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Weekend Reading: Financially Independent Entrepreneur Edition

I’ve written before about my modified pursuit of FIRE (Financial Independence, Retire Early). The twist is that I’m striving for FIE – to be a Financially Independent Entrepreneur. It’s an idea that I haven’t been able to get out of my head lately. Here’s why:

For as long as I’ve been writing this blog I’ve had a goal to achieve financial freedom by age 45. I’ve also declared a goal of reaching $1M in net worth by the end of 2021, the year I turn 41.

I’m on pace to achieve that, perhaps slightly ahead of schedule. More importantly, though, is a realization that my so-called side hustle – the online income earned from blogging, freelance writing, and financial planning – has far surpassed my full-time salary. Simply put, I could leave my day job tomorrow and still pull in enough income to meet our spending and savings goals.

So what’s holding me back? A few things. The security of a full-time job with benefits. A wife and two children who depend on my income. A $200,000 mortgage. The angst of where my next freelance contract will come from (and when it will be paid). Navigating the constantly changing online world while trying to earn a living. Having enough of a cushion in the bank in case things go sideways.

I think about all of those things. But the reality is my business has grown by nearly 50 percent this year. I’ve never been busier, and I know there’s plenty of opportunities I’m leaving on the table because I can only do so much on evenings and weekends.

If you’re familiar with Dragon’s Den pitches, the dragons always ask the entrepreneurs if they’re into their venture 100 percent, or if they’re still entrenched in their day job just in case their big idea doesn’t pan out. Invariably, the dragons pass on pitches where the entrepreneur isn’t fully committed to his or her venture. They want the founder to be all in.

I’m not saying that I’ll be taking my talents to Dragon’s Den anytime soon. The point is, as an entrepreneur, there comes a time when you need to be all-in to realize your full potential. It’s funny, but I’m scared to go all-in right now, even though I know that I earn enough income on the side to replace my salary and continue to live the same lifestyle.

What I’m trying to wrap my head around is the additional earning potential if I can dedicate even 10-15 more hours a week to my online business. The more I think about that, the more sure I am that I can make this work financially.

I like to wrestle with big financial decisions by talking them out here on the blog. It’s a great platform for these kinds of discussions. And while I won’t throw out a date or deadline as to when I plan to make this transition, know that it’s been on my mind for some time and I’m getting very close to pulling the trigger.

Financially Independent Entrepreneur. I like the sound of that.

This Week’s Recap:

This week I collaborated with Erika Toth, a director at BMO ETFs, to dispel the myth that passive investing is in a bubble.

Over on the Young & Thrifty blog I shared a beginner’s guide to index funds.

I went to Seattle this week to explore the city and take in the Seahawks vs. Rams game (which was an amazing game to see live!).

My wife and I are off to Vancouver next week to celebrate our anniversary. Hopefully we luck out with the same great, sunny weather!

Promo of the Week:

Interest rates on savings accounts have been ticking down at most big banks and credit unions. Once a market leader, Tangerine recently dropped its interest rate to a pitiful 1.15 percent. If you want to earn a higher rate on your savings then you need to look outside the big banks and consider an online bank.

EQ Bank has offered one of the best interest rates in the country since it launched in 2016. Its EQ Bank Savings Plus Account, which has also has some chequing account functionality, pays a healthy 2.30%* interest. That’s double Tangerine’s savings account and nearly triple what some of the big banks currently offer (short term promos aside).

What I like about EQ Bank is that it doesn’t mess around with short term promotions and teasers. It pays an everyday high interest rate – currently 2.30%* – on every dollar (up to a maximum of $200,000).

If you’re the type of person who likes to hold a large amount of cash, whether it’s an emergency fund or a short-to-medium term savings goal – do yourself a favour and start earning higher interest on that savings. Sign up for an EQ Bank Savings Plus Account here.
*Interest is calculated daily on the total closing balance and paid monthly. Rates are per annum and subject to change without notice.

Weekend Reading:

Stephen Weyman at Credit Card Genius shares the best credit card offers, sign-up bonuses, and deals for October.

Are wealth taxes a good idea? Here’s Nick Magguilli on the pros and cons of a net worth tax.

Some big thinking here by Morgan Housel on the three most important forces shaping the world:

“Find something that’s important to you in 2019 – social, political, economic, whatever – and with a little effort you can trace the roots of its importance back to World War II. There are so few exceptions to this rule it’s astounding.”

Speaking of FIRE, here’s why this couple ditched the FIRE movement and couldn’t be happier.

Advisors say this is the biggest behavioural bias driving investment mistakes.

Melissa Leong explains how to give yourself a fall money makeover.

Million Dollar Journey blogger Frugal Trader answers a reader question from a low income senior trying to decide between a TFSA and RRSP.

Erica Alini tackles the best way to generate cash from your investments in retirement.

In this video, PWL Capital’s Ben Felix offers his own take on the index investment bubble theory:

One of the biggest myths in investing is that you need to beat the market. You don’t — and you probably couldn’t if you tried.

The Evidence Based Investor blog offers five strategies that are better than timing the market:

“In summary, timing the market — while superficially an attractive idea — is fraught with danger. If you get lucky, great, but there’s no method to it. We’ve seen that not even the gurus are much good at it.”

A good piece by Ben Carlson on resulting: our tendency to equate the quality of a decision with the quality of its outcome.

The classic question of whether you should keep your company pension, or take a lump-sum pension buyout and invest it yourself.

Should you pay for your child’s university education? The Blunt Bean Counter blog explains how to tackle this problem.

Finally, Canadian Budget Binder explains how hoarding affects your children when you’re gone.

Have a great weekend, everyone!

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20 Comments

  1. Ken T on October 5, 2019 at 8:14 pm

    Hi Rob
    Great article and I like your transparency. As someone who also does some financial coaching I would like to provide you with a bit of a different opinion on your current situation.

    I would say you are on the right path to cut the “ties” to the job but I would wait until the next true correction and then make the decision. Career decisions always look better when things have gone really well for a long time. For example, if you lost 25% in a market correction would you still make the same decision. If you say yes, then go for It!

    • Robb Engen on October 7, 2019 at 3:47 pm

      Hi Ken, thanks for sharing your thoughts. As a public sector employee in Alberta, our day of reckoning is coming sooner than later (likely when the budget drops in two weeks). A correction won’t really affect my decision at all. I won’t be pulling from my investments, and if anything a recession or crash would be good for business as more people dig into their finances and look for help.

  2. Maria @ Handful of Thoughts on October 5, 2019 at 9:04 pm

    Sounds like you are at a bit of a tipping point. It’s a good problem to have. Congrats on building your side hustle to the point of it potentially becoming your main hustle. I look forward to reading how your decision plays out.

    • Robb Engen on October 7, 2019 at 3:48 pm

      Thanks Maria! Definitely at a tipping point and I’ll keep everyone posted on my thought process and decision.

  3. Frito on October 5, 2019 at 9:37 pm

    First thought is that FI is FI no matter what you choose to do once you get there. You can be an FIA (accountant) or an FIS (salesman) or… Just getting to the financial independence part is the goal.

    Second thought is – I think you already know the answer. Looking past the pros and worries you have mentioned, if you had a client come to you with the same scenario what would your advice be? Turn on your logical brain, take the emotion and fear out of it (which is the service you provide to others) .

    I planned for years and years to retire early. When I took the first step I chickened out and got a part time job for about 18 months cuz I freaked out about not having a regular paycheck. I finally pulled the plug on working and haven’t looked back – that was 6 years ago and absolutely no regrets.

    But puleeze…..get your TFSA topped up before you pull the plug entirely!!!!

    • Robb Engen on October 7, 2019 at 3:50 pm

      Hi Frito, my logical brain is part of the problem! It wants me to have 12-18 months of income in the bank before pulling the trigger.

      But I hear you – people stress about retirement and finding the right time, but no retiree I’ve talked to has ever regretted retiring early.

      Working on the TFSA!

  4. Dr. MB on October 5, 2019 at 9:39 pm

    Hey Robb,

    You should look at the owners of Warby Parker. They kept their day jobs and built an extremely successful company.

    I think there are many ways to get where one wants.

    Best of luck with whichever path you choose.

    • Robb Engen on October 7, 2019 at 3:52 pm

      Hey Dr. MB – cool story, thanks for sharing! I agree, many paths to take. I just feel like I’m at a fork in the road and need to make a choice.

  5. JohnF. on October 6, 2019 at 6:16 am

    I think the FIRE movement is a bit of a fad. Mostly people that hate their day job. But there is more to life than dreaming about sitting back and enjoying your day. Most of us enjoy their day by doing something meaningful. So, if you absolutely hate your job, find something better. I like your idea of FIE; still independent but do something you love to do. As far as that goes, you are ahead of the curve. So, congratulations.

    But Ken T. (comment above) makes an excellent point. Things have been going rather well for a while now and one may look at this as being the new normal. However, would you be able to stay FI if things go bad for a while. It may be good, and hopefully you like your current job, to try to find a way to juggle both for the next little while before taking the plunge. It isn’t easy to give up a steady income and benefits.

    However, the most important thing is that you do what you love to do and be good at it. You’ll do fine either way.

    • Robb Engen on October 7, 2019 at 3:54 pm

      Hi JohnF, it’s not that I hate my job – it’s fine, but I’m definitely not passionate about it the way I am about personal finance. My issue comes down to time. For nine years I’ve juggled a full-time job and a growing side business. Now that the side business has full-time potential, it’s becoming increasingly clear that I can’t do both for much longer or something has to give.

  6. Keith C. Cowan on October 6, 2019 at 8:51 am

    I went through the same soul-searching when I retired right after the dot.bomb and decided that I could make enough after tax capital gains by active trading to compensate for the lower stash. After 5 years, I gradually moved to value buy and hold, really retiring. My safety net was a return to active trading. Never needed it. 17 years retired from salary.

  7. Keith C. Cowan on October 6, 2019 at 8:54 am

    BTW our stash is bigger than is was then and we spend $150k/year, including gifting. We live in Vancouver and the outlook for sunshine is good.

  8. DJ on October 6, 2019 at 8:23 pm

    Give “Originals” by Adam Grant a read. In it he outlines, as a VC, he’s often impressed by those who don’t give up their day job. It means they are diligent and manage risk well, something he looks for in a business to invest in.

    • Robb Engen on October 7, 2019 at 3:55 pm

      Thanks for the recommendation!

  9. GYM on October 6, 2019 at 9:12 pm

    Fantastic, good job on having your side hustle beat your main hustle!! That’s amazing.

    There’s actually a term for it, it’s called “FITE” (Financial Independence Then Entrepreneurship)–
    https://www.genymoney.ca/do-entrepreneurs-want-less-financial-independence-early-retirement/

    Is there any capacity for you to work PT at your main job so you can dedicate more time to your growing side hustle? To me, that would be the ideal- job security with pension and time to spend on family/ work on entrepreneurship.

    Hope the weather is good for you! It was a beautiful fall day today.

    • Robb Engen on October 7, 2019 at 3:58 pm

      GYM, that is a great questions. I’ll know more in the coming weeks / months after the provincial budget falls and the public sector gets hollowed out. Perhaps I’ll have some negotiating power to request a 3-day work-week, or work from home, something like that.

      Great idea!

      PS – The YVR weather is looking pretty good!

  10. Chrissy @ Eat Sleep Breathe FI on October 12, 2019 at 9:35 am

    Hi Robb,

    Congrats on the side hustle milestone. That’s an enormous accomplishment and one I’m sure took a lot of blood, sweat, and tears.

    I’m a SAHM and don’t have to juggle a full-time job with blogging, but I am not nearly as prolific as you with your writing. I also don’t do any freelance or consulting. So bravo to you for taking on so much for such many years.

    • Robb Engen on October 12, 2019 at 4:28 pm

      Hi Chrissy, thanks so much! I’m hoping to get back some work-life balance and pursue my entrepreneurial dream.

  11. Mark Mitchell on October 13, 2019 at 4:51 am

    Great post!

    Always bet on yourself!

    I was working in Sales full time for years while I tried to make the transition to Mortgages.

    Similarly, it got to a point where I could no longer handle both.

    It was the best decision I ever made going full time in mortgages – Betting on yourself is the safest bet you can make!

    Good luck 🙂

  12. Mike Holman on November 1, 2019 at 11:47 am

    Meant to comment on this a while ago…

    Good luck with your decision. I have the utmost respect for you being able to do a full-time job + side businesses + parenting for as long as you have.

    Given the age of your kids, having more time for them might be pretty cool as they get into more activities etc.

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