Weekend Reading: Location Independent Edition

One of the best things about running my online business is that I can write and offer financial planning from anywhere in the world. No longer tethered to a day job, I planned to test the ‘location independent’ waters this year with some extended travel to see how I could balance work and play.

A global pandemic threw a wrench into those plans, but the idea of a location independent lifestyle still intrigues me. I’ve been inspired by the likes of David Bach, who took his family on a ‘radical sabbatical’ to live in Italy for a year, and friend of the blog Kyle Prevost, who’s moving to Doha, Qatar with his wife to teach at an international school.

Like Kyle, perhaps my wife and I have been watching too many episodes of House Hunters International. We fell in love with Scotland when we visited last summer, but sadly had to cancel our return visit this year. Still, we’ve dreamed about an extended stay there and eventually even moving to Scotland. 

We don’t know exactly what this looks like. Our children are still young (11 and 8) and so we’d be uprooting them from their friends and their school. Maybe we continue to travel (when we can travel again) and explore the world until they’re post-secondary age before committing to a move. Or, maybe we try the semester or year-long sabbatical somewhere while they’re still in school. Maybe they attend post-secondary abroad and we simply tag along to live somewhere nearby. Who knows.

Wherever we end up, I know I’ll be able to continue working remotely doing what I love – educating Canadians about personal finance and investing, while also helping clients achieve their financial goals. 

Having our own finances in order certainly helps. We’ve maxed out our RRSPs and my TFSA, with plans to accelerate my wife’s TFSA contributions next year. We’re fully funding our kids’ RESP every year. We don’t have a car payment or any other debt besides our mortgage – which has an absurdly low interest rate of 1.45%.

More importantly, we’ve not only survived the first seven months of entrepreneurship, the business has grown by 65% – led by an increase in fee-only financial planning clients. That tells me I made the right decision to leave my day job and that this online and potentially location independent business can thrive in the years to come.

Have you ever taken a sabbatical or thought about living a location independent lifestyle? Let me know in the comments.

This Week’s Recap:

On Thursday I explained how you can retire up to 30% wealthier simply by switching out of your expensive actively managed mutual funds and into index funds. 

Over on Greedy Rates I wrote a beginner’s guide to investing in ETFs.

And, on Young and Thrifty, I looked at everyone’s favourite topic these days – day trading stocks.

From the archives: Stop asking $3 questions and start asking $30,000 questions.

Promo of the Week:

One downside to credit card hacking is the impact of new inquiries on your credit score. Every new inquiry tends to lower your score (temporarily) by 10 points or so. Back when I was aggressively applying for credit cards to stockpile travel rewards points, my credit score took a major nose dive.

I haven’t applied for a new card since February and I’ve noticed my credit score has improved quite a bit – up to 752 (that’s high for me).

I use Borrowell to monitor my credit score and check my credit report every month. It doesn’t affect your credit score, and Borrowell uses bank-level encryption to ensure your information stays safe. Get your free credit score here.

Weekend Reading:

Credit Card Genius reports that Canadian household debt-to-income is now at 177%. But should you care?

Global’s Erica Alini looks at how Covid-19 is luring Canadians into the stock market.

The Irrelevant Investor Michael Batnick also looks at why everyone’s trading, even his plumber:

“You can only see your friends doubling and tripling their money for too long before you get sucked in, and that’s just what happened to my plumber.”

On the other hand, Warren Buffett is ‘willing to look like an idiot in the short term,’ according to ‘Wall Street’s biggest influencer’.

Why experts say some older personal finance rules may no longer apply.

Rob Carrick looks at 2020 vs. 2012 vs. 1984 and concludes that young adults have it harder than ever today.

How to make good money decisions in the new normal? Half Banked blogger Des Odjick sold her car.

I opened this article with some musings about quitting my job to live a location independent lifestyle. But I’ve always stopped short of telling people to ditch their 9-5 and follow their entrepreneurial dreams. It’s not for everyone. Blogger Nick Maggiulli agrees, saying there’s nothing wrong with a traditional career.

Jason Heath says the pandemic has put the financial plans of Canadians to the test and also reminded us why we make such plans to begin with.

Ben Felix and Cameron Passmore interview Dr. William Bernstein in their latest episode of the Rational Reminder:

Kind Wealth founder David O’Leary wants socially responsible investors to focus on their mission and values and stop arguing that responsible investments beat the market.

The Eat Sleep Breath FI blog shares the FIRE alternative you may not have considered: semi-retirement. I can get behind that.

Morningstar’s Christine Benz looks at whether retirees should adopt a flexible withdrawal strategy:

“I think most retirement research, most planners that I speak with would suggest that doing a fixed percentage probably isn’t going to work for many retirees. It just results in too many fluctuations in standard of living.”

Less than 1% of Canadians choose to delay CPP. Here’s why the rest are missing out. I’ve also written about the benefits of deferring CPP to age 70.

I enjoyed this post from Jonathan Clements who says he’s a year or two away from tapping his portfolio for income. He shared his thinking around how best to generate income and preserve capital.

Here’s why your retirement asset drawdown strategy should fit your personal story and not some arbitrary rule of thumb.

Finally, Maria at Handful of Thoughts shares why her family goes against traditional personal finance advice and owns three vehicles. Hey, as long as you’re spending on things you value, I say go for it.

Have a great weekend, everyone!

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8 Comments

  1. Pam Fines on July 25, 2020 at 1:48 pm

    I worked overseas. As an engineer I had an opportunity and while single I figured, why not! It was a great opportunity and I was surprised buy the number of people I worked with that moved with their families.

    While not your situation, I recommend to everyone to take a bit of a leap and travel when you can. And from friends they don’t regret at all exposing their kids to that kind of adventure as well

  2. Keith C. Cowan on July 25, 2020 at 2:10 pm

    I would encourage you to make the move. When I moved from Edmonton to Toronto after 8 years, everyone was opposed. One year later I offered to move back and not one of them wanted to.

    Culturally, Scotland might be a bit over the top. Do you understand the language? I do because my Dad and his siblings and friends were all from there. I had to learn the language at an early age.

    I understand that, with global warming, they are even getting summer for more than a few days.

    Anyway, it is better to do it sooner rather than later. It becomes harder when they get to university age.
    Keith

    • Maria @ Handful of Thoughts on July 26, 2020 at 7:44 am

      Location independence definitely intrigues me. We have always thought that we would eventually live somewhere else for awhile and bring our kid(s) with us.

      We have yet to pull the trigger because are still setting ourselves up for it. This is one of the reasons I would consider teaching for longer as there are some great exchange programs that would decrease some of the complexity of it.

      For now I’m happy following along on other people’s journeys and living vicariously through them.

      Thanks for the mention.

  3. Peter on July 25, 2020 at 4:06 pm

    Re your thoughts of eventually moving to Scotland:

    1. The growth in your TFSAs would not be recognized as tax free. You’d have to cash them in and buy ISAs. There’s an excellent annual limit of 20,000 pounds per person but it’s something you’d have to consider.
    2. I suspect the same would apply to your RESPs.
    3. Growth in your RRSPs and RRIFs would no longer be tax free.
    4. You must know about the UK’s 40% Inheritance Tax. There’s an allowance but you’re already heading for it!
    5. Despite excellent experiences, transferring money is never cheap or stress-free and you’d always be at the mercy of exchange rates.
    6. Because of possible Scottish independence, Brexit and Covid-19, things could be very uncertain for years.

    My wife and I have spent a year in California and 2 years in Iowa for graduate study over the years. Our three boys (as babies, then pre-teens and teenagers) survived into adulthood (we think) better for the experience. The UK and Europe would be amazing for your family.

    Bearing all that in mind, and from the standpoint of somebody who’s considering moving back after 50 years in Canada, after a lot of research I would advise you do whatever you want to do earlier rather than later. Save yourself a lot of financial complications later on.

    I enjoy the openness of your columns. Thank you

  4. Thomas McEvoy on July 25, 2020 at 5:34 pm

    My thing is to over to Ireland for a few weeks and walk the Wild Atlantic Way and B&B it if possible. I saw Dublin back in the 80’s and have always wanted to go back.

  5. sara on July 26, 2020 at 10:27 am

    RBC has a free on-line credit report available.

  6. Mark on July 27, 2020 at 6:29 am

    Having been to Scotland myself for a few weeks and having best friends living there now, I would say “go for it”. I too have been inspired by Kyle’s leap of faith and I believe because you have your financial act together rather well, the time to enjoy the experience vs. waiting is now.

    You have built a great online business and I believe you and your family would really enjoy living abroad or at least trying it out.

    With x2 TFSAs and RRSPs both maxed out, it is our hope as well we can consider some semi-retirement dreams we’ve been working towards in a few years 🙂

    Keep up the great work (as always) my friend.
    Mark

    • Ben on July 29, 2020 at 6:25 am

      Does anyone know of a good resource for Canadians thinking of moving abroad? I’m thinking things like taxes, healthcare, societal norms etc for various countries

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