stores for fear of the virus, consumers did their weekly shopping online, often finding the best price through a simple Google search. With nothing to do at night they stayed in scrolling Facebook on their iPhones or streaming Netflix on Amazon Prime (source).

And while our new digitized way of life drove record earnings for Big Tech, ultimately raising their stock prices, retail investors continued to send tech stocks even higher. 2021 was indeed the year of the retail investor, where the average Joe, flush with cash from unspent stimulus cheques and nothing but time on his hands, could suddenly launch a day-trading career from his living room and bet on hot stocks from Tesla to AMC (source). These stocks soon became known as ‘meme stocks’, heavily discussed, pumped and dumped by the Reddit group WallStreetBets.

When the retail investor was not pumping the next hot stock on Reddit, he could be found making another trade on Robinhood. Rock-bottom interest rates made it possible for trading platforms like Robinhood, already offering commission-free trading, to now offer 2.5% margin loans to retail day-traders (source). Margin loans are a no-no in the responsible financial independence space, but they were embraced heavily by retail day traders. Margin loans allow you to buy stocks with money you have borrowed from your trading account. The rationale is, if you can borrow 100k for $2,500, but make an even bigger profit then you’ve won. But when the stocks start coming down the trading platform can implement what’s known as a ‘margin call’, where they force the day traders to sell at a loss so they can pay back their loan. Sadly, one too many WallStreetBets investors reported losing a chunk of their life savings on margin calls during the 2021 meme stock era.

In addition to recklessly taking out margin loans, many retail investors were also heavily participating in options trading, where you make a deal to buy or sell a stock at a preferred price. In 2021, options trading was at an all-time high, driven by the retail investor (souce). You can make a lot of money from options trading, but if the stock goes in the opposite direction, you can be forced to sell your position at a loss, in what’s known as a ‘squeeze’.

And that is exactly what happened in January 2021 during the now famous Gamestop saga, although this time it was the hedge funds being squeezed. Retail investors caught wind that some powerful hedge funds had bet against the Gamestop stock (GME) (source). Banding together, the Redditors turned GME into a global meme stock and drove the price higher, forcing the hedge funds to cover their short positions by selling. This only drove the price even higher, and soon the stock had skyrocketed over 6,000% since the summer of 2020 (source)! From my living room I watched the stock quickly crash, then go up again, then crash, then go up again.

The news media loved the David and Goliath story of retail investors catching the billionaire hedge fund managers with their pants down, all led by one brave revolutionary YouTuber named Roaring Kitty. It seemed like everyone was throwing their last $10 into GME, not just to make money, but to be part of something larger.

I admit there were moments when I would catch my finger hovering over the ‘buy’ button and I would have to talk myself down from making a grave investing error. As an index investor I had never bought an individual stock because I knew myself too well. I knew the moment I started trading individual stocks would also be the moment I sold my globally diversified portfolio for some hot stock, and I could very well wipe out my entire life savings. And that’s just not something I am willing to risk.

But it was tempting. Oh boy, it was tempting! The bull market of 2021 was a euphoric time. Even my simple index funds were going up 0.50% every day. My portfolio was sitting at a new high of 650k. Every morning, I would check the futures from my bed while sipping my coffee and see another day of green on the screen. It was an unbelievable feeling to know I was practically guaranteed to make another $3,250 that day, before I even turned on my laptop. I became hubristic. I didn’t need my corporate job! Why would I stay chained to my desk on a beautiful summer’s day while my corporate overlords droned on, my workload increased and my conference calls ran into the evening, when I was clearly making more in the stock market without even getting out of bed?

What had I become? Just five years earlier I would have given anything to be able to work remotely full time so I could live with Victor, in a beautiful house no less. Now I had everything I had ever wanted, and it still wasn’t enough. But it wasn’t money or material things I wanted. It was time and space. I wanted to be able to do what I wanted to do when I wanted to do it. I wanted to be able to roll out of bed and go for an hour-long walk in the sun. I wanted to stretch, run, read books on the back porch and listen to the birds chirp, maybe donate my time and skills to a worthy cause. Was that so bad?

Repeatable steps I took that you can too!

• Bull markets can be exciting times, but what goes up can eventually come down, even if the historical down markets have only been temporary. Continue to invest during the highs, but don’t get caught up in the hype. Never take out a margin loan to invest, and don’t stray from the low-cost broad-based globally diversified portfolio you have been building. A single stock may look hot today, but it’s not worth gambling your financial independent future away.
• If you think you might be tempted to trade recklessly, please get support from family and friends and call Gambler’s Anonymous. And as much as I advocate for DIY investing of low-cost index funds, if you find yourself making day-trades in your underwear it might be a good idea to seek out a professional robo-advisor like Wealthsimple or Justwealth who can safely invest your money in a low-cost broad-based index fund. You’ll pay a slightly higher management fee than you would if you invested on your own, but it might be money well-spent if it prevents you from gambling your life savings on a single stock.

Disclaimer: I am not a financial advisor. None of this is financial advice. I encourage you to do your own research.

Could I still achieve financially independence and embrace minimalism as a first-time homeowner? Or would the stress of mortgage payments and ongoing home maintenance affect my finances and mental health? I was about to find out.

At the end of August we got the keys to our empty house and guided an oversized beeping truck up the slanted driveway. Movers carried our every possession into the living room, bedroom, kitchen, basement and two small bedrooms that we converted into an office and a gym. It felt like we had a lot of stuff, but once everything was set up the house looked clean and tidy. We bought a few more things to tie it all together (I know, I know…), like a new TV, couch for the basement, dining room table and side table. Still, most of our furniture was from Victor’s earlier days in Winnipeg, my apartment in Toronto and our condo in Hamilton. I felt we had struck a good balance between holding onto old things that still worked, adding a few more pieces and not accumulating a bunch of useless junk. Still, I believe the more space you have, the more stuff you will inevitably end up buying to fill it. I was grateful that we had not bought a bigger house than this one.

I was also very grateful that we had not taken on a large mortgage to buy the most expensive house we could. Being from Toronto where houses cost north of $2 million, I had always thought of a mortgage as a chain around my neck that would take multiple lifetimes of nonstop corporate servitude to pay off. As the housing market comprises one third of Canada’s GDP, our banks, mortgage brokers, real estate agents and individual home sellers are all invested in getting young people to take on as much debt as possible to buy the most expensive house they can, which at the time was up to 8 times a person’s salary. During Covid mortgages were lower than ever. New rock-bottom interest rates enabled banks to trap unsuspecting young homebuyers by saddling them with million-dollar mortgages, a tasty piece of cheese in the great mouse trap of life.  

While it would have been all too easy for me and Victor to borrow a million dollars to buy the most expensive house we could, if interest rates had gone up our monthly mortgage payments would have as well. And because we would likely be selling the house in three years’ time after Victor’s posting was over, a more expensive house could have turned into a risky investment should we not be able to sell the house in the future. So to cover the 450k cost of our house, we took on a mortgage of 360k, which ended up being about $675/month each before property taxes and utilities. Our total monthly carrying costs were right around what we had been paying to rent a one-bedroom condo in Toronto, which meant our grocery budget didn’t need to change, and I could afford to continue saving the same amount I had been, which was now about $4,000/month.

Still, some personal finance experts believe that a house is a money pit that bleeds you dry and prevents you from building wealth in the stock market. This is certainly what I had believed since I learned to invest. But now that I had left the big city for the fresh northern air and traded our rented condo for more space and a plush green lawn, I began to see the benefit of having a place to call my own. I could pop into our exercise room and cue up a YouTube yoga video on a rainy day. Or spend time watering the lawn and digging up weeds, my blood pressure easing after just 30 minutes in the sunshine. And our large kitchen made cooking healthy meals a breeze. Our home was a safe haven from the outside world. A place that no landlord could evict me from. A home that, if paid off early, could house and support me even if I were to lose my job or the markets were to take a dive.

I began to see that owning a home can be an integral part of a financially independent life.  

One cool September morning I was drinking coffee in bed, the echoed sound of a single hammer carrying from the newly built subdivision down the street, when I began to dive deep into Mr. Money Mustache’s blog. Mr. Money Mustache whose real name is Pete Adeney, achieved financial independence in the early 2000’s on an engineer’s salary and moved to Boulder Colorado where he and his wife at the time bought a house with cash as a sanctuary to raise their son. Over the years Adeney has discovered a passion for carpentry and DIY around the house and can often be found sharing a beer on a roof with friends after a long day installing solar panels. Meanwhile his investment portfolio has continued to outpace inflation over 20 years and three bull markets, easily covering his monthly bills with plenty to spare, so much so that in 2016 he gave 100k away to charity (source)! Owning a modest, energy-efficient home in walkable or bikeable distance to amenities like schools, parks and grocery stores, allows Adeney to put his “favourite values into action” like living frugally and environmentally, performing “good old fashioned hard work” and spending more time in nature, while allowing him to keep a good chunk of money invested in the stock market (source). “When you’re living a frugal and natural life, you spend a lot of time at home,” Adeney writes on his blog. “By having a comfortable house, you can be happy and entertained at home…enjoying staycations instead.” (source).

I loved owning our house, especially during the pandemic when there was nowhere else to go except for weekly masked trips to the grocery store. We had so much space compared to our tiny one bedroom in Hamilton! So much light shining through every room. I felt so lucky to have this house, and so glad that we had chosen this one, and had not gone over budget. I truly felt like we had discovered the balance of having enough. I loved setting up the sprinkler on the lawn, watering the flowers in the garden, going to bed on a chilly autumn night to the smell of our neighbours’ wood burning fireplace. Our home became a refuge on cold winter nights, a place to relax after a long day, read on the couch in the morning, watch Netflix at night. When my family visited, they brought our family dog with them. She tore through the backyard, zipping back and forth, stopping only to yelp desperate barks of happiness after so many months apart from us. I finally understood why so many people love owning their own home, and now I was one of them.

I did love the house. But not a month after we moved in things started to break. One by one, each shiny kitchen appliance failed. First the microwave, then the dishwasher, then the stove locked itself and refused to open like a stubborn canine with a stick in its mouth. Then the dryer in the basement needed a new vent. Then it needed a new drum. Then the dishwasher died again. Then our fire alarms started clanging one night at 3 a.m. Then our security system needed new batteries. Then a trip to Home Depot to replace the flapper in the toilet tanks. Then back to Home Depot to exchange the first, incorrect size of flapper for the correct one. This was the trade-off between a rental and a place you owned. When you rent, if anything breaks, your landlord is responsible for fixing it. When you own it, you are responsible. You have to break out the multi-language instruction manual, listen to the same three songs on replay as you wait on hold with a customer care centre to see if your appliance is covered under warranty. After learning that it’s not, you have to call a local repair centre to book an appointment. And then finally, you have to come up with the $400 to pay the guy.

On the bright side, Bob, the man who fixed our appliances was very chatty and nice to talk to. As I got to know Bob, I came to suspect that he may be on his way to financial independence himself. He told me that he owned his own home out in the country where he fixed his own appliances. He wore the same t-shirt every day, and never bought anything. He didn’t even have a dishwasher! “I have one plate, two bowls and a spoon,” he shrugged. “I just don’t have a need for stuff”. Bob was a frugal, DIY homeowner, just like Mr. Money Mustache.

With the money we were paying Bob to fix our every appliance, if he was paying off his modest home, investing the money or simply just saving the cash, there may very well have been a multi-millionaire immersed in our dishwasher’s cavity, tightening bolts and screws. Bob inspired me to take matters into my own hands and DIY my way around the house wherever I could. I wasn’t about to get up on the roof or take the furnace apart with my bare hands, but I made sure to query Bob and any other tradesperson so I could learn to manage the house over time. I would ask to shadow the plumber who showed me where the external water valve was, the guy who maintained our furnace at the start of winter, the Enbridge guy who replaced our gas meter outside in a snowstorm. I thought about my Mom who manages her family home with the precision and skills of a well-paid CEO, while staying cool as a cucumber.

“Handymen aren’t born, they’re made sweetheart,” she assured me when I called her in a panic for every issue. “You’ll learn over time. Just keep at it.”

And so I did, cleaning our bug-infested filters that I found in the air exchanger and leaving them to dry in the sun. I got up on a ladder to screw in soft white lightbulbs in every room, bright white ones in the garage. I replaced the broken garage door opener, changed our central vac bags. I cleared snow away from our gas and dryer vents outside, replaced the downspout that had fallen off in a spring thaw. Soon I was the general manager of our household, walking from room to room with a notebook and pen, my never-ending list now fitting nicely on one page.

“You’re amazing!” Victor would say. “I could never do this on my own.” He was right. His work schedule demanded that he physically be in the office during the week while mine allowed me to tackle home emergencies between conference calls. I wondered how anyone else handled home emergencies without work-from-home flexibility. Did at least one person have to constantly be at home and stand guard in case the pipes burst? I would eventually find out.

Repeatable steps I took that you can too!

• Consider NOT taking out the largest mortgage to buy the most expensive house. Make sure you have some wiggle room and extra savings if interest rates go up.
• Ask yourself if home ownership is important to you. Would you enjoy gardening and BBQ-ing in the backyard? Do you need extra space for your dogs or family? Or would the freedom and flexibility of renting appeal to you more? There is no wrong answer, but there is a right one for you.
• Learn to DIY your way around the house. For minor issues like a leaking faucet, can you find a YouTube video and learn how to fix it on your own? For more serious issues like a furnace or plumbing, call around for a few different quotes before committing to the most expensive one. And chat up the tradespeople. They are often very friendly and willing to share how things work around the house.  

Disclaimer: I am not a financial advisor. None of this is financial advice. I encourage you to do your own research.

By August, after the military movers loaded our belongings onto a truck and we drove four hours to start our new life, the stock market had fully recovered its 30% loss and was marching higher. Ever since the stock market had bottomed just four and a half months earlier, I had continued to invest vigorously with every paycheck, only making a one-time withdrawal from my RRSP to cover part of the down payment on our new home. As a result, my portfolio was now in the green and larger than ever as I had continued purchasing index funds at fire-sale discounts.

So much had changed in those four and a half months. Covid was still spreading through the world like wildfire, and many were mandated to work from home. As our government had asked us to stay in social bubbles of 10 people or less, there were no summer weddings or backyard BBQs commonly found in a typical summer. Nor was there any travel as most international flights had been cancelled, the wide skies overhead a silent blue. Instead, people began to explore their own backyards, some heading up north to rent a cottage or an RV. So when we rolled up to the Hilton Homewood Suites along the shores of Lake Nipissing where we would be staying for a month, I was not surprised to see a myriad of families enjoying the large sandy beach. As I tend to gravitate to any sparkling body of water in my vicinity, I grabbed Victor and we jogged down the hill to check out the picturesque waterfront.

Lake Nippissing was a large freshwater lake bordered by North Bay’s signature pine trees in the hilly distance. Boisterous children ran through the clear shallow water, squealing with delight as they kicked up their heels to splash their parents. Others stayed on land building sandcastles in the warm August sun while their caregivers scrolled Facebook on their iPhones. In these isolating times people yearned for connection and entertainment, and technology was there to assist. As a result, the mega-cap technology stocks known as the FAANG stocks (later becoming the Magnificent 7) were surging. Technology companies like Facebook (Meta), Apple, Amazon, Netflix and Google exploded during the Covid pandemic, making many investors wealthy. As an index investor, I was grateful that I was invested in the Total US stock market as one third of the index was comprised of technology companies yielding big returns for any investor holding US broad-based equities.

Across the lake a large stretch of trees on Manitou Island lined the horizon. To our left a wooden pier stretched out into the water, its creaky wooden beams supporting an ice cream shop and hot dog stand. A paved promenade snaked down the hill, surrounded by inukshuks and pink flowers, currently being pollinated by a swarm of bumble bees. There was even a waterside patio that served pints of local beer and fish & chips. With no planes in the air the waterfront was a hazy mid-afternoon quiet. The sun bounced off the water and the trees were emerald, green from all the rain that had fallen earlier that summer.

As I breathed in the clean air, a mix of pine, muddy freshwater lakes, deep fried foods and coconut-scented sunscreen, I could not believe my luck. Just six months earlier I had been stuck in a snowy subway delay on my way to a grueling week-long workshop. Now I was spending a month in a comfortable hotel along the water, my schedule more flexible than ever, my investments working overtime. I would have time every morning to jog along the promenade, to slow down and spend time outside. Most importantly, I got to continue living with my husband full-time, in one of the most beautiful places I had ever seen.

At the same time, people all around the world were suffering from the now out-of-control pandemic. Many had died, others were fighting for their lives, while still more had lost their jobs or their businesses. I was grateful for my own good fortune, but I also felt extremely guilty that Covid-19 seemed to have benefited me while robbing others.  

“It’s out of your control,” Victor assured me when I explained my feelings to him. “We just need to make sure we don’t spread the virus, and to be thankful for everything we have.”

I slipped off my sandals. The sand was warm and grainy beneath my feet. I took a bite of my raspberry ripple ice cream and tasted the creamy sweetness. I closed my eyes and felt the warm sun caress my skin, heard the waves lapping against the shore. Victor was right. I had so much to be grateful for.

The days I spent living in a 3-star hotel on Lake Nipissing were some of the happiest of my life. With most of my stuff in storage I was forced to live like a backpacker – and I loved every minute.

Every morning I would wake up to the sun streaming through the fly-encrusted hotel window. “It’s a beautiful day in the Bay!” I would exclaim as I sipped my instant coffee and looked out across the parking lot of RVs and out towards the lake.

I jogged along the water’s edge, stopping to admire the bumblebees hovering over the lavender and watch the rippling waves. I still had online meetings to attend but most days I could log off late-afternoon and find a shaded spot on the beach. The sky was clear. Light shone through the trees, dappling the sand. I floated in the shallow water, listening to children splash their exasperated parents. Later I would return to our room, my skin warmed by the sun, my body swimming in a vitamin D-infused euphoria.

I had always thought it would be difficult to leave the big city behind. I had worried about it back in Winnipeg, when I first learned to invest. But now all the things I had once been attached to were gone. All the trendy restaurants were closed. Friends had moved out of the city for greener pastures. Now, I found myself drawn to the simple, free things in life. Waking up to the sun, moving my body, spending time outside, watching the sun set along Lake Nippissing with Victor at the end of the day. For me, this was the good life. It wasn’t yachts and mansions and first-class flights abroad. And it certainly wasn’t promotions and accolades. What was the point of spending your life climbing the corporate ladder when an unpredictable virus could knock you over any minute?

During my relaxing afternoons on the beach, I read JL Collins’ A Simple Path to Wealth. In his book and on his blog JLCollinsnh.com, Collins explains the stock market in a clear, digestible way. He also introduces beginner investors to the concept of financial independence. He suggests that if you are invested in a broad-based low-cost index fund such as VTSAX which tracks the US Total Stock Market, once you can live off of 4 percent of your portfolio, “you are financially free.” (source). At this point you no longer need to work if you don’t want to, because your portfolio funds your lifestyle.

I pictured having a portfolio so large that 4 percent could power my whole life. I could only imagine the freedom. At this point I still wasn’t sure how long my office would be closed, how long I could live this dream-come-true up north with Victor. While I didn’t want Covid to hurt anyone, I would be lying if I said I wasn’t benefitting greatly from the way in which the world had changed so suddenly. While I was not yet financially independent, my globally diversified low-cost portfolio had allowed me to begin this new life. It was showing me what my future could be like if I kept growing my wealth. But my office could call me back any minute, and it would be back to the harsh lighting and windowless rooms, and away from Victor and the fresh northern air.

But maybe, just maybe, if I kept growing my portfolio, I could withdraw 4 percent per year and my dreams could come true every day.

“The less you need, the more you are free,” JL Collins whispered in his soothing voice as the wind rustled the pages (source).

I thought about all my things in storage, the clothes I had stopped buying. Over the years I had whittled away the need for material things, and now I was getting a glimpse into what could be a peaceful, free future if I continued to reduce my needs and embrace minimalism. The less money I spent on things, the more I could invest, and the faster I could live a peaceful life on my terms. As I scrolled through my budgeting app I noticed that my annual budget had indeed gotten smaller over the years. Still, 4 percent of my portfolio could not yet cover my annual expenses. But one day it might.

The afternoon sun began to set, signaling time’s relentless march. I was not going to quit now.

Repeatable steps I took that you can too!

• Check in with yourself throughout your wealth-building journey. Are you still the same person that you were when you started? Have your values changed? Has the world changed? What would you spend your days doing if you didn’t have to work for a living?
• Add up your monthly budget and multiply it by 12 to get your annual budget. Is it 40k? 50k? 100k? If you multiply that by 25, you’ll get an idea of how much you would need to become financially independent and live off your portfolio indefinitely. For example, if your annual budget is 40k and you multiply that by 25, you would need a million-dollar portfolio to safely withdraw 4 percent, or 40k a year. We’ll get into risk and safe withdrawal numbers in Chapter 12, but this exercise gives you a good idea of what you might be working towards.
• Is your annual budget too high for financial independence? If so, are there any areas you can cut to bring your annual budget down? The smaller your annual budget, the smaller a portfolio you will need to become financially independent.
• Have recent events such as a recession caused more risk to your portfolio?

Disclaimer: I am not a financial advisor. None of this is financial advice. I encourage you to do your own research.

The big 3-story pine tree was the first thing I saw when we rounded the corner and drove half-way down the hilly street on that rainy Monday morning in June. Behind the giant tree stood the house, a 2001 raised bungalow with a grey brick facade, large windows and a for-sale sign staked into the freshly cut lawn.

We parked on the cracked driveway behind our real estate agent’s white corolla. “I hope you like steps!” Suzanne said as she held her large folder over her head to stay dry. We followed her up the steep drive and then up 13 large winding steps to the front door.

“The nice thing about being on a hill is the views,” she said, fiddling with the lock box.

I turned around and saw that we were towering over the street, the smell of freshly cut grass swirling upwards. Rainwater gushed down the driveway towards the street, and in the distance, a forest of trees bunched together like giant heads of broccoli, under a rolling mist extending for miles all the way across the horizon and down to Lake Nipissing.

Everything felt surreal. I still couldn’t believe we were house-hunting, something I never thought I would get to do as a millennial. But after spending the last two weeks calling around for rentals with no luck, and seeing the reasonable home prices in North Bay compared to Toronto, we had found one house on Realtor that had taken our collective breath away. Now standing on the front porch, the house was even more magnificent in person.

We put on our masks before entering the wreath-adorned glass door and stepped onto a welcome mat and into the front foyer. A chandelier light fixture illuminated the way, creating a cozy atmosphere. Up more steps, into the large living room with stunning views of the trees. Rain water battered the windows. Into the kitchen, stainless steel appliances gleamed, putting our tiny Hamilton kitchen to shame. We padded along the hardwood floors down the softly-lit hallway and into an office, then into a guest bedroom and finally the main bedroom. I gasped as we entered, and I saw one wall painted charcoal grey, the other café au lait, and a four-poster queen-sized bed covered in white and brown pillows and a fluffy duvet. There was a big closet on one side and on the other, a large 3-panelled window, looking out into the landscaped backyard. Through the window I could see a haven of birch trees, maple trees and a spinning air conditioner unit gently cooling the house a comfortable 19 degrees.

“How long has this place been on the market?” I asked as I wandered into the grey and white ensuite.

“One month,” Suzanne said, checking the listing. “But it may have been over-priced. They just dropped it down to 440k”.

Victor and I looked at each other in shock. 440k wouldn’t even get you a decent one-bedroom condo in Toronto, let alone a three-bedroom house with a two-car garage, central air, landscaped yard and sweeping views. Not only was this house perfect, it just felt…right.

“Let’s check out the backyard?” Victor said with a smile. I grabbed his arm as we practically floated outside, whispering to each other how much we adored this house. Soon we were outside in the fresh air.

“That’s better,” Suzanne said pulling down her surgical mask. The three of us stood on a wooden deck with an awning and violet curtains that created an outdoor oasis. The rain had stopped, and the sun was now shining on the owners’ impressive garden. Pink roses, hydrangeas, daisies and a million species of green plants shared the space with little garden Buddhas and an elephant. A large maple tree swayed above us, its leaves rustling softly in the breeze.

“Well we just…” I said, looking at Victor. I was lost for words.

“We love it,” he said. “We can probably give them what they’re asking?”

“Maybe even a bit more in case there’s competition?” I said. Victor nodded eagerly.

“I don’t think you need to go over $10,000,” Suzanne said. Victor and I told Suzanne about Toronto, land of the bully offer, where it was normal for houses to go hundreds of thousands of dollars over-asking. We both secretly knew that while we couldn’t offer that much, we would be happy to offer more than $10,000. We had been pre-approved for a mortgage, and even though the Covid crash was still in play, we were comfortable with the $90k down payment.  

“This is a different market though,” Suzanne explained. “I don’t know that you’ll be able to sell this house for a profit in three years after Victor’s posting is over.” As this was our first real social encounter in North Bay, we were touched that a real estate agent would choose to protect our interests over a potentially higher profit. We decided that we would follow Suzanne’s suggestion and offer $10,000 over-asking. Suzanne said there would be two other showings that day, and the owners would be reviewing offers that night.

“Fingers crossed,” she said, as we made our way back down the driveway. “If you have time to explore North Bay, check out Birchhaven cove park. It’s where we used to have drunken bonfires back in high school. Those were the days!” she cackled.   

Once in the car, Victor and I both exhaled sharply. It felt like we had both been holding our breath in the whole time.

“I love that house,” he said. “I really hope we get it.” I agreed, but not just because the house was perfect and move-in ready. If the owners didn’t accept our offer, I wasn’t sure what we were going to do. There weren’t many rentals in North Bay and this house was the only one for sale within our budget. Victor’s posting started in less than two months, and right now, we didn’t have a place to live.

To ease our fears, we decide to take Suzanne’s advice and check out Birchhaven cove park. We drove down winding, hilly roads lined with pine and birch trees, passing a ski hill on our left, the chairlift suspended in mid-air. I wondered if the ski hill would be open by wintertime, or if Covid would cause it to close indefinitely. Was this new world permanent? I was still in shock at how much our lives had changed in a matter of months. I had gone from frantically commuting back and forth to the office and living in a one-bedroom apartment in Hamilton, to house-hunting in a part of the country that could only be described as a northern paradise, with its fresh air, trees, lakes and kind people. Surrounded by so much nature, I felt an overwhelming sense of relief, as if I had been thirsty for so long and was finally drinking a cool glass of milk. We parked the car on a residential street and followed a gravel path through a thick wood, into a cove with a sandy beach, picnic tables and a calm, swimmable lake. We walked down to the shore, took off our shoes and waded into the cold shallow water which quickly became dark and deep within a few steps. Across the shore, pine trees stood on ancient grass-covered rock formations which continued in twists and turns as the water left the cove and rippled towards the larger, connected Trout Lake.  All around us was quiet, the only sound the soft buzz of a cicada in the distance.

I turned to look at Victor. “I can’t believe this place,” I said, smiling. “It’s just so beautiful!”

Victor pulled me close and kissed the top of my head. “It really is,” he said. “I think we’re going to have a wonderful three years here.” I knew he was right, whether we ended up getting the house or not.

That night we found ourselves back at our 3-star hotel enjoying another dinner of Swiss Chalet take-out when my phone rang. It was Suzanne.

“So, there’s another offer on the table but the owners want you to have priority,” she said through speaker phone. “But they are wondering if they can push out the move-in date to the end of August so they can have time to clean and stuff.”

Victor and I looked at each other with uncertainty. His posting started right after the August 1^st long weekend which meant we would need to be in North Bay a few days beforehand. Where would we live for a month? And what would we do with our couch, bed, coffee maker?

“I guess we could stay here,” Victor said, referring to the hotel in which we were currently enjoying our Swiss Chalet. “And put all our stuff in storage?”

“I can make us healthy meals in the kitchenette?” I offered. Although a month of Swiss Chalet didn’t sound like a bad thing. The more I thought about it, the more intriguing of an idea this sounded. Why not spend August in a Hilton Homewood Suites along the water? We had some hotel points, and since very few people were staying in hotels during the pandemic, the discounted price for this room was reasonable. And having embraced minimalism over the last few years, I found the thought of temporarily living out of my backpack thrilling. 

“Why don’t I let you two talk it over,” Suzanne said. “But they need to know in forty minutes.”

“No it’s okay,” I said. “We want the house. We can accommodate.”

“Are you sure you’ll be alright in a hotel for that long?” Victor asked.

“Yes,” I said. “I’m sure.”

“Okay, I’ll get back to you by midnight,” Suzanne said, and hung up. I felt myself start to shake. Did this mean we got the house? What had we just agreed to? Everything was happening so fast! We were both so excited and nervous. And it was only 8 p.m. How long would we have to wait for Suzanne to get back to us?

At 11:45 p.m. I jolted awake to the sound of Victor’s cell phone vibrating across the coffee table. I must have dozed off waiting for Suzanne’s call.

“Congratulaaaaaaations!” Suzanne sang through the speaker. “That was a close one!”

I shrieked with joy. The house was ours! In just two months’ time Victor and I would begin a new life together up north. And we had two places to call home – first the hotel and then the house. All this while the pandemic had forced my office to remain shut, my corporate stresses scattered across a dark, abandoned desk like a handful of paper clips. I had never felt so excited and free in all my life.  

Repeatable steps I took that you can too!

• When the time is right to buy a condo or a house, make sure it is not the most expensive house on the block. And make sure you love it.
• Listing prices can be starting points for negotiation. Depending on the housing market, you may be able to make a lower offer. Or in our case, we needed to make a higher offer to win against the competition. Before making an offer on the house, take a good look at your down payment and budget. Can you afford to go over the listing price? What would that mean for your mortgage and monthly payments? The last thing you want is to be caught up in a late-night bidding war and accidentally bid too much or too little. To help give you an idea of what a fair price would be, you can use websites like Housesigma.com to see what comparable homes have sold for in the last year or so. North Bay was not yet on Housesigma when we put in our offer, but we were able to review recently sold comparable properties with our realtor to ensure we were paying a fair price.
• We were lucky that our portfolio was starting to bounce back, and we could cover the down payment. The lesson here is that if you are planning on purchasing a condo or house in the next year or two, your downpayment should be in something safer like a GIC or a High Interest Savings Account in case there is a drop in the market.