Weekend Reading: The Truth About F.I.R.E. Edition

A personal finance workshop held just outside of Toronto last month attracted a group of 75 financial independence seeking Canadians and Americans. This ‘Camp Mustache’ gathering was borne out of the F.I.R.E. (Financial Independence Retire Early) movement made famous by Mr. Money Mustache and has attracted followers from around the world.

The Globe and Mail’s Rob Carrick spoke at the event and came away with a newfound appreciation for the F.I.R.E. movement:

“A super-interesting group at Camp Mustache — really smart, capable people. The critics need to get over the idea that these people want to retire, full stop. They really just want to take back financial control of their lives.”

As one of those critics, my beef with F.I.R.E. has more to do with bloggers who sell the dream that, “I retired early, and so can you,” all while continuing to earn income from blogging, speaking, and book sales. But I am fascinated by real life (non-blogger) folks who are chasing F.I.R.E. and it sounds exactly like Rob Carrick describes: Smart and driven people trying to be mindful of their spending and take control of their lives.

The media in the U.S. has been all over the F.I.R.E. movement for years now, but Canadian news outlets are starting to catch on. The Toronto Star recently featured F.I.R.E. advocate Scott Reickens, who has his sights set on early retirement at age 41:

“The most magical part of the FIRE movement is the community. There are meetups all over the country, Facebook groups and a ton of people talking about this online and scrutinizing things. Impromptu meetings happen. It’s valuable to talk to people who understand this path and it’s incredible to spend time with people who have similar values. Then, you don’t have to do it alone.”

The Globe and Mail took a more critical look at the idea of retiring extremely early. One professor at the Richard Ivey School of Business had a 21-year-old student who came up with a plan to retire in his late 20s. Four years after the student’s graduation, he came back to say he had met his retirement goal through a combination of extreme savings and real estate investing and was ready to stop working at the age of 27.

Finally, a really smart take from MoneySense’s Allan Norman. He answered a reader question from a 49-year-old who found himself unexpectedly “retired” and wanted to stay that way permanently. Not only was his investment advice sound, but he challenged the reader’s early retirement ideas with a tough reality check:

“Simon, at age 49, you still have a lot of life to live. If you’re able, I’d encourage you to find a new job or career. I know you have a lot of money saved, but to stretch it over another 41 years is going to be tough. There are a lot of unknowns, including new cars to buy, trips to take and things to enjoy that will require more money. Waiting a few more years before stepping away from the workforce entirely will provide you with a safety net that will give you the financial peace of mind a comfortable retirement requires.”

I wrote about my own financial independence pursuit last week, sharing my internal struggle with when to quit my day job and go full-time as an online entrepreneur. I appreciate all of your comments, emails, tweets, messages, and words of encouragement (and caution). I’ve circled a date on the calendar and of course will let you know more when I can.

This Week’s Recap:

This week we had Victor Fong guest post about preparing for the next recession – a guide for the Canadian middle class.

In my Smart Money column at the Toronto Star I shared why you shouldn’t invest money that you’ll need in the next 3-5 years.

Promo of the Week:

Every week I get emails from readers asking about how to switch from their high-fee bank mutual funds to a robo-advisor. I’ve got a great post that outlines exactly how to transfer your RRSP to Wealthsimple, one of Canada’s leading robo-advisors.

Boomer & Echo readers get their first $10,000 of investments with no management fees for a year when they sign up for their first account at Wealthsimple.

Weekend Reading:

Stephen Weyman at Credit Card Genius shares the best credit cards of 2019 – the top one has an incredible average earn rate of 3.76 percent!

CBC Marketplace looked into credit scores and why four websites give you four different credit scores. More proof that your credit score is just a small piece of what lenders look for when evaluating loans.

Sticking with credit cards and rewards, here’s Patrick Sojka explaining how to maximize the elite benefits from the American Express Platinum card. I’m taking advantage of one of those perks right now (Gold Elite status with Marriott Bonvoy).

Rob Carrick lists five investment costs that are killing your returns, and what to do about them.

Jason Heath answers a great question – what is a pension bridge benefit and how does it work?

Here’s an incredible chart showing the impact of smartphones on the camera industry:

The iPhone comes out in 2007 and changes the camera industry. Amazing to see a 90% decline in just 10 years after growth for decades

Amazing that something can go from peak to trough in exact 10

Makes you ask- What’s the next product where this will happen? pic.twitter.com/9tMGHyYo2e

— Andrew Chen (@andrewchen) October 8, 2019

Are Canadian car owners being misled about how often a vehicle needs to be serviced? A while ago I wrote something similar about how often should you service your vehicle.

An interesting piece in the Globe and Mail: With baby boomers aging, the cost of long-term care is set to triple in the next 30 years. What’s our plan for dealing with this?

Speaking of preparation, here’s another great video by PWL Capital’s Ben Felix on preparing for the recession:

What Wealthsimple acquiring SimpleTax means and why tax preparers are the urologists of the financial world.

Adam Meyers says most Canadians know the ins and outs of an RRSP, but fewer can tell you about RRIFs, which is what happens to an RRSP when you turn 71.

How often should you rebalance your portfolios, and is now a good time to do it? Dale Roberts at Cut the Crap Investing explains.

Why single seniors get the shaft when it comes to tax breaks, and here’s how to fix this injustice:

“In retirement, couples get to take advantage of a significant tax-saving measure called pension income-splitting. Solo seniors, be they lifetime singles or people whose spouse has died, have no equivalent tax break. Given their longer lifespans on average, women are the primary victims of this discrimination.”

Legendary fighter Sugar Ray Leonard never wanted to be a boxer until his dad got sick. Here’s the incredible money story of the five-time world champion and Olympic gold medallist.

Have a great weekend, everyone!