This post was written by long time reader Robert Britton as part of our retirement series. Today is Robert’s last day of work – congratulations!
Life feels long. This article gives a very brief synopsis of most of mine; and then lists a few habits that helped me along the way.
I’ve never understood why people want to retire. If you find something you love to do, just keep on doing it! Later I realized that loving the occupation does not answer the question of what else you might love.
Related: My thoughts on early retirement
Well I started out in life intending to be a preacher, although I was continually distracted by the love of science and logic. Eventually this dichotomy led to me chucking my ministerial aspirations and starting a job as a computer operator.
Bottom line: my career started very late at about age 26 – not a robust financial start.
Not long after, I wrote an aptitude test and was trained by a large life insurance company to be a computer programmer. This led to a variety of positions and ultimately a long career consulting from client-to-client as a database architect.
The contracts and employment stints tended to be under a year, and my longest gig anywhere was not much over 2 years.
The life insurance experience and their education programs led me to realize that life insurance is important; but that it should only be bought as term insurance.
A Messy Divorce
Another formative influence on me was an incredibly nasty divorce starting at age 35 and ending almost 20 years later after two full trials of two and three weeks – and 70 other court motions.
I estimate that in the worst 10-year period I paid an average of $1,000 per month to my lawyers, and I was not always able to work due to emotional stress. Custody trials can do that to you, and worse, but it’s very hard not to love your children deeply and want the best for them.
In the end I raised my three children as a single parent with no help of any kind from my ex-wife. For many years I was even paying child support when they lived with me.
By age 39 I was in debt by about $40,000 with no assets and no house. I borrowed money from my tiny RRSP and bought a small townhouse which changed little in value for almost 10 years.
I developed a love for bicycling and bicycle touring. Most of my vacations have been on bicycle, sometimes after a plane ride first. Each of my children in their mid-teens was treated to thousands of kilometers of cycling in summer vacation.
This of course is nice for fitness and costs a fraction of what most people consider standard vacations.
For example, in 1999 I rode from Amsterdam to Stonehenge and back with my 16-year-old daughter – nearly 2,000 kilometers in three weeks. The total cost including airfare was well under $3,000 and a richer experience would be difficult to devise (although my daughter was not quite as amused as I that the French took us as a man with a younger wife).
Planning For Retirement
Somewhere in all this I realized that one day I would need to retire – as in, live on my savings – and “unfortunately” my recent ancestors almost all lived into their 90’s.
With the huge financial drain that seemed never-ending I figured I’d have to address my retirement budget by tuning my wants. Now I love few things as much as a bicycle ride, a walk in the woods, or a good book that teaches me something.
Free tuition, available in some cases to seniors, is right up my alley and may lie ahead. I’ve sampled many luxuries but deliberately aimed to love the finer things in life, like nature, the movement of my body, and the thoughts in my brain.
Some Things That Helped Me Retire Wealthy:
1. My rule of corollaries: If I can’t do something, chances are I can find something else that’s rewarding. When I could not locate my children for a time I was free to travel on business and pick up career depth like never before.
2. I enjoyed seeking personal health and fitness. My favourite organ, the brain, needs the body working as well as possible. One day this body will really be whipped into shape!
3. I worked the brain. I had a mentally-demanding job. Moreover, little helps a career, or financial planning, like a developed mind. When not actually learning the tricks of my trade, I tried to learn a language, do cryptic crosswords, read something in Scientific American that baffled me, or anything else I found very hard.
4. I am addicted to buying – a shopaholic if you will. This started around 1999 and I am not quite cured. If I find myself with a few thousand dollars to spare I tend to blow it until it hurts. Mostly on dividend-paying stocks I hold for way too long. It’s amazing how this works over time even when some go bust. Why buy a fancy TV when there is a stock I don’t own?
5. I largely avoided mutual funds. If I liked their ideas then I just bought the stocks the funds bought – but usually didn’t bail out as quickly. Why on earth pay them 2.5% for usually marginal returns?
6. I did not put my whole nest egg into housing, but for Pete’s sake it’s a deal! Housing provides accommodation, tends to rise in value over the long term, and is tax free asset accumulation. It’s also a type of forced savings.
7. I avoided bank accounts, savings or chequing. I had part of my mortgage as a line of credit and used that as my chequing and savings account. When my paycheck went in I was saving at the mortgage rate, with no taxes, and when I needed money there were never any fees.
Related: Is Manulife One Worth A Look?
8. I didn’t fall for many trends. I’m very technical by profession – I’ve developed computer apps for almost 40 years. Geeks like me never bought trendy expensive computers – they are just overpriced sets of components that other people sell for half the price (albeit a little less pretty).
Ditto the phones. I don’t actually need a smartphone, and certainly not an $800 one. Especially from companies that tell you beauty is outdated six months later. If a company can succeed at this consistently, buy their stock not their product.
I finally got a trendy smartphone because of a fantastic discount (under half price) on the job at a phone company. Three months later people were lining up overnight to replace that model – oddly, two years later mine still works fine.
9. As a self-employed consultant, I lived on 40 percent of my gross income. The remainder was for taxes or stayed in my “other RRSP” – my company assets. I did not take vacations as a given and a right – I had many years with none.
I never did the Florida or Caribbean thing, even though everyone around me did. The main cost of vacation is time away from the office, unpaid, so when I did it I made sure it mattered.
10. I rode my bicycle to work most of the year, at least if was under 25km. Everything about this improved my life and finances.
11. Single parenting can get you down, especially as a man. The system doesn’t like us at all. Maybe I should have re-married – I didn’t try that but it may have made life a lot easier financially and otherwise. On the other hand there are benefits in the solitary life. I think I can plot a long range plan either way if need be.
12. I separated retirement planning and planning the ability to retire. I found it very useful to have a financial target for when I would be able to retire, even when I didn’t think I would ever want to.
13. I thought. What did people do alone in their cars or walking down the street before smart phones were invented? They were alone in thought! I made thinking my normal routine.
When I would leave on my commute I often planned what to ponder in silence en route. “I will now think about the merits of not selling off company assets in retirement until necessary, but just take the dividends it receives”, or, “Do I have enough risk in my stock portfolio – should I take on something paying 8.5 percent dividends or a nuclear or solar stock – or should I stay more conservative”. “Should I start taking CPP as soon as I qualify?”
I think about other things too, but this is a financial blog. Why make myself a slave to communications at the expense of my thinking time? My own thoughts are my priority and they pay dividends.
14. My favourite market summary is the fear/greed index on CNN. I love it, not because of its accuracy, and it certainly gives no clear tips and no Canadian content, however it reminds me that the stock market is driven by emotions. If I’m having the same emotions at decision time, what are my odds of beating the market?
15. I’ve never cheated on any taxes. I didn’t want CRA to be looking over my shoulder. This includes border taxes. By the way, I’ve never crossed the border just to shop – I want my community and my government to benefit from what I buy. Go Canada!
16. I did mostly my own work on investing. I tend to be suspicious of financial advisors since they mostly work on commission. Most advice columns only touch on some things that will help. They often make assumptions like the following, none of which apply to me personally:
- you have a pension to think about
- you are married
- you know your current income, so you can, for example, calculate 70 percent of it
- you have a TV
- you don’t have to debate at what age your company should stop paying you a full CPP-covered salary, or whether to withdraw from your RRSP first to save the 10 percent CPP tax
- you actually know what you’ll do if you sell your expensive home to downsize
- you know how much you’ll need to live on in retirement (here’s a handy guide)
- you like to have a lot of cash instruments such as GIC’s and savings accounts
I still love designing databases – it requires thought and creativity. But activities like yoga, learning to sculpt stone, managing a forest, and learning Mandarin or Spanish seem both interesting and extremely difficult.
I’m 60 and a half. I’ve been able to retire for a while now. Today I will leave technology behind and do some of these other things. I may just ride my bicycle to Texas from Toronto next month. If not, I will look for another way to ponder next steps while getting a little fitter.