My Retirement Dream & Why I Drive a 13-year-old Minivan

This post is part of Sun Life Canada’s #retireinspired promotion.  Check out their site here for some cool stories regarding how Canadians plan to get to – and then spend – their retirement. 

One thing I am never accused of is overcompensating for something by driving a flashy ride.  Rides don’t get less flashy than the minivan you spent part of your childhood in.

A reasonable person might ask why in the world a guy from the YOLO generation, who is in his mid-twenties, and takes home a decent paycheque, would drive an old minivan to work every day.  The truth is that my fiancée and I also own a newer commuter car, but since she commutes farther than I do, I get to drive our back up vehicle – the fly ride that screams “I am a proud soccer mom” to everyone as I drive by.

So, do I have some weird need to identify as a suburban mother of two or the dad that coaches little league?  No. I simply have the weird need to “retire” as young as possible and live each day on my own terms.

SunLife.ca Wanted to Know My Retirement Dream

For me, retiring isn’t about living out a Freedom 55™ or Cialis™ commercial everyday with other “seniors” who look like they are 30-year-old models.  Retiring is really a bit of a misnomer in that I have no idea what I’ll do once I achieve what Moneysense’s Jonathon Chevreau calls Findependence.  When I no longer need my day job to provide income any longer I might still decide to make money doing something I enjoy or I might decide to travel.  I might volunteer for a number of extremely worthy causes or I might disengage with society for a few weeks and retreat to a beautiful sunny deck by a lake, armed with half-a-forest’s worth of reading material.  The only thing I’m sure about is that I want to reach that point of ultimate financial independence very quickly.

Related: Book Review: Findependence Day

There are folks out there who are willing to make larger sacrifices than me in order to build up their nest egg at a faster rate.  For example, my fiancée and I are not ones for cutting our food budget to the bone, we splurge on travel from time to time, and when we badly want a relatively inexpensive luxury good we don’t hesitate to treat ourselves once in a while.  We could live with roommates if we really want to maximize our income potential but instead we enjoy our modest house and the privacy it provides.  If you want someone that pops under the Google Search results when you type in “Extreme Savings” or “Extreme Early Retirement” you need to look somewhere else.

What Are You Willing to Forgo In Order to Make Your Dream a Reality?

While I may not be “extreme”, I think it is fair to say I am willing to sacrifice more immediate gratification than most; consequently, I drive a fully-functioning family-friendly motor with four wheels 4km to work every day.  If there was public transportation available in the rural area I live in I’d likely choose that option instead.  Sometimes I bike or walk to work, but on those January days when the prairie winds can cut through 9 layers of clothing I push my courage and pride to the side and jump into Ol Reliable.

When my parents decided to finally treat themselves to a bit of a newer vehicle after two decades of minivan-supported family adventures, I was fortunate to inherit what could charitably be described as a working piece of nostalgia.  Given the right price (a big hug) and the complete lack of major mechanical issues, you won’t hear me complain.  I know that I could easily get approved for a large new car loan and snag whatever shiny vehicle the marketers thrust into my face at the right moment.  I won’t say I never have the occasional weak moment when I seen new cars or pickups drive by or when I pass by a car lot and the newly buffed vehicles seem to wink at me,  but instead I’m content to take that cash and throw it into my long-term investment plan.

Any Plan Is Better Than No Plan

As a young person planning for retirement is a tough task due to the fact there are so many variables that could change and the very vagueness of something that seems so distant can make procrastination a far more enticing option than planning.  I don’t know every precise step I’ll take on my journey to retirement, but I do know that I want that journey to be far shorter than most, that my eventual destination will look pretty modest to many members of the middle class, and that the savings rates I’ll likely need to attain along the way won’t be easy in a world that tries very hard to get me to spend and satisfy my need intense want for immediate gratification.

My retirement dream is worth sacrificing a few looks of envy as I drive by.  It’s worth sacrificing an overpriced status symbol.  The feeling of waking up in the morning and knowing that the entire day is mine to do with what I want and that I am beholden to no one – that’s worth a whole lot of sacrifice.

How many weeks of vacation do you get?  I want 52.  That’s my retirement dream.

Thanks to Sun Life for putting together an interesting look at retirement dreams and various paths to get there as part of their promotion.  Check out their site here to see what other Canadians have to say about their quest for their ideal retirement.

How Much Will I Need to Save for Retirement?

To be honest, I know I am saving for retirement because I do not want to continue working full-time slaving away and being in the rat race, but I do not know the exact number that I will need for retirement.  I know it’s somewhere up there, though.  Thought it would be nice to write up a post to figure this out together.

According to The Globe and Mail, Canadians believe they will need an average of $908,000 in retirement savings in order to live comfortably.  In Alberta and British Columbia, people feel that they will need at least one million dollars in retirement savings in order to live comfortably as well.  About 1 in 3 Canadians do not feel that they can meet this expectation.

Let’s Look at the Average

Money Sense has a handy chart that tells you at a quick glance how much you will probably need to have in your portfolio in order to retire comfortably depending on what kind of retirement you want to live.  The only limitation with this chart is that it only shows retirement at age 65 (I would personally like to retire earlier than that, or at least be able to just work part-time instead of full-time at an earlier age, let’s say in 10-15 years).

For an average single person who wants to retire at age 65, one would need about $875,000 in retirement savings.  Upper middle class entails international travel, a new car every 8 years or so, and a comfortable retirement.

What Factors Affect Your “Number”

How Much Will I Need to Save for RetirementThere are numerous factors that can affect your number.  For example, whether or not you have children or not.  Whether you own your home or whether you plan to rent.  Whether you have a defined benefit pension or a pension at all and whether you qualify for government retirement benefits.Continue Reading

Dividend Income Update: September 2014

This blog is great because it keeps me accountable.  Sometimes I forget what my goals are until I re-read what I wrote.  Obviously in the last three months I didn’t do anything to increase my dividend income, so I better get my butt in gear.  The last update was a good update because there was a lot going on.  In this update, I actually lost some money just because Just Energy triggered a sell and so I lost the dividend income with that.  There were a few minor changes but not much.

I think perhaps the reason why I didn’t take much action in buying more dividend stocks is because I was upset from the TFSA overpayment (so instead of $7000 cash in my TFSA account I really only have $4000 to play with and buy stocks) and also because stocks seem a little overpriced at the moment.

Here are some of the changes I noticed when updating my dividend income spreadsheet:

  • BMO (BMO.TO) increased their dividend from 0.76 cents a share to 0.78 cents a share
  • Telus (TU) increased their dividend from 0.38 cents a share to 0.38 cents a share
  • One of my stop limit orders was triggered, Just Energy (JE.TO) and it sold for $6 a share (yeah, ouch) so now the dividend income from Just Energy is gone
  • For some reason in my spreadsheet on ZDV, I had the monthly dividend as 0.08 cents per share but it should actually be 0.062 a share, so I had to update that.

If you want to  make your own spreadsheet, check out my snazzy ‘step by step guide on how to make a dividend income spreadsheet

Here is a recap of some of the goals I had in June and for September (in italics for your reading pleasure) alongside the action I took:

  • I am going to look into selling Transalta (TSE: TA) depending on how it performs and how much I am up or down in the stock.  I only have 100 shares anyways.
    • I didn’t do anything about this.  The dividend is even crappier than last time.
    • September 2014 update: I didn’t sell Transalta, the dividend is the same so far.
  • The exchange traded fund CPD isn’t doing that well, but the dividends are ok and have offset the losses that I have had (well, imaginary losses since I have not sold)
    • It bounced back up and I am happy happy happy.

September 2014 update: Still doing good.

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