Financial Independence Update: Still On Track For Freedom 45

It’s been a while since we checked in on our financial freedom goals. Three years ago I had the audacity to say that I’d be financially free by 40. Then a few unplanned expenses came up, reality set-in, and I pushed findependence back five years to age 45.

Here we are today, a week from my 37th birthday, and I’m happy to report that our finances are on track. I plan to have a net worth of $1 million in four-and-a-half years and reach financial freedom by the year 2024.

We have a lot of saving to do before we get there but the power of compound interest and diligent saving can take our current net worth of $476,671 to over $1,000,000 sooner than you might think.

I use conservative projections in my planning, such as no major salary increases, two percent annual returns on housing, and eight percent returns on long-term investments.

Financial Freedom

Here’s what our big picture finances should look like by the end of 2024:


  • Cash savings – $55,000 (approximately one year of expenses in today’s dollars)
  • RRSP – $305,000 – Assumption: contribute $3,000 per year and see the portfolio grow by eight percent annually
  • TFSA – $220,000 – Assumption: contribute $20,000 per year (lots of unused TFSA contribution room) and see the portfolio grow by eight percent annually
  • RESP – $91,000 – Assumption: continue to max-out annual contributions for both children and see the portfolio grow by five percent annually
  • Defined benefit pension – $342,000 – Assumption: continue working for existing employer and contributing to the pension plan
  • Principal residence – $538,000 – Assumption: increase market value of the house by two percent annually


  • Mortgage – $1,200 – Assumption: paid off in full on January 1, 2025

Freedom 45

I’ve said before that becoming financially free doesn’t necessarily mean quitting my full-time job to retire early. What it does mean is that I’ll no longer have to rely on regular employment to meet our needs.

With our mortgage paid off, cash in the bank, a healthy investment portfolio, decent workplace pension, and a second income stream from our online business, we’ll be in great financial shape at 45.

Will I still work full-time? Probably. But while I do I’ll continue building up my savings – call it an opportunity fund – so that when the right time comes along I can leave my day job to do something I truly enjoy without answering to anyone but myself and my family.

It’s hard to visualize exactly what that might be, but in my mind it involves writing and helping people with their finances.

Final thoughts

I know the next few years will be dedicated to increasing our savings rate. I look forward to the day when our investments make up a bigger portion of our net worth than our home does.

I’ll also continue working hard to grow this online business, as well as my reputation as a personal finance expert in Canada. I want the work I do online to not only provide a secondary source of income for our family today, but to flourish into something I can pursue in the future when I do decide to walk away from my day job.

How are your financial freedom plans coming along?

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  1. John Ryan on August 1, 2016 at 5:25 am

    Congrats! Glad to hear you’re still on track!

    • Echo on August 1, 2016 at 10:02 am

      Thanks for your support, John!

  2. Tringo on August 1, 2016 at 6:14 am

    This is a great achievement. However, I would have major qualms with your 8% return assumption. These returns are typically linked with long-term interest rates because of a stable equity risk premium, and current 10-year rates at 1.5% make it highly unlikely that equity returns will be as high as 8% going forward.

    I think you’re being a bit too aggressive with this assumption and may be disappointed if a more realistic 5-6% is what actually happens.

    Curious to know what others may think about this.

    • Michael James on August 1, 2016 at 7:43 am

      Robb is on a great track, but I agree with Tringo that 8% per year may be high. I prefer to think about real returns. That way I don’t bother estimating both inflation and returns for various asset classes. I assume 4% above inflation for stocks, 0% for fixed income, and don’t worry much about my house. I’ll be pleasantly surprised if actual returns are higher.

      • Echo on August 1, 2016 at 9:06 am

        Hi Michael, I’m not too fussed about the number – it could be 5-6% and it wouldn’t really affect my financial freedom goals. This is a living and breathing plan that I’ll adjust by saving more, working longer, etc. just like any would-be retiree should be doing.

    • Echo on August 1, 2016 at 9:04 am

      Hi Tringo, I use historical returns in my assumptions rather than trying to predict why “this time will be different.” Just think how many times you’ve heard that interest rates have nowhere to go but up (they’ve actually gone down) and that bonds will lose money.

      Financial Planning Standards Council uses the following guidelines for investment return projections:

      Canadian equities: 6.4%
      Foreign developed market equities 6.8%
      Emerging market equities 7.7%

      Historical investment returns between 1935 and 2015 have been more like:

      U.S. stocks – 11.4%
      Cdn stocks – 9.6%
      International stocks – 8.3%


      • Denis on August 1, 2016 at 2:39 pm


        I believe 8% is the long time average of the S&P including reinvested dividend. 6% is what a good financial adviser can get you net of fees. I wonder if you are into the euphoria of the longest bull market in my memory (if you discount insane bubble late 20th century). Everyone is a great investor these days just like at the end of the aforementioned bubble if I recall. As an anecdote, I remember of a couple that worked for Nortel AND borrowed to buy as much Nortel as they could borrow. Needless to say, it didn’t end well BUT I know most would not put all their eggs in a basket.

        Good luck on your way to retirement. At 20ish, I started to save for retirement and the freedom 55 ads were in vogue. I retired 1 year early but not as good as you seem to be heading. In any case, I always loved my jobs.

        • Echo on August 1, 2016 at 4:41 pm

          Hi Denis, normal long-term stock market returns are 8.5% (

          From 1926 through 2009 the annualized return of US stocks was 9.7%, and the simple average was 11.7%.

          My own portfolio return since Jan 1 2011 is 9.93% (it’s higher if you go back to 2009), but I’m not counting on any sort of ‘Engen’ premium going forward.

          As I’ve said, eight percent is just a number and nothing to get hung up on. That assumption checks out historically, dating back many decades, which is good enough for me.

          • Denis on August 3, 2016 at 9:19 am

            I can live very well on 6% so anything above is gravy. If I consistently make 6%, may as well give it to my fiancee’s adviser and save the hassle.

    • Ted on August 1, 2016 at 9:22 am

      I totally agree with your statement plus using your principal residence in the mix does not add income but is an expense.

  3. Gene on August 1, 2016 at 7:00 am

    You have great discipline and a sound objective. Have you thought of adding an additional emphasis of taking more risk around changing jobs or adding additional income by creating another business… other than your blog which could end up generating a lot as well? 🙂

    I find so many people forget about career progress on their journey to financial freedom or early retirement. I’ve taken a lot of risks with my career… joining startups, doing a start up, moving continents several times, etc. I am 45 and could have retired a few years ago. I like what I do, am continuously learning, have lots of fun with my family, and get a lot of personal/emotional/social rewards from my work. So combining frugal living, smart investing with earning power I’ve been able to achieve pretty good financial health.

    I love reading your blog and daily emails! Thanks for the continuous stream!

    • Echo on August 1, 2016 at 9:12 am

      Gene, you bring up a great point. My career has sort of stagnated, which got me thinking about ramping up my online efforts, but a change of careers is not out of the realm of possibility. I’m a bit risk averse in the sense that my kids are young and I still have a big mortgage, so taking a big risk is not something I’m prepared to do right now. Instead, I see the next 3-4 years as a great time to put my head down and save as much as I can.

      I’ll definitely keep my eyes open for other opportunities. Thanks for your comment!

      • Richard on August 1, 2016 at 4:37 pm

        The good thing is that today, there are more opportunities than ever if you have the right skills. Some can fill in gaps in your income and some can be as rewarding as a regular career (or more). And anyone who has built a well-read blog has at least a few of those skills. It’s certainly not as easy but I don’t see it as something risky given all the options out there.

  4. Emma on August 1, 2016 at 7:14 am

    Wow! something to aspire to 🙂 Congrats on your progress so far.

    Can I be nosy for moment? I’ve been in and out of pension plans throughout my career and I’m still not clear on how to work them into my retirement plan. I’ve noticed you count them as a significant part of your net worth by 2024 — but won’t you have another 17 years at least before you can start drawing on that plan?

    If you do retire at age 45, how does your pension factor into that?

    Currently, my retirement savings strategy is to save for financial freedom as if I don’t have a pension plan. Right now, I feel like having a pension is setting me back in regards to that goal.

    Any thoughts? I hate having all these restrictions on a portion of my money! Would love to see a post on this.

    • Echo on August 1, 2016 at 10:01 am

      Hi Emma, thanks for the kind words. I include the commuted value of my pension in my net worth calculations – the amount that the pension is worth if I were to leave the plan today. Now, leaving a pension plan means one of two things: transferring the commuted value into a locked-in retirement account; or leaving it in the pension plan to be drawn from in retirement (at a much reduced amount than if you stayed in the plan throughout your entire career).

      How would that help me at 45? It wouldn’t, although it’s comforting to know there’s an income stream waiting for me in retirement.

      It’s important to note that I treat my net worth goal as completely different and separate from my financial freedom goal. Net worth is just a number, and as many have pointed out, a paid-for house and a pension plan that I can only access in retirement won’t help pay the bills at age 45 or even 50.

      Financial freedom has always been about building multiple streams of income and paying off the mortgage.

  5. My Own Advisor on August 1, 2016 at 7:20 am

    Well done Robb.

    As you know, ultimately your savings rate will help you reach your goals. Keep it up.

    • Echo on August 1, 2016 at 10:01 am

      Thanks so much, Mark!

  6. Dividend Growth Investor on August 1, 2016 at 9:11 am

    Hi Robb,

    I recalculated the amounts for TFSA and RRSP, and came up with different results. Perhaps I am doing something wrong?

    1) I used a starting value of 118,766 for the RRSP and annual contributions of $3,000 at the beginning of every year. Plus 8% annual returns ( I assume no returns in 2016 since start year). I get 254,290 by end of 2024. vs $305K from your article. That is a big variance.

    2) I used a starting value of 4359 for the TFSA and annual contributions of $20,000 at the beginning of every year. Plus 8% annual returns. I get 237,819 by the end of 2024 vs $220K in your article.

    3) I used a starting value of 450,000 for the house and 2% annual appreciation. I get 527,247 by the end of 2024 vs $538K in your article.

    I am also curious, how would you cover your expenses after 2024, which would be likely a little over $50,000/year from that portfolio that would be worth less than $1M (including over a third in a pension which may or may not be accessible prior to your late 50s/early60s) Perhaps you are hoping that your businesses will cover any gaps?

    I would appreciate your input!

    Good luck in your journey!

    Dividend Growth Investor

    • Echo on August 1, 2016 at 10:32 am

      Hi DGI, thanks for your comment. Hopefully I can help explain the variances that you’ve found in my calculations.

      RRSP – I’m using an end of 2016 value of $125,000 (a roaring July market has already pushed my RRSP portfolio to $125,283). I have a bit of unused contribution room and so I’ll be making a $12,000 contribution for the next two years before settling into $3,000 annual contributions (my PA limit).

      TFSA – There are two years with reduced contributions due to some other financial commitments.

      House – I have a current value of $450,000 (since 2015) and so the 2016 year-end figure is $459,000 (+2%).

      As for covering expenses beyond 2024, that’s the great unknown at this point. If things continue as they are today then we should be able to withdraw $50,000 annually from our small business. I think there’s potential to grow the business in the next few years and if I succeed then I’ll build up a cash reserve inside the business account to help cover any gaps or shortfalls. My wife and I can split the income to save on taxes (right now she receives all of the income because I have regular employment income).

      There are some passive income components to our online business but it would still require work to run the blog, write for other publications, and do financial planning on the side. That’s why even if I choose to leave the workforce early I wouldn’t call myself retired, just free to pursue work that I enjoy on my own time.

      • Dividend Growth Investor on August 1, 2016 at 12:25 pm

        Hi Robb,

        Thank you for your response. I appreciate it. Having a side business that you love and that pays for things could indeed be very helpful. If you already love what you do, and you earn enough to pay your expenses, then you should extend this pleasurable activity for as long as possible ( this is a very crude paraphrasing of something Charlie Munger once said). If you have that flexibility, it is even better.

        Anywho, good luck in your journey!


  7. Richard on August 1, 2016 at 4:39 pm

    That’s some great progress! Nice to see when the goal gets closer — even though it may still sound like a big gap, the compounding returns of your investments plus the new contributions will close it quickly.

  8. Tawcan on August 1, 2016 at 5:51 pm

    I think that’s really good progress. 8% return might be a bit high but I think it’s reasonable. Since these are just estimates, things can change. However, they do give you a rough idea. I just came across Mad Fientist’s FI Laboratory – It might be a good 2nd source to check your numbers. I did a quick check and it estimated we should reach FI in about 9 years… roughly on track of our estimates too.

  9. JohnnyStash on August 5, 2016 at 9:00 am

    Why wouldn’t you carry the o/s mortgage amount as a liability? It appears that you are only accounting for a payment, unless I am missing something?

    • Echo on August 5, 2016 at 11:44 am

      Hi JohnnyStash – on Dec 31st 2024 the outstanding mortgage balance will be approximately $1200. It will be completely paid off the following month.

  10. Dividend Earner on August 18, 2016 at 8:18 pm

    I had 45 in mind too for a while but I don’t think that’s realistic either. I think I have to at least wait until the kids are out of high school. They are currently the most expensive years I find to provide them with opportunities.

    50 is my new Financial Freedom date (8 years from now) which is still pretty good I would say. By then the kids will have moved out or I will have downsized to push them out 🙂

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